Commissioner Of Income Tax, Jaipur-Iii, Jaipur v. Per Hon’ble Jhaveri J.07/02/2017

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 106 / 2010 Commissioner of Income Tax, Jaipur-III, Jaipur. ----Appellant Versus Smt. Champa Devi Soni, w/o Dr. S.L. Soni Prop. M/s. Navjeevan Hospital Research Center, Sikar. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Daksh Preek on behalf of Mr. Sameer Jain For Respondent(s) : Mr. Naresh Gupta _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHURJudgment Per Hon’ble Jhaveri J.07/02/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department and confirmed the orderof the CIT(A). 2.This Court while admitting the appeal on 16.03.2012 has framed the following substantial question of law: “Whether setting aside of income to thetune of Rs.74,44,857/- is justified when itwas based upon tangible evidencesrecovered during the course of survey u/s133A and application of Section 145(3)upheld by the Tribunal and further noconvincing logic, reason or rational providedfor deleting the same?” 3.The brief facts of this case are that the return of total incomein this case was filed on 07.03.2001 declaring total income ofRs.1,54,070/-. This return was processed u/s 143(1)(a) on28.03.2002. Since survey u/s 133A of the Income Tax Act, 1961was conducted in this case on 25.10.1999, notice u/s 143(2) wasissued on 15.05.2001 for scrutiny assessment, fixing the case on24.05.2001, which was served upon the assessee on 16.05.2001.Thereafter, the case was transferred to this office and therefore afresh notice u/s 143(2) was issued to the assessee on 11.09.2002,fixing the case on 08.10.2002, which served on the assessee on27.09.2002 along with questionnaire. 3.1 In response to the above notice, case was adjourned to20.11.2002, the assessee was asked to furnish details regardingpurchase of machines (ultra sound) and other details as perquestionnaire dated 04.09.2002, the assessee furnished the copyof bills and other items. Further a questionnaire was issued to theassessee on 02.12.2002 to furnish the details of the caseregarding use of oxygen and Niturs and Carbondioxide. 3.2 The A/R of the assessee filed the reply dated 16.12.2002 thatI am enclosing the list of O.T. expenses, where in, the nature ofexpenditure is fully stated. But no difference of the gases havebeen shown by the assessee and it is clear that the assessee isnot maintaining the records of the Gas on whether the gas isoxygen or nitrus or carbondioxide so as to ascertain the cases ofoperation. 3.3Further, the assessee is not maintaining proper books ofaccount because on going through the x-ray and Lab charges, the accounts are not fully vouched. The receipt are Rs.26,810/- for alltesting where as the assessee has purchased X Ray film on32,180/- and the cost of the X Ray film is between Rs. 25 to Rs.35as such there should be closing balance of raw material oranesthetic agents is also not purchased. No other material oranesthetic agents is also not purchased. No closing balance hasbeen shown in the balance sheet. There are also under billing inthe reciept, medicine beg charges, operation charges and testingcharges. 4.Counsel for the appellant has taken us to the order of theAssessing Officer as well as the CIT(A) and contended that theTribunal has seriously committed an error in reversing the findingand view taken by the Assessing Officer. Counsel for the appellanthas taken us to the order of the Assessing Officer observing asunder: 4.Counsel for the appellant has taken us to the order of theAssessing Officer as well as the CIT(A) and contended that theTribunal has seriously committed an error in reversing the findingand view taken by the Assessing Officer. Counsel for the appellanthas taken us to the order of the Assessing Officer observing asunder: “4. in connection with (IV) point of thesurvey report that the assessee is chargingheavy fees from indoor patient register foroperation and recording very less accountin the receipt of operation charges. In thisregard, the Inspector of this circle wasdeputed to make an inquiries from thepatients whom the assessee got operatedfrom various doctors. On inquiries, fromoperated patient’s relatives, who incurredthe expenditures of operation and medicineit has been found that the heavy fees havebeen charged for the operation and lessreceipt was issued and recorded in theaccounts. One relative of patient of Smt.Fatiba W/o Shri Shabbir Hussain wasconfronted. Shri Sajjad Hussain, who is sonof the patient paid Rs. 6000/- for theoperation of Lap. Cholecystectomy. In hisstatement Shri Sajjad Hussain state thatthere is rate of Rs. 5000/- but due to hisprofession, the amount was charged at Rs.6000/-. similarly, another patient Shri Rameshwar Lal, S/o Shri Prema was alsoinquired. The patient nears about 74 yearsold. He was suffering from ROLI C vesiclestone. His son bore the operation liability.His son Mangilal Chejar was confronted andhe clearly without any confrontationadmitted that the charge of his father’soperation was Rs. 10,000/- to 12,000/-paid to the Soni Hospital. They charged Rs.7,000/- at the time of admission andbalance was taken during the operationperiod to discharging time, this includedmedicine, testing and X Ray charges. It isassumed that charges are Rs. 10,000/- tothe minimum side of the statement givenby Shri Mangi Lal. 7. This calculation of one-month operationcharges taken by the hospital. Similarlycalculation goes to 12 month charges it willbe Rs. 6,06,200/- X 12 = 72,74,400/-.however, I noticed that the receipt of theoperation charges on 25.10.2002, i.e. thedate of survey, where the assessee onlycould charge the receipt is Rs.21,400/-where the receipt of Shri Dinesh as statedabove was issued at Rs. 7,000/- instead ofRs.10,000/- while the photocopy of thedetails were with the department at page64 of the survey cover. The assessee couldnot arrive as such receipts during the yearreflect the malafide intention of theassessee to evade the cash receipt byissuing less receipt. However, if theaverage of the receipts is taken for theyear than the receipt of operation will be asunder i.e. 21,400/- X 365 = Rs.78,11,000/-. in the above method figurecomes to Rs. 72,74,3400/- and Rs.78,11,000/- which is very near to arrive atthe total receipt of operation. Now it isclear that the assessee is charging moremoney and issuing the receipt of minimumcharges. This is malafide intention of theassessee to evade the tax. As above byproving Section 145, I reject the accountbooks of the assessee. I therefore, reachon this conclusion that the receipt of theassessee is Rs.72,74,400/- which isreduced by the receipt of the assesseeduring the year i.e. Rs. 18,53,530/- = Rs.54,20,870/-. 5.Taking into consideration the material on record, the Assessing Officer held as under: 5.Taking into consideration the material on record, the Assessing Officer held as under: “8. Similarly, regarding the bed charges,the assessee is having two type of bedcharges in hospital. The assessee in Herstatement stated that the charges ofGeneral ward is Rs. 120/- and the chargesfor private ward is Rs. 240/-. on goingthrough the operation ticket/Admissionticket it is clear that the assessee is havingtwo type of charges. It has also beennoticed that there are two bed in thePrivate ward and there is also male andFemale ward. In private ward bed No. 1 isknown and marked Pvt-1 on the Admissionticket and No. 2 bed is marked as Pvt-2.Similarly, in male ward, there are right bedin male and there are 4 bed in femaleward. During the 10 to 13[th] Oct it has alsobeen noticed that in the following date theextra bed was made available to thepatients. Dated 13.10.1999 Gulab KanwarDated 12.10.1999 Bodu RamDated 11.10.1999 Geeta DeviDated 11.10.1999 Rahni Devi.” 6.After the order was passed under Section 145, he contendedthat the Assessing Officer has rightly estimated income of theassessee to the tune of Rs. 74,44,857/-, and therefore, the viewtaken by the Assessing Officer is required to be approved. 7.Counsel for the respondent contended that in view ofconcurrent finding, more particularly the finding of CIT (A) at page39 & 40 which reads as under: “Hence, after going through all the relevantmaterial on record, with reference to theabove mentioned five cases. I find thatthere is no evidence of any suppression ofoperation charges receipt by the assessee.It is so because in the cases of Shri SajjadHussain, Shri Mangilal and Shri Dinesh,who were examined by the A.O. also, they have confirmed to have paid thoseamounts for the operations, which havebeen found recorded by the assessee in hisbooks. Further, in the case of Smt. NoorBano and Smt. Naraini, the smalldifference appears to be on account ofdiscrepancy relating to the registrationcharges and bed charges and bed chargesand not on account of operation charges. The A.O. has not found any discrepancy inany of those records, except in the fiveinstances discussed above, wherein also nodiscrepancy was established as far as theoperation charges receipts are concerned.Hence, on these facts, the addition ofRs.54,20,870/- made by the A.O. is notsustainable and, thus, that addition isdirected to be deleted.” 8.He contended that the view taken by the CIT (A) and furthermodification by the Tribunal in deleting the addition which wasmade is required to be approved. 9.We have heard counsel for both the sides. 10.Taking into consideration that the five clients which made astatement earlier that they have given cash amount in operationwhich was rebutted by the affidavit and after the remand, theAssessing Officer has approved the same and taking into accountthe subsequent development, the CIT(A) has rightly partly allowedthe appeal of the assessee which was further upheld by theTribunal. In our view, the Tribunal has not committed any error insetting aside the income of Rs. 74,44,857/- which was passed onthe assumption that the income which was suppressed one daywas taken into consideration for 365 days, which is not proper inthe facts of the case. 11.Taking into consideration that the estimated income arrivedat by the Assessing Officer which has been reversed by the Tribunal, we are in complete agreement with the view taken bythe CIT(A) and Tribunal and no interference is called for. 12.In that view of the matter, the issue is answered in favour ofthe assessee and against the department. 13.The appeal stands dismissed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Asheesh Kr. Yadav/140