Coimbatore Child Trust Hospital (P) Ltd., Coimbatore V. DCIT, Coimbatore

ITA 1494/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9200 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 23-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Section: 143(3); 234B; 132; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1494/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) M/S. COIMBATORE CHILD TRUST HOSPITAL P.LTD., 1/1, NEW STREET, KONGU NAGAR, RAMANATHAPURAM, COIMBATORE - 641 045. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, COIMBATORE. PAN:AADCC6332M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. ARJUNRAJ, C.A. /RESPONDENT BY : MR. P.RADHAKRISHNAN, JCIT /DATE OF HEARING : 17 TH MARCH, 2016 /DATE OF PRONOUNCEMENT : 6 TH JUNE, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)- 18, CHENNAI DATED 23.03.2015 IN ITA NO.546/CIT(A)1 8/14-15 PASSED UNDER SECTION 153C R.W.S 143(3) & 250(6) OF THE ACT . 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER IN ISSUING NOTICE UNDER SECTION 1 53C 2 ITA NO.1494/MDS/2015 OF THE ACT AND SUBSEQUENTLY PASSING THE ASSESSMENT ORDER. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ADDITION OF ` 13,71,584/- MADE BY THE LEARNED ASSESSING OFFICER F OR THE ALLEGED DEFICIT IN CASH. III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST OF ` 35,340/- UNDER SECTION 234A AND ` 4,24,078/- AND UNDER SECTION 234B OF THE ACT. 4. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CONDUCTE D ON 22.09.2010 AT THE PREMISES OF DR.K.NEMINATHAN WHO I S THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY. BASED O N THE MATERIALS SEIZED DURING THE SEARCH, NOTICE UNDER SE CTION 153C WAS ISSUED TO THE ASSESSEE ON 26.09.2011 AND S ERVED ON 29.09.2011. THEREAFTER THE ASSESSEE FILED ITS RE TURN OF INCOME ON 19.12.2011 DECLARING NIL INCOME. SUBSEQU ENTLY, THE LEARNED ASSESSING OFFICER COMPLETED THE ASSESSM ENT UNDER SECTION 153C R.W.S. 143(3) OF THE ACT ON 22.0 3.2013 MAKING CERTAIN ADDITIONS AMONGST WHICH THE APPEAL B EFORE US ARE RELATED TO THE ADDITION ON ACCOUNT OF UNACCOUNT ED RECEIPTS FOR RS.13,71,584/- , TOWARDS LEVY OF INTER EST UNDER 3 ITA NO.1494/MDS/2015 SECTION 234A & 234B OF THE ACT AMOUNTING TO RS.35,3 40/- AND RS.4,24,078/- RESPECTIVELY. 5. GROUND NO.1: ISSUANCE OF NOTICE U/S.153C OF T HE ACT: THE LEARNED AUTHORIZED REPRESENTATIVE HAS NOT ADVANCED ANY ARGUMENTS WITH RESPECT TO THE AFORESAI D GROUND RAISED BY THE ASSESSEE IN ITS APPEAL. THEREF ORE THE SAME IS DISMISSED AS NOT PRESSED. 6.1 GROUND NO.2 : ADDITION OF RS.13,71,584/- TOWARDS UNACCOUNTED RECEIPTS: DURING THE COURSE OF SEARCH, IT WAS OBS ERVED BY THE LEARNED AUTHORIZED REPRESENTATIVE THAT THE ASSESSEE HAD DEFICIT CASH BALANCE AMOUNTING TO RS.13,71,584/-. I T WAS EXPLAINED TO HIM THAT THE DEFICIT CASH BALANCE WAS DUE TO NON-ACCOUNTING OF CERTAIN RECEIPTS IN THE BOOKS OF THE COMPANY. FURTHER, DR.MALLIKA NEMINATHAN WIFE OF THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY OFFERED T HE SAME AS UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 2010- 11. FOR THE AFORESAID REASON THE LEARNED ASSESSING OFFICER 4 ITA NO.1494/MDS/2015 MADE ADDITION OF RS.13,71,584/- IN THE HANDS OF THE ASSESSEE. 6.2 ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER BY STATING THAT THE ADMISSION OF DR.MALLIKA NEMINATHAN DURING THE COURSE OF SEARCH CANNOT BE TA KEN LIGHTLY AS SHE IS HOLDING A RESPONSIBLE POSITION IN THE HOSPITAL AND AWARE OF THE DAY-TO-DAY AFFAIRS OF THE ASSESSEE HOSPITAL. 6.3 BEFORE US, THE LEARNED AUTHORIZED REPRESENTAT IVE SUBMITTED THAT THE ASSESSEE HAD NOT ACCOUNTED CERTA IN RECEIPTS IN ITS BOOKS OF ACCOUNTS WHEN THE SEARCH T OOK PLACE AND THEREFORE THE DEFICIT WAS REFLECTED IN THE BOOK S OF ACCOUNTS. HE FURTHER ARGUED STATING THAT DR.MALLIK A NEMINAHTAN WIFE OF THE MANAGING DIRECTOR OF THE ASS ESSEE COMPANY, OUT OF ANXIETY AND IN A STATE OF SHOCK ADM ITTED THE DEFICIT CASH AS THE UNACCOUNTED RECEIPT. HOWEVER, SUBSEQUENTLY THE LEFT OUT ENTRIES WERE PASSED IN TH E BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY AND RECONCILED. IT WAS THEREFORE ARGUED THAT THE ADDITION MADE BY THE LEAR NED 5 ITA NO.1494/MDS/2015 ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED RECEIPT S OF RS13,71,584/- MAY BE DELETED. 6.4 THE LEARNED DEPARTMENTAL REPRESENTATIVE ON TH E OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE R EVENUE AND PRAYED FOR SUSTAINING THE SAME. 6.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREF ULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. BOOKS OF ACCOUNTS OF ANY BUSINESS HOUSE WILL NOT COMPLETE AT ANY POIN T OF TIME ONLINE. CERTAIN ENTRIES WILL BE LEFT OUT FOR THE DA Y TO BE PASSED. SIMILARLY, IN THE CASE OF THE ASSESSEE THE LEFT OUT ENTRIES WERE SUBSEQUENTLY PASSED AND THE CASH BOOK WAS RECONCILED. WITHOUT LOOKING INTO THE ENTRIES PASSED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT, THE LEARNED ASSES SING OFFICER HAS SIMPLY TAKING ADVANTAGE OF THE STATEMEN T RECORDED UNDER DURESS FROM DR. MALLIKA NEMINATHAN M ADE THE ADDITION OF RS. 13,71,584/- AS UNACCOUNTED RECE IPT. THIS AGGRESSIVE AND COERCIVE APPROACH OF THE LEARNED ASS ESSING OFFICER WHICH HAS BEEN FURTHER UPHELD BY THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT APPLIC ATION OF 6 ITA NO.1494/MDS/2015 MIND IS NOT APPRECIABLE. IN THIS SITUATION WE ARE O F THE CONSIDERED VIEW THAT THE ADDITION MADE BY THE REVEN UE DOES NOT HAVE ANY MERIT. ACCORDINGLY, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 13,71,584/- MADE ON ACCOUNT OF UNACCOUNTED RECEIPT. THUS, THIS ISSUE IS HELD IN FAVOUR OF THE ASSESSEE. 7. GROUND NO.3: LEVY OF INTEREST U/S.234A & 234B LEVY OF INTEREST UNDER SECTION 234A & 234B OF THE A CT IS CONSEQUENTIAL IN NATURE. THEREFORE, THE LEARNED ASSESSING OFFICER IS DIRECTED TO REWORK THE INTEREST AFTER GI VING EFFECT TO THE ORDER OF THE TRIBUNAL. ACCORDINGLY THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 6 TH JUNE, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 6 TH JUNE, 2016 SOMU 7 ITA NO.1494/MDS/2015 *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF