DR SURENDRA H GOUHAR, MUMBAI V. ITO 11(3)(3), MUMBAI

ITA 7626/MUM/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0673 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 14-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN LD
• Assessee Lawyers: M SUBRAMANYAM LD
• Section: 143(3); 234B

Judgement Text

ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1038/MUM/2012 ( / ASSESSMENT YEAR: 2007-08) DR.SURENDRA H GOUHAR CWING, BHAVESHWAR PLAZA 2 ND FLOOR, L.B.S.MARG GHATKOPAR(W),MUMBAI-400 086 / VS. ASSISTANT COMMISSIONER OF INCOME TAX OFFICER 11(3) MUMBAI ! ./ ./PAN/GIR NO. AACPG-3284-A ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & ./I.T.A. NO.7626/MUM/2012 ( / ASSESSMENT YEAR: 2009-10) DR.SURENDRA H GOUHAR CWING, BHAVESHWAR PLAZA 2 ND FLOOR, L.B.S.MARG GHATKOPAR(W),MUMBAI-400 086 / VS. INCOME TAX OFFICER 11(3)(3) MUMBAI ! ./ ./PAN/GIR NO. ACXPG-2351-H ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : M. SUBRAMANYAM, LD.AR RE VENUE BY : V.JUSTIN, LD. DR / DATE OF HEARING : 21/12/2017 / DATE OF PRONOUNCEMENT : 17/01/2018 ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEALS BY ASSESSEE FOR ASSESSMENT YEARS [AY] 2007-08 & 2009-10 CONTEST SEPARATE ORDER OF FIRST A PPELLATE AUTHORITY. SINCE, COMMON ISSUES ARE INVOLVED IN BOTH THE APPEA LS, WE DISPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE O F CONVENIENCE AND BREVITY. FIRST WE TAKE UP APPEAL FOR AY 2007-08. ITA NO. 1038/MUM/2012 AY 2007-08 2.1 THIS APPEAL CONTEST THE ORDER OF LD. COMMISSION ER OF INCOME TAX (APPEALS)-2 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-2/IT/976-09-10 DATED 15/12/2010 QUA CONFIRMATION OF CERTAIN DISALLOWANCE U/S 40(A)(IA) FOR RS.34,59,470/- & FURTHER DISALLOWANCE OF RS.88,232/ -, BEING AMOUNT PAID TO THE DOCTORS BY THE ASSESSEE. 2.2 FACTS, IN BRIEF, ARE THAT THE ASSESSEE, BEING QUALIFIED DOCTOR BY PROFESSION RUNNING A NURSING HOME UNDER THE NAME AN D STYLE OF SATYAM NURSING HOME WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 14/12/2 009 BY LD. ASSISTANT COMMISSIONER OF INCOME TAX, RANGE 11( 3), MUMBAI [AO] AT RS.99.35 LACS AS AGAINST RETURNED INCOME OF RS. 36.32 LACS FILED BY THE ASSESSEE ON 26/10/2007. THE ASSESSEE, INTER-ALIA, SUFFERED DISALLOWANCE U/S 40(A)(IA) FOR RS.34.59 LACS AND CE RTAIN OTHER DISALLOWANCE FOR RS.88,232/- AND BOTH THESE ADDITIO NS ARE THE SUBJECT MATTER OF THIS APPEAL. 2.3 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THA T THE ASSESSEE RECEIVED CERTAIN PAYMENTS AGAINST CASHLESS INSURANCE CLAIMS OF THE ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 3 PATIENTS FROM THIRD PARTY ADMINISTRATORS [TPA] . THE CLAIMS COMPRISED-OFF OF CONSULTATION FEES OF OUTSIDE DOCTORS, COST OF ME DICINES, LABORATORY CHARGES & ASSESSEES HOSPITAL CHARGES. ACCORDINGLY, THE ASSESSEE, AGAINST THOSE CLAIMS AS RECEIVED FROM TPA, IN TURN, PAID THE SAME TO OUTSIDE DOCTORS, LABORATORIES AND SUPPLIERS OF MEDI CINES AND RETAINED THEIR PORTION OF CHARGES. WHILE MAKING THESE PAYMEN TS, THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE [TDS] AS PER THE PROVISION S OF SECTION 194J AND HENCE, WAS SADDLED WITH DISALLOWANCE U/S 40(A)( IA) FOR RS.34,59,470/-. THE SECOND ADDITION OF RS.88,232/- REPRESENT DIFFERENTIAL AMOUNT SINCE ASSESSEE MADE ACTUAL PAYMENT OF RS,28, 03,968/- ONLY TO DOCTORS AS AGAINST RS.28,92,200/- AS CLAIMED BY THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD.CIT(A) VIDE IMPUGNED ORDER DATED 15/12/20 10 WHERE LD.CIT(A) AFTER APPRECIATING THE CONTRACTUAL RELATI ONSHIPS BETWEEN RESPECTIVE PARTIES CONCLUDED THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS AGAINST PAYMENT TO LABORATORIES & OUTSIDE DOCTO RS BUT NOT AGAINST PAYMENT TOWARDS PURCHASE OF MEDICINES. THE OTHER AD DITION OF RS.88,232/- WAS ALSO CONFIRMED SINCE THE ASSESSEE C OULD NOT SUBSTANTIATE THE SAME. AGGRIEVED, THE ASSESSEE IS I N FURTHER APPEAL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR], QUA DISALLOWANCE U/S 40(A)(IA), CONTENDED THAT THE ASSESSEE MERELY ACTED AS CONDUIT BETWEEN TPA AND OUTSIDE DOCTORS / LABORATORIES AND THE PAYMENTS WER E MERE REIMBURSEMENTS IN NATURE AND HENCE THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS AGAINST THE RESPECTIVE PAYMENTS. OUR ATT ENTION WAS DRAWN TO THE FACT THAT TPA HAS DULY DEDUCTED THE TAX AT S OURCE FROM PAYMENT ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 4 MADE TO THE ASSESSEE ON GROSS AMOUNT REIMBURSED BY THEM TO THE ASSESSEE AND THEREFORE, NO FURTHER TDS WAS REQUIRED TO BE MADE THERE- AGAINST , THE LD. AR, IN THE ALTERNATIVE, PLEADED THAT THE RESPECTIVE PAYEES HAVE DULY REFLECTED THE PAYMENTS IN THEIR RE TURN OF INCOME AND HENCE, THE SAID DISALLOWANCE, EVEN OTHERWISE, WAS U NWARRANTED IN TERMS OF SECOND PROVISO TO SECTION 40(A)(IA). PER CONTRA , LD. DR DEFENDED THE CONCLUSION DRAWN BY LD. CIT(A). 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. FIRST OF ALL, WE FIND THAT THE ASSESSEE HAS RELIED ON CBDT CIRCULAR NO.8/2009 DATED 24/11/2009 TO SUPPORT THE CONTENTION THAT NO TDS WAS REQUIRED TO BE DEDUCTED BY THE ASSE SSEE FROM THE IMPUGNED PAYMENTS. HOWEVER, WE FIND THE SAME TO BE OF NO HELP TO ASSESSEE AS THE SAID CIRCULAR ONLY TALKS ABOUT LIAB ILITY OF TPA TO DEDUCT TDS WHILE MAKING PAYMENT ON BEHALF OF INSURANCE COM PANIES FOR SETTLING MEDICAL / INSURANCE CLAIMS WITH THE HOSPITALS. WE A RE NOT CONCERNED WITH THE SAME AT PRESENT SINCE THE QUESTION BEFORE US IS THE LIABILITY OF ASSESSEE TO DEDUCT TDS WHILE MAKING PAYMENT TO RESP ECTIVE PARTIES AGAINST INSURANCE CLAIMS RECEIVED BY HIM FROM TPA. 6. GOING FURTHER, WE DO NOT FIND ANY STRENGTH IN TH E PRIME CONTENTIONS OF LD. AR THAT THE AMOUNTS, BEING MERE REIMBURSEMEN TS IN NATURE, WERE NOT COVERED BY THE PROVISIONS OF SECTION 194J. THE ASSESSEE HAS RAISED COMPOSITE CLAIMS AGAINST THE TPA WHICH COMPRISE OF VARIOUS ITEMS. NEVERTHELESS, THE PAYMENT THEREOF TO THE RESPECTIVE PARTIES IS THE LIABILITY OF THE ASSESSEE ONLY AND TPA DO NOT HAVE ANY CONTRA CT WITH OUTSIDE DOCTORS / LABORATORIES. THEREFORE, THE LD. CIT(A) H AS CLINCHED THE ISSUE IN RIGHT PERSPECTIVE BY NOTING THAT THERE WAS NO CONTR ACTUAL RELATIONSHIP ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 5 BETWEEN TPA AND OUTSIDE DOCTORS / LABORATORIES. HEN CE, WE ARE NOT CONVINCED WITH THE ARGUMENTS OF LD. AR ON THIS ACCO UNT. 7. HOWEVER, SO FAR AS THE ALTERNATIVE ARGUMENT IS C ONCERNED, WE CONCUR WITH THE SUBMISSIONS OF LD. AR THAT THE ASSE SSEE STOOD BENEFITTED BY SECOND PROVISO TO SECTION 40(A)(IA) I N VIEW OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN CIT VS. ANSAL LANDMARKS TOWNSHIP PVT. LTD. IN ITA NO. 160/161/2015 WHERE IT HAS ALREADY BEEN UPHELD THAT THESE PROVISIONS, BEING DECLARATORY AND CURATIVE IN NATURE, APPLY RETROSPECTIVELY. THE NEWLY INSERTED SECOND PROVISO TO SECTION 40(A)(IA) READ WITH FIRST PROVISO TO SUB SECTION (1) OF SECTI ON 201, IS APPLICABLE TO THE CASE OF THE ASSESSEE AND THERE CANNOT BE ANY DI SALLOWANCE U/S. 40(A)(IA) IF THE ASSESSEE FULFILS REQUIREMENT OF FI RST PROVISO TO SECTION 201(1). THEREFORE, WE DEEM IT FIT TO RESTORE THE MA TTER BACK TO THE FILE OF LD. AO FOR THE LIMITED PURPOSE OF PROVIDING ONE MOR E OPPORTUNITY TO ASSESSEE TO ADDUCE EVIDENCES / FURNISH DOCUMENTS AS PER REQUIREMENTS OF SECOND PROVISO TO 40(A)(IA) READ WITH FIRST PROV ISO TO SECTION 201(1). THE ASSESSEE IS DIRECTED TO CO-OPERATE WITH LOWER A UTHORITIES FORTHWITH TO SUBSTANTIATE THIS CONTENTION FAILING WHICH THE LOWE R AUTHORITIES SHALL BE AT LIBERTY TO DECIDE THE ISSUE ON THE BASIS OF MATERIA L AVAILABLE ON RECORD. THIS GROUND OF ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. REGARDING DISALLOWANCE OF RS.88,232/-, IT IS NOT ED THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING. TH E LD. AR HAS CONTENDED THAT THE SAID AMOUNT REPRESENT DEDUCTIONS BY TPA AND THE SAME ARE NOT RECEIVED BY THE ASSESSEE. THIS, BEING FACTUAL MATTER, REQUIRES RECONCILIATION. WE FIND THAT THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE SAME BEFORE BOTH THE LOWER AUTHORI TIES. THEREFORE, WE ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 6 SEE NO HARM IN PROVIDING ANOTHER OPPORTUNITY TO THE ASSESSEE TO RECONCILE THE SAME. THEREFORE, THE SAID DISALLOWANC E IS RESTORED BACK TO THE FILE OF LD. AO WITH A DIRECTION TO ASSESSEE TO RECONCILE / SUBSTANTIATE THE SAME. THE GROUND OF ASSESSEES APPEAL STANDS AL LOWED FOR STATISTICAL PURPOSES. IN NUTSHELL, THE ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 7626/MUM/2012 AY 2009-10 9. THE ASSESSEE, IN SIMILAR FASHION, HAS SUFFERED D ISALLOWANCE U/S 40(A)(IA) IN AY 2009-10 FOR RS.38,67,010/- WHICH HA S BEEN CONFIRMED BY LD. CIT(A) RELYING ON THE ORDER FOR AY 2007-08. SIN CE THE ISSUE IS IDENTICAL IN ALL RESPECT EXCEPT FOR FIGURES AND MIN OR VARIATIONS, THE SAME IS RESTORED BACK TO THE FILE OF LD. AO WITH SIMILAR DIRECTIONS. RESULTANTLY THE ASSESSEES GROUND STANDS ALLOWED FOR STATISTICA L PURPOSES. ANOTHER GROUND CONTEST LEVY OF INTEREST U/S 234B & 234C. TH E SAME BEING MANDATORY AND CONSEQUENTIAL IN NATURE AND HENCE, DO NOT REQUIRE ANY INTERFERENCE. 10. RESULTANTLY, BOTH THE APPEALS STANDS PARTLY ALL OWED FOR STATISTICAL PURPOSES IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY,2018 SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARW AL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 17.01.2018 SR.PS:- THIRUMALESH ITA.NOS.1038 & 7626/MUM/2012 DR.SURENDRA H GOUHAR ASSESSMENT YEARS-2007-08 & 2009-10 7 ! / 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