DR. VINOD SHARMA, NEW DELHI V. ACIT, CIRCLE- 61(1), NEW DELHI

ITA 6997/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3183 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: SUNIL GARG
• Section: 201; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.- 6997 /DEL/ 2018 (ASSESSMENT YEAR: 2010-11) DR VINOD SHARMA, B 147, MT KAILASH, EAST OF KAILASH NEW DELHI. VS. ACIT, CIRCLE-61 (1), NEW DELHI. PAN NO. AACCA3104G APPELLANT RESPONDENT ASSESSEE BY SH. SUNIL GARG , CA REVENUE BY MS. NIDHI SRIVASTAVA, CIT DR DATE OF HEARING: 6/4/2021 PRONOUNCEMENT ON 15/6/2021 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 30/08/2018 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-20, NEW DELHI (LD. CIT(A)), IN THE CASE OF SH. VINOD SHARMA (THE ASSESSEE), FOR THE ASSESSMENT YEAR 2010-11, THE ASSESSEE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DOCTOR BY PROFESSION AND DERIVED INCOME FROM BUSINESS/PROFESS ION AND INCOME FROM OTHER SOURCES. PURSUANT TO THE SURVEY CONDUCTE D IN THE CASE OF M/S 2 CARDIO TECHNOVENTION, AND INFORMATION RECEIVED THER E FROM THE CASE OF THE ASSESSEE WAS REOPENED FOR THE ASSESSMENT YEAR 2 010-11 BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). ASSESSEE FILED THE RETURN OF INCOME ON 29 19 99-2000 10 DECLARING A TOTAL INCOME OF RS. 64, 18, 010/-. ASSESSMENT ORDER READS THAT DURING THE COURSE OF SURVEY IN THE CASE OF M/S CARDIO TECHNOVE NTIONAND DEALING IN THE SUPPLY OF MEDICAL EQUIPMENT LIKE CORONARYSTENTS EXT.SEVERAL HANDWRITTEN NOTEBOOKS IN PENCIL CONTAINING DETAIL O F CASE TRANSACTION FOR FY 2008-09 TO 2012-13 WERE IMPOUNDED; THAT SUCH AN NOTEBOOK CONTAINED SEVERAL ENTRIES IN CODED FORM WHICH WAS S UBSEQUENTLY DECIPHERED TO BE IN THE FORMAT OF HOSPITAL NAME/DOCTORS INITIAL/PRODUCT NAME/DATE/BI LL NUMBER COMMISSION AMOUNT PAID. FROM THE PERUSAL AND CROSS-REFERRING OF ALL THE AVA ILABLE INFORMATION, IT TRANSPIRED THAT M/S CARDIO TECHNOVENTIONHAD PAID CO MMISSION TO DOCTORS IN CASH FOR THE USE OF STENTS SUPPLIED TO V ARIOUS HOSPITALS; AND THAT THE REGULATIONSOF MEDICAL COUNCIL OF INDIA DEB ARRED THE MEDICAL PROFESSIONALS FROM RECEIVING ANY FORM OF COMMISSION PAYMENT OR OTHER FAVOURS AND SO THOSE DOCTORS WOULD OBVIOUSLY NOT SH OW THE RECEIPTS AS THEIR INCOME. LEARNED ASSESSING OFFICER RECORDED TH AT THE ABOVE INFORMATION RECEIVED WAS CONFIRMED IN THE ASSESSMEN T ORDER OF M/S CARDIO TECHNOVENTIONAND FOR THE ASSESSMENT YEAR 201 4-15. ACCORDING TO SUCH INFORMATION THE ASSESSEE RECEIVED A SUM OF RS. 11, 05, 000/-FOR THE FINANCIAL YEAR 2009-10. LEARNED ASSESSING OFFICER, ACCORDINGLY WHILE REJECTING THE EXPLANATION OFFERED BY THE ASSESSEE O N THIS ASPECT, ADDED SUCH SUM TO THE INCOME OF THE ASSESSEE. 3 3. AGGRIEVED BY SUCH AN ADDITION, ASSESSEE PREFERRE D AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ADDITION AN D DISMISSED THE APPEAL. ASSESSEE IS THEREFORE, BEFORE US IN THIS AP PEAL CONTENDING THAT THE AUTHORITIES BELOW FAILED TO CONSIDER THE SUPPOR TING DOCUMENTS AND PLEA SUBMITTED ON BEHALF OF THE ASSESSEE AND THEREF ORE, THE ADDITION CANNOT BE SUSTAINED. 4. IT IS THE ARGUMENT ON BEHALF OF THE ASSESSEE THA T THE CODE THAT WAS ATTEMPTED TO BE DECIPHERED BY THE REVENUE READS, FO R EXAMPLE, NHI/VS/CO/548 15000 AND THE REVENUE INTERPRETED I T AS REPRESENTING HOSPITAL NAME/DOCTORS INITIAL/PRODUCT NAME/DATE/BI LL NUMBER COMMISSION AMOUNT PAID TO SAY THAT A SUM OF RS. 15 ,000 WAS PAID TO VS (VINOD SHARMA) IN RESPECT OF THE PRODUCT WITH CODE CO, WHERE THE NHI REPRESENTS NATIONAL HEART INSTITUTE. LD. AR ARGUES THAT EXCEPT THE SURMISES AND CONJECTURES OF THE LEARNED ASSESSING O FFICER, THERE IS NO CONCRETE MATERIAL TO CONNECT THIS CODE WITH THE ASS ESSEE AND THERE ARE ANY NUMBER OF POSSIBILITIES DISTURBING THIS INTERPR ETATION. HE SUBMITTED THAT THERE IS NO CORROBORATING EVIDENCE FROM ANY QU ARTER TO PINPOINT THIS INTERPRETATION ADOPTED BY THE REVENUE. LD. AR SUBMI TTED THAT THERE ARE POSSIBILITIES THAT ANY CASH WAS ACTUALLY GIVEN TO S OME OTHER PERSON WHO MAY BE THE PARTNER OF THE FIRM M/S CARDIO TECHNOVEN TIONAND FOR SIPHONING OF PROFITS OF THE FORM, THE HOSPITAL; NAT IONAL HEART INSTITUTE AS DISCOUNT ON PURCHASES; THE PURCHASE MANAGER AT THE HOSPITAL FOR PLACING THE ORDER, THE ACCOUNTS PERSONNEL AT THE HOSPITAL F OR RELEASING PAYMENTS, IN A TRUSTEE OF THE HOSPITAL, A NEW EMPLOYEE AT THE HOSPITAL, THE PATIENT WHO WAS OPERATED UPON, THE VENDOR FROM HOME STANDS WERE PURCHASED, ANY OTHER FACILITATOR OR MEDIATOR SO ON AND SO FORT H. HE THEREFORE SUBMITS 4 THAT IT WOULD BE UNREASONABLE TO CONCLUDE THAT THE AMOUNT TO REACH THE ASSESSEE, WITHOUT ANY FOOLPROOF EVIDENCE. 5. HE FURTHER SUBMITTED THAT ACCORDING TO THE REVEN UEM/S CARDIO TECHNOVENTIONHAD SHOWN CERTAIN COMMISSIONS TO HAVE BEEN PAID TO THE AGENTS THROUGH BANKING CHANNELS BUT HAVING RECEIVED THE SAME BACK IN CASH, SUCH AMOUNTS WERE PAID TO THE DOCTORS AND IT WAS THE PLEA TAKEN BY THE REVENUE IN THE CASE OF M/S CARDIO TECHNOVENTION . IN THE CASE OF M/S CARDIO TECHNOVENTIONIT WAS NEGATIVED BY THE LD. CIT (A) IN APPEAL. FURTHER IN THE CASE OF THE ASSESSEE HIMSELF FOR THE SUBSEQU ENT YEARS SUCH A PROPORTION WAS GIVEN UP BY THE REVENUE AND NO ADDIT ION WAS MADE ON THIS SCORE. HE SUBMITS THAT THERE IS APPROBATION AN D REPROBATION BY REVENUE IN RESPECT OF THE VERY SAME RECEIPT IN THE HANDS OF THE ASSESSEE AND SUCH A COURSE IS NOT ACCEPTABLE. 6. PER CONTRA, LD. DR PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE NOTING IS IN THE DIARY WERE CONFIRMED BY M/S CARDIO TECHNOVENTIONADDITIONS AND IT WAS NOT DE NIED BY THE ASSESSEE. SHE FURTHER ARGUED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SIMPLY DENIED THE ALLEGATI ONS WITHOUT ANY SUBMISSION OF SUPPORTING PAPERS AND THE CONDUCT OF THE ASSESSEE IS FRAUGHT WITH SUSPICIOUS CIRCUMSTANCES AND THEREFORE WHILE FOLLOWING THE ADDITION OF THE HONBLE SUPREME COURT IN THE CASE O F DURGA PRASAD MORE 82 ITR 540, THE ADDITION IN THE HANDS OF THE ASSESS EE IS JUSTIFIABLE. 7. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. AS SUBMITTED BY THE REVENUE, I N THE DIARIES THE RELEVANT NOTINGS READ IN A CRYPTIC FORM LIKE NHI/P S/CO/548 15000 AND 5 THE REVENUE READ IT AS HOSPITAL NAME/DOCTORS INITI AL/PRODUCT NAME/DATE/BILL NUMBER COMMISSION AMOUNT PAID. WHIL E READING SO, REVENUE STOPPED AT THE SECOND POSITION, NAMELY, DO CTORS INITIAL TO FASTEN THE LIABILITY. EVEN IF WE GO BY THE DECODING OF THE CODE AS DONE BY THE REVENUE, AS ARGUED BY THE LD. AR AND RIGHTLY AL SO, THERE IS NO REASON AS TO WHY WE SHOULD STOP AT OUR SELECT THE 2 ND POSITION TO FASTEN THE LIABILITY OR TO CONCLUDE THAT THE DOCTOR RECEIVED T HE AMOUNT. IT COULD EQUALLY BE POSSIBLE THAT THE HOSPITAL MIGHT HAVE RE CEIVED SUCH AMOUNT IN RESPECT OF A PARTICULAR PATIENT ATTENDED BY SUCH DO CTOR TO USE SUCH INSTRUMENT. THIS POSSIBILITY CANNOT BE RULED OUT. W HEN THERE ARE MORE POSSIBILITIES THAN ONE, AND MANY OF SUCH POSSIBILIT IES EXCLUDE THE INVOLVEMENT OF A PARTICULAR PERSON SUGGESTING THE I NVOLVEMENT OF SOMEBODY ELSE ALSO, IN OUR CONSIDERED OPINION IT WO ULD BE UNREASONABLE TO CONCLUDE THAT SUCH PERSON WHO ALSO BEEN EXONERAT ED BY ONE OF THE POSSIBILITIES, TO HAVE RECEIVED THE COMMISSION. AS RIGHTLY ARGUED ON BEHALF OF THE ASSESSEE, THIS CODE COULD ALSO BE IND ICATIVE OF A TRANSACTION AND FOR THE PURPOSE OF IDENTIFICATION OF TRANSACTIO N, THE NAME OF THE HOSPITAL/NAME OF THE DOCTOR/NAME OF THE INSTRUMENT SO ON AND SO FORTH COULD HAVE BEEN NOTED IN RESPECT OF THE COMMISSION PAID. WITHOUT ANY SUPPORTING MATERIAL SUPPLYING A DIRECTION TO THIS E NTRY TOWARDS THE DOCTOR AND DOCTOR ALONE, IS UNREASONABLE AND SUCH AN ENTRY DOES NOT TAKE US ANYWHERE MORE PARTICULARLY TO POINT OUT THE DOCTOR TO HAVE RECEIVED THE COMMISSION. 8. APART FROM THIS, IT COULD BE SEEN FROM THE RECOR D AND THE ORDERS IN CASE OF M/S CARDIO TECHNOVENTION THAT THE PLEA OF T HE REVENUE WAS THAT THE COMMISSION THAT WAS PAID TO THE AGENT THROUGH B ANKING CHANNELS WAS 6 RECEIVED BACK BY M/S CARDIO TECHNOVENTION IN CASH T O PAY THE SAME TO THE DOCTORS. IN THE ORDER FOR THE ASSESSMENT YEAR 2 014-15 IN THE CASE OF M/S CARDIO TECHNOVENTION, IN APPEAL, LD. CIT(A) ON A CONSIDERATION OF THE ENTIRE MATERIAL REACHED THE CONCLUSION THAT IN RESP ECT OF THE COMMISSION PAID TO THE AGENT, THE SAME WAS CONFIRMED BY THE AG ENTS, BY COGENT RECORD AND SUPPORTED BY THE DENIAL OF THE HOSPITALS AND THE FACTS AND CIRCUMSTANCES DID NOT PROVE THAT THERE WAS ANY WITH DRAWAL IN CASH BY THE COMMISSION AGENT FROM THEIR BANK ACCOUNTS NOR ANY E VIDENCE TO SHOW THAT IT WAS PAID TO THE DOCTORS. IT WAS FURTHER OBS ERVED THAT SUCH COMMISSION PAID TO THE AGENTS WAS ACCEPTED IN THE E ARLIER ASSESSMENT YEARS BY THE DEPARTMENT. IT WAS THE SPECIFIC FINDIN G OF THE LD. CIT(A) IN SUCH ORDER THAT THE ROUGH NOTING IN THE NOTEBOOK RE FERRED TO BY THE REVENUE DOES NOT CONFIRM THE FACT THAT COMMISSION W AS NOT PAID TO THE AGENTS OR THAT IT WAS RECEIVED BACK FROM THE AGENTS . 9. IT IS, THEREFORE, AMPLY CLEAR THAT THE PLEA OF T HE REVENUE THAT THOUGH THE COMMISSION WAS INITIALLY PAID TO THE AGE NTS THROUGH BANKING CHANNELS, IT WAS RECEIVED BACK IN CASH TO BE PAID T O THE DOCTORS, FALLS TO GROUND. THERE IS NO MATERIAL BEFORE US TO DISTURB T HIS FINDING RETURNED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THE CASE OF M/S CARDIO TECHNOVENTION. APART FROM THAT THERE IS NO D ENIAL OF THE FACT THAT IN THE SUBSEQUENT ASSESSMENT YEAR OF A 2011-12 THE ADDITION OF RS. 14, 10, 000/-UNDER SECTION 68 OF THE ACT WAS DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY INVALIDATIN G THE REOPENING WHEREAS FOR THE ASSESSMENT YEAR 2012-13, THE PROPOS ED ADDITION OF RS. 5.7 LACS ON ACCOUNT OF THE ALLEGED CASH COMMISSION WAS DROPPED AND THE LEARNED ASSESSING OFFICER ACCEPTED THE RETURN FILED BY THE ASSESSEE. 7 10. ALL THESE THINGS CUMULATIVELY GO TO SHOW THAT M /S CARDIO TECHNOVENTION WAS GIVEN A CLEAN CHIT FROM THE ACCUS ATION OF RECEIVING THE COMMISSION PAID TO AGENT THROUGH BANKING CHANNE LS, IN CASH AND PAID TO THE DOCTORS, WHICH THE DOCTORS COULD NOT SHOW AS THE RECEIPT DUE TO THE PROHIBITION OF THE REGULATIONS OF THE MEDICAL C OUNCIL OF INDIA. IT FURTHER ESTABLISHES THAT, WHEN ONCE THE VERY ALLEGA TION OF CASH COMMISSION IS RULED OUT, NO FURTHER INFERENCE COULD BE DRAWN AGAINST THE DOCTORS TO SAY THAT THEY HAVE RECEIVED SUCH NON-EST COMMISSION. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE ARGUMENT OF THE REVENUE AND ACCORDINGLY, HOLD THAT THE ADDITION CANNOT BE SUSTA INED. CONSEQUENTLY, WE DIRECT THE LEARNED ASSESSING OFFICER TO DELETE T HE ADDITION. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 15 TH DAY OF JUNE, 2021. SD/- SD/- (O.P.KANT) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/6/2021