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2015 (11) TMI 1130 - AT - Income TaxDisallowance of professional charges - failure to produce the confirmation of the persons to whom professional charges were paid - CIT(A) allowed the claim - Held that - As seen from the order of Ld. CIT(A), it is seen that he has given a categorical finding that out of this amount of ₹ 6.00 lakh paid by the assessee to M/s Neuro Surgery Clinic in lieu of services rendered to the assessee, the payment of ₹ 2.00 lakh was made through account payee cheque and ₹ 4.00 lakh was shown as outstanding liability, which was paid in subsequent year. He has also given a finding that the recipient M/s Neuro Surgery Clinic has duly shown the receipt on account of professional charges from the assessee in its income tax return. He has also given a finding that these expenses incurred by the assessee are incidental to his medical professional consultancy and same are allowable expenses. Ld. DR of the Revenue could not controvert these findings of Ld. CIT(A) and therefore, we find no reason to interfere in the order of Ld. CIT(A) on this issue. - Decided against revenue. Disallowance of medical pathology expenses - CIT(A) allowed the claim - Held that - Regarding this expenditure also, categorical findings were given by Ld. CIT(A) that these expenses are incidental to assessee s professional activities and are allowable as business expenditure and payments were made through banking channel and the recipient M/s Medical Pathology Clinic has duly disclosed the receipts of this amount in its income tax return. Since Ld. DR of the Revenue could not controvert any of these findings of Ld. CIT(A), we find no reason to interfere - Decided against revenue. Addition made on account of Repairs & maintenance - CIT(A) allowed the claim - Held that - These are professional expenses duly supported by proper bills and vouchers and payments were made through bank account. He has also given a finding that the expenses were incurred on account of repairs and maintenance of building, which was used by the assessee for his medical professional activities. Under these facts, we do not find any reason to interfere in the order of Ld. CIT(A) - Decided against revenue. Restricting the addition @ 10% from 25% of the vehicle running expenses, car insurance and depreciation made on account of personal use by CIT(A) - Held that - We find that 20% disallowance out of vehicle expenses was made by the AO on adhoc basis, but this fact is noted by the Ld. CIT(A) that the assessee s wife and his son had owned two vehicles in their own names and the assessee denied using official cars for personal use. This fact is also noted by the Ld. CIT(A) that the assessee has not given any explanation in respect of non maintenance of log book of vehicle. Under these facts, Ld. CIT(A) has reduced the disallowance out of vehicle expenses from 20% made by the AO to 10% - Decided against revenue. Addition made on account of professional income - CIT(A) deleted the addition - Held that - AO did not bring any material on record, which could prove that the assessee has violated the terms and condition of professional and technical services contract made with Sahara Hospital from which the assessee has disclosed net professional income at ₹ 1,28,81,200/-. He has also given a finding that the AO has taken the professional receipt without conducting the necessary enquiries and without bringing any material on record to justify the huge undisclosed professional receipts of ₹ 43,80,000/-. Based on these findings, Ld. CIT(A) has deleted the net income of ₹ 29,26,650/- out of professional receipt alleged by the AO of ₹ 43.80 lakh by holding that this addition is without any basis and therefore, not justified. Ld. DR of the Revenue could not controvert any of these findings of Ld. CIT(A) and could not point out that any material have been brought on record by the AO in support of this allegation that there was undisclosed personal receipt of ₹ 43.80 lakh. - Decided against revenue. Addition made treating the income from agriculture as income from other source - CIT(A) deleted the addition - Held that - This issue has been decided by the Ld. CIT(A), on this basis that the assessee has owned agricultural land approx 10 bighas irrigated on which agricultural activities were carried out through agricultural labours. He has also noted that the assessee has shown agricultural income in earlier and later years and the same was accepted by the AO without taking any adverse inference. Noreason to interfere in the order of the Ld. CIT(A) on this issue also - Decided against revenue. Disallowance of electricity expenses - CIT(A) deleted the addition - Held that - AO made this addition at the rate of 50% of expenses on account of electrical charges without bringing any material on record, which could prove that the electrical expenses debited and claimed by the assessee in his books included the electrical expenses of assessee s residence. At against this, it is noted by the Ld. CIT(A) that as per assessee, two electric meters are installed separately at his residence. Considering these facts, we do not find any reason to interfere in the order of the Ld. CIT(A) on this issue also because when separate electric meters are installed at the residence of the assessee, it cannot be said that electric from official meter was used for residential purpose without bringing any adverse material on record. - Decided against revenue.
Issues Involved:
1. Allowability of professional charges of Rs. 6 lakhs. 2. Allowability of medical pathology expenses amounting to Rs. 2.50 lakhs. 3. Deletion of addition on account of repairs and maintenance expenses of Rs. 1,84,720/-. 4. Restriction of addition from 25% to 10% of vehicle running expenses, car insurance, and depreciation. 5. Deletion of addition made on account of professional income of Rs. 29,26,650/-. 6. Deletion of addition treating agricultural income of Rs. 1,00,000/- as income from other sources. 7. Deletion of addition of Rs. 55,396/- on account of disallowance of electricity expenses. Detailed Analysis of Judgment: 1. Allowability of Professional Charges of Rs. 6 Lakhs: The Revenue challenged the allowance of professional charges of Rs. 6 lakhs by the Commissioner of Income Tax (Appeals) [CIT(A)], arguing that the assessee did not produce confirmation from the recipients. The CIT(A) found that the expenses were incurred for services rendered by M/s Neuro Surgery Clinic, with Rs. 2 lakhs paid via account payee cheque and Rs. 4 lakhs shown as outstanding liability, paid in the subsequent year. The payments were reflected in the bank account and books of the assessee, and the recipient acknowledged the receipt in its Income Tax Return (ITR). The tribunal upheld the CIT(A)'s decision, noting that the Revenue did not controvert these findings. 2. Allowability of Medical Pathology Expenses Amounting to Rs. 2.50 Lakhs: The Revenue contended that pathology expenses should be borne by patients, not the doctor. The CIT(A) found that the expenses were incidental to the assessee's professional activities, paid through banking channels, and disclosed by the recipient in its ITR. The tribunal upheld the CIT(A)'s decision, as the Revenue could not dispute these findings. 3. Deletion of Addition on Account of Repairs and Maintenance Expenses of Rs. 1,84,720/-: The Revenue argued that no vouchers were furnished for the expenses. The CIT(A) found that the expenses were incidental to the professional activity, supported by proper bills and vouchers, and paid through the bank account. The expenses were for repairs and maintenance of a building used for professional activities. The tribunal upheld the CIT(A)'s decision, as the Revenue could not dispute these findings. 4. Restriction of Addition from 25% to 10% of Vehicle Running Expenses, Car Insurance, and Depreciation: The AO made a 20% disallowance on an ad hoc basis. The CIT(A) noted that the assessee's family owned vehicles and denied using official cars for personal use but did not maintain a logbook. The CIT(A) reduced the disallowance to 10%. The tribunal found no reason to interfere with the CIT(A)'s decision. 5. Deletion of Addition Made on Account of Professional Income of Rs. 29,26,650/-: The AO alleged undisclosed professional receipts of Rs. 43.80 lakhs. The CIT(A) found no material evidence from the AO to support this claim and noted that the assessee disclosed professional income from Sahara Hospital. The tribunal upheld the CIT(A)'s decision, as the Revenue could not provide contrary evidence. 6. Deletion of Addition Treating Agricultural Income of Rs. 1,00,000/- as Income from Other Sources: The CIT(A) found that the assessee owned approximately 10 bighas of irrigated agricultural land and had shown agricultural income in previous and subsequent years, accepted by the AO. The tribunal upheld the CIT(A)'s decision, finding no reason to interfere. 7. Deletion of Addition of Rs. 55,396/- on Account of Disallowance of Electricity Expenses: The AO made a 50% disallowance without evidence. The CIT(A) noted that separate electric meters were installed at the assessee's residence. The tribunal upheld the CIT(A)'s decision, as the Revenue did not provide evidence to the contrary. Conclusion: The tribunal dismissed the Revenue's appeal and the assessee's cross-objections (CO), finding no reason to interfere with the CIT(A)'s decisions on all issues. The CIT(A)'s findings were based on evidence and proper reasoning, which the Revenue could not successfully challenge.
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