Mewar Hospital Pvt. Ltd. , Udaipur V. ACIT, Central Circle-2, Udaipur

ITA 431/JODH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2216 (ITAT-JODHPUR)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMAN Y U SINGH YADAV J
• Assessee Lawyers: ABHINAV KOTHARI
• Keywords: Principle of natural justice
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 431/JODH/2019 (ASSESSMENT YEAR-2011-12) MEWAR HOSPITAL PVT. LTD. BEDLA ROAD, PRIYADARSHANI NAGAR, UDAIPUR-313001. VS ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE-2, INCOME TAX DEPARTMENT, MUMAL TOWER, SAHELI MARG, UDAIPUR-313001. (APPELLANT) (RESPONDENT) PAN: AADCM 7804 L ASSESSEE BY SHRI AMIT KOTHARI (CA) & SHRI ABHINAV KOTHARI (CA) R EVENUE BY SHRI ABHIMAN Y U SINGH YADAV (JCIT-DR) DATE OF HEARING 1 8 /03/2020 DATE OF PRONOUNCEMENT 20 /03/2020 O R D E R PER SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT(A)-II, UDAIPUR DATED 24.09.2019 FOR THE ASS ESSMENT YEAR 2011-12 ON THE GROUNDS MENTION HEREINBELOW:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER DATED 24.09.2010 PASSED BY THE LD. CIT (APPEALS)-II UDAIPUR U/S 250(6) OF THE INCOME TAX ACT, 1961 IS BAD IN LAW & I LLEGAL. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, LD. CIT (APPEALS)-II UDAIPUR HAS ERRED IN AFFIRMING THE OR DER OF LD. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, UDAIP UR, PASSED U/S 2 ITA 431/JODH/2019 MEWAR HOSPITAL PVT. LTD. VS ACIT 144 RWS 144/143(3) OF THE IT ACT, 1961 WITHOUT GIV ING REASONABLE OPPORTUNITY BEING HEARD TO THE APPELLANT THEREFORE EX PARTE ORDER PASSED BY THE LD. AO IS AGAINST THE NATURAL JUSTICE THEREFORE ACTION OF LD. CIT(APPEALS)-II, UDAIPUR, IS ERRONEOUS & BAD IN LAW AND LIABLE TO BE DELETED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, LD. CIT (APPEALS)-II UDAIPUR HAS ERRED IN GRANTING RELIEF O F RS. 75,392/- ONLY OUT OF TOTAL ADDITION OF RS. 3,87,730/- ON ACCOUNT OF SUPPRESSION OF X- RAY RECEIPT REVENUE BASED ON AD-HOC ESTIMATION BASI S MADE BY THE LD. AO, WHICH UNJUSTIFIED, UNWARRANTED & BAD IN LAW AND LIABLE TO BE DELETED ENTIRELY. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, LD. CIT (APPEALS)-II UDAIPUR HAS ERRED IN GRANTING RELIEF O F RS.14,11,384/- ONLY OUT OF TOTAL DISALLOWANCE OF RS. 18,81,845/- O N ACCOUNT OF DISCOUNT CLAIMED BY THE APPELLANT ON AD-HOC ESTIMAT ION BASIS MADE BY THE LD. AO, WHICH UNJUSTIFIED, UNWARRANTED & BAD IN LAW AND LIABLE TO BE DELETED ENTIRELY. 5. THE APPELLANT PRAYS FOR JUSTICE AND THE APPEAL DESERVES TO BE ALLOWED. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND MODIFY ANY GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. ' 2. AT THE TIME OF HEARING GROUND NO. 1 AND 2 OF THE APPEAL ARE NOT PRESSED BY THE LD. AR OF THE ASSESSEE. THEREFORE, T HESE TWO GROUNDS ARE DISMISSED AS NOT PRESSED. 3. GROUND NO. 3 OF THE APPEAL RELATES TO PART ADDIT ION SUSTAINED ON ACCOUNT OF X-RAY RECEIPTS. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM THE RECORD THAT THE AO MADE ADDITION FOR RS. 3,87,730/- WHICH WAS SUSTAINED AT RS. 3,12,338/- AND RELIEF WAS ALLOWED AT RS. 75,392/- B Y THE LD. CIT(A). THE AO OBSERVED THAT DURING THE COURSE OF SEARCH, X-RAY DO NE DURING THE PERIOD OF 4 3 ITA 431/JODH/2019 MEWAR HOSPITAL PVT. LTD. VS ACIT MONTHS FROM OCTOBER, 2016 TO JANUARY, 2017 IT WAS F OUND THAT X-RAY RECEIPTS WERE FOR 3839 WHEREAS X-RAY CONSUMED WAS 4530, AND AS SUCH THERE WAS EXCESS CONSUMPTION OF 691 FILMS. ON THESE HYPOTHESI S IT WAS OBSERVED THAT X- RAYS RECEIPT IN TOTAL WAS 3.87%. ON THESE FACTS FOR THE SEARCH YEAR FOR FINANCIAL YEAR 2017-18 SUPPRESSION OF RECEIPTS WAS ESTIMATED AT RS. 3,87,7301-. THE CIT(A) ALLOWED DEDUCTION FOR 3% ON ACCOUNT OF WASTAGES AND ALLOWED RELIEF OF RS. 75,392/- AND SUSTAINED BALANC E ADDITION OF RS.3,12,338/-. 4. WE ALSO FOUND FROM THE RECORD THAT THE CONTENTIO N OF THE ASSESSEE IS THAT THE ENTIRE BASIS FOR ADDITION WAS NOT JUSTIFIE D. BASED ON THE X-RAYS DONE DURING THE 4 MONTHS PERIOD FROM OCTOBER, 2016 TO JA NUARY, 2017, CANNOT BE ANY BASIS FOR THE ADDITION IN THE YEAR. EVEN VARIOU S FACTORS OF WASTAGES HAD NOT BEEN CONSIDERED, ERROR OF TECHNICIAN, PACKAGE C HARGES, SCHEME CHARGES ETC. HAS NOT BEEN CONSIDERED. SOMETIMES FILMS ARE W ASTED DUE TO CALIBRATION & TECHNICAL ISSUES AND EVEN REPEAT X- RAYS ARE DONE , IF THE SAME IS NOT DONE PROPERLY. THE ASSESSEE ALSO RELIED UPON SOME JUDICI AL DECISIONS IN SUPPORT THAT THE ESTIMATED ADDITION CANNOT BE MADE. 5. WE ALSO OBSERVE THAT THE ADDITION IS NOT BASED U PON ANY MATERIAL OR EVIDENCE FOR THE YEAR UNDER CONSIDERATION AND EVEN DURING SEARCH NOTHING HAS BEEN FOUND RELATED TO THE YEAR. THERE IS NO BASIS F OR ESTIMATION OF SUPPRESSION OF X-RAYS. EVEN THE TECHNICIAN DURING THE SEARCH PR OCEEDINGS HAD STATED THAT IN EVERY BUNDLE CERTAIN X-RAYS GETS DAMAGED, AND FU RTHER THERE ARE VARIOUS OTHER REASONS BY WHICH X-RAYS FILMS CAN GET DAMAGED . THERE IS NO ALLEGATION 4 ITA 431/JODH/2019 MEWAR HOSPITAL PVT. LTD. VS ACIT THAT SOME X-RAYS HAVING BEEN DONE, AND THERE IS NO RECEIPTS ISSUED OR THERE IS ANY SUPPRESSION OF RECEIPTS. THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO MERIT IN THE ADDITION SUSTAINED BY THE LD CIT(A) AT RS. 3,12,338/-, HENCE WE DIRECT THE A.O. TO DELETE THE SAME. 6. THE NEXT ISSUE RELATES TO ADDITION FOR DISCOUNTS . FROM PERUSAL OF THE RECORD, WE FOUND THAT THE AO MADE ADDITION FOR RS. 18,81,845/- FOR DISCOUNTS WHICH WAS PARTLY DELETED BY THE LD. CIT(A) AND 25% OF THE DISALLOWANCE TO THE EXTENT OF RS. 4,70,461/- WAS SUSTAINED ON WHICH THE ASSESSEE IS IN APPEAL. THE AO MADE ADDITION ON THE GROUND THAT IN THE SEAR CH YEAR IT WAS FOUND THAT THE APPELLANT HAD CLAIMED CERTAIN DISCOUNTS WHICH C OULD NOT BE VERIFIED. THE AO ALSO OBSERVED THAT DURING SEARCH SOME PERSONS AC CEPTED DISCOUNT AND SOME DID NOT ACCEPTED. THOUGH THERE WAS NO CLAIM OF DISCOUNT DURING THE YEAR, THE AO ESTIMATED THE DISCOUNT AT RS. 18,81,84 5/- AND MADE ADDITION THEREOF. 7. WE ALSO FOUND THAT THE LD CIT(A) OBSERVED THAT I N THE SEARCH YEAR IT WAS OBSERVED THAT DISCOUNTS WAS BEING ALLOWED AND I N EARLIER YEAR THE RECEIPTS WERE NET OF DISCOUNTS. THE ASSESSEE HAD CH ANGED THE METHOD OF ACCOUNT OF DISCOUNTS. HOWEVER, ON THE BASIS OF CONC LUSION DRAWN IN THE SEARCH YEAR THE CIT(A) OBSERVED THAT DISALLOWANCE DESERVES TO BE MADE BUT THE SAME WAS RESTRICTED TO 25% OF THE TOTAL ADDITION AN D ACCORDINGLY ADDITION OF RS. 4,70,461/- WAS SUSTAINED AND BALANCE ADDITION W AS DELETED. 5 ITA 431/JODH/2019 MEWAR HOSPITAL PVT. LTD. VS ACIT 8. WE ALSO OBSERVE THAT THERE IS NO CLAIM OF DISCO UNT AS SUCH, AND THE ADDITION WAS BASED ON ESTIMATED DISCOUNTS. IN CASE THERE IS NO CLAIM OF SUCH DISCOUNTS THE QUESTION OF DISALLOWANCE OF ANY ADDIT ION IS UNCALLED FOR. THERE IS NO CASE OF SUPPRESSION OF RECEIPTS BY SHOWING LESSE R RECEIPTS. FURTHER IF THE RECEIPTS ARE SHOWN NET OF DISCOUNT THE SAME CANNOT BE SAID TO BE NOT VERIFIABLE AS THE SAME IS DIRECTLY LINKED TO THE CO RRESPONDING RECEIPTS. THE ADDITION BEING MADE ONLY ON THE BASIS OF SUSPICION, THEREFORE, WE DIRECT TO DELETE THE SAME. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20/03/2020. SD/- SD/- (R.C.SHARMA) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :. 20/03/2020 *RANJAN COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. THE CIT(A) 5. DR, ITAT, JODHPUR 6. GUARD FILE (ITA NO. 431/JODH/2019) BY ORDER ASSISTANT REGISTRAR ITAT JODHPUR