M/s Oxford Hospital Pvt. Ltd., Jalandhar V. The Joint Commissioner of Income Tax, Jalandhar

ITA 224/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0569 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 19-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: K BHAGAT
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.224(ASR)/2016 ASSESSMENT YEAR:2010-11 PAN: AAACO5596L M/S. OXFORD HOSPITAL (P) LIMITED VS. JT. COMMR. OF INCOME TAX, JALANDHAR. RANGE-III, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K. BHAGAT, CA RESPONDENT BY: SH.BHAWANI SHANKER, DR DATE OF HEARING: 29/06/2016 DATE OF PRONOUNCEMENT: 11/07/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2010-11, AGAINST THE ORDER DATED 14.03.2016, PASSED BY THE LD. CIT(A)-2, JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER PASSED BY THE WORTHY CIT(A) IS A GAINST LAW & FACTS OF THE CASE. 2. THAT THE WORTHY CIT(A) HAS WRONGLY CONFIRMED THE ADDITION OF RS.5,08,136/- RELATING TO IRRECOVERABLE AMOUNTS CLA IMED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. 3. THAT THE LD. CIT(A) HAS NOT GIVEN ITS OPINION IN REGARD TO GROUND NO.3 OF GROUNDS OF APPEAL IN RESPECT OF NON ISSUE OF SUMMONS TO VARIOUS PERSONS RELATING TO IRRECOVERABL E AMOUNTS, AS REQUESTED BY THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. ITA NO. 224(ASR)/2016 A.Y. 2010-11 2 4. THAT THE LD. CIT(A) HAS NOT GIVEN ITS OPINION IN REGARD TO THE SUBMISSIONS OF THE ASSESSEE REGARDING AMENDMENT IN THE LAW FROM 01.04.1989 AND VARIOUS JUDGMENTS MENTIONED IN THE APPELLATE PROCEEDINGS. 5. THAT THE LD. CIT(A) HAS NOT TAKEN COGNIZANCE OF THE FACT THAT THE A.O. HAS OBSERVED IN PARA 4 OF ITS ORDER THAT N O HOSPITAL NOW A DAYS CAN EXEMPT A SINGLE PENNY TO ANY PATIENT AND HAS NOT GIVEN ANY JUDGMENT IN REGARD TO THE SUBMISS IONS OF THE ASSESSEE IN THIS RESPECT. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NOS. 3 & 4, HENCE, THE SAME ARE DISMISSED AS NOT PR ESSED. 3. GROUND NO.1 IS GENERAL. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMP ANY, WHICH IS RUNNING A HOSPITAL UNDER THE NAME AND STYLE OF OXFO RD HOSPITAL PVT. LIMITED, FILED ITS RETURN OF INCOME FOR THE YEAR U NDER CONSIDERATION ON 25.09.2010, DECLARING THEREIN AN INCOME OF RS.19,42 ,890/-. THE AO COMPLETED ASSESSMENT U/S 143(3) OF THE ACT AT AN I NCOME OF RS.24,51,026/- AND MADE THE FOLLOWING ADDITIONS: (I) ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENSES RS.2,02,168/- CLAIMED BY WAY OF IRRECOVERABLE AMOUNTS FROM INDOOR PATIENTS. (II) ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENS ES RS.1,52,112/- CLAIMED BY WAY OF IRRECOVERABLE AMOUNTS FROM PATIENT NAMELY BABY JASPREET KAUR (III) ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPEN SES RS.1,53,856/- CLAIMED BY WAY OF IRRECOVERABLE AMOUNTS FROM PATIENT, NAMELY SH. HARDEEP SINGH 3. THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY TH E A.O. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,08,136/- RELATING ITA NO. 224(ASR)/2016 A.Y. 2010-11 3 TO IRRECOVERABLE AMOUNTS CLAIMED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. HE FURTHER ARGUED THAT THE LD. CIT(A) HAS NOT TAKEN COGNIZANCE OF THE FACT THAT THE AO HAS OBSERVED IN PARA 4 OF HIS ORDER THA T NO HOSPITAL NOW-A- DAYS CAN EXEMPT A SINGLE PENNY TO ANY PATIENT AND H AS NOT GIVEN ANY JUDGMENT IN REGARD TO THE SUBMISSIONS OF THE ASSESS EE IN THIS RESPECT. IT HAS FURTHER BEEN CONTENDED THAT THE AMOUNTS IN QUES TION WERE INDEED IRRECOVERABLE FROM INDOOR PATIENTS; THAT THESE AMOU NTS WERE DULY WRITTEN OFF IN THE BOOKS OF ACCOUNT OF THE ASSESSEE; AND TH AT THE ASSESSEE HAD UNDISPUTEDLY REPEATEDLY ASKED THE AO TO SUMMON THE PATIENT, WHICH REQUEST WAS WRONGLY NOT ACCEDED TO. 4. HE, THEREFORE, PRAYED THAT THE ADDITION IN QUEST ION MAY BE DELETED. 5. THE LD. DR, ON THE OTHER HAND, STRONGLY RELIED O N THE IMPUGNED ORDER. 6. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THE F ACTS ARE NOT DISPUTED. THE CONTROVERSY IS SHORT, I.E., THE AMOUNTS IN QUES TION HAVE BEEN WRITTEN OFF BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AS IRRE COVERABLE. SUCH AMOUNTS ARE ALLOWABLE TO THE ASSESSEE AS DEDUCTION. THE HONBLE SUPREME COURT, IN THE CASE OF T.R.F. LTD. VS. CIT , 323 ITR 397, (SC), HAS HELD THAT AFTER 01.04.1989, IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT THE DEBT, IN FACT, HAS BECOME IRRECO VERABLE AND THAT IF THE SAME IS WRITTEN OFF BY THE ASSESSEE IN ITS ACCOUNT S AS IRRECOVERABLE, THIS IS SUFFICIENT FOR THE DEDUCTION CLAIMED TO BE ALLOW ED ITA NO. 224(ASR)/2016 A.Y. 2010-11 4 7. FURTHER, AS HELD IN AJIT KUMAR C. KAMDAR VS. CI T, 1 SOT 183 (MUM.), IT HAS BEEN HELD THAT IF A DEBT IS WRITTEN OFF IN THE ACCOUNTS OF THE ASSESSEE FOR THE PREVIOUS YEAR, THIS WILL BE SUFFI CIENT FOR CLAIMING THE AMOUNT AS A BAD DEBT. IT IS THE ASSESSEES PREROGAT IVE TO DECIDE AS TO WHETHER THE DEBT HAS BECOME BAD OR NOT. THE DEPARTM ENT CANNOT INSIST ON PRODUCTION OF DEMONSTRATIVE AND INFALLIBLE PROO F OF THE DEBT HAVING BECOME BAD, AS HELD IN NEWDEAL FINANCE & INVESTMEN T LTD. VS. DCIT, 74 ITD 469. BESIDES THESE CASE LAWS, THERE ARE NUMEROU S DECISIONS FAVOURING THE ASSESSEE, TO WHICH, NO CONTRARY DECI SION HAS BEEN CITED. 8. IN VIEW OF THE ABOVE, THE GRIEVANCE OF THE ASSES SEE IS FOUND TO BE JUSTIFIED AND IS ACCEPTED AS SUCH. THE ORDER UNDER CHALLENGE IS REVERSED. 9. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/07/ 2 016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 11/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. OXFORD HOSPITAL (P) LTD., JALANDH AR 2. THE JCTI, R-III, JALANDHAR 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.