Assured Best Care Hospital P Ltd., Trichy V. ACIT Central Circle 2(1), CHENNAI

ITA 2839/CHNY/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6597 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-10-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 24-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Assessee Lawyers: S SRIDHAR
• Keywords: Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 2839/CHNY/2017 / ASSESSMENT YEAR : 2009-10 M/S. ASSURED BEST CARE HOSPITAL P LTD., NO.1, MALLIGAI SALAI, ANNAMALAI NAGAR, TRICHY -18. [PAN: AAECA 1172A] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), INVESTIGATION WING, ROOM NO. 122, 1 ST FLOOR, NEW NO. 46, M.G. ROAD, NUNGAMBAKKAM, CHENNAI 034. ( / APPELLANT) ( %&( /RESPONDENT ) ( ) / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE %&( ) / RESPONDENT BY : SHRI. G. JOHNSON, ADDL. CIT ) /DATE OF HEARING : 21.01.2021 ) /DATE OF PRONOUNCEMENT : 27.01.2021 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-18, CHENNAI IN ITA NO. 369/ 16-17 DATED 21.09.2017 FOR ASSESSMENT YEAR 2009-10. :-2-: ITA NO. 2839/CHNY/2017 2. M/S. ASSURED BEST CARE HOSPITAL PVT. LTD., THE A SSESSEE IS ENGAGED IN HOSPITAL SERVICES. WHILE MAKING THE ASS ESSMENT FOR ASSESSMENT YEAR 2009-10, THE ASSESSING OFFICER FOUN D THAT THE ASSESSEE HAS PAID REFERRAL FEES FOR CONSULTING DOCTORS. AFT ER EXAMINING THE ASSESSEES CLAIM, THE AO DISALLOWED THE CLAIM HOLDI NG THAT THE REFERRAL CHARGES PAID TO DOCTORS IS CLEAR CUT VIOLATION OF T HE MEDICAL COUNCIL LAW. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THE ORDER OF THE LD. CIT(A), THE ASSESSEE FILED THIS APPEAL. 3. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. THE LD. AR SUBMITTED THAT THE LD. CIT(A) HAS FAILED TO NOTE TH AT THE REFERRAL FEES ARE PAID TO OUTSIDERS FOR REFERRING THE PATIENTS WH ICH IS INEVITABLE IN THIS INDUSTRY. HE FURTHER SUBMITTED THAT THE LD. CIT(A) FAILED TO NOTE THAT THE CIRCULAR NO. 5/2012 (F.NO. 225/142/2012-ITA.II DATED 01.08.2012) IMPOSING A PROHIBITION ON THE MEDICAL PRACTITIONER AND THEIR PROFESSIONAL ASSOCIATIONS FROM TAKING ANY GIFT, TRAVEL FACILITY, HOSPITALITY, CASH OR MONETARY GRANT FROM THE PHARMACEUTICAL AND ALLIED H EALTH SECTOR INDUSTRIES IS ON THE CODE OF CONDUCT OF MEDICAL COU NCIL FOR THE MEDICAL PRACTITIONER AND NOT FOR HEALTHCARE SERVICES COMPAN IES SUCH AS ASSURED BEST CARE WHICH IS A HOSPITAL. SINCE, THE ASSESSEE IS A COMPANY WHICH :-3-: ITA NO. 2839/CHNY/2017 IS PROVIDING MEDICAL CARE SERVICES FOR PROFIT, THE LD. AO WITHOUT EXAMINING THE COMPONENTS OF THE EXPENDITURE SIMPLY DISALLOWED WHICH HAS BEEN WRONGLY UPHELD BY THE LD. CIT(A). THEREFO RE, THE LD. AR SUBMITTED THAT THIS CASE MAY BE REMITTED BACK TO TH E AO FOR A PROPER EXAMINATION AS TO WHETHER THE PAYMENTS WERE MADE TO DOCTORS OR OTHER AGENCIES AND WHETHER SUCH PAYMENTS ARE LIABLE UNDER THE PROVISIONS OF INCOME TAX ACT. PER CONTRA, THE LD. DR INVITING OUR ATTENTION TO THE ASSESSMENT ORDER SUBMITTED THAT TH E LD. AO HAS CLEARLY RECORDED A FINDING THAT THE ASSESSEE HAS PAID REFER RAL FEES FOR CONSULTING DOCTORS AGAINST WHICH THE LD. AR INVITIN G OUR ATTENTION TO THE ORDER OF THE LD. CIT(A) SUBMITTED THAT BEFORE THE L D. CIT(A) THE ASSESSEE SUBMITTED THAT THE IMPUGNED AMOUNT WAS BEI NG PAID TO VARIOUS AGENCIES WHO REFER CUSTOMERS AND INSTITUTIO NS FOR CONTINUED RELATIONSHIP AND SUCCESSFUL BUSINESS OPERATIONS. H OWEVER, THIS ASPECT HAS NOT BEEN EXAMINED. THEREFORE, THE LD. AR REITE RATED HIS SUBMISSIONS FOR RE-EXAMINATION. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. THOUGH, THE ASSESSING OFFICER RECORDED A FINDING THAT THE IMPUGNED AMOUNT WAS PAID TO CONSULTING DOCTORS, THE ASSESSEE HAS TAKEN A PLEA BEFORE THE LD. CIT(A) THAT THE IMPUGNE D AMOUNT WAS PAID :-4-: ITA NO. 2839/CHNY/2017 TO VARIOUS AGENCIES WHO REFER CUSTOMERS AND INSTITU TIONS FOR CONTINUED RELATIONSHIP AND SUCCESSFUL BUSINESS OPERATIONS. T HEREFORE, PRIMA FACIE, IT IS CLEAR THAT THE NATURE OF EXPENDITURE HAS NOT BEEN EXAMINED PROPERLY. THEREFORE, WE DEEM IT FIT TO REMIT THIS ISSUE BACK TO THE AO FOR A FRESH EXAMINATION. THE ASSESSEE SHALL LAY AL L PARTICULARS AND RELEVANT MATERIALS BEFORE THE AO IN SUPPORT OF ITS CONTENTION AS TO WHOM THE IMPUGNED AMOUNTS WERE PAID AND FOR WHAT PU RPOSES ETC. THE AO SHALL EXAMINE SUCH MATERIAL AND ALSO EXAMINE WHETHER SUCH PAYMENTS COULD BE CLAIMED LEGITIMATELY BY THE ASSES SEE AND AFTER AFFORDING DUE OPPORTUNITY TO THE ASSESSEE DECIDE TH E ISSUE IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 27 TH JANUARY, 2021 AT CHENNAI. SD/- ( ) ( V. DURGA RAO ) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 27 TH JANUARY, 2021 JPV )%2343 /COPY TO: 1. ( / APPELLANT 2. %&( /RESPONDENT 3. 5 ) ( /CIT(A) 4. 5 /CIT 5. 3% /DR 6. /GF