ACIT, CHENNAI V. Dr.R.Surendran, CHENNAI

ITA 1562/CHNY/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7962 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2000-2001
• Appeal Filed On: 05-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: S SRIDHAR; K R RAJARAM
• Keywords: Revised return; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NOS. 1562 &1563/MDS/2009 AND 1030, 1031, 103 2 & 1033/MDS/2010 ASSESSMENT YEARS : 2000-01 TO 2005-06 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-XV, CHENNAI. V. DR. R. SURENDRAN, NO. 24, 5 TH CROSS STREET, LAKE AREA, NUNGAMBAKKAM, CHENNAI-600 034. (PAN : AASPS5489B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL. RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE AND SHRI K.R. RAJARAM, CA O R D E R PER BENCH: THESE ARE APPEALS FILED BY THE REVENUE AGAINST THE ORDERS OF THE LEARNED CIT(APPEALS)-XII, CHENNAI IN APPEAL NOS. ITA NOS. 5 47 & 548/07-08 DATED 15- 07-2009 FOR THE ASSESSMENT YEARS 2000-01 AND 2001-0 2 AND ITA NOS. 196, 194, 193 & 192/09-10 DATED 31-03-2010 FOR THE ASSESSMENT YEARS 2002-03, 2003-04, 2004-05 AND 2005-06. I.T.A. NOS. 1562 & 1563/MDS/2009 AND 1030 TO1033/MDS/2010. 2 2. SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL REPR ESENTED ON BEHALF OF THE REVENUE AND SHRI S.SRIDHAR, ADVOCATE ALONG WITH SHR I K.R. RAJARAM, C.A. REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING COMMON GROUNDS : 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD CIT(A) ERRED IN ALLOWING 80% AS DEDUCTIO N OUT OF THE UNDISCLOSED PORTION OF THE FEES RECEIVED IN CASH FROM APOLLO HOSPITAL, OVER AND ABOVE WHAT WAS ALREADY AL LOWED BY THE ASSESSING OFFICER. 3. THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE ASSESSING OFFICER HAS ALLOWED CERTAIN AMOUNT TO WARDS PROBABLE EXPENSES AND CONSIDERED ONLY THE NET AMOUN T FOR ADDITION. 4. THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT 80% AS DEDUCTION TOWARDS PROBABLE EXPENSES OUT OF T HE UNDISCLOSED RECEIPTS IS EXCESSIVE AND UNREASONABLE TO BE ALLOWED IN AN ADHOC MANNER. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED I.T.A. NOS. 1562 & 1563/MDS/2009 AND 1030 TO1033/MDS/2010. 3 CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER BE RESTORED. 4. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE L EARNED AUTHORISED REPRESENTATIVE THAT THE ISSUE IN THESE APPEALS WAS AGAINST THE ACTION OF THE LEARNED CIT(A) GRANTING THE ASSESSEE THE BENEFIT OF DEDUCTION OF 80% OF THE FEES ALLEGED TO HAVE BEEN RECEIVED BY THE ASSESSEE IN CA SH FROM M/S. APOLLO HOSPITAL. IT WAS THE SUBMISSION THAT THE ISSUE WAS SQUARELY C OVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF D R. B. CHENDHILNATHAN IN ITA NO. 1219 TO 1221/MDS/09 DATED 19 TH MARCH, 2010, WHEREIN THE CO-ORDINATE BENCH OF THIS TRIBUNAL HAS HELD AS FOLLOWS : 4. BEFORE US, SIMILAR ARGUMENTS WERE RAISED ON BEHALF OF THE ASSESSEE. THE LEGAL ISSUE CHALLENGIN G THE RE- OPENING WAS NOT SERIOUSLY CONTESTED, SO WE DO NOT A CCEPT THE PLEA AGAINST RE-OPENING OF ASSESSMENT ORDERS I N ALL THESE YEARS. WE HAVE ALSO FOUND THAT IN PARA 3.7, 3.8 AND 3.9 OF HIS ORDER, THE LD. CIT(A) HAS RECORDED AN IN CORRECT FACT. THE ASSESSING OFFICER HAS NOT MADE ANY ADDIT ION AFTER DENYING THE CLAIM @ 10% ON ACCOUNT OF ADMINISTRATIVE CHARGES. IT SHOWS THAT THE LD. CIT( A) HAS I.T.A. NOS. 1562 & 1563/MDS/2009 AND 1030 TO1033/MDS/2010. 4 PASSED THIS ORDER IN A CURSORY AND LEISURELY MANNER . BE THAT AS IT MAY, THIS CLAIM IS IN FACT ALLOWABLE. T HE CHENNAI BENCH HAS BEEN TAKING A VIEW THAT SUCH ADMINISTRATI VE CHARGES @ 100% ARE REQUIRED TO BE PAID. THE HOSPIT AL HAS ALSO CONFIRMED THIS FACT. THEREFORE, THIS CLAI M OF THE ASSESSEE IS A VALID ONE. THE OTHER CLAIM OF THE ASSESSEE IS THAT FOR PROVIDING THE SERVICES TO THE APOLLO HO SPITAL AS A CONSULTANT, HE HAS TO EMPLOY SOME PERSONS TO ASSIST HIM AND THAT IS WHY SALARY HAS BEEN PAID AND HAS BEEN CLAIMED. THE ASSESSING OFFICER DID NOT MAKE FURTHE R ENQUIRY, BUT SIMPLY REJECTED THE EXPLANATION OF THE ASSESSEE. GIVEN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, WE ARE CONVINCED THAT THIS CLAIM OF THE ASSES SEE HAS TO BE ALLOWED. WE HAVE GONE THROUGH THE ORAL AS WELL AS WRITTEN SUBMISSIONS AND ARE OF THE CONSIDERED OPINI ON THAT THIS ADDITION BEING NOT WARRANTED AS THE ASSESSEE HAS TO PAY SALARY TO HIS ASSISTANTS TO CARRY HIS BUSINESS DESERVES TO BE DELETED IN ALL THESE YEARS OVER AND ABOVE WHA T HAS BEEN OFFERED IN THE REVISED RETURNS OF INCOME. IT IS THE ASSESSEE WHO HAS TO DECIDE AS TO IN WHAT MANNER HE HAS I.T.A. NOS. 1562 & 1563/MDS/2009 AND 1030 TO1033/MDS/2010. 5 TO CARRY ON HIS BUSINESS. WHEN RECEIPT OF BUSINESS HAS BEEN ACCEPTED, THE ANCILLARY EXPENSES HAVE ALSO TO BE ACCEPTED. THESE EXPENSES HAVE NEITHER BEEN FOUND I LLEGAL NOR HAVE BEEN PROVED TO BE BOGUS. HENCE, WE ALLOW THIS CLAIM OF THE ASSESSEE IN ALL THE YEARS. 5. IT WAS SUBMITTED BY THE LEARNED DR THAT THE LEAR NED CIT(A) HAD ALLOWED THE ASSESSEES CLAIM OF EXPENSES OF 80% WITHOUT ANY EVIDENCE. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) IS LIABLE TO BE REVERSED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE FACTS IN THE PRESENT CASE CLEARLY SHOWS THAT THE ASSESSING OFFIC ER HAS MADE THE ADDITION IN THE HANDS OF THE ASSESSEE ON THE BASIS OF SWORN STA TEMENT RECORDED FROM THE SENIOR GENERAL MANAGER (FINANCE) OF M/S. APOLLO HOS PITAL. HERE WE MAY MENTION THAT THE STATEMENT OF THE SR. GENERAL MANAGER (FINA NCE) HAD BEEN GIVEN TO THE ASSESSEE. HOWEVER, NO OPPORTUNITY OF CROSS-EXAMINA TION HAD BEEN GRANTED TO THE ASSESSEE. OBVIOUSLY, NO EVIDENCE CAN BE RELIED UPON WITHOUT GRANTING THE ASSESSEE AN OPPORTUNITY OF CROSS-EXAMINATION OR REB UTTAL. THE ASSESSMENT ORDER ALSO DOES NOT COME OUT WITH ANY EVIDENCE AS TO THE FOUNDATION ON THE BASIS OF WHICH THE SAID SR. GENERAL MANAGER (FINANCE) HAS GI VEN SUCH A STATEMENT THAT CASH HAS BEEN PAID IN EXCESS TO THE ASSESSEE. IF T HERE IS A COMPUTATION, THEN WHO PREPARED SUCH COMPUTATION AND HAS THE PERSON WH O PREPARED THIS I.T.A. NOS. 1562 & 1563/MDS/2009 AND 1030 TO1033/MDS/2010. 6 COMPUTATION BEEN EXAMINED, NOTHING IS COMING OUT. IN ANY CASE, THIS ISSUE WOULD FADE INTO THE REALM OF ACADEMIC INTEREST INSO FAR AS THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE LEARNED C IT(A) IN CONFIRMING ANY PORTION OF THE INCOME ASSESSED ADDITIONALLY IN THE HANDS OF THE ASSESSEE. IT IS FURTHER NOTICED THAT THE ISSUE IN THE APPEAL IS SQUARELY CO VERED BY THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DR. B. CHENDHILNATHAN, REFERRED TO SUPRA. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWIN G THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL, THE FINDINGS OF TH E LEARNED CIT(A) STAND UPHELD AND THE APPEALS OF THE REVENUE ARE DISMISSED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 4-11-20 10. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 04 TH NOVEMBER, 2010. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE