D.b. Income Tax Appeal v. Dr. Suresh Sharma

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR : J U D G M E N T : D.B. INCOME TAX APPEAL NO.45/2012CIT, Udaipur Vs. Dr. Suresn Sharma Date of Judgment 14[th] January, 2013 PRESENT HON'BLE MR. JUSTICE DINESH MAHESHWARIHON'BLE MR. JUSTICE ARUN BHANSALI Mr. K.K. Bissa, for the appellant. ---- BY THE COURT:(PER HON'BLE BHANSALI),J. The present appeal under Section 260A of the Income TaxAct, 1961 ['the Act'] has been filed by the Revenue seeking toquestion the order dated 09.12.2011 passed by the Income TaxAppellate Tribunal, Jodhpur Bench, Jodhpur ['the Tribunal'] inITA No.653/JODH/08 and C.O.No.27/JODH/2009 for theassessment year 2004-2005, whereby, the Tribunal has affirmedthe order dated 17.09.2008 passed by the Commissioner ofIncome Tax (Appeals), Udaipur ['the CIT(A)'] partly allowing theappeal preferred by the assessee and deleting the additions ofRs.6,71,668/- on account of unaccounted factory expenses,Rs.60,438/- on account of expense of M/s Suresh Grenite,Rs.1,01,292/- on account of expense of M/s Sharma Nursing Home, Rs.50,070/- on account of low GP Rate of M/s SharmaNursing Home, and Rs.5,05,682/- on account of income fromundisclosed sources and allowing the cross objection filed by theassessee and deleting disallowance of deappreciation ofRs.1,76,003/- as made by the Assessing Officer ['the AO'] in theassessment order dated 29.12.2006. Having heard the learned counsel for the appellant andhaving perused the material placed on record, we are clearly ofthe view that the present appeal essentially raises issues relatingto appreciation of evidence resulting in finding on facts; and nosubstantial question of law is involved. The facts of the case may be noted thus: The assesseeruns a nursing home and also owns a marble cutting plant. Theassessee filed his original return of income for the assessmentyear 2004-2005 on 02.08.2004 declaring NIL income besides anagricultural income of Rs.64,800/-. It appears that a surveyunder Section 133A of the Act was undertaken on 29.11.2006 atthe business premises of the assessee and on the basis ofmaterial found during the course of survey, while notice underSection 148 of the Act was issued relating to assessment years2002-2003 and 2003-2004 and for the said assessment yearsassessments were completed under Section 143(3)/148 of theAct and assessment for the year 2004-2005 was completedunder Section 143(3) of the Act. The AO, inter alia, made theadditions, few of which were deleted by the CIT(A) as noticed hereinbefore. The appeals arising out of assessment years2002-2003 to 2006-2007 filed by revenue were decided by the Tribunal by a common order. For the assessment year 2004-2005 the Tribunal has observed as under:- (i)Addition on account of unaccounted factory expenses: “We have considered the findings given by the authoritiesbelow. We have already considered the similar issue in theorder for the assessment year 2002-03. We find thatassessee has shown receipts in the name of Suresh Graniteand there are transactions in the separate bank account ofM/s Suresh Granite. Further the said note book no.18 alsocontains transactions relating to Suresh Granite. Thereturn of income of the wife of Assessee Mrs. SushmaSharma has been filed in time including the income fromM/s Sushma Granite. The findings given by assessingofficer are not correct and the expenditure incurred and thebank deposits made by the assessee from the regularsources of receipts shown by the assessee family fromvarious concerns. Therefore, following the findings givenby us for Assessment Year 2002-03 in respect of the similarnoting of expenditure, we uphold the findings given by theCIT (A) and dismiss this ground of the departmentalappeal.” (ii)Addition on account of unaccounted expense of M/s Suresh Granite : (ii)Addition on account of unaccounted expense of M/s Suresh Granite : “In such circumstances, when the over all receipts covers allthese expenditures, no addition can be made on the basis ofnoting in the diary. We find that the issue is similar toground no.1 dealt with above and the findings given by usin that respect will apply even in respect of this issue. Weaccordingly uphold the order of CIT (A) on this issue alsoand the ground of appeal is rejected.” (iii)Addition on account of unaccounted expense of M/sSharma Nursing Home: “In such circumstances, there are all possibilities ofaccounting overall expenditure in different heads, however,the overall payments noted in these diaries are notexceeding the overall receipts shown by the assessee in allthe Profit and Loss accounts of the group concerns.Therefore, no addition in respect of the unaccountedexpenditure on the basis of such noting can be made. Weaccordingly uphold the deletion of addition on account ofunexplained salary expenditure. This ground of departmental appeal is also rejected.” (iv)Addition on account of low G.P. Rate of M/s SharmaNursing Home: “We have dealt up this issue in detail for the assessmentyear 2002-03 and in view of the findings given in thatrespect and the facts and circumstances of the caseobserved above, we hereby decline to interfere with theorder of the CIT(A) on this ground also. The ground ofappeal of the departmental appeal is rejected.” (v)Addition on account of income from undisclosedsources: “After hearing the rival parties and the perusing the ordersof authorities below and also the material available in thepaper books filed by the assessee we are of the consideredview that ld. AO was not justified in holding that thebusiness of M/s Suresh Granites has been discontinued onlyon the basis of disconnection of power. The assessee hasshown the availability of power from the D G Set of M/sSusham Granite the proprietorship concern of the wife ofassessee which is operating in the same premises.Therefore, the addition made on this count cannot beupheld. We find no reason to interfere the findings given bythe CIT (A) on this count. This ground of appeal of thedepartmental appeal is accordingly rejected.” (vi)In relation to cross objection of the assessee: “The disallowance is made consequent to the finding thatthe business of M/s Suresh Granite had been discontinued.In view of our findings above in ground no.5 of thedepartmental appeal, this ground of cross objection isallowed.” This Court while considering the appeal filed by theRevenue for the assessment year 2002-2003 being D.B. Income Tax Appeal No.47/2012 (CIT, Udaipur Vs. Dr. Suresh Sharma)has held as under:- “In our view, the submissions do not make out anysubstantial question of law for consideration by this Court inthis appeal. The grounds as urged and the questions assuggested essentially relate to the matters of appreciationof evidence for factual enquiry and rendering findings onfacts about the expenditure on purchase of medicines,receipt of consultation fees and expenditure at factory andhospital. Though the AO made the additions with reference to his opinion on the material found and impounded duringthe course of survey proceedings, however, the CIT(A)disagreed with the findings of the AO after thoroughlyanalyzing the material on record and after referring to theinconsistencies in the assessment order on accountingaspects and the fact that the trading additions had alreadybeen made in the original assessment. Thereafter, theTribunal found no reason to interfere while scrutinizing thefindings recorded by the CIT(A) on relevant considerations. to his opinion on the material found and impounded duringthe course of survey proceedings, however, the CIT(A)disagreed with the findings of the AO after thoroughlyanalyzing the material on record and after referring to theinconsistencies in the assessment order on accountingaspects and the fact that the trading additions had alreadybeen made in the original assessment. Thereafter, theTribunal found no reason to interfere while scrutinizing thefindings recorded by the CIT(A) on relevant considerations. In an overall view of the matter, we are satisfied thatthe findings on facts have been rendered by the twoappellate authorities in accordance with law; and the ordersimpugned do not suffer from any perversity or wrongapplication of any principle of law so as to raise anysubstantial question of law. Consequently and in view of the above, the appealfails and the same is, therefore, dismissed summarily.” The reasons foregoing, on all the relevant and material aspects, equally apply to the present appeal too, which is basedon self-same grounds. Thus, following the decision aforesaidand in the same terms, this appeal also stands dismissedsummarily. (ARUN BHANSALI), J. (DINESH MAHESHWARI), J.