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TMI Blog2015 (9) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... t of facts. It is also a contention that a further loan of ₹ 5 Lakhs advanced by the same person in the subsequent year has been accepted by the AO as genuine credit. Considering these facts, we are of the opinion that the credit received long back has to be accepted as genuine one. Like-wise, in the case of D Venumadhav also there is no dispute with reference to the identity of the person and employment with M/s. Aditya Hospital. AO cannot base his satisfaction why assessee has to borrow from one of the employees in Financial Year 2003-04. AO has to examine whether the credit is genuine or not. The fact that said person has confirmed the advance and is a genuine person has to be considered in verifying the creditworthiness of the person. Considering the facts of the case and amount involved, we are of the opinion that credit from Shri D. Venu Madhav also has to be considered as genuine one. AO also did not make any enquiries with the said persons nor having any incriminating material in the course of search proceedings. In view of this, AO is directed to delete the additions so made. Assessee’s grounds on this issue in AY. 2004-05 are allowed. - Decided in favour of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate Benches in number of cases, we are of the opinion that the disallowance for personal use can be restricted to 10% of the vehicle maintenance claimed in respective assessment years. Even though we are aware that these are re-assessments, we are of the opinion that AO can re-examine the issues which are not examined in the original assessment and in this case, there seems to be no assessments U/s. 143(3) earlier. Following the principles laid down by the Hon'ble Allahabad High Court in the case of Rajkumar Arora [2014 (10) TMI 255 - ALLAHABAD HIGH COURT] we are of the opinion that AO can examine the vehicle maintenance claimed in the re-assessment. Accordingly, we restrict the expenditure disallowance to 10% being personal in nature U/s. 37(1). Balance of the expenditure is allowable - Decided partly in favour of assessee. Additions made on the basis of Hospital Management System package - Held that:- only because some of the doctors have admitted of receiving the payments mentioned in the seized material or the fact that the hospital’s application before the Settlement Commission has been admitted, in no way proves that the assessee has actually received the amount ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additions were made in AY. 2009-10 and 2010-11 on the basis of the said HMS package, wherein Assessing Officer (AO) was of the opinion that assessee was paid substantial amounts which were not accounted by assessee. AO, after giving due opportunity to assessee, made various disallowances in other years from 2004-05 to 2008-09 and major additions in AY. 2009-10 and 2010-11. In AY. 2009-10, an addition of ₹ 96,73,154/- was made. It was the opinion of the AO that assessee has received an amount of ₹ 1,15,86,331/- as per the HMS package whereas assessee has accounted professional receipts in the return of income at ₹ 19,13,177/-. The difference was added as income in this year. Like-wise, in AY. 2010-11, HMS package indicated payment of ₹ 1,74,01,698/-, whereas assessee admitted ₹ 42,21,831/-. The difference of ₹ 1,31,79,867/- was brought to tax. In other years, there were disallowances of salaries, vehicles maintenance etc., made by the AO which are partly confirmed by the Ld. CIT(A). Apart from that, certain un-secured loans obtained by assessee were also brought to tax as un-explained credits in AY.2004-05 which are partly confirmed by the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate : Provided also that the Central Government may by rules8 made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking channel where date, mode of payment and other details was duly recorded-ITAT held that since no incriminating materials in relation to gift deeds were found in search, no addition on such gift could be made in assessment proceedings u/s. 153A-Held, u/s 153A AO had been given power to assess or reassess total income of assessment years in question in separate assessment orders-Consequently, even though assessment order had been passed u/s 143(1) (a) or u/s 143(3), AO would be required to reopen those proceedings and reassess total income taking notice of undisclosed income found during search and seizure operation-Where assessment or reassessment proceedings had already been completed and assessment orders passed, then AO would be competent to reopen assessment proceeding already made-Reasons given by ITAT that no material was found during search could not be sustained-Addition made by AO found to be proper-Revenue's Appeal allowed. Held Only the undisclosed income found during the search and seizure operation were required to be assessed and the regular assessment proceedings were preserved. The introduction of Section 153A of the Act provides a depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Incomes assessed Rs. 2004-05 03-11-04 4,41,770 1,47,910 11-11-10 11,77,770 2005-06 25-10-05 17,47,692 1,28,750 11-11-10 28,98,319 2006-07 31-10-06 22,78,770 80,000 11-11-10 31,91,788 2007-08 02-11-07 19,74,380 2,89,950 11-11-10 29,86,074 2008-09 30-09-08 13,99,560 4,64,425 11-11-10 54,10,223 8.1 AO as briefly stated has made additions of certain cash credits and disallowances of salary, depreciation on vehicles and maintenance in above assessment years. Un-explained Loans: 9. In AYs. 2004-05 and 2005-06 an amount of ₹ 7 Lakhs loans received each were considered as un-explained cash credits. Ld CIT(A) gave relief in AY 2005-06 where as the addition in AY 2004- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has furnished all the relevant documents, he prays to delete the addition made by the AO. 9.4 Ld. CIT(A) confirmed the above ₹ 7 Lakhs in AY. 2004-05 agreeing with AO s contentions. 10. After considering the rival contentions and perusing the paper book, we are of the opinion that loan credits from Tandu Srinivas and D. Venu Madhav are to be accepted as genuine. In fact as seen from the impounding orders u/s. 132(3) of the Act issued on 24-03-2010 to the Manager SBI, Chikkadapally Branch by the Dy. Director of Income Tax, (Investigation) placed at page 3 of the paper book, it indicates that Tandu Srinivas has a bank account No.3185 in the said bank and prohibitory orders were issued for any lockers available in that name. This indicate that the said Tandu Srinivas is an existing person and is available in the address of assessee only. Therefore, the contentions of the CIT(A) that the said person is having the same addresses as that of assessee while rejecting assessee contentions can not be accepted. In fact this supports assessee contentions. Therefore the loan from the said T Srinivas has to be accepted as a genuine claim considering that bank account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also provides after care by the hospital itself. Since, they are corporate hospitals, there will be no dearth of assistants as claimed by assessee. Most of the payments made by assessee are in cash and number of persons paid is many. There are at least 10 to 20 names mentioned in the salaries account furnished by him. This is highly improbable, hence, keeping in view the above factors, 50% of the salaries paid by assessee are disallowed i.e. 50% of ₹ 72,000/- = ₹ 36,000/- for AY. 2004-05; 50% of ₹ 9,01,254/- = ₹ 4,50,627/- for AY.2005-06; 50% of ₹ 10,88,861=Rs.5,44,430/- for AY. 2006-07; 50% of ₹ 11,61,076 = ₹ 5,80,538/- for AY. 2007-08 and 50% of ₹ 12,48,270 = ₹ 6,24,135/- for AY. 2008-09 and added to the returned income. 12. Assessee before the CIT(A) stated that he is a surgeon by profession and requires entire team consisting of medical, para-medical, support staff etc. for performance of surgery and related matters for which he has to pay salary. This is apart from the expenditure incurred towards salary to driver etc. Further, assessee argued that the AO has disallowed 50% of the salaries stating that after care is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the opinion that there is no need to disallow any expenditure which was claimed in the original returns of income. There is no incriminating material found and assessee cannot be expected to produce the vouchers and persons after lapse of sufficient time when assessee s returns originally filed were accepted without any scrutiny. In view of this, we are of the opinion that no expenditure can be disallowed out of the salary claimed and accordingly, assessee s grounds are allowed. AO is directed to delete the disallowance so made in all the impugned assessment years. Disallowance of vehicle maintenance and depreciation : 15. Another issue contested by assessee in AYs. 2006-07 to 2010-11 is with reference to disallowance of depreciation on vehicles and vehicle maintenance. AO was of the opinion that in AY. 2006-07, the vehicles were purchased in a later half of the year and so depreciation of 50% of the eligible amount is only allowable. Further, he was of the opinion that assessee s professional work requires to move around in very reasonable area as he is residing very close to the hospitals in which he is providing consultancy and does not require so many vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on maintenance of vehicles is on higher side and hence 50% of the expenses on maintenance are disallowed as relatable to personal use . He stated both reasons being higher side as well as personal use. There is no clarity in the opinion of the AO and no comparable expenditure was made out. There is no incriminating material also in the search. We are of the opinion that expenditure claimed is reasonable compared to the receipts disclosed by assessee from various hospitals. The AO cannot sit in judgment on the nature of expenditure unless he examine the expenditure on a day to day basis from the vouchers maintained. However, considering that assessee is a doctor and also a public figure some use of vehicles for personal use cannot be ruled out. Consistent with the view taken by co-ordinate Benches in number of cases, we are of the opinion that the disallowance for personal use can be restricted to 10% of the vehicle maintenance claimed in respective assessment years. Even though we are aware that these are re-assessments, we are of the opinion that AO can re-examine the issues which are not examined in the original assessment and in this case, there seems to be no assessments U/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Cheque (Rs) 18.07.2008 7,87,527 15.04.2009 11,66,770 07.08.2008 12,64,283 30.04.2009 10,75,446 19.08.2008 2,01,300 11.06.2009 13,91,923 10.09.2008 08,83,468 08.07.2009 14,21,245 04.11.2008 02,51,955 09.08.2009 2,58,840 28.11.2008 01,89,150 25.08.2009 10,17,833 31.12.2008 1,27,715 02.09.2009 16,22,835 24.01.2009 33,000 24.09.2009 34,000 26.01.2009 01,96,700 08.10.2009 12,98,684 09.03.2009 01,35,780 29.10.2009 10,00,011 09.03.2009 09,07,266 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on data which is not verifiable, as admitted by the AO in his remand report (vide page 173 to 176 of the Paper Book). vii. All the bank accounts were verified by the seized party and are available with the AO and no such payments as cheques as alleged in HMS package were received other than those admitted in the TDS certificates as paid to assessee. viii. That assessee gives consultation in various hospitals and the Modus operandi is that patients who come through him or others are recommended to the hospital or admitted in his name in the hospital, even though he may not render any consultation to the particular patient. Moreover, the case sheets does not contain any financial aspect and critically the doctor cannot mention any fee or expenditure etc., in the case sheet. Therefore, the AO s contention that case sheet contains details of patients and fee cannot be correct. Case sheet may contain referral doctor as well as consulting doctor s name but never consist of financial part. ix. That Aditya Hospital may have admitted before the Settlement Commission certain additional incomes which may prove against that hospital, but there is no evidence that assessee has rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r both the years under consideration mentioning the amounts actually paid to the assessee. The bank account of the assessee also reflected only those payments as mentioned in the TDS certificates for both the years. It is a fact on record that the Assessing Officer has not made any enquiry or brought any other material on record to prove that the amounts mentioned in the seized material were actually paid to the assessee. As such, it is submitted that circumstances, only because some of the doctors have admitted of receiving the payments mentioned in the seized material or the fact that the hospital's application before the Settlement Commission has been admitted in no way proves that the assessee has actually received the amounts mentioned in the seized document, unless there are other corroborative material to prove such fact. No addition can be made only on the basis of presumptions and surmises . 19. Ld. DR while admitting that AO has expressed his inability to verify the so called cheque payments stated to have been paid by Aditya Hospital in HMS package, however, placed on record the order of the Settlement Commission, copies of the print out of incriminating materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hospital might have received the amounts as mentioned in the seized document but has remitted only part of it to the assessee and not the entire amount. Unless there is some other evidence on record to show that the amount mentioned in the seized material was actually paid to the assessee it cannot be said with certainty that the assessee has actually received the amount0 as mentioned in the seized document. More so, when the hospital has issued a TDS certif icate mentioning the amount actually paid to the assessee. The bank account of the assessee also ref lected only those payments as mentioned in the TDS certif icate. It is a fact on record that the Assessing Off icer has not made any enquiry or brought any other material on record to prove the fact that the amount mentioned in the seized material was actually paid to the assessee. In the aforesaid circumstances, only because some of the doctors have admitted of receiving the payments mentioned in the seized material or the fact that the hospital s application before the Settlement Commission has been admitted in no way proves that the assessee has actually received the amount mentioned in the seized document, unless there a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, an amount of ₹ 49,78,144/- was supposed to have been paid in AY. 2009-10 and an amount of ₹ 1,54,56,205/- was supposed to have been paid in AY.2010-11 by cheques. Balance amount of cash at ₹ 66,08,187/- in AY. 2009-10 and cash ₹ 19,70,493/- was supposed to have been paid in AY. 2010- 11. Leave alone the cash part, even the alleged cheque payments were also not verifiable, other than those admitted by assessee in the TDS certificates certified by Aditya Hospita. Even in the remand report, AO expresses his inability to make the verification. If the HMS package relied on by the Revenue indicates payments by cheques it is very easy to verify the payments through the Banks. There is no evidence whatso- ever of either payment by cheque to assessee or by clearance in assessee s bank amount. This itself indicate that the entries in HMS package cannot be relied upon. It is also to be noted that assessee has furnished re-conciliation of the amounts received on the basis of the TDS certificates and actually received in banks as under: B. Narasaiah Statement of Reconciliation F.Y. 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars Page No. Amount Opening balance as per books 180 3,13,110 Add: Amount net off of TDS receivable from Aditya Hospitals (5824105-614016) 161 52,10,089 Less: Income actually received from banks 38,78,402 (As per Annexure 2) Closing balance as per ledger 180 16,44,797 Annexure 2 Date Amount received from Banks Page No. Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... You, I once again confirm that the payments alleged to have been made to me as per Exhibit 1 is not true. A cursory glance at said exhibit would reveal that certain payments allegedly made to me are by cheque and also cash. First of all I once again confirm that I have not received any payment in cash. Secondly the alleged payments shown against me in form of cheque which are duly highlighted for easy reference do not figure in my bank accounts. As per the said exhibit sums aggregating to about ₹ 1,74,26,698/- was allegedly made to me by Aditya Hospitals comprising of about ₹ 19,70,493/- in cash and balance of ₹ 1,54,56,205/- by cheques which is absurd. A table is appended hereto showing the alleged payments in cash and cheque. Whatever I have received from Aditya Hospital during the financial year 2009-10 or till date is only by cheques which can be verified with reference to my bank accounts. If the cheques as per Exhibit 1 have been given to me, should figure in my bank accounts, which is not the case. All my bank accounts are available with you which can be verified. I have no other bank accounts other than what has been admitted and reflected in my Balance Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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