2023 (5) TMI 742 - HC - Income Tax

Expenditure incurred on free distribution of medicines to patients and other social organizations during the flood situation - Tribunal came to the conclusion that AO had based his conclusion solely upon a statement recorded from an office bearer of the social organization and disallowed the expenses incurred by the assessee for supplying free medicines to social organizations - Tribunal noted that the assessee was not provided the opportunity to cross-examine despite specific request made HELD THAT - As without affording such an opportunity the AO could not have drawn adverse inference against the assessee. AO based his findings on a statement recorded from one Dr. Chatterjee. Interestingly, the said Dr. Chatterjee was working as a resident Medical Officer in the assessee hospital from 1997 and according to him, due to certain personal issues between himself and the assessee hospital he left the hospital in March, 2013 and again rejoined in July, 2015. It appears that a statement was recorded from the said Doctor on 1st December, 2016 which could not have been of any relevance. Such supply of medicines by the assessee was stated to have been done during October, 2013. Furthermore, the said Dr. Chatterjee was also not made available for cross-examination by the assessee. As factual conclusion arrived at by the Tribunal, we find no questions, much less substantial questions of law, arises for consideration in this appeal.

Summary

Issues:
The appeal by the revenue under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal for the assessment year 2014-15.

Summary:

The appeal involved a dispute regarding the genuineness of the expenditure incurred by the assessee on free distribution of medicines during a flood situation. The Assessing Officer had doubts about the authenticity of the expenses. The entire matter was based on a statement from Dr. Chatterjee, who was not made available for cross-examination. The Tribunal found that the Assessing Officer's conclusion was contrary to the records. It noted that the assessee was engaged in charitable activities and had conducted a medical camp to provide free medicines to the needy during the flood. The Tribunal also observed that the Assessing Officer had based his findings solely on a statement from an office bearer of a social organization without allowing the assessee to cross-examine. The Tribunal concluded that no substantial questions of law arose for consideration in this appeal.

Therefore, the appeal was dismissed, and the application for stay was also rejected.