Anil Hospital Genetic Clinic v. Commissioner Of Income Tax Jai

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 164 / 2002 Anil Hospital Genetic Clinic Versus Commissioner Of Income Tax Jai ----Appellant ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sanjay Jhanwar For Respondent(s) : Mr. R.B. Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHURJudgment 10/01/2017 1. By way of this appeal, the assessee has assailed thejudgment and order of the Tribunal whereby Tribunal has reversedthe finding of the CIT(A) whereby CIT(A) has allowed the appealpreferred by the assessee. 2.While admitting the matter, this court has not framedsubstantial question of law, therefore, we are framing twoquestions for consideration questions No.1 & 4 which reads asunder:- “1. Whether on the facts and circumstances of thecase, the ld. ITAT was within its jurisdiction u/s245(1) of the Act to deal with and decide an issue,which was not before it by way of either grounds ofappeal or arguments of any of the parties?case, the ld. ITAT was within its jurisdiction u/s245(1) of the Act to deal with and decide an issue,which was not before it by way of either grounds ofappeal or arguments of any of the parties? 4. Whether on the facts and circumstances of thecase, the ld. ITAT was correct in denying the benefitof investment allowance u/s 32A of the Act in respectof “Laprocators and & Steam Sterilizer” by holdingcase, the ld. ITAT was correct in denying the benefitof investment allowance u/s 32A of the Act in respectof “Laprocators and & Steam Sterilizer” by holding that the appellant do not satisfy the conditions laiddown u/s 32A of the Act?” 3.The facts of the case are that The assessee firm carries onthe profession of detection of pathogenic funggi in tissues, geneticassessments requiring flourescence microscopy, detection ofoutsperm antibodies and examination of issue defects. 4.A search was conducted at the business premises of theassessess and at the residence of its partners on 13/9/88. Besides cash and jewellery the books of accounts for the period upto thedate of search were seized. During the course of search statementof Dr. Amarchand who is head of the family was recorded. In hisstatement Dr. Amarchand admitted that receipts to the extent of25% are not recorded in the books of the assessee firm.Subsequently a joint petition dated 29/11/88 was filed with theDy. Director of Investigation wherein the unrecorded receipts forthe assessment year under consideration were quantified at Rs.1,35,485/-. However in the computation of income the assesseehas shown the unrecorded receipts at Rs. 1,37,196/-. It isexplained that the slight variation is on account of actualcalculations. 5.The assessee has declared gross receipts from Genetic Clinicat Rs. 5,87,037/-. A scrutiny of the details furnished revealed thatthe average receipt for the post search period has declinedconsiderably in comparison to the receipts for the period beforesearch. The details in this regard are as under:- PeriodAmount as Amount TotalAverageper bookssurrenderedFrom 1.7.1987 to 4,11,587/- 1,37,196/- 5,48,783/- 37,847/-12.9.1988From 13.9.1988 to 1,75,450/- Nil175,450/- 26,992/-31.3.1989(6 months) 6.While the average monthly receipts for the period beforesearch amounted to Rs. 37,847/- the average monthly receipts forthe post search period has declined to Rs. 26,992/. The assesseewas asked to explain the reason for decline in receipts for thepost search period. 7.The CIT(A) while considering the case of the assessee hasgiven cogent reasons while considering Section 32A(2)(b)(ii) ofthe Income Tax Act, 1961 and held as under:- Section 32A(2)(b)(ii) PeriodAmount as Amount TotalAverageper bookssurrenderedFrom 1.7.1987 to 4,11,587/- 1,37,196/- 5,48,783/- 37,847/-12.9.1988From 13.9.1988 to 1,75,450/- Nil175,450/- 26,992/-31.3.1989(6 months) 6.While the average monthly receipts for the period beforesearch amounted to Rs. 37,847/- the average monthly receipts forthe post search period has declined to Rs. 26,992/. The assesseewas asked to explain the reason for decline in receipts for thepost search period. 7.The CIT(A) while considering the case of the assessee hasgiven cogent reasons while considering Section 32A(2)(b)(ii) ofthe Income Tax Act, 1961 and held as under:- Section 32A(2)(b)(ii) “in any other industrial undertaking for the purpose ofbusiness of construction, manufacture or productionof any article or thing, not being an article or thingspecified in the list in the Eleventh Scheduled.” 8.However, the tribunal while considering the same has notfollowed the decision and has reversed the findings of theCIT(A). 9.Counsel for the appellant Mr. Jhanwar has relied uponthe decision in Commissioner of Income Tax vs. TrinityHospital reported in (1997) 225 ITR 0178. Subsequently, thesame judgment was also followed by the Hon’ble High Courtor other High Court one of them being Andhra Pradesh HighCourt in (2000) 243 ITR 0110 Commissioner of Income Tax vs. Dr. S. Surender Reddy. 10.Counsel for the respondent Mr. Mathur has contendedthat in view of the facts and circumstances, the view taken bythe tribunal is just and proper. No interference is called for. 11.We have heard counsel for the parties. 12.Taking into consideration the fact that view taken by thiscourt in Trinity Hospital (supra) has been rightly followed bythe CIT(A), in our view, the tribunal has committed seriouserror in reversing the finding of the CIT(A). 13.In that view of the matter, both the issues are requiredto be answered in favour of the assessee and against theDepartment. 14.The appeal stands allowed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Brijesh 6.