DR. SAWARKAR ANIL GULABRAO, Amaravati V. THE ACIT, AMRAVATI CIRCLE, Amaravati

ITA 6/NAG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1335 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNESH P THOMAS
• Assessee Lawyers: HIMESH DEMBLE
• Section: 133A

Judgement Text

1 ITA NO. 06/NAG/2015. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 06 /NAG/2015. ASSESSMENT YEAR : 2008 - 09. DR. SAWARKAR ANIL GULABRAO, ASSTT. COMMISSIONER OF INCOME - TAX, AMRAVATI. VS. AMRAVATI CIRCLE, AMRAVATI. PAN ACGPS5474E. APPELLANT. RESPONDENT. APPELLANT BY : SHRI HIMESH DEMBLE. RESPONDENT BY : S MT. AGNESH P. THOMAS. DATE OF HEARING : 23 - 08 - 2016 DATE OF PRONOUNCEMENT : 23 RD AUGUST, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 23 - 09 - 2014 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09. THE GROUND OF APPEAL READ S AS UNDER : THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE A.O. AT RS.14,99,206/ - . 2. BRIEF FACTS OF THE CASE ARE AS UNDER: RETURN OF INCOME DECLARING INCOME OF RS.23,27,390/ - WAS FILED BY THE ASSESSEE ON 29 - 09 - 2008. THE ASSESSEE IS A MEDICAL PRACTITIONER. IT WAS NOTED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THAT A SURVEY WAS CONDUCTED U/S 133A AT THE BUSINESS PREMISES OF THE ASSESSEE ON 02 - 08 - 2007. IT WAS ALSO NOTED THAT DURING THE COURSE OF HIS STATEMENT RECORDED AT THE TIME OF SURVEY, THE ASSESSEE HAD DISCLOSED ADDITIONAL INCOME OF RS.30,00,000/ - OVER AN D 2 ITA NO. 06/NAG/2015. ABOVE HIS REGULAR INCOME. THE AO, HOWEVER, NOTED THAT IN SPITE OF THE SAID DISCLOSURE OF RS.30,00,000/ - BEING CREDITED TO THE PROFESSIONAL INCOME OF THE ASSESSEE, THE ASSESSEE WAS FILING THE RETURN SHOWING TOTAL INCOME OF ONLY RS.23,27,394/ - . HE, THEREFO RE, ASKED THE ASSESSEE TO EXPLAIN THE SAME. 3. IT WAS EXPLAINED BY THE ASSESSEE THAT THEY HAD DULY CREDITED THE PROFESSIONAL INCOME OF RS.30,00,000/ - TO THEIR INCOME AND EXPENDITURE ACCOUNT AND THAT REGULAR PROFESSIONAL EXPENSES WERE REQUIRED TO BE DEDUCTE D TO ARRIVE AT THE NET INCOME AND THE SAME ARE DULY REFLECTED IN THE BOOKS OF ACCOUNTS WHICH ARE AUDITED. IT WAS FURTHER SUBMITTED THAT THE EXPENSES ARE INCREASED BY ABOUT 16% DUE TO THE INCREASE IN THE CORPORATION TAX AND MEDICAL EXPENSES. THE AO, HOWEVE R, DID NOT AGREE WITH THE ABOVE SUBMISSIONS. HE NOTED THAT THE NET PROFIT TO TOTAL RECEIPT RATIO FOR ASSESSMENT YEAR 2006 - 07 WAS 46.74% AND HE APPLIED THE SAME RATIO FOR THE YEAR UNDER CONSIDERATION AND DETERMINED THE NET PROFIT FOR THE YEAR FROM THE REGUL AR PROFESSIONAL ACTIVITY OF THE ASSESSEE TO BE RS.9,26,600/ - . FURTHER SINCE THE ASSESSEE HAD DISCLOSED THE AMOUNT OF RS.30,00,000/ - HE DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.39,26,600/ - AND AFTER ALLOWING DEDUCTION UNDER CHAPTER VIA OF RS.1,00,0 00/ - , HE COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS.38,26,600/ - AS AGAINST RETURNED INCOME OF RS.23,27,394/ - WHICH RESULTED IN AN ADDITION OF RS.14, 9 9,206/ - . 4. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFORE THE LEARNED CIT(APPEALS). UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) CONFIRMED THE ADDITION. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. IN THIS CASE THE AO HAS NOTED THAT ON THE SURVEY CONDUCTED U/S 133A THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME OF RS.30,00,000/ - . THOUGH THE ASSESSEE HAS DECLARED THE SAID SUM IN THE RETURN OF INCOME HE HAS ALSO DEBITED THE RELEVANT EXPENDITURE AND 3 ITA NO. 06/NAG/2015. RESULTANTLY NET AMOUNT OF RS.23,27,394/ - WAS DECLARED. WITHOUT POINT ING OUT ANY DEFECT IN THE BOOKS OF ACCOUNTS AND VOUCHERS SO PRODUCED THE AO PROCEEDED TO HOLD AS UNDER : IN THIS CASE IT IS ESSENTIAL TO TAKE NET PROFIT TO TOTAL RECEIPT RATIO OF PREVIOUS YEAR IN WHICH WAS CONDUCTED. SO A.Y. 2006 - 07 IS CONSIDERED TO ARRI VE AT REGULAR INCOME OF A.Y. 2008 - 09. IN THE A.YR. 2006 - 07, ASSESSEE SHOWS TOTAL RECEIPTS OF RS. 763350/ - AND NET PROFIT AT RS.356770/ - @ 46.74%. IN THE A.YR. 2008 - 09, ASSESSEE SHOWS TOTAL RECEIPTS OF RS.1982459/ - . CONSIDERING THE NET PROFIT FOR A.Y. 2006 - 07 @ 46.74% ON TOTAL RECEIPTS COMES TO RS.926600/ - . HENCE, DIFFERENCE BETWEEN REGULAR INCOME PLUS DECLARED INCOME IN SURVEY I.E. RS.9,26,600/ - + RS. 30,00,000/ - ) RS.39,26,600/ - ( - ) DEDUCTION UNDER CHAPTER VIA RS.1,00,000/ - RS.38,26,6600/ - AND RETURNED I NCOME RS.23,27,394/ - (I.E.) RS.38,26,600/ - - RS.23,27,394) AMOUNT OF RS.14,99,206/ - IS ADDED BACK TO THE TOTAL INCOME. THE LEARNED CIT(APPEALS) HAS ALSO UPHELD THIS ORDER HOLDING THAT HE WAS DOING SO ON THE BASIS OF REASONS RECORDED BY THE AO. I FIND TH AT THE REASONS RECORDED BY THE AO ARE NOT AT ALL COGENT. WHY THE ASSESSEES EXPENDITURE SHOULD BE DENIED HAS NOT BEEN COGENTLY BROUGHT ON RECORD BY THE AO. NO DEFECT IN BOOKS, BOGUS OR UNJUSTIFIED EXPENSES HAS BEEN NOTED. FURTHER MORE THE STATEMENT OBTAINE D DURING THE SURVEY DEHORSE ANY CORROBORATIVE EVIDENCE ARE NOT AT ALL A BASIS FOR ADDITION. THIS PROPOSITION IS DULY SUPPORTED BY HONBLE APEX COURT DECISION IN THE CASE OF CIT, SALEM VS. M/S S. KHADER SON, CIVIL APPEAL NO. 13224 OF 2008 VIDE ORDER DATED 2 0 - 09 - 2012 . IN THIS REGARD IT IS ALSO NOTEWORTHY THAT THE ASSESSEE HAS OFFERED AN ADDITIONAL AMOUNT OF RS.20 LAKHS IN THE ASSESSMENT YEAR 2007 - 08 AND THE RETURN FILED SHOWED A NET PROFIT OF RS.16.91 LAKHS ONLY AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMEN T. IN THESE CIRCUMSTANCES, THE BASIS FOR ADDITION THE ABOVE OF RS.14,99,206/ - IN THIS CASE IS NOT AT ALL SUSTAINABLE. HENCE I HAVE NO HESITATION IN SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY THE ORDERS OF THE AUTHORITIES BELOW STAND REVERSED. 4 ITA NO. 06/NAG/2015. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF AUGUST,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 23 RD AUGUST, 2016. COPY FORWARDED TO : 1. DR. SAWARKAR ANIL GULABRAO, CONGRESS NAGAR ROAD, SAWARKAR HOSPITAL, AMRAVATI. 2. A.C.I.T., AMRAVATI CIRCLE, AMRAVATI. 3. C.I.T. - III, NAGPUR. 4. CIT(APPEALS), - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.