Shri Nareshkumar Hansrajbhai Dhaduk, Surat V. The Income tax Officer,Ward-9(3), Surat

ITA 13/AHD/2009

• Counselvise Citation: [2010] 137 COUNSELVISE.COM (IT) 0212 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-01-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 01-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: DIVYAKANT PARIKH
• Keywords: Depreciation; Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD - AHMEDABAD D BENCH (BEFORE DR.O.K. NARAYANAN, VICE-PRESIDENT AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER) ITA NO.13/AHD/2009 [ASSTT.YEAR: 2005-2006] NARESHKUMAR HANSRAJBHAI DHADUK F-4, DOCTOR HOUSE, SARGAM COMPLEX, HIRABAUG, VARACHHA ROAD, SURAT. VS. INCOME TAX OFFICER, WARD 9(3), SURAT. PAN: ADOPD 9773 E ASSESSEE BY : SHRI. DIVYAKANT PARIKH REVENUE BY : SHRI C.K.MISHRA DATE OF ORDER RESERVED: 07-01-2010 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2005-2006 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-V AT SURAT DATED 25-11-2008 AND ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IS A MEDICAL PRACTITIONER. HE IS A LSO RUNNING A X-RAY AND SONOGRAPHY CLINIC. THE ASSESSING OFFICER MADE A 20% ADDITION TOWARDS NET PROFIT AMOUNTING TO RS.6,85,068/- AND C OMPLETED THE ASSESSMENT ALONGWITH THE SALARY INCOME RETURNED BY THE ASSESSEE. THE ADDITION WAS MADE BY THE ASSESSING AUTHORITY ON THE GROUND THAT THE PROFIT DECLARED BY THE ASSESSEE WAS NOT COMMENSURAT E TO THE CONSUMPTION OF ELECTRICITY CHARGES IN HIS CLINIC. IN FIRST APP EAL THE 20% ADDITION WAS PAGE - 2 ITA NO.13/AHD/2009 -2- MODIFIED TO A LUMP-SUM ADDITION OF RS.5,00,000/- BY CIT(A). THE ASSESSEE IS HIGHLY AGGRIEVED AND THEREFORE THE SECO ND APPEAL BEFORE THE TRIBUNAL. 3. THE ONLY GROUND RAISED BY THE ASSESSEE IN THE PR ESENT APPEAL IS THAT THE CIT(A) HAS ERRED IN CONFIRMING ESTIMATED ADDITI ON AT RS.5,00,000/- ON ACCOUNT OF ALLEGED SUPPRESSION OF PROFESSIONAL RECE IPTS ON THE BASIS OF CONSUMPTION OF ELECTRICITY. 4. WE CONSIDERED THE ISSUE. THE ADDITION HAS BEEN MADE BY THE ASSESSING AUTHORITY ON THE GROUND OF DISPROPORTIONA TE CONSUMPTION OF ELECTRICITY ENERGY. THE HON'BLE KERALA HIGH COURT HAD AN OCCASION TO CONSIDER A SIMILAR CASE WHERE ADDITION WAS MADE ON THE GROUND OF DISPROPORTIONATE CONSUMPTION OF ENERGY. THE COURT HELD THAT REJECTION OF ACCOUNTS IS NOT JUSTIFIED ONLY ON THE GROUND OF POW ER CONSUMPTION AND IN THE ABSENCE OF ANY STRONG AND SUFFICIENT REASON.(ST . TERRASAS OIL MILLS V/S. STATE OF KERALA 25 STC 497). WE FIND THAT THE ABOVE JUDGMENT HAS A GREAT FORCE TO BE APPLIED IN THE PRESENT CASE. APA RT FROM THE ALLEGED DISPARITY IN THE CONSUMPTION OF ELECTRICITY ENERGY, THE ASSESSING OFFICER HAS NOT POINTED OUT ANY OTHER POIGNANT REASON TO MA KE AN ADDITION AGAINST THE ASSESSEE. IT IS TO BE FURTHER NOTED THAT THE A SSESSEE HAS ALREADY EXPLAINED THAT INCOME RETURNED WAS COMPARATIVELY LO W FOR THE REASON OF HIGH AMOUNT OF DEPRECIATION CLAIMED ON NEWLY PURCHA SED MEDICAL EQUIPMENTS. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE A RE CONSTRAINED TO HOLD THAT THE LUMP-SUM ADDITION OF RS.5,00,000/- SU STAINED BY THE CIT(A) IS NOT JUSTIFIED. IT IS SUFFICIENT TO MAKE A LUMP- SUM ADDITION OF PAGE - 3 ITA NO.13/AHD/2009 -3- RS.1,00,000/- TO COVER UP ALL PROBABLE OMISSIONS AN D SUPPRESSIONS. ACCORDINGLY, WE MODIFY THE ADDITION TO A LUMP-SUM A MOUNT OF RS.1,00,000/-. THE ASSESSING AUTHORITY IS DIRECTED TO REVISE THE COMPUTATION OF INCOME IN THE LIGHT OF THE ABOVE DIR ECTION. WE MAKE IT CLEAR THAT OUR ORDER IN THIS APPEAL WILL NOT BE A P RECEDENCE AS THE ISSUE DECIDED IN THE PRESENT APPEAL IS A PURE QUESTION OF FACT, APPLYING ONLY TO THIS IMPUGNED ASSESSMENT YEAR. THEREFORE, THE MODI FIED ADDITION OF RS.1,00,000/- IS NOT A TRENDSETTER EITHER AGAINST T HE ASSESSEE OR AGAINST THE REVENUE. 6. IN RESULT THIS APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY THIS 8TH DAY OF JANUARY, 2010. SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (DR.O.K. NARAYANAN) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 08-01-2010 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD