NUECLEAR HEALTHCARE LTD., Mumbai V. A.C.I.T. - 16(3), Mumbai

ITA 662/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5456 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 02-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAVITA P KAUSHIKLD
• Assessee Lawyers: DINKLE HARIYA LD
• Keywords: Revenue expenditure
• Section: 143(3); 234B; 115JB

Judgement Text

M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.662/MUM/2018 ( / ASSESSMENT YEAR: 2013-14) M/S NUCLEAR HEALTHCARE LIMITED, D-37/3, TTC INDUSTRIAL AREA, MIDC, TURBHE, NAVI MUMBAI 400 703 / VS. CIT ( APPEALS) - 7 , AAYKAR BHAVAN, MK ROAD, CHURCHGATE, MUMBAI 400 020 PAN/GIR NO. AADCN - 5392 - G ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : MS. DINKLE HARIYA LD. AR REVENUE BY : MS. KAVITA P. KAUSHIK-LD. DR / DATE OF HEARING : 08/09/2020 / DATE OF PRONOUNCEMENT : 07/10/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2013-14 CONTEST THE ORDER OF L D. COMMISSIONER OF INCOME-TAX (APPEALS)-7, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT-7/IT-24/2016-17 DATED 14/11/2017 ON FOLLOWING GROUNDS OF APPEAL: - GROUND NO.1: REPAIRS & MAINTENANCE M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 2 1.1 THE LEARNED ACIT ERRED IN DISALLOWING REPAIRS A ND MAINTENANCE EXPENSE OF RS.11,96,298. 1.2 THE LEARNED ACIT FAILED TO APPRECIATE THAT THE EXPENSES ARE INCURRED FOR THE BUSINESS, FULLY SUPPORTED AND PAID BY THE APPELLANT . THE LEARNED ACIT ALSO FAILED TO ADJUST THE AMOUNT OF RS.837,409/- FROM AM OUNT DISALLOWED, BEING EXPENSES REVERSED DURING THE PERIOD. 1.3 THE APPELLANT PRAYS THAT THE EXPENSES AS CLAIME D OUGHT TO BE ALLOWED. GROUND NO. 2: DEFERRED REVENUE EXPENDITURE 2.1 THE LEARNED ACIT ERRED IN DISALLOWING AMOUNT OF RS.16,49,705/- AS NON- REVENUE EXPENDITURE. 2.2 THE LEARNED ACIT FAILED TO APPRECIATE THAT THE SAID EXPENDITURE REFERS TO PAYMENT MADE TO VARIOUS AUTHORITIES ON ACCOUNT OF E XPENSES AND ARE FULLY SUPPORTED. THEY ARE REVENUE IN NATURE. 2.3 THE APPELLANT PRAYS THAT THE EXPENSES AS CLAIME D BEING REVENUE IN NATURE OUGHT TO BE ALLOWED. GROUND NO.3: INTEREST CHARGED U/S 234B 3.1 THE LEARNED ACIT ERRED IN CHARGING INTEREST U/S 234B OF RS.38,32,230/- 3.2 THE LEARNED ACIT FAILED TO APPRECIATE THAT THE TAX LIABILITY AS PER THE PROVISIONS OF SECTION 115JB OF RS.49,19,036/- WAS P AID BY THE APPELLANT BEFORE THE END OF THE RELEVANT YEAR BY WAY OF ADVAN CE TAX AND TAX DEDUCTED AT SOURCE. 3.3 THE APPELLANT PRAYS THAT THE INTEREST CHARGED U /S 234B OUGHT TO BE DELETED AND REFUND OF RS.38,32,230/- AS CLAIMED IN THE RETU RN OF INCOME TO BE GRANTED. GROUND NO.3 WHICH CONTEST LEVY OF INTEREST U/S. 234 B BEING CONSEQUENTIAL IN NATURE, WOULD NOT REQUIRE ANY SPEC IFIC ADJUDICATION ON OUR PART. IN GROUND NOS. 1 & 2, THE ASSESSEE IS AGG RIEVED BY DISALLOWANCE OF REPAIRS & MAINTENANCE EXPENSES FOR RS.11.96 LACS AND ANOTHER DISALLOWANCE OF CERTAIN EXPENDITURE OF RS.1 6.49 LACS. 2. WE HAVE CAREFULLY HEARD THE ARGUMENTS ADVANCED B Y BOTH THE REPRESENTATIVES. WE HAVE ALSO PERUSED RELEVANT MATE RIAL ON RECORD INCLUDING DOCUMENTS PLACED IN THE PAPER-BOOK. OUR A DJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCE EDING PARAGRAPHS. 3. THE MATERIAL ON RECORD WOULD SHOW THAT AN ASSESS MENT WAS FRAMED AGAINST THE ASSESSEE FOR THE YEAR UNDER CONS IDERATION U/S 143(3) ON 29/03/2016 WHEREIN THE RETURNED LOSS OF RS.23.32 LACS WAS ASSESSED M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 3 AT INCOME OF RS.13.88 LACS UNDER NORMAL PROVISIONS. WHILE FRAMING THE ASSESSMENT, THE ASSESSEE WAS, INTER-ALIA, SADDLED WITH REPAIRS & MAINTENANCE DISALLOWANCE OF RS.12.73 LACS AND DISAL LOWANCE OF DEFERRED REVENUE EXPENDITURE OF RS.16.49 LACS WHICH FORM THE SUBJECT MATTER OF PRESENT APPEAL BEFORE US. THE ASSESSEE BE ING RESIDENT CORPORATE ASSESSEE IS STATED TO BE ENGAGED IN THE B USINESS OF PROVIDING HEALTHCARE SERVICES. DISALLOWANCE OF REPAIRS & MAINTENANCE EXPENDITURE 4.1 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE CLAIMED DEDUCTION OF RS.20.38 LACS UNDER THE HEAD REPAIRS & MAINTENANCE-BUILDINGS. UPON PERUSAL OF DETAILS FILED BY THE ASSESSEE, IT WAS OBSERVED BY LD.AO THAT AN AMOUNT RS.11.96 LACS WAS PAID TO AN ENTITY NAMELY M/S PROCONVIS CONSULTANTS PRIVATE LIMITED (PROCONVIS) FOR DESIGNING WORK OF THE PREMISES. HOWEVER, THE INVOIC ES WERE ISSUED IN THE NAME OF M/S THYROCARE. SINCE THE PAYMENT WAS ST ATED TO BE NOT MADE BY THE ASSESSEE, THE EXPENDITURE WAS DISALLOWE D AND ADDED TO THE INCOME OF THE ASSESSEE. 4.2 BEFORE LD. CIT(A), THE ASSESSEE PLEADED THAT NO NEW ASSET WAS CREATED AND THE EXPENDITURE WAS IN NORMAL COURSE OF BUSINESS TO MAINTAIN THE PREMISES FROM WHERE THE BUSINESS OF TH E ASSESSEE WAS CARRIED ON AND THEREFORE, THE SAME WAS AN ALLOWABLE DEDUCTION. THE ATTENTION WAS DRAWN TO THE FACT THAT THE MAJORITY O F EXPENDITURE INCLUDE EXPENSES INCURRED TOWARDS PURCHASE OF CABLES, COPPE R STRIPS, LIGHTS ELECTRICAL FITTINGS, PAINTING MATERIAL ETC. WHICH W ERE TOWARDS GENERAL WEAR AND TEAR OF BUSINESS ASSETS. IT WAS ALSO SUBMITTED THAT THE ASSESSEE AND M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 4 M/S THYROCARE WERE GROUP COMPANY AND THE VENDOR RAI SED THE INVOICES INADVERTENTLY IN THE NAME OF M/S THYROCARE. HOWEVER , THE PAYMENTS WERE MADE BY THE ASSESSEE AFTER DEDUCTION OF TAX AT SOURCE. THE ATTENTION WAS ALSO DRAWN TO THE FACT THAT THE ACTUA L PAYMENT PAID TO VENDOR AFTER CONSIDERING THE DISCOUNTS/CREDIT NOTES ISSUED BY VENDOR WAS ONLY RS.3.58 LACS AS AGAINST RS.11.96 LACS WRONGLY NOTED BY LD. AO. HOWEVER, THE SUBMISSIONS WERE REJECTED SINCE THE AS SESSEE FAILED TO ADDUCE ANY PROOF TO SUPPORT THE SUBMISSIONS AND IN VIEW OF THE FACT THAT THE EXPENSES WERE CAPITAL IN NATURE. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4.3 UPON PERUSAL OF DOCUMENTS AS PLACED IN THE PAPE R-BOOK, WE FIND THAT M/S PROCONVIS HAS RAISED AN INVOICE ON 26/12/2 012 FOR RS.11.96 LACS IN THE NAME OF M/S THYROCARE. THE INVOICE IS S TATED TO BE FOR DESIGNING / EXECUTION WORK AT CERTAIN PREMISES. HOW EVER, THE LEDGER EXTRACT OF THE SAID VENDOR AS APPEARING IN ASSESSEE S BOOKS WOULD CLEARLY SHOW THAT THE ASSESSEE, ITSELF, HAS MADE PA YMENT OF RS.3,51,711/- ONLY TO THE VENDOR ON 30/03/2013 WHIC H HAS BEEN CLEARED FROM ASSESSEES BANK ACCOUNT ON 10/04/2013. THE AMO UNT OF RS.8.37 LACS REPRESENT DEBIT NOTE ISSUED BY THE VENDOR AND THE EXPENDITURE HAS BEEN REVERSED TO THAT EXTENT. THE ASSESSEE HAS DEDU CTED DUE TAX AT SOURCE FROM THE AFORESAID PAYMENT. THESE FACTS WOUL D REBUT REVENUES ALLEGATIONS THAT THE PAYMENTS WERE NOT MADE BY THE ASSESSEE. THE ASSESSEES EXPLANATION THAT THE INVOICE WAS INADVER TENTLY ISSUED BY THE VENDOR IN THE NAME OF GROUP CONCERN WAS TO BE ACCEP TED. REGARDING THE NATURE OF THE EXPENDITURE, THE COMPLETE DETAILS OF THE SAME WAS PLACED M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 5 BEFORE LOWER AUTHORITIES AND THE EXPENDITURE WAS IN THE NATURE OF DESIGNING WORK OF CERTAIN PREMISES FROM WHERE THE A SSESSEES BUISNESS WAS BEING CARRIED ON. BY EXPANDING THIS AMOUNT, NO NEW ASSET COULD BE SAID TO HAVE COME INTO EXISTENCE AND THEREFORE, THE EXPENDITURE WAS TO BE TREATED AS REVENUE IN NATURE. FINALLY, ON THE GI VEN FACTS AND CIRCUMSTANCES, THE IMPUGNED DISALLOWANCE OF RS.11.9 6 LACS AS MADE BY LD. AO COULD NOT BE SUSTAINED IN THE EYES OF LAW. B Y DELETING THE SAME, WE ALLOW GROUNDS RAISED IN THIS REGARD. DISALLOWANCE OF DEFERRED REVENUE EXPENDITURE 5.1 THE SECOND DISALLOWANCE OF RS.16.49 LACS WAS RE LATED WITH DEFERRED REVENUE EXPENDITURE AS CLAIMED IN THE COMP UTATION OF INCOME. THE ASSESSEE CLAIMED DEDUCTION OF DEFERRED REVENUE EXPENDITURE FOR RS.52.46 LACS IN THE COMPUTATION OF INCOME. UPON PE RUSAL OF DETAILS FILED BY THE ASSESSEE, THE FOLLOWING EXPENDITURE WA S HELD TO BE NON- REVENUE IN NATURE: - NO. PARTICULARS AMOUNT (RS.) 1. PAYMENT TO APCPDCL (DEVELOPMENT AND SERVICE LINE CHARGES) 4,85,840/- 2. STAMP DUTY (LEASE AGREEMENT) 7,14,000/- 3. MSEDCL (NO PROOF SUBMITTED) 1,93,928/- 4. REIMBURSEMENT OF EXPENSES (NO PROOF SUBMITTED) 2,55,937/- TOTAL 16,49,705/ - ACCORDINGLY, THE SAME WAS DISALLOWED WHILE FRAMING THE ASSESSMENT. 5.2 BEFORE LD. CIT(A), IT WAS SUBMITTED THAT PAYMEN T TO APCPDCL WAS INCURRED FOR SANCTIONING OF ADDITIONAL ELECTRICITY LOAD FOR HYDERABAD PET CENTER. THE STAMP DUTY CHARGES WERE STATED TO BE FO R REGISTERING THE M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 6 LEASE AGREEMENT. THE PAYMENT TO MSEDCL WAS STATED T O BE ELECTRICITY CHARGES FOR THE MONTH OF MARCH, 2013 WHEREAS THE BA LANCE AMOUNT OF RS.2.55 LACS WAS STATED TO BE MERE REIMBURSEMENT IN NATURE. HOWEVER, THE ASSESSEES SUBMISSIONS COULD NOT FIND WITH LD. CIT(A) WHO CONFIRMED THE DISALLOWANCES. AGGRIEVED, THE ASSESSE E IS IN FURTHER APPEAL BEFORE US. 5.3 UPON PERUSAL OF DOCUMENTS, WE FIND THAT THE ASS ESSEE VIDE SUBMISSIONS DATED 21/12/2015 TO LD.AO HAD PROVIDED COMPLETE DETAILS AS WELL AS SUPPORTING DOCUMENTS OF THE EXPENDITURE SO CLAIMED U/S 37(1). THE PAYMENT OF RS.1,93,928/- HAS BEEN MADE T O MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. TOWARDS EL ECTRICITY BILL AND THE SAME IS CLEARLY REVENUE IN NATURE. THE PAYMENT OF RS.4,8 5,840/- TO APCPDCL IS TOWARDS SERVICE LINE CHARGES AND DEVELOPMENT CHA RGES, WHICH IS ALSO REVENUE IN NATURE. THE STAMP DUTY OF RS.7,14,000/- IS TOWARDS REGISTRATION OF LEASE DEED IN ASSESSEES FAVOR WHIC H IS ALSO REVENUE IN NATURE. THE EXPENSES REIMBURSED BY THE ASSESSEE HAV E BEEN PAID THROUGH BANK ACCOUNT AND ROUTINE EXPENDITURE IN NAT URE. THEREFORE, NONE OF THE EXPENDITURE COULD BE SAID TO BE CAPITAL IN N ATURE AND HENCE, ALLOWABLE EXPENDITURE U/S 37(1). WE ORDER SO. THE I MPUGNED DISALLOWANCE SO MADE STANDS DELETED. THE GROUND STA NDS ALLOWED. CONCLUSION 6. THE APPEAL STANDS PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 07 TH OCTOBER, 2020. SD/- SD/- (C.N.PRASAD) (MAN OJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER M/S NUCLEAR HEALTHCARE LIMITED ITA NO.662/MUM/2018 ASSESSMENT YEAR : 2013-14 7 MUMBAI; DATED : 07/10/2020 SR.PS, JAISY VARGHESE !' # $ # / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' ( ) / THE CIT(A) 4. ' / CIT CONCERNED 5. ()' * , * , / DR, ITAT, MUMBAI 6. )+,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.