Dr. Keya Sen, Kolkata V. ACIT, Circle - 55, Kolkata, Kolkata

ITA 95/KOL/2012

• Counselvise Citation: 9523514 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S BHATTACHARY A
• Keywords: Business income; Depreciation

Judgement Text

I.T.A. NO.: 95/KOL./2012 ASSESSMENT YEAR : 2007-08 PAGE 1 TO 4 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ABRAHAM P. GEORGE (ACCOUNTA NT MEMBER) I.T.A. NO.: 95/KOL./ 2012 ASSESSMENT YEAR : 2007-2008 DR. KEYA SEN,...................................... .........APPELLANT 385, JODHPUR PARK, KOLKATA-700 068 [PAN : AJWPS 2011 E] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,,............. ....RESPONDENT CIRCLE-55, KOLKATA, 54/1, RAFI AHMED KIDWAI ROAD, KOLKATA-700 016 APPEARANCES BY: SHRI S. BHATTACHARYA, A.R., FOR THE ASSESSEE SHRI SABOORUL HASAN USMANI, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : DECEMBER 19, 2013 DATE OF PRONOUNCING THE ORDER : DECEMBER 30, 2013 O R D E R PER ABRAHAM P. GEORGE : 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST AN ORDER DATED 15 TH NOVEMBER, 2011 OF COMMISSIONER OF INCOME TAX (APPEA LS)-XXXVI, KOLKATA FOR ASSESSMENT YEAR 2007-08. 2. GRIEVANCE OF ASSESSEE IS THAT A CLAIM OF DEPRECI ATION OF RS.1,94,771/- ON A NURSING HOME BUILDING AND PLANT & MACHINERY INSTALLED THEREIN WERE NOT ALLOWED. 3. FACTS APROPOS ARE THAT ASSESSEE, A MEDICAL PRACT ITIONER, HAD FILED HER RETURN DECLARING INCOME OF RS.32,55,072/-. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSI NG OFFICER THAT I.T.A. NO.: 95/KOL./2012 ASSESSMENT YEAR : 2007-08 PAGE 1 TO 4 2 ASSESSEE HAD CLAIMED DEPRECIATION OF RS.1,97,264/- ON HIS CHAMBER AND NURSING HOME BUILDING IN ADDITION TO DEPRECIATION O N PLANT AND MACHINERY RS.80,167/-. ASSESSING OFFICER WAS OF THE OPINION THAT THE CLAIM FOR DEPRECIATION COULD NOT BE ALLOWED SINCE N URSING HOME BUILDING WAS NOT UTILIZED BY ASSESSEE FOR HER PROFESSION. AS PER THE ASSESSING OFFICER, THE NURSING HOME WAS RUN BY ASSESSEES HUS BAND DR. ABHIJIT SEN UNDER THE NAME AND STYLE DRISTI PRADIP EYE MICRO & PHACO SURGERY DAY CARE CENTRE. LATTER WAS SHOWING INCOME FROM THE SA ID NURSING HOME AS A PROPRIETORSHIP BUSINESS. ITS CAPITAL WAS ALSO FUND ED BY DR. ABHIJIT SEN. HENCE ACCORDING TO THE ASSESSING OFFICER CLAIM OF D EPRECIATION ON THE NURSING HOME FLAT/BUILDING COULD NOT BE ALLOWED. A DISALLOWANCE OF RS.2,77,431/- WAS MADE. 4. IN HER APPEAL BEFORE THE LD. CIT(APPEALS), ARGUM ENT OF THE ASSESSEE WAS THAT SHE WAS RECEIVING FROM DRISTI PRADIP EYE M ICRO & PHACO SURGERY DAY CARE CENTRE, 20% OF ITS TOTAL COLLECTION. SUCH RECEIPT WAS SHOWN IN HER PROFIT & LOSS A/C. ASSESSEE ALSO MENTIONED THAT SHE HAD FIRST RIGHT OF REFUSAL TO ASSIST IN THE SURGERIES CONDUCTED BY DR. ABHIJIT SEN IN THE NURSING HOME. AS PER THE ASSESSEE, THE DEPRECIATION CLAIMED ON THE NURSING HOME FLAT WAS RS.1,79,251/- ONLY. THE DEPRE CIATION CLAIMED ON NURSING HOME ELEVATOR LIFT AND AIR CONDITIONER WAS RS.15,520/- ONLY. THUS THE TOTAL DEPRECIATION CLAIM RELATING TO THE N URSING HOME CAME TO RS.1,94,771/- ONLY. ASSESSEE POINTED OUT THAT TOTAL DEPRECIATION CLAIMED HAD TWO COMPONENTS, WHICH WAS DEPRECIATION CLAIMED BY THE ASSESSEE FOR HER CHAMBER IN A SEPARATE BUILDING AND DEPRECIATION CLAIMED FOR THE NURSING HOME FROM WHICH HER HUSBAND WAS RUNNING DRI STI PRADIP EYE MICRO & PHACO SURGERY DAY CARE CENTRE. 5. LD. CIT(APPEALS) AFTER CONSIDERING THE SUBMISSIO N OF ASSESSEE WAS OF THE OPINION THAT THE NURSING HOME BUILDING AND P LANT & MACHINERY THEREIN BELONGED ENTIRELY TO HER HUSBAND. ACCORDING TO HIM, THE SAID BUSINESS WAS THE PROPRIETARY CONCERN OF HER HUSBAND THOUGH ASSESSEE I.T.A. NO.: 95/KOL./2012 ASSESSMENT YEAR : 2007-08 PAGE 1 TO 4 3 WAS HAVING 50% OWNERSHIP THEREIN. IN HIS OPINION, I NCOME OF THE NURSING HOME WAS NOT IN THE NATURE OF BUSINESS RECEIPT. HE, THEREFORE, HELD THAT IN SO FAR AS DEPRECIATION ON PLANT & MACHINERY AND BUI LDING PERTAINING TO DRISTI PRADIP EYE MICRO & PHACO SURGERY DAY CARE CE NTRE, ASSESSEES CLAIM COULD NOT BE ALLOWED. HE, THEREFORE, CONFIRME D DISALLOWANCE TO THE EXTENT OF RS.1,94,771/-. 6. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE DIS ALLOWANCE SUBMITTED THAT THE ASSESSEE WAS SHOWING 20% OF THE INCOME FRO M THE NURSING HOME, NAMELY DRISTI PRADIP EYE MICRO & PHACO SURGERY DAY CARE CENTRE IN ITS PROFIT & LOSS A/C. RELYING ON PAPER BOOK PAGE 12, L D. AR POINTED OUT THAT 20% SHARE OF TOTAL COLLECTION CHARGES RS.6,06,160/- WAS SHOWN AS INCOME FROM THE NURSING HOME. NET PROFIT FROM THE SAID PRO FIT & LOSS A/C. COMING TO RS.27,65,732/- WAS CONSIDERED UNDER THE H EAD INCOME FROM BUSINESS OR PROFESSION. THE TOTAL INCOME FROM THE PROFESSION INCLUDING SUCH AMOUNT AFTER MAKING DISALLOWANCES AND ALLOWANC ES AS PRESCRIBED UNDER THE ACT CAME TO RS.31,39,014/-. THIS WAS THE SAME AMOUNT CONSIDERED BY THE ASSESSING OFFICER IN HIS ASSESSME NT ALSO. ACCORDING TO HIM, THE RECEIPT FROM DRISTI PRADIP EYE MICRO & PHA CO SURGERY DAY CARE CENTRE WAS CONSIDERED AS BUSINESS RECEIPT AND, THER EFORE, DEPRECIATION OF THE BUILDING FROM WHERE SUCH BUSINESS WAS RUN HAD T O BE ALLOWED AT ASSESSEES END. 7. PER CONTRA, LD. DR SUPPORTED THE ORDER OF AUTHOR ITIES BELOW. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT ASSES SEE HAD AN AGREEMENT WITH HER HUSBAND ENTERED ON 30.06.2000, COPY OF WHI CH HAS BEEN PLACED AT PAGES 19-21 OF THE PAPER BOOK, WHEREIN IT IS CLE ARLY STATED THAT ASSESSEE WOULD BE ENTITLED TO 20% OF THE DAILY COLL ECTION FROM THE NURSING HOME. THE SAID AGREEMENT CLEARLY SHOWED THA T NURSING HOME WAS RUN BY BOTH THE PARTIES, THOUGH IT IS MENTIONED THEREIN THAT THE I.T.A. NO.: 95/KOL./2012 ASSESSMENT YEAR : 2007-08 PAGE 1 TO 4 4 BUSINESS WOULD ABSOLUTELY BELONG TO ASSESSEES HUSB AND DR. ABHIJIT SEN. THE NURSING HOME BUILDING WERE JOINTLY OWNED BY THE TWO PERSONS AND ANY ADDITION AND EXTENSION WAS ALSO TO BE DONE JOIN TLY. RECEIPT OF 20% FROM RUNNING OF THE NURSING HOME WAS SHOWN BY THE A SSESSEE AS A PART OF HER BUSINESS INCOME. THOUGH THE LD. CIT(APPEALS) HA S STATED THAT IT WAS NOT IN THE NATURE OF BUSINESS RECEIPT, HE HAS NOT S PECIFICALLY MENTIONED UNDER WHAT HEAD IT WOULD FALL. EVEN IF IT WAS CONSI DERED AS INCOME FROM OTHER SOURCES, DEPRECIATION IS AN ALLOWABLE CLAIM. THERE IS NO DISPUTE THAT THE NURSING HOME AS WELL AS PLANT & MACHINERY WERE BEING USED FOR THE PURPOSE OF BUSINESS. IN THIS SITUATION, WE ARE OF T HE OPINION THAT THE CLAIM OF DEPRECIATION COULD NOT HAVE BEEN DISALLOWED. SUC H DISALLOWANCE STANDS DELETED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF DECEMBER, 2013. SD/- SD/- MAHAVIR SINGH ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 30 TH DAY OF DECEMBER, 2013 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.