National Hospital, Jabalpur V. Assistant Commissioner of Income Tax, Jabalpur

CO 28/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1098 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 11 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2013
• Court: TRIBUNAL
• Department Lawyers: V B SARGOR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 186/JAB/2013 A.Y. : 2009-10 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 1(1), JABALPUR VS NATIONAL HOSPITAL, 703, GOLE BAZAR, JABALPUR APPELLANT RESPONDENT PAN NO. : AABFN9318B C.O.NO.28/JAB/2013 (ARISING OUT OF I.T.A.NO. 186/JAB/2013) A.Y. : 2009-10 NATIONAL HOSPITAL, 703, GOLE BAZAR, JABALPUR VS ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 1(1), JABALPUR CROSS OBJECTOR RESPONDENT -: 2: - 2 DEPARTMENT BY : SHRI V.B. SARGOR, DR ASSESSEE BY : SHRI VIJAY GUPTA, CA DATE OF HEARING : 2 6 . 0 5 .201 5 DATE OF PRONOUNCEMENT : 25 . 0 6 .201 5 O R D E R PER GARASIA, J.M. APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FIL ED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT( A),JABALPUR, DATED 07.12.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER. 3. THE ASSESSEE IS A PARTNERSHIP FIRM RUNNING THE HOSPITAL IN THE NAME OF NATIONAL HOSPITAL ALONGWI TH MEDICAL SHOP WITH THE PREMISES OF THE HOSPITAL BUILDING. DU RING THE YEAR, THE FIRM HAS SHOWN A NET PROFIT OF RS. 31,89, 185/- FROM MEDICAL SHOP DIVISION AND NET PROFIT OF RS. 2,27,76 8/- FROM HOSPITAL DIVISION. THE AO HAS VERIFIED THAT FIRM IS SHOWING MEAGRE NET PROFIT RATIO OF 0.62 % FROM HOSPITAL DI VISION COMPARED TO OTHER HOSPITAL, WHICH IS PROPRIETORY CO NCERN HAVING INCOME FROM HOSPITAL DIVISION ONLY. THE AO H AS -: 3: - 3 VERIFIED THE NET PROFIT, WHICH WAS DECLARED NET PRO FIT @9%, THEREFORE, NET PROFIT WAS ADOPTED AS 9% AND MADE AD DITION OF RS. 30,67,867/-. 4. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S ALLOWED THE APPEAL BY OBSERVING AS UNDER :- 3.13(III) REGARDING GROUND NO. 2 AND 3, I TEND TO AGREE WITH THE CONTENTION OF THE COUNSEL. THE AO HA S NOT POINTED OUT ANY MISTAKE IN THE BOOKS OF ACCOUNT , NOR HAS HE REJECTED THE BOOKS OF ACCOUNT BEFORE ESTIMATING THE GROSS PROFIT. THE AO HAS ALSO NOT COMPARED THE BOOK RESULTS OF THE ASSESSEE WITH EARLIER YEARS. THE COMPARABLE CASE CITED BY THE ASSESSING OFFICER IS A PROPRIETORSHIP CONCERN, WHEREAS THE APPELLANT IS A PARTNERSHIP FIRM AND INTEREST AND SALARY TO THE PARTNERS ARE TO BE ALLOW ED. REGARDING THE CONTENTION OF THE ASSESSEE, THAT FACT S OF THE COMPARABLE CASE WERE NOT DISCLOSED TO THE APPELLANT, THE SAME WAS NOT REBUTTED BY THE ASSESSING OFFICER. THE AO IN REMAND REPORT HAS ONLY SUBMITTED THAT IN THE QUESTIONNAIRE THE AO HAD ASKED THE APPELLANT REGARDING LOW NET PROFIT. I HAV E NO OPTION, BUT TO ACCEPT THIS CONTENTION OF THE APPELLANT. IN VIEW OF THIS, THE ADDITION MADE ON ACCOUNT OF LOW NET PROFIT, OF RS. 30,67,867/- IS HE REBY DELETED. THE AO IS DIRECTED TO ACCEPT THE NET PROFI T AS SHOWN BY THE APPELLANT IN HIS RETURN OF INCOME. THESE GROUNDS OF APPEAL ARE ALLOWED. IN VIEW OF THI S DELETION, THE ADDITIONAL GROUND RAISED BY THE APPELLANT, IS INFRUCTUOUS, THE SAME IS HENCE, DISMISSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, -: 4: - 4 WE FIND THAT THE AO HAS NOT REJECTED THE BOOKS OF A CCOUNT AND HE HAS MADE THE ADDITION ON THE GROUND THAT SIMILAR HOSPITAL, WHICH IS RUNNING THE SHOP IS HAVING 0 % OF THE NET PROFIT, THEREFORE, HE HAS ADOPTED 9 %. WE FIND THAT THE AO HAS NOT REJECTED THE BOOKS AND NO SPECIFIC DEFECT WAS FOUND IN THE ACCOUNTS OF THE ASSESSEE. WHEN THERE IS NO DEFECT, THE PROFIT CANNOT BE ESTIMATED. MOREOVER, WE FIND THAT THE ASS ESSEE IS MAINTAINING TWO SEPARATE BOOKS OF ACCOUNTS OF HOSPI TAL DIVISION AND MEDICAL SHOP. THE ASSESSEE IS ALSO INC URRING EXPENSES LIKE RENT, ELECTRICITY, INTEREST, SALARY, MAINTENANCE OF BOOKS OF HOSPITAL EVEN THOUGH RELATES TO MEDICAL SH OP, THEREFORE, THE LD. CIT(A) CONSIDERING THE FACTS OF THIS CASE, HE HAS DELETED THE ADDITION. MOREOVER, THE AO HAS NOT GIVEN ANY COMPARABLE NET PROFIT OF OTHER HOSPITALS, THEREFORE , THE LD. CIT(A) HAS DELETED THE ADDITION. OUR INTERFERENCE I S NOT CALLED FOR. 6. CROSS OBJECTION IS SUPPORTIVE TO THE ORDER OF LD. C IT(A) AND ALTERNATIVE REMEDY SOUGHT FROM THIS CROSS OBJEC TION, BUT AS WE HAVE DISMISSED THE DEPARTMENTAL APPEAL, WE DI SMISS THE CROSS OBJECTION. -: 5: - 5 7. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION BOTH ARE DISMISSED. THIS ORDER IS PRONOUNCED IN ACCORDANCE WITH RULE 34(4) OF I.T.A.T. RULES, BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 25 TH JUNE, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 25 TH JUNE , 2015. CPU* 256