2024 (11) TMI 1057 - AT - Income Tax

Addition based on Professional Receipt in the Original Return of Income - Assessee filed a Revised Return of Income to correct the same - HELD THAT - There is no reason why Six Sigma Medicare Research Limited should refund Rs. 1,89,909/- out of the total deposit of Rs. 28 lakhs, when assessee continues to be Consultant in the said hospital Even otherwise, it is beyond comprehension that why a hospital shall refund an odd amount of Rs. 1,89,909/-. As an admitted fact that hospital has made total payment of Rs. 47,26,546/- to the Assessee during the year, which were shown as professional receipts by the assessee in the Original Return of Income. Out of the total Professional Receipts received from Six Sigma Medicare Research Ltd., there is no evidence to suggest that Rs. 1,89,909/- pertains to partial refund of deposits. Therefore, the addition of Rs. 1,89,909/- is confirmed. Payment made to Anesthetist - Assessee has proved that assessee had made payment to Anesthetist. Hence, we accept the assessee s contention and direct the Assessing Officer to delete the addition. Payment to Kochar(Anesthetist) as professional charges - We agree that these Operation Notes were not filed before the AO/CIT(A). These Operation Notes have been considered by us as an evidence only to substantiate the primary evidence filed by the assessee before AO and CIT(A). We have already discussed in earlier paragraphs the evidences filed by assessee before the AO and CIT(A) in the form of copy of bank statement of Dr.RK, copy of TDS Return etc. We are convinced that assessee had made payment to Dr. RK as professional fees. The said amount was wholly and exclusively for the purpose of the business of the assessee. Hence, we direct AO to delete the addition. Petrol and Diesel Expenditure - Accountant only considered Rs. 5,955/- and failed to consider remaining amount of Rs. 1,05,230/-. No specific evidence has been filed by the assessee before us to prove the Diesel Expenditure. Assessee merely filed a Ledger Account at page no.60 and 61 of the paper book. The Ledger Account shows certain cash payments at periodic intervals. However, that does not prove that the expenditure has been incurred wholly and exclusively for the purpose of the business of the assessee. Accordingly, addition of Rs. 1,05,230/- is upheld. Salary and Wages - The amount was the salary of March, 2020; hence, remained payable. It is observed from the submission of assessee before the AO dated 28.03.2022 that assessee had filed copy of salary register, name, PAN and Address of all the employees. Before us also assessee filed copy of ledger extract, copy of salary register - DR has not pointed out any discrepancy in these documents. On perusal of the Ledger Account, it is observed that Rs. 48,950/- was shown as payable on 31.03.2020. In these facts and circumstances of the case, we are convinced that it is an allowable expenditure. Accordingly, AO is directed to delete the addition.

Issues Involved:

1. Confirmation of additions based on the original ITR versus the revised ITR.
2. Addition of Rs. 1,89,909 as professional receipts.
3. Disallowance of Rs. 5,68,000 towards professional charges paid to two doctors.
4. Disallowance of Rs. 1,54,180 for petrol and diesel expenses and salary and wages.

Issue-Wise Detailed Analysis:

1. Confirmation of Additions Based on Original ITR:

The primary issue was whether the Assessing Officer (AO) was justified in confirming the additions based on the original Income Tax Return (ITR) instead of the revised ITR. The assessee argued that the revised ITR should replace the original ITR, and thus, the additions made by relying on the original ITR were not justified. The tribunal noted that the AO assessed the total income at Rs. 42,58,230 as declared in the original ITR, disregarding the revised ITR which declared a lower income of Rs. 33,46,140. The tribunal's analysis was centered on whether the revised ITR was a valid replacement and whether the AO's reliance on the original ITR was legally justified.

2. Addition of Rs. 1,89,909 as Professional Receipts:

The assessee claimed that Rs. 1,89,909 was a refund of a deposit and not professional income. The tribunal examined the evidence provided, including the revised balance sheet and confirmation from the hospital, Six Sigma Medicare & Research Ltd. The tribunal concluded that there was no substantial evidence to suggest that the amount was a refund rather than professional income, especially since the hospital had made significant payments to the assessee during the year. The tribunal confirmed the addition, noting the lack of clarity and supporting evidence from the assessee's side.

3. Disallowance of Rs. 5,68,000 Towards Professional Charges:

This issue involved payments made to Dr. Daniel Fernandes and Dr. Rashmi Kochar. The tribunal analyzed the evidence provided by the assessee, including TDS returns, bank statements, and ledger accounts. For Dr. Daniel Fernandes, the tribunal found sufficient evidence that Rs. 1,75,000 was indeed paid and directed the AO to delete the addition. Regarding Dr. Rashmi Kochar, the tribunal considered additional evidence, such as operation notes and TDS records, which substantiated the claim that payments were made for professional services rendered. The tribunal directed the deletion of the Rs. 3,93,000 addition, finding the payments justified and substantiated.

4. Disallowance of Rs. 1,54,180 for Petrol and Diesel Expenses and Salary and Wages:

The tribunal examined the claim of Rs. 1,05,230 for petrol and diesel expenses, which the assessee argued were legitimate business expenses. However, due to a lack of specific evidence proving the expenses were incurred exclusively for business purposes, the tribunal upheld the disallowance. Regarding the Rs. 48,950 for salary and wages, the tribunal found that the assessee provided sufficient documentation, including a salary register and ledger extracts, proving the amount was payable and allowable as an expense. Consequently, the tribunal directed the AO to delete the addition for salary and wages.

Conclusion:

The tribunal partly allowed the appeal, directing the deletion of certain additions while upholding others based on the evidence and arguments presented. The judgment emphasized the necessity for clear and substantiated evidence when claiming deductions or contesting additions in tax assessments.

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