Dr. Suryanarayan Rameshwar Jaju, Malegaon V. Income-tax Officer,

ITA 793/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0571 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Depreciation

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE ! ' , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM ITA NO.793/PN/2014 ASSESSMENT YEAR : 2010-11 DR. SURYANARAYAN RAMESHWAR JAJU, JAJU NURSING HOME, SATANA ROAD, MALEGAON 423 203. PAN: ACWPJ0148A .. APPELLANT VS. INCOME TAX OFFICER, WARD 3(4), MALEGAON. ... RESPONDENT / APPELLANT BY : NONE / DEPARTMENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 28.12.2015 / DATE OF PRONOUNCEMENT: 30.12.2015 % / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.02.2014 OF THE CIT(A)-I, NASHIK RELATING TO ASSE SSMENT YEAR 2010-11. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE NAME OF ASSESSEE WAS CALLED FOR HEARING. THERE WAS NO APPLICATION SEEKI NG ADJOURNMENT OF THE HEARING. THEREFORE, THE APPEAL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATI VE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A MEDICAL PRACTITIONER AND IS ALSO HAVING INCOME FROM SHARE TRADING AND TRADIN G IN COMMODITIES. HE FILED HIS RETURN OF INCOME ON 30.09.2010 DECLARING TOTAL INCO ME OF RS.5,15,242/-. DURING THE 2 ITA NO.793/PN/2014 COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTED THAT THE ASSESSEE HAS SHOWN PROFESSIONAL RECEIPTS AT RS.28,67,266/- A ND INTEREST AT RS.964/-. AFTER DEBITING ALL THE EXPENSES THE NET SURPLUS HAS BEEN SHOWN AT RS.5,31,892/-. HE NOTED THAT THE OPD REGISTER MAINTAINED BY THE ASSES SEE REVEALED ONLY THE NAMES OF THE PERSONS ATTENDED. NO OTHER DETAILS SUCH AS THEIR COMPLETE POSTAL ADDRESSES, THE RECEIPT AND ITS NUMBER ISSUED TO THE PATIENT AR E AVAILABLE. AS SUCH THERE IS NO CHECK ON THE OPD RECEIPTS OF RS.8,09,460/-. ON BEI NG CONFRONTED BY THE ASSESSING OFFICER, IT WAS SUBMITTED THAT THE OPD REGISTER CON TAINED NAME OF THE PATIENT AND FEES RECEIVED FROM SUCH PATIENT. THE RECEIPTS ARE ISSUED ONLY FOR THE PATIENT WHO DEMANDS. IN VIEW OF THE ABOVE, THE ASSESSING OFFIC ER WAS OF THE OPINION THAT THE OPD REGISTER PREPARED BY THE ASSESSEE DOES NOT CONT AIN THE CORRECT RECEIPTS. HE, THEREFORE, ENHANCED THE OPD RECEIPTS BY 10% OF THE GROSS RECEIPTS AND MADE AN ADDITION OF RS.80,946/-. 4. SIMILARLY, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF IPD AT RS.17,34,460/-. FROM THE VARIOU S BILLS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER NOTED THAT THE BILLS ARE CHAR GED WITHOUT ANY DETAILS OF ADMISSION PERIOD, MEDICINE PROVIDED, CHARGES LIKE N URSING, ROOM CHARGES, ETC.. ONLY THE TOTAL AMOUNTS ARE MENTIONED. THEREFORE, H E WAS OF THE OPINION THAT THE PRACTICE FOLLOWED BY THE ASSESSEE SHOWS THAT BILLS ARE PREPARED AS PER ADJUSTMENT OF RECEIPTS TO BE DISCLOSED. FURTHER, EACH AND EVE RY BILL AMOUNT IS REDUCED BY RS.100/- TO RS.200/- I.E. THE BILL AMOUNT IS ON THE HIGHER SIDE AND THE ACTUAL RECEIPT IS ON LOWER SIDE. IN VIEW OF THE ABOVE, THE ASSESS ING OFFICER CONCLUDED THAT THE ASSESSEE HAS SUPPRESSED THE IPD FEES. HE, THEREFOR E, ENHANCED THE IPD RECEIPTS SHOWN AT RS.17,34,460/- BY 10% AND MADE ADDITION OF RS.1,73,446/-. 5. THE ASSESSING OFFICER FURTHER MADE ADDITION OF R S.46,055/- OUT OF ELECTRICITY CHARGES BEING RELATABLE TO THE RESIDENCE OF THE ASS ESSEE AS PROBABLE PERSONAL 3 ITA NO.793/PN/2014 EXPENDITURE. THE ASSESSING OFFICER ALSO DISALLOWED AN AMOUNT OF RS.16,998/- OUT OF VARIOUS EXPENSES SUCH AS CAR EXPENSES, CAR DEPRE CIATION, CAR INSURANCE, INTEREST ON CAR LOAN AND TELEPHONE AND MOBILE EXPENSES FOR N ON-BUSINESS PURPOSES. SIMILARLY, THE ASSESSING OFFICER MADE ADDITION OF R S.21,456/- BEING DIFFERENCE IN THE BOOKS, WHICH WAS ACCEPTED BY THE ASSESSEE FOR ADDIT ION. IN SUM AND SUBSTANCE, THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME O F RS.8,54,143/- AS AGAINST THE RETURNED INCOME OF RS.5,15,242/-. 6. IN APPEAL, THE LD. CIT(A) RESTRICTED THE ADDITIO N TO 5% OF THE GROSS RECEIPTS AND SUSTAINED THE ADDITION OF RS.40,473/- OUT OF AD DITION OF RS.80,946/- ON ACCOUNT OF OPD RECEIPTS BY OBSERVING AS UNDER :- 5.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND ORAL AS WELL AS WRITTEN SUBMISSIONS ON BE HALF OF THE APPELLANT. THE A.O. HAS MADE THE IMPUGNED ADDITION FOR SOME OF THE DEFECTS IN THE BOOKS OF ACCOUNTS AND OTHER RECORDS MAINTAINED BY THE APPELL ANT. HOWEVER, NON- MAINTENANCE OF PROPER RECORD BY THE APPELLANT IS NO T PURPOSEFUL. THE ADVERSE INFERENCE DRAWN BY THE A.O. ON THE BASIS OF SOME DE FECTS IN MAINTENANCE OF PROPER RECORD IS NOT SUPPORTED WITH ANY DIRECT OR I NDIRECT EVIDENCE, IT IS AN UNDISPUTED FACT THAT THE APPELLANT IS ENGAGED IN TH E PROFESSION AT THE PLACE WHERE MAINLY LOWER OR MIDDLE INCOME PEOPLE ARE RESI DING. IT IS ALSO AN ACCEPTED FACT THAT THE APPELLANT WAS MAINTAINING SUCH RECORD FROM YEAR TO YEAR UNDER THE BONA FIDE BELIEF THAT THE SAME IS IN COMPLIANCE OF REQUIREMENTS. HOWEVER, THERE IS NO EVIDENCE THAT THE APPELLANT HAS CONCEALED ANY RECEIPT OR INCOME. IN ADDITION TO ABOVE, THERE IS ALSO NO FINDING ON ANY UNDISCLOSED ASSET OR INVESTMENT OR EXPENDITURE TO JUSTIFY THE ADDITION M ADE BY THE A.O. THE BOOKS OF ACCOUNTS ARE ALSO NOT SPECIFICALLY REJECTED BY THE A.O. THE DEFECTS POINTED OUT BY THE A.O. ARE NOT SUFFICIENT TO JUSTIFY THE IMPUG NED ADDITION IN THE HANDS OF THE APPELLANT. HOWEVER, AT THE SAME TIME IT IS ALSO AN ACCEPTED FACT THAT THE RECORD IS NOT PROPERLY MAINTAINED BY THE APPELLANT. THEREFORE CONSIDERING THE ENTIRE FACT AND TO MEET THE END OF JUSTICE, I DIREC T A.O. TO RESTRICT THE IMPUGNED DISALLOWANCE AT 5% OF GROSS RECEIPTS. THEREFORE THE IMPUGNED DISALLOWANCE SHALL BE RESTRICTED TO RS.40,473/-. THIS GROUND OF APPEAL THEREFORE IS PARTLY ALLOWED. 7. SIMILARLY, IN RESPECT OF ADDITION OF RS.1,73,446 /- ON ACCOUNT OF SUPPRESSION OF RECEIPTS IN IPD, THE LD. CIT(A) RESTRICTED THE SAME TO RS.86,723/- BY OBSERVING AS UNDER :- 4 ITA NO.793/PN/2014 6.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND ORAL AS WELL AS WRITTEN SUBMISSIONS ON BE HALF OF THE APPELLANT. THE A.O. HAS MADE THE IMPUGNED ADDITION FOR SOME OF THE DEFECTS IN THE BOOKS OF ACCOUNTS AND OTHER RECORD MAINTAINED BY THE APPELLA NT. HOWEVER, NON- MAINTENANCE OF PROPER RECORD BY THE APPELLANT IS NO T PURPOSEFUL. THE ADVERSE INFERENCE DRAWN BY THE A.O. ON THE BASIS OF SOME DE FECTS IN MAINTENANCE OF PROPER RECORD IS NOT SUPPORTED WITH ANY DIRECT OR I NDIRECT EVIDENCE SO AS TO JUSTIFY THE ADDITION. IT IS AN UNDISPUTED FACT THAT THE APPELLANT IS ENGAGED IN THE PROFESSION AT THE PLACE WHERE MAINLY LOWER OR MIDDL E INCOME PEOPLE ARE RESIDING. IT IS ALSO AN ACCEPTED FACT THAT THE APPE LLANT WAS MAINTAINING SUCH RECORD FROM YEAR TO YEAR UNDER THE BONA FIDE BELIEF THAT THE SAME IS IN COMPLIANCE OF REQUIREMENTS. HOWEVER, THERE IS NO EV IDENCE THAT THE APPELLANT HAS CONCEALED ANY RECEIPT OR INCOME. IN ADDITION TO ABOVE, THERE IS ALSO NO FINDING ON ANY UNDISCLOSED ASSET OR INVESTMENT OR E XPENDITURE TO JUSTIFY THE ADDITION MADE BY THE AO. THE BOOKS OF ACCOUNTS ARE ALSO NOT SPECIFICALLY REJECTED BY THE A.O. THE DEFECTS POINTED OUT BY THE A.O. AR E NOT SUFFICIENT TO JUSTIFY THE IMPUGNED ADDITION IN THE HANDS OF THE APPELLANT. T HE A.O. HAS ALSO TO FAILED TO APPRECIATE THE PREVAILING SYSTEM OF ROUNDING OF THE BILLS AND ALSO SMALL DISCOUNT IN MOFUSSIL AREA. THERE IS NO EVIDENCE THAT THE APPEL LANT HAS CHARGED OVER AND ABOVE THE ACTUAL BILL AMOUNT. HOWEVER, AT THE SAME TIME IT IS ALSO ACCEPTED FACT THAT THE RECORD IS NOT PROPERLY MAINTAINED BY THE APPELLANT. THEREFORE, CONSIDERING THE ENTIRE FACT AND TO MEET THE END OF JUSTICE, I DIREC T A.O. TO RESTRICT THE IMPUGNED DISALLOWANCE AT 5% OF GROSS RECEIPTS. THEREFORE, T HE IMPUGNED DISALLOWANCE SHALL BE RESTRICTED TO RS.86,723/-. THIS GROUND OF APPEA L THEREFORE IS PARTLY ALLOWED. 8. SO FAR AS THE DISALLOWANCE OF RS.46,055/- ON ACC OUNT OF ELECTRICITY EXPENSES IS CONCERNED, THE LD. CIT(A) RESTRICTED THE SAME TO RS.23,027/- BY OBSERVING AS UNDER :- 7.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND ORAL AS WELL AS WRITTEN SUBMISSIONS ON BEHALF O F THE APPELLANT. THE A.O. HAS MADE THE IMPUGNED DISALLOWANCE FOR THE SOLE REASON THAT PART OF THE ELECTRIC METER IS USED BY THE APPELLANT FOR HIS PERSONAL PURPOSE. THEREFORE, THE A.O. ASSUMED THE QUANTUM THEREOF AT 50% OF THE TOTAL ELECTRICAL BILL OF THE SAID ELECTRIC METER. IN MY CONSIDERED VIEW THE DISALLOWANCE MADE BY THE A.O. I S ON A HIGHER SIDE AND THEREFORE THE SAME IS RESTRICTED TO 25% OF THE ELEC TRIC BILLS OF THE SAID SECOND ELECTRIC METER AS AGAINST DISALLOWED BY THE A.O. AT 50%. THEREFORE, THE IMPUGNED DISALLOWANCE SHALL BE RESTRICTED TO RS.23,027/-. T HIS GROUND OF APPEAL THEREFORE IS PARTLY ALLOWED. 9. SO FAR AS THE VARIOUS OTHER EXPENSES ARE CONCERN ED, THE LD. CIT(A) RESTRICTED THE SAME TO 10% AS AGAINST 20% DISALLOWE D BY THE ASSESSING OFFICER AND RESTRICTED TO RS.8,499/- BY OBSERVING AS UNDER :- 8.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, THE ASSESSMENT ORDER AND ORAL AS WELL AS WRITTEN SUBMISSIONS ON BEHALF OF TH E APPELLANT. THE BOOKS OF 5 ITA NO.793/PN/2014 ACCOUNTS OF THE APPELLANT ARE AUDITED. THE AUDITOR HAS ALSO NOT POINTED OUT ANY ELEMENT OF PERSONAL EXPENSES IN TAX AUDIT REPORT. THE A.O. HAS ALSO NOT BROUGHT ON RECORD ANY INSTANCE OF PERSONAL EXPENSES DEBITED TO PROFIT AND LOSS ACCOUNT. THE REASONABILITY OF THE EXPENSES IS ALSO NOT IN DISPUT ED. THEREFORE, THE A.O. WAS NOT JUSTIFIED IN MAKING IMPUGNED DISALLOWANCE AT THE RA TE OF 20%. HOWEVER, CONSIDERING THE ENTIRE FACT SOME PERSONAL USE OF VE HICLE AND TELEPHONE CANNOT BE RULED OUT. HENCE IN ORDER TO MEET THE END OF JUSTI CE THE IMPUGNED DISALLOWANCE IS RESTRICTED TO 10% AS AGAINST 20% CONSIDERED BY THE A.O. THEREFORE, THE IMPUGNED DISALLOWANCE IS RESTRICTED TO RS.8,499/-. THIS GRO UND OF APPEAL THEREFORE IS PARTLY ALLOWED. 10. AGGRIEVED BY SUCH ORDER OF THE CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK IS N OT JUSTIFIED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.40,473/- ON ACCOUNT OF OPD RECEIPTS. 2. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK IS N OT JUSTIFIED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.86,723/- ON ACCOUNT OF SUPPRESSION OF RECEIPTS IN IPD. 3. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK IS N OT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF ELECTRICITY EXPENDITURE TO THE EXTE NT OF RS.23,027/- ON ACCOUNT OF NON-BUSINESS PURPOSE. 4. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK IS J USTIFIED IN CONFIRMING THE DISALLOWANCE OF CAR EXPENSES, CAR DEPRECIATION, CAR INSURANCE, INTEREST ON CAR LOAN AND TELEPHONE AND MOBILE EXPENSES TO THE EXTEN T OF RS.8,499/-. 5. THE APPELLANT CRAVES FOR ADDITION TO, DELETION, ALTERATION, MODIFICATION, CHANGE ANY OF THE ABOVE GROUNDS OF APPEAL. 11. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AVAILABLE O N RECORD. THE LD. CIT(A) HAS GIVEN VALID REASONS WHILE PARTLY SUSTAINING THE VAR IOUS ADDITIONS MADE BY THE ASSESSING OFFICER. THE RELEVANT PORTION OF THE ORD ER OF THE CIT(A) WHILE GIVING PART RELIEF TO THE ASSESSEE HAS BEEN REPRODUCED IN THE P RECEDING PARAGRAPHS OF THIS ORDER. THE REASONED ORDER PASSED BY THE CIT(A) ON THE ISSUES CONCERNED DOES NOT CALL FOR ANY INTERFERENCE FROM OUR SIDE. THERE IS NO OTHER MATERIAL AVAILABLE ON RECORD TO TAKE A CONTRARY VIEW THAN THE VIEW ALREAD Y TAKEN BY THE LD. CIT(A) ON 6 ITA NO.793/PN/2014 THESE ISSUES. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF DECEMBER, 2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) # / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH DECEMBER, 2015. %&'#()!*!+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE