Sukvinder Singh Turna, Haldwani V. Income Tax Officer, Uttrakhand

ITA 1025/DEL/2015

• Counselvise Citation: 102520114 RSA 2015
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 18-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Onus to prove
• Section: 143(3); 133A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH . H.S.SIDHU , JM AND SH. O.P.KANT , AM ITA NO. 1025 /DEL./ 2015 : ASSTT. YEAR : 2008 - 09 SUKVINDER SINGH TURNA, C/O SUDHANSHU SRIVASTAVA, ADVOCATE, 58, AVAS VIKAS COLONY, CIVIL LINES, HALDWANI PAN:ACHPT1813H VS INCOME TAX OFFICER, KHATIMA, DISTRICT UDHAM SINGH NAGAR, UTTRAKHAN D (APPELLANT) (RESPONDENT) APPELLANT BY : DR. RAKE S H GUPTA SH. TARUN KUMAR, ADV RESPONDENT BY : SH. SUJIT KUMAR, SR. DR DATE OF HEARING : 18.08.2015 DATE O F PRONOUNCEMENT : 23 .09.2015 ORDER PER O.P.KANT, A.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 06.01.2015 OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - II, DEHRADUN , RAIS ING FOLLOWING GROUNDS OF APPEAL : - 1. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED FIRST APPELLATE AUTHORITY HAVE ERRED IN PRIN CIPLE AND IN LAW IN DISALLOWING THE DEDUCTION U/S 80IB (11B) OF RS.5,63,793/ - CLAIMED BY THE ASSESSEE. 2. THAT IN ANY VIEW OF THE MATTER, THE ORDER UNDER APPEAL IS WRONG ON FACTS AS WELL AS IN LAW AND IS LIABLE TO BE REVERSED AND THE APPEAL ALLOWED. 3. THA T THE DEDUCTION U/S 80IB (11B) AS CLAIMED BY THE ASSESSEE MAY KINDLY BE ALLOWED AND THE ADDITION MADE MAY KINDLY BE DELETED. PAGE 2 OF 7 2. THE ONLY ISSUE INVOLVED IN ALL THREE GROUNDS OF THE ASSESSEE IS DISALLOWANCE OF THE DEDUCTION OF RS.5,63,793/ - U/S 80IB (11B) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) / - BY THE ASSESSING OFFICER ( IN SHORT AO) AND CONFIRMATION OF THE SAME BY LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) [IN SHORT CIT(A) ]. 3. THE FACTS IN BRIEF THAT THE ASSESSEE IS AN INDIVI DUAL AND DURING THE RELEVANT YEAR DERIVED INCOME FROM RUNNING OF A HOSPITAL NAMELY M/S. TURNA MAX MULTI SPECIALTY HOSPITAL , REMUNERATION AND INTEREST FROM THE PARTNERSHIP FIRM M/S KARAN CONSTRUCTION AND INCOME FROM AGRICULTURAL OPERATION S . THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.09.2008 , DECLARING TOTAL INCOME OF RS.3,66,860/ - AND AGRICULTURAL INCOME OF RS. 5,88,300/ - . THE ASSESSEE ALSO CLAIMED DEDUCTION OF RS.5,63,793/ - U/S 80IB (11B) OF THE ACT FOR OPERATING AND MAINTAINING A HOSPITAL IN RURAL AREA. IN THE CASE OF THE ASSESSEE , A SURVEY U/S 133A OF THE ACT WAS CONDUCTED ON 29.02.2008. IN SURVEY PROCEEDING S , THE ASSESSEE SURRENDERED A SUM OF RS.5 LAC TO COVER UP THE DEFICIENCY / OMISSIONS . THIS AMOUNT OF RS.5 LACS HAS BEEN DISCLOSED BY THE ASSESSEE AS INCOME FROM OTHER SOURCES IN THE RETURN OF INCOME FILED. THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY AND NOTICE U/S 143(2) OF THE ACT WAS ISSUED. IN THE COURSE OF ASSESSMENT PROCEEDING, THE AO NOTICED THAT THE ASSESSEE HAS CONSTRUCTED A HOSPITAL BETW EEN 1 ST OCTOBER, 2004 AND 31 ST MARCH, 2008 IN A RURAL AREA BUT DID NOT FULFILL ONE OF THE CONDITIONS OF SECTION 80IB( 11B) OF THE ACT OF HAVING AT L EAST 100 BEDS FOR THE PATIENTS AND THEREFORE , IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 23.11.2010 , HE DISALLOWED THE CLAIM OF DEDUCTION . PAGE 3 OF 7 4. AGGRIEVED , THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). IN THE COURSE OF APPELLATE PROCEEDINGS B EFORE THE LD . CIT(A) , THE ASSESSEE FILED CERTAIN ADDITIONAL EVIDENCE S . THE AO SUBMITTED A DETAILED REMAND REPORT ON THE EVIDENCE FURNISHED BY THE ASSESSEE. A COPY OF THE REMAND REPORT WAS SENT TO THE ASSESSEE BY THE LD CIT(A) FOR HIS COMMENT. THE REMAND REPORT AND THE REJOINDER OF THE ASSESSEE HAVE BEEN REPRODUCED BY THE CIT(A) IN HIS ORDER. AFTER DETAILED ANALYSIS OF THE SUBMISSION OF THE LD AO AND THE ASSESSEE , THE LD CIT(A) UPHELD THE DISALLOWANCE OF DEDUCTION BY HOLDING THAT THE ASSESSEE DID NOT ACQUIRE 100 BEDS ON OR BEFORE 31.03.2008. AGGRIEVED, THE ASSESSEE IS BEFORE US. 5. AT THE TIME OF HE ARING, THE LEARNED AUTHORISED REPRESENTATIVE (IN SHORT AR ) OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE CONSTRUCTED A HOSPITAL IN RURAL AREA BETWEEN 1 ST OCTOBER, 2004 AND 31 ST MARCH, 2008 AS PER THE CONDITIONS (I) OF THE SECTION 80IB (11B) OF THE ACT , WHICH WAS FOUND FUNCTIONING WITH 34 BEDS AT THE TIME OF SURVEY CONDUCTED ON 29.02.2008 (ONE MONTH BEFORE END OF THE RELEVANT PREVIOUS YEAR) BY THE INCOME - TAX DEPARTMENT AND 80 BEDS HAVE BEEN ADDED THEREAFTER ON 16TH MARCH, 2008 . FURTHER, HE URGED THAT THE ASSESSEE HAS ALREADY SUBMITTED A BILL NO. 217 DATED 16/03/2008 IN SUPPORT OF PURCHASE OF 80 BEDS FROM M/S KISAN AGRICULTURE WORKSHOP DURING ASSESSMENT PROCEEDINGS, A COPY OF WHICH HAS BEEN FILED AT PAGE NO. 98 OF THE PAPER BOOK , HOWEVER BY MISTAKE, THI S BILL WAS ENTERED UNDER THE HEAD BUILDING ACCOUNT RATHER THAN UNDER THE HEAD FURNITURE AND FIXTURE ACCOUNT IN BOOKS OF ACCOUNT. FURTHER, HE SUBMITTED THAT ADVANCE PAYMENTS OF RS.15,000 / - AND RS. 18,000 / - WERE MADE IN CASH TO M/S KISAN AGRICULTURE WORKSHOP ON 28 - 12 - 2007 AND 16 - 02 - 2008 ( I.E. BEFORE THE DATE PAGE 4 OF 7 OF SURVEY) AND FINAL PAYMENT OF RS. 15,000 WAS MADE ON 16 - 03 - 2008 ( I.E. AFTER THE DATE OF SURVEY). FURTHER, HE SUBMITTED THAT THE ADVANCE PAYMENTS MAD E BEFORE THE DATE OF SURVEY ARE OUT OF THE UNDISCLOSED INCOME OF RS. 5.00 LAKHS DECLARED BY THE ASSESSEE IN RETURN OF INCOME. THE LD AR ARGUED FURTHER THAT THE FACT THAT THE HOSPITAL HAD 100 BEDS DURING THE CONCERNED YEAR IS ALSO SUPPORTED BY THE CERTIFICA TE OF MEDICAL OFFICER - IN - CHARGE OF THE COMMUNITY HEALTH CENTRE, SITARGANJ (I.E. CONCERNED AREA), A COPY OF WHICH HAS BEEN FILED AT PAGE NO. 97 OF THE PAPER BOOK OF THE ASSESSEE. HE FURTHER ARGUED THAT THE AO CANT IGNORE THE EVIDENTIARY VALUE OF THE SAME MERELY ON THE GROUND THAT SAME WAS UNDATED AND SUBMITTED DURING THE ASSESSMENT PROCEEDINGS WITHOUT CONFRONTING THE ASSESSEE AT THAT POINT OF TIME AND ALSO STATED THAT ANY SUCH CERTIFICATE WAS NOT REQUIREMENT OF THE PROVISIONS OF LAW. THE LD . AR FURTHER SU BMITTED THAT T HE INSPECTOR OF THE INCOME TAX OFFICE HAS ALSO VISITED THE HOSPITAL DURING THE ASSESSMENT PROCEEDING AND HE ALSO REPORTE D OF HAVING BEDS MORE THAN 100 AT THE TIME OF PHYSICAL INSPECTION. HE FURTHER ARGUED THAT THE REPORT OF THE INSPECTOR CANT BE USED FOR REJECTION OF THE CLAIM OF THE ASSESSEE, RATHER, IT WAS IN FAVOUR OF THE ASSESSEE. FURTHER, THE LD . AR STATED THAT THE BUILDING OF THE HOSPITAL WAS ALREADY COMPLETED AND THE DURING ASSESSMENT PROCEEDING THE ASSESSEE HAS SUBMITTED THE LAY O UT PLANS OF THE 100 BEDS , WHICH ALSO SUBSTANTIATE D THE CLAIM OF THE ASSESSEE. FURTHER HE ARGUED THAT THE AO HAS NOT RAISED ANY DOUBT EITHER ON THE LAY OUT PLANS OR THE COPY OF THE BILLS OF THE M/S. KISAN AGRICULTURE WORKSHOP FILED BY THE ASSESSEE . 10. THE LD AR FINALLY CONCLUDED HIS ARGUMENTS THAT IN VIEW OF SUBMISSION MADE ABOVE AS WELL AS THE SUBMISSION MADE BEFORE THE CIT(A) AND THE PAGE 5 OF 7 EVIDENCES SUBMITTED IN SUPPORT OF EXISTENCE OF THE 100 BEDS , THE ASSESSEE HAS DISCHARGED HIS BURDEN OF PROOF AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR THE SAID DEDUCTION . 12. ON THE OTHER HAND , THE LEARNED SR. DEPARTMENT REPRESENTATIVE (IN SHORT DR ) SUPPORTED THE ORDER OF THE LOWER AUTHORITIES AND ARGUED THAT AT THE TIME OF SURVEY ONLY 34 BEDS WERE FOUND AN D THE SURVEY WAS CONDUCTED JUST MONTH BEFORE THE END OF THE RELEVANT PREVIOUS YEAR. HE FURTHER ARGUED THAT INCONSISTENCIES WERE FOUND IN THE BUILDING ACCOUNT DURING THE COURSE OF ASSESSMENT PROCEEDING AND COPY OF BUILDING ACCOUNT FILED DURING APPELLATE PROCEEDINGS AND A N UNDATED CERTIFICATE FROM THE MEDICAL OFFICER WAS NOT HAVING EVIDENTIARY VALUE. HE FURTHER MENTIONED THAT THE ASSESSEE HAS SHOWN PURCHASE OF 100 BEDS, HOWEVER NO BILLS OF MATTRESS AND BED SHEETS HAVE BEEN SHOWN AND THEREFORE THE CLAIM OF THE ASSESSEE OF HAVING 100 BEDS IN THE H OSPITAL IS FULLY SUBSTANTIATED AND THEREFORE, THE ACTION OF THE CIT(A) MAY BE SUSTAINED. 13. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD AND THE ORDER S OF THE LOWER AUTHORITIES. WE FIND THAT THE SOLE ISSUE OF DISPUTE IN THIS CASE IS WHETHER THE ASSESSEE WAS HAVING 100 BEDS AS ON 31.3.2008 OR NOT. WE FIND THAT ASSESSEE AND THE AO BOTH ARE AGREED THAT AT LEAST 34 BEDS WERE AVAILABLE AS ON DATE OF SURVEY I.E. 29.2.2008. THE ASSESSEE HAS CLAIMED THAT THE BILLS OF PURCHASE OF 80 BEDS WAS FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS, HOWEVER, THE AO IN HIS ASSESSMENT ORDER HAS MENTIONED THAT NO SUCH RECEIPT FROM 'LOHAR' WAS FILED. LATER ON, IN REMAND PROCEEDINGS THE AO HA S ADMITTED THAT THE BILL IS PLACED ON ASSESSMENT FOLDER. WE FIND THAT PAGE 6 OF 7 THE BILL FOR FABRICATION IN ORIGINAL ALONG WITH THE ORIGINAL DETAILED PLAN OF THE OUTLAY OF BEDS WAS SUBMITTED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE SAME HAS BEEN ACCEP TED BY THE AO AS BEING AVAILABLE IN THE RECORDS OF THE DEPARTMENT. THE NON - MENTIONING OF THESE TWO DOCUMENTS BY THE AO IN THE ASSESSMENT ORDER OR THE ORDER SHEET CANNOT BE TAKEN AS AN EVIDENCE AGAINST THE ASSESSEE. WE NOTE THAT THE IT IS NOT A NECESSARY CO NDITION FOR THE GRANT OF DEDUCTION U / S 80IB (11B) THAT THE ASSESSEE SHOULD TAKE SUITABLE STEPS TO GET THE EXISTENCE OF 100 BEDS VERIFIED FROM AN OFFICIAL OF THE DEPARTMENT PRIOR TO MAKING A CLAIM OF DEDUCTION UNDER THE SAID SECTION. THEREFORE, THE ASSESSEE CANNOT BE FAULTED ON THE COUNT THAT HE SUBMITTED THE CERTIFICATE FROM THE MEDICAL OFFICER - IN - CHARGE ONLY DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. WE FURTHER NOTE THAT IN THE ASSESSMENT ORDER IT WAS MENTIONED AT PAGE NO. 3 (LAST PARAGRAPH) THAT THE INCOME TAX INSPECTOR VIDE HIS REPORT DATED 08/09/2010 HAS REPORTED THAT THE NUMBER OF BEDS WERE 102. THE INCOME TAX INSPECTOR CARRIED OUT HIS INSPECTION DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ONLY AND HE HAD VERIFIED THE EXISTENCE OF 102 BEDS. IT IS ALSO NOTED THAT SURRENDER OF RS 5,00,000/ - WAS MADE BY THE ASSESSEE AT THE TIME OF THE SURVEY TO COVER ANY DISCREPANCIES/OMISSIONS /AND THE SAME WAS ACCEPTED BY THE DEPARTMENT ALSO. THUS, THE ISSUE OF ENTRY OF THE PURCHASE OF THE BEDS IN THE BOOKS OF A CCOUNTS OF THE PREVIOUS YEAR BECOMES VERY MUCH REDUNDANT AND THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON THIS GROUND. WE ALSO FIND CONSIDERABLE COGENCY IN THE ASSESSEE'S SUBMISSION THAT THERE WAS NO ADDITIONS TO FURNITURE AND FIXTURES DURING THE IMMEDIAT ELY TWO SUCCEEDING ASSESSMENT YEARS VIZ. AY 2009 - 10 AND AY 2010 - 11, WHEREAS THE AO IN HIS ASSESSMENT ORDER FOR AY 2010 - 11 HAS GIVEN A CATEGORICAL FINDING PAGE 7 OF 7 ABOUT THE NUMBER OF BEDS BEING AVAILABLE AT A FIGURE OF 102 BEDS. THUS, THIS CREATES A VERY REASONABLE INFERENCE THAT THE BEDS WERE PURCHASED AND WERE VERY MUCH IN USE IN AY 2008 - 09 I.E. THE YEAR UNDER APPEAL. 13.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE ARE OF THE VIEW THAT THE ASSESSEE IS VERY MUCH ENTITLED FOR DEDUCTION U/S. 80IB(11B) OF THE INCOME TAX ACT, 1961, HENCE, THE DEDUCTION MADE ON THIS ACCOUNT AMOUNTING TO RS.5,63,793/ - NEEDS TO BE ALLOWED AND ACCORDINGLY ADDITION IS HEREBY DELETED. WE HOLD AND DIRECT ACCORDINGLY. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 2 3 / 09 /2015 . - S D / - - S D / - (H.S. SIDHU) ( O.P.KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 3 / 09/2015 *AJAY* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR DELHI BENCHES, NEW DELHI