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TMI Blog2015 (9) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... up roughly at about 25% as non-surgery cases as the nursing home was mainly run under the guidance of assessee being a surgeon. Since neither party is able to furnish any evidence with reference to actual number of surgeries being done, the reasonable estimation of the AO cannot be faulted. Therefore, the bifurcation adopted by the AO in the respective years out of the total patients is however, upheld. On issue of estimation of fee received in surgery cases and non-surgery cases, it seems the amounts are on higher side. In one of the statements recorded from the patient there is a signed proforma for claim of reimbursement of medical expenditure in which surgery fee was shown at 3,500/-. Based on that, it is fairly reasonable to estimate that amount as fee received for surgery in that year. Based on the above, the receipts from surgery in AY. 2004-05 would be at 10 Lakhs (4,000 X 2,500), in AY. 2005-06 at 11,49,000/- (383 X 3,000) and in AY. 2006-07 at 6,93,000/-. The estimation submitted by assessee at our instance is based on the statement from which the surgery fee at 3,500/- could be inferred. Accepting the same, with reference to non-surgery fee also, the total receipts per y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax in AY. 2003-04, accordingly, the grounds are allowed. AO is directed to delete the amount made as an addition in this year. Agricultural Income - Held that:- There is lot of variation of the agricultural income depending on the agricultural holdings. Assessee’s husband Dr. S. Venkateswara Prasad also offered agricultural income and the same was accepted as such. Keeping that in mind and also the fact that no incriminating material was found and proceedings are u/s 153C, we are of the opinion that action of the AO cannot be upheld. He is directed to accept the agricultural income as offered by assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), assessee contended that the capital gain is not taxable in this year and is taxable as Long Term Capital Gain in later year and benefit u/s. 54F is eligible to assessee. Ld. CIT(A) consequent to the orders in the hands of assessee's wife for the same assessment year, directed the AO to treat the capital gain as Long Term Capital Gain. beyond that CIT(A) has not given any other relief. 4.1 Assessee is contesting that CIT(A) should have allowed the complete relief. It was further contended that the development agreement was dt. 02-10-2000 and the necessary capital gains either would arise in 2001-02 or at the time of possession of the apartment in 2004-05, the same cannot be brought to tax in AY. 2003-04. 4.2 After considering the respective contentions and perusing the evidences on record, we are of the opinion that the capital gains cannot be taxed in AY. 2003-04. As seen from the order of Smt. Amruthavalli, CIT(A)'s finding is as under: "7.2 It may be seen that the appellant and her husband had entered into agreement with M/s. Chaitanya Constructions, Tirupati on 02.10.2000. The said property was purchased on 9.3.2000. The developer completed the construction work and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied 20 patients out of 1,428 patients noted down in the diary for a period of four years. The year-wise break-up of the patients were 534, 511, 264 and 119. Out of these patients, the AO roughly considered some as surgery cases and some as non-surgery cases. In surgery cases, the doctor's receipt was taken at ₹ 18,000/- per patient and in non-surgery cases, ₹ 2,500/- per patient. Accordingly, AO estimated the receipt in the impugned assessment years i.e., AYs. 2004-05 to 2006-07 as under: Asst. Year Receipts from Surgery Cases Receipts from Non-Surgery Cases Total Collections Rs. 2004-05 72,00,000 3,35,000 75,35,000 2005-06 68,94,000 3,20,000 72,14,000 2006-07 35,64,000 1,65,000 37,29,000 7. Thereafter, AO bifurcated the gross receipts between assessee and assessee's wife at 75% and 25%. Thus, in AY. 2004-05 out of gross receipts of ₹ 72 Lakhs estimated on 400 patients (@ 18,000 per surgery) and ₹ 3,35,000/- (134 @ 2,500). Thus, the total collections of Swarnamrutha Hospitals was estimated at ₹ 75,35,000/- 75% of the above collections at ₹ 56,61,250/- are considered as assessee's collections and along with offered income by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 128 @ ₹ 600/- ₹ 76,800 12,25,800 4,11,280 8,14,520 2006-07 198 @ ₹ 3,500/- ₹ 6,93,000 66 @ ₹ 750/- ₹ 49,500 7,42,500 5,05,620 2,36,880 9. Ld. DR however, relied on the orders of AO and CIT(A) to submit that there is a suppression of gross receipts and accordingly, the estimation was made. Ld. CIT(A), having confirmed the estimation, there is no further reduction to be done in assessee's case. He relied on the orders of the authorities. 9.1 Having considered the rival contentions and perusing the statements recorded, it is to be noted that department did not have any evidence of suppression of receipts. It may be altogether a different issue that assessee has not maintained any Books of Account nor the hospital has any records. The only in-patient diary was available without any fee received or amount spent. It was the contention that hospital not only undertakes the room charges and nursing charges but also consultation fee of the doctors which was passed on to respective persons. As far as assessee is concerned, he is only a specialized doctor for the hospital being run in his wife's name and surgical fee is received by him. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rates estimated Rs. Gross receipts already admitted in ROI Net addition to be sustained 2004-05 10,71,500 3,46,550 7,24,950 2005-06 12,25,800 4,11,280 8,14,520 2006-07 7,42,500 5,05,620 2,36,880 10. The amounts mentioned in above column No. 8 are accordingly sustained and AO is directed to delete balance amount. Assessee's grounds are partly considered as allowed. 11. In the result, Appeal in AY 2003-04 is allowed and in AYs 2004-05,05-06,06-07 are partly allowed. Smt S. Amruthavalli : 12. In this assessee's case, re-assessments, consequent to the search in husband case were done from AYs. 2002-03 to 2008-09 under section 153C. In all the assessment years, one issue which is common is with reference to agricultural income which is partly treated as 'Income from Other Sources'. As far as AYs. 2004-05, 2005-06 and 2006-07 are concerned, there are estimations of hospital receipts which were brought to tax in assessee's own case, like in husband's case. Detailed orders were passed in assessee's case. Even though, the AO has made double addition of the same amount in assessee's case as well as her husband's case, Ld. CIT(A) gave relief and Revenue is aggrieved on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Prasad and referral fee to certain extent was already brought to tax in his hands. However, assessee's hospital charges, nursing charges and Pathology charges are to be estimated in the same way. Even though, Ld. AO estimated the gross receipts and bifurcated between assessee and Dr. S. Venkateswara Prasad, we are of the opinion that same methodology may not be applicable to the facts of the case. As far as surgery fee and non-surgery referral fee are concerned, they were separately brought to tax in the hands of Dr. S. Venkateswara Prasad. Therefore, what is to be considered in assessee's hand is only the hospital charges, nursing charges and Pathology charges etc. These charges may not vary whether it is the surgical case or a non-surgical case. These charges may be fixed depending on the number of days the patient stays in the hospital. However, AO did not examine for how many days each patient has stayed in the hospital and what could be the hospital charges, nursing charges etc. In the absence of these details, it may be very difficult to estimate how much charges assessee has received and accounted. Assessee has already received some amounts in the respective assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in receipts already. Keeping that in mind an amount of ₹ 2,00,000 can be estimated to be additional receipts in assessee case. The reasons given in the husband's appeals in estimation will equally apply here. We are of the opinion that the above estimation will meet the ends of justice as there is no addition to wealth identified in search. AO is directed to modify the orders accordingly. Capital Gains: 15. This issue arises in AY. 2003-04. The facts are similar to the facts discussed in the case of Dr. S. Venkateswara Prasad above for AY. 2003-04. For the reasons stated therein, since assessee has got possession in the year relevant to AY. 2004-05, the capital gains cannot be brought to tax in AY. 2003-04, accordingly, the grounds are allowed. AO is directed to delete the amount made as an addition in this year. Agricultural Income: 16. From AY. 2002-03 onwards to 2008-09, the common issue is with reference to agricultural income. In AY. 2002-03, assessee offered an amount of ₹ 40,000/- towards 'Income from agriculture'. AO was of the opinion that assessee could not earn so much of agricultural income from agricultural land of ₹ 1.33 acres. It was the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be assessed in the hands of the assessee only. 3. The Hon'ble CIT(A) ought to have appreciated the fact that the assessee has not made any payment towards consultancy charges to Dr. S.V. Prasad, as evident from non-deduction of TDS and in any case the expenditure is not deductible U/s. 40(a)(ia) and/or 40A(3). 19. The issues in these grounds are discussed elaborately in the case of Dr. S. Venkateswara Prasad as well as Dr. S. Amruthavalli. Considering the facts therein and keeping in mind our order in the above appeals, we are of the opinion that there is no merit in Revenue's contentions. There can not be double addition of the same amounts in both hands. If fees to the doctor was collected by Hospital the same is allowable as expenditure while assessing the hospital receipts. AO himself gave a finding that 75% receipts go to Dr SV Prasad. Having given a finding he should have taxed the balance amount in Smt. Amrutavalli's case. CIT(A) order is according to law and facts. Moreover the issue in ground no 3 was not before any authority. AO has not disallowed any amount invoking section 40A(3). Therefore ground is superfluous. More over hospital might be acting as an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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