ITO, CHENNAI V. Sri Dr.K.A.Rathna Sabapathy, CHENNAI

ITA 770/CHNY/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57909 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 31-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N PRAKASH
• Assessee Lawyers: T BANUSEKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 770/MDS/2009 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER, WARD-IX(2), CHENNAI. V. DR. K.A. RATHNA SABAPATHY, KPA CLINIC, NO.10, II STREET, BALAJI NAGAR, ROYAPETTAH, CHENNAI-600 014. [PAN:AABPA4524C ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N. PRAKASH, JCIT RESPONDENT BY : SHRI T. BANUSEKAR, CA DATE OF HEARING : 31-01-2012 DATE OF PRONOUNCEMENT : 31-01-2012 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN ITA NO. 250/07-08 DATED 29-1-2009 FOR THE ASSESSMENT YEAR 2005-06. 2. SHRI T.N. PRAKASH, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI T.BANUSEKAR, CA REPRESENTED ON BEHALF OF THE A SSESSEE. I.T.A. NO.770/MDS/2009 2 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE IS A DOCTOR. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD CONSTRUCTED A MULT I STOREYED BUILDING IN 2002 AT GREAMS ROAD. IT WAS THE SUBMISSION THAT THE ASSESS EE HAD RECEIVED RENTAL INCOME FROM LETTING OUT ROOMS IN THE SECOND FLOOR OF THE B UILDING AND THE SAME HAD BEEN CLAIMED AS PROFESSIONAL INCOME. IT WAS THE SUBMISS ION THAT IN THE COURSE OF ASSESSMENT THE ASSESSING OFFICER HAD PROPOSED TO TR EAT THE SAME AS RENTAL INCOME. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD SUBMITT ED THAT THE ASSESSEE WAS RUNNING A CONVALESCENT POINT AT THE SAID PREMISES B Y PROVIDING NURSING AND TREATMENT TO PATIENTS WHO HAD OPERATIONS AT VERY NE ARBY HOSPITALS. IT WAS THE FURTHER SUBMISSION THAT THE CLAIM OF THE ASSESSEE H AD NOT BEEN ACCEPTED AND THE ASSESSING OFFICER HAD TREATED THE RENTAL INCOME REC EIVED FROM THE CONVALESCENT POINT AS INCOME FROM HOUSE PROPERTY. IT WAS THE FURTHER SUBMISSION THAT ON APPEAL THE LEARNED CIT(A) HAD ACCEPTED THE CLAIM OF THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE ASSESSEE WAS RECEIVING RENTA L INCOME, THE SAME WAS LIABLE TO BE TREATED AS INCOME FROM HOUSE PROPERTY AND T HE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE REVERSED. 4. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE SAID CONVALESCENT POINT WAS DULY AUTHORIZED BY THE MEDIC AL COUNCIL. IT WAS THE FURTHER SUBMISSION THAT THE MULTI STOREYED BUILDING WHICH W AS OWNED BY THE ASSESSEE ON THE SECOND FLOOR HAD THE CONVALESCENT POINT. THE T HIRD FLOOR WAS RENTED OUT UNDER THE NAME, ANGSON CENTRE, AND THE INCOME FROM THE SAME HAD BEEN OFFERED UNDER I.T.A. NO.770/MDS/2009 3 THE HEAD INCOME FROM HOUSE PROPERTY. IT WAS THE SUBMISSION THAT IN THE CONVALESCENT POINT WHICH WAS RUN AT THE SECOND FLOO R THE ASSESSEE WAS MAINTAINING A CLINIC AND PROVIDING PATIENTS MEDICAL FACILITIES. IT WAS THE SUBMISSION THAT THE ASSESSEE AND HIS DAUGHTER WERE DOCTORS AND THE ASSE SSEE WAS A SURGEON WHO WAS HAVING A PROFESSIONAL PRACTICE FOR THE PAST 38 YEAR S AND THE ASSESSEES DAUGHTER IS A DOCTOR WHO IS AN INTENSIVIST. THE CONVALESCENT P OINT IS REGISTERED UNDER THE TAMILNADU HOSPITALS AND NURSING HOME BOARD WHICH IS AN ORGAN OF INDIAN MEDICAL ASSOCIATION AFTER DUE RECOGNITION. IT WAS THE SUBM ISSION THAT AS THE ASSESSEE WAS A SURGEON AND HIS DAUGHTER WAS AN INTENSIVIST, THEY H AD THE NECESSARY SKILL FOR PROVIDING MEDICAL RELIEF TO THE PATIENTS. THEY HAD THE NECESSARY NURSING STAFF AND AS THE SECOND FLOOR OF THE BUILDING WAS USED FOR PR OFESSIONAL EXPLOITATION, THE INCOME THERE-FROM WAS OFFERED AS PROFESSIONAL INCOM E. IT WAS SUBMITTED THAT THE PATIENTS WERE CHARGED ROOM RENTS ON A DAILY BASIS A S ALSO THE PROFESSIONAL CHARGES. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) IS LIABLE TO BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LEARNED CIT(A) CLEARLY SHOWS THAT THE LEARNED CIT(A ) HAS CATEGORICALLY GIVEN A FINDING THAT THE ASSESSEE AND HIS DAUGHTER ARE DOCT ORS WHO ARE RUNNING THE CONVALESCENT POINT. ADMITTEDLY, THE CONVALESCENT P OINT IS REGISTERED WITH THE TAMILNADU HOSPITALS AND NURSING HOME BOARD. THIS R EGISTRATION WOULD NOT BE POSSIBLE IF THE PROPERTY WAS BEING USED AS A PAYING GUEST OR A HOTEL FACILITY. THE TAMILNADU HOSPITALS AND NURSING HOME BOARD WOULD GI VE THE REGISTRATION AND I.T.A. NO.770/MDS/2009 4 RECOGNITION ONLY IF THE CONVALESCENT POINT HAS THE NECESSARY STAFF AND EQUIPMENT NECESSARY FOR PROVIDING THE CONVALESCENT FACILITIES . IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE INCOME FROM THE CONVALESCENT POIN T IS LIABLE TO BE TREATED ONLY AS THE PROFESSIONAL INCOME OF THE ASSESSEE AND NOT UND ER THE HEAD INCOME FROM HOUSE PROPERTY. IN THE CIRCUMSTANCES, THE APPEAL OF THE REVENUE STANDS DISMISSED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 31/01/2 012. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 31 ST JANUARY, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE