M/s. G I Healthcare Pvt. Ltd.(Kaizan Hospital), Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-2(1)(1), Ahmedabad

ITA 2417/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4993 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 23-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: Depreciation; Capital expenditure
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. GI HEALTHCARE PVT. LTD. (KAZEN HOSPITAL), 132 FT. RING ROAD, NR. HELMET CIRCLE, MEMNAGAR, AHMEDABAD - 380052 PAN: AADCG4824E (APPELLANT) VS THE D CIT, CIRCLE - 2(1)( 1 ) , AHMEDABAD - 380022 (RESPONDENT) REVENUE BY : S H RI LALIT P. JAIN , SR. D . R. ASSESSEE BY: MS. URVASHI SHODHAN, A.R. DATE OF HEARING : 15 - 01 - 2 019 DATE OF PRONOUNCEMENT : 31 - 01 - 2 019 / ORDER P ER : AMARJ IT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2012 - 13 , ARI SES FROM ORDER OF THE CIT(A) - 2, AHMEDABAD DATED 16 - 08 - 2 016 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF AP PEAL OF TH E ASSESSEE IS AGAINST THE LEVY OF PENALTY OF RS. 3 , 27 , 468/ - U/S. 271(C) OF THE ACT. I T A NO . 2417 / A HD/20 16 A SS ESSMENT YEAR 2012 - 13 I.T.A NO. 2 4 17 /AHD/20 16 A.Y. 2012 - 13 PAGE NO M/S. G I HEALTHCARE PVT. LTD. VS. D CIT 2 3. THE FACT IN BRIEF IS THAT DURING THE ASSESSMENT MADE U/S. 143(3) OF THE ACT THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF FOLLOWING AMOUNTS : - (I) CAPITALIZATION OF INTEREST U/S. 36(1)(III) RS. 9 , 22 , 418 (II) ADDITION ON ACCOUNT OF INCOME RS. 1 , 07 , 359 REGARDING CAPITALIZATION OF INTEREST U/S. 36(1)(III), T HE ASSESSEE WAS ASKED TO FURNISH THE DETAIL OF LOAN AMOUNT, PURCHASE OF ASSETS AND WORKING OF INTEREST TILL THE DATE OF PUTTING OF USE OF ASSETS. IN RESPONSE THE ASSESSEE H A S EXPLAINED THAT NO PORTION OF INTEREST WAS CAPITALIZED IN RESPECT OF MACHINERIES AS THERE WAS NO TIME DIFFE RE NCE REQUIRING THE SAME AS TO ACQUISITION AND PUT TO USE. I N THIS CON NECTION, THE ASSESSEE HAS EXPLAINED THAT IT HAS INAUG UR ATED KAIZEN HOSPITAL ON 27H NOV, 2011 AND FURNISHED THE DETAIL OF INTEREST IN THE PERIOD 01 - 04 - 2011 AS UNDER: - PARTICULARS TOTAL FOR I - OR FOR BUILDING FURNITURE EQUIPMENTS INTEREST ON LOAN FROM 1,49,175 22,449 1,26,726 STATE BANK OF INDIA INTEREST ON LOAN FROM 8,21,791 3,48,459 80,347 3,92,985 NUTAN NAGRIK SAHAKARI BANK LTD. 9,70,966 3,70,908 2,07,073 3,92,985 AFTER VERIFICATION OF THE DETAIL SUBMITTED BY THE ASSESSEE THE ASSESSING OFFICER HAS CAPITALIZED THE INTEREST OF R S. 9 , 70 , 966/ - AND ALLOWED DEPRECATION TO T HE AMOUNT OF RS. 48 , 548 AND ADDED THE REMAINING AMOUNT OF RS. 9 , 22 , 418 TO THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE S AME AS CAPITAL EXPENDITURE. I.T.A NO. 2 4 17 /AHD/20 16 A.Y. 2012 - 13 PAGE NO M/S. G I HEALTHCARE PVT. LTD. VS. D CIT 3 REGARDING SECOND ADDITION ON ACCOUNT OF INTEREST INCOME DURING THE ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS RECEIVED THE FOLLOWING AMOUNTS FROM THE THREE PART IES WHICH WERE NOT CREDITED IN T H E P & L A/C (I) TORRENT POWER LIMITED RS. 12359 (II) RANBAXY LABORATORY LTD. RS. 50000 (III) CIPLA LTD. RS. 45000 ------------- RS.107359 THE ASSESSEE COULD NOT EXPLAIN THE SAME THEREFORE T HE ASSESSING OFFICER HAS ADDED T H E SAME TO THE TO T AL INCOME OF THE A SSESSEE. THE ASSESSING OFFICER HAS ALSO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER HAS SHOW CAUSED THE ASSESSEE TO EXPLAIN WHY T HE PENALTY ON THE AFORESAID ADDITION SHOU LD NOT B E LEVIED U/S. 271(1)(C) OF T HE ACT. THE ASSESSEE HAS EXPLAINED T HAT THERE WAS ONLY DISALLOWANCE/ ADDITION BUT NOTING HAS BEEN PROVED TO SHOW CONCEALMENT OF INCOME WHICH WAS ENVISAGED U/S. 271(1) (C) OF THE ACT. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158 (2010). THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE AND HELD THAT ASSESSEE HA D FURNISHED INACCURATE PARTICULARS OF INC OME AND ALSO FAILED TO SUBSTANTIATE REASONABLE AND SATISFACTORY EXPLANATION THE REFORE THE ASSESSING OFFICER HA D LEVIED PENALTY OF RS. 527468/ - U/S. 271(1)(C) OF T H E ACT. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL B EFORE THE LD. CIT(A). T HE LD. CIT(A) HAS CON FIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER . I.T.A NO. 2 4 17 /AHD/20 16 A.Y. 2012 - 13 PAGE NO M/S. G I HEALTHCARE PVT. LTD. VS. D CIT 4 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSING OFFICER HAS LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT TO THE AMOUNT OF RS. 3 , 27 , 468/ - ON THE GROUND OF FURNISHING INACCURATE PARTICULARS OF INCOME IN RESPECT OF THE FOLLOWING ADDITIONS MADE IN THE ASSESSMENT ORDER U/S. 143(3) FINALIZED ON 30 - 07 - 2015: - (I) CAPITALIZATION OF INTEREST U/S. 36(1)(III) RS. 9 , 22 , 418 (II) ADDITION ON ACCOUNT OF INC OME RS. 1 , 07 , 359 IN RESPECT OF CAPITALIZATION OF INTEREST OF RS. 9 , 22 , 418/, WE OBSERVE THAT ASSESSEE HAS OBTAINED LOAN FROM THE S TATE B ANK OF INDIA AND NUTAN NAGRIK SAHAKARI BANK LTD. WHICH HAS BEEN UTILIZED FOR THE PURPOSE OF BUILD ING FURNITURE AND EQUI PMENT OF KAIZEN HOSPITAL INAUGURATED ON 27 - 11 - 2011. THE ASSESSEE EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT PORTION OF INTEREST PAID WAS CAPITALIZED AS THERE WAS NO TIME DIFFERENCE REQUIR ING THE SAME AS TO ACQUISITION AND PUT TO USE. IN THIS REGARD , IT IS OBSERVED THAT THE SMALL AMOUNT OF BANK LOAN OF RS. 9 , 70 , 966/ - HAS BEEN USED FOR TH R EE COMPONENTS I.E. BUILDING FURNITURE AND EQUIPMENT AT DIFFERENT STAGES THEREFORE, THE ASSESSSEE HAS CLAIMED SUCH PART OF EXPENSES AS REVENUE EXPEN DITU RE INSTEAD OF CLAIMING DEPRECIATION ON CAPITALIZATION OF SUCH EXPENSES. IN THE LIGHT OF THE ABOVE FACTS, WE DO NOT FIND IT APPROPRIATE TO CONSIDER THAT THERE IS A CASE OF FURNISHING INACCURATE PARTICULAR OF INCOME. THEREFORE, WE ARE OF THE VIEW IT IS NOT JUSTIFIED TO LEVY PENALTY ON THE IMPUGNED AMOUNT O F RS. 9 , 70 , 966/ - . HOWEVER IN RESPECT OF REVENUE RECEIPT OF RS. 1 , 07 , 359 RECEIVED AS PER TDS CERTIFICATE WHICH WAS NOT CREDITED IN THE P & L A/C , WE OBSERVE THAT T H E ASSESSEE HAS FAILED TO SUBSTANTIATE WITH ANY I.T.A NO. 2 4 17 /AHD/20 16 A.Y. 2012 - 13 PAGE NO M/S. G I HEALTHCARE PVT. LTD. VS. D CIT 5 MATERIAL THAT WHY THE IMPUGNED RECEIPT W AS NOT DISCLOSED IN ITS INCOME. THEREFORE, WE CONSIDER THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS. 1 , 07 , 359 AND WE JUSTIFY THE ACTION OF THE ASSESSING OFFICER OF LEVY ING THE PENALTY U/S. 271(1)(C) OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE PENALTY AS SUPRA , THEREFORE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 31 - 01 - 201 9 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 31 /01/2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,