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TMI Blog2022 (10) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... and disposed off in this consolidated order. Appeal wise adjudication is given in the following paragraphs. I.T.A. No. 252/Viz/2021 Assessment Year :2013-14 2. This appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-1, Visakhapatnam [Ld. CIT(A)] in ITA No. 147/2017-18/CIT(A)- 1/VSP/2020-21, dated 04/06/2020 arising out of the order passed U/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 [the Act] for the AY 2013-14. 3. Brief facts of the case are that the assessee is a partner in M/s. Vijetha Hospitals, Visakhapatnam. A survey operation U/s. 133A was conducted in the business premises of M/s. Vijetha Hospitals on 12/5/2015. During the survey verification it was found that the assessee has received an amount of Rs.13,78,200/- towards Referral Fee from the firm M/s. Vijetha Hospitals, Visakhapatnam during the FY 2012-13 relevant to the AY 2013-14. The assessee while recording his sworn deposition stated that the Referral Fee was not disclosed in the return of income already filed for the AY 2013-14 and would be offered as additional income in the revised return of income for the AY 2013-14. Subsequently, the Ld. AO finding reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. 4. Any other ground or grounds that may be urged at the time of hearing." 5. The only issue is with respect to the year of taxability of the referral fees claimed to have been paid by M/s. Vijetha Hospitals during the FY 2012-13. The Ld. AR argued that M/s. Vijetha Hospitals follows the Mercantile System of Accounting and has provided for referral fees payable to the assessee namely Dr. KallepalliKurmanadh. However, the Ld. AR pleaded that the assessee being an individual considers cash basis of accounting and hence the amount received from M/s. Vijetha Hospitals during the FY 2013-14 relevant to the AY 2014-15 has been rightly disclosed in the AY 2014-15. Per contra, the Ld. Departmental Representative countered the argument of the Ld. AR and stated that M/s. Vijetha Hospitals has paid the referral fees and claimed that as expenditure during the FY 2012-13 in their books of accounts. He relied on the orders of the Ld. Revenue Authorities. 6. We have heard both the parties and perused the material available on record and the orders of the authorities below. It is an admitted fact that the assessee is entitled for referral fee of Rs. 13,78,200/- and the dispute is with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal is with respect to the year of taxability of the referral fees claimed to have been paid by M/s. Vijetha Hospitals during the FY 2013-14. This issue is identical to that of the one raised by the assessee in his appeal I.T.A. No. 252/Viz/2021for the AY 2013-14. We have dealt with this issue while adjudicating the appeal in the above paragraphs of this order. Since the issue raised vide Ground No.2 of this appeal is identical to that one adjudicated by us while dealing with the appeal for the AY 2013-14, our decision given therein will apply mutatis mutandis to the instant issue also as there is no change in the facts and circumstances for both the years ie 2013-14 and 2014-15. Accordingly, we allow Ground No.2 raised by the assessee in favour of the assessee. 11. The second issue (Ground No.3) raised by the assessee is with respect to the addition of Rs. 10 lakhs as unexplained unsecured loan. It is seen from the order of the Ld. Revenue Authorities that the assessee has never produced the details with respect to creditworthiness and genuineness of the unsecured loan except for the confirmation from the loan creditor. The onus is on the assessee to establish the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 148 of the Act. The case was later selected for limited scrutiny under CASS and a notice U/s. 143(2) was issued on 20/09/2016 and served on the assessee on 24/09/2016. Subsequently, notice U/s. 142(1) of the Act was also issued to the assessee on 03/10/2016 and duly served on 6/10/2016. The case was thereafter converted from 'limited scrutiny' to 'complete scrutiny' with the prior approval of the Principal Commissioner of Income Tax-1, Visakhapatnam on 18/11/2016. The same was conveyed to the assessee vide letter dated 28/11/2016 and duly served on the assessee on 30/11/2016. In response to the notices, the assessee's representative filed the information called for by the Ld. AO. The assessee also submitted before the Ld. AO the reasons for filing the revised return of income where the books have been re-audited. The Ld. AO observed that the assessee has admitted, in addition to the regular income, an amount of Rs. 1,09,54,885/- during the survey operation as detailed below: Sl No Nature of omission / mistake Amount of additional income admitted 1. Referral Fees wrongly claimed to have paid but actually not paid, now offered for taxation. Rs. 47,36,048/- 2. Depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in good faith based on the doctrines of estoppels? 4. (a) The Ld. CIT(A) failed to make any further enquiries into the sources of the partners and genuineness of the entire loan transactions. (b) The Ld. CIT(A) erred in accepting the gross receipts of the assessee as loan transactions from the partners without actually examining the sources of those partners and without granting opportunity to the AO but merely relying on the ledger a/c of those partners in the books of account of the assessee-firm. (c) The Ld. CIT(A) ought not to have accepted a ledger a/c as complete evidence in proving the genuineness of the cash loan transactions, because the assessee's claim of loan transactions is always represented in the form of ledger a/c of the third party in the assessee's books of account. (d) The order of the Ld. CIT(A) may be set aside on this count and the AO may be given an opportunity for examination of the sources of the partners. 5. The Ld. CIT(A) ought to have verified the revised audit report wherein no violation of sec. 269SS(col. No.31) was mentioned therein, meaning thereby the entire amount of Rs. 86,19,001/- (out of which cash receipt is Rs. 21,00,000/-) init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the partners and others which were wrongly included in the hospital receipts have been identified and corrected. The Ld. AR pleaded that the Assessing Officer should have considered the revised return filed on 2/12/2015 but has erroneously considered the original return, but has adopted the amount specified in revised return with respect to unsecured loans and has disallowed the same. The Ld. AR therefore pleaded that the Ld. AO has erroneously taken the total income as per original return but has made the disallowances claimed by the assessee in its revised return of income. He therefore pleaded the order of the Ld. CIT(A) be upheld. 21. We have heard both the parties and perused the material available on record and the orders of the authorities below. Admittedly the assessee in order to correct the errors while filing the original return has filed the revised return of income on 2/12/2015. The contention of the Ld. DR could not be accepted that the revised return is filed subsequent to the date of search of 12/5/2015. We find force in the argument of the Ld. AR that the revised return was filed before the due date specified u/s. 139(5) of the Act and before the issue of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore this ground raised by the Revenue is dismissed. 24. With respect to Ground No.6 regarding the disallowance of various expenses by the Ld. AO, we find that voluminous documentary evidences have been produced before the Ld. AO for verification however, the Ld. AO not relying on the self-made vouchers and other documents, estimated the disallowance @ 20% of certain expenses as detailed in the order of the Ld. AO. We also find no fresh evidence has been produced before the Ld. CIT(A) to provide one more opportunity to the Ld. AO to verify the same. The Ld. CIT(A) has rightly observed as follows: "4.6.2. I have considered the issue. It is a fact that the appellant had admitted additional income of Rs. 47,36,048/- on account of referral fees vide para 9 of the order. It is not rational to further disallow 20% on the expenses. Therefore, I find merit in the argument of the appellant. Accordingly, further addition of Rs. 15,62,600/- in respect of Visiting Charges & Reference charges is deleted. 4.6.3. Regarding other expenses such as material purchases / hospital maintenance, the disallowance is reduced to 10% after examining the fact and circumstances of the case. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the appellant satisfactorily explained unsecured loans of Rs. 1,46,19,000/- including those received from the partners. 4. The Ld. CIT(A) is not justified in partly sustaining to the extent of Rs. 4,93,156/- the addition made by the Assessing Officer towards disallowance of expenses on ad-hoc basis. 5. Any other grounds of cross objection that may be raised at the time of hearing." 30. Grounds No.1, 2 & 3 raised by the assessee are in support of the decision of the Ld. CIT(A). While adjudicating the Revenue's appeal, we have dealt with this issue and upheld the decision of the Ld. CIT(A). Thus, the adjudication of these grounds become infructuous and dismissed as such. 31. Ground No.4 is with respect to the decision of the Ld. CIT(A) in partly sustaining the addition made by the Ld. AO towards disallowance of expenses on ad-hoc basis. This issue is similar to that of the Ground No.6 raised by the Revenue in its appeal. While adjudicating Ground No.6 of the Revenue's appeal in the above paragraphs of this order, we upheld the decision of the Ld. CIT(A). Since the issue is same our decision given therein mutatis mutandis applies to the instant ground also. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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