Dr. Santosh Manohar Kumar, Kolkata V. ITO, Ward-22(3), Kol, Kolkata

ITA 1604/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1775 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KALYAN NATH
• Keywords: Bogus purchase
• Section: 143(3); 133A; 69

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1604 & 1730/KOL/2016 ASSESSMENT YEARS:2009-10 & 2008-09 DR. SANTOSH MANOHAR KUMAR, M/S KUMAR SURGICAL 7 LAPROSCOPIC CLINIC, 235/3/1, N.SS.C. BOSE ROAD, BANSDRONI, KOLKATA-47 [ PAN NO.AGGPK 6042 G ] / V/S . ITO WARD-22(3), 54/1, RAFI AHMED KIDWAIA ROAD, KOLKATA-700 016 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI SOUMITRA CHOUDHURY, ADVOCATE ! /BY RESPONDENT SHRI KALYAN NATH, ADDL. CIT-DR $ /DATE OF HEARING 30-06-2017 $ /DATE OF PRONOUNCEMENT 11-08-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-21/6, KOLKATA DATED 21.04.2016 & 27.06.2016. ASSESSMENTS WERE FRAMED BY ITO WARD-55( 3), KOLKATA U/S 143(3)/147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE THEIR ORDERS DATED 30.12.2011 & 29.12.2010 FOR ASSESSMENT YEARS 2009-1 0 & 2008-09 RESPECTIVELY. SHRI SAUMITRA CHOUGHURY, LD. ADVOCATE APPEARED ON B EHALF OF ASSESSEE AND SHRI KALYAN NTH, LD. DEPARTMENTAL REPRESENTATIVE REPRESE NTED ON BEHALF OF REVENUE. ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 2 2. BOTH THE APPEALS ARE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF BREVITY. FIRST WE TAKE UP ITA NO.1730/KOL/2016 FOR THE A.Y 2008-09. 3. GROUND NO.1 AND 7 ARE GENERAL IN NATURE AND DO N OT REQUIRE ANY SEPARATE ADJUDICATION. 4. FIRST ISSUE RAISED BY ASSESSEE IN GROUND NO. 2 A ND 3 ARE THAT LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF 10,10,470/- ON ACCOUNT OF UNDISCLOSED INVESTMENT U /S. 69 OF THE ACT. 5. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND PRACTICING MEDICAL PRACTITIONER UNDER THE NAME & STYLE M/S KUMAR SURGI CAL & LAPROSCOPIC CLINIC. THE ASSESSEE HAS SHOWN CLOSING STOCK IN ITS BOOKS OF AC COUNT AT 47,650- AS ON 31.03.2008. IN THE ASSESSMENT YEAR 2009-10 A SURVEY OPERATION U /S 133A OF THE ACT WAS CONDUCTED ON 20.06.2009 WHEREIN IT WAS FOUND THAT A SSESSEE HAS SHOWN CLOSING STOCK AS ON 31.03.20008 FOR 10,58,120/-. THE STOCK STATEMENT WAS FILED WITH THE UCO BANK BASDRONI BRANCH. ACCORDINGLY, THE ASSESSING OFFICER FORMED THE OPINION THAT ASSESSEE HAS SUPPRESSED HIS CLOSING STOCK AS ON 31.03.2008 B Y 10,10,470/- ( 10,58,120 47,650 ). 6. IN VIEW OF THE ABOVE, THE CASE OF ASSESSEE WAS REOPENED FOR A.Y. 2008-09 I.E. THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO CALLED UPON THE ASSESSEE AND SOUGHT EXPLANATION FOR THE AB OVE UNDER STATED CLOSING STOCK. IN COMPLIANCE THERETO, ASSESSEE SUBMITTED THAT HE HAS RECEIVED HUGE NUMBER OF FREE SAMPLES OF MEDICINES WHICH WERE QUITE EXPENSIVE AND THOSE SAMPLES WERE MARKED AS NOT FOR SALE . THE COST OF SUCH MEDICINES WAS DETERMINED AT A M ARKET VALUE WHICH WAS NORMALLY QUITE HIGH. BESIDES THE FREE SAMPLES O F MEDICINES, THE ASSESSEE WAS IN POSSESSION OF OTHER MEDICINES AND SIMPLE ITEMS WHIC H WERE OF EXPIRED DATES. BUT ALL THESE MEDICINES WERE SHOWN IN THE CLOSING STOCK AS CONSUMABLE ITEMS. AS SUCH, ASSESSEE HAS NOT INCURRED ANY COST FOR FREE SAMPLES , THEREFORE, NO COST WAS SHOWN IN THE BOOKS OF ACCOUNT. BUT FOR THE PURPOSE OF AVAILI NG LOAN FROM THE BANK, THE FREE SAMPLE MEDICINES AND EXPIRED MEDICINE ALONG WITH CO NSUMABLE ITEMS WERE SHOWN AT MARKET VALUE IN THE STOCK STATEMENT SUBMITTED TO TH E BANK. HOWEVER, THE AO FOUND THAT THE STATEMENT FURNISHED BY THE ASSESSEE HAS NO T BEEN SUPPORTED BY ANY ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 3 DOCUMENTARY EVIDENCE. ACCORDINGLY, AO TREATED THE E XCESS STOCK OF 10,10,470/- FILED WITH THE BANK AS ASSESSEES UNDISCLOSED INVESTMENT U/S. 69 OF THE ACT AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 7. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE STOCK STATEMEN T FURNISHED TO THE UCO BANK BASDRRONI BRANCH CONTAINS THE FREE SAMPLE AND EXPIR ED MEDICINES WHICH WERE VALUED AT MARKET PRICE FOR THE SOLE PURPOSE OF AVAILING TH E CASH CREDIT FACILITIES FROM THE BANK. HOWEVER, LD. CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER:- 4.2. THE WRITTEN SUBMISSION FURNISHED DURING THE AP PELLATE PROCEEDINGS BY THE APPELLANT HAS ALREADY BEEN REPRODUCED ABOVE, WHICH IS SIMILAR TO THE EXPLANATION GIVEN DURING THE ASSESSMENT PROCEEDINGS WHICH WAS R EJECTED BY THE AO FOR WANT OF EVIDENCE. THE APPELLANT'S EXPLANATION IS THAT STOCK STATEMENT GIVEN TO THE BANK INCLUDED FREE SAMPLES OF MEDICINES AND CONSUMABLES AND LABORATORY EQUIPMENTS. DURING THE, APPELLATE PROCEEDINGS, CASH BOOK AND LE DGER WERE CALLED FOR BUT NOT PRODUCED. THE LIST OF LABORATORY EQUIPMENTS APPEARI NG IN THE STOCK STATEMENT FOR BANK BUT APPEARING IN THE BALANCE SHEET OF THE APPELLANT WAS NOT SUPPORTED BY BILLS AND PROPERLY EXPLAINED. AS IN THE ASSESSMENT PROCEEDING S, NO EVIDENCE WAS PRODUCED TO PROVE THAT THE APPELLANT WAS ALSO IN POSSESSION OF FREE SAMPLES OF MEDICINES AND CONSUMABLES WHICH HAD NOT BEEN ACCOUNTED FOR. IT IS SEEN FROM THE STOCK STATEMENT GIVEN TO THE BANK THAT IN RESPECT OF ' OTHER MEDICINES & MEDICAL EQUIPMENT ' A LUMPSUM ENTRY OF RS. 320460 WAS SHOWN. HENCE, IN TH E ABSENCE OF SPECIFIC DETAILS OF MEDICAL EQUIPMENT WHICH COULD BE SEEN IN THE SAID S TOCK STATEMENT AS WELL AS BALANCE SHEET OF THE APPELLANT, THE EXPLANATION REGARDING L ABORATORY EQUIPMENT BEING A PART OF THE STOCK STATEMENT CANNOT BE ACCEPTED. SPECIFIC QUANTITIES AND VALUES HAVE BEEN MENTIONED IN RESPECT OF OTHER MEDICINES IN THE STOC K STATEMENT. IT WAS HELD BY THE HON'BLE GAUHATI HIGH COURT IN THE CASE OF DHANSIRA M AGARWALLA V. COMMISSIONER OF INCOME-TAX (1993) 201 ITR 0192 (GAU) THAT WHEN THER E WAS A DIFFERENCE BETWEEN THE STOCK VALUE SHOWN IN THE BOOKS OF ACCOUNT OF THE AS SESSEE AND THE VALUE DISCLOSED TO THE BANK AND THE ASSESSEE DID 'NOT OFFER ANY SATISF ACTORY EXPLANATION BEFORE THE ASSESSING OFFICER, THE- ASSESSING 0FFICER COULD NOT BE FOUND FAULT WITH FOR DEEMING THE EXCESS AMOUNT TO BE THE INCOME OF THE ASSESSEE FOR THE YEAR CONCERNED. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF COIMBATORE SPINNING & WEAVING CO. LTD. V. COMMISSIONER OF INCOME-TAX (1 974) 95 ITR 375 (MAD). THEREFORE, THE APPELLANT'S CONTENTION THAT THE ASSE SSING OFFICER CANNOT RELY ONLY ON THE BANK STATEMENT FOR THE PURPOSE OF DETERMINING T HE ACTUAL AND EXCESS STOCK CANNOT BE ACCEPTED. HENCE, THE ADDITION OF RS.10,10,470 MA DE BY THE AO IS CONFIRMED . BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 8. LD. AR FOR THE ASSESSEE BEFORE US REITERATED THE SAME ARGUMENTS THAT WERE MADE BEFORE LD. CIT(A). THE LD. AR FURTHER SUBMITT ED THAT THE SUBSEQUENT ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 4 ASSESSMENT YEAR I.E. 2008-09 WAS ALSO ASSESSED U/S 143(3) OF THE ACT. AS PER THE ACCOUNTING PRACTICE THE CLOSING STOCK DECLARED BY A SSESSEE AT THE END OF FINANCIAL YEAR BECOMES THE OPENING STOCK OF THE NEXT FINANCIAL YEA R. THUS, IF THE INCOME FOR THE YEAR UNDER CONSIDERATION IS INCREASED BY THE AMOUNT OF C LOSING STOCK THEN THE AO HAS TO GIVE THE EFFECT IN THE SUBSEQUENT YEAR FOR THE OPEN ING STOCK. BUT THE AO HAS FAILED TO DO SO. AS PER THE LD. AR, THE AMOUNT OF EXCESS CLOS ING STOCK SHOWN BY THE AO HAS NEUTRAL EFFECT ON THE PROFITABILITY OF THE ASSESSEE . IT IS BECAUSE IF THE PROFIT INCREASED FOR THE CURRENT YEAR THEN THE PROFIT HAS TO COME DO WN BY THE SAME AMOUNT FOR THE SUBSEQUENT ASSESSMENT YEAR DUE TO THE EFFECT OF CLO SING & OPENING STOCK. LD. AR ALSO SUBMITTED THE EXCESS CLOSING STOCK SHOW N BY THE AO IS OUT OF FREE SAMPLE AND EXPIRY MEDICINES WHICH WERE RECEIVED BY IT FREE OF COST. LD. AR FURTHER SUBMITTED THAT INFLATION IN THE CLOSING STOCK FOR AVAILING TH E CASH CREDIT FACILITIES DOES NOT AMOUNT TO INCOME OF THE ASSESSEE. IN THIS CONNECTION, HE R ELIED ON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE CIT VS. ACRO INDIA LI MITED REPORTED IN 298 ITR 447 (BOM) WHERE IT WAS HELD AS UNDER : AS FAR AS THAT ASPECT IS CONCERNED, THE TRIBUNAL HA S CLEARLY HELD THAT THE VALUATION OF THE STOCK DECLARED TO THE BANK IS IN FACT INFLATED AND THAT THE CORRECT VALUATION OF THE STOCK WAS NOT SUPPRESSED FROM THE REVENUE. THE TRIB UNAL HAS RELIED ON THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. N. S WAMY [2000] 241ITR 363 . THERE THE DIVISION BENCH HAS HELD THAT THE BURDEN OF PROO F IN SUCH A CASE IS ON THE REVENUE AND THE SAME COULD NOT BE DISCHARGED BY MERELY REFE RRING TO A STATEMENT OF THE ASSESSEE TO A THIRD PARTY. IN OUR VIEW, THERE IS NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL INASMUCH IT HAS FOLLOWED THE DECISI ON OF THE DIVISION BENCH OF THIS COURT AND THE MADRAS HIGH COURT. SIMILARLY THE HON'BLE GUJARAT HIGH COURT IN THE CAS E OF CIT VS. VEERDIP ROLLERS PVT. LTD. REPORTED IN 323 ITR 341 (GUJ) WHEREIN IT WAS H ELD AS UNDER : HELD THAT, THE ASSESSING OFFICER HAD FOUND THAT THE ASSESSEE HAD SUBMITTED THE BANK STATEMENT WITH INFLATED PRICE OF THE STOCK WHILE TH ERE WAS NO DIFFERENCE IN QUANTITY OF THE STOCK. AS HELD IN ASHOK KUMAR V. ITO [2006] 201 CTR (J&K) 178, ADDITION COULD NOT BE MADE ON THE BASIS OF DIFFERENCE BETWEEN CLOS ING STOCK DECLARED IN THE TRADING ACCOUNT AND THE STOCK SHOWN IN THE STATEMENT SUBMIT TED BY THE ASSESSEE TO THE BANK AS THE STOCK POSITION SHOWN TO THE BANK WAS ON ESTIMAT E BASIS AND INFLATED VALUE WAS SHOWN TO AVAIL OF MORE CREDIT FROM BANK. IN VIEW OF THE ABOVE, THERE WAS NO JUSTIFICATION FOR MAKING ANY ADDITION ON THE ALLEGA TION OF INFLATED STOCK SHOWN TO THE BANK. WHETHER THE VALUE OF THE STOCK SHOWN IN THE B OOKS OF ACCOUNT WAS GENUINE OR NOT HAD BEEN CONSIDERED BY THE TRIBUNAL AND CONSIDE RING THE FACTS DISCUSSED BY THE TRIBUNAL THERE WAS NO REASON TO HOLD THAT THE FINDI NG OF THE TRIBUNAL WAS PERVERSE. ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 5 THE LD AR BEFORE US ALSO FILED THE COPY OF THE STOC K STATEMENT WHICH WAS FURNISHED TO THE BANK AND DEMONSTRATED THAT THE SAME WAS NOT SIG NED BY THE ASSESSEE. THEREFORE, NO RELIANCE CAN BE PLACED ON SUCH UNSIGNED STOCK STATE MENT FOR THE PURPOSE OF THE IMPUGNED ADDITION. ON THE OTHER HAND, LD. DR FOR THE REVENUE VEHEMENTL Y RELIED ON THE ORDER OF AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. THE ISSUE IN THE IN STANT CASE RELATES TO THE ADDITION MADE BY THE AO ON ACCOUNT OF SUPPRESSED STOCK DECLA RED BY THE ASSESSEE. THE ASSESSEE IN ITS BOOKS OF ACCOUNTS HAS DECLARED CLOS ING STOCK OF 47,650/- WHEREAS THE SAME WAS DECLARED IN THE STOCK STATEMENT SUBMITTED TO THE BANK FOR 10,10,470/- ONLY. THEREFORE THE ADDITION WAS CONFIRMED BY AO AND ACTI ON TAKEN BY AO WAS SUBSEQUENTLY CONFIRMED BY LD. CIT(A). NOW THE ISSUE BEFORE US FOR OUR ADJUDICATION SO AS TO WHETHER THE DIFFERENCE IN THE CLOSING STOC K AS ON 31.3.2008 BETWEEN THE BOOK AND STOCK STATEMENT FURNISHED TO THE BANK AMOUNTS T O THE INCOME OF ASSESSEE IN THE GIVEN FACTS AND CIRCUMSTANCES. THE WHOLE DISPUTE PERTAINS TO THE STOCK STATEMENT S UBMITTED TO THE BANK AS ON MARCH 31, 2008 HAVING A STOCK AT RS.10,58,120/- WHETHER I T IS ALSO AVAILABLE AS ON MARCH 31, 2008 OR NOT. AFTER CAREFUL CONSIDERATION, IT IS OB SERVED THAT THE AO HAS NOT MENTIONED ANY CASE OF BOGUS PURCHASES AND SALES. THE ASSESSIN G OFFICER HAS ALSO NOT STATED AS TO HOW THERE IS UNDERVALUATION OF THE STOCK. THE ONLY BONE OF CONTENTION IS THE DIFFERENCE BETWEEN THE PRICE OF THE STOCK AS SHOWN IN THE STOC K STATEMENT SUBMITTED TO THE BANK AND THE STOCK STATEMENT DECLARED BY ASSESSEE IN THE INCOME-TAX RETURNS. THE EXPLANATION TENDERED BY THE ASSESSEE TO THE ASSESSI NG OFFICER THAT THE VALUE OF THE STOCK AS SUBMITTED TO THE BANK WAS INCLUSIVE OF FRE E SAMPLES FOR WHICH NO COST WAS INCURRED. THE ASSESSEE HAS DECLARED THE SAME ON THE HIGHER SIDE BECAUSE THERE HAS TO BE A MARGIN WHICH IS REFERRED TO AS THE AMOUNT OF C USHION WHICH ANY BANK KEEPS WHILE FINANCING FOR ANY ASSET. WE AGREE WITH THE LEARNED AUTHORIZED REPRESENTATIVE THAT THUS THE VALUE OF THE STOCK SUBMITTED TO THE BANK CANNOT BE TAKEN TO BE THE EXACT VALUE OF THE STOCK. THIS IS THE USUAL PRACTICE ADOPTED BY TH E BUSINESSMEN BY INFLATING THE STOCK ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 6 OF THE ASSETS IN ORDER TO AVAIL BETTER FINANCIAL HE LP FROM THE BANK. THE DEPARTMENT IS NOT JUSTIFIED IN CALCULATING THE PRICE SHOWN IN THE BANK STATEMENT REFERRED TO AS THE STOCK STATEMENT SUBMITTED TO THE BANK FOR MAKING AD DITIONS IN THIS REGARD. IN CASE THE DEPARTMENT HAS DOUBTS ABOUT THE VALUE OF THE STOCK IN QUESTION, IT COULD HAVE WELL VERIFIED FROM THE COMPANIES WHICH HAVE SUPPLIED FRE E OF COST SAMPLES TO THE ASSESSEE AND THEN COULD HAVE COME TO A CONCLUSION THAT THERE IS A DIFFERENCE BETWEEN THE MARKET PRICE OF THE STOCK AND THE ONE DECLARED BY T HE ASSESSEE. BUT IN THIS CASE, THE DEPARTMENT HAS NOT CARRIED OUT ANY SUCH EXERCISE. T HE LEARNED ASSESSING OFFICER HAS NOT MENTIONED OR OBSERVED ANY DEVIATION FROM ACCOUN TING PRINCIPLES ADOPTED BY THE ASSESSEE. HE HAS ALSO NOT FOUND ANY BOGUS PURCHASE. AFTER CONSIDERING THE PROS AND CONS OF THIS CASE, I N THE GIVEN FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED A SSESSING OFFICER HAS WRONGLY ADDED THE DIFFERENCE IN VALUATION AS DECLARED BEFORE HIM AND THE ONE WHICH WAS FOUND TO BE RECORDED IN THE STATEMENTS PRODUCED BEFORE THE BANK FOR FINANCIAL AID. THE EXPLANATION TENDERED BY THE ASSESSEE SEEMS TO BE PLAUSIBLE AND REASONABLE. 10.1 IN THIS REGARD WE ALSO FIND SUPPORT AND GUIDAN CE FROM THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. SHIB SANKAR DAS REPORTED IN 83 TAXMANN.COM 193 WHEREIN IT WAS HELD AS UNDER : SO FAR AS THE SECOND ISSUE IS CONCERNED THE FACTS F OUND BY THE TRIBUNAL ARE THAT THE STOCK STATEMENT GIVEN TO THE BANK IS DATED 29TH FEB RUARY, 2008. THE SURVEY WAS CONDUCTED SOON THEREAFTER ON 10TH MARCH, 2008. IT W AS UNDISPUTED BEFORE THE TRIBUNAL THAT AT THE TIME OF SURVEY PHYSICAL VERIFI CATION OF STOCK WAS MADE AND IT TALLIED AS PER BOOKS OF ACCOUNT MAINTAINED BY THE A SSESSEE. ON THESE FACTS, WE ARE UNABLE TO ACCEPT THE ARGUMENT ON BEHALF OF THE REVE NUE THAT THE BANK HAVING HAD VERIFIED THE STOCK, STATED TO BE THERE WITH THE ASS ESSEE, SUCH SHOULD BE ACCEPTED FOR THE PURPOSE OF THE ADDITION BEING SUSTAINED. THE JUDGME NTS RELIED UPON BY THE ASSESSEE LEND CREDENCE TO OUR ACCEPTING THE TRIBUNAL'S FINDI NG ON FACT. WHEN THE REVENUE ITSELF COULD NOT DETECT A DISCREPANCY IN THE STOCK, RELYIN G UPON A VERIFICATION MADE BY A PERSON NOT CONCERNED WITH THE ASSESSMENT CANNOT BE RELEVANT EVIDENCE TO LAWFULLY PRESUME UNDISCLOSED INCOME. THE CORRECTNESS OF THE VERIFICATION MADE BY THE BANK WAS NOT DETERMINED. THAT IS NOT A MATTER FOR CONSID ERATION OR ADJUDICATION IN THIS APPEAL. BESIDES THE ABOVE WE ALSO FIND THAT THE AO HAS INCR EASED THE CLOSING STOCK AS ON 31 ST OF MARCH 2008 BY RS.10,10,470/- BUT OMITTED TO GIVE THE EFFECT OF THE CLOSING STOCK IN THE SUBSEQUENT YEAR WHERE THE IMPUGNED CLOSING STOC K BECOMES THE OPENING STOCK. ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 7 THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES WE A RE OF THE VIEW THAT THERE IS NO EFFECT ON THE OVERALL PROFITABILITY OF THE ASSESSEE ON ACCOUNT OF INCREASE IN THE CLOSING STOCK IN THE YEAR UNDER CONSIDERATION. IT IS BECAUS E THE CLOSING STOCK OF THE YEAR UNDER CONSIDERATION BECOMES THE OPENING STOCK OF THE SUBS EQUENT YEAR. AS A RESULT IN ONE YEAR THE INCOME OF THE ASSESSEE SHALL INCREASE ON A CCOUNT OF CLOSING STOCK BUT THE INCOME OF THE SUBSEQUENT YEAR SHALL DECREASE BY THE SAME AMOUNT. THE RETURN OF INCOME OF THE ASSESSEE FOR THE SUBSEQUENT ASSESSMEN T YEAR I.E. 2009-10 WAS ALSO ASSESSED UNDER SECTION 143(3) OF THE ACT BUT NO EFF ECT ON ACCOUNT OF CLOSING STOCK OF THE EARLIER YEAR WAS GIVEN TO THE YEAR UNDER CONSID ERATION. IN VIEW OF ABOVE, WE DELETE THIS ADDITION MADE BY T HE AO. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 11. NEXT ISSUE RAISED BY ASSESSEE IN GROUND NO.4 & 5 IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTAINING THE DISALL OWANCE OF 1,35,483/- ON ACCOUNT OF INTEREST ON HOUSE BUILDING LOAN. 12. THE ASSESSEE, DURING THE YEAR HAS CLAIMED DEDUC TION OF 1,35,483/- UNDER THE HEAD INTEREST ON BUSINESS LOAN BY DEBITING ITS PE RSONAL PROFIT AND LOSS ACCOUNT. THE ASSESSEE HAS SHOWN GROSS CONSULTANCY FEE FOR 4,22,690/-. ACCORDINGLY, AO ASKED THE ASSESSEE TO JUSTIFY THE INTEREST EXPENSE CLAIMED BY HIM IN CONNECTION WITH CONSULTANCY FEE EARNED IN INDIVIDUAL CAPACITY. THE ASSESSEE IN COMPLIANCE THERETO SUBMITTED THAT THE LOAN HAS BEEN UTILIZED FOR PURCHASING HOUSE PRO PERTY WHICH HAS BEEN USED FOR THE PURPOSE OF ITS CLINIC AND THEREFORE THE INTEREST EX PENSE WAS INCURRED FOR THE COMMERCIAL/ BUSINESS PURPOSES. HOWEVER, AO OBSERVED THAT ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM ON THE BASIS OF DOCUMENTARY EVIDENCE JUSTIFYING THAT THE HOUSE PROPERTY HAS BEEN UTILIZED FOR THE PURPOSE OF ITS C LINIC. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE AO REJECTED THE CLAIM OF ASSESSEE AND ADDED THE AMOUNT OF INTEREST AT 1,35,483/- TO THE TOTAL INCOME OF ASSESSEE. 13. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER:- 5.2 I HAVE CONSIDERED THE FACTS MENTIONED IN THE AS SESSMENT ORDER AND THE APPELLANTS SUBMISSION REPRODUCED ABOVE WHICH IS SK ETCHY. IT IS SEEN FROM THE RETURN OF INCOME THAT THE APPELLANT HAS ALREADY CLAIMED IN TEREST OF RS.157957 AGAINST INCOME FORM HOUSE PROPERTY. IT HAS NOT BEEN EXPLAIN ED IN THIS CONTEXT AS TO HOW ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 8 INTEREST FOR SAID HOUSE PROPERTY WAS CLAIMED AS A B USINESS EXPENDITURE ALSO. THE APPELLANT HAS NOT FURNISHED SUFFICIENT EVIDENCE TO ESTABLISH THAT THE INTEREST RS.1,35,483 HAD BEEN INCURRED ON LOAN BORROWED FOR THE PURPOSE OF BUSINESS. HENCE, THE DISALLOWANCE OF INTEREST OF RS.1,35,483 IS CONF IRMED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 14. LD. AR FOR THE ASSESSEE SUBMITTED THAT THE AMOU NT OF INTEREST WAS CLAIMED IN THE EARLIER YEAR AND ON SUBSEQUENT YEARS AND NO DIS ALLOWANCE OF WHATSOEVER WAS MADE IN THIS REGARD. THE HOUSE PROPERTY FOR WHICH THE LO AN WAS TAKEN WAS UTILIZED FOR THE PURPOSE OF THE CLINIC. THEREFORE THE SAME SHOULD BE ALLOWED AS DEDUCTION. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE IN THIS SEN SE CASE RELATES TO THE DISALLOWANCE MADE BY THE LOWER AUTHORITIES ON THE LOAN TAKEN BY THE ASSESSEE. THE STAND OF THE ASSESSEE WAS THAT THE LOAN WAS UTILIZED FOR THE PUR POSE OF ITS CLINIC THEREFORE SHOULD BE ALLOWED AS DEDUCTION HOWEVER THE LOWER AUTHORITIES FOUND THAT NO EVIDENCE WAS PRODUCED BY THE ASSESSEE SUGGESTING THAT THE LOAN H AS BEEN UTILIZED FOR THE PURPOSE OF THE BUSINESS. 15.1 WE FIND THAT THE LD. AR HAS ALSO NOT BROUGHT A NYTHING ON RECORD SUGGESTING THAT THE LOAN FOR THE HOUSE PROPERTY WAS UTILIZED FOR CO MMERCIAL PURPOSES. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE CONTRARY TO THE FINDING OF LEARNED CIT(A), WE REFRAIN TO INTERFERE IN THE ORDER OF LOWER AUTHORITIES. HENCE THIS GROUND OF APPEAL OF ASSESSEE IS DISMISSED. 18. NEXT ISSUE RAISED BY ASSESSEE IN GROUND NO.6 IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTAINING THE ADDITI ON OF 1.02 LACS AS UNDISCLOSED PROFESSIONAL INCOME. 19. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HA S RECEIVED FOLLOWING INCOME:- SL.NO NAME OF THE CONCERN DATE AMOUNT RS) 1 MOHAN CLINIC & RESEARCH CENTRE PVT. LTD. 14.02.08 30,000 2 -DO- 04.03.08 15,000 ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 9 3 -DO- 20.03.08 25,000 4 FIVE POINT MICRO SURGERY CENTRE PVT LTD. 17.12.07 32,000 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO OBS ERVED THAT THE ADDITION OF INCOME HAS NOT BEEN SHOWN BY THE ASSESSEE IN ITS IN COME TAX RETURN. ACCORDINGLY, AO ADDED THE SUM OF 1.02 LAKH TO THE TOTAL INCOME OF ASSESSEE. 20. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT INCOME OF 1.02. LAKH HAS BEEN DULY SHOWN IN ITS PROFIT AND LOSS ACCOUNT. HOWEVER, LD. CIT(A) DISREG ARDED THE CONTENTION OF ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER :- 6.2 IN THE WRITTEN SUBMISSION, WHICH HAS BEEN REPRO DUCED ABOVE, THE APPELLANT HAS ONLY STATED THAT THE AMOUNT OF RS.1,02,000 HAD BEEN CREDITED TO THE PROFIT AND LOSS ACCOUNT. NO DETAILS WERE FURNISHED DURING THE APPEA L PROCEEDINGS TO PROVE THIS CONTENTION. AS ALREADY STATED, CASH BOOK AND LEDGER WERE NOT PRODUCED BY THE APPELLANT. HENCE, THE ADDITION OF RS.102,000 IS CON FIRMED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 21. LD. AR BEFORE US DREW OUR ATTENTION ON THE BALA NCE-SHEET WHERE THE TDS ON THE AFORESAID INCOME WAS DULY SHOWN WHICH IS KEPT O N THE RECORD. ON THE CONTRARY, LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIE S BELOW. 22. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE IN THIS CAS E RELATES TO THE AMOUNT OF INCOME FOR 1.02 LAKH WHICH WAS RECEIVED FROM MOHAN CLINIC & RE SEARCH CENTRE PT. LTD. AND FIVE POINT MICRO SURGERY CENTRE PVT. LTD. RESPECTIVELY. THE TOTAL AMOUNT RECEIVED BY ASSESSEE FOR 1.02 LAKH FROM THE ABOVE TWO ORGANIZATION. AFTER G OING THROUGH THE PROFIT AND LOSS ACCOUNT OF ASSESSEE WE FIND THAT IT HAS SHOWN ITS GROSS INCOME FOR 38,85,504/- FROM M/S KUMAR SURGICAL & & LAPROSCOPIC CLINIC AS WELL AS FROM HIS CONSULTANCY FEE OF 4,22,690/-. AT THE SAME TIME, WE ALSO FIND THE INCO ME RECEIVED BY ASSESSEE FOR 1.02 LAKH WAS SUBJECT TO TDS AND TDS HAS DULY BEEN CLAIMED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. AS THE INCOME DIS CLOSED BY ASSESSEE ARE MUCH MORE THAN THE AMOUNT OF ALLEGED CONCEALED INCOME OF RS. 1.02 LACS, THEREFORE, WE ARE OF THE VIEW THAT ASSESSEE HAS DISCLOSED ALL HIS INCOME AND NOTHING HAS CONCEALED THERE FROM. ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 10 ACCORDINGLY, WE DELETE THE SAME. AO IS DIRECTED ACC ORDINGLY. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 23. LAST ISSUE RAISED BY ASSESSEE IN GROUND NO.7 IS LEVY OF INTEREST U/S. 234B/234C OF THE ACT WHICH IS CONSEQUENTIAL. THEREFORE, AO IS DIRECTED TO GRANT CONSEQUENTIAL RELIEF TO THE ASSESSEE. 24. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. COMING TO ITA NO.1604/KOL/2016 FOR A.Y. 09-10 . 25. AT THE OUTSET, IT IS NOTICED THAT THIS APPEAL B Y ASSESSEE IS DELAYED BY 36 DAYS AND ASSESSEE HAS FILED CONDONATION PETITION SUPPORT ED BY AFFIDAVIT STATING THE REASONS. THE LD. DR FOR REVENUE FAIRLY CONCEDED THAT IN VIEW OF THE REASONS GIVEN IN CONDONATION PETITION DELAY CAN BE CONDONED. IN VIEW OF CONCESSION GIVEN BY LD. DR, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARI NG. 26. GROUNDS NO.1 AND 10 ARE GENERAL IN NATURE AND D O NOT CALL FOR ANY SEPARATE ADJUDICATION. 27. FIRST ISSUE RAISED BY ASSESSEE IN GROUND NO. 2 AN 3 ARE THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTAINING THE ADDITI ON OF 7,86,331/- AS UNDISCLOSED INCOME. 28. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IN DIVIDUAL AND PRACTICING MEDICAL PRACTITIONER. A SURVEY OPERATION WAS CONDUCTED U/S. 133 OF THE ACT DATED 20.06.2009 AT THE BUSINESS PREMISES OF ASSESSEE. THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE RECEIPT AND EXPENSES TO THE EXTENT OF 13,01,513/- AND 5,15,181/-HAVE NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. ACCORDINGLY, ASSESSING OFFICER INFERRED THAT THE ASSESSEE HAS UN DER STATED ITS PROFIT BY AMOUNT OF 7,86,331/- ONLY ( 1301513 515181 ) AND ACCORDINGLY THE ADDED TO THE TOTAL INCOME OF ASSESSEE. 29. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT HE HAS DECLARED GR OSS INCOME AT 76,54,612/- FROM HIS PROPRIETOR BUSINESS AND FROM HIS PERSONAL CONSU LTANCY FEE OF 8,65,598.00 RESPECTIVELY. THUS, THE ALLEGATION OF AO THAT INCOM E PERTAINED TO EXPENDITURE TO IT FOR 13,01,513/- AND 5,15,181/- HAS BEEN UNDERSTATED IS INCORRECT. HOWEV ER, LD. CIT(A) DISREGARDED THE CONTENTION OF ASSESSEE AND CONFIRME D THE ORDER OF AO. ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 11 BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 30. BEFORE US LD. AR FILED PAPER BOOK WHICH IS RUNN ING PAGES FROM 1 TO 15 AND REITERATED THE SAME ARGUMENTS THAT WERE PLACED BEFO RE LD. CIT(A) WHEREAS LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW . HE REQUESTED THE BENCH TO CONFIRM THE SAME. 31. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET, IT WAS OBSERVED THAT AO HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT ASSESSEE HAS CON CEALED ITS INCOME TO THE EXTENT OF 13,01,513/- AND CORRESPONDING EXPENSES FOR RS. 5,15 ,181.00 HAS NOT BEEN CLAIMED. ON PERUSAL OF AUDITED ACCOUNTS OF ASSESSEE, IT WAS OBSERVED THAT ASSESSEE HAS SHOWN GROSS RECEIPT OF ITS INCOME FOR 76,54,612/- FROM M/S KUMAR SURGICAL & LAPROSCOPIC CLINIC. SIMILARLY, ASSESSEE HAS SHOWN CONSULTANCY F EE OF 8,65,598/- AS EVIDENT FROM HIS INDIVIDUAL PROFIT AND LOSS ACCOUNT. IN THE ABSE NCE OF ANY DOCUMENTARY EVIDENCE, IN OUR CONSIDERED VIEW NO ADDITION CAN BE SUSTAINED. C ONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE REVERSE THE ORDER OF LD. CIT(A) AND DELETE THE ADDITION MADE BY AO. ACCORDINGLY, AO IS DIRECTED. HENCE, THI S GROUND OF ASSESSEE IS ALLOWED. 32. GROUND NO.4 IS NOT PRESSED AT THE TIME OF HEARI NG. HENCE, SAME IS DISMISSED BEING NOT PRESSED. 33. GROUND NO. 5 TO 8 ARE INTER-RELATED AND THEREFO RE BEING TAKEN UP TOGETHER. THE ISSUE RAISED BY ASSESSEE IN GROUNDS NO. 5 TO 8 ARE THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY SUSTAINING THE DISALLOWANCE OF V ARIOUS AMOUNTS ON ACCOUNT OF NON-DEDUCTION OF TDS. 34. AT THE OUTSET, LD. AR BEFORE US SUBMITTED THAT THE PROVISION OF SECTION 194J IS NOT APPLICABLE TO THE ASSESSEE AS ITS TURNOVER IN T HE IMMEDIATE PRECEDING YEAR WAS LESS THAN LIMIT AS SPECIFIED U/S. 44AB OF THE ACT. LD. A R ALSO SUBMITTED THAT ASSESSEE WAS RUNNING A CLINIC UNDER THE NAME & STYLE M/S KUMAR S URGICAL & LAPROSCOPIC CLINIC AS WELL AS HE WAS PRACTICING AS MEDICAL PRACTITIONER. THE ASSESSEE MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR BOTH ACTIVITIES. AS PER LD. AR THE LIMIT OF 40 LAKH IS APPLICABLE U//S 44AB OF THE ACT IN CASE OF ITS M/S KUMAR SURGI CAL & LAPROSCOPIC CLINIC AND SIMILARLY AS MEDICAL PRACTITIONER THE LIMIT WAS AT 10 LAKH FOR THE APPLICABILITY OF ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 12 PROVISION OF 44AB OF THE ACT. LD. AR ALSO SUBMITTED THAT THE TURNOVER OF BOTH THE SOURCE OF INCOME CANNOT BE CLUBBED TOGETHER. HE REQ UESTED THE BENCH TO DECIDE THE ISSUE ON MERIT. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE ISSUE RAISED BY LD. AR HAS NOT BEEN ADJUDICATED BY THE AUTHORITIES BELOW AND HE REQUEST ED THE BENCH TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJ UDICATION. IN REJOINDER, LD AR SUBMITTED THAT THE ISSUE RAISED BY ASSESSEE IS LEGA L IN NATURE AND WHICH CAN BE ADJUDICATED BY THE TRIBUNAL. IN THIS CONNECTION, LD . AR RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF NTPC VS. CIT REPORTED IN 229 ITR 383 (SC). 35. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE ADMIT THE LEGAL IS SUE RAISED BY ASSESSEE AT THE TIME OF HEARING AFTER HAVING RELIANCE ON THE PRINCIPLE LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF NTPC (SUPRA). FOR THE APPLICABILITY OF THE TDS PROVISIO NS ON THE ASSESSEE, LET US FIRST EXAMINE THE PROVISION OF SECTION 194J, WHICH READS AS UNDER:- [ FEES FOR PROFESSIONAL OR TECHNICAL SERVICES . 194J(1) ANY PERSON NOT BEING AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY OF- (A) FEES FOR PROFESSIONAL SERVICES, OR (B) FEES FOR TECHNICAL SERVICES, [OR] [(BAA) ANY REMUNERATION OR FEES OR COMMISSION BY WH ATEVER NAME CALLED OTHER THAN THOSE ON WHICH TAX IS DEDUCTIBLE UNDER SECTION 192, TO A DIRECTOR OF A COMPANY, OR] [(C) ROYALTY, OR (C) ANY SUM REFERRED TO IN CLAUSE (VA) OF SECTION 28,] SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO [TE N] PER CENT OF SUCH SUM AS INCOME- TAX ON INCOME COMPRISED THEREIN: PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION- (A) FROM ANY SUMS AS AFORESAID CREDITED OR PAID BEFORE THE 1 ST DAY OF JULY, 1995; OR (B) WHERE THE AMOUNT OF SUCH SUM OR, AS THE CASE MAY BE , THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE AFORESAID PERSON TO THE ACCOU NT OF, OR TO, THE PAYEE, DOES NOT EXCEED- (I) [THIRTY THOUSAND RUPEES], IN THE CASE OF FEES FOR P ROFESSIONAL SERVICES REFERRED TO IN CLAUSE (A) OR (II) [THIRTY THOUSAND RUPEES], IN THE CASE OF FEES FOR T ECHNICAL SERVICES REFERRED TO IN [CLAUSE (B), OR] [(III) [THIRTY THOUSAND RUPEES], IN THE CASE OF ROY ALTY REFERRED TO IN CLAUSE (C) OR (IV) [THIRTY THOUSAND RUPEES], IN THE CASE OF SUM REFERR ED TO IN CLAUSE (D):] ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 13 [PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UND IVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM BY WAY OF FEES FOR PROFESSIONAL SERVICES OR TEC HNICAL SERVICES IS CREDITED OR PAID, SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER TH IS SECTION :] [PROVIDED ALSO THAT NO INDIVIDUAL OR A HINDU UNDIVI DED FAMILY REFERRED TO IN THE SECOND PROVISO SHALL BE LIABLE TO DEDUCT INCOME-TAX ON THE SUM BY WAY OF FEES FOR PROFESSIONAL SERVICES IN CASE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY.] FROM A PLAIN READING OF THE ABOVE SECTION, WE FIND THAT AN INDIVIDUAL HUF ARE NOT LIABLE TO DEDUCT TDS IF THEIR TURNOVER IN THE PRECE DING YEAR IS LESS THAN THE LIMIT SPECIFIED U/S. 44AB OF THE ACT. THE YEAR BEFORE US PERTAINS TO AY 2009-10, THEREFORE TO CHECK THE APPLICABILITY OF THE PROVISION OF SECT ION 44AB OF THE ACT, WE HAVE TO SEE THE TURNOVER OF THE ASSESSEE OF THE IMMEDIATE PRECE DING YEAR I.E. AY 2008-09. THE TURNOVER OF THE ASSESSEE IN AY 2008-09 REPRODUCED B ELOW:- SL. NO. PARTICULARS AMOUNT 1. M/S KUMAR URGICAL & LAPROSCOPIC CLINIC 30,58,254 2. INDIVIDUAL CAPACITY 4,22,690 FROM THE ABOVE, WE FIND THAT TURNOVER OF ASSESSEE I S LESS THAN THE LIMIT AS SPECIFIED U/S 44AB OF THE ACT AND PROVISION OF SECTION 44AB OF TH E ACT FOR AY 2009-10 READS AS UNDER: 46 [ AUDIT OF ACCOUNTS OF CERTAIN PERSONS CARRYING ON BU SINESS OR PROFESSION. 47 44AB. 48 EVERY PERSON, (A) CARRYING ON BUSINESS SHALL, IF HIS T OTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS EXCEED OR EXCEEDS FORTY LAKH RU PEES IN ANY PREVIOUS YEAR 49 [***]; OR (B) CARRYING ON PROFESSION SHALL, IF HIS GROSS RECEIPTS IN PROFESSION EXCEED TEN LAKH RUPEES IN ANY 50 [PREVIOUS YEAR; OR FROM THE ABOVE, WE FIND THAT LIMIT FOR THE PROFESSI ONAL WAS SPECIFIED FOR 10 LAKH AND FOR OTHER CONCERN IT WAS SPECIFIED FOR 40 LAKH AS THE ASSESSEE BEFORE US IS MAINTAINING SEPARATE BOOKS OF ACCOUNT FOR BOTH SOUR CE OF INCOME AS EVIDENT FROM THE SEPARATE PROFIT & LOSS ACCOUNT MAINTAINED BY HIM. T HEREFORE WE HAVE TO CHECK THE APPLICABILITY OF THE TDS PROVISIONS SEPARATELY FOR BOTH THE SOURCE OF INCOME. THUS, FROM THE ABOVE, WE FIND THAT THE TURNOVER IS LESS T HAN THE LIMIT AS SPECIFIED BY THE ITA NO.1604 & 1730/KOL/2016 A.YS. 09-1 0 & 08-09 DR. SANTOSH M KUMAR VS. ITO WD-22(3) , KOL. PAGE 14 ASSESSEE U/S.44AB OF THE ACT. ACCORDINGLY WE HOLD T HAT THE TDS PROVISION WILL NOT BE APPLIED TO THE ASSESSEE FOR THE YEAR UNDER CONSIDER ATION. HENCE, WE DELETE THE ADDITION MADE BY AO. THUS THE AO IS DIRECTED ACCORDINGLY. TH IS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 37. LAST ISSUE RAISED BY ASSESSEE IN GROUND NO.9 IS LEVY OF INTEREST U/S 2324B/234C OF THE ACT, WHICH IS CONSEQUENTIAL. THEREFORE, AO I S DIRECTED TO GRANT CONSEQUENTIAL RELIEF TO ASSESSEE. 38. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. 39. IN COMBINE RESULT, BOTH APPEALS OF ASSESSEES STAND PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 11/08/2017 SD/- SD/- ((!) ($!) (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS *+, - 11/08/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-M/S KUMAR SURGICAL & LAPROSCOPY CLINIC, 2 35/3/1, N.S.C. BOSE ROAD, BANS DRONI, KOLKATA-47 2. ! /REVENUE-ITO WARD-22(3) 54/1, RAFI AAHMED KIDWAI RO AD, KOLKATA-16 3. ++- . / CONCERNED CIT 4. . - / CIT (A) 5. /01 ((- , - / DR, ITAT, KOLKATA 6. 123 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO - ,