Shri Praksh K.Sejwani, Bharuch v. The Dy.CIT.,Bharuch Circle,, Bharuch

ITA 3277/AHD/2008 | 2003-2004
Pronouncement Date: 02-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 327720514 RSA 2008
Bench Ahmedabad
Appeal Number ITA 3277/AHD/2008
Duration Of Justice 1 year(s) 9 month(s) 3 day(s)
Appellant Shri Praksh K.Sejwani, Bharuch
Respondent The Dy.CIT.,Bharuch Circle,, Bharuch
Appeal Type Income Tax Appeal
Pronouncement Date 02-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 02-07-2010
Date Of Final Hearing 29-06-2010
Next Hearing Date 29-06-2010
Assessment Year 2003-2004
Appeal Filed On 29-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND BHAVNESH SAINI JUDICIAL MEMBER) ITA.NO.3277/AHD/2008 ASSTT.YEAR : 2003-2004 PRAKASH K. SEJWANI PROP: OF ASHA NURSING HOME PANCHBATTI BHARUCH. VS. DCIT BHARUCH CIR. BHARUCH. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL REVENUE BY : SHRI A.K. KHANDELWAL O R D E R PER G.D. AGARWAL VICE-PRESIDENT: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT(A)-VI BARODA DATED 04 .07.2008 FOR A.Y.2003- 2004 ARISING OUT OF THE ORDER OF THE ASSESSING OFFI CER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961. 2. THE ONLY GROUND RAISED IN THE ASSESSEES APPEAL IS AS UNDER: 1. THAT THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY U/S.271(1)(C) IN RESPECT OF ADDITION OF ALLEGED SUPPRESSION OF RECEIPTS OF RS.5.29 LAKHS. 3. AT THE TIME OF HEARING BEFORE US IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE ASSESSEE IS A DOCTOR AND HE IS ALSO RUNNIN G A NURSING HOME AT BHARUCH. ON 22-7-2003 SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF SUR VEY IT WAS NOTICED BY THE REVENUE AUTHORITIES THAT THERE WAS AN UNDERSTATEMEN T OF RECEIPT AND IN THE STATEMENT RECORDED AT THE TIME OF SURVEY THE ASSES SEE ADMITTED TO HAVE UNDER STATED HIS RECEIPT TO THE TUNE OF RS.6 06 000/-. T HAT THE RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED ON 24 -11-2003 I.E. AFTER THE SURVEY IN WHICH THE ADDITIONAL INCOME OF RS.6 06 00 0/- WAS OFFERED BY THE ITA.NO.3277/AHD/2008 -2- ASSESSEE OVER AND ABOVE NET PROFIT OF THE PROFESSIO N. DURING THE ASSESSMENT PROCEEDINGS THE AO EXAMINED THE CASH BOOK AS WELL AS REGISTER AND HE FOUND THAT THE ACTUAL DIFFERENCE FOR SUPPRESSION OF RECEI PT IN THE CASE OF OUTDOOR PATIENTS WAS RS.5 28 909/- AND IN THE CASE OF INDOO R PATIENTS IT WAS RS.2 75 540/-. HE THEREFORE MADE THE ADDITION OF RS.8 04 449/- FOR UNDERSTATEMENT OF THE RECEIPTS. HOWEVER HE ALSO M ADE FURTHER ADDITION OF RS.6 06 000/- WHICH WAS THE INCOME DISCLOSED BY THE ASSESSEE. IN THE QUANTUM APPEAL THE CIT(A) WAS OF THE OPINION THAT THE INCO ME DISCLOSED BY THE ASSESSEE AT RS.6 06 000/- WAS ON ACCOUNT OF OUT-DOOR PATIENT AND RECEIPT FROM OTHER SERVICES LIKE X-RAY ECHO TMT ETC. ACCORDINGLY HE SUSTAINED ADDITION OF RS.5 28 909/-. HE HAS STATED THAT THE ASSESSEE BEI NG A DOCTOR AND BUSY IN HIS PROFESSIONAL ASSIGNMENT COULD NOT FILE APPEAL AGAIN ST THE ORDER OF THE CIT(A). FURTHER THE AO LEVIED PENALTY U/S.271(1)(C) IN RES PECT OF THE ADDITION OF RS.8 04 449/- MADE BY HIM AND THE CIT(A) ALSO SUSTA INED THE PENALTY UPON THE ADDITION OF RS.5.29 LAKHS. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT EVEN IF THE ADDITION IS SUSTAINED IN THE QUANTUM APPEAL THE AS SESSEE CAN AGITATE THE SAME WHILE CONSIDERING THE LEVY OF PENALTY. HE HAS SUBM ITTED THAT IN THE ASSESSMENT ORDER THE AO HAS WORKED OUT THE UNDERSTATEMENT OF RECEIPT FOR EACH DAY AND THEN HAD ARRIVED AT THE CONCLUSION THAT THE TOTAL U NDERSTATEMENT OF THE RECEIPT BY THE ASSESSEE WAS RS.8 04 449/-. THUS THERE WAS NO WARRANT FOR HOLDING THAT THE ABOVE UNDERSTATEMENT WAS OVER AND ABOVE THE INCOME ALREADY DISCLOSED BY THE ASSESSEE. HE ALSO SUBMITTED THAT THE CIT(A) WAS AL SO NOT JUSTIFIED IN HOLDING THAT THE INCOME DISCLOSED BY THE ASSESSEE WAS ONLY FOR OUTDOOR PATIENT AND OTHER SERVICES LIKE X-RAY ECHO TMT ETC. HE HAS S UBMITTED THAT THE ENTIRE RECEIPT FROM THE PATIENTS IS EITHER FROM INDOOR PAT IENTS OR FROM OUTDOOR PATIENTS. THE RECEIPT CAN BE FOR THE PROFESSIONAL SERVICES OF ASSESSEE AS DOCTOR ROOM CHARGES OR FOR X-RAY ECHO TMT ETC. ONCE THE RECE IPT IN RESPECT OF INDOOR PATIENTS AS WELL AS OUTDOOR PATIENTS FOR EACH DAY I S ALREADY CONSIDERED SEPARATELY THERE WAS NO WARRANT FOR HOLDING THAT T HE DISCLOSURE MADE BY THE ASSESSEE WAS OVER AND ABOVE THE ADDITION MADE BY TH E AO. HE THEREFORE ITA.NO.3277/AHD/2008 -3- SUBMITTED THAT THE PENALTY LEVIED UNDER SECTION 271 (1)(C) OF THE ACT IS NOT JUSTIFIED. IN THE ALTERNATE IT IS SUBMITTED BY TH E LEARNED COUNSEL THAT IF AT ALL PENALTY CAN BE LEVIED UNDER SECTION 271(1)(C) IT W OULD BE FOR RS.1 98 449/- (RS.8 04 449/- MINUS RS.6 06 000/-) ONLY. 4. THE LEARNED DR ON THE OTHER HAND RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. HE HAS SUBMITTED THAT IN THE QU ANTUM APPEAL THE CIT(A) HAS RECORDED A SPECIFIC FINDING THAT THE INCOME DIS CLOSED BY THE ASSESSEE AT RS.6 06 000/- WAS IN RESPECT OF OUTDOOR PATIENTS AN D RECEIPT FROM OTHER SERVICES LIKE X-RAY ECHO TMT ETC. THEREFORE THE CIT(A) H AD SUSTAINED THE ADDITION IN RESPECT OF SUPPRESSION FROM INDOOR PATIENTS I.E. RS .5.29 LAKHS. DURING THE COURSE OF SURVEY IT WAS ALREADY ESTABLISHED THAT T HE ASSESSEE WAS CONCEALING HIS INCOME BY SUPPRESSING THE RECEIPTS. THE ASSESS EE HAD ALSO OFFERED THE SUPPRESSED RECEIPT FROM OUTDOOR PATIENTS AND OTHER SERVICES LIKE X-RAY ECHO TMT ETC. IN THE RETURN OF INCOME BUT THE SUPPRESSI ON OF THE RECEIPT FROM INDOOR PATIENTS WAS NOT OFFERED IN THE RETURN OF IN COME AND THEREFORE THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS RIGH TLY LEVIED THEREFOR. THE SAME SHOULD BE SUSTAINED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED MATERIALS PLACED BEFORE US. THERE IS NO DI SPUTE THAT DURING THE COURSE OF SURVEY THE REVENUE AUTHORITIES FOUND THE EVIDEN CE OF UNDERSTATEMENT OF RECEIPTS BY THE ASSESSEE. THE ASSESSEE ALSO ADMITT ED THE SAME AND IN THE RETURN OF INCOME APART FROM NET PROFIT AS PER THE INCOME AND EXPENDITURE ACCOUNT ALSO DISCLOSED ADDITIONAL INCOME OF RS.6 06 000/-. THE ASSESSING OFFICER HAS GIVEN THE DATE WISE CHART FROM PAGE NOS.4 TO 7 OF H IS ORDER AND HAS WORKED THAT THE UNDERSTATEMENT OF RECEIPT FROM INDOOR PATIENTS WAS RS.5 28 909/-. IN RESPECT OF OUTDOOR PATIENTS HE WORKED OUT THE UNDE RSTATEMENT AT RS.2 75 540/-. THE FINDING OF THE ASSESSING OFFICER IN PARA 8.1 OF HIS ORDER READS AS UNDER: 8.1 IT IS SEEN FROM THE ABOVE CHART THAT THE ASSES SEE HAS WHILE ACCOUNTING THE RECEIPTS IN CASH BOOK FROM THE INDOO R AND OUTDOOR ITA.NO.3277/AHD/2008 -4- REGISTERS UNDERSTATED THE RECEIPTS. AS SUCH BY AD OPTING THIS PRACTICE HE HAS FURTHER UNDERSTATED RECEIPTS OF RS.2 75 540/- F OR OUTDOOR PATIENTS AND RS.5 28 909/- FOR INDOOR PATIENTS IN THE CASH B OOK OVER AND ABOVE THE UNDERSTATEMENT ADMITTEDLY MADE IN THE SAID REGI STERS WITH REFERENCE TO THE PRIMARY RECORDS TO THE EXTENT OF RS.6.06 LAC S. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN AS TO WHY THE DISCREP ANCY ARRIVED AS ABOVE SHOULD NOT BE ADDED TO THE TOTAL INCOME IN ADDITION TO THE DISCLOSURE MADE AT THE TIME OF SURVEY ON ACCOUNT OF UNDERSTATE MENT OF RECEIPTS OF RS.6 06 000 VIDE PROCEEDINGS DATED 12/12/2005. THUS AS PER THE AO UNDERSTATEMENT OF RECEIPT FROM INDOOR AND OUTDOOR PATIENTS WORKED OUT AT RS.8 04 449/- WHICH WAS OVER AND ABOVE THE DISCLOSURE OF RS.6 06 000/- MADE BY ASSESSEE. IT IS MENTIONED BY THE AO THAT THE DISCLOSURE OF RS.6 06 000/- WAS IN RESPECT OF INCOM E FROM SPECIALIZED SERVICES LIKE X-RAY ECHO TMT ETC. IN THE QUANTUM APPEAL THE CIT(A) WAS OF THE OPINION THAT THE DISCLOSURE OF THE INCOME BY THE AS SESSEE WAS INCLUSIVE OF UNDERSTATED RECEIPTS FROM OUTDOOR PATIENTS AS WELL AS OTHER SERVICES X-RAY ECHO TMT ETC. THE ORDER OF THE CIT(A) IN THE QUANTUM HA D BECOME FINAL. HOWEVER IN THE PENALTY APPEAL THE ASSESSEE HAS REITERATED THAT THE DISCLOSURE MADE BY THE ASSESSEE OF RS.6 06 000/- WAS FOR THE ENTIRE SUPPRE SSION OF INCOME I.E. FROM INDOOR AS WELL AS OUTDOOR PATIENTS. FROM THE PERUS AL OF THE ASSESSMENT ORDER WE FIND THAT THE ASSESSING OFFICER HAS COMPARED EAC H DAYS RECEIPT AS PER THE CASH BOOK AS WELL AS AS PER THE REGISTER IN RESPECT OF INDOOR AND OUTDOOR PATIENTS. THIS IS NOT THE CASE OF THE REVENUE THAT IN RESPECT OF INDOOR AND OUTDOOR PATIENTS IF THE SERVICES LIKE X-RAY ECHO TMT ETC. IS PROVIDED THE SAME WOULD NOT BE INCLUDED IN THE REGISTERS OF INDO OR AND OUTDOOR PATIENTS. IN OUR OPINION WHEN THE RECEIPT FROM EACH PATIENT WHE THER INDOOR AND OUTDOOR IS CONSIDERED IT WILL INCLUDE THE ENTIRE RECEIPT FROM PATIENT. THE RECEIPT FROM THE PATIENTS CAN BE FROM PROFESSIONAL FEES OF THE DOCTO R ROOM RENT COST OF MEDICINES SUPPLIED AND OTHER SERVICES LIKE X-RAY E CHO TMT ETC. ONCE THE RECEIPT FROM EACH AND EVERY PATIENT WAS ALREADY CON SIDERED AND IT WAS WORKED OUT THAT THE UNDERSTATEMENT OF RECEIPTS WAS RS.8 04 449/- THERE WAS NO JUSTIFICATION FOR HOLDING THAT THE ABOVE RECEIPT WA S OVER AND ABOVE THE DISCLOSURE MADE BY THE ASSESSEE. SINCE NO APPEAL I S FILED BY THE ASSESSEE ITA.NO.3277/AHD/2008 -5- AGAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITIO N OF RS.5.29 LACS FOR UNDERSTATEMENT OF RECEIPTS OUR FINDING IN THIS ORD ER WOULD BE RELEVANT TO DECIDING THE QUANTUM OF PENALTY ONLY. THEREFORE FO R THE PURPOSES OF PENALTY PROCEEDINGS WE HOLD THAT THE CONCEALMENT OF INCOME BY THE ASSESSEE WAS ONLY TO THE TUNE OF RS.1 98 449/- (RS.8 04 449/- BEING T HE ACTUAL UNDERSTATEMENT OF THE RECEIPTS BY THE ASSESSEE MINUS RS.6 06 000/- IN COME ALREADY DISCLOSED BY THE ASSESSEE). WE THEREFORE DIRECT THE ASSESSING OFFICER TO LEVY MINIMUM PENALTY ON THE CONCEALMENT OF INCOME OF RS.1 98 449 /-. 6. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 2 ND JULY 2010. SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 02-07-2010 VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER AR ITAT AHMEDABAD