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2018 (11) TMI 541 - AT - Income TaxUnaccounted cash - telescoping benefit to the assessee - Held that - A.O. has not disputed this and there is no reference in the assessment order to indicate the contrary as the balance cash found during the search represents current year s professional receipts and has been duly taken into account in the return filed. There is no scope for making the impugned addition under the provisions of the Act. A.O. is directed to delete the addition of ₹ 9,65,955/-. In the result, the addition to the tune of ₹40,000/- sustained against the impugned addition of ₹ 19,75,955/-. CIT(A) gave a categorical finding that the cash found during the course of search represents part of such professional receipts have been accounted by the assessee and filed the return of income. This fact is not disputed by the A.O. as found by the CIT(A). Once a part of income is already disclosed in the return of income, no separate addition can be made. Therefore, we find no infirmity in the order passed by the CIT(A) and this ground of appeal raised by the revenue is dismissed. Unexplained investment in gold jewellery - Held that - CIT(A) has considered the entire facts of the case and he has rejected the additional claim of 200gms. made by the assessee before the A.O. In so far as telescoping of an amount of ₹ 8,84,371/-, which pertains to income offered for A.Y. 2010-11 and also an amount of ₹ 3,91,675/- with reference to addition made undisclosed income for A.Y. 2010-11 telescoping benefit was given by the CIT(A) on the ground that there is no evidence on record to show that the above amounts are utilized for any other investment or expenditure. Even before us, the department is not able to produce any evidence that the above amounts offered for taxation in the assessment year 2010-11, which are used for any other investment or expenditure. So under these facts and circumstances of the case, the telescoping benefit given by the CIT(A) to the extent of ₹ 8,84,371/- and also ₹ 3,91,675/- is justified and no interference is called for. Accordingly, this ground of appeal filed by the revenue is dismissed. Addition towards unaccounted outpatient receipts - Held that - A.O. has not accepted the explanation given by the assessee on the ground that the assessee has only paid advance tax of ₹ 2 lakhs, therefore, the assessee will offer the professional receipts for taxation only ₹ 15 lakhs and he is of the opinion that the balance of ₹ 23,16,550 (-) 15 lakhs ₹8,16,550/- is treated as undisclosed income. When the assessee himself accepted that he will file a return of income and same will be considered for the taxation, the A.O. without considering the explanation given by the assessee on the ground that advance tax paid and addition was made in our opinion, which is baseless, unreasonable and unjustified. On the contrary, CIT(A) considered the explanation of the assessee and deleted the addition made by the A.O. by observing that the amount which is found during the course of search has taken into account by filing the return of income. No addition is warranted. We find no infirmity in the order passed by the CIT(A) and this ground of appeal raised by the revenue is dismissed. Unaccounted professional receipts - Held that - A.O. has not accepted the explanation given by the assessee on the ground that neither the hospital has maintained the books of accounts nor assessee has maintained the books, therefore, addition is made. On appeal, the CIT(A) has gave a categorical finding that these amounts found during the course of search pertains to current year, though these receipts were not recorded in the regular books of accounts of the hospital or of the assessee they have included and considered as a part of current year s receipts while filing the return of income. Subsequent to the search, the assessee has complied these receipts in his books of accounts and offered them for tax in the return of income filed. In view of the above specific finding of the Ld. CIT(A), when the amount is found during the course of search pertains to current year, the same is offered for taxation by filing the return of income, it cannot be said that it is undisclosed income, when the time is available for the assessee to file a return of income. Admission of income u/s 132(4) - declaration of income in the return - A.O. is of the view that the assessee had admitted the income of ₹ 24,72,629/- against the declaration of income of ₹ 50 lakhs in the statement recorded u/s 132(4) - Held that - The above issue is neither emanated from the assessment order nor from the CIT(A) s order and has no impact on assessment made u/s 143(3). D.R. during the appeal hearing could not relate to the addition made in the assessment order. However, on verification of the assessment order, it is noted that the assessee had admitted income of ₹ 89,92,920/- against the declared income of ₹ 50 lakhs u/s 132(4) of the Act and consequential order resulted in total income of ₹ 1,35,00,044/-.
Issues Involved:
1. Addition of ?9,70,000/- as unexplained income. 2. Addition of ?9,65,955/- as unexplained cash. 3. Addition of ?37,30,000/- as unexplained investment in gold jewellery. 4. Addition of ?8,16,550/- as unaccounted outpatient receipts. 5. Addition of ?21,89,650/- as unaccounted professional receipts. 6. Discrepancy in declared income under Section 132(4) of the Income Tax Act. Issue-wise Detailed Analysis: 1. Addition of ?9,70,000/- as Unexplained Income: The Assessing Officer (A.O.) noted that during the search, cash of ?19,75,955/- was found at the assessee’s residence and hospital chamber. The assessee explained that ?9,70,000/- represented professional receipts for the assessment year 2010-11, ?40,000/- belonged to his wife, and the remaining ?4,36,855/- was professional receipts for the period 1.4.2010 to 20.12.2010. The A.O. rejected the explanation due to lack of evidence and added ?19,75,995/- as unexplained income. The Commissioner of Income Tax (Appeals) {CIT(A)} allowed the benefit of telescoping for ?9,70,000/- since there was no indication that the additional income offered for the previous year was utilized elsewhere. The Tribunal upheld the CIT(A)'s decision, finding no reason to interfere with the order. 2. Addition of ?9,65,955/- as Unexplained Cash: The A.O. found cash of ?19,75,955/- and added it as unexplained income. The assessee contended that ?9,65,955/- was part of current year’s professional receipts. The CIT(A) observed that the seized material indicated professional receipts of ?21.89 lakhs, which were part of the current year’s income. The A.O. did not dispute this, and the CIT(A) directed the deletion of ?9,65,955/- from the addition. The Tribunal upheld the CIT(A)'s decision, noting that the cash found was part of the professional receipts included in the return of income. 3. Addition of ?37,30,000/- as Unexplained Investment in Gold Jewellery: During the search, gold jewellery weighing 3040 gms was found in a locker and 544.30 gms at the residence. The A.O. considered 2000 gms as unexplained and valued it at ?37,30,000/-. The assessee claimed that the jewellery was acquired over time as part of family tradition. The CIT(A) allowed telescoping of ?8,84,371/- and ?3,91,675/- from additional income offered for A.Y. 2010-11. The Tribunal upheld the CIT(A)'s decision, finding no evidence that the amounts were used for other investments or expenditures. 4. Addition of ?8,16,550/- as Unaccounted Outpatient Receipts: The A.O. added ?8,16,550/- as unaccounted outpatient receipts based on seized material showing professional receipts of ?23,16,530/-. The A.O. inferred that the assessee intended to disclose only ?15 lakhs based on advance tax paid. The CIT(A) deleted the addition, citing the Supreme Court’s judgment in ACIT Vs. A.R. Enterprises, which stated that payment of advance tax does not necessarily reflect total income. The Tribunal upheld the CIT(A)'s decision, noting that the receipts were part of the current year’s income and were included in the return of income. 5. Addition of ?21,89,650/- as Unaccounted Professional Receipts: The A.O. added ?21,89,650/- as unaccounted professional receipts from M/s. R.K. Children’s Hospital, noting that these receipts were not recorded in the books. The assessee contended that these were part of the current year’s income. The CIT(A) deleted the addition, stating that the receipts were included in the return of income filed for the year. The Tribunal upheld the CIT(A)'s decision, agreeing that the receipts were part of the current year’s income and were offered for taxation. 6. Discrepancy in Declared Income under Section 132(4): The A.O. noted a discrepancy between the income admitted under Section 132(4) (?50 lakhs) and the income declared in the return (?24,72,629/-). The Tribunal found that this issue was not part of the assessment order or the CIT(A)'s order and had no impact on the assessment. The Tribunal dismissed this ground as infructuous. Conclusion: The Tribunal dismissed the appeal filed by the revenue, upholding the CIT(A)'s decisions on all grounds. The judgments were pronounced in the open court on 18th May 2018.
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