M/s. Sanjivani Hospital, Ahmednagar V. ITO, Ward 2, Ahmednagar, Ahmednagar

ITA 1432/PUN/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60021 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Diversion of income; Agreed addition; TDS
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NOS. 1432 & 1433/PN/2010 (ASSTT. YEARS : 2006-07 ) M/S SANJIVANI HOSPITAL ... APPELLANT NEAR CHAND SULTANS HIGH SCHOOL AHMEDNAGAR PAN : AAMFS9444A V. INCOME TAX OFFICER , WARD 2, RESPONDENT AHMEDNAGAR APPELLANT BY : SHRI. M.K. KULKARNI RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING :21/02/12 DATE OF PRONOUNCEMENT : -3-12 ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS : ITA NO. 1432/PN/2010 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. C.I.T.(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS. 2,50,900/- MADE BY THE A.O. ON ACCOUNT OF DIFFEREN TIAL AMOUNTS OF PROFESSIONAL FEES THE ADDITIONS BEING NOT OF REA LLY ACCRUED INCOME AND WERE IN FACT DIVERSION OF INCOME BY OVER RIDING TITLE. THE ADDITIONS CONFIRMED BEING NOT IN CONSONANCE WIT H THE PROVISIONS OF LAW BE QUASHED. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST U/S. 234-A, 234-B AND 234-C OF THE ACT AND IT BE DELETED. GROUND NO. 1 2. THE RELEVANT FACTS ARE THAT THE ASSESSEE FIRM I. E. AN HOSPITAL WAS HAVING 2 PARTNERS I.E. HUSBAND AND WIFE, BOTH DOC TORS. DURING THE ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 2 COURSE OF ASSESSMENT PROCEEDINGS, DR. VIJAY MORESHW AR JOSHI, THE HUSBAND DIED AND THE RUNNING OF THE HOSPITAL WAS CO NTINUED BY THE OTHER PARTNER. DURING THE COURSE OF VERIFICATION OF BOOK S OF ACCOUNTS, THE A.O. OBSERVED THAT AMOUNT OF RECEIPT REFLECTED IN THE CA SH RECEIPT ISSUED BY THE ASSESSEE WAS HIGHER THAN WHAT WAS RECORDED IN THE CORRESPONDING DAILY CASE REGISTER MAINTAINED BY THE ASSESSEE. TH E AO HIGHLIGHTED 25 SUCH CASES MENTIONED IN ANNEXURE A ATTACHED TO TH E ASSESSMENT ORDER. HE QUANTIFIED SUCH DIFFERENTIAL AMOUNT IN RESPECT O F SAID 25 CASES AT RS.79,080/-. THE ASSESSEE EXPRESSED ITS INABILITY TO RECONCILE THE DIFFERENCE AND AGREED TO PAY TAXES ON THE SAID DIFF ERENTIAL AMOUNT VIDE ITS LETTER DATED 25/11/2008. THE A.O. ACCORDINGLY MADE AN ADDITION OF RS.79,080/- TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE A.O. NOTICED FURTHER THAT THERE WAS DIFFEREN CE IN THE AMOUNTS SHOWN IN THE BILLS ISSUED TO PATIENTS AND CORRESPO NDING ENTRIES IN THE DAILY CASE REGISTER. THE A.O FOUND OUT 38 SUCH ENT RIES WHERE THERE WAS DIFFERENCE IN THE AMOUNT AS PER BILL AND AS PER CA SE REGISTER, SUCH ENTRIES HAVE BEEN LISTED AT ANNEXURE B ATTACHED TO THE AS SESSMENT ORDER. THE ASSESSEE TRIED TO EXPLAIN THE REASON FOR DIFFERENCE , BUT ULTIMATELY, AGREED TO PAY TAX ON THE AMOUNT IN DIFFERENCE FOR THE SAK E OF MENTAL PEACE. THE A.O HAS ACCORDINGLY MADE ADDITION OF RS. 1,85,940/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE LD CIT(A) HAS ALSO UPHELD THE ABOVE ADDITIO NS WITH DIRECTION TO EXCLUDE ADDITION OF RS. 14,120/- THERE-FROM AS T HE SAME WAS INCLUDED TWICE IN ANNEXURE A AND ANNEXURE B. THE ADDITI ON UPHELD IS NOW RS. 2,50,900/- (RS. 2,65,020/- MINUS RS. 14,120/-). ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 3 5. IN SUPPORT OF THE GROUND, THE LD. A.R. REITERAT ED THE EXPLANATION MADE BEFORE THE AUTHORITIES BELOW. HE SUBMITTED TH AT SO FAR AS ADDITION OF RS. 79,098/- MADE ON ACCOUNT OF DISCREPANCY IN R ECEIPT AS PER RECEIPTS PREPARED AND THE AMOUNT RECORDED IN THE BOOKS OF AC COUNTS IN THE CASES LISTED IN ANNEXURE A IS CONCERNED, IT REPRESENTS MOSTLY THE OPERATIONS PERFORMED WHERE ANESTHETISTS ARE INVOLVED AND IT IS GENERAL PRACTICE IN THE MEDICAL WORD THAT ANESTHETISTS ACCEPT BILL IN CASH ON THE SPOT FOR THE ANESTHESIA PERFORMED BY THEM. THOUGH THE RECEIPT IS ISSUED IN THE NAME OF THE PATIENT FOR THE GROSS AMOUNT, THE FIRM ONLY CREDITS NET AMOUNT THAT IS RETAINED AFTER DEDUCTING THE PAYMENT MADE T O ANESTHETISTS AND THE NET AMOUNT RETAINED HAVE BEEN PROPERLY ACCOUNT ED FOR IN THE BOOKS OF ACCOUNT. 6. REGARDING THE ADDITION OF RS. 1,85,940/- BASED O N ANNEXURE B, THE EXPLANATION OF THE LD. A.R. REMAINED THAT THE BILL AMOUNTS WERE LATER REDUCED AFTER SOME CONCESSION OR DISCOUNT WAS ALLOW ED ON THE BILLS AMOUNT ON THE REQUEST OF PATIENTS CONSIDERING THEIR POOR FINANCIAL CONDITIONS. HE SUBMITTED THAT RECEIPTS WERE ISSUED IN RESPECT OF ACTUAL AMOUNTS RECEIVED FROM THE PATIENTS AND ENTERED IN T HE BOOKS OF ACCOUNT. 7. THE LD. A.R. SUBMITTED THAT WITHOUT APPRECIATING BONAFIDE OF THE EXPLANATION OF THE ASSESSEE, THE AUTHORITIES BELOW HAVE MADE AND UPHELD THE ADDITIONS IN QUESTION. 8. THE LD. D.R. ON THE OTHER HAND PLACED RELIANCE O N THE ORDERS OF THE AUTHORITIES BELOW. ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 4 9. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW, WE DO NOT FIND SUBSTANCE IN THE ABOVE CONTENTION OF THE LD. A .R. AS IT IS EVIDENT FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE A SSESSEE COULD NOT RECONCILE THE DIFFERENCE IN THE ABOVE AMOUNT BASED ON ANNEXUREA AND ANNEXURE B AND HAS ADMITTED THE PROPOSED ADDITION IN ABSENCE OF EVIDENCE TO SUPPORT HIS CLAIM. UNDER THESE CIRCUMS TANCES, WE ARE HAVING NO OPTION BUT TO UPHOLD THE ABOVE ADDITION SUSTAINE D BY THE LD CIT(A) I.E. RS. 2,50,900/-. THE GROUND NO. 1 IS ACCORDINGL Y REJECTED. GROUND NO. 2. 10. IN THIS GROUND, INTEREST CHARGED UNDER SECTION S 234A, 234B AND 234C OF THE ACT HAS BEEN QUESTIONED. THE INTEREST CHARGED IS CONSEQUENTIAL IN NATURE. HENCE, GROUND NO. 2 DOES NOT NEED INDEPENDENT ADJUDICATION. 11. CONSEQUENTLY, APPEAL IS DISMISSED. ITA NO. 1433/PN/2010 12. IN THIS APPEAL, THE ASSESSEE HAS QUESTIONED THE LEVY OF PENALTY U/S. 271(1)(C ) ON THE ADDITION OF RS. 2,90,126/- UPHELD BY THE LD CIT(A). 13. AT THE OUTSET OF HEARING, THE LD. A.R. POINTED OUT THAT IN THE PRESENT CASE, THE ASSESSEE IS NO MORE IN EXISTENCE AS THE SAME HAS BEEN DISSOLVED AFTER THE DEMISE OF ONE OF THE TWO PARTNE RS, HENCE PENALTY IN QUESTION IS NOT LEVIABLE. IN THIS REGARD, HE CITE D THE PROVISIONS LAID ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 5 DOWN U/S. 189, SUB-SECTION (3) AND SUB-SECTION (4) THERETO. THE LD. D.R. OPPOSED THIS PROPOSITION OF THE LD. A.R. 14. HAVING GONE THROUGH THE ABOVE REFERRED PROVISIO NS U/S. 189 OF THE I.T. ACT 1961, WE DO NOT FIND SUBSTANCE IN THE PREL IMINARY OBJECTION RAISED BY THE LD. A.R. . ADMITTEDLY, ONE OF THE TW O PARTNERS OF THE ASSESSEE FIRM DIED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT EVEN OTHERWISE, SUB-SECTION (1) TO SECTION 189 OF THE AC T MAKES IT CLEAR THAT WHERE ANY BUSINESS OR PROFESSION CARRIED ON BY ANY FIRM HAS BEEN DISCONTINUED OR WHERE A FIRM IS DISSOLVED, THE A.O. SHALL MAKE AN ASSESSMENT OF THE TOTAL INCOME OF THE FIRM AS IF NO SUCH DISCONTINUANCE OR DISSOLUTION HAD TAKEN PLACE AND ALL THE PROVISIONS OF THIS ACT INCLUDING THE PROVISIONS RELATING TO THE LEVY OF PENALTY OR ANY S UM CHARGEABLE UNDER ANY PROVISIONS OF THE ACT SHALL APPLY, SO FAR AS MA Y BE, TO SUCH ASSESSMENT. IN THE PRESENT CASE, HOWEVER, DESPITE DEMISE OF ONE OF THE TWO PARTNERS, THE ASSESSEE CONTINUED ITS ACTIVITIES , HENCE IT IS NOT A CASE OF DISCONTINUANCE OF ITS AFFAIRS BY THE ASSESSEE. S UB- SECTION (3) MAKES IT CLEAR THAT EVERY PERSON WHO WAS AT THE TIME OF SUC H DISCONTINUANCE OR DISSOLUTION, A PARTNER OF THE FIRM AND THE LEGAL R EPRESENTATIVE OF ANY SUCH PERSON WHO IS DECEASED, SHALL BE JOINTLY AND SEVERA LLY LIABLE FOR THE AMOUNT OF TAX, PENALTY OR OTHER SUM PAYABLE AND ALL THE PROVISIONS OF THIS ACT SO FAR AS MAY BE, SHALL APPLY TO ANY SUCH ASSES SMENT OR IMPOSITION OF PENALTY OR OTHER SUM. THE SUB-SECTION (4) TO THE S ECTION MAKES IT CLEAR THAT WHERE SUCH DISCONTINUANCE/DISSOLUTION TAKES PL ACE AFTER ANY PROCEEDING IN RESPECT OF AN A.Y. HAVE COMMENCED, T HE PROCEEDINGS MAY BE CONTINUED AGAINST THE PERSON REFERRED TO IN SUB- SECTION (3) FROM THE STAGE AT WHICH SUCH IS STOOD AT THE TIME OF SUCH D ISCONTINUANCE OR DISSOLUTION, AND ALL THE PROVISIONS OF THIS ACT SHA LL, SO FAR AS MAY BE, ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 6 APPLIED ACCORDINGLY. IN VIEW OF THE ABOVE CLEAR PO SITION, WE DO NOT FIND SUBSTANCE IN THE PRELIMINARY OBJECTIONS RAISED BY T HE LD. A.R. THE SAME IS ACCORDINGLY REJECTED. 15. WE HAVE ALREADY DISCUSSED THE FACTS OF THE ADD ITIONS BASED ON ANNEXURE A AND ANNEXURE B APPENDED TO THE ASSE SSMENT ORDER HEREINABOVE. IN THE PRESENT APPEAL, THE ASSESSEE H AS QUESTIONED PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT ON THE SAID ADDIT IONS, UPHELD BY THE TRIBUNAL IN THE QUANTUM APPEAL. 16. THE CONTENTION OF THE LD. A.R. REMAINED THAT DU E TO DEMISE OF THE HUSBAND PARTNER OF THE FIRM I.E. AN HOSPITAL, THE W IFE WAS NOT ABLE TO RECONCILE THE DIFFERENCE OF AMOUNT/DISCREPANCIES PO INTED OUT IN ANNEXURE A AND ANNEXURE B, HENCE SHE HAD AGREED FOR PAY MENT OF TAX ON THE ABOVE ADDITIONS. HE CONTENDED THAT ASSESSMENT PROC EEDINGS AND PENALTY PROCEEDINGS ARE TWO INDEPENDENT PROCEEDINGS, HENCE BONAFIDE OF THE EXPLANATION IN SUCH AGREED ADDITIONS CAN ALWAYS BE CONSIDERED WHILE EXAMINING THE JUSTIFICATION OF PENALTY LEVIED ON TH OSE ADDITIONS. IN SUPPORT, HE PLACED RELIANCE ON THE FOLLOWING TWO DE CISIONS : 1) ACIT VS. MALU ELECTRODES (P) LTD. (2010), 33 DTR (NAG.) 487 2) CIT VS. VASANT K. HANDIGUND (2010) 327 ITR 233 ( KAR ) 17. THE LD. D.R. ON THE OTHER HAND PLACED RELIANCE ON THE PENALTY ORDER. SHE SUBMITTED THAT THE EXPLANATION FURNISHE D BY THE ASSESSEE WHILE OPPOSING ADDITION BEFORE THE AUTHORITIES BELO W WAS NOT FOUND BONAFIDE IN ABSENCE OF EVIDENCE AND REALIZING THE SAME, THE ASSESSEE AGREED FOR THE ADDITIONS ON WHICH PENALTY HAS BEEN LEVIED. SHE SUBMITTED THAT IT IS NOT A CASE THAT ADDITIONS HAVE BEEN MADE BY THE AUTHORITIES ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 7 BELOW SIMPLY ON THE BASIS OF ACCEPTANCE OF THE ASSE SSEE. UNDER THESE CIRCUMSTANCES, THERE IS NO SUBSTANCE IN THE CONTEN TION OF THE LD. A.R. 18. CONSIDERING THE ABOVE SUBMISSION, WE FIND THAT THE LD CIT(A) HAS DEALT WITH THE ADDITION OF RS. 79,098/- MADE ON ACC OUNT OF ANNEXURE A AND ADDITION OF RS. 1,85,940/- MADE ON ACCOUNT OF A NNEXURE B APPENDED TO THE ASSESSMENT ORDER IN PARA NO. 7 AND 7.1 OF THE FIRST APPELLATE ORDER. FOR A READY REFERENCE PARA NOS. 7 & 7.1 OF THE FIRST APPELLATE ORDER ARE BEING REPRODUCED HEREUNDER : 7.0 I HAVE CAREFULLY GONE THROUGH THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE APPELLA NT AND THE MATERIAL PLACED ON RECORD. THE FIRST GROUND OF APP EAL RELATES TO THE ADDITION OF RS. 79,098/- MADE ON ACCOUNT OF DISCREP ANCY IN RECEIPTS AS PER RECEIPTS PREPARED AND THE AMOUNT RECORDED IN THE BOOKS OF A/C IN THE CASES LISTED IN ANNEXURE A APPENDED T O THE ASSESSMENT ORDER. THE CONTENTION OF THE APPELLANT IN THIS REG ARD IS THAT THE ANNEXURE A REPRESENTS MOSTLY THE OPERATIONS PERFO RMED WHERE ANESTHETISTS ARE INVOLVED AND IT IS THE GENERAL PRA CTICE IN THE MEDICAL WORLD THAT THE ANESTHETISTS ACCEPTS BILL I N CASH ON THE SPOT FOR THE ANESTHESIA PERFORMED BY THEM. IT IS CLAIM ED THAT THOUGH THE RECEIPT IS ISSUED IN THE NAME OF THE PATIENT FO R THE GROSS AMOUNT THE FIRM ONLY CREDITS NET AMOUNT THAT IS RETAINED AFTER DEDUCTING THE PAYMENT MADE TO ANESTHETIST AND THE N ET AMOUNTS RETAINED HAVE BEEN PROPERLY ACCOUNTED FOR IN THE BO OKS OF A/C. THIS CLAIM OF THE APPELLANT IS NOT ON SOUND FOOTING. EX CEPT STATING THAT NET PROFESSIONAL RECEIPTS ARE CREDITED IN THE ACCOU NTS, THE APPELLANT HAS NOT FURNISHED AN IOTA OF EVIDENCE LIKE NAME & A DDRESS OF ANESTHETISTS TO WHOM THE CASH PAYMENTS ARE CLAIMED TO HAVE BEEN MADE, EXACT AMOUNT PAID TO EACH ANESTHETIST, DATE O F PAYMENT, DETAILS OF TDS MADE ON SUCH PAYMENTS, WHETHER THE A NESTHETISTS HAVE ACKNOWLEDGED THE RECEIPT OF THE AMOUNTS AND SH OWN IN THEIR RETURNS OF INCOME ETC. WHEN A PART OF THE PROFESSI ONAL FEES SHOWN IN THE RECEIPTS ISSUED IS CLAIMED AS EXPENDITURE, T HE ONUS IS ON THE APPELLANT TO PROVE THAT THE EXPENDITURE CLAIMED IS GENUINE AND IT WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 8 PROFESSION OF THE APPELLANT. BUT THE APPELLANT HA S TOTALLY FAILED TO ADDUCE ANY EVIDENCE AND PROVE THAT THE AMOUNTS WER E PAID TO ANESTHETISTS AND IT IS GENUINE BUSINESS OR PROFESSI ONAL EXPENDITURE OF THE APPELLANT. FURTHER, ON PERUSAL OF ANNEXURE A ATTACHED TO THE ASSESSMENT ORDER, IT IS NOTICED THAT AMOUNTS CLAIME D TO HAVE BEEN PAID TO ANESTHETISTS ARE MORE THAN 50% OF THE GROS S RECEIPTS, WHICH BY ANY STANDARDS IN MEDICAL PROFESSION IS QUI TE ABNORMAL. ALL THESE FACTS CLEARLY INDICATE THAT THE NEW CLAIM MAD E NOW IS ONLY AN AFTERTHOUGHT TO AVOID PAYMENT OF TAXES AND PENAL CO NSEQUENCES. 7.1 THE OTHER DISPUTE IN APPEAL RELATES TO THE ADDI TION OF RS.1,85,940/- MADE ON ACCOUNT OF DISCREPANCY IN AMO UNTS AS PER BILLS RAISED VIS--VIS THE RECEIPTS ISSUED AND ENTE RED IN THE DAILY CASE REGISTER AND IN THE BOOKS OF A/C IN THE CASES ISTED IN ANNEXURE B APPENDED TO THE ASSESSMENT ORDER. THE CONTENTI ON OF THE APPELLANT RAISED NOW IN THIS RESPECT IS THAT THE BI LL AMOUNTS WERE LATER REDUCED AFTER SOME CONCESSION OR DISCOUNT WA S ALLOWED ON THE BILL AMOUNT ON THE REQUEST OF PATIENTS CONSIDE RING THEIR POOR FINANCIAL CONDITION. IT WAS STATED THAT RECEIPTS WERE ISSUED IN RESPECT OF ACTUAL AMOUNTS RECEIVED FROM THE PATIENT S AND ENTERED IN THE BOOKS OF ACCOUNTS. BUT, IN THE STATEMENT OF T OTAL INCOMED WITH THE APPEAL THE REASONS CITED BY THE APPELLA NT FOR THE DISCREPANCY ARE TOTALLY DIFFERENT. IT WAS STATED T HEREIN THAT THE APPELLANT, WITH A VIEW TO HELP SOME PATIENTS VISITI NG THEIR HOSPITAL WAS ISSUING BILLS FOR HIGHER AMOUNT AT THEIR REQUE ST TO ENABLE THEM TO PRODUCE THE SAME BEFORE THE DEPARTMENT CONCERNE D FOR AVAILING SUBSTANTIAL BENEFIT THROUGH MEDICAL BILL CLAIMS. THUS THE APPELLANT HAS BEEN TAKING DIFFERENT STAND AT DIFFERENT TIMES REGARDING THE DISCREPANCY IN THE RECEIPTS IN THE CASES LISTED IN ANNEXUREB. FURTHER, AS SEEN FROM ANNEXURE B, IN SOME CASES, T HE ENTIRE BILL AMOUNT WAS NOT INCLUDED IN THE RECEIPTS, FOR INSTAN CE, IN CASE OF BILL NO. 717, FULL AMOUNT OF RS. 13,050/- WAS NOT INCLUD ED IN THE RECEIPTS. THEREFORE, IN SUCH CASES, IT IS NOT A CO NCESSION GIVEN TO THE POOR AND NEEDY PATIENTS BUT EXCLUSION OF THE EN TIRE AMOUNT FROM THE PROFESSIONAL RECEIPTS IN THE BOOKS OF A/C. IT IS THE USUAL PRACTICE IN THE HOSPITALS TO SETTLE THE DOCTORS FEE S AND OTHER CHARGES AT THE TIME OF DISCHARGE OF THE PATIENT AND ISSUE T HE BILL FOR THE ACTUAL AMOUNT PAID OR PAYABLE AFTER ALLOWING DISCOU NT, IF ANY, TO THE ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 9 PATIENT AND NOT VICE VERSA. IF THE DISCOUNT IS AL LOWED LATER AS CLAIMED BY THE APPELLANT IN THE PRESENT CASE AFTER ISSUING THE BILL, THE NORMAL ACCOUNTING PRACTICE FOLLOWED IN SUCH CA SES IS TO RECORD THE ENTIRE RECEIPT IN THE BOOKS OF A/C AS AND WHEN THE BILL RAISED AND THEN DEBIT THE CONCESSION, IF ANY, GIVEN LATER AS EXPENDITURE UNDER THE HEAD CONCESSION OR DISCOUNT OR BAD D EBT AS THE CASE MAY BE IN THE PROFIT AND LOSS A/C. BUT THE PRACTIC E CLAIMED TO HAVE BEEN FOLLOWED BY THE APPELLANT IS RATHER STRANGE A ND DOES NOT ACCORD WITH PREVAILING BUSINESS PRACTICES AND ACCOU NTING NORMS FOR SUCH RECEIPTS. HERE ALSO, THE APPELLANT HAS TOTALL Y FAILED TO ADDUCE ANY EVIDENCE AND PROVE THAT AFTER RAISING THE BILL, CONCESSION WAS GIVEN TO THE NEEDY PATIENTS ON THEIR REQUEST AND N ET AMOUNT WAS SHOWN IN THE BOOKS OF A/C. IN THESE CIRCUMSTANCES, THE FRESH CLAIM MADE BY THE APPELLANT NOW DOES NOT INSPIRE CONFIDEN CE AND IT IS ONLY AIMED AT AVOIDING PENAL CONSEQUENCES AFTER THE ASSESSING OFFICER DETECTED THE DISCREPANCIES IN PROFESSIONAL RECEIPTS ON THE BASIS OF THE BOOKS OF A/C AND OTHER RECORD MAINTAIN ED AND PRODUCED BY THE APPELLANT ITSELF DURING THE ASSESSMENT PROCE EDINGS. 19. FROM THE VERY READING OF ABOVE PARAGRAPHS, WE F IND THAT NEITHER THE EXPLANATION FURNISHED BY THE ASSESSEE REGARDING THE ABOVE ADDITIONS WERE BONEFIDE NOR THE SAME WAS SUPPORTED BY EVIDENC E. ON THE BONAFIDE OF THE EXPLANATION REGARDING ADDITION OF RS. 79,090 8/-, WE POINT OUT THAT THE OBSERVATION OF THE LD CIT(A) THAT AMOUNTS CLAI MED TO HAVE BEEN PAID TO ANESTHETIST ARE MORE THAN 50% OF THE GROSS RECEI PTS, WHICH BY ANY STANDARDS IN MEDICAL PROFESSION IS QUITE ABNORMAL, HAS NOT BEEN REBUTTED BY THE ASSESSEE. THUS, THE EXPLANATION FURNISHED B Y THE ASSESSEE REGARDING THE ADDITION DOES NOT APPEAR TO BE BONAFI DE. LIKEWISE ON THE ADDITION OF RS. 1,85,940/- MADE ON ACCOUNT OF DISCR EPANCY IN AMOUNT AS PER BILLS RAISED OR THE RECEIPTS ISSUED AND ENTER ED IN THE DAILY CASE REGISTER AND IN THE BOOKS OF ACCOUNT IN THE CASES L ISTED IN ANNEXURE B APPENDED TO THE ASST. ORDER, THE EXPLANATION OF THE ASSESSEE KEPT SHIFTING. INITIALLY, THE STAND TAKEN IN THE STAT EMENT OF TOTAL INCOME FILED ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 10 WITH THE APPEAL WAS THAT THE ASSESSEE WITH A VIEW TO HELP SOME PATIENTS, THEIR HOSPITAL WAS ISSUING BILLS FOR HIGH ER AMOUNT BUT ACCEPTING THEM TO PRODUCE BEFORE THE DEPARTMENT CONCERNED FOR SUBSTANTIAL BENEFITS THROUGH MEDICAL MATERIAL CLAIMS. DURING T HE COURSE OF ARGUMENT, HOWEVER, THE ASSESSEE CONTENDED BEFORE THE LD CIT(A ) THAT THE BILL AMOUNTS WERE LATER REDUCED AFTER SOME CONCESSION OR DISCOUNT WAS ALLOWED ON THE BILL AMOUNT ON THE REQUEST OF PATIEN TS CONSIDERING THEIR POOR FINANCIAL CONDITIONS. THUS, THE BONAFIDE OF T HE EXPLANATION FURNISHED BY THE ASSESSEE ON THIS ADDITION IS ALSO NOT ACCEPT ABLE. UNDER THE ABOVE CIRCUMSTANCES, WE HOLD THAT THE ASSESSEE IS NOT EN TITLED FOR EXEMPTION UNDER EXPLANATION1 TO SEC. 271(1)(C ) OF THE ACT O N THE BASIS OF BONAFIDE OF EXPLANATION REGARDING THE ADDITIONS IN QUESTION. 20. SO FAR AS THE ABOVE CITED DECISIONS RELIED UPON BY THE A.R. ARE CONCERNED, THESE ARE HAVING DISTINGUISHABLE FACTS, HENCE NOT HELPFUL TO THE ASSESSEE. IN THOSE CASES, AGREED ADDITIONS WER E MADE ON THE BASIS OF ADMISSION OF THE ASSESSEE AND A.O. WAS HAVING NO OCCASION TO EXAMINE THE VALIDITY OF THE ADDITION ON ITS MERITS. HOWEVER, IN THE PRESENT CASE, WHEN THE ASSESSEE REALIZED THAT IT IS NOT IN A POSITION TO RECONCILE THE DIFFERENCE IN THE AMOUNT RECORDED OR DIFFERENCE DUE TO DISCREPANCY IN THE BOOKS AND COULD NOT ESTABLISH TH E EXPLANATION FURNISHED BY IT BEYOND DOUBT, IT AGREED UPON THE AD DITIONS PROPOSED. 21. UNDER THE ABOVE CIRCUMSTANCES, WE ARE HAVING N O OPTION BUT TO UPHOLD THE PENALTY SUSTAINED BY THE LD CIT(A). THE GROUND IS ACCORDINGLY REJECTED. 22. IN RESULT, APPEALS ARE DISMISSED. ITA . NO.1432 & 1433/PN/2010 M/S.SANJIVANI HOSPITAL, A.Y. 2006-07 PAGE OF 11 11 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 26TH MARCH 2012. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 26TH MARCH, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT I, PUNE 4. THE CIT(A)-I, PUNE 4. THE D.R. A BENCH, PUNE 5. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE