M/s. Omega Diagnostic Centre P.Ltd, Bathinda V. The Asstt. Commissioner of Income-tax, Bathinda

ITA 637/ASR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9619 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 22-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income; Deemed to accrue or arise in india
• Section: 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.637(ASR)/2014 ASSESSMENT YEAR: 2011-12 M/S. OMEGA DIAGNOSTIC CENTRE PVT. LTD. PAN:AAACO1996N VS. ACIT, CIRCLE-1, BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA (CA) RESPONDENT BY: SH. RAHUL DHAWAN (DR) DATE OF HEARING: 02.08.2016 DATE OF PRONO UNCEMENT: 03.08.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF LEARNED CIT(A), BATHINDA, DATED 13.08.2014, FOR ASST. YEAR: 2011-12. 2. THE ONLY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THE ACTION OF LEARNED CIT(A), BY WHICH HE HAD CONFIRMED THE INCOM E SURRENDERED DURING THE COURSE OF SURVEY AS DEEMED INCOME AND NO T AS BUSINESS INCOME. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER ARE THAT DURING SURVEY PROCEEDINGS THE ASSESSEE SURREN DERED AN AMOUNT OF RS.15 LACS ON ACCOUNT OF EXCESS CASH AMOUNT, HOWEVE R, DURING ITA NO.637 (ASR)/2014 ASST. YEA R: 2011-12 2 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT ASSESSEE HAD CREDITED THIS AMOUNT OF RS.15 LACS IN ITS P&L A CCOUNT AS MISCELLANEOUS INCOME AND THEREFORE, HAD DECLARED TH E SAME AS BUSINESS INCOME. THE ASSESSING OFFICER AFTER CONFRONTING THE ASSESSEE THAT THIS INCOME HAS TO BE SEPARATELY ASSESSED U/S 69 OF THE ACT MADE THE ADDITION SEPARATELY BY FOLLOWING THE JUDGMENT OF TH E HONBLE GUJRAT HIGH COURT IN THE CASE OF FAQIR MOHMAD HAJI HASA VS. CIT (2001) 247 ITR 290 (GUJ). 4. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPE AL BEFORE LEARNED CIT(A), WHO ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE CASE LAW OF FAQIR MOHMAD HAJI HASA VS. CIT (2001) 247 ITR 290 (GUJ) WAS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS IN THAT CASE THE CUSTOM AUTHORITIES HAD INTERCEPTED A CAR FROM WHICH THEY HAD SEIZED GOLD BARS AND THEREFORE, THE INCOME TAX AUTHORITIES HAD HELD INVESTMENT IN GOLD BARS AS UNEXPLAINED INVESTMENT AND THEREFOR E, THE ADDITION U/S 69A OF THE ACT WAS CONFIRMED BY THE HONBLE GUJRAT HIGH COURT, WHEREAS IN THE PRESENT CASE, THE ASSESSEE HAD SURRENDERED T HE AMOUNT WHICH HAD DIRECTLY ARISEN FROM THE SAID BUSINESS ACTIVITY AND THEREFORE, THE ITA NO.637 (ASR)/2014 ASST. YEA R: 2011-12 3 SURRENDERED AMOUNT WAS ASSESSABLE UNDER THE HEAD OF BUSINESS INCOME. THE LEARNED AR SUBMITTED THAT SUBSEQUENT TO THE DEC ISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF FAQIR MOHMAD HAJI HASA (SUPRA) , THE SAME COURT IN THE CASE OF CIT VS. RADHE DEVELOPER S INDIA LTD. (2010) 329 ITR 1 DISTINGUISHED ITS DECISION IN THE CASE OF FAQIR MOHD HAAJI HASSAN (SUPRA) RELYING ON THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF D.P. SANDU BROS. CHEMUR (PVT.) LTD. 142 TAX MAN 713. HE SUBMITTED THAT IN THE CASE OF ASSESSEE ALSO THE SOU RCE OF INCOME IS IDENTIFIABLE AS THAT FROM THE BUSINESS AND THEREFOR E, IN THE PRESENT CASE THE INCOME CAN ONLY BE ASSESSED AS BUSINESS INCOME. THE LEARNED AR FURTHER SUBMITTED THAT LEARNED CIT(A) HAS DISMISSED THE APPEAL OF ASSESSEE BY RELYING UPON THE JUDGMENT OF HONBLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P) LTD., VS. CIT, PANCHKULA & OTHERS, ORDER DATED 27.04.2011 IN ITA NO.106 OF 20 11 (O&M), WHEREAS THE HONBLE PUNJAB & HARYANA HIGH COURT HAD NO OCCA SION TO DISCUSS THE SUBSEQUENT JUDGMENTS OF GUJRAT HIGH COURT WHERE THE HONBLE GUJRAT HIGH COURT CATEGORICALLY STATED THAT INCOME HAS TO BE ASSESSED IN ANY OF THE HEADS SPECIFIED IN SEC.14 OF THE ACT. TH E LEARNED AR ALSO RELIED ON THE JUDGMENT OF AMRITSAR BENCH IN THE CASE OF J. B. RESORTS VS. ITO, IN ITA NO.488(ASR)/2015 AND SUBMITTED THAT IN THAT CAS E ALSO THE SURRENDER AMOUNT WAS MADE IN THE FORM OF CASH AND HONBLE TRI BUNAL VIDE ORDER DATED 19.05.2016 HAS HELD THAT SUCH INCOME WAS ASSE SSABLE AS BUSINESS INCOME WAS ASSESSABLE AS BUSINESS INCOME OF THE ASS ESSEE. THEREFORE, IT ITA NO.637 (ASR)/2014 ASST. YEA R: 2011-12 4 WAS ARGUED IN VIEW OF THE ABOVE FACTS AND CIRCUMSTA NCES, THAT THE APPEAL OF THE ASSESSEE BE ALLOWED. 7. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE C ASE OF KIM PHARMA (P) LTD., (SUPRA) IS DULY APPLICABLE TO THE ASSESSE E AS THE HONBLE PUNJAB & HARYANA HIGH COURT IS THE JURISDICTIONAL HIGH COU RT AS REGARDS THE ASSESSEE, THEREFORE, AS PER LAW OF JURISPRUDENCE TH E HONBLE TRIBUNAL IS BOUND TO FOLLOW THE JURISDICTIONAL HIGH COURT. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. THE CONTENTION OF LEARNE D AR THAT AMRITSAR BENCH OF TRIBUNAL IN THE CASE OF J.B RESORTS HAS DE CIDED SIMILAR ISSUE IN FAVOUR OF ASSESSEE IS NOT CORRECT AS IN THAT CASE S URRENDER WAS NOT MADE IN THE FORM OF CASH BUT WAS MADE DUE TO CERTAIN DIS CREPANCIES IN THE VOUCHERS. THEREFORE, THE FACTS AND CIRCUMSTANCES OF THIS CASE LAWS ARE NOT APPLICABLE TO ASSESSEE. WE FIND THAT HONBLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P) LTD., (SUPRA) HAS DECIDED SIMILAR ISSUE WHEREIN THE ISSUE OF EXCESS CASH AMOUNT HAS B EEN DECIDED AGAINST THE ASSESSEE. THE RELEVANT PART OF THE ORDER OF THE HONBLE HIGH COURT IS REPRODUCED BELOW. 2. BRIEFLY STATED, THE FACTS NECESSARY FOR ADJUDIC ATION AS NARRATED IN THE APPEAL ARE THAT A SURVEY WAS CONDUCTED UNDER SECTION 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 1.9.2005. DURING THE COURSE OF SEARCH, A CASH AMOUNT OF RS.5,00,000/- WAS FOUND AND THE BOOKS OF ACCOUNTS FOR THE YEAR UNDER CONSIDERATION WERE NOT FOUND TO BE COMPLETE ITA NO.637 (ASR)/2014 ASST. YEA R: 2011-12 5 UPTODATE. THE ASSESSEE SURRENDERED ADDITIONAL INCOM E OF RS.10,00,000/- RELATING TO THE ASSESSMENT YEAR 2005-06 AND RS.5,00 ,000/- FOR THE ASSESSMENT YEAR 2006-0,7. THE ASSESSING OFFICER VID E ORDER DATED 26.12.2008 MADE ADDITIONS ON ACCOUNT OF CERTAIN DIS ALLOWANCES AND THE TOTAL LOSS DECLARED BY THE ASSESSEE AT RS.5,37,300/ - WAS REDUCED TO RS.2,22,765/-. THE SAID LOSS WAS ASSESSED AS 'INCOME FROM BUSINESS' AND THE SURRENDERED INCOME WAS ASSESSED AS AN INCOME UN DER SECTION 69A OF THE ACT. FEELING AGGRIEVED, THE ASSESSEE FILED AN A PPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) PN SHORT ',THE CIT(A)'] WHO VIDE ORDER DATED 16.12.2009 DISMISSED THE APPEAL. ON FUR THER APPEAL BY THE ASSESSEE, THE TRIBUNAL VIDE ORDER DATED 30.4.2010 U PHELD THE ORDER OF THE CIT(A) AND DISMISSED THE APPEAL WHICH GAVE RISE TO THE ASSESSEE TO APPROACH THIS COURT BY WAY OF THE INSTANT APPEAL. 3. WE HAVE HEARD LEARNED COUNSEL FOR THE ASSESS EE. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AMOUNT SURRENDERED BY THE ASSESSEE WAS BUSINESS INCOME AND ASSESSABLE AS SUCH. HE RELIED UPON A DECISION OF THE KARNATAKA HI GH COURT IN COMMISSIONER OF INCOME-TAX AND ANOTHER V. S.K. SRIG IRI AND BROS. (2008) 298ITR 13 (KAM). 5. THE POINT FOR DETERMINATION IN THIS APPEAL IS , WHETHER RS.5,00,000/- WHICH WAS SURRENDERED BY THE ASSESSEE DURING THE CO URSE OF SURVEY UNDER SECTION 133A OF THE ACT WOULD FORM PART OF BUSINESS INCOME OR WAS ASSESSABLE UNDER SECTION 69A OF THE ACT. THE ASSESS ING OFFICER, THE CIT(A) AND THE TRIBUNAL AFTER CONSIDERING THE FACTUAL ASPE CT NOTICED THAT THE AMOUNT SURRENDERED DURING THE SURVEY WAS NOT REFLECTED IN THE BOOKS OF ACCOUNT AND NO SOURCE FROM WHERE IT WAS DERIVED WAS DECLARED BY THE ASSESSEE AND, THEREFORE, IT WAS DEEMED INCOME OF THE ASSESSEE UNDER SECTION 69A OF THE ACT. THE FINDINGS RECORDED BY TH E TRIBUNAL IN THIS REGARD ARE AS UNDER: 'IN THE FACTS OF THE PRESENT CASE, WE FIND THAT ASS ESSEE DURING THE COURSE OF SURVEY HAD SURRENDERED THE INCOME AS INCO ME FROM OTHER SOURCES THOUGH A PLEA HAS BEEN RAISED BY THE ASSESS EE THAT THE INCOME WAS SURRENDERED AS INCOME FROM JOB WORK BUT NO EVIDENCE TO PROVE THE STAND OF THE ASSESSEE HAS BEEN BROUGHT ON RECORD. THE ASSESSEE HAD ALSO SURRENDERED ADDITIONAL INCOME OF RS. 10 LACS IN ASSESSMENT YEAR 2005-06 ON ACCOUNT OF SUNDRY CREDIT S, REPAIRS TO BUILDING AND ADVANCES TO STAFF, WHICH BEING RELATAB LE TO BUSINESS CARRIED ON BY ASSESSEE WAS INCLUDED AS INCOME FROM BUSINESS. HOWEVER, IN RESPECT OF CASH FOUND DURING SURVEY, WH ICH WAS NOT REFLECTED IN THE BOOKS OF ACCOUNT, NO SOURCE WAS DE CLARED BY THE ASSESSEE AND IN THE ABSENCE OF NATURE OF SOURCE OF CASH BEING PROVED; THE SAME IS NOT ASSESSABLE AS INCOME FROM B USINESS. IN THE CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE CIT(A) IN INCLUDING THE ADDITIONAL INCOME AS DEEMED INCOME U/S 69A OF THE A CT AND NOT ALLOWING THE BENEFIT OF THE BUSINESS LOSSES DETERMI NED AGAINST THE SAID DEEMED INCOME. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. ITA NO.637 (ASR)/2014 ASST. YEA R: 2011-12 6 THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF H ONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P) L TD., (SUPRA), WE HOLD THAT CASH SURRENDER MADE BY ASSESSEE HAS BEEN RIGHT LY ASSESSED AS DEEMED INCOME AND NOT AS BUSINESS INCOME. 9. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 .08.2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: 03.08.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER