ACIT, Circle-1, Tirupathi, Tirupathi V. R. Sudha Rani, Tirupathi, Tirupathi

CO 34/HYD/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3559 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M NARMADA
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Unexplained investment; Depreciation; Search and seizure; Additional evidence; Reasonable cause; Condonation of delay; Revised return
• Section: 40A(3); 143(3); 142(1); 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 371/HYD/14 2009-10 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, TIRUPATI DR. R. SUDHA RANI, TIRUPATI [PAN: AFEPR8106B] 372/HYD/14 2010-11 C.O. NOS. 33 & 34/HYD/2015 (IN ITA NOS. 371 & 372/HYD/2014) ASSESSMENT YEARS: 2009-10 & 2010-11 DR. R. SUDHA RANI, TIRUPATI [PAN: AFEPR8106B] VS ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, TIRUPATI (CROSS-OBJECTOR) (RESPONDENT) FOR REVENUE : SMT. M. NARMADA, DR FOR ASSESSEE : SHRI V. RAGHAVENDRA RAO, AR DATE OF HEARING : 21-02-2018 DATE OF PRONOUNCEMENT : 21-03-2018 O R D E R PER S. RIFAUR RAHMAN, A.M. : THESE TWO APPEALS ARE BY REVENUE AGAINST THE ORDER(S) OF THE COMMISSIONER OF INCOME TAX (APPEALS)-GUNTUR, ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 2 -: FOR THE AYS. 2009-10 & 2010-11. CROSS-OBJECTIONS ARE FILED BY ASSESSEE AGAINST THE SAID APPEALS OF REVENUE. CONDONATION OF DELAY: 2. BOTH THE APPEALS OF REVENUE HAVE BEEN FILED WITH A DELAY OF ONE DAY. REVENUE HAS FILED AN AFFIDAVIT SE EKING CONDONATION OF DELAY FOR BOTH THE APPEALS. ON THE OTHE R HAND, BOTH THE CROSS-OBJECTIONS OF ASSESSEE HAVE BEEN FILED WITH A DELAY OF 379 DAYS. ASSESSEE HAS FILED PETITIONS FOR CONDONATION OF DELAY FOR BOTH THE CROSS-OBJECTIONS. 2.1. CONSIDERING THE PETITIONS FOR CONDONATION OF DEL AY IN RESPECT OF BOTH THE PARTIES AND BEING SATISFIED WITH T HE REASONABLE CAUSE FOR THE DELAY, WE HEREBY CONDONE THE DELAY IN FILING THE APPEALS AS WELL AS THE CROSS-OBJECTIONS, W HICH ARE ADMITTED TO BE HEARD ON MERITS. 3. BRIEF FACTS RELATING TO AY. 2009-10 ARE THAT ASSESSE E IS AN INDIVIDUAL, DERIVING INCOME FROM MEDICAL PROF ESSION. FOR THIS ASSESSMENT YEAR, ASSESSEE HAS ORIGINALLY FILED R ETURN OF INCOME ON 30-09-2009 ADMITTING AN INCOME OF RS. 4,95 ,000/-. THE SAME WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT [ACT]. SUBSEQUENTLY, SEARCH AND SEIZURE OPERATIONS WER E CONDUCTED IN THE GROUP CASES OF DR. B. SUKUMAR AND AS SESSEE ON 21-02-2011. ACCORDINGLY, NOTICES U/S. 153A WERE ISSUED TO ASSESSEE. IN RESPONSE, ASSESSEE HAS FILED REVISED R ETURN OF INCOME ON 17-12-2012 DECLARING INCOME OF RS. 7,09,0 20/-. SUBSEQUENTLY, NOTICES U/S. 143(2) AND 142(1) WERE IS SUED AND SERVED. THE ASSESSING OFFICER (AO) HAS MADE THE FOL LOWING ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 3 -: ADDITIONS/DISALLOWANCES WHILE COMPLETING THE ASSESSMEN T U/S. 143(3) R.W.S. 153A OF THE ACT : AMOUNT RS. 1. ADDITION ON ACCOUNT OF SUPPRESSION OF RECEIPTS 4,06,373 2. DISALLOWANCE OF AROGYA SREE EXPENDITURE 11,58,999 3. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S. 69 OF THE I.T. ACT 19,72,731 4. DISALLOWANCE OF EXPENDITURE U/S. 40(A)(IA) OF THE I.T. ACT 1,84,490 5. DISALLOWANCE OF EXPENDITURE OWING TO NON-SUBMISSION OF EVIDENCE 20,46,562 4. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT(A) AND MADE SUBMISSIONS RE LATING TO THE ABOVE ADDITIONS/DISALLOWANCES. LD.CIT(A) HAS ALLO WED THE GROUNDS RAISED BY THE ASSESSEE ON ALL THE ADDITIONS AN D DISALLOWANCES EXCEPT GROUND NO. 5 OF DISALLOWANCE U /S. 40(A)(IA) OF THE ACT, IN WHICH HE ENHANCED THE DISALL OWANCES TO THE EXTENT OF RS. 6,85,540/-. 5. AGGRIEVED WITH THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US RAISING SIX GROUNDS, AS PER WHICH THEY OBJECTED THAT LD.CIT(A) HAS ERRED IN DELETING ADDITIONS/DISALLOWANCES BASED ON FRESH EVIDENCES SUB MITTED BY ASSESSEE BEFORE HIM VIOLATING RULE 46A OF THE INCO ME TAX RULES. 6. BASED ON THE GROUNDS OF APPEAL, LD.DR SUBMITTED THAT WITH REGARD TO UNEXPLAINED INVESTMENT, ADDITIONAL EXPENDITURES CLAIMED IN REVISED RETURN OF INCOME AND ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 4 -: DISALLOWANCE U/S. 40(A)(IA) EVEN THOUGH THE PAYMENTS A RE ABOVE THE PRESCRIBED LIMIT, THE LD.CIT(A) HAS MERELY A CCEPTED THE ADDITIONAL EVIDENCE SUBMITTED BY ASSESSEE WITHOUT GI VING PROPER OPPORTUNITY TO AO, HAS ALLOWED THE APPEAL FILED BY ASSESSEE. SHE PRAYED THAT THIS APPEAL SHOULD BE REMITTE D BACK TO THE FILE OF AO FOR FRESH VERIFICATION OF EVIDENCES SUBMITTED BEFORE THE LD.CIT(A). 7. ON THE OTHER HAND, LD.AR SUBMITTED THAT THE EVIDENCES SUBMITTED BEFORE THE LD.CIT(A) ARE NOT FRES H EVIDENCES. ALL THOSE INFORMATION WAS ALREADY SUBMIT TED BEFORE THE LD.AO VIDE LETTER DT. 25-02-2013 WHICH IS PLACED A T PG. 20 TO 22 OF THE PAPER BOOK. IT CLEARLY DEMONSTRATES THAT ASS ESSEE HAS FILED CASH BOOK, LEDGER, BANK STATEMENTS RELEVANT T O SAVING/CURRENT ACCOUNTS, STATEMENT IN RESPECT OF LOANS, STATEMENT IN RESPECT OF CHIT ACCOUNTS ALONG WITH SIX FILES CONTAINING BILLS AND VOUCHERS RELATING TO EXPENDITURE W HICH WAS DULY ACKNOWLEDGED BY THE O/O. AO AND PRAYED THAT THE FINDINGS OF LD.CIT(A) ARE BASED ON THE MATERIAL WHIC H WERE PLACED BEFORE THE AO. THEREFORE, THE ORDER PASSED BY THE APPELLATE AUTHORITY IS PROPER. 8. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. THE BRIEF FACTS RELATING TO GROUND NO.1 RAIS ED BY THE DEPARTMENT RELATING TO UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT ARE THAT THE AO NOTED THAT THE REVISED RETURN OF INCOME FILED BY ASSESSEE IN WHICH THE OPENING WDV OF EQUIP MENT FALLING UNDER THE BLOCK OF ASSETS VIZ., EQUIPMENT & GE NERATOR; WAS INCREASED TO THE EXTENT OF RS. 19,72,731/-. DURING THE ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 5 -: ASSESSMENT PROCEEDINGS, ASSESSEE SUBMITTED THAT THE DIFFERENCE IN OPENING WDV IS DUE TO ADDITIONS MADE TO THE FIXED ASSETS DURING THE AY. 2007-08 AND THE SOURCES F OR THE SAID INVESTMENTS WERE EXPLAINED DURING THE ASSESSMENT PROCEEDINGS OF THE RELEVANT AY. 2007-08. THE SAME WA S NOT ACCEPTED BY THE AO AND MADE THE ADDITIONS OF THE ABOVE DIFFERENCE AS UNEXPLAINED INVESTMENT. BEFORE THE LD .CIT(A), ASSESSEE HAS SUBMITTED THAT INCREASE IN THE HEAD EQUIPM ENT & GENERATOR HAS TAKEN PLACE IN THE AY. 2007-08 AND SU ITABLE EXPLANATION WAS OFFERED DURING THAT YEAR ITSELF. ASSES SEE SUBMITTED THAT SHE HAS NOT CLAIMED ANY DEPRECIATION ON THE SE ADDITIONAL ASSETS AND HENCE THE SAME FIGURE APPEARED A S AN OPENING WDV IN THE SUBSEQUENT ASSESSMENT YEARS. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE, LD.CIT(A) H AS ALLOWED THE GROUND RAISED BY ASSESSEE BY MAKING THE FOLLOWING OBSERVATIONS: 8.3. I HAVE PERUSED THE SUBMISSIONS MADE AND IT IS CLEAR THAT THE INCREASE IN FIXED ASSETS HAS TAKEN PLACE IN THE ASST. YEAR 2007- 08, WHERE THIS MATTER HAS BEEN EXPLAINED IN DETAIL. THE APPELLANT HAS NOT CLAIMED DEPRECIATION ON THESE INCREASED FIXED A SSETS AND HENCE THE SAME FIGURE APPEARED AS INCREASED WDV. REPEATI NG THE ADDITION IN THE SUBSEQUENT ASSESSMENT YEAR ON ACCOUNT OF UNE XPLAINED INVESTMENT IS WITHOUT ANY BASIS IN LAW AND ACCOUNTS AND STANDS DELETED. THE APPELLANTS APPEAL IS ALLOWED. 8.1. AFTER CONSIDERING THE SUBMISSIONS, WHICH ARE P LACED ON RECORD, IN OUR CONSIDERED VIEW, ASSESSEE HAS REV ISED THE OPENING WDV OF THE ASSETS VIZ., EQUIPMENT AND GENERATO R TO THE EXTENT OF RS. 19,72,731/-. IT IS THE DUTY OF ASSESS EE TO EXPLAIN PROPERLY THE DIFFERENCE IN CARRYING FORWARD OF WDV VALUE AS ON 01-04-2008. ASSESSEE HAS REVISED THIS V ALUE ONLY ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 6 -: IN THE REVISED RETURN OF INCOME FILED. IT WAS MEREL Y CLAIMED THAT ASSESSEE HAS NOT CLAIMED ANY DEPRECIATION. HOWEVER , THE EXPLANATION OFFERED FOR THE ABOVE ADDITIONS THAT IT WAS A LREADY EXPLAINED DURING AY. 2007-08, IN WHICH SUCH ADDITION S WERE MADE, IS NOT ENOUGH. IT COULD BE, ASSESSEE MIGHT HAVE PURCHASED THOSE ASSETS BY AVAILING PROPER LOANS FROM FINANCIAL INSTITUTIONS BUT SHE HAD CHOSEN NOT TO CAPITALISE THOSE A SSETS OR SHE HAD CAPITALISED THOSE ASSETS DURING THE AY. 200 7-08 BUT WHY THE OPENING WDV WAS DECLARED AS LESSER VALUE IN THE ORIGINAL RETURN OF INCOME. THESE ARE GENUINE EXPLANA TIONS ASSESSEE HAS TO OFFER BEFORE THE ASSESSING AUTHORITIES . LD.CIT(A) HAS DELETED THE ADDITION MERELY BECAUSE THES E ADDITIONS WERE MADE IN THE SUBSEQUENT ASSESSMENT YEAR, THE SAME CANNOT BE ADDED IN THIS ASSESSMENT YEAR AS UNEXPL AINED INVESTMENT, WHICH IS, ACCORDING TO US NOT PROPER. WHEN ASSESSEE CLAIMS DIFFERENTLY IN THE REVISED RETURN OF I NCOME, IT IS THE DUTY OF ASSESSEE TO EXPLAIN PROPERLY THE SOURCE OF SUCH INVESTMENT. THEREFORE, FOR THE SAKE OF JUSTICE, WE AR E REMITTING BACK THIS ISSUE OF UNEXPLAINED INVESTMENT TO THE FILE O F AO TO VERIFY THE SOURCES OF INVESTMENT WITH A PROPER OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. 9. WITH REGARD TO GROUND NO. 2, DISALLOWANCE OF EXPENDITURE TO THE EXTENT OF RS. 20,46,562/-. THE FACTS ARE THAT AO OBSERVED THAT ASSESSEE HAS INFLATED THE EXPENDITURE UNDER THE HEAD CONSULTATION CHARGES, COST OF MEDICINE AND SA LARIES AGGREGATING TO RS. 20,46,562/- IN THE REVISED RETURN O F INCOME WHEN COMPARED TO THE ORIGINAL RETURN OF INCOME FILED BY ASSESSEE. AO NOTED THAT DURING THE COURSE OF SEARCH A ND ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 7 -: SEIZURE OPERATIONS, TWO DAILY COLLECTION REGISTERS REF LECTING THE UNACCOUNTED RECEIPTS WERE FOUND AND ASSESSEE ALSO ACC EPTED THE UNACCOUNTED RECEIPTS BY WAY OF UNDISCLOSED INCOME IN THE REVISED P&L A/C FILED ALONG WITH REVISED RETURN OF IN COME. HE FURTHER OBSERVED THAT ASSESSEE HAD NEITHER CLAIMED ANY EXPENDITURE RELATING TO THESE ADDITIONAL RECEIPTS NOR AN Y MATERIAL RELATING TO INFLATED EXPENDITURES WERE FOUND D URING THE COURSE OF SEARCH. THEREFORE, THESE ADDITIONAL EXPE NDITURES WERE DISALLOWED BY THE AO. 9.1. THE ASSESSEE SUBMITTED BEFORE THE LD.CIT(A) THAT AO HAS MADE THE FOLLOWING ADDITIONS AS ADDITIONAL EXPE NDITURE: I. CONSULTANCY CHARGES - RS. 10,20,000/- II. COST OF MAINTENANCE - RS. 7,76,562/- III. SALARIES - RS. 2,50,000/- WITH REGARD TO CONSULTANCY CHARGES, ASSESSEE SUBMITTED THAT SHE HAD CLAIMED CONSULTANCY CHARGES IN THE REVISED RE TURN OF INCOME AT RS.12,04,490/- WHICH IS NOTHING BUT ASSESSE E HAS SHOWN RS.1,84,490/- AS CONSULTANCY CHARGES AND RS. 10,20,000/- AS AROYGA SREE DOCTOR CONSULTANCY FEE IN THE P&L A/C WHICH IS FILED ALONG WITH ORIGINAL RETURN OF INCO ME. AS SUCH THERE IS NO ADDITIONAL EXPENDITURE CLAIMED BY ASSESSEE . 9.2. WITH REGARD TO COST OF MEDICINE AND SALARIES, ASSESSEE MAINTAINS BOOKS OF ACCOUNT UNDER MERCANTILE SYSTEM OF ACCOUNTING. A SUM OF RS. 11,79,111/- WHICH IS R ECEIVABLE FROM AROGYA SREE SCHEME AS ON 31-03-2009 WHICH WAS RELATING ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 8 -: TO AY. 2009-10 HAS BEEN ACCOUNTED FOR DURING THE AY. 2 009-10 IN THE ORIGINAL RETURN OF INCOME. ACCORDINGLY, THE ABOVE SUM TOWARDS RECEIPTS FROM AROGYA SREE RECEIPTS HAS BEEN IN CREASED IN THE REVISED P&L A/C AND TO THIS EXTENT, IT HAS BEEN SHOWN AS RECEIVABLE FROM AROGYA SREE RECEIPTS IN THE BALANCE SHEET. SIMILARLY, CERTAIN PURCHASES VALUED AT RS. 7,76,562/- MADE DURING THE AY. 2009-10 WHICH ARE OUTSTANDING AS ON 31 -03- 2009 AND SALARIES OF RS. 2,50,000/- WHICH HAS NOT BE EN ACCOUNTED FOR IN THE ORIGINAL RETURN OF INCOME. SINCE THE RECEIPTS WHICH ARE RECEIVABLE AS ON 31-03-2009 ACCOU NTED FOR, SIMILARLY THE ABOVE EXPENDITURES RELATING TO AY. 2009- 10 FOR WHICH PAYMENTS ARE OUTSTANDING HAVE ALSO BEEN ACCOUNTED FOR IN THE REVISED RETURN OF INCOME WHICH ARE REFLECTED UNDER THE HEAD SUNDRY CREDITORS AND SALARIES PAYABLE. ACCORDI NGLY, ASSESSEE HAS FILED COPIES OF LEDGER EXTRACTS OF COST O F MEDICINES AND SALARIES ALONG WITH ACCOUNT COPIES OBTAINED FROM SUPPLIERS, SHOWN UNDER THE HEAD SUNDRY CREDITORS WERE SUBMITTED. 9.3. BASED ON THE ABOVE SUBMISSION, LD.CIT(A) ACCEP TED THE CONTENTION OF ASSESSEE AND ACCORDINGLY, GROUND RAI SED WAS ALLOWED. 9.4. CONSIDERED THE RIVAL CONTENTIONS AND MATERIAL ON RECORD. WE OBSERVE THAT AO HAS MADE THE THREE ADDITIONS RELATING TO CONSULTANCY CHARGES, COST OF MEDICINES AN D SALARIES. WITH REGARD TO CONSULTANCY CHARGES, ASSESSEE HAS BROUG HT ON RECORD THE DETAILS OF EXPENDITURE RELATING TO CONSULTANC Y CHARGES AND THE DIFFERENCES IN THE RELEVANT P&L STATEME NT ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 9 -: ITSELF. AS SUCH, THERE IS NO ADDITIONAL EVIDENCE SUB MITTED BEFORE THE LD.CIT(A). THEREFORE, WE UPHOLD THE FINDI NGS OF LD.CIT(A) WITH REGARD TO CONSULTANCY CHARGES. 9.5. COMING TO COST OF MAINTENANCE AND SALARIES, ASSESSEE HAS RECOGNIZED THE PENDING RECEIPTS FROM ARO GYA SREE SCHEME AT THE SAME TIME RECORDED THE RELEVANT EXPENDITUR E ONLY IN THE REVISED RETURN OF INCOME FILED. ASSESSEE HAS SUBMITTED RELEVANT INFORMATION ALONG WITH CONFIRMATION OF BALANCE RECEIVED FROM SUPPLIERS BEFORE THE LD.CIT(A) . THIS BALANCE CONFIRMATION AND RELEVANT VOUCHERS FOR PURCHA SE OF MEDICINE AND SALARIES DUE WERE NOT SUBMITTED BEFORE TH E AO. IN OUR CONSIDERED VIEW, THIS NEEDS VERIFICATION AS TH E SAME WAS NOT SUBMITTED BEFORE THE AO. SALARY PAYABLE AND SUPPLI ER CONFIRMATION ARE REMITTED BACK TO THE FILE OF AO FOR VER IFICATION. NEEDLESS TO SAY THAT ASSESSEE MAY BE GIVEN PROPER OPP ORTUNITY OF BEING HEARD. GROUND NO. 2 IS ALLOWED FOR STATISTICA L PURPOSES. 10. GROUND NO. 3 IS WITH REGARD TO CLAIM OF INFLATED EXPENDITURE RELATING TO CHIT DISCOUNT, BANK INTEREST AND X -RAY EXPENSES TO THE EXTENT OF RS. 11,58,999/-. THE FACTS R ELEVANT TO THE ABOVE GROUND ARE, AO OBSERVED THAT ASSESSEE HAS INFLATED THE EXPENDITURE AGAINST AROGYA SREE RECEIPTS I N REVISED RETURN OF INCOME BY DEBITING ADDITIONAL EXPENDITURE TO TH E EXTENT OF RS. 11,58,999/- UNDER THE HEAD CHIT DISCOUN T, INTEREST TO BANK AND X-RAY EXPENSES. ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 10 -: 10.1. ON THE OTHER HAND, IN THE APPELLATE PROCEEDINGS , ASSESSEE SUBMITTED THAT IN THE ORIGINAL RETURN OF INCOME, ASSESSEE HAS REFLECTED THE AROGYA SREE RECEIPTS AS UN DER: PARTICULARS DEBIT CREDIT AR OGYASREE COLLECTIONS 71,47,271 BANK INTEREST 7,45,910 CHIT DISCOUNT 3,23,726 X RAY EXPENSES 89,363 TOTAL 11,58,999 71,47,271 NET TOTAL 59,88,272 ASSESSEE SUBMITTED THAT ASSESSEE HAS DECLARED AROGYA SR EE RECEIPTS OF RS. 59,88,272/- IN THE P&L A/C FILED ALON G WITH ORIGINAL RETURN OF INCOME. ASSESSEE HAS FILED LEDGE R EXTRACTS OF THE ABOVE RECEIPTS WHICH WAS MAINTAINED IN THE PACKAGE TALLEY. HOWEVER, WHILE FILING REVISED RETURN OF IN COME, ASSESSEE HAS REFLECTED AROGYA SREE COLLECTIONS ON THE GROSS B ASIS AND CLAIMED THE RELEVANT EXPENDITURE IN THE P&L A/C. IN SU PPORT OF THE ABOVE CLAIM, ASSESSEE HAS FILED LEDGER EXTRACTS OF INTEREST TO BANK, CHIT DISCOUNT AND X-RAY EXPENSES IN THE P&L A /C ALONG WITH COPIES OF STATEMENT RELATING TO 27 LOAN ACCO UNTS. BASED ON THE ABOVE SUBMISSIONS, LD.CIT(A) ACCEPTED THE CONTENTIONS OF ASSESSEE AND ALLOWED THE GROUNDS RAISED BY ASSESSEE. 10.2. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. WE HAVE NOTICED THAT ASSESSEE HAS DISCLOSED AROGYA SREE RECEIPTS IN THE ORIGINAL RETURN OF INCOME AFTER ADJUSTING THE EXPENDITURES. ACCORDING TO ASSESSEE, IT IS RELEVAN T TO THAT PARTICULAR SOURCE OF INCOME. WHEREAS AT THE TIME OF FIL ING ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 11 -: REVISED RETURN OF INCOME, IT HAS PROPERLY DISCLOSED T HE TOTAL RECEIPTS FROM AROGYA SREE AND DECLARED THE ABOVE SAID EXPENDITURE IN THE P&L A/C AS EXPENDITURE. FURTHER, R ELEVANT INFORMATION WAS SUBMITTED BEFORE AO ON 25-02-2013 WHI CH WAS ALSO ACKNOWLEDGED BY THE AO. THEREFORE, IT IS NOT AN ADDITIONAL EVIDENCE, IT IS ONLY A BOOK ADJUSTMENT WHIC H IS ALREADY IN THE FILE OF AO. THEREFORE WE ARE IN AGR EEMENT WITH THE FINDINGS OF LD.CIT(A). MOREOVER, THE PROCEEDINGS BEFORE LD.CIT(A) ARE NOTHING BUT EXTENSION OF ASSESSMENT PROCEEDINGS. ACCORDINGLY, GROUND RAISED BY REVENUE IS DISMISSED. 11. WITH REGARD TO GROUND NO. 4, THE RELEVANT FACTS ARE THAT AO NOTICED THAT ASSESSEE HAS ADMITTED CONSULTANCY CHARGES TO DOCTORS UNDER THE HEAD CONSULTANCY CHARGES TO THE EXTENT OF RS. 12,04,490/- IN THE REVISED RETURN OF INC OME, WHEREAS IN THE ORIGINAL RETURN OF INCOME, THE SAME EXP ENDITURE WAS CLAIMED AT RS. 10,20,000/-. WHEN ASKED FOR THE DE TAILS, ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE SAME . IN THE ABSENCE OF SUCH DELETION, AO ADDED BACK THE DIFFEREN CE OF RS. 1,84,490/- U/S. 40(A)(IA) OF THE ACT DUE TO NON-DEDU CTION OF TDS. 11.1. DURING THE COURSE OF APPELLATE PROCEEDINGS, ASSESSEE SUBMITTED THAT ALL THE OUTSTANDING EXPENDITURE RELATING TO CONSULTANCY CHARGES WERE ALREADY PAID AN D THERE IS NO OUTSTANDING AT THE YEAR-END BY RELYING ON THE SPECIAL BENCH DECISION OF ITAT IN THE CASE OF MERILYN SHIPPING AND TRANSPORT LTD., VS. ACIT [136 ITD 23] (SB) [16 ITR 1] ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 12 -: (SB)(VISAKHA.)(TRIB.). DURING THE APPELLATE PROCEEDI NGS, LD.CIT(A) OBSERVED THAT SPECIAL BENCH DECISION IN TH E CASE OF MERILYN SHIPPING AND TRANSPORT LTD., VS. ACIT (SUPRA) IS STAYED BY THE HON'BLE HIGH COURT OF AP. FURTHER, HE OBS ERVED THAT AO HAS RESTRICTED THE DISALLOWANCE TO RS. 1,84,490/- ON THE GROUND THAT BALANCE AMOUNT OF RS. 10,20,000/- WAS ADDED BACK ON THE GROUND OF INFLATION OF EXPENDITURE AND TO AVOID REPETITIVE DISALLOWANCES OF THE SAME AMOUNT, IT WAS RESTR ICTED TO RS. 1,84,490/- UNDER THE PROVISIONS OF SECTION 40(A )(IA). SINCE LD.CIT(A) ALLOWED THE EXPENDITURE OF RS. 10,20, 000/-, IT BECOMES NECESSARY THAT THE TDS PROVISIONS ARE ATTRACTED TO THE TOTAL VALUE OF RS. 12,04,490/-. HOWEVER, HE NOTICED T HAT RS. 1,43,950/- DO NOT ATTRACT TDS SINCE PAYMENT TO EACH DOCTO R IS BELOW RS. 20,000/- AND FURTHER, AN AMOUNT OF RS. 3,75 ,000/- WAS PAID TO SHRI V. RAJENDRA, LEGAL HEIR OF SMT. YAS ODAMMA, DECEASED PATIENT UNDER AROGYA SREE SCHEME FOR THE COMPENSATION, THE TDS PROVISION WILL NOT BE ATTRACTED; ACCORDINGLY, HE ALLOWED TO THE EXTENT OF EXEMPTION. TH EREFORE, LD.CIT(A) HAS ENHANCED THE DISALLOWANCE TO THE EXTENT OF RS. 6,85,540/-. 11.2. CONSIDERED THE RIVAL CONTENTIONS AND MATERIAL ON RECORD. WE NOTICED THAT ASSESSEE HAS FILED EVIDENCES TO CLAIM THAT IT HAS PAID PAYMENT TO DOCTORS BELOW RS. 20,000/- A ND CLAIM UNDER AROGYA SREE SCHEME BEFORE CIT(A). THIS INFORMATION WAS NOT SUBMITTED BEFORE THE AO. WE NOTICED THAT THIS INFORMATION NEEDS NO FURTHER VERIFICATION. THESE ARE HANDFUL VOUCHERS WHICH WERE SUBMITTED BEFORE LD.CIT( A) WHICH HE HAS VERIFIED AND AGREED. NO NEED OF ANY FURTHER I NVESTIGATION ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 13 -: OR VERIFICATION. ACCORDINGLY, GROUND RAISED BY REVEN UE IS DISMISSED. 12. FURTHER, WE NOTICED THAT ASSESSEE HAS FILED CROSS- OBJECTIONS RELYING ON THE DECISION OF MERILYN SHIPPIN G AND TRANSPORT LTD., VS. ACIT (SUPRA). FOLLOWING THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF PALAM GAS SERVIC E VS. CI T [394 ITR 300] (SC) [CIVIL APPEAL NO. 5512 OF 2017 DT. 03-05-2017], THE ISSUE OF PAID PAYABLE IS A LREADY ADDRESSED AND THE ABOVE SAID DECISION OF SPECIAL BEN CH IN THE CASE OF MERILYN SHIPPING AND TRANSPORT LTD., VS. ACIT (SUPRA) IS NOT RELEVANT. ACCORDINGLY, THE CROSS-OBJECTION FILED BY ASSESSEE VIDE C.O. NO. 33/HYD/2015 IS DISMISSED. ITA NO. 372/HYD/2014 (AY. 2010-11): 13. THE FACTS RELATING TO THIS APPEAL ARE, AO HAS COMPLETED THE ASSESSMENT U/S. 143(3) R.W.S. 153A OF TH E ACT BY MAKING THE FOLLOWING ADDITIONS: AMOUNT RS. 1. ADDITION ON ACCOUNT OF SUPPRESSION OF RECEIPTS 12,88,135 2. DISALLOWANCE OF AROGYA SREE EXPENDITURE 43,44,834 3. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S. 69 OF THE I.T. ACT 21,63,675 4. DISALLOWANCE OF DEPRECIATION 1, 91 , 89 4 5. DISALLOWANCE OF CASH PAYMENTS U/S. 40A(3) 1,15,600 6. DISALLOWANCE OF EXPENDITURE U/S. 40(A)(IA) OF THE I.T. ACT 23,71,600 7. DISALLOWANCE OF EXPENDITURE OWING TO NON-SUBMISSION OF EVIDENCE 9,15,929 ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 14 -: 13.1. OUT OF THE ABOVE DISALLOWANCES, ALL THE DISALLOWANCES EXCEPT DISALLOWANCE OF DEPRECIATION IS A NEW ISSUE. ALL THE OTHER ARE SIMILAR TO THE FACTS WHICH WERE ADJUDICATED IN THE EARLIER APPEAL I.E., ITA NO. 371/ HYD/2014 (2009-10) HEREIN ABOVE. THE CONCLUSIONS DRAWN IN T HE ABOVE ORDER ARE EQUALLY APPLICATION TO THE FACTS OF THIS APP EAL ALSO. THEREFORE, GROUND RAISED BY THE DEPARTMENT IS ACCORDIN GLY DISPOSED OF. 14. WITH REGARD TO GROUND NO. 4, RELATING TO DISALLOWANCE OF DEPRECIATION, THE FACTS RELATING TO THIS GROUND ARE THAT AO NOTICED THAT ASSESSEE HAS CLAIMED EXCESS DEPRECIATION UNDER THE HEAD EQUIPMENT AND ADDITION TO EQUIPMENT. SUCH EXCESS DEPRECIATION CLAIMED OF RS. 1,91,894/- WERE DISALLOWED. 14.1. AGGRIEVED WITH THE ABOVE DISALLOWANCE, ASSESSE E FILED AN APPEAL BEFORE THE CIT(A) AND CIT(A) AFTER CO NSIDERING THE SUBMISSIONS OF ASSESSEE AND DEPRECIATION SCHEDULE , FILED BEFORE HIM, FOUND THAT THE ACTUAL CLAIM OF DEPRECIATION IS WHAT WAS CLAIMED IN THEIR ORIGINAL RETURN OF INCOME AND THE RE IS NO ADDITIONAL CLAIM OF DEPRECIATION IN THE REVISED RETURN. THE SAME WAS ACCORDINGLY DELETED. AGGRIEVED WITH THE ABOVE OR DER, REVENUE IS IN APPEAL BEFORE US. 14.2. IN THIS REGARD, LD.AR BROUGHT TO OUR NOTICE THE DEPRECIATION SCHEDULE IN WHICH ASSESSEE HAS CLAIMED DEPRECIATION TO THE EXTENT OF RS. 22,11,862/- WHICH IS PLACED AT PG. 18 OF THE PAPER BOOK. EVEN IN REVISED RETURN OF INCOME, ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 15 -: ASSESSEE HAS CLAIMED ONLY DEPRECIATION TO THE EXTENT O F RS. 22,11,862/-. THE RELEVANT RETURN IS PLACED ON RECORD AT PAGES 165 TO 170 OF PAPER BOOK. 14.3. CONSIDERED THE ABOVE SUBMISSIONS. WE FOUND TH AT THE CLAIM OF ASSESSEE IS PROPER. THE CLAIM MADE BY A SSESSEE IN RETURN OF INCOME IS RELEVANT AND NOT THE CALCULATION AS PER THE DEPRECIATION SCHEDULE, WHICH MAY BE FILED BY THE ASSE SSEE BEFORE THE AO. WE FIND THAT THE ASSESSEE HAS CLAIMED VALID DEPRECIATION IN THE RETURN OF INCOME AS PER DEPRECIATI ON SCHEDULE. THEREFORE, GROUND RAISED BY REVENUE IS DI SMISSED. IN THE RESULT, APPEAL OF REVENUE IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. ACCORDINGLY, THE CROSS-OBJECTION FILED BY A SSESSEE VIDE C.O. NO. 34/HYD/2015 IS DISMISSED. 15. TO SUM-UP BOTH THE APPEALS OF REVENUE ARE PARTL Y ALLOWED FOR STATISTICAL PURPOSES AND BOTH THE CROSS-OBJ ECTIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2018 SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHMA N) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 21 ST MARCH, 2018 TNMM ITA NOS. 371 & 372/HYD/14 CO NOS. 33 & 34/HYD/15 :- 16 -: COPY TO : 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-(1) , TIRUPATI. 2. DR. R. SUDHA RANI, SAI SUDHA HOSPITALS, 513C, RE DDY & REDDY COLONY, TIRUPATI. 3. CIT(APPEALS)-GUNTUR. 4. CIT-TIRUPATI. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.