M/s Shally Nursing Home, Sirhind V. ITO, Mandi Gobindgarh

ITA 479/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9990 (ITAT-CHANDIGARH)
• Duration Of Justice: 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 02-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Assessee Lawyers: K P BAJAJ
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 479/CHD/2O16 ASSESSMENT YEAR : 2010-11 M/S SHALLY NURSING HOME, VS THE ITO, OPPOSITE AAM KHAS BAGH, SIRHIND. BASSI ROAD, SIRHIND. PAN: AACPS9216N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.P.BAJAJ RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 19.05.2016 DATE OF PRONOUNCEMENT : 23.05.2016 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF ID. CIT(APPEALS), MEERUT CAMP AT PATIA LA DATED 22.03.2016 FOR ASSESSMENT YEAR 2010-11. 2. IN THE PRESENT APPEAL, ASSESSEE HAS CHALLE NGED THE REJECTION OF THE BOOKS OF ACCOUNT A ND ADDITION OF RS. 5,13,490/- ON ACCOUNT OF UNDISCLOSED RECEIPTS FROM PROFESSION. 3. BRIEFLY THE FACTS OF THE CASE ARE THA T ASSESSEE IS RUNNING A NURSING HOME IN S IRHIND. DURING THE YEAR, ASSESSEE HAS SHOWN INDOO R RECEIPTS AT RS. 18,06,725/-. THE ASSESSING OFFICER, IN ORDER TO VERIFY GENUINENESS OF THESE RECEIPTS, 2 MADE INDEPENDENT ENQUIRIES FROM SOME OF THE PATIENT S BY RECORDING THEIR STATEMENTS, THE DETAILS OF WHICH A RE NOTED AT PAGE 2 OF THE ASSESSMENT ORDER. THE AS SESSING OFFICER RECORDED STATEMENTS OF HUSBAND OF SMT. SA NDEEP KAUR, SMT. BHAGWANT KAUR AND SMT. NEHA BANSAL. THE ASSESSEE HAS SHOWN RECEIPTS FROM THESE PATIENTS IN A SUM OF RS. 15,500/-, RS. 16,000/- AND RS. 16,000/- (TOT AL RS. 47,500/-). THE ASSESSING OFFICER MENTIONED THE RECE IPTS AS STATED BY THESE PATIENTS OR THEIR ATTENDANTS AS PER THEIR STATEMENTS IN A SUM OF RS. 22,000/-, RS. 25,000/-AN D RS. 60,000/- RESPECTIVELY. THE DIFFERENCE IN THE INDOOR RECEIPTS WERE, THUS, FOUND IN A SUM OF RS. 6,500/-, RS. 9,000/- AND RS. 44,000/-(TOTAL RS. 59,500/-). THE ASSESSING OFFICER, THEREFORE, NOTED THAT THE ABOVE RESULT OF ENQUIRIES SHOWS THAT ASSESSEE WAS SUPPRESSING THE I NDOOR RECEIPTS BY 125% OF THE RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT. THEREFORE, POSSIBILITY OF SUPPRESSION IN T HE CASES OF ALL THE INDOOR PATIENTS CANNOT BE RULED OUT. THE*ASSESSING OFFICER, THEREFORE, GAVE SHOW CAUSE N OTICE TO THE ASSESSEE AND ALSO PROVIDED COPIES OF STATEME NTS OF THESE PATIENTS RECORDED AND ASSESSEE WAS ALLOWED CR OSS- EXAMINATION OF THESE DEPARTMENTAL WITNESSES. THE OU T- COME OF THE CROSS-EXAMINATION OF THESE PATIENTS SHO WS ; I) SMT. BHAGWANT KAUR HAS STATED THAT SHE PAID RS. 19,000/- TO THE ASSESSEE HOSPITAL FOR THE OPERATION AND RS. 6,000/- WAS SPENT ON MEDICINES WHICH WERE PURCHASED BY HER HUSBAND FROM OUTSIDE THE HOSPITAL. DURING THE COURSE OF RE-EXAMINATION, SHE HAS 3 STATED THAT HER HUSBAND SPEND THE WHOLE AMOUNT, THAT IS WHY SHE TOLD THE TOTAL EXPENDITURE AT RS. 25,000/-. HOWEVER, SHE HAS CLARIFIED THAT OUT OF THE ABOVE AMOUNT, ONLY RS. 19,000/- WAS PAID TO THE ASSESSEE FOR DELIVERY OF HER CHILD AND BALANCE AMOUNT OF RS. 6,000/- WAS PAID FOR PURCHASE OF MEDICINES FROM OUTSIDE THE HOSPITAL. II) SHRI JITENDER SINGH, HUSBAND OF SMT. SANDEEP KAUR HAS STATED THAT HE HAS PAID RS. 20,000/- TO THE ASSESSEE HOSPITAL FOR OPERATION OF HIS WIFE FOR DELIVERY AND RS. 2,000/- HAS BEEN SPENT ON MEDICINES PURCHASED FROM OUTSIDE THE HOSPITAL. IN RE- EXAMINATION ALSO, HE HAS CONFIRMED THE SAME FACTS. III) SMT. NEHA BANSAL HAS STATED THAT SHE REMAINED ADMITTED IN ASSESSEE'S HOSPITAL FOR 15 DAYS AND PAID RS. 16,000/- ONLY FOR DELIVERY OF THE CHILD. IN RE-EXAMINATION, IT WAS POINTED OUT TO HER THAT IN THE CROSS- EXAMINATION SHE HAS STATED PAYMENT OF RS. 16,000/- ONLY TO THE ASSESSEE BUT IN EARLIER STATEMENT, SHE HAS STATED THAT SHE REMAINED IN HOSPITAL FOR 15 DAYS AND TOTAL PAYMENT TO DOCTORS, ROOM CHARGES ETC. WAS PAID IN A SUM OF RS. 60,000/-. SHE CLARIFIED THAT ONLY RS. 16,000/- WAS PAID TO THE ASSESSEE FOR HER OPERATION AND TOTAL EXPENDITURE IN RESPECT OF HERSELF AND CHILD WAS RS. 60,000/-. SHE FURTHER STATED THAT SAME EXPENSES WERE MADE ON THE MEDICINES PURCHASED OUTSIDE THE ASSESSEE HOSPITAL AND EXACT AMOUNT SPENT IS NOT REMEMBERED AT THIS STAGE. 4 4. THE ASSESSEE FILED WRITTEN SUBMISSIONS ON THE CR OSS- EXAMINATION WHICH IS REPRODUCED IN THE ASSESSMENT O RDER IN WHICH THE ASSESSEE EXPLAINED THAT WITNESSES AT S R.NO. 1 AND 2 HAVE DEPOSED TOTAL PAYMENT MADE TO THE HOSP ITAL AND WITNESS NO. 3 HAS JUST NARRATED THE AMOUNT OF SURGERY CHARGES PAID TO DR. SHALLY. THE RECEIPTS UN DER VARIOUS HEADS ARE SUPPORTED BY REGULAR RECEIPTS, PH OTO COPES HAVE BEEN FILED, THE RATE OF CAESAREAN OPERAT ION WAS BETWEEN, RS. 15,000/- TO RS. 16,000/-. SIMILARLY, O THER WITNESSES SMT. SANDEEP KAUR AND SMT. BHAGWANT KAUR HAVE ALSO SIGNIFICANTLY STATED THAT AMOUNTS PAID TO THE ASSESSEE HOSPITAL WERE RS. 19,000/- TO RS. 20,000/- ONLY. IT WAS, THEREFORE, SUBMITTED THAT WHOLE ADDITION IS UNJUSTIFIED. IN CASE OF SMT. NEHA BANSAL, THOUGH T HE EXPENDITURE ON DELIVERY WAS MORE BUT CHARGES OF ASS ESSEE WERE CONFINED TO PACKAGE CHARGES OF RS. 15,000/- TO RS. 16,000/- ONLY. 5. THE ASSESSING OFFICER CONSIDERED THE MATERIAL ON RECORD AND EXPLANATION OF THE ASSESSEE AND FOUND TH AT IN THE CROSS-EXAMINATION OF SMT. BHAGWANT KAUR AND HUSBAND OF SMT. SANDEEP KAUR, IT WAS CLEARLY MENTIO NED THAT THEY HAVE MADE PAYMENTS OF RS. 19,000/- TO RS. 20,000/- TO THE HOSPITAL AND REMAINING AMOUNT WAS S PENT FOR PURCHASE OF MEDICINES OUTSIDE THE HOSPITAL. THE EXPLANATION OF THE ASSESSEE THAT IN ABOVE TWO CASES , LABORATORY EXPENSES OF RS.15,000/- EACH WERE INCLUD ED IN PAYMENT RECEIVED, WAS FOUND AFTER-THOUGHT. THE ASSE SSEE 5 FAILED TO FURNISH EVIDENCE TO PROVE EXPENSES ON ACC OUNT OF SCANNING FEES AND MEDICINES INCLUDED IN THE PAYMENT S RECEIVED FROM THE PATIENTS. AS REGARDS CROSS-EXAMIN ATION IN THE CASE OF SMT. NEHA BANSAL, THE CROSS-EXAMINATION CANNOT BE RELIED UPON. THE ASSESSING OFFICER ULTIMATELY, DISCUSSING THE VARIOUS FACTS IN THE ASSESSMENT ORDER, CONCLUDED THAT THERE IS SUPPRESSI ON OF RECEIPTS IN THE CASES OF THESE THREE PATIENTS ; SMT . SANDEEP KAUR RS. 4,500/-, SMT. BHAGWANT KAUR RS. 3,000/- AND SMT. NEHA BANSAL RS. 6,000/-. THE TOTAL SUPPRESSION OF RECEIPT WAS FOUND IN A SUM OF RS. 13,500/-. THE ASSESSING OFFICER, ACCORDINGLY, FOUND THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT RELIAB LE AND HE WAS NOT SATISFIED ABOUT THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNT MAINTAINED BY THE SAME. SAME WERE, THEREFORE, REJECTED UNDER SECTION 145(3) OF THE ACT. 5(I) THE ASSESSING OFFICER, CONSIDERING TOTAL RECEI PTS DECLARED IN THESE CASES, SUPPRESSED RECEIPTS AND TO TAL TURNOVER, FOUND THAT THERE IS A SUPPRESSION OF THE INDOOR RECEIPTS DURING THE YEAR IN A SUM OF RS. 5,13,490/- . THE ADDITION OF THE SAME WAS MADE. 6. THE ASSESSEE CHALLENGED THE REJECTION OF THE B OOKS OF ACCOUNT AND ABOVE ADDITION BEFORE ID. CIT(APPEALS) AND SAME SUBMISSIONS WERE REITERATED AS WERE MADE BEFOR E ASSESSING OFFICER. THE ID. CIT(APPEALS) WAS NOT SAT ISFIED 6 WITH THE EXPLANATION OF THE ASSESSEE AND FOUND THAT ENQUIRY CONDUCTED BY THE ASSESSING OFFICER RESULTED IN SUPPRESSION OF RECEIPTS IN THE CASE OF THE ASSESSEE WHICH HAVE NOT BEEN CORRECTLY RECORDED IN THE BOOKS OF AC COUNT. THEREFORE, REJECTION OF THE BOOKS OF ACCOUNT WAS FO UND JUSTIFIED. THE ID. CIT(APPEALS) ALSO FOUND ESTIMATE OF INCOME BY ASSESSING OFFICER TO BE CORRECT BY RELYIN G UPON DECISION OF HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF SALES TAX VS M/S H.M. ESUFALL, H.M. ABDULALI REPORTED IN 1973 AIR 2266. THE ID. CIT(APP EALS) FURTHER FOUND THAT ASSESSING OFFICER DETECTED SUPPR ESSION OF RECEIPTS AFTER RECORDING OF STATEMENTS OF THE WI TNESSES AND FACTS FOUND DURING THE COURSE OF CROSS-EXAMINAT ION. THEREFORE, ADDITION WAS CONFIRMED AND APPEAL OF THE ASSESSEE WAS DISMISSED. 7. I HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE SPE CIFIC ENQUIRY WITH REGARD TO SUPPRESSION OF INDOOR RECEIP TS IN THE CASE OF THE ASSESSEE. THE ASSESSING OFFICER R ECORDED STATEMENTS OF THREE WITNESSES I.E. PATIENTS WHO WER E PROVIDED MEDICAL FACILITIES IN THE ASSESSEE HOSPITAL AND REMAINED UNDER TREATMENT. ALL THE THREE WI TNESSES IN THEIR EXAMINATION-IN-CHIEF, CONFIRMED GIVING HI GHER AMOUNTS TO THE ASSESSEE AS AGAINST RECEIPTS SHOWN B Y THE ASSESSEE IN THE BOOKS OF ACCOUNT. EVEN AFTER PROVIDING OPPORTUNITY TO CROSS-EXAMINE WITNESSES, T WO WI TNESSES/PATIENTS HAVE FURTHER CONFIRMED GIVING EXTR A 7 AMOUNT TO THE ASSESSEE AS AGAINST THE ENTRIES MADE BY ASSESSEE IN THE BOOKS OF ACCOUNT. THEREFORE, SPECIF IC MATERIAL WAS FOUND AGAINST THE ASSESSEE REGARDING SUPPRESSION OF INDOOR RECEIPTS. THE TOTAL RESULT O F ENQUIRY AND MATERIAL ON RECORD CLEARLY SUGGEST THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT RELIABLE. THE ASSESSEE RECORDED LESSER INDOOR RECEIPTS IN THE BOO KS OF ACCOUNT THEREFORE, ASSESSING OFFICER WAS CORRECTLY NOT SATISFIED ABOUT THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE SA ME ARE, THEREFORE, RIGHTLY REJECTED UNDER SECTION 145 (3) OF THE INCOME TAX ACT. I, THEREFORE, DO NOT FIND ANY MERIT IN GROUND NO. 1 OF APPEAL OF THE ASSESSEE. THE SAME IS, ACCORDINGLY, DISMISSED. 7(I) HOWEVER, AS REGARDS ADDITION MADE ON MERITS, T HE ASSESSING OFFICER AFTER RECORDING STATEMENTS OF HUS BANDS OF SMT. SANDEEP KAUR AND SMT. BHAGWANT KAUR, FOUND THAT THESE PATIENTS HAVE PAID MORE AMOUNT TO THE ASSESSEE HOSPITAL BUT IN THE CROSS-EXAMINATION, THE Y HAVE SLIGHTLY REDUCED THEIR PAYMENTS MADE TO THE ASSESSE E HOSPITAL. THE ASSESSING OFFICER, ULTIMATELY GAVE BE NEFIT IN THESE TWO CASES AND HAD TAKEN THE FINAL DIFFERENCE OF SUPPRESSION OF RECEIPTS IN A SUM OF RS. 4,50 0/- AND RS. 3,000/- RESPECTIVELY, AS PER STATEMENTS MADE IN CROSS-EXAMINATION. HOWEVER, IN THE CASE O F SMT. NEHA BANSAL, SHE HAS STATED IN EXAMINATION-IN-C HIEF THAT SHE HAS PAID RS. 60,000/- TO THE AS SESSEE 8 BUT LATER ON SHE HAS CLARIFIED TO HAVE PAID ONLY RS. 16,000/- TO THE ASSESSEE HOSPITAL AND EVEN IN CROSS - EXAMINATION CONFIRMED THAT SHE HAS PAID ONLY RS. 16,000/- TO THE ASSESSEE HOSPITAL. THE WITNESS HAS EXPLAINED THAT THE TOTAL EXPENDITURE FOR HERSELF AN D HER CHILD WAS RS. 60,000/- AND MEDICINES HAVE BEEN PURCHASED OUTSIDE THE ASSESSEE HOSPITAL. ASSESS EE RECEIVED RS.16000/- ONLY. THE ASSESSING OFFICER DID NOT BELIEVE HER STATEMENT MADE IN THE CROSS-EXAMINATION . THE ASSESSING OFFICER, WITHOUT ANY JUSTIFICATION HAS TA KEN THE DIFFERENCE OF RECEIPTS IN A SUM OF RS. 6,000/-. THE COPY OF HER CROSS-EXAMINATION IS FILED IN THE PAPER BOOK WH ICH REVEALED THAT SHE HAS CONFIRMED IN HER CROSS-EXAMIN ATION THAT SHE PAID RS. 16,000/- TO THE ASSESSEE HOSPITAL . THE WITNESS SMT. NEHA BANSAL DID NOT SAY THAT RS. 60,00 0/- WAS PAID TO THE ASSESSEE HOSPITAL. THEREFORE, IN TH E CASES OF SMT. SANDEEP KAUR AND SMT. BHAGWANT KAUR, ASSESSING OFFICER WAS JUSTIFIED IN TAKING THE ADVER SE INFERENCE AGAINST THE ASSESSEE FOR SUPPRESSION OF R ECEIPTS BUT THERE WAS NO JUSTIFICATION TO DRAW ANY ADVERSE INFERENCE IN THE CASE OF SMT. NEHA BANSAL BECAUSE T HERE IS NO SUPPRESSION OF RECEIPTS DISCLOSED FROM HER STATEMENT. 7(II) IT IS WELL SETTLED LAW THAT THE STATEMENT OF WITNESS CONSISTS OF EXAMINATION-IN-CHIEF AND CROSS-EXAMINAT ION. BOTH HAVE TO BE READ TOGETHER. THE ASSESSING OFFICE R, WITHOUT ANY JUSTIFICATION IGNORED THE FACTS STATED BY THE 9 WITNESS IN THE CROSS-EXAMINATION. THEREFORE, THERE MAY NOT BE ANY SUPPRESSION OF RECEIPTS IN THE CASE OF S MT. NEHA BANSAL, AS IS ALLEGED BY THE ASSESSING OFFICER . THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT WHOLE ADDITION OF R S. 5,13,490/- IS NOT JUSTIFIED. SAME IS EXCESSIVE BECA USE NO ADDITION SHOULD BE MADE ON THE BASIS OF STATEMENT O F SMT. NEHA BANSAL. 8. CONSIDERING THE ABOVE FACTS AND DISCUSSION, I MO DIFY AND RESTRICT THE ADDITION OF RS. 5,13,490/- TO RS. 3 LACS IN ALL. THE ASSESSING OFFICER IS, THEREFORE, DIRE CTED TO MAKE ADDITION OF RS. 3 LACS ON THIS ISSUE AS AGAIN ST ADDITION OF RS. 5,13,490/-. GROUND OF APPEAL NO. 2 OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 23 RD MAY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD