The Dy. CIT, Visakhapatnam V. Sri Sai Dhanwantari Helth Care, Visakhapatnam

ITA 489/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6503 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C DAS
• Section: 148; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI D.MANMOHAN, VICE PRESIDENT & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO . 489 / VIZ / 201 6 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) DCIT, CIRCLE - 4(1) VISAKHAPATNAM VS. M/S SRI SAI DHANWANTARI HEALTH CARE (P) LTD. D.NO.17 - 1 - 17 DR.C.S.MANGAMMA BUILDING OPP. KGH, MAHARANIPETA VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI K.C.DAS, DR / RESPONDENT BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 05 . 1 2 .2017 / DATE OF PRONOUNCEMENT : 06 . 1 2 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : 1 . TH IS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) [CIT(A)] - 2 , VI S A KHAPATNAM VIDE 2 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM ITA NO.16/2013 - 14/CIT(A) - 2/C - 4(1)/VSP/2016 - 17 DATED 1 5 .0 9 .201 6 FOR THE A.Y. 20 1 1 - 1 2 . 2 . ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ADDITION OF RS.47,15,490/ - TOWARDS UNDISCLOSED INCOME DISCLOSED BY THE ASSESSEE BEFORE THE DDIT DURING THE COURSE OF SEARCH ON 22 . 02 . 2011. T HE ASSESSEE IS ENGAGED IN H EALTH C ARE SERVICES , FOR THE ASSESSMENT YEAR 2011 - 12, T HE ASSESSEE FILED THE NIL RETURN OF INCOME ON 19. 0 9.2011. THE RETURN WAS PROCESSED U/S 143(1) AND SUB SEQUENTLY THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S 148 OF I.T.ACT , CONSEQUENT TO THE SEARCH ACTION U/S 132 IN THE GROUP CASES OF DR. K.RADHA KRISHNA ON 24.12.2010. DURING THE ASSESSMENT PROCEEDINGS, THE A SSESSING O FFICER(AO) FOUND THAT THE MA NAGING DIRECTOR OF THE COMPANY, SHRI C.S.SRINIVAS HAS GIVEN A STATEMENT U/S 132 (4) ON 22.02.2011 ADMITTING THE UNDISCLOSED INCOME OF RS.40,00,000/ - IN THE NAME OF THE ASSESSEE COMPANY M/S SRI SAI DHANWANTHARI HEALTH C ARE PVT. LTD. FOR THE ASSESSMENT YEAR 2 011 - 12 RELEVANT TO THE FINANCIAL YEAR 2010 - 11. HOWEVER, SUBSEQUENTLY, THE ASSESSEE HAD RETRACTED FROM THE DISCLOSURE MADE AND ADMITTED THE UNDISCLOSED RECEIPTS OF RS.40,00,000/ - INSTEAD OF INCOME AND ACCORDINGLY FILED THE RETURN OF INCOME. THE AO HAS GON E 3 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM THROUGH THE DDITS APPRAISAL REPORT , THE SEIZED MATERIAL AND THE STATEMENT S RECORDED DURING THE COURSE OF SEARCH AND BROUGHT TO TAX A SUM OF RS.47,15,490/ - AS UNDISCLOSED INCOME. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT (A) . THE LD.CIT(A) DURING THE APPEAL PROCEEDINGS HAS CALLED FOR THE REMAND REPORT FROM THE AO. THE AO SUBMITTED REMAND REPORT ON 04.12.2014 STATING THAT THE TOTAL RECEIPTS AS PER THE SEIZED MATERIAL WAS RS.47,38,327/ - FOR THE PERIO D FROM 01.05.2010 TO 22.12.2010 AND A GAINST THE RECEIPTS OF RS.47,38,327/ - , THE ASSESSEE HAD ACCOUNTED A SUM OF RS.3,41,910/ - IN THE LEDGER LEAVING THE BALANCE AMOUNT OF RS.43,76,470/ - . SUBSEQUENT TO S E ARCH , THE ASSESSEE HAS ACCOUNTED THE RECEIPTS OF RS.40,01,524/ - IN THE B OOKS OF ACCOUNTS AND FILED THE RETURN OF INCOME. ACCORDING TO THE REMAND REPORT OF AO, THE SUPPRESSED RECEIPTS FOR THE PERIOD FROM 01.05.2010 T O 23.12.2010 WAS RS.3,94,893/ - ARE AS UNDER : RECEIPTS AS PER SEIZED REGISTERS : RS. 4 7 ,38,327/ - LESS : RECEIPTS AS PER LEDGER A/C. : RS. 3,41,910 ADD : INSERTION ENTRIES : RS. 40,01,524 : RS. 43,43,434/ - RECEIPTS SUPPRESSED FOR THE PERIOD RS. 3,94,893/ - 01.05.2010 TO 23.12.2010 3.1. THE LD. CIT (A) CONSIDERED THE REMAND REPORT AND WORKED OUT THE SUPPRESSED RECEIPTS FOR THE PERIOD FROM 01.05.2010 TO 22.12.2010 AT 4 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM RS.6,35,299/ - AND DIRECTED THE AO TO RESTRI CT THE ADDITION TO RS.6,35,299/. THE LD.CIT(A) ARRIVED AT THE SUPPRESSED RECEIPTS OF RS.6,35,299 / - AS UNDER: WITH REFERENCE TO THE ABOVE MATERIAL INFORMATION IT IS EVIDENT THAT THE ACTUAL RECEIPTS FOR THE PERIOD 01 . 05.2010 TO 22.12.2010 AGGREGATED TO RS.47,38,327/ - ; AGAINST WHICH THE RECEIPTS RECORDED IN THE REGULAR BOOKS OF ACCOUNT WAS FOUND TO BE ONLY RS.1,01,504/ - (ACCOUNTED RECEIPTS RS.3,41,910/ - MINUS RECEIPTS ACCOUNTED FOR APRIL MONTH OF RS.2,40,406/ - ). THUS, A GAINST THE RECEIPTS FOUND TO BE RECEIVED DURING THE PERIOD 01.05.2010 TO 22 . 12.2010 OF RS.47,38,327/ - THE ASSESSEE HAS ADMITTED RECEIPTS TO THE TUNE OF RS.41,03,028/ - AS PER ITS UPDATED REGISTER FOR THE SAID PERIOD ( I. E. RS.1,01,504/ - RECORDED AS PER REGUL AR BOOKS + RS.40,01,524/ - INCORPORATED IN THE UPDATED REGISTER FOR THE ABOVE PERIOD). THUS THE SUPPRESSED RECEIPTS FOR THE PERIOD 01.05.2010 TO 2212.2010 WOULD BE RS.6,35,299/ - WHICH HAS TO BE CONSIDERED FOR ADDITION. THE SEIZED MATERIAL CLEARLY INDICATE T HAT THE RECEIPTS FOR THE PERIOD 01.05.2010 TO 22.12.2010 WAS RS.47,38,327/ - WHICH IS REFLECTED PARTLY AS ACCOUNTED RECEIPTS FOR THE PERIOD OF RS.1,01,504/ - IN THE REGULAR BOOKS AND RECEIPTS TO THE TUNE OF RS.40,01,524/ - INCORPORATED IN THE UPDATED REGISTER. AS A RESULT, THERE IS NO BASIS TO INFER THAT THE ENTIRE AMOUNT OF RS . 47,38,327/ - WOULD REPRESENT UNDISCLOSED INCOME FOR THE SUBJECT YEAR. THEREFORE THE AO IS DIRECTED TO RESTRICT THE ADDITION TO RS.6,35,299/ - UP TO THE DATE OF SEARCH. 4. AGGRIEVED BY THE ORDER OF THE CIT (A) , THE REVENUE IS IN APPEAL BEFORE US . DURING THE APPEAL HEARING, THE LD.DR ARGUED THAT THE ASSESSEE HAD ADMITTED DURING THE COURSE OF SEARCH THAT 75% OF LAB RECEIPTS WERE SUPPRESSED AND FURTHER ADMITTED THE ADDITIONAL INCOME OF RS. 40,00,000/ - . HOWEVER, SUBSEQUENT TO THE SEARCH IN THE RETURN OF INCOME THE ASSESSEE HAD ADMITTED RS.40,00,000/ - AS UN DISCLOSED RECEIPTS INSTEAD OF INCOME. THE LD.DR FURTHER ARGUED THAT THE ENTIRE SUPPRESSED RECEIPTS REQUIRED TO BE TAXED WITHOUT ALLOWING ANY EXPENDITURE. THE LD.DR ARGUED THAT THE 5 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM CIT(A) HAS COMMITTED AN ERROR IN ALLOWING THE EXPENDITURE AGAINST UNDISCLOSED RECEIPTS, HENCE REQUESTED TO RESTORE THE ASSESSMENT ORDER. 5. ON THE OTHER HAND, LD.AR ARGUED THAT THE SEARCH WAS CONDUCTED IN T HE MIDDLE OF THE FINANCIAL YEAR I.E. ON 24.12.2010 AND BY THAT TIME, THE BOOKS OF ACCOUNTS WERE NOT UPDATED. THOUGH THE ASSESSEE HAD ISSUED ALL THE RECEIPTS AND IN POSSESSION OF EXPENDITURE VOUCHERS, THE BOOKS WERE NOT UPDATED AND FAIRLY CONCEDED THAT THE RECE IPTS WERE NOT ACCOUNTED TO THE EXTENT OF 75% . SUBSEQUENT TO THE SEARCH, THE BOOKS OF ACCOUNTS WERE UPDATED DULY ACCOUNTING THE RECEIPTS AND EXPEN SES AND PLACED THE COMPLETE ACCOUNTS BEFORE THE AO . THE AO DID NOT FIND ANY DEFECTS AND THE ASSESS E E HAD CORRECTLY ADMITTED THE INCOME AND ARGUED THAT THERE WAS NO ERROR IN THE ORDER OF THE LD. CIT(A) AND NO INTERFERENCE IS CALLED FOR. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, A SEARCH U/S 132 WAS CARRIED OUT IN THE GROUP CASES OF DR. K RADHA KRISHNA ON 24.12.2010. DURING THE COURSE OF S EARCH , THE ASSESSEE HAD ADMITT ED THAT ALL THE LAB RECEIPTS WERE NOT ENTERED IN THE REGULAR BOOKS OF ACCOUNTS AND ACCORDINGLY MADE THE DISCLOSURE OF RS.40,00,000/ - FOR THE FINANCIAL YEAR 2010 - 11. THE CONCERNED REGISTERS WERE 6 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM SEIZED BY THE DEPARTMENT. SUBSEQUENT TO THE SEARC H THE ASSESSEE HAD DULY ACCOUNTED THE RECEIPTS PENDING FOR ACCOUNTING IN THE BOOKS OF ACCOUNTS AND COMPILED THE PROFIT AND LOSS ACCOUNT AND ARRIVED AT TAXABLE INCOME AND ACCORDINGLY FILED THE RETURN OF INCOME. THE AO IN THE REMAN D REPORT DT. 04.1 2.2014 ACCEPTED THAT THE RECEIPTS AS PER THE SEIZED REGISTERS WAS RS.47,38,327/ - AGAINST ADMITTED THE RECEIPTS IN THE LEDGER AT RS.3,41,910/ - , RESULTING IN DIFFER ENCE OF RS.3,94,8 93/ - . THE LD. CIT (A) WORKED OUT THE SUPPRESSED RECEIPT S AT RS.6,35,299/ - CONSIDERING THE ACCOUNTED RECEIPTS OF RS.1,01,504/ - AS PER REGULAR BOOKS OF ACCOUNTS A ND GIVEN A FINDING THAT THERE WAS NO BASIS TO INFER THAT THE ENTIRE AMOUNT OF RS.47,38,327/ - WOULD REPRESENT UNDISCLOSED INCOME . THE LD. CIT (A) ARRIVED AT THE SUPPRESSED RECEIPTS OF RS. 6,35,299/ - AS UNDER : RECEIPTS AS PER THE SEIZED MATERIAL : RS. 47,38,327/ - LESS :RECEIPTS ACCOUNTED IN REGULAR BOOKS: RS. 1,01,504/ - DIFFERENCE RS.46,36,823/ - LESS :RECEIPTS ADMITTED AFTER SEARCH RS.40,01,524/ - SUPPRESSED RECEIPTS RS. 6,35,299/ - 6.1. ON CAREFUL VERIFICATION OF THE LD.CIT(A)S WORKING OF SUPPRESSED RECEIPTS AT RS.6,35,299/ - THE SAME APPEARS TO BE CORRECT AND LOGICAL . THOUGH THE LD.DR HAS ARGUED THAT NO EXPE NDITURE REQUIRED TO BE ALLOWED FROM THE UNDISCLOSED RECEIPTS, THE AO HAS NOT BROUGHT ON RECORD ANY EVIDENCE WITH REGARD TO THE INFLATION OF EXPENDITURE OR BOGUS EXPENDITURE . 7 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM THE AO ALSO DID NOT MAKE OUT A CAS E THAT THE EXPENDITURE DEBITED TO PROFIT & LOSS ACCOUNT WAS NOT GENUINE. THERE WERE NO DEFECTS FOUND BY THE AO IN THE ASSESSMENT AND THERE WAS NO DISPUTE WITH REGARD TO THE GENUINE NE SS OF EXPENDITURE. IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD WITH REGARD TO EXCESS CLAIM OF EXPENDITURE OR BOGUS EXPENDITURE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OP EN COURT ON 6 TH DEC 2017. SD/ - SD/ - ( . ) ( . . ) ( D. MANMOHAN ) ( D.S. SUNDER SINGH ) / VICE PRESIDENT / ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 06 .12.2017 L. RAMA, SPS 8 ITA NO . 489 /VIZ/201 6 M/S SRI SA I DHANWANTARI HEALTH CARE(P) LTD., VISAKHAPATNAM / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - THE DCIT, CIRCLE - 4(1), VISAKHAPATNAM 2 . / THE RESPONDENT M/S SRI SAI DHANWANTARI HEALTH CARE (P) LTD. , D.NO.17 - 1 - 17, DR.C.S.MANGAMMA BUILDING, OPP. KGH, MAHARANIPETA, VISAKHAPATNAM 3. THE COMMISSIONER OF INCOME TAX - 2 , VI SAKHAPATNAM 4 . THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VI SAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM