ACIT, Patiala V. Dr. Maheshinder Singh, Patiala

ITA 593/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86131 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 593/CHD/2014 ASSESSMENT YEAR : 2009-10 THE A.C.I.T., VS. DR.MAHESHINDER SINGH, CIRCLE PATIALA. PROP. M/S AMANDEEP CLINIC, LEHAL COLONY, PATIALA PAN: ACFPS0024H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH, DR RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 27.01.2015 DATE OF PRONOUNCEMENT : 30.01.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PATIALA DATED 24.3.2014 FOR ASSESSMENT Y EAR 2009-10 ON THE FOLLOWING GROUNDS OF APPEAL : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT UPHOLDING THE ACTION OF THE AO REGARDING REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE INCOME TAX ACT, 1961, IGNORING THE FACT THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS AND COULD NOT SUBSTANTIATE ITS CLAIM BACKED BY ANY DOCUMENTARY EVIDENCE AS MENTIONED IN THE ASSESSMEN T ORDER, IN VIEW OF THE NUMEROUS DEFICIENCIES POINTED OUT BY THE AO . 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS.46,00,150/- MADE ON ACCO UNT OF UNACCOUNTED RECEIPTS, BY NOT APPRECIATING THE FACT TH AT TESTS FOR HEPATITIS B, C AND HIV PROFILING ARE ONLY DONE IN THE CASE OF PATIENTS UNDERGOING SURGERY, AND THE ASSESSEE FAILED TO MAINTAIN 2 ANY STOCK PARTICULARS REGARDING THE MEDICINES USED D URING SURGICAL OPERATIONS AND REAGENTS USED IN LABORATORY. FURTHER, THE ASSESSEE DID NOT MENTION THE ADDRESSES OF THE PATIENTS WITHOU T WHICH INDEPENDENT VERIFICATION COULD NOT BE MADE, AND DID N OT SUBSTANTIATE THE DETAILS OF SURGICAL OPERATION/SERVI CES IN THE PATIENT INDOOR REGISTER/RECEIPT BOOKS BY NOT PRODUCING INDI VIDUAL PATIENT FILES. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS DOCTOR BY PROFESSION. THE ASSESSING OFFICER HAD D ISCUSSED THE ISSUE IN DETAIL IN THE ASSESSMENT ORDER AND HAS ALSO REPRODUCED THE REPLY OF THE ASSESSEE GIVEN DURING T HE ASSESSMENT PROCEEDINGS. IN BRIEF, THE FACTS ARE TH AT THE ASSESSING OFFICER CONCLUDED THAT THE NUMBER OF OPER ATIONS DONE BY THE ASSESSEE ARE MORE THAN THAT SHOWN IN TH E RECORDS. THE BASIS FOR THIS CONCLUSION ARE THAT: (I) THE A.O. CONTENDED THAT ALL THE PERSONS W HO HAVE UNDER GONE LAB TESTS INCLUDING HEMOGRAM, BLOOD GROU PING, CLOTTING TIME, HBS AG ETC. HAS UNDERGONE SURGERY. T HE A.O. CONTENDS THAT ALL THE PATIENTS WHO HAVE UNDERGONE L AB INVESTIGATION DONT FIND MENTION IN THE INDOOR/OUTD OOR REGISTERS. THE A.O. RELIED ON THE STATEMENT GIVEN BY THE ASSESSEE IN THIS CONNECTION THAT THE PATIENTS WHO A RE FOUND FIT FOR SURGERY ARE SENT TO LAB FOR INVESTIGA TION. ( II) THE A.O. CONTENDS THAT THE RATIO OF LAB RECEIP TS TO INDOOR RECEIPTS IS QUITE HIGH I.E. 21.2% WHICH SHOU LD NOT BE MORE THAN 5% TO 10%. (III) THE RATIO OF MEDICINES CONSUMED TO INDOOR RE CEIPTS IS HIGH I.E. 27% TO 28% DESPITE THE FACT THAT OPERATIO N FEE IS EXCLUSIVE OF MEDICINES, DRESSING AND ANESTHESIA. (IV) THE A.O. CONTENDS THAT THE SERVICES OF ONLY ON E ANESTHESIA HAS BEEN AVAILED DURING THE YEAR WHO HAS BEEN PAID RS.1,80,,000/- DURING THE WHOLE YEAR WHIC H IS TOO LOW. THE A.O., THEREFORE, ASSUMED THAT THE ASSE SSEE IS GETTING SERVICES OF ANOTHER ANESTHESIA ALSO. 3 (V) THE A.O. CONTENDS THAT THE ASSESSEE HAS NOT MAINTAINED THE CASE REGISTER AND INVENTORY HAS PER RULE - 6F OF THE INCOME TAX RULES AS NATURE OF SERVICE REN DERED IS NOT MENTIONED IN THE REGISTER OR BILL. THE A.O., THEREFORE, PROPOSED TO REJECT THE BOOKS OF ACCOUNTS U/S 145(3) OF INCOME TAX ACT, 1961. 3. THE ASSESSEE SUBMITTED A DETAILED REPLY DURING T HE ASSESSMENT PROCEEDINGS WHICH HAS ALSO BEEN REPRODUC ED BY THE ASSESSING OFFICER. THE ASSESSEE SUBMITTED AS UNDER: (I) AS PER THE STATEMENT GIVEN TO QUESTION NO . 7 IT HAS BEEN SUBMITTED THAT THE PATIENTS WHO CAN BE OPERATED ARE SENT TO L AB FOR INVESTIGATION. ALL PATIENTS WHO ARE SUBJECTED TO LAB TESTS AND FOUND FIT FOR SURGICAL OPERATION ARE ENTERED INTO THE INDOOR REGISTER WHICH CAN BE VERIFIED FROM THE LAB REGISTER AND INDOOR REGISTER IMPOUNDED BY T HE A.O. IN SHORT, IT IS SUBMITTED THAT PATIENTS WHO NEED SURGICAL OPERATION ARE SENT FOR LAB TEST TO DECIDE WHETHER HE/SHE IS FIT FOR OPERATION. IT IS ALSO SUBMITTED THAT 10 DIFFERENT TESTS ARE REFERRED BY THE APPELLANT TO TH E PATIENT BEFORE DOING SURGERY AS STATED AGAINST QUESTION NO. 8 DURING THE STATEMENT RECORDED. THE APPELLANT CONTENDED THAT THE A.O. HAS ARBITRARIL Y PRESUMED THAT THE PATIENTS UNDERGOING LAB TESTS ONLY WERE SUBJECTED TO SURGERY OPERATION. IT IS ALSO SUBMITTED THAT THE APPELLANT DECIDES FOR O R AGAINST THE SURGERY ON THE BASIS OF OUTCOME OF ALL THE TESTS. THE LAB TES TS ARE CONDUCTED TO DECIDE THE COURSE OF TREATMENT AND THERE MAY BE VAR IOUS SITUATIONS WHEN OPERATION IS NOT CONDUCTED. THERE COULD NOT BE A CASE WHERE SURGICAL OPERATION IS CARRIED OUT WITHOUT LAB TESTS HOWEVER, THE CONVERSE IS NOT TRUE (II) THE OBSERVATION OF THE A.O. THAT THE LAB RECEI PTS TO INDOOR RECEIPTS IS QUITE HIGH IS A SWEEPING STATEMENT WITHOUT ANY SPECI FICATION. IT IS ALSO SUBMITTED THAT THE FIGURES ARE COMPARABLE WITH PRECED ING TWO YEARS. (III) REGARDING CONSUMPTION OF MEDICINE, IT IS SUBMITTED THAT DUE TO TYPOGRAPHICAL ERRED INCLUSIVE HAS BEEN TYPED AS EXC USIVE AT PAGE NO. 1 S.NO. 3 IN THE LETTER DATED 11.02.2011. THE MEDICINES PURCHASED HAVE BEEN CONSUMED DURING LAB TESTS/SURGICAL OPERATION/I NDOOR STAY OF 4 PATIENTS. FURTHER, THE RATIO OF MEDICINE RECEIPTS IS ACTUALLY 22.04% WHICH IS COMPARABLE WITH PRECEDING YEARS. (IV) AS REGARDS THE OBSERVATION OF THE A.O. THAT THE COST OF MEDICINE USED IN THE OPERATION IS ANYWHERE BETWEEN 400 AND 600, TH E APPELLANT WONDERED AS TO HOW THE FIGURES HAVE BEEN ARRIVED AT AS THE APPELLANT HAS ONLY STATED THE NAMES OF MEDICINES ETC. WITHOUT QUANTIFYING THE SAME. (V) AS REGARDS THE OF SERVICES OF ANESTHETIST IS CO NCERNED, THE APPELLANT SUBMITTED THAT RS.1,800,000/- IS PAID TO DR. H ARINDER PAUL SINGH ON WHICH TDS HAS BEEN DULY DEDUCTED AND DEPOS ITED AND FURTHER ONE CONFIRMATION LETTER WAS ALSO SUBMITTED TO THIS EF FECT. REGARDING THE AVAILING OF SERVICES OF ANOTHER ANESTHETIST IT IS SUBM ITTED THAT THE SAME IS ONLY ON ALLEGATION WITHOUT EVIDENCE. (VI) THE APPELLANT FURTHER SUBMITTED THAT THE PAT IENT REGISTER CONTAINS COMPLETE DETAILS OF EACH PATIENT AND MONEY RECEIVED FR OM THEM. A CASE REGISTER HAS BEEN MAINTAINED FOR INDOOR AND OUT D OOR PATIENTS AND CONTAINS ALL DETAILS AS STIPULATED IN FORM NO. 3C UNDE R THE INCOME TAX RULES. THE ASSESSES IS A SURGEON FOR PILES RELATED P ROBLEMS ONLY AND, THEREFORE, THE TYPE OF SERVICE REMAINS SAME IN ALL CA SES. THE APPELLANT HAS DULY ISSUED RECEIPTS IN RESPECT OF AMOUNT CHARG ED FOR OPD/INDOOR/LAB CHARGES AND ALL THE RECEIPTS BOOKS ARE IMPOUNDED BY THE A.O. THE STOCK INVENTORIES IS MAINTAINED AS PER RU LE- 6F(3) OF THE INCOME TAX RULES'62. 3. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE AND CONCLUDED THAT ALL THE PATIENTS WH O ARE SENT TO LAB FOR INVESTIGATION ARE OPERATED UPON. THERE FORE, ALL 1008 PATIENTS WHO UNDERWENT LAB TESTS ARE OPERATED UPON. THE ASSESSING OFFICER FURTHER CONTENDED THAT 980 PA TIENTS OUT OF 1008 PATIENTS HAVE UNDERGONE BATTERY OF LAB TEST S AND GOING BY THESE TYPES OF TESTS, IT WAS INFERRED THAT THEY HAVE UNDERGONE SURGERY. AS REGARDS THE RATIO OF LAB RE CEIPTS TO INDOOR RECEIPTS, THE ASSESSING OFFICER STATED THAT PRINCIPLE OF 5 RES-JUDICATE IS NOT APPLICABLE IN TAX PROCEEDINGS. THE ASSESSING OFFICER, THEREFORE, CONCLUDED THAT 80% OF 980 PATIENTS WHO HAVE UNDERGONE LAB TESTS NEEDED SURGER Y AND APPLIED GROSS RECEIPTS @ RS.10,000/- PER OPERATION. THE ASSESSING OFFICER ARRIVED AT THE FIGURE OF RS.78,40 ,000/- AS AGAINST THE GROSS RECEIPT OF THE ASSESSEE IN PLACE OF RS.32,39,815/- SHOWN BY THE ASSESSEE AND COMPUTED T HE INCOME AT RS.46,00,150/- AND MADE ADDITION ACCORDIN GLY. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LEARNED CIT (APPEALS) AND DETAILED WRITTEN SUBMISSIONS FILE D WHICH ARE NOTED IN THE IMPUGNED ORDER, IN WHICH THE ASSESSEE HAS REFUTED ALL THE ALLEGATIONS OF THE ASSESSING OFFICE R AND CONTENDED THAT THERE WERE NO BASIS TO REJECT THE BO OKS OF ACCOUNT BECAUSE NO SPECIFIC DEFECTS HAVE BEEN POINT ED OUT AND THAT CORRECT RECEIPTS HAVE BEEN NOTED. THE FINDIN GS GIVEN BY THE ASSESSING OFFICER ARE BASED ON IMAGINATION ONLY . THE ASSESSEE ALSO EXPLAINED THAT IT IS NOT NECESSARY TH AT ALL THE PATIENTS SENT TO LAB FOR TESTS WERE SUBJECT TO SURG ICAL OPERATION. IN THE ABSENCE OF ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNT, THE ADDITION IS WHOLLY UNJUSTIFIED. 5. THE LEARNED CIT (APPEALS) FORWARDED THE REPLY OF THE ASSESSEE TO THE ASSESSING OFFICER BUT THE ASSESSING OFFICER DID NOT REBUT THE SUBMISSIONS OF THE ASSESSEE. THE LE ARNED CIT (APPEALS) CONSIDERING THE MATERIAL ON RECORD DELETE D THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARAS 5 AND 6 OF THE APPELLATE ORDER ARE REPRODU CED AS UNDER : 6 5.2 I HAVE CONSIDERED THE SUBMISSIONS MADE. AS REG ARDS RULE- 6F. IT IS SEEN THAT THE APPELLANT HAS DULY FOLLOWED THE R ULES IN MAINTENANCE OF CASE REGISTER AND INVENTORY ETC WHICH IS NOT REBUTTED BY THE A.O. DURING THE APPELLATE PROCEEDINGS. AS PER THIS RULE IN THE REGISTER ONLY THE NAME OF THE PATIEN T IS TO BE WRITTEN. THE A.O. HAS NOT COME OUT WITH ANY SPECIFIC DISCREPANCY IN THE RECORDS MAINTAINED. THERE IS NOT A SINGLE INST ANCE CITED BY THE A.O. TO SHOW THAT A PATIENT HAS BEEN OPERATED UP ON WITHOUT ENTRY IN THE RELEVANT REGISTER/BILLS. THE A.O. HAS ASS UMED THAT ALL PERSON HAVING UNDERGONE LAB TESTS HAVE UNDERWENT SUR GERY AND THEN THE A.O. HIMSELF ADMITTED THAT 20% OF SUCH PAT IENTS MIGHT NOT HAVE BEEN OPERATED UPON. THE A.O. HAS MADE CERTAIN STATEMENTS THAT THE LAB RECEIPT TO INDOOR RECEIPT R ATIO SHOULD BE 5% TO 10% WITHOUT ANY SUPPORTING EVIDENCE. THE A.O. FURT HER ASSUMED THAT SERVICES OF ANOTHER ANESTHETIST HAS BE EN AVAILED BY THE APPELLANT BUT FAILED TO BEING ANY EVIDENCE ON R ECORD IN THIS CONNECTION. ON THE OTHER HAND, THE APPELLANT HAS SUB MITTED A DETAILED REPLY DURING THE ASSESSMENT PROCEEDING ALS O COVERING AND EXPLAINING THE VARIOUS ISSUES RAISED BY THE A.O. THE APPELLANT HAS SUBMITTED THAT THE BOOKS OF A/C ARE DULY AUDITE D AND ALL BILLS AND VOUCHERS ARE DULY PRODUCED BEFORE THE A.O. AND IN FACT THE SAME ARE APPARENTLY IMPOUNDED ALSO. NO DEFECT IS F OUND IN THE BOOKS OF ACCOUNTS. IN MY OPINION, THEREFORE, THE A.O. HAS ERRED IN REJECTI NG THE BOOKS OF A/C AND MAKING THE ADDITION AND NO ADDITIO N CAN BE MADE ON THE BASIS OF SURMISES AND CONJECTURES ONLY. THE ADDITION MADE BY THE A.O. IS, THEREFORE, DELETED. 06. IN THE RESULT, THE APPEAL IS ALLOWED. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. THE LEARNED D.R FOR THE REVENUE RELIED UPON THE ORD ER OF THE ASSESSING OFFICER. ON THE OTHER HAND, THE LEARNED COUNSEL FOR ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. IT APPEARS FROM THE FACTS RECO RDED IN THE 7 ASSESSMENT ORDER AND IN THE APPELLATE ORDER THAT TH E ASSESSING OFFICER ASSUMED CERTAIN FACTS REGARDING O PERATION OF CERTAIN PATIENTS WHO WERE REFERRED FOR LAB TESTS. HOWEVER, THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW WHETHER ACTUALLY ANY PATIENT HAD UNDERGONE SURGERY WITHOUT RECORDING THE SAME IN THE RECORDS OF THE AS SESSEE. THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER MERELY ON ASSUMPTION OF CERTAIN FACTS WITHOUT ANY BASIS. NO SPECIFIC DEFECTS HAVE BEEN POINTED OUT IN THE MAINTENANCE OF BOOKS OF ACCOUNT. THEREFORE, REJECTION OF THE BOOKS OF ACC OUNT WAS NOT JUSTIFIED. THE LEARNED CIT (APPEALS) ON PROPER AP PRECIATION OF THE FACTS AND MATERIAL ON RECORD CORRECTLY DELET ED THE ADDITION. WE ALSO NOTE HERE THAT THE ASSESSING OF FICER HAS NOT REBUTTED THE CONTENTION OF THE ASSESSEE PARA-WI SE BEFORE THE LEARNED CIT (APPEALS). THEREFORE, IT APPEARS TO BE AN ADDITION ON IMAGINATION ONLY. WE, THEREFORE, DO N OT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY, DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JANUARY, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH JANUARY, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 8