ACIT, Coimbatore V. Sudha Hospital, Erode

ITA 1039/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8358 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-09-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL IRS
• Keywords: Unexplained investment
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./I.T.A. NO. 1039/MDS/2016 / ASSESSMENT YEAR : 2012-2013 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -3(I/C) COIMBATORE VS. M/S. SUDHA HOSPITAL, NO.162, PERUNDURAI ROAD, ERODE 638 011. [PAN ABSFS 3370C] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. SUPRIYO PAL, IRS, JCIT. $% ! ' # /RESPONDENT BY : NONE & ' '( /DATE OF HEARING : 27-09-2016 )* ' '( /DATE OF PRONOUNCEMENT : 05-10-2016 ! / O R D E R PER SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: IN THIS APPEAL, THE REVENUE HAS TAKEN ALTOGET HER FIVE GROUNDS OF WHICH GROUND NOS. 1 & 5 ARE GENERAL IN NATURE NEEDING NO SPECIFIC ADJUDICATION. THIS APPEAL WAS FIRST POSTE D FOR HEARING ON 27.06.2016. DESPITE NOTICE BEING ISSUED, NONE APPE ARED FOR THE ASSESSEE ON THAT DATE. HENCE THE BENCH DIRECTED IS SUE OF NOTICE ITA NO. 1039/MDS/2016 :- 2 -: THROUGH LD. DEPARTMENTAL REPRESENTATIVE. ACCORDINGL Y, TODAY WHEN THE MATTER WAS TAKEN UP FOR HEARING, THE LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT NOTICE WAS DULY SERVED ON THE ASSESS EE AND DATE OF HEARING HAS BEEN DULY INTIMATED. LD. DEPARTMENTAL REPRESENTATIVE PLACED ON RECORD COPY OF THE ACKNOWLEDGMENT FROM DR . D. KANDASWAMI, PARTNER WHO HAD SIGNED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE APPEAL IS TAKEN UP FOR HEARING TOD AY. 2. FACTS APROPOS ARE THAT THE ASSESSEE A FIRM RUNNIN G A CHAIN OF HOSPITALS CALLED M/S. SUDHA HOSPITALS WAS SUBJEC TED TO A SEARCH UNDER SECTION 132 OF . THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) ON 28.03.2012. SUBSEQUENT TO SEAR CH, NOTICE U/S.153A OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSE E FILED RETURNS OF INCOME FOR VARIOUS ASSESSMENT YEARS AS UNDER:- SL.NO A.Y DATE OF FILING OF RETURN U/S.139(1) INCOME ORIGINALLY RETURNED U/S.139(1) . RETURNED INCOME U/S.153A . ADDITIONAL INCOME OFFERED . 1 2006-07 - - - - 2 2007-08 - - - - 3 2008-09 - - - - 4 2009-10 - - - - 5 2010-11 - - - - 6 2011-12 06.10.2011 23,10,780 1,05,78,210 82,67,430 7 2012-13 - - 3,47,52,980 - ITA NO. 1039/MDS/2016 :- 3 -: 3. DURING THE COURSE OF ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR, LD. ASSESSING OFFICER NOTED THAT P ARTNER OF THE ASSESSEE SHRI. K. SUDHAKAR HAD IN A STATEMENT REC ORDED U/S.132(4) OF THE ACT ADMITTED A SUM OF E5.64 CRORES AS UNACCOUNT ED PROFESSIONAL RECEIPTS OF THE HOSPITALS. THE UNACCOUNTED RECEIPTS WORKED OUT BY THE ASSESSEE WHICH WAS A PART OF THE INCOME DISCLOSED IN THE ABOVE REFERRED RETURNS, WERE AS UNDER:- UNACCOUNTED RECEIPTS ADMITTED (RECONCILIATION) (AMOUNT IN E) MONTH GROSS RECEIPT AS PER SEIZED MATERIAL ANN/SH/ PV/LS/S-1 EXPENSES AS PER SEIZED MATERIAL ANN/SH/PV/ LS/S-1 NET INCOME AS PER SEIZED MATERIAL (A) NET INCOME FOR AS BOOKS (B) DIFFERENCE UNDISCLOSED INCOME (A-B) APR - 11 68,70,629 34,40,0 05 34,30,624 6,68,272 27,62,352 AUG - 11 99,41,872 43,47,926 55,93,946 45,487 55,48,459 SEP - 11 1,05,68,070 41,28,383 64,39,687 1,03,248 63,36,439 OCT - 11 88,86,629 18,13,541 70,73,088 2,13,047 68,60,041 NOV - 11 91,45,490 42,04,321 49,41,169 2,84,828 46 ,56,34 DEC - 11 64,29,895 39,40,970 24,88,925 9,58,719 15,30,206 2,76,93,838 4. LD. ASSESSING OFFICER WAS OF THE OPINION THAT TH ERE WAS UNACCOUNTED CASH OF E25,77,503/- FOUND AT THE PREMI SES OF SAID ITA NO. 1039/MDS/2016 :- 4 -: HOSPITAL COWLY BROWN ROAD, COIMBATORE DURING THE S EARCH AND THIS WAS NOT OFFERED AS INCOME BY THE ASSESSEE. CONTENT ION OF THE ASSESSEE WAS THAT UNACCOUNTED RECEIPTS OF E2,76,93, 838/- FORMING AN PART OF INCOME RETURNED FOR THE IMPUGNED ASSESSMEN T YEARS COVERED THE ABOVE UNACCOUNTED CASH. HOWEVER THIS EXPLANATI ON WAS NOT ACCEPTED BY THE LD. ASSESSING OFFICER. 5. LD. ASSESSING OFFICER ALSO FOUND THAT ASSESSEE H AD NOT DISCLOSED UNACCOUNTED STOCK OF E32,41,117/- FOUND F ROM M/S. SUDHA HOSPITAL, ERODE. ARGUMENT OF THE ASSESSEE WAS THAT SUCH UNACCOUNTED STOCK WAS PURCHASED USING THE CASH WITHDRAWALS OF E 46,86,213/- MADE BY DR. K. SUDHAKAR FROM FIRM. AS PER THE ASSESSEE THE CASH WITHDRAWALS WERE MADE OUT OF UNACCOUNTED RECEIPTS ADMITTED AS INCOME. THIS EXPLANATION WAS ALSO NOT ACCEPTED BY T HE LD. ASSESSING OFFICER. 6. LD. ASSESSING OFFICER ALSO FOUND THAT ASSESSEE H AD ACQUIRED THREE PROPERTIES ON WHICH THERE WERE ON MONEY PAYME NTS TO THE TUNE OF E1,30,72,500/-. AS PER LD. ASSESSING OFFICER, CR OSS VERIFICATION WITH TWO OF THE SELLERS PROVED ON MONEY PAYMENTS. SUBMIS SION OF THE ASSESSEE IN THIS REGARD WAS THAT PROPERTY WAS PURCH ASED BY NOT BY THE FIRM BUT BY VARIOUS INDIVIDUALS IN THEIR RESPECTIVE NAMES AND PROPERTIES ITA NO. 1039/MDS/2016 :- 5 -: DID NOT BELONG TO THE FIRM. THIS EXPLANATION WAS AL SO NOT ACCEPTED BY THE LD. ASSESSING OFFICER. 7. THE LD. ASSESSING OFFICER CONSIDERED UNEXPLAINE D CASH, UNEXPLAINED STOCK AND UNEXPLAINED INVESTMENTS AS UN DISCLOSED INCOME OF THE ASSESSEE APART FROM THE RETURNED INCOME OF E 3,47,52,980/-. 8. AGGRIEVED, THE ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) HELD THAT ASSESSEE HAS OFFERED A SUM OF E2,76,93,838/- AS UNACCOUNTED RECEIPTS FROM THE PR OFESSION, AND HENCE THERE WAS NO REASONS TO MAKE ANY ADDITION FO R DIFFERENCE IN CASH, OR FOR DIFFERENCE IN STOCK. IN SO FAR AS, ON -MONEY PAYMENTS FOR IMMOVABLE PROPERTIES WERE CONCERN, LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPINION THAT SUCH ON MONEY PAY MENTS, EVEN IF PROVED, COULD ONLY BE CONSIDERED IN THE HANDS OF T HE INDIVIDUALS IN WHOSE NAME THE PROPERTY STOOD. THUS, HE DELETED ALL THE THREE ADDITIONS. 9. NOW BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE STRONGLY ASSAILING THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) ITA NO. 1039/MDS/2016 :- 6 -: SUBMITTED THAT LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAD ACCEPTED THE CONTENTION OF THE ASSESSEES WITHOUT A NY EVIDENCE. 10. AS MENTIONED BY US, NOBODY APPEARED ON BEHALF O F THE ASSESSEE. 11. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES B ELOW. WE HAVE ALSO HEARD LD. DEPARTMENTAL REPRESENTATIVE CA REFULLY. IT IS NOT DISPUTED THAT FOR THE IMPUGNED ASSESSMENT YEAR ASSE SSEE HAD FILED RETURN PURSUANT TO NOTICE U/S.153A OF THE ACT DISC LOSING AN INCOME OF E3,47,52,980/-. ASSESSEE HAS CLEARLY MENTIONED THA T A SUM OF E2,76,93,838/- OUT OF THE ABOVE WAS UNACCOUNTED REC EIPTS IN THE HOSPITALS. BEING SO, IN OUR OPINION THERE WAS NO REASON TO MAKE ANY ADDITION FOR UNACCOUNTED CASH OF E25,77,500/-, OR F OR UNACCOUNTED STOCK OF E32,41,117/-. BOTH THESE WERE WELL EXPLAI NED BY THE UNDISCLOSED RECEIPTS RETURNED BY THE ASSESSEE. SO FAR AS ALLEGED ON MONEY PAYMENTS FOR PROPERTIES PURCHASED WERE CONCER NED, IT IS NOT DISPUTED BY THE REVENUE THAT THE PROPERTIES WERE NO T IN THE NAME OF THE FIRM BUT IN THE NAME OF VARIOUS INDIVIDUALS. N OTHING IS THERE ON RECORD TO SHOW THAT SUCH INDIVIDUALS HAD PURCHASED THESE PROPERTIES ON BEHALF OF THE ASSESSEE FIRM. IN SUCH CIRCUMSTAN CES, WE ARE OF THE ITA NO. 1039/MDS/2016 :- 7 -: OPINION THAT LD. COMMISSIONER OF INCOME TAX (APPEAL S) WAS JUSTIFIED IN DELETING ALL THESE ADDITION. WE DO NOT FIND ANY REA SON TO INTERFERE. 12. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.1039/MDS/2016 STAND DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 5TH DAY OF OCT OBER, 2016, AT CHENNAI. SD/- ( . ) (G. PAVAN KUMAR) $ % & / JUDICIAL MEMBER SD/- ( . ) (ABRAHAM P. GEORGE) ' % & / ACCOUNTANT MEMBER +& / CHENNAI , / DATED: 5 TH OCTOBER, 2016 KV - ' $'./ 0/' / COPY TO: 1 . ! / APPELLANT 3. 1' () / CIT(A) 5. /45 $'6 / DR 2. $% ! / RESPONDENT 4. 1' / CIT 6. 57 8& / GF