DCIT 8(3), MUMBAI V. UNITED HEALTH CARE PAREKH TPA P. LTD, MUMBAI

ITA 268/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3188 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Department
• Bench Allotted: F
• Next Hearing Date: 08-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-01-2014
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH SODHANI
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI AMARJIT SINGH , J M ./ ITA NO. 268 / MUM/20 1 4 ( / ASSESSMENT YEAR : 2009 - 2010 ) DCIT - 8(3), MUMBAI - 400020 VS. UNITED HEALTH CARE PAREKH TPA PVT. LTD. MUMBAI(EARLIER KNOWN AS PAREKH HEALTH MANAGEMENT PVT. LTD.), 3B, GUNDECHA ENCLAVE, KHERANI ROAD, SAKI NAKA, ANDHERI (EAST), MUMBAI - 72 ./ ./ PAN/GIR NO. : A A CCP 3776 F ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI G.M.DOSS /ASSESSEE BY : SHRI ASHISH SODHANI / DATE OF HEARING : 08 / 02 /201 6 / DATE OF PRONOUNCEMEN T : 31/03 /2016 / O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), MUMBAI, DATED 28 - 10 - 2013, FOR THE ASSESSMENT YEARS 200 9 - 2010 , IN MATTER OF ORDER PASSED U/S.14 3(3) OF THE I.T.ACT. 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED FOR DELETING THE ADDITION MADE BY THE AO BY DISALLOWING PAYMENT U/S.40 ( A ) (IA) OF THE I.T.ACT. 3. AT THE OUTSET, LD. AR PLACED ON RECORD ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 - 08, DA RED 9 - 11 - 2015, WHEREIN EXACTLY SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AFTER HAVING THE FOLLOWING OBSERVATION : - ITA NO. 268 /1 4 2 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FACTS IN BRIEF ARE THAT THE ASSESSEE DECL ARED NIL INCOME AFTER CLAIMING SET OFF OF CARRIED FORWARD UNABSORBED DEPRECIATION ALLOWANCE, IN ITS RETURN F ILED ON 13.10.2007, WHICH WAS ASSESSED U/S 143(3) OF THE ACT ON 29.12.2009 ON A TAXABLE INCOME OF RS. 7,41,87,640/ - .IT IS NOTED THAT THE LD. ASSESS ING OFFICER ADDED THE INCOME ON THE BASIS OF THE DECISION FROM HEN 'BLE KARNATAKA HIGH COURT IN THE CASE OF MEDI ASSIST TPA VS. DCIT AND ALSO CBDT CIRCULAR NO. 8/2009 DATED 24.11.2009 HOLDING THAT TPAS ARE LIABLE TO DEDUCT TAX AT SOURCE U/S 194J OF THE ACT IN RESPECT OF PAYMENT MADE TO HOSPITALS. IN THE PRESENT APPEAL) THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FACILITATING HEALTH INSURANCE CLAIM SETTLEMENT AND THE ASSESSEE ACTS ON BEHALF OF INSURANCE COMPANIES AND MAKES PAYMENTS TO HOSPITALS IN R ESPECT OF S ERVICES AVAILED BY INDIVIDUAL, HOLDING INSURANCE PO LICIES. BEFORE DOING SO, THE ASSESSEE ENTERED INTO AGREEMENTS WITH INSURANCE COMPANIES AND THE AGREEMENTS RELATE TO ADMINISTRATION OF GROUP HEALTH INSURANCE POLICIES PROVIDED BY THE INSURANCE COMPANIES TO THE EMPLOYING ENTITY (EMPLOYER), WHICH IN - TURN PROVIDES THE POLICY TO THE INSURED PERSONS. WHEN AN INSURED PERSON APPROACHES THE HOSPITAL, THE BILLS ARE FORWARDED BY THE HOSPITALS TO THE ASSESSEE UNDER THE CASHLESS HOSPITALIZATION SCHEME. THE ASSESSEE IN - T URN FORWARDS THE BILLS TO THE INSURANCE COMPANY. INSURANCE COMPANIES PAYS THE BILLS TO THE HOSPITALS DIRECTLY THROUGH A CHECK OF REMITS MONEY TO A FLOAT ACCOUNT THROUGH WHICH PAYMENTS ARE MADE BY THE ASSESSEE. IN NO SITUATION, THE ASSESSEE' MAKES PAYMENTS OUT OF ITS OWN ACCOUNTS. THE SERVICES PROVIDED 'BY THE ASSESSEE INCLUDE FACILITATION OF CASHLESS HOSPITALIZATION OF INSURED PERSONS, CALL CENTRE SERVICES, CLAIM PROCESSING AND PAYMENT SERVICES, CUSTOMER RELATIONS AND CONTRACT MANAGEMENT SERVICES. NOW UNDIS PUTED FACTS EMERGES FROM THE RECORD IS THAT THE ASSESSEE DISCHARGES THE LIABILITY OF THE INSURANCE COMPANY OUT OF THE FLOAT MONEY PLACED BY THE INSURANCE COMPANY WITH THE ASSESSEE AND FURTHER THE ASSESSEE IS PROHIBITED TO USE THE FLOAT MONEY FOR ANY PURPOS ES OTHER THAN MAKING PAYMENTS IN DISCHARGING THE LIABILITY OF INSURANCE COMPANY TOWARDS THE INSURED PERSONS. WE NOTE THAT THE CASE RELIED UPON BY THE LD. DR FROM HON 'BLE KARNATAKA HIGH COURT, IN THAT CASE NO DISCUSSION HAS BEEN MADE WITH RESPECT TO APPLIC ABILITY OF SECTION 40 (A)(IA) IN A CASE WHEREIN SUCH AMOUNT ARE NOT ROUTED THROUGH PROFIT & LOSS ACCOUNT OF THE ASSESSEE AND ME RELY TALKS ABOUT APPLICABILITY OF SECTION 194J ON TPA. T HERE IS NO DISCUSSION WITH RESPECT TO ACCOUNTING METHOD ADOPTED BY THE TP AS WHEREIN THE AMOUNT HAS NOT BEEN RO UTED THROUGH PROFIT & LOSS ACCOUNT. SECTION 40(A}(LA) CAN BE INVOKED IF THERE IS A DEBIT OF SAID PAYMENT AS EXPENDITURE IN PROFIT & LOSS ACCOUNT, THUS IN OUR VIEW NON DEDUCTION OF TDS ON PAYMENTS MADE FROM PROFESSIONAL SERVICES EVEN IF NOT DEBITED IN THE PROFIT & LOSS ACCOUNT WOULD MAKE ASSESSEE LIABLE FOR LEVY OF INTEREST IX] S 201 (1) AND 201 (LA) OF THE ACT, HOWEVER NO ACTION U/S 40(A)(IA) CAN BE TAKEN. OUR VIEW FINDS SUPPORTS FROM THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. HEALTH INDIA TPA SERVICES PVT. LTD. ( 2014) 49 TAXMANN.CORN 541 (MUMBAI.) ORDER ITA NO. 268 /1 4 3 DATED 21 - 02 - 20 14~ WHEREIN, IDENTICALLY, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE ASSESSEE HAS NOT RENDERED ANY PROFESSIONAL S ERVICE TO THE INSURER OR INSURED AND ONLY COLLECTING THE AMOUNT FROM THE INSURER AND PASSING IT ON TO VARIOUS HOSPITALS WHO PROVIDES MEDICAL SERVICES TO THE INSURED. SINCE THERE IS NO CLAIM OF EXPENDITURE BY THE ASSESSES) DISALLOWANCE U/S 40(A)(IA ) AS WAS DONE BY THE ASSESSING OFFICER DOES NOT ARISE. OUR V I EW FURTHER FIND SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF PARAMOUNT HEALTH SERVICES (TPA) PVT. LTD. VS. ITO ( ITA NO. 2188/MURNJ2013) ORDER DATED 25.07.2014. IN VIEW OF THE FACTUAL MATRIX A ND THE CASES CITED) HEREINABOVE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY, THEREFORE, APPEAL OF THE REVENUE IS DISMISSED. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING TH E ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE MADE IN RESPECT OF THE EXPENDITURE WHICH WAS NOT CLAIMED BY THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT. 4 . IN THE RESULT, APP EAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31/03 /2016 SD/ - SD/ - ( AMARJIT SINGH ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 31/03 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPOND ENT. 3. ( ) / THE CIT(A) , MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//