Dr.Kallepalli Kurmanadh, Visakhapatnam V. Incom tax officer, Ward-1(4), Visakhapatnam

ITA 29/VIZ/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0872 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 21-09-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 13-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Retraction; Revised return
• Section: 131; 148; 143(3); 142(1); 133A; 139(5); 143(1); 143(2)

Judgement Text

आयकरअपीलȣयअͬधकरण, ͪवशाखापटणमपीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM Įीदुåवूǽआरएलरेɬडी, ÛयाǓयकसदèयएवंĮीएसबालाकृçणन, लेखासदèयकेसम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकरअपीलसं./ I.T.A. No. 252/Viz/2021 (Ǔनधा[रणवष[/ Assessment Year :2013-14) Dr.KallepalliKurmanadh, Visakhapatnam. PAN: AERPK 2916 C Vs. Income Tax Officer, Ward-1(4), Visakhapatnam. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) आयकरअपीलसं./ I.T.A. No.29/Viz/2022 (Ǔनधा[रणवष[/ Assessment Year :2014-15) Dr.KallepalliKurmanadh, Visakhapatnam. PAN: AERPK 2916 C Vs. Income Tax Officer, Ward-1(4), Visakhapatnam. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) आयकरअपीलसं./ I.T.A. No.77/Viz/2021 (Ǔनधा[रणवष[/ Assessment Year :2014-15) Income Tax Officer, Ward-1(1), Visakhapatnam. Vs. M/s. Vijetha Hospitals, Visakhapatnam. PAN: AAGFV 2938 Q (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) CO No. 54/Viz/2021 (In आयकरअपीलसं./ I.T.A. No.77/Viz/2021) (Ǔनधा[रणवष[/ Assessment Year :2014-15) M/s. Vijetha Hospitals, Vs. Income Tax Officer, 2 Visakhapatnam. PAN: AAGFV 2938 Q Ward-1(1), Visakhapatnam. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸकȧओरसे/ Assessee by : Sri GVN Hari, Advocate Ĥ×याथȸकȧओरसे/ Revenue by : Sri ON Hari Prasada Rao, Sr. AR सुनवाईकȧतारȣख/ Date of Hearing : 22/09/2022 घोषणाकȧतारȣख/Date of Pronouncement : 13/10/2022 O R D E R PERBENCH : Out of the above four captioned appeals, ITA No.252/Viz/2021; ITA No.29/Viz/2022 are filed by the assessee in the case of Dr. KallepalliKurmanadh for the AY 2013-14 and 2014-15 respectively. ITA No.77/Viz/2021 is filed by the Revenue and the C.O. No. 54/Viz/2021 is filed by the assessee in the case of M/s. Vijetha Hospitals, Visakhapatnam for the AY 2014-15. Since, the assessees and the issues raised in the present appeals are inter-connected therefore for the sake of convenience, they are clubbed, heard together and disposed off in this consolidated order. Appeal wise adjudication is given in the following paragraphs. 3 आयकरअपीलसं./ I.T.A. No. 252/Viz/2021 (Ǔनधा[रणवष[/ Assessment Year :2013-14) 2. This appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-1, Visakhapatnam [Ld. CIT(A)] in ITA No. 147/2017-18/CIT(A)- 1/VSP/2020-21, dated 04/06/2020 arising out of the order passed U/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 [the Act] for the AY 2013-14. 3. Brief facts of the case are that the assessee is a partner in M/s. Vijetha Hospitals, Visakhapatnam. A survey operation U/s. 133A was conducted in the business premises of M/s. Vijetha Hospitals on 12/5/2015. During the survey verification it was found that the assessee has received an amount of Rs.13,78,200/- towards Referral Fee from the firm M/s. Vijetha Hospitals, Visakhapatnam during the FY 2012-13 relevant to the AY 2013-14. The assessee while recording his sworn deposition stated that the Referral Fee was not disclosed in the return of income already filed for the AY 2013-14 and would be offered as additional income in the revised return of income for the AY 2013-14. Subsequently, the Ld. AO finding reasons to believe that the income chargeable to tax has escaped assessment within 4 the meaning of section 147 of the Act issued notice U/s. 148 dated 24/02/2016 and served on the assessee on 29/02/2016. In response to the notice, assessee filed written submissions on 24/03/2016 and requested that the original return filed for the AY 2013-14 may be treated as the return of income filed in response to the notice U/s. 148 of the Act. Subsequently, statutory notices U/s. 143(2) and 142(1) of the Act were issued and duly served on the assessee. In response, the assessee’s Representative submitted details in support of the income furnished by the assessee in his return of income. However, the Ld. AO noted that as per the sworn statement recorded u/s. 131 of the Act on 3/7/2015, in reply to Question No.16, the assessee has admitted that the Referral Fee from M/s. Vijetha Hospitals amounting to Rs. 13,78,200/- during the FY 2012-13, the assessee has failed to include the income offered during the survey proceedings while filing his revised return of income. The assessee’s Representative submitted that the referral fee was received by cash during the FY 2013-14 only. Relying on the voluntary admission made by the assessee in his sworn statement u/s. 131 of the Act, the Ld. AO not convinced and accordingly added Rs. 13,78,200/- in addition to the total income returned while filing the original return of income on 8/11/2014. 5 Aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee reiterated the same submissions made before the Ld. AO and not satisfied with the submissions of the assessee, the Ld. CIT(A) confirmed the order of the Ld. AO. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 4. The assessee has raised the following grounds of appeal: “1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the fac ts of the case. 2. The Ld. CIT(A) is no t justified in sustaining the addition of Rs. 13,78,200/- towards alleged underreporting of referral fee from Vije tha Hospitals. 3. The Ld. CIT(A) ought to have appreciated that the appellant has been following cash syste m of accounting consistently and ad mitted the referral fee of Rs. 13,78,200/- to tax in the AY 2014-15 i.e., in the year in which the appellant received the amount. 4. Any other ground or grounds that may be urged at the time of hearing.” 5. The only issue is with respect to the year of taxability of the referral fees claimed to have been paid by M/s. Vijetha Hospitals during the FY 2012-13. The Ld. AR argued that M/s. Vijetha Hospitals follows the Mercantile System of Accounting and has 6 provided for referral fees payable to the assessee namely Dr. KallepalliKurmanadh. However, the Ld. AR pleaded that the assessee being an individual considers cash basis of accounting and hence the amount received from M/s. Vijetha Hospitals during the FY 2013-14 relevant to the AY 2014-15 has been rightly disclosed in the AY 2014-15. Per contra, the Ld. Departmental Representative countered the argument of the Ld. AR and stated that M/s. Vijetha Hospitals has paid the referral fees and claimed that as expenditure during the FY 2012-13 in their books of accounts. He relied on the orders of the Ld. Revenue Authorities. 6. We have heard both the parties and perused the material available on record and the orders of the authorities below. It is an admitted fact that the assessee is entitled for referral fee of Rs. 13,78,200/- and the dispute is with regard to the treatment of income in the AY 2013-14 or in the AY 2014-15. The assessee being a professional Doctor stated that he maintained books of account on cash basis. Therefore, the referral fee of Rs. 13,78,200/- received by the assessee has been offered to taxation in the FY 2013-14 relevant to the AY 2014-15. It is well settled principle that the assessee can chose his method of accounting 7 either cash or mercantile basis which cannot be disputed by the Revenue. Accordingly, the assessee has declared the amount received from M/s. Vijetha Hospitals during the FY 2013-14 while filing his return of income for the AY 2014-15. Merely based on the fact that M/s. Vijetha Hospitals who has accrued the expenses in their books of account cannot be the criteria to tax the income during the AY 2013-14 in the hands of the assessee who is maintaining the books of account on cash basis. The Ld. DR has also conceded that there is no difference in the tax rates for the AY 2013-14 and AY 2014-15. In view of the above discussions, we are of the considered view that since the assessee is maintaining the books of account on cash basis, the assessee has rightly disclosed his income when the Referral fee is received from M/s. Vijetha Hospitals during the FY 2013-14 and hence has rightly filed his return of income disclosing the same in the AY 2014-15. We therefore quash the orders of the Ld. Revenue Authorities and allow the appeal of the assessee. 7. In the result, appeal filed by the assessee is allowed. 8 आयकरअपीलसं./ I.T.A. No.29/Viz/2022 (Ǔनधा[रणवष[/ Assessment Year :2014-15) 8. This appeal filed by the assessee against the order of the Ld. CIT(A)-1, Visakhapatnam in ITA No. 154/2017-18/CIT(A)- 1/VSP/2020-21, dated 4/6/2020 arising out of the order passed U/s. 143(3) r.w.s 147 of the Act. 9. The assessee has raised the following grounds of appeal: 1. “The order of the Ld. CIT(A) is contrary to the f acts and also the law applicable to the f acts of the case. 2. The Ld. CIT(A) is not justif ied in sustaining the addition of Rs. 13,15,900/- made by the Assessing Off icer towards alleged underreporting of referral f ees received f rom Vijetha Hospitals. 3. The Ld. CIT(A) is not justif ied in sustaining the addition of Rs. 10,00,000/- made by the AO towards alleged unexplained unsecured loan. 4. Any other grounds may be urged at the time of hearing.” 10. The first issue (Ground No.2) involved in this appeal is with respect to the year of taxability of the referral fees claimed to have been paid by M/s. Vijetha Hospitals during the FY 2013-14. This issue is identical to that of the one raised by the assessee in his appeal I.T.A. No. 252/Viz/2021for the AY 2013-14. We have dealt 9 with this issue while adjudicating the appeal in the above paragraphs of this order. Since the issue raised vide Ground No.2 of this appeal is identical to that one adjudicated by us while dealing with the appeal for the AY 2013-14, our decision given therein will apply mutatis mutandis to the instant issue also as there is no change in the facts and circumstances for both the years ie 2013-14 and 2014-15. Accordingly, we allow Ground No.2 raised by the assessee in favour of the assessee. 11. The second issue (Ground No.3) raised by the assessee is with respect to the addition of Rs. 10 lakhs as unexplained unsecured loan. It is seen from the order of the Ld. Revenue Authorities that the assessee has never produced the details with respect to creditworthiness and genuineness of the unsecured loan except for the confirmation from the loan creditor. The onus is on the assessee to establish the creditworthiness and genuineness of the loan creditor. The same was not produced before the Ld. CIT(A) and even before us. Therefore, the Ld. CIT(A) in his findings has observed as follows: “4.2.2. I have considered the issue. The appellant was unable to furnish confirmation letter in this case. Though the appellant had established the identity, creditworthiness and genuineness was not established. In the case of loan creditors, the appellant needs to establish all the three ingredients. Failure to establish any ingredient will render the loan / credit non-genuine. Thus, I have no reason to interfere with the order of the Assessing Officer. Accordingly, the addition of Rs. 10,00,000/- is sustained.” 10 12. We find that the Ld. CIT(A) has rightly considered the issue and has sustained the addition made by the Ld. AO. We therefore find no error in the order of the Ld. CIT(A) and hence no interference is required on this issue. Thus, the Ground No.3 raised by the assessee is dismissed. 13. Grounds No.1 and 4 are general in nature and therefore they need no adjudication. 14. In the result, appeal filed by the assessee is partly allowed. आयकरअपीलसं./ I.T.A. No.77/Viz/2021 (By Revenue) (Ǔनधा[रणवष[/ Assessment Year :2014-15) 15. This appeal filed by the Revenue against the order of the Ld. CIT(A)-1, Visakhapatnam in ITA No.10405/2016-17/CIT(A)- 1/VSP/2020-21, dated 30/06/2020 arising out of the order passed U/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 for the AY 2014-15. 16. Briefly stated the facts of the case are that the assessee is a Multi-Specialty Hospital, filed its return of income for the AY 11 2014-15 declaring total income of Rs. 13,43,660/- on 8/11/2014. The return was summarily processed U/s. 143(1) of the Act. Subsequently, a survey action U/s. 133A of the Act was conducted in the business premises of the assessee-firm M/s. Vijetha Hospitals, Maharanipeta, Visakhapatnam on 12/5/2015. Subsequent to the survey action a notice U/s. 148 was issued to the assessee on 24/02/2016 and the same was served upon the assessee on 29/02/2016. In the meantime, the assessee filed its revised return U/s. 139(5) of the Act declaring a total income of Rs. 59,47,690/- on 2/12/2015 for the AY 2014-15. Therefore, the assessee in response to the notice U/s. 148 of the Act, requested the Ld. AO to treat the revised return filed on 2/12/2015 as the return of income filed in response to the notice U/s. 148 of the Act. The case was later selected for limited scrutiny under CASS and a notice U/s. 143(2) was issued on 20/09/2016 and served on the assessee on 24/09/2016. Subsequently, notice U/s. 142(1) of the Act was also issued to the assessee on 03/10/2016 and duly served on 6/10/2016. The case was thereafter converted from ‘limited scrutiny’ to ‘complete scrutiny’ with the prior approval of the Principal Commissioner of Income Tax-1, Visakhapatnam on 18/11/2016. The same was conveyed to the assessee vide letter dated 28/11/2016 and duly 12 served on the assessee on 30/11/2016. In response to the notices, the assessee’s representative filed the information called for by the Ld. AO. The assessee also submitted before the Ld. AO the reasons for filing the revised return of income where the books have been re-audited. The Ld. AO observed that the assessee has admitted, in addition to the regular income,an amount of Rs. 1,09,54,885/- during the survey operation as detailed below: Sl No Nature of omission / mistake Amount of additional income admitted 1. Referral Fees wrongly claimed to have paid but actually not paid, now offered for taxation. Rs. 47,36,048/- 2. Depreciation wrongly claimed on land and building in ROI filed without put to use, now offered for taxation. Rs. 37,62,625/- 3. Depreciation wrongly claimed on addition made to fixed assets without put to use, now offered for taxation. Rs. 10,31,062/- 4. Referral Fees paid to Dr. K. Kurmanadh (Rs. 13,15,000/-) and Dr. B.A.P. Rao (Rs. 1,09,250/-) without deduction of tax at source. Assessee voluntarily offered the same for taxation. Rs. 14,25,150/- Total Rs. 1,09,54,885/- 17. The assessee filed revised return of income on 02/12/2015 admitting the above income but considered a sum of Rs 13 86,19,000/- as unsecured loans out of the total receipts declared while filing original return of income. The assessee also filed before the Ld. AO the reconciliation statement between the profit admitted in the original return and the revised return filed by the assessee. The Ld. AO considered the submissions and observed that there is a reduction in the income declared in the revised return of income and completed the assessment in taking the net profit offered by the assessee in its original return of income. The Ld. AO assessed the total income at Rs. 3,09,65,640/- by raising a tax demand of Rs. 1,19,63,910/-. Aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before the Ld. CIT(A). 18. Before the Ld. CIT(A), the assessee’s Representative filed the same details as filed before the Ld. AO. The assessee’s Representative submitted that unsecured loans obtained from the partner of the firm to the extent of Rs. 86,19,000/- has been wrongly accounted as income while filing the original return of income and hence while correcting the mistake the assessee has resorted to file the revised return income. Considering the submissions made by the assessee’s Representative, the Ld. 14 CIT(A) partly allowed the appeal. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us. 19. The Revenue has raised the following grounds of appeal: “1. The order of the Ld. CIT(A)-1, Vis akh ap atn am is erroneous on facts an d in l aw. 2. The Ld CIT(A) ought not to have accepted the retraction from discl osure made of Rs. 1,09,54,885/- during the course of survey. 3. Whether the assessee can retract fro m his o wn s wo rn statement viol ating doctrine of estoppel s, when the Department did not made further inquiries bel ieving the assessee’s admission in good fai th b as ed on the doctrines of estoppel s? 4. (a) The Ld. CIT(A) fail ed to make any further enquiries into the sources of the partners and genuineness of the entire l oan trans actions. (b) The Ld. CIT( A) erre d in accepting the gross receipts of the assessee as l oan trans actions from the partners wi thout actu al l y examining the sources of those partners an d without gran ting opportunity to the AO but merel y rel ying on the l edger a/c of those partners in the books of account of the assessee-firm. (c) The Ld. CIT( A) ought not to have accepted a l edger a/c as compl ete evidence in proving the genuineness of the cash loan trans actions, because the assessee’s cl aim of l oan trans actions is al ways represented in the form of l edger a/c of the third p arty in the assessee’s books of account. (d) The order of the Ld. CIT(A) may be se t asi de on this count and the AO may be given an opportunity for examin ation of the sources of the partne rs. 5. The Ld. CIT(A) ought to h ave verified the revised audi t report whe rein no viol ation of sec. 269SS(col . No.31) was mentioned therein, meaning thereby the entire amount of Rs. 86,19,001/- (out of which cas h receipt is Rs. 15 21,00,000/-) initial l y cl aimed as gross receipts is actu al l y not l oan but gross receipts of the assessee onl y. 6. (i) The Ld. CIT(A) ought to have examined the evidences for incurring expenses amounting to Rs. 2,00,65,496/- on which 20% dis al lo wance was made by the AO for wan t of proof. (ii) The order of the Ld. CIT(A) may be se t asi de on this count and the AO may be given an opportunity for verification of these expenses. 7. The appell ant craves l eave to add or del ete or amend or substitute an y ground of appeal before an d / or at the time of hearing of appe al . 8. For these or other grounds th at may be urged at the time of appe al hearing, it is p rayed th at these above additions made on rel evant dis al l owance be resto red.” 20. The Ld. DR argued that the assessee has accepted the sum of Rs. 1,09,54,885/- during the search. However, while filing the revised return of income the assessee has reduced the income of the hospital by around Rs. 86,19,000/- and re-audited the financials by filing the loss return for Rs.44,29,419/-. The Ld. DR submitted that the reduction in the total receipts by the hospital for Rs. 86,19,000/- was treated as unsecured loans received from the partners and third parties by cash and alsoby way of cheques. The Ld. DR vehemently argued that the assessee has reduced Rs. 86,19,000/- from the income to accommodate the income admitted of Rs. 1,09,54,885/- during the survey 16 operations. The Ld. DR therefore pleaded that the order of the Ld. AO be restored. Per contra, the Ld. Authorized Representative [the Ld. AR] submitted that the revised return is not a loss return where the assessee has declared a profit of Rs. 59,47,694/- including the income admitted during the survey operations. The Ld. AR further submitted that the revised return was filed on 2/12/2015 before the issue of notice U/s. 148 on 24/02/2016. The Ld. AR also reiterated that in order to correct the accounting errors the assessee has filed the revised return which is within the due date prescribed U/s. 139(5) of the Act. The Ld. AR further submitted that these unsecured loans have been obtained from the partners of the firm and confirmation of such loans along with creditworthiness of the partners have been submitted in paper book along with copies of bank statements. The Ld. AR also submitted that in the notes forming part of the audit report, the details of the unsecured loans given by the partners and others which were wrongly included in the hospital receipts have been identified and corrected. The Ld. AR pleaded that the Assessing Officer should have considered the revised return filed on 2/12/2015 but has erroneously considered the original return, 17 but has adopted the amount specified in revised return with respect to unsecured loans and has disallowed the same. The Ld. AR therefore pleaded that the Ld. AO has erroneously taken the total income as per original return but has made the disallowances claimed by the assessee in its revised return of income. He therefore pleaded the order of the Ld. CIT(A) be upheld. 21. We have heard both the parties and perused the material available on record and the orders of the authorities below. Admittedly the assessee in order to correct the errors while filing the original return has filed the revised return of income on 2/12/2015. The contention of the Ld. DR could not be accepted that the revised return is filed subsequent to the date of search of 12/5/2015. We find force in the argument of the Ld. AR that the revised return was filed before the due date specified u/s. 139(5) of the Act and before the issue of notice U/s. 148 of the Act on 24/2/2016. It is observed that the assessee has corrected the accounting errors while filing the revised return of income. Further, we also find from the paper book that the assessee has submitted the details of unsecured loans, confirmation from the loan creditors and also the income tax returns and the bank statements of the loan creditors. Further, we find that the 18 assessee and also its partners are assessed by the same Assessing Officer viz., ITO, Ward-1(4). The Ld. AO if not relying on the documents produced by the assessee, could have verified the creditworthiness based on the filing of returns of the partners available in his records. The Ld. CIT(A) has rightly verified the loans and the sources of loans of the creditors and rightly deleted the addition made by the Ld. AO. We therefore find no error in the order of the Ld. CIT(A) on this ground and therefore no interference is required. 22. With respect to Ground No.5 regarding the violation of the provisions of section 269SS, we find that the assessee has proved the creditworthiness of the loan creditors which is recorded in the books of accounts of the assessee as well as loan creditors. The Hon’ble Supreme Court in the case of ADA Investigation vs. Kumar A B Shanti 255 ITR 258 explained the objects of introducing section 269SS of the IT Act, 1961. “The object of introducing section 269SS is to ensure that a taxpayer is not allowed to give false explanation for his unaccounted money, or if he has given so me false entries in his accounts, he shall no t escape by giving false explanation for the same. During search and seizures, unaccounted money is unear thed and the taxpayer would usually give the explanation that he had borrowed or received deposits from his relatives or friends and it is easy for the so-called leader also to manipulate his records later to suit the plea of the 19 taxpayer. The main object of sec tion 269SS was to curb this menace.” 23. Respectfully following the above judicial precedents, we are of the considered view that the facts of the present case does not attract the provisions of section 269SS of the Act. We therefore find no error in order of the Ld. CIT(A) and hence no interference is required in the order of the Ld. CIT(A) and dismiss the grounds raised by the Revenue. Accordingly, we are of the considered view that there is no merit on this ground and therefore this ground raised by the Revenue is dismissed. 24. With respect to Ground No.6 regarding the disallowance of various expenses by the Ld. AO, we find that voluminous documentary evidences have been produced before the Ld. AO for verification however, the Ld. AO not relying on the self-made vouchers and other documents, estimated the disallowance @ 20% of certain expenses as detailed in the order of the Ld. AO. We also find no fresh evidence has been produced before the Ld. CIT(A) to provide one more opportunity to the Ld. AO to verify the same. The Ld. CIT(A) has rightly observed as follows: “4.6.2. I have considered the issue. It is a f act that the appellant had admitted additional income of Rs. 47,36,048/- 20 on account of ref erral f ees vide para 9 of the order. It is not rational to f urther disallow 20% on the expenses. Theref ore, I f ind merit in the argument of the appellant. Accordingly, further addition of Rs. 15,62,600/- in respect of Visiting Charges & Ref erence charges is deleted. 4.6.3. Regarding other expenses such as material purchases / hospital maintenance, the disallowance is reduced to 10% af ter examining the f act and circu mstances of the case. Accordingly, the Assessing Officer is directed to adopt Rs. 1,17,820/- and Rs. 3,75,336/- respectively. The remaining disallowance on account of salaries / staff welf are / vehicle maintenance, the Assessing Officer has disallowed at the rate of 20% without adducing any def ect except unverif iability in nature. It is a well laid down principle of law that ‘unable to comprehend the issue’ or unverif iable in nature can’t be attributable to the appellan t and cannot be a base f or disallowance. Per se there cannot be any addition on estimation without some credible material. Af ter examination of f acts, I f ind no reason in disallowing 20% salary, staff welf are and vehicle maintenance. Accordingly, the Assessing Off icer is directed to delete the addition on these heads.” 25. We therefore find no error in the order of the Ld. CIT(A) who was estimated 10% as against 20% of the disallowances made by the Ld. AO. We are therefore of the considered view that the there is no need to interfere with the order of the Ld. CIT(A) on this issue. It is ordered accordingly. 26. With respect to Ground No.3, it is found that the assessee has not retracted the sworn in statement who has accepted the disclosure made during the survey operations by offering Rs. 1,09,54,885/- to tax. The assessee has only corrected the 21 hospital receipts which were wrongly accounted as income instead of unsecured loans from partners. We therefore dismiss this ground raised by the Revenue. 27. Ground no.1, 7 and 8 are general in nature and therefore they need no adjudication. 28. In the result, appeal filed by the Revenue is dismissed. CO No. 54/Viz/2021 (In आयकरअपीलसं./ I.T.A. No.77/Viz/2021) (Ǔनधा[रणवष[/ Assessment Year :2014-15) 29. This Cross Objection is filed by the assessee and it arises out of the ITA No. 77/Viz/2021 (AY: 2014-15). The assessee has raised the following grounds in its cross objection: “1. The Ld. CIT(A) is justif ied in upholding the validity of revised return of income f iled in response to notice U/s. 148 of the Act and thereby directing the Assessing Officer to accept the income as per revised return of income. 2. The Ld.CIT(A) is justif ied in accepting the claim of the appellant that the decrease of Rs. 86,19,100/- in gross receipts when compared with the original return of income is on account exclusion of unsecured loans wrongly included in the gross receipts. 3. The Ld. CIT(A) is justif ied in holding that the appellan t satisf actorily explained unsecured loans of Rs. 1,46,19,000/- including those received f rom the partners. 22 4. The Ld. CIT(A) is not justif ied in partly sustaining to the extent of Rs. 4,93,156/- the addition made by the Assessing Off icer towards disallowance of expenses on ad-hoc basis. 5. Any other grounds of cross objection that may be raised at the time of hearing.” 30. Grounds No.1, 2 & 3 raised by the assessee are in support of the decision of the Ld. CIT(A). While adjudicating the Revenue’s appeal, we have dealt with this issue and upheld the decision of the Ld. CIT(A). Thus, the adjudication of these grounds become infructuous and dismissed as such. 31. Ground No.4 is with respect to the decision of the Ld. CIT(A) in partly sustaining the addition made by the Ld. AO towards disallowance of expenses on ad-hoc basis. This issue is similar to that of the Ground No.6 raised by the Revenue in its appeal. While adjudicating Ground No.6 of the Revenue’s appeal in the above paragraphs of this order, we upheld the decision of the Ld. CIT(A). Since the issue is same our decision given therein mutatis mutandis applies to the instant ground also. Accordingly, this ground raised by the assessee is dismissed. 32. Ground No.5 is general in nature and therefore no need to adjudicate this ground. 23 33. In the result, Cross Objection raised by the assessee is dismissed. Pronounced in the open Court on the 13 th October, 2022. Sd/- Sd/- (दुåवूǽआर.एलरेɬडी) (एसबालाकृçणन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) ÛयाǓयकसदèय/JUDICIAL MEMBER लेखासदèय/ACCOUNTANT MEMBER Dated : 13.10.2022 OKK - SPS आदेशकȧĤǓतͧलͪपअĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee–(i) Dr.KallepalliKurmanadh, C/o. Vijetha Hospital, D.No. 18-01-15 & 16, KGH Down Road, Maharanipeta, Visakhapatnam. 2. राजèव/The Revenue – (i) Income Tax Officer, Ward-1(4), Direct Taxes Building, MVP Colony, Visakhapatnam. 3. The Principal Commissioner of Income Tax-1, Visakhapatnam. 4. आयकरआयुÈत (अपील)/ The Commissioner of Income Tax (Appeals)-1, Visakhapatnam. 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयअͬधकरण, ͪवशाखापटणम/ DR,ITAT, Visakhapatnam 6. गाड[फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam