M/s M/s Tibetan Herbal Clinic, Kangra V. ACIT, Palampur

CO 45/CHANDI/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9926 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R R THAKUR
• Assessee Lawyers: MANJIT SINGH
• Keywords: Business income; Rule of consistency; Source of fund
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 1029/CHD/2012 ASSESSMENT YEAR: 2009-10 THE ACIT, VS M/S TIBETAN HERBAL CLINIC, CIRCLE, VPO MCLEODGANJ, PALAMPUR. DHARAMSHALA, DISTT. KANGRA (HP), KANGRA. PAN: AABFT4798H & C.O. 45/CHD/2012 ITA NO. 1029/CHD/2012 ASSESSMENT YEAR: 2009-10 M/S TIBETAN HERBAL CLINIC, VS THE ACIT, VPO MCLEODGANJ, CIRCLE, DHARAMSHALA, PALAMPUR. DISTT. KANGRA (HP), KANGRA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI R.R. THAKUR DATE OF HEARING : 25.11.2014 DATE OF PRONOUNCEMENT : 27.11.2014 O R D E R PER BHAVNESH SAINI,JM THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT( APPEALS) SHIMLA DATED 20.07.2012 FOR ASSESSMENT YEAR 2009-10 . 2. THE LD. COUNSEL FOR THE ASSESSEE SEEKS PERMISSIO N TO WITHDRAW THE CROSS OBJECTION AND MADE ENDORSEMENT T O THE SAME EFFECT. THE CROSS OBJECTION OF THE ASSESSEE I S DISMISSED 2 AS WITHDRAWN PARTICULARLY WHEN NO SEPARATE RELIEF I S CLAIMED IN THE CROSS OBJECTION. 3. WE HAVE HEARD REPRESENTATIVES OF BOTH THE PARTIE S AND PERUSED THE FINDINGS OF AUTHORITIES BELOW. THE DEP ARTMENTAL APPEAL IS DECIDED AS UNDER. 4. THE GROUND NO. 1 OF THE DEPARTMENTAL APPEAL READ S AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 35,93,872/- MADE BY THE A.O. EVEN THROUGH THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS COMPLETELY I NSPITE OF BEING GIVEN REPEATED OPPORTUNITIES AND HAS FAILED TO ES TABLISH THAT THE RECEIPTS OF 'USA CLINIC' ARE FROM BUSINESS INCO ME AND NOT FROM DONATIONS OF ANY TYPE. ALSO THE PRINCIPLE OF' STOPPEL OR RES JUDICATA' HAS HELD TO BE INAPPLICABLE IN INCOME TAX MATTERS BY THE SUPREME COURT IN INSTALLMENT SUPPLY (P VT) LTD, VS UNION OF INDIA, AND IN RADHOSOAMI SATSANG VYAS VS CIT AND BY BOMBAY HIGH COURT IN H.A. SHAH AND CO. VS CIT, ETC. 5. BRIEFLY THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE FIRM CONSISTS OF TWO TIBETAN DOCTORS AS PARTNERS, NAMELY DR. YASHI DHANDON AND DR. LOBSANG TENZIN. THE TWO PARTNERS DI AGNOSE PATIENTS AND PRESCRIBE THE SELF-MANUFACTURED TIBETA N HERBAL MEDICINES IN THEIR CLINIC AT MECLEODGANJ, DHARAMSAL A. APART FROM THIS THE ASSESSEE IS ALSO RUNNING A HOTEL AT M ECLEODGANJ. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER DOUBTED THE GENUINENESS OF THE ASSESSEE'S C LAIM REGARDING THE RECEIPT OF INCOME IN THE FORM OF FORE IGN CURRENCY TO BE ON ACCOUNT OF CLINIC RECEIPTS AND HELD THAT T HE ASSESSEE HAD NOT BEEN ABLE TO ESTABLISH THAT THE MEDICINES W ERE ACTUALLY SENT TO THE USA BY THE TWO DOCTORS AGAINST WHICH TH E PAYMENTS WERE RECEIVED FROM THE FOREIGN PATIENTS. THEREFORE THE ASSESSING 3 OFFICER TREATED THE CLINIC RECEIPTS OF RS.35,93,872 /- AS INCOME FROM OTHER SOURCES AND DISALLOWED THE ENTIRE EXPENS ES DEBITED IN THE P & L A/C OF CLINIC RECEIPTS. 6. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD . CIT(APPEALS) AND IT WAS SUBMITTED THAT THE ID. A.O. HAD GROSSLY ERRED IN CHANGING THE NATURE OF INCOME FROM THE LON G ESTABLISHED AND ACCEPTED 'INCOME FROM BUSINESS OR P ROFESSION' TO 'INCOME FROM OTHER SOURCES'. IT WAS ARGUED THAT THE SOURCE OF INCOME WAS CHANGED MERELY ON SURMISES AND PURELY ON GUESS WORK, EVEN THOUGH THE ACCOUNT BOOKS, PATIENT REGIST ER, DISPATCH REGISTER AND RELEVANT BANK ACCOUNTS WERE A CCEPTED IN TOTO BY THE ID. A.O. IT WAS VEHEMENTLY ARGUED THAT THE ACCOUNTS OF THE ASSESSEE WERE CONSOLIDATED FOR THE VARIOUS B USINESS ACTIVITIES AND THAT THE TENTATIVE ACCOUNT STATEMENT S SUBMITTED AT THE DIRECTIONS OF THE ID. A.O. COULD NOT BE MADE THE BASIS FOR FRAMING THE ASSESSMENT. IT WAS CONTENDED THAT THE I D. A.O. WAS NOT JUSTIFIED IN HOLDING THAT NO PROOF OF SENDING M EDICINES ABROAD WAS SUBMITTED WITHOUT REJECTING THE DISPATCH REGISTER AND THE DETAILED DATE-WISE LISTS OF DISPATCH. IT WA S REPEATEDLY ARGUED THAT THE APPELLANT FIRM HAS BEEN FUNCTIONING SINCE 1/4/1981 AND BOTH THE DOCTORS(PARTNERS) ARE REGISTE RED UNDER THE CENTRAL COUNCIL OF TIBETAN MEDICINE AND ARE PHY SICIANS TO HH DALAI LAMA. IT WAS EXPLAINED THAT THE PATIENTS V ISITING THEIR PLACE ARE INDIAN AS WELL AS FOREIGNERS, MOSTLY FROM USA, AND EVERY PATIENT IS DIAGNOSED AT THEIR CLINIC AT MECLO EODGANJ ONLY FOR THE REASON THAT ALL THE REQUIRED FACILITIES FOR DIAGNOSIS ARE AVAILABLE AT THEIR CLINIC ONLY. THE PRESCRIPTION OF MEDICINES IS DONE ACCORDING TO A TIME-BOUND COURSE, AND THE PATI ENTS FROM 4 ABROAD GETTING RELIEF MAKE FURTHER REQUEST FOR THE SAME MEDICINES FOR FURTHER COURSE. THE SAID MEDICINES AR E DISPATCHED TO THE PATIENTS BY REGISTERED PARCEL AND THE COST OF THE MEDICINES ALONGWITH THE PROFESSIONAL CHARGES AN D POSTAL CHARGES IS RECEIVED THROUGH BANK CHEQUES. IT WAS EX PLAINED THAT THE ASSESSEE IS MAINTAINING THE PATIENT REGIST ER MENTIONING THE NAME OF EACH AND EVERY PATENT, HIS / HER DIAGNOSIS, THE MEDICINE PRESCRIBED AND THE AMOUNT C HARGED. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IS NOT HAVI NG ANY CLINIC IN THE USA, NOT DO THE TWO DOCTORS CARRY ANY MEDICINES DURING THEIR VISIT TO USA. BUT THEIR ALREADY DIAGNO SED PATIENTS DO MEET THEM THERE FOR THE REVIEW OF THEIR CASES. H OWEVER, NO FRESH PATIENTS ARE DIAGNOSED IN USA DURING THE DOCT ORS VISIT THERE. IT WAS AGITATED THAT THE ASSESSEE IS NOT CO VERED UNDER THE PROVISIONS OF FDA AND THAT THE LD. ASSESSING OF FICER HAS MISCONCEIVED THE WHOLE ISSUE. 7. THE LD. CIT(APPEALS) CONSIDERING THE MATERIA L ON RECORD, DELETED THE ADDITION OF RS. 35,93,872/- AND ALLOWED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 3.3 AND 3.4 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 3.3 THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDE RED WITH REFERENCE TO THE FACTS OF THE CASE, THE RELEVANT AS SESSMENT RECORDS, THE BOOKS OF ACCOUNT AND RELATED DOCUMENTS PRODUCED IN ORIGINAL ALONGWITH THE BANK PAPERS AND BANK PASS B OOKS DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS NOT ED THAT THE ASSESSEE FIRM CAME INTO EXISTENCE W.E.F. 1/4/1981 AN D HAS BEEN MAINTAINING BOOKS OF ACCOUNT EVER SINCE THEN. IT HA S BEEN HAVING THE SAME BUSINESS AND MAINTAINING THE SAME METHOD O F ACCOUNTING FOR THESE YEARS. THE LAST ASSESSMENT OF THE ASSESSEE U/S 143(3) WAS 5 MADE FOR THE A. Y. 2005-06 BY THE ADDL. CIT, PALAMP UR RANGE VIDE HIS ORDER DATED 13/12/2007 ACCEPTING THE CLINIC REC EIPTS AS INCOME FROM BUSINESS OR PROFESSION. A PERUSAL OF THE AUDITE D BALANCE SHEETS, TRADING AND PROFIT AND LOSS ACCOUNTS OF THE ASSESSEE FOR VARIOUS YEARS REVEALS THAT IT HAS BEEN MAINTAINING TH E CONSOLIDATED ACCOUNT FOR ALL ITS RECEIPTS FROM VARIOUS SOURCES AND ALSO FOR ALL THE EXPENSES INCURRED. A PERUSAL OF THE PATIENT REGISTE R REVEALS THAT COMPLETE DETAILS REGARDING THE PATIENTS ARE RECORDED THEREIN AS MENTIONED IN PARAGRAPH 3.2 ABOVE. LIKEWISE, THE DISPATC H REGISTER PRODUCED BY THE APPELLANT DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS SHOWS DATE- WISE ENTRY GIVING THE RECEIPT NO. ISSUED BY THE POST O FFICE MECLOEODGANJ, ALONGWITH THE AMOUNT OF POSTAGE CHAR GED FOR EACH DISPATCH. IT IS UNDERSTANDABLE THAT THE APPELLAN T MADE ALL THE ENTRIES REGARDING THE RECEIPT NUMBERS ALONGWITH THE DATE OF DISPATCH IN ITS DISPATCH REGISTER AND DISPENSED WIT H THE INDIVIDUAL RECEIPTS. IT IS NOT UNDERSTOOD AS TO HOW THE ID. A. O. HAS COMPLETELY DISMISSED THE OVERWHELMING EVIDENCE SUBMITTED BY THE ASSESSEE WITH THE REMARKS THAT NO EVIDENCE REGARDING THE DISP ATCH OF MEDICINES WAS SUBMITTED BY THE ASSESSEE. THE ID. A.O. HA S NOT CARED TO CONDUCT EVEN A SINGLE ENQUIRY FROM THE CON CERNED POST OFFICE REGARDING THE LARGE NUMBER OF DISPATCHES REGULARLY MA DE BY THE ASSESSEE FROM THE SAID POST OFFICE. FURTHER, EACH AN D EVERY RECEIPT ON ACCOUNT OF MEDICINE AND PROFESSIONAL CHARGES FRO M ABROAD IS THROUGH CHEQUES WHICH HAVE BEEN DULY DEPOSITED IN ACCOUNT NO. 10219821244 OF THE ASSESSEE WITH THE S B. THE PHOTO- COPIES OF ALL THE CHEQUES THUS RECEIVED HAVE ALSO BEE N METICULOUSLY MAINTAINED BY THE ASSESSEE. EACH AND EVE RY ENTRY OF RECEIPT CAN BE EASILY CO-RELATED TO THE DETAILS GIVEN IN THE PATIENT REGISTER AND IN THE CASH BOOK. THERE IS ALSO FOUND FORCE IN THE APPELLANT'S SUBMISSION THAT THEY HAVE A WELL ESTABLI SHED CLINIC AT MECLOEODGANJ WHICH IS EQUIPPED WITH THE FACILITY FOR DIAGNOSIS AND IT IS HERE THAT THE FOREIGN PATIENTS ARE DIAGNOSED INITIALL Y. ONLY THE REVIEW OF THE CASES OF THE SAME PATIENTS IS CARRIED OUT BY THE DOCTOR PARTNERS DURING THEIR VISIT TO THE USA, AND NO REGIS TRATION OF ANY NEW PATIENT IS DONE THERE. IT IS NORMAL FOR THE PATIENT S TO CONTINUE WITH THEIR TREATMENT OVER A PERIOD OF TIME AND TO KEEP GE TTING THE 6 MEDICINES THROUGH POST. THERE IS NOTHING UNUSUAL AB OUT THIS PRACTICE. THE ID. A.O'S ARGUMENT THAT THE FDA DOES N OT APPROVE THE PRESCRIPTION OF ANY ETHNIC MEDICINES DOES NOT APPEA R TO BE HAVING A DIRECT BEARING ON THE CASE OF THE ASSESSEE AS FAR A S THE ASSESSMENT OF ITS INCOME IS CONCERNED. IF AT ALL THE MEDICINES AR E BEING SENT TO USA IN CONTRAVENTION OF ANY PROVISION OF THE LAW OF THAT COUNTRY, THE ACTION CAN BE TAKEN ONLY UNDER THAT LAW BY THE AUTHOR ITIES CONCERNED. THE ID. A.O. HAS NOT MADE ANY EFFORTS WHATSOEVER TO ESTABLISH THAT THE PATIENTS MENTIONED IN THE PAT IENT REGISTER WERE NOT GENUINE, OR THAT THE DISPATCH OF MEDICINES TO T HEM WAS NOT ACTUALLY MADE, OR THAT THE RECEIPT FROM THEM WAS EITH ER NOT GENUINE OR WAS ON SOME OTHER ACCOUNT. THUS THE ID. A.O. HAS ACT UALLY PROCEEDED MERELY ON SURMISES AND CONJECTURES DESPITE ADMITTING ON PAGE 3 PARA 4(III) OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAD SUBMITTED COMPLETE EVIDENCE REGARDING THE FOREIGN R ECEIPTS AND REGARDING THE PARTICULARS OF THE AMERICAN CITIZENS F ROM WHOM THE PROFESSIONAL FEE WAS CHARGED. THE FINDING GIVEN BY T HE ID. A.O. THAT A FEW NAMES WERE NOT RECORDED IN THE REGISTER IS NOT FOUND TO BE FACTUALLY CORRECT, AND THE ID. A. 0. HAS ALSO NOT GIV EN ANY SPECIFIC DETAILS IN THIS REGARD. SIMILARLY, AS ALREADY M ENTIONED, THE ID. A.O. HAS ALSO COMPLETELY IGNORED THE COMPLETE R ECORD OF DISPATCH THROUGH REGISTERED POST SUBMITTED BY THE AS SESSEE. IT WAS CLEARLY EXPLAINED BY THE ASSESSEE TO THE ASSESSING O FFICER THAT THEY WERE NOT MAINTAINING ANY CLINIC IN THE USA AND THAT THEY WERE MEETING THEIR PATIENTS AT THE RESIDENCE OF A FRIEND WHOSE COMPLETE ADDRESS WAS DULY FURNISHED. WITHOUT CARING TO CONDUC T ANY ENQUIRY TO CROSS CHECK THE CLAIM OF THE ASSESSEE IN THIS REGARD, THE ID. A.O. HAS GIVEN A VAGUE FINDING 'CAN THE DOCTORS PRACTICE ON THEIR PREMISES OF THE FAMILY FRIEND? THE ASSESSEE IS ALSO SILENT ON THE NATURE OF THE PREMISES'. THUS THE ID. A.O. IS NOT JUSTIF IED IN CONCLUDING THAT 'THE ASSESSEE COULD NOT ESTABLISH THE EXISTENCE OF USA CLINIC'. ONCE THE ASSESSEE HAS FURNISHED THE NA ME OF THE FAMILY FRIEND OF THE DOCTOR PARTNERS AND HIS COMPLE TE ADDRESS, IT WAS FOR THE ID. A.O. TO PROVE THAT THE PARTICULARS GIVEN WERE NOT CORRECT. 3.4 IN VIEW OF THE DISCUSSION ABOVE AND AFTER CONSI DERING THE COMPLETE DOCUMENTARY EVIDENCE BEFORE THE ID. A.O., IT I S HELD THAT THE ID. A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO P ROVE THAT ANY 7 OF THE CLAIM MADE BY THE ASSESSEE REGARDING THE RECEIPT OF PROFESSIONAL CHARGES FROM THEIR PATIENTS IN USA WAS FALSE. THE ID. A.O. HAS ALSO NOT FOUND ANY DEFECT WITH THE AUDITED AC COUNTS AND OTHER RELATED DOCUMENTS PRODUCED BY THE ASSESSEE. TH E ID. A.O. HAS SUMMARILY DISALLOWED ALL THE EXPENSES INCLUDING THE INTEREST ON CAPITAL TO THE PARTNERS AND THE REMUNERATION/SALARY PAID TO THE WORKING PARTNERS WITH OUT EVEN TAKING INTO CONSIDERAT ION THE FACT THAT THE ASSESSEE FIRM HAS RETURNED INCOME FROM OTHER SO URCES ALSO, SUCH AS PROFESSIONAL RECEIPTS FROM DOMESTIC PATIENTS , HOTEL BUSINESS, BANK INTEREST ETC. WHILE DOING SO, THE ID . A.O. HAS NOT PAID ANY ATTENTION TO THE LEGAL PROVISIONS OF THE ACT, T O THE LONG HISTORY OF THE ASSESSEE'S CASE AND TO THE MASSIVE RECORD MAINTA INED BY THE ASSESSEE. THEREFORE THE ADDITION MADE BY THE ID. A.O. TR EATING THE PROFESSIONAL RECEIPTS AS INCOME FROM OTHER SOURCES A ND BY DENYING ALL THE VALID EXPENSES IS NOT FOUND TO BE SUSTAINABL E AND IS DIRECTED TO BE DELETED. 8. AFTER GOING THROUGH THE RIVAL SUBMISSIONS OF BOTH THE PARTIES, WE DO NOT FIND ANY MERIT IN THE DEPARTMENT AL APPEAL ON THIS GROUND. 9. THE LD. DR RELIED UPON ORDER OF THE ASSESS ING OFFICER AND ALSO SUBMITTED THAT THE RULE OF ESTOPPEL OR RES JUD ICATA DO NOT APPLY TO THE INCOME TAX PROCEEDINGS. 10. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND F ILED THE COPIES OF VARIOUS ASSESSMENT ORDERS PASSED BY THE A SSESSING OFFICER UNDER SECTION 143(3) OF THE ACT FOR VARIOUS ASSESSMENT YEARS TO SHOW THAT IN EARLIER AS WELL AS IN SUBSEQU ENT ASSESSMENT YEARS, THE ASSESSING OFFICER ACCEPTED TH E CONTENTION OF THE ASSESSEE AND HELD THE CLINIC RECE IPTS AS BUSINESS INCOME OF THE ASSESSEE. THEREFORE, DEPART MENTAL 8 APPEAL WOULD NOT HAVE ANY MERIT. HE HAS ALSO PRODU CED THE RECEIPT & DISPATCH REGISTER FOR PERUSAL. 10.1 WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE SOLE DISPUTE IS WHETHER TOTAL INCOME DECLARED BY THE ASSESSEE FI RM WAS BUSINESS INCOME OR INCOME FROM OTHER SOURCES AND WH ETHER DISALLOWANCE OF THE EXPENDITURE IS JUSTIFIED. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT RIGHT FROM BEGINNING, T HE INCOME OF THE ASSESSEE WAS ACCEPTED BY THE REVENUE DEPARTM ENT AS BUSINESS INCOME AND NO DEFECTS IN THE BOOKS OF ACCO UNT MAINTAINED BY THE ASSESSEE HAVE BEEN FOUND. HE HAS FILED COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2001-02 DATED 29.03.2004 UNDER SECTION 143(3) AND FOR ASSESSMENT YEAR 2002-03 DATED 29.03.2006 UNDER SECTION 147 READ WIT H SECTION 143(3) OF THE ACT IN WHICH THE ASSESSING OFFICER, O N THE IDENTICAL FACTS ACCEPTED THE RETURNED INCOME DECLAR ED AS INCOME FROM BUSINESS OR PROFESSION. THE LD. COUNSE L FOR THE ASSESSEE ALSO FILED COPIES OF THE ASSESSMENT ORDERS FOR SUBSEQUENT ASSESSMENT YEARS 2010-11 DATED 06.03.201 3 UNDER SECTION 143(3) AS WELL AS FOR ASSESSMENT YEAR 2011- 12 DATED 28.02.2014 UNDER SECTION 143(3) IN WHICH THE ASSESS ING OFFICER ON IDENTICAL FACTS ACCEPTED THE BUSINESS INCOME DEC LARED FROM THE SAME BUSINESS AND PROFESSION. THE DEPARTMENT, THEREFORE, SHOULD NOT HAVE TAKEN A CONTRARY VIEW WITHOUT JUSTI FYING ANYTHING ON RECORD AGAINST THE ASSESSEE. 11. THE LD. COUNSEL FOR THE ASSESSEE PRODUCED THE D ISPATCH REGISTER WHICH CLEARLY SUPPORT CLAIM OF ASSESSEE TH AT MEDICINES WERE DISPATCHED TO FOREIGN COUNTRIES AGAINST WHICH ASSESSEE 9 HAS EARNED INCOME. THE FACTS ARE, THEREFORE, SIMIL AR AND SOURCE OF INCOME OF THE ASSESSEE IS SIMILAR AS CONSIDERED IN EARLIER AS WELL AS SUBSEQUENT ASSESSMENT YEARS BY THE INCOME T AX DEPARTMENT. THE INTERESTING PART IS THAT THE DEPAR TMENTAL APPEAL IS FILED BEFORE THE TRIBUNAL ON 11.10.2012 C HALLENGING THE ORDER OF THE LD. CIT(APPEALS) IN ACCEPTING THE CLAIM OF ASSESSEE OF BUSINESS INCOME AND THUS, ALLOWING EXPE NDITURE AGAINST THE SAME INCOME. EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL, ASSESSING OFFICER PASSED THE ASSESSMENT ORDERS FOR SUBSEQUENT ASSESSMENT YEARS 2 010-11 AND 2011-12 AND ACCEPTED THE CLAIM OF ASSESSEE OF G ENUINE BUSINESS INCOME FROM THE SAME SOURCES. THEREFORE, IT IS CLEAR CASE OF ABUSE OF THE POWER BY THE ASSESSING OFFICER TO TAKE A DIFFERENT VIEW AGAINST THE ASSESSEE AS AGAINST SETT LED FACTS AND MATERIAL ALREADY CONSIDERED AND BROUGHT ON RECORD B Y THE ASSESSEE. IF THE DEPARTMENT WAS AGGRIEVED AGAINST THE ORDER OF LD. CIT(APPEALS), THEN THE ASSESSING OFFICER SHOULD NOT HAVE TAKEN A VIEW IN FAVOUR OF THE ASSESSEE IN SUBSEQUEN T ASSESSMENT YEARS. IT IS ALSO INTERESTING TO NOTE HE RE THAT THE ASSESSMENT ORDER IN QUESTION HAS BEEN PASSED BY ACI T-CIRCLE (R.NISHA ORAON) PALAMPUR, HP AND ALSO FILED THE PRE SENT APPEAL BEFORE THE TRIBUNAL ON BEHALF OF THE REVENUE DEPART MENT. THE SAME ACIT (R.NISHA ORAON) HAS PASSED THE ASSESSMEN T ORDER FOR SUBSEQUENT ASSESSMENT YEAR 2010-11 IN FAVOUR OF THE ASSESSEE ON 06.03.2013 ACCEPTING THE SAME CLAIM OF THE ASSESSEE. THE MATTER, THEREFORE, REQUIRES SERIOUS CONCERN AND INVESTIGATION BY SENIOR AUTHORITIES OF THE INCOME T AX 10 DEPARTMENT AS TO WHAT WAS THE PURPOSE IN FILING APP EAL BEFORE THE TRIBUNAL CHALLENGING THE ORDER OF THE LD. CIT(A PPEALS) WHEN THE SAME ACIT IS CONSISTENTLY ACCEPTING THE CLAIM O F THE ASSESSEE OF SAME NATURE OF SOURCE OF INCOME IN EARL IER AS WELL AS SUBSEQUENT ASSESSMENT YEARS. IT IS WELL SETTLED LAW THAT EVEN IF THE RULE OF RES JUDICATA AND PRINCIPLE OF E STOPPLE DO NOT APPLY TO THE INCOME TAX PROCEEDINGS BUT THE INCOME TAX AUTHORITIES SHALL HAVE TO TAKE CONSISTENT VIEW ON T HE IDENTICAL FACTS UNLESS SOMETHING OTHERWISE IS BROUGHT ON RECO RD BY THE A.O. THUS, THE RULE OF CONSISTENCY SHOULD BE APPLIE D TO THE INCOME TAX PROCEEDINGS AND AUTHORITIES BELOW SHOULD HAVE HAD THE REGARD TO THE SETTLED PRINCIPLE OF LAW. WE REL Y UPON DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF RADHA SOAMI SATSANG VS CIT 193 ITR 321, SATISH PANNA LAL SHAH 249 ITR 221, DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VIKAS CHEMI GUM INDIA 276 ITR 32 AND DE CISION OF MADHYA PRADESH HIGH COURT IN THE CASE OF GODAVARI CORPORATION LTD. 156 ITR 835. 12. CONSIDERING THE ABOVE DISCUSSION AND FINDING OF FACT RECORDED BY THE LD. CIT(APPEALS), IN THE LIGHT OF T HE HISTORY OF THE ASSESSEE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION. THE DEPARTM ENTAL APPEAL FAILS ON THIS ISSUE AND IS ACCORDINGLY, DISMISSED. 13. THE GROUND NO. 2 OF THE DEPARTMENTAL APPEAL REA DS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS FURTHER ERRED IN DELETING THE ADDITION OF R S. 9,04,000/- MADE BY THE A.O. EVEN THOUGH IT WAS SEEN FROM THE 11 'CERTIFICATE OF ELIGIBILITY FOR NON-LMMIGRANT(F-L) STUDENT' ISSUED BY US DEPARTMENT OF JUSTICE, SUBMITTED BY THE ASSESSEE, AN AMOUNT OF 15,000 USD WERE EXTENDED BY 'PARENT SPONSOR' WHILE 5,800 USD WERE EXTENDED BY 'STUDENTS P ERSONAL FUNDS'. 14. BRIEFLY, THE FACTS ON THIS ISSUE ARE THAT DURIN G THE COURSE OF ASSESSMENT IT WAS OBSERVED BY THE A.O. TH AT ONE OF THE PARTNERS, NAMELY LOBSANG TENZIN HAD WITHDRAWN RS.96,500/- FOR PERSONAL EXPENSES, WHILE THE OTHER PARTNER, DR. YASHI DHANDON HAD WITHDRAWN RS.7,92,000/-. THE A.O. CONCLUDED THAT THE WITHDRAWALS SHOWN BY DR. TENZIN WERE NOT SUFFICIENT AS HE WAS MARRIED AND HAD A SON STUDYING IN USA. HE, THEREFORE, ESTIMATED THE PERSONAL EXPENSES OF D R. TENZIN AT RS.10,00,000/- WHICH INTER-ALIA INCLUDED A CALCULAT ION OF THE EXPENSES INCURRED ON HIS SON AT RS.6,00,000/-. THU S, A NET ADDITION OF RS. 9.04.000/- WAS MADE TO THE TAXABLE INCOME OF THE FIRM. 15. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD . CIT(APPEALS) AND IT WAS SUBMITTED THAT THE ID. A.O. HAD MADE THE ADDITION OF RS.9,04,000/- PURELY ON SURMISES AN D WITHOUT EVEN APPRECIATING THE BOOKS OF ACCOUNT AND OTHER DO CUMENTS FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. IT WAS ARGUED THAT DETAILED NARRATION OF EACH BANK WITHDRA WAL WAS CLEARLY MENTIONED IN THE CASH BOOK AND LEDGER OF TH E ASSESSEE, AND THAT ALL THE WITHDRAWALS FOR BUSINESS PURPOSES AS WELL AS FOR PERSONAL EXPENSES WERE DULY RECORDED IN THE BOO KS OF ACCOUNT. IT WAS EXPLAINED THAT BOTH THE PARTNERS WE RE HAVING NO DEPENDENTS AND WERE LIVING UNDER ONE ROOF HAVING A COMMON KITCHEN. THE COMBINED WITHDRAWALS OF BOTH THE PARTN ERS STOOD 12 AT RS.8,88,OOO/-WHICH COULD NOT BE CONSIDERED LOW B Y ANY STANDARD. IT WAS FURTHER EXPLAINED THAT THE SON OF DR. LOBSANG HAD BEEN LIVING IN USA FOR LONG AND HE WAS TOTALLY SELF DEPENDENT. HE WAS HAVING SUFFICIENT INCOME TO SUPPO RT HIS STUDIES AND HIS PERSONAL EXPENSES AS WAS EVIDENT FR OM HIS INCOME-TAX RETURNS FILED IN THE USA. IT WAS FURTHER EXPLAINED THAT THE ID. A.O. WAS NOT JUSTIFIED IN MAKING THE F ORM FILLED FOR THE DEPARTMENT OF JUSTICE, IMMIGRATION AND NATURALI ZATION SERVICE THE BASIS OF ESTIMATING THE EXPENSES, AS TH E SAID DETAILS ARE GIVEN IN CASE THERE WERE TO BE NO EMPLOYMENT OP PORTUNITY AVAILABLE FOR EARNING INCOME. BUT, IN REALITY, THE PARTNERS SON WAS EARNING HANDSOME INCOME AND TAKING CARE OF ALL HIS EXPENSES. IN FACT, HE HAD ALSO ADVANCED MONEY TO T HE TUNE OF RS. 62,869/- TO THE APPELLANT FIRM IN THE FINANCIAL YEAR 2006-07 FROM HIS OWN EARNING IN THE USA WHICH WAS VERIFIABL E FROM THE BOOKS OF ACCOUNT OF THE APPELLANT FIRM. 16. THE LD. CIT(APPEALS), CONSIDERING EXPLANATION O F THE ASSESSEE AND MATERIAL ON RECORD, DELETED THE ADDITI ON. HIS FINDINGS IN THE APPELLATE ORDER IN PARA 5 ARE REPRO DUCED AS UNDER : 5. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED WITH REFERENCE TO THE FACTS OF THE CASE THE RELEVANT BOOKS OF ACCOUNT AND THE RELATED DOCUMENTS , IT IS NOTED THAT THE ID. A.O. HAS TOTALLY MISDIRECTED HERSELF WHILE DISCUSSING THE WITHDRAWALS THROUGH CHEQUES OF SELF AMOUNTING TO RS.19,84,615/-. EACH AND EVERY CHEQUE WAS FOUND DULY RECORDED IN THE CASH BOOK AND THE LEDGER AND THE CLEAR NARRATION EXPLAINING THE PURPOSE OF WITHDRAWALS WAS ALSO FOUND RECORDED IN T HE BOOKS OF ACCOUNT. THEREFORE, THE A O'S FINDING THAT THE 13 SAID WITHDRAWALS WERE NOT REFLECTED IN THE BANK STATEMENT AND THE CASH BOOK IS NOT FOUND TO BE IN O RDER. SAME IS TRUE OF THE WITHDRAWALS MADE BY THE TWO PARTNERS FOR THEIR PERSONAL EXPENSES. ALL THE ENTRI ES IN THIS REGARD ARE DULY ACCOUNTED FOR IN THE RELEVANT BANK ACCOUNT AS WELL AS IN THE RESPECTIVE CAPITAL ACCOUN T OF THE TWO PARTNERS. IT IS FURTHER NOTED THAT THE ASSE SSEE HAD DULY EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT EVEN DR. LOBSANG TENZIN HAD NO DEPENDENT(S) AND THAT HIS SON WAS TOTALLY SELF- DEPENDENT HAVING HIS OWN SOURCES OF INCOME. BUT, INSTEAD OF EXAMINING THE DETAILS IN THIS REGARD, TH E ID. A.O. SIMPLY PROCEEDED TO CONCLUDE THAT THE HOUSE HO LD EXPENSES OF THE TWO PARTNERS COULD NOT BE UNEQUAL A ND THAT THE EXPENSES OF DR. TENZIN WERE HIGHER BECAUSE OF THE EDUCATIONAL EXPENSES OF HIS SON. THE ID. A. O. ALSO COMPLETELY OVERLOOKED THE FACT THAT THE EXPENSES ON ACCOUNT OF THE FOREIGN TRAVELS OF THE TWO PARTNERS WERE SEPARATELY DEBITED TO THE PROFIT AND LOSS ACCOUNT O F THE APPELLANT FIRM. A PERUSAL OF THE INCOME-TAX STATEME NTS OF DR. TENZIN'S SON, NAMELY TENZIN TSERING SHOWS T HAT IN THE YEAR UNDER CONSIDERATION HE EARNED $43317 ON ACCOUNT OF WAGES AND $45030 ON ACCOUNT OF SOCIAL SECURITY WAGES, IN RESPECT OF WHICH FEDRAL INCOME-T AX, SOCIAL SECURITY TAX, STATE INCOME-TAX AND MEDICARE TAX WAS DEDUCTED. LIKEWISE, IN THE NEXT FINANCIAL YEAR, HE EARNED WAGES TO THE TUNE OF $48156 AND SOCIAL SECUR ITY WAGES TO THE TUNE OF $ 50193. THUS, THE WAGES EARNE D BY THE PARTNER'S SON ARE MUCH MORE THAN THE EXPENSE S TENTATIVELY MENTIONED IN THE FORM OF US DEPARTMENT OF JUSTICE, IMMIGRATION AND NATURALIZATION SERVICES. THEREFORE THE ID. A.O. IS NOT FOUND JUSTIFIED IN CALCULATING AN AMOUNT OF 15000 USD AS THE EXPENDITU RE INCURRED BY THE PARTNER DR. LOBSANG TENZIN ON HIS S ON'S EDUCATION IN THE USA. THE ID. A.O. HAS NOT BROUGHT ANYTHING ON RECORD TO CONTROVERT THE PARTNER'S CLAI M OF THE EARNINGS OF HIS SON IN THE USA. THUS THE ENTIRE 14 ADDITION HAS BEEN MADE BY THE A.O. PURELY ON SURMIS ES AND WITHOUT HAVING ANY CONCRETE INFORMATION IN POSSESSION. KEEPING IN VIEW THE FACT THAT THE TWO PARTNERS WERE LIVING TOGETHER AND MAINTAINING A COMMON KITCHEN WITHOUT HAVING ANY DEPENDENTS, THE WITHDRAWALS MADE BY DR. TENZIN AMOUNTING TO RS.96,500/- CANNOT BE CONSIDERED INADEQUATE IN THE ABSENCE OF ANY FACTUAL INFORMATION REGARDING HIS EXTRAORDINARY EXPENSES, IF ANY. THE ADDITION MADE B Y THE ID. A.O. AMOUNTING TO RS.9,04,000/- IS ACCORDIN GLY NOT FOUND SUSTAINABLE AND IS DIRECTED TO BE DELETED . 17. AFTER HEARING RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSES SEE IS A FIRM AND HAS A DIFFERENT STATUS UNDER INCOME TAX ACT AS AGAINST THE PARTNERS. THE ASSESSING OFFICER HAS MADE ADDITION AGAINST THE ASSESSEE ON ACCOUNT OF LOW PERSONAL WITHDRAWALS BY THE PARTNER. ON THIS REASON ALONE, THE ASSESSING OFFIC ER IS NOT JUSTIFIED IN MAKING ADDITION AGAINST THE ASSESSEE A ND APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED BECAUSE NO AD DITION IN THE NAME OF PARTNER COULD BE MADE IN THE CASE OF THE FI RM OF SUCH PERSONAL EXPENDITURE IN NATURE. 18. THE LD. CIT(APPEALS) FURTHER FOUND FROM THE REC ORD THAT PROPER WITHDRAWALS HAVE BEEN SHOWN BY THE PARTNERS AND SON OF THE PARTNER WAS SELF DEPENDENT AND HAS SOURCE OF IN COME WHICH IS SUPPORTED BY EVIDENCES AND MATERIAL ON RECORD. IT WAS ALSO FOUND THAT BOTH THE PARTNERS WERE LIVING TOGETHER A ND HAVE NO DEPENDENCY AND WERE MAINTAINING COMMON KITCHEN. TH EREFORE, LD. CIT(APPEALS) , ON PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD, CORRECTLY DELETED THE ADDITION. THE GRO UND NO. 2 OF 15 THE APPEAL OF THE REVENUE HAS NO MERIT AND IS ACCOR DINGLY, DISMISSED. 19. IN THE RESULT, THE DEPARTMENTAL APPEAL FAIL S AND IS DISMISSED. 20. BEFORE PARTING WITH THE ORDER, WE WOULD LIKE TO MENTION THAT SINCE THE SAME ASSESSING OFFICER IS TAKING A D IFFERENT STAND IN THIS CASE, THEREFORE, OFFICE IS DIRECTED TO FORW ARD A COPY OF THIS ORDER TO THE CCIT/CIT CONCERNED FOR LOOKING IN TO THE MATTER FOR TAKING APPROPRIATE REMEDIAL ACTION IN TH E MATTER. WITH THESE OBSERVATIONS, THE DEPARTMENTAL APPEAL IS DISMISSED. 21. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMI SSED AND CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WIT HDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH NOVEMBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH