ITO, BEHROR V. SMT. SUNITA GUPTA PROP., Jaipur

ITA 1360/JPR/2010

• Counselvise Citation: 136023114 RSA 2010
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: MAHENDRA GARGIYEA
• Keywords: Sale consideration of property below Jantri Value; Loose papers; Fair market value
• Section: 143(3); 133A; 145

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR ( BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAINI ) ITA NO. 1360/JP/2010 ASSESSMENT YEAR: 2005-06 PAN: AENPG 0397 R THE ITO VS. SMT. SUNITA GUPTA BEHROR PROP. M/S. NAVDEEP HOSPITAL & SURGICAL CENTRE, KUNJ VIHAR, KOTPUTLI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI D.C. SHARMA ASSESSEE BY : SHRI MAHENDRA GARGIYEA DATE OF HEARING : 17.01.2014. DATE OF PRONOUNCEMENT : 11.03..2014 ORDER PER HARI OM MARATHA, J.M. THE REVENUE HAS FILED THIS APPEAL AGAINST THE O RDER OF THE LD CIT(A), ALWAR, DATED 08-09-2010 FOR THE A.Y. 2005-06. 2. THE REVENUE HAS TAKEN GROUND NO.1 AS UNDER: 1. THAT THE LD. COMMISSIONER OF INCOME-TAX (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE TRADING ADDITION OF RS.1245588/- INSPITE OF ACKNOWL EDGING THE DISCREPANCIES, WITHOUT GIVING ANY PROPER JUSTIFICAT ION OR COGENT 2 REASONS AND WITHOUT PROPERLY APPRECIATING THE FINDI NGS AND MATERIAL/CORROBORATIVE EVIDENCE BROUGHT ON RECORD B Y THE AO WHICH IS CONTRARY TO THE DICTA OF HONBLE SUPREME COURT I N THE CASE OF MANGLORE GANESH BEEDI WORKS VS KANSLA NEROLAC PAINT S LIMITED (2010) 30 VST 254 (SC). HE HAS NOT GIVEN ANY VALID REASONS OR JUSTIFICATION FOR DISTRIBUTING THE ESTIMATE OF THE AO AS WELL AS ARRIVING AT HIS OWN ESTIMATION WHICH IS ARBITRARY AND WITHOU T ANY BASIS. IN THIS REGARD RELIANCE IS PLACED ON THE DECISION OF HONBL E RAJASTHAN HIGH COURT IN THE CASE OF SHRI NARENDRA MOHAN PALIWAL 19 0 CTR 236 2.1 BRIEFLY STATED, THE FACTS OF THIS GROUND ARE TH AT THE ASSESSEE IS RUNNING AN HOSPITAL IN THE NAME OF M/S NAVDEEP HOSPITAL & S URGICAL AT KOTPUTLI. A SURVEY U/S 133A OF THE INCOME-TAX ACT, 1961 (THE A CT FOR SHORT) WAS CONDUCTED AT THIS HOSPITAL ON 17.02.2005. IT WAS NO TICED THAT THE BOOKS OF ACCOUNT WERE NOT WRITTEN UP TO THE DATE OF THE SURV EY. THE AO ALSO FOUND THAT DURING THE YEAR THE ASSESSEE HAS DISCLOSED NP RATE OF 3.28% WHICH IS QUITE LOW AS COMPARED TO A.Y.2004-05. THE A.O. HAS REFERRED TO THE IMPOUNDED PAPERS AS ANNEXURE-21 TO 25 AND HE HAS ALLEGED SUPPRESSION OF THE RECEIPTS DURING THE MONTH OF NOVEMBER 2004 TILL FEBRUARY 2005, FOR 101 DAYS TOTALING TO RS.5,10,697/-. SUCH WORKING IS SU MMARIZED AT PAGE 2 & 3 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS ASKED AS TO WHY RECEIPTS FROM MEDICINE HAVE NOT BEEN SHOWN. IN RESPONSE, IT WAS S UBMITTED THAT THE ASSESSEE WAS HITHERTO RUNNING A HOSPITAL ONLY, WHIC H INCLUDED OPD AND OT FACILITIES AND THE FEES RECEIPTS THEREOF ARE DULY ACCOUNTED FOR. HOWEVER, THE RECEIPTS ON ACCOUNT OF MEDICINES WERE PAID TO A MED ICAL SHOP BEING RUN IN 3 THE HOSPITAL PREMISES ITSELF BY SHRI AJAY GUPTA, TH E PROP. OF DEEP MEDICAL STORE. THIS CONTENTION WAS HOWEVER, REJECTED BY TH E AO ON THE REASONING THAT THE ASSESSEE HAS NOT ACCOUNTED FOR THE RECEIPT S ON ACCOUNT OF MEDICINES WHEREAS SHRI AJAY GUPTA WOULD HAVE DISCLOSED HIS OW N RECEIPTS. HE ALLEGED THAT THE SUPPRESSED RECEIPT OF RS.5,10,697/- DID NO T INCLUDE THE RECEIPTS ON ACCOUNT OF MEDICINES ETC.. HE HAS FURTHER ALLEGED THAT ACCOUNTS WERE NOT FOUND COMPLETE ON THE DAY OF SURVEY AND NO COMPLET E BILLS /VOUCHERS AND RECEIPTS WERE KEPT AND FROM THE REGULAR BOOKS OF AC COUNT IT WAS NOT CLEAR THAT THE ASSESSEE HAD MADE ANY PAYMENT ON ACCOUNT O F MEDICINES TO SHRI AJAY GUPTA (DEEP MEDICAL STORE) AFTER CHARGING FROM THE PATIENTS. HE ALSO REFERRED TO ANSWER GIVEN TO Q NO.26 BY SHRI VIJAY KUMAR GUPTA, THE HUSBAND OF THE ASSESSEE IN THE STATEMENT RECORDED D URING SURVEY ON 17-02-2005 TO EMPHASIZE THAT THE SUPPRESSION OF TH E RECEIPT WAS DULY ADMITTED BY THE ASSESSEE AND HIS STATEMENT WAS NO T RETRACTED. THE AO HAS INVOKED SEC.145 OF THE ACT ON THE BASIS OF THESE DI SCREPANCIES AND OTHERS NOTED BY HIM. CONSIDERING THAT SUPPRESSED RECEIPTS OF RS.5,10,697/-, WERE ONLY FOR 101 DAYS, WHEREAS THE ASSESSEES HOSPITAL WAS RUNNING THROUGHOUT THE YEAR FOR 365 DAYS HENCE, HE HAS WORKED OUT TO TAL RECEIPTS FOR THE WHOLE YEAR AT RS.18,45,588/-. HOWEVER, HE HAS REDUCED AD DITIONAL INCOME OF RS.6.00 LACS DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SURVEY AND THE 4 BALANCE AMOUNT OF RS.12,45,588/- HAS BEEN ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 2.2 WHEN THE ASSESEE CHALLENGED THE SAME BEFORE THE LD. CIT(A), HE HAS DELETED THIS ADDITION BY HOLDING AS UNDER.- 4.3 I HAVE CAREFULLY CONSIDERED THE REPLY FILED BY THE ASSESSEE AND ASSESSMENT ORDER. SHRI AJAY GUPTA ADMITTED IN QUEST ION NO. 2 OF THE STATEMENT DATED 17.07.2005 THAT HE HAS INCOME FROM THE DEEP MEDICAL STORE. HE HAS PAN NO. AGFPG 4982N AND FILED THE RETURN TO THE ITO, BEHROR. DR. VIJAY KUMAR GUPTA HUSBAND OF T HE ASSESSEE ADMITTED DURING THE COURSE OF SURVEY THAT PACKAGE S YSTEM IS ADOPTED IN THE HOSPITAL. THEY ACCEPT DEPOSIT IN ADVANCE AND ISSUED THE FINAL BILL TO THE PATIENT AFTER FULL TREATMENT. THEY PREP ARED FINAL BILL ON THE BASIS OF ALL EXPENSES WHICH ALSO INCLUDES MEDICINE EXPENSES. HE HAS ADMITTED UNDISCLOSED RECEIPTS AVERAGELY PER CASE RS .900/- TO RS.1,000/- THUS, 6 LACS AN ADDITIONAL INCOME DISCLO SED FOR A.Y. 2005- 06. THE TOTAL DISCREPANCY CALCULATED BY THE LD. AO IN ASSESSMENT ORDER AT PAGE-3 AT RS.5,10,697/- FOR 101 DAYS. THES E UNDISCLOSED RECEIPTS INCLUDE EXPENSES OF THE MANPOWER, PLANT AN D MACHINERY EXPENSES, RAW MATERIAL USED FOR ECG, X-RAY AND VARI OUS TESTS. IN OTHER WORDS THE WHOLE UNACCOUNTED RECEIPTS WOULD NO T BE INCOME. THE LD. AO HAS NOT TAKEN INTO CONSIDERATION ALL THESE A SPECTS AT THE TIME OF CALCULATING UNDISCLOSED INCOME. MOREOVER THE CREDIT OF MEDICINE PURCHASED FROM M/S DEEP MEDICAL STORE HAS NOT GIVEN BY THE AO. THE REJECTION OF THE BOOK U/S 145(3) MADE ON THE BASIS OF WHATEVER LOOSE PAPERS WERE FOUND FOR WHICH THE ASSESSEE HAS DISCLO SED AN ADDITIONAL INCOME RS.6 LACS FOR WHOLE YEAR BUT ESTIMATION MADE BY THE LD. AO WITHOUT ANY BASIS, IS NOT JUSTIFIABLE. THE LD. AO H AS ACCEPTED THE TOTAL RECEIPTS FOR THE A.Y. 2005-06 AT RS.32,67,353/- AFT ER ADDING RS.6 LACS IN NET PROFIT I.E. RS.74,540/-. THE NET PROFIT IS W ORKED OUT 20.64%, WHICH WAS 9.43% IN PRECEDING YEAR ON TOTAL RECEIPTS OF RS.20,62,468/- . KEEPING IN VIEW OF THE ABOVE FINDINGS AND HON'BLE RAJASTHAN HIGH COURT CASE CIT V/S. GOTAN LIME KHANIJ UDYOG 256 ITR PAGE-243 THE AO HAS FAILED TO MAKE OUT THE CASE FOR ADDITION OF RS.12,45,588/-. THEREFORE THE ADDITION IS DELETED. 5 2.3 FEELING AGGRIEVED, THE REVENUE IS NOW BEFORE US. 2.4 THE LD. DR STRONGLY RELIED UPON THE FINDINGS RE CORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. HE ARGUED THAT IT WAS A CLEAR CASE OF SUPPRESSION OF THE RECEIPTS BASED ON THE IMPOUNDED MATERIAL FOUND DURING THE SURVEY, HENCE, THE AO IS FULLY JUSTIFIED IN MA KING THE ADDITIONS WHEREAS THE LD. CIT(A) IS NOT RIGHT IN DELETING THE ADDITIO N WITHOUT GIVING PROPER JUSTIFICATION OR COGENT REASONS. 2.5 THE LD. AR ON THE OTHER HAND HAS STRONGLY RELI ED ON THE ORDER OF THE LD. CIT(A).HE FURTHER SUBMITTED THAT THE FACT CANN OT BE DENIED THAT THE ASSESSEE WAS RUNNING HOSPITAL ONLY TO CARRY OUT OP ERATIONS [OT AND OUTDOOR PATIENT CONSULTATION (OPD)]. IT WAS NOT HAVING ANY MEDICAL SHOP EARLIER. THEREFORE, THE FEES WAS TOWARDS OPERATION CHARGES , OPD FEES ETC., WHICH WAS DULY CREDITED IN THE REGULAR BOOKS OF ACCOUNT. HE FURTHER SUBMITTED THAT WITH THE OPENING OF A MEDICAL SHOP NAMELY DEEP MEDI CAL STORE IN THE HOSPITAL PREMISES, W.E.F. 31.08.2004, IT STARTED O FFERING A COMPLETE PACKAGE WHICH INCLUDED THE OPERATION CHARGES, ADMISSION CHA RGES AND ALSO COST OF MEDICINES. SINCE THE PART OF THE RECEIPTS, RELATED TO THE COST OF MEDICINES AND THE SAME WAS RECEIVED ON BEHALF OF THE PATIENT HENC E RECEIPT TO THAT EXTENT WAS USED TO BE PASSED ON TO THE MEDICAL SHOP. SUCH RECEIPT WAS THEREFORE, 6 NOT THE RECEIPT OF THE ASSESSEE HENCE; THERE WAS NO OCCASION/REASON FOR THE ASSESSEE TO HAVE ACCOUNTED FOR SUCH RECEIPTS IN ITS BOOKS OF ACCOUNTS. THIS FACT IS VERY WELL EVIDENT FROM THE IMPOUNDED LOOSE SLIPS ON WHICH EVEN REFERENCE OF SUCH EXPENDITURE IS MENTIONED. MOREOV ER, WHENEVER THE PATIENT WAS SENT TO THE MEDICAL SHOP, THE SHOP OWNER USED T O PUT A NOTE SHOWING REF NH (REFERRED BY I.E. NAVDEEP HOSPITAL) WHICH MEANT THAT SUCH PATIENT WAS REFERRED BY NAVDEEP HOSPITAL AND THE COST OF MEDICI NES SHALL BE PAID BY THE NAVDEEP HOSPITAL (THE ASSESSEE). THUS, THE MEDICAL SHOP USED TO DEBIT THE AMOUNT OF SUCH EXPENSES IN THE ACCOUNT OF THE ASSES SEE. THIS IS EVIDENT FROM THE DETAILED WORKING GIVEN FOR THE RELEVANT PERIOD IN THE BOOKS OF DEEP MEDICAL STORE SHOWING THE SALE OF MEDICINE TO THE A SSESSEE. HE DREW OUR ATTENTION TOWARDS THE WORKING PLACED AT PAGES 20 TO 39 OF THE ASSESSEES PAPER BOOK IN SUPPORT OF THIS CONTENTION. A DETAILE D CHART PLACED AT PAGES 9 TO 18 OF THE ASSESSEES PAPER BOOK FOR 92 DAYS OUT OF 101 DAYS BASED ON THE IMPOUNDED LOOSE SLIPS WAS REFERRED TO, WHEREIN THE EXACT AMOUNT OF THE MEDICINES SUPPLIED BY DEEP MEDICAL STORE IS SHOWN W ITH REFERENCE TO A PARTICULAR PATIENT AND THIS WAY THE ASSESSEE PASSED ON THE COST OF MEDICINES SUPPLIED BY NAVDEEP HOSPITAL FOR THIS PERIOD. SUCH A SCHEME WAS DEVELOPED KEEPING IN MIND THAT A PATIENT COMING TO THE HOSPIT AL FOR OPERATION, NEED NOT RUN HERE AND THERE FOR WANT OF MEDICINES. FOR THIS PURPOSE ONLY, THESE 7 FACILITIES WERE MADE AVAILABLE IN THE HOSPITAL PREM ISES THROUGH DIFFERENT PERSONS. HE SUBMITTED THAT THE ENTRIES MADE IN THE SAID CHART BASED ON THE IMPOUNDED SLIPS SHOWS THE COST OF MEDICINES PAID TO THE MEDICAL SHOP AND DULY RECONCILE WITH A DETAILED WORKING FOR THE RELE VANT PERIOD IN THE BOOKS OF DEEP MEDICAL STORE AT PAGES 20 TO 39 SHOWING THE SA LE OF MEDICINE TO THE ASSESSEE. THIS FULLY SUPPORTS THE CONTENTION OF THE ASSESSEE THAT IT WAS IN RECEIPT OF GROSS AMOUNT ONLY WHICH ALSO INCLUDED TH E COST OF MEDICINES (WHICH WAS PASSED ON TO THE MEDICAL SHOP) APART FRO M THE INCOME FROM CONSULTATION, OPERATION FEES ETC. AS REGARDS THE AL LEGATION OF THE AO THAT IT WAS NOT CLEAR THAT THE ASSESSEE MADE PAYMENT ON ACC OUNT OF MEDICAL TO THE MEDICAL SHOP AFTER RECEIPT FROM THE PATIENT HE SUBM ITTED THAT IT IS A SUSPICION ONLY IN AS MUCH AS IT IS ALSO NOT DENIED THAT SHRI AJAY GUPTA, PROPRIETOR OF DEEP MEDICAL STORE WAS RUNNING A MEDICAL SHOP AND A N INDEPENDENT ASSESSEE. HE IS INCOME TAX ASSESSEE AND FILING HIS RETURN OF INCOME REGULARLY BASED ON THE REGULAR BOOKS OF ACCOUNT MAINTAINED, W HICH WERE NOT ADVERSELY COMMENTED UPON. DRAWING OUR ATTENTION TO STATEMENT OF AJAY GUPTA RECORDED ON DATED 17.02.2005 PLACED AT 51 TO 60, IT WAS SUBMITTED THAT, HE WAS NOT ASKED WITH REGARD TO SUCH TRANSACTION WITH THE ASSESSEE. IN ABSENCE OF ANY CONTRARY EVIDENCE, IT HAS TO BE ACCEPTED THA T THE ASSESSEE DID PAID THE COST OF MEDICINE SO RECOVERED TO THE MEDICAL SHOP. HE VEHEMENTLY ARGUED 8 THAT SUCH CONTENTION CANNOT BE AN AFTER THOUGHT IN AS MUCH AS RIGHT AT THE TIME OF SURVEY, DR. VIJAY GUPTA HUSBAND OF THE ASSE SSEE DULY EXPLAINED THESE DETAILS IN ANS. TO Q. NO.26 (AVAILABLE AT PAG E 49) WHEREIN, SHRI GUPTA GAVE AN EXAMPLE OF ONE PATIENT SAVTRI DEVI WITH REF ERENCE TO BILL NO 1201 WHERE THE ASSESSEE RECEIVED RS.5,000/- ON 19.01.200 5 ON ADMISSION AND FURTHER RS.2,500/- ON 27.01.2005 ON DISCHARGE WHERE AS THE RECEIPT WAS ISSUED FOR RS.4,000/- ONLY IN AS MUCH AS THE BALANC E WAS THE RECEIPT WAS ON ACCOUNT OF MEDICAL EXPENDITURE. HE SUBMITTED THAT N OTABLY THE AO RELIED UPON A PART OF THIS VERY Q. NO.26 AGAINST THE ASSES SEE, ADMITTING SUPPRESSION @ RS.900/- TO RS.1,000/- PER CASE. THEREFORE , THE OTHER PART OF THE ANSWER CANNOT BE IGNORED BECAUSE IT IS SETTLED LAW THAT E VIDENCE HAS TO BE READ IN ITS ENTIRETY. HE THEREFORE CONTENDED THAT THE ESTIMATIO N OF THE RECEIPT ON THIS BASIS OF RS.18,45,588/- WAS NOT AT ALL WARRANTED. H E ALSO CLARIFIED THAT THE PACKAGE SCHEME HAS BEEN COMMENCED W.E.F 31.04.2008 HENCE, IN THE FIRST 5 MONTHS OF THE YEAR, THE PATIENT ITSELF USED TO BRIN G THE MEDICINES IN ABSENCE OF ANY SUCH PACKAGE SYSTEM. ADMITTEDLY, NO DOCUMENT ARY EVIDENCE WAS FOUND OR REFERRED TO SHOWING SUCH SUPPRESSION FOR T HE REST OF THE PERIOD. THEREFORE, THERE COULD NOT BE ANY QUESTION OF SUCH ESTIMATION. HENCE, THE ENHANCEMENT IN THE INCOME TO THAT EXTENT WAS NOT JU STIFIED. THE ASSESSEE HAS ALREADY FAIRLY ADMITTED THE SUPPRESSION OF ITS INCO ME OF AROUND RS.900/- TO 9 RS.1,000/- PER CASE AND THEREFORE, MADE A SURRENDER OF SUBSTANTIAL AMOUNT OF RS.6,00,000/-. FURTHER IN ANS TO Q. NO.19 WHEN ASKE D IN WRITING, THE ASSESSEE STATED OF DOING 60 OPERATIONS AVERAGE PER MONTH APA RT FROM MINOR ONE INCLUDING MINOR OPERATIONS ALSO, JUSTIFYING THE AMO UNT SO SURRENDERED. THEREFORE, NO FURTHER ADDITION OVER AND ABOVE WAS W ARRANTED. HE FURTHER SUBMITTED THAT U/S 145 AO IS BOUND TO MAKE AN HONE ST ESTIMATION OF INCOME AND PLACED RELIANCE ON CIT V/S GOTAN LIME KHANIZ UD YOG 256 ITR 243 (RAJ) WHEREAS THE ESTIMATION MADE BY THE AO WAS NOT FAIR BECAUSE IF RS.6,00,000/- SURRENDERED IS ADDED TO THE DECLARED INCOME OF RS.74,540/- IN A.Y. 2005-06, THE NP RATE WORKS OUT TO 20.64% (ON T OTAL RECEIPTS OF RS.32,67,353/-), AS AGAINST 9.43% DECLARED IN THE P RECEDING YEAR ON TOTAL RECEIPTS OF RS.20,62,468/- WHICH WAS DULY ACCEPTED IN THE SCRUTINY ASSESSMENT MADE ON DATED 06.12.2006 U/S 143(3) FOR A.Y.2004-05 (WITH COPIES PLACED AT PAGES 61-66). THEREFORE, ASSUMING FURTHER ADDITION OF RS.12,45,588/- IS HELD JUSTIFIED, IT WILL RESULT IN TO NP RATE OF 40.40% WHICH IS ABSOLUTELY IMPOSSIBLE BEING IMAGINARY. THIS CLEARLY SPEAKS OF THE INCORRECTNESS AND UNFAIRNESS IN THE ESTIMATION OF T HE AO. HE STRONGLY RELY UPON THE ORDER OF LD. CIT(A) AND PRAYED TO DISMISS ES THE APPEAL OF THE REVENUE. 10 2.6 WE HAVE CAREFULLY CONSIDERED THE FINDINGS RECO RDED BY THE AUTHORITIES BELOW, THE RIVAL CONTENTIONS OF THE PARTIES AND HAV E ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE REASONING GIV EN BY THE LD. CIT(A) ON THE DELETION OF THE IMPUGNED ADDITION, WAS FULLY RE ASONABLE AND JUSTIFIED. IT APPEARS THAT THE AO DID NOT APPRECIATE THAT IN THE TOTAL AMOUNT WHICH WAS RECEIVED DURING THE YEAR, ALSO INCLUDED THE AMOUNT ON ACCOUNT OF MEDICINE, PATHOLOGICAL LAB ETC. APART FROM THE FEES ON ACCOUN T OF ADMISSION, OPERATION CHARGES ETC. THE RECEIPT ON ACCOUNT OF MEDICINE, PA THOLOGICAL TEST ETC. DID NOT BELONG TO THE ASSESSEE AND CREDIT OF PAYMENT TH EREOF TO SH. AJAY GUPTA SHOULD HAVE BEEN GIVEN. THE AO THOUGH REFERRED TO A NS TO Q.26 AND ALSO REPRODUCED THE EXTRACT IN THE ASSESSMENT ORDER BUT IGNORED THIS FACT THAT THE RECEIPT ON ACCOUNT OF MEDICINE ETC WAS NOT TO BE AC COUNTED FOR. OUR ATTENTION WAS DRAWN TOWARDS A CHART BASED ON THE IMPOUNDED SL IPS WHICH WAS PREPARED FOR 92 DAYS TO SHOW THAT THE AMOUNT OF MED ICINES ENTERED IN THE IMPOUNDED SLIPS BELONGED TO SHRI AJAY GUPTA TO WHOM THE PAYMENTS WERE MADE. A COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN T HE BOOKS OF SHRI AJAY GUPTA WAS ALSO PLACED IN SUPPORT OF THE CONTENTION. WE FIND THAT ALTHOUGH STATEMENT OF SHRI GUPTA AND KALULAL GURJAR WERE REC ORDED ON DATED 17.02.2005 HOWEVER, NO SPECIFIC QUESTION ON THIS AS PECT WAS RAISED. THE ASSESSEE HAS ALREADY SURRENDERED ADDITIONAL INCOME OF RS.6,00,000/- TO COVER 11 UP POSSIBLE LEAKAGE AND BASED ON ANS TO Q.NO.19 THE LD. AR DEMONSTRATED THAT THE SUPPRESSED INCOME IF ANY, CAME TO RS.5,52, 500/- ONLY AS AGAINST THIS, THE ASSESSEE HAS ALREADY SURRENDERED RS.6,00,000/-. THESE FACTS COULD NOT BE DENIED BY THE LD. DR ALSO. AFTER REJECTION OF THE A CCOUNTS, NEEDLESS TO SAY THAT AO IS BOUND TO MAKE A FAIR ESTIMATION OF INCOM E BASED ON THE COGENT MATERIAL AND OTHER RELEVANT FACTORS. THUS, THE ESTI MATION MADE IN THE PRESENT CASE IS FOUND CONTRARY TO THE MATERIAL AVAILABLE ON RECORD AND IS NOT FOUND TO BE A FAIR ESTIMATION. THIS IS FOR THE REASON THAT T HE ASSESSEE HAS ALREADY DECLARED RS.6,00,000/- AND CONSIDERING THE SAME, TH E NP WORKED OUT TO 20.64% ON THE TOTAL RECEIPTS OF RS.32,67,353/- AS A GAINST THE NP RATE OF 9.43% ONLY DECLARED IN THE PRECEDING YEAR WHICH WAS EVEN ACCEPTED BY THE DEPARTMENT IN THE SCRUTINY ASSESSMENT. IF THE IMPUG NED ADDITION SO MADE, IS CONFIRMED, THE RESULTANT NP WOULD HAVE BEEN OF 40.4 0% WHICH APPEARS TO BE IMAGINARY. IN GOTAN LIME (SUPRA) IT HAS BEEN HELD T HAT MERE REJECTION OF BOOKS OF ACCOUNT NEED NOT NECESSARILY LEAD TO ADDIT IONS TO THE RETURNED INCOME. IN THE PRESENT CASE, THE AO DID NOT MAKE A FAIR ESTIMATION IN CONFORMITY OF THE SETTLED JUDICIAL GUIDELINE. HENCE , THE LD. CIT(A) RIGHTLY DELETED THE IMPUGNED ADDITION. HENCE, THIS GROUND O F THE REVENUE IS DISMISSED. 12 2.7 IN GROUND NO. 2, THE REVENUE HAS CHALLENGED TH E DELETION OF THE ADDITION MADE ON ACCOUNT OF THE UNEXPLAINED INVESTM ENT OF RS.1,06,195/- IN CONSTRUCTION OF HOSPITAL BUILDING. 2.8 THE FACTS APROPOS ARE THAT THE ASSESSEE WAS ENG AGED IN THE CONSTRUCTION OF HOSPITAL BUILDING. THE AO NOTED THA T INVESTMENT DISCLOSED BY THE ASSESSEE RS.14,63,485/-. HOWEVER, AS PER VALUAT ION DONE BY THE GOVERNMENT VALUER IT WAS ESTIMATED AT RS.15,69,680/ -, THUS THERE WAS A DIFFERENCE OF RS. RS.1,06,195/-. WHEN ASKED, THE AS SESSEE REPLIED THAT SUCH DIFFERENCE BEING LESS THAN 10% WAS WITHIN THE TOLER ANCE LIMIT. HOWEVER, THE AO NOT FEELING SATISFIED AND CONSIDERED THE DIFFERE NCE AS INVESTED FROM THE UNDISCLOSED INCOME FROM MEDICAL. CONSIDERING THE FA CT THAT SEPARATE ADDITION ON ACCOUNT OF SUPPRESSED MEDICAL INCOME OF RS.12,45,588/- IS MADE, HENCE NO SEPARATE ADDITION WAS MADE OF RS.1,0 6,195/- BUT WITH THE RIDER THAT IN CASE, THE ASSESSEE GETS RELIEF IN ANY APPEAL/REVISION, THIS ADDITION SHALL BE ADDED TO THE EXTENT OF THE RELIEF/DEDUCTIO N. THE CIT(A) DELETED THE ADDITION AGREEING WITH THE SUBMISSIONS OF THE ASSES SEE THAT THE ALLEGED DIFFERENCE WAS LESS THEN 10% AND MOREOVER THE DR. V IJAY KUMAR GUPTA AS WELL AS SHRI AJAY KUMAR GUPTA HAD ADMITTED DURING T HE COURSE OF SURVEY THAT INVESTMENT IN HOSPITAL BUILDING WAS MADE FROM THE RECEIPTS OF THE HOSPITAL BUSINESS. 13 2.9 FEELING AGGRIEVED THE REVENUE HAS TAKEN THE FO LLOWING GROUND:- THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE UNEXPLAIN ED INVESTMENT OF RS. 1,06,195/- IN CONSTRUCTION OF HOSPITAL BUILDING . 2.10 BEFORE US THE LD. DR STRONGLY RELIED UPON THE FINDINGS RECORDED IN THE ASSESSMENT ORDER AND SUBMITTED THAT WHEN, ADMITTEDL Y, THERE WAS A DIFFERENCE, THE ADDITION WAS RIGHTLY MADE BY THE AO AND LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE PRAYED FOR T HE CONFIRMATION OF THE ADDITION. 2.11 PER CONTRA THE LD. AR HAS VEHEMENTLY ARGUED THAT ESTIMATIONS ARE AFTER ALL ESTIMATIONS AND CANNOT BE THE ACCURATE. T HEREFORE, ANY SUCH DIFFERENCE BELOW 10% HAS BEEN HELD TO BE WITHIN THE TOLERANCE LIMIT. HE RELIED UPON RAHUL CONSTRUCTIONS V/S DCIT (2010) 38 DTR 19 (PUNE) HOLDING THAT CAPITAL GAINSCOMPUTATIONAPPLICABILITY OF S.50C VI S-AVIS VALUATION OF PROPERTY BY DVOA COMBINED READING OF THE RELEVANT PROVISIONS SHOWS THAT THE VALUATION MADE BY THE DVO IS SUBJECT TO APPEAL AND THE SAME IS NOT FINAL IN THE INSTANT CA SE, THE ASSESSEE RECEIVED AN AMOUNT OF RS.19,00,000 AS SALE CONSIDER ATION ON ACCOUNT OF SALE OF BASEMENT OF A BUILDINGSTAMP VALUATION A UTHORITIES HAVE ADOPTED THE VALUE AT RS.28,73,000 FOR THE PURPOSE O F STAMP DUTYON BEING OBJECTED BY THE ASSESSEE FOR SUBSTITUTION OF THE SAME FIGURE UNDER S. 50C(2), THE AO REFERRED THE MATTER TO THE DVO WHO DETERMINED THE FMV OF THE PROPERTY ON THE DATE OF S ALE AT RS.20,55,000THIS ITSELF SHOWS THAT THERE IS A WIDE VARIATION BETWEEN 14 THE TWO VALUES AND THAT THEY ARE BASED ON SOME ESTI MATEDIFFERENCE BETWEEN THE SALE CONSIDERATION SHOWN BY THE ASSESSE E AND THE FMV DETERMINED BY THE DVO IS ONLY RS.1,55,000 WHICH IS LESS THAN 10 PER CENTIN VIEW OF THE FACT THAT VALUATION IS ALWAYS A MATTER OF ESTIMATION WHERE SOME DIFFERENCE IS BOUND TO OCCUR, THE AO WAS NOT JUSTIFIED IN SUBSTITUTING THE VALUE DETERMINED BY T HE DVO FOR THE SALE CONSIDERATION DISCLOSED BY THE ASSESSEETHEREFORE, AO IS DIRECTED TO TAKE RS.19,00,000 ONLY AS THE SALE CONSIDERATION OF THE PROPERTY HE SUBMITTED THAT THE LD. CIT(A) RIGHTLY DELETED TH E ADDITION. 2.12 WE HAVE CAREFULLY CONSIDERED THE RIVALS CONTE NTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT IS NOT DENIE D THAT THE DIFFERENCE OF RS.1,06,195/- WAS A DIFFERENCE BETWEEN 2 ESTIMATION S. WE AGREED WITH THE CONTENTIONS OF LD. AR THAT THERE IS BOUND TO BE SOM E DIFFERENCE IN THE ESTIMATES GIVEN BY THE 2 EXPERTS/PERSONS. WE AGREE WITH THE VIEW TAKEN BY THE PUNE BENCH OF ITAT IN THE CASE OF RAHUL CONSTRU CTIONS (SUPRA) THAT SUCH A DIFFERENCE WHICH IS BELOW 10% IS WITHIN TOLERANCE LIMIT. HENCE THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. WE CONFIRM THE DELETION SO MADE. HENCE, THIS GROUND OF THE REVENUE IS DISMISSED. 3.1 IN GROUND NO. 3 THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION OF RS. 30,000/- MADE ON ACCOUNT OF THE NON BUSINESS USER OF THE BUILDING AND OTHER FACILITIES. 3.2 BRIEFLY STATED THE FACTS AS NOTED BY THE AO AR E THAT THE HUSBAND OF THE ASSESSEE DR. VIJAY KUMAR GUPTA HAS BEEN USING HOSPI TAL BUILDING FOR 15 RESIDENTIAL PURPOSE AND OTHER FACILITIES LIKE ELECT RICITY, WATER ETC. FOR HIS PERSONAL PURPOSE. HENCE, THE AO HAS MADE AN ESTIMAT ED ADDITION OF RS.30,000/- FOR PERSONAL USER. THE CIT(A) HOWEVER, DELETED SUCH ADDITION ON THE PREMISE THAT HUSBAND IS A SURGEON AND IS ALS O CEO OF THE HOSPITAL. HIS SERVICE, AS A SURGEON, IS REQUIRED ROUND THE CL OCK IN THE HOSPITAL. WITH THIS VIEW HE HAS BEEN GIVEN RESIDENTIAL ACCOMMODATI ON IN THE HOSPITAL COMPOUND ITSELF TO ENSURE BETTER AND ROUND THE CLOC K FACILITY TO THE PATIENTS AND PARTICULARLY AT THE TIME OF EMERGENCY. HENCE, T HIS CANNOT BE TERMED AS USE OF BUILDING FOR NON-BUSINESS PURPOSES BUT IT WA S A DIRECT NECESSITY AND WAS INCIDENTAL TO BUSINESS. 3.3 FEELING AGGRIEVED THE REVENUE HAS CHALLENGED T HE DELETION TAKING THE FOLLOWING GROUND:- THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE UNEXPLAIN ED INVESTMENT OF RS. 30,000/- ON A/C OF USE OF BUILDING FOR NON BUSI NESS PURPOSE. 3.4 BOTH THE PARTIES HAVE TAKEN THE SAME STAND AND HAVE REPEATED THEIR RESPECTIVE ARGUMENTS. IN ADDITION, THE LD AR ALSO S UBMITTED THAT SUCH EXPENDITURE WAS INCURRED OUT OF COMMERCIAL EXPEDIEN CY AND RELIED UPON THE DECISIONS IN THE CASES OF T.T.PVT. LTD. V/S ITO (1 980) 121 ITR 551 (KAR), 16 CIT V/S UDHOJI SHRIKRISHNADAS (1983) 139 ITR 827 (M P) JK WOOLEN MANUFACTURERS 72 ITR 612 (SC). 3.5 WE HAVE CONSIDERED THE RIVALS CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. DR COULD NOT DENY THE FACT THAT DR. GUPTA WAS A SURGEON AND IN THE CASE OF A HOSPITAL, HIS PRESENCE WAS AN UNAVOIDABLE BUSINESS NECESSITY. PROVIDING RESIDENCE AND OTHER FACILITIES THEREFORE, WAS AN EXPENDITURE INCURRED OUT OF THE COMMERCIAL EXPEDIEN CY. WE FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CI T(A) ON THIS ASPECT. HENCE, THIS GROUND OF THE REVENUE IS DISMISSED. 4.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS D ISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11-0 3-2014. SD/- SD/- ( N.K. SAINI ) (HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH MARCH, 2014. *MISHRA COPY FORWARDED TO :- 1. THE ITO, BEHROR 2. SMT. SUNITA GUPTA, KOTPUTLI 3. THE LD.CIT(A) BY ORDER 3. THE LD CIT 4. THE D/R 5. GUARD FILE (ITA NO.1360/JP/2010) AR ITAT, JAIPUR 17 18 19