M/s. Life Care Hospital Ltd., Indore V. The ACIT, Indore

ITA 579/IND/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9721 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-01-2011
• Assessment Year: misc
• Appeal Filed On: 14-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: ANIL K KHANDELWAL
• Keywords: Loose papers

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.579/IND/09 A.Y.2006-07 LIFE CARE HOSPITAL LIMITED INDORE PAN AABCL0083E APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX 3(1) INDORE RESPONDENT APPELLANT BY : SHRI ANIL K. KHANDELWAL RESPONDENT BY : SHRI P.K. MITRA O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R OF THE LEARNED CIT(A) DATED 22.9.2009 ON THE GROUND THAT ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.3, 24,000/- U/S 69 OF THE ACT ON ACCOUNT OF LOOSE PAPERS. 2 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHR I ANIL KHANDELWAL, LD. COUNSEL FOR THE ASSESSEE AND SHRI P.K. MITRA, L EARNED SENIOR DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT DURING SURVEY ON 25.11.2005 CERTAIN LOOSE PAPERS AND EXCESS CASH WAS ALLEGEDLY FOUND AT THE PREMISES OF THE ASSESSEE FOR WHICH THE ASSESSEE SURRENDERED RS.70,51,762/- AND OFFERED THE SAME IN ITS RETURN OF INCOME. THEREFORE, NO SEPARATE ADDITION IS REQUIRED TO BE M ADE. ON THE OTHER HAND, THE SENIOR DEPARTMENTAL REPRESENTATIVE CONTE NDED THAT THE ENTRIES/NOTINGS AGGREGATING TO RS.6,24,322/- (PAGE S 28 AND 29) WERE NOT EXPLAINED BY THE ASSESSEE, THEREFORE, AFTER ALL OWING THE CREDIT OF RS. 3 LAC, THE IMPUGNED ADDITION WAS RIGHTLY MADE BY TH E ASSESSING OFFICER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY ENGAG ED IN THE BUSINESS OF RUNNING A HOSPITAL WHICH COMMENCED ITS BUSINESS DURING THE FINANCIAL YEAR 2005-06, RELEVANT TO ASSESSMENT YEAR UNDER CON SIDERATION. A SURVEY WAS CONDUCTED AT THE PREMISES OF THE ASSESSE E ON 25.11.2005 WHEREIN CERTAIN LOOSE PAPERS AND EXCESS CASH WAS FO UND TO WHICH THE ASSESSEE SURRENDERED AN AMOUNT OF RS.70,51,762/- AN D OFFERED THE SAME FOR TAXATION IN ITS RETURN. THE ASSESSEE SURRE NDERED RS.20 LACS (FOR BUILDING), RS. 5 LACS (LAND AND SITE DEVELOPMENT), RS.10 LACS (FOR EQUIPMENT) AND RS.10 LACS (FOR FURNITURE AND FIXTUR E), AGGREGATING TO 3 RS.45 LACS. A FURTHER SURRENDER OF RS.10 LACS WAS MADE ON ACCOUNT OF CAR, RS.13 LACS FOR CASH FOUND AND RS.2,50,000/- FO R ENTRIES MADE IN LOOSE PAPERS. THUS, THE TOTAL SURRENDER OF RS.70,5 1,762/- WAS MADE BY THE ASSESSEE. THE ASSESSING OFFICER FURTHER MADE A N ADDITION OF RS.3,24,000/- U/S 69 OF THE ACT WHICH WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND IS FURTHER UNDER CHALLENGE BEFORE THE TRIBUNAL. WE HAVE ALSO PERUSED THE PAPE R BOOK FILED BY THE ASSESSEE RUNNING INTO 1 TO 55 PAGES INCLUDING THE S TATEMENT TENDERED BY THE DIRECTOR OF THE ASSESSEE DURING SURVEY PROCEEDI NGS AND ALSO THE PHOTOCOPIES OF THE LOOSE PAPERS AS ALSO THE SUBMISS IONS OF THE ASSESSEE BEFORE THE LEARNED ASSESSING OFFICER AS W ELL AS BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IF THE TOTALITY OF FACTS IS ANALYSED, IT IS SEEN THAT THE ASSESSING OFFICER MIX ED TWO ISSUES I.E. WRONGLY ALLOWING CREDIT OF RS.3 LACS FROM THE TOTAL OF UNEXPLAINED ENTRIES (PAGES 28 AND 29) BECAUSE THIS AMOUNT WAS SURRENDER ED ON ACCOUNT OF LOOSE PAPERS (EXCLUDING PAGES 28 AND 29). IT IS NO TED HERE THAT DURING STATEMENTS RECORDED AT THE TIME OF SURVEY, AN AMOUN T OF RS.2,50,000/- WAS DULY OFFERED ON ACCOUNT OF OTHER LOOSE PAPERS ( RELEVANT PAGE OF STATEMENT SPECIFICALLY QUESTION NO. 14 AND 30 OF THE PAPER BOOK) WHICH IS ALSO MENTIONED AT PAGE 6 OF THE ASSESSMENT ORDER . THE ASSESSEE IN ITS RETURN OFFERED RS. 3 LACS SO THIS AMOUNT IS NOT RELATED WITH LOOSE PAPERS (LOOSE PAPER NOS. 28 AND 29). SECONDLY, THE ASSESSEE HAS 4 ALREADY SURRENDERED RS. 45 LACS, THEREFORE, THERE W AS NO NEED TO MAKE ANY FURTHER ADDITION ON ACCOUNT OF UNEXPLAINED ENTR IES AGGREGATING TO RS. 6,24,322/- WHICH IS MUCH HIGHER THAN THE AGGREG ATE OF AMOUNT NOTED ON THESE TWO PAPERS. THE DECLARATION/SURRENDER MAD E BY THE ASSESSEE DURING SURVEY HAS DULY COVERED THE ALLEGED AMOUNT, THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE SE PARATE ADDITION ON ACCOUNT OF LOOSE PAPERS AND THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) IN CONFIRMING THE SAME. CONSEQUENTLY, THE ADDITION SO MADE IS DELETED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AFTER THE CONCLUS ION OF HEARING ON 10 TH JANUARY, 2011. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH JANUARY, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/-