Brij Basant Hospitals Pvt Ltd, Ahmedabad v. The Income Tax Officer Wd 1(2), Ahmedabad

ITA 922/AHD/2009 | 2005-2006
Pronouncement Date: 14-03-2011 | Result: Allowed

Appeal Details

RSA Number 92220514 RSA 2009
Assessee PAN AABCB7677A
Bench Ahmedabad
Appeal Number ITA 922/AHD/2009
Duration Of Justice 1 year(s) 11 month(s) 19 day(s)
Appellant Brij Basant Hospitals Pvt Ltd, Ahmedabad
Respondent The Income Tax Officer Wd 1(2), Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 14-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 14-03-2011
Date Of Final Hearing 14-03-2011
Next Hearing Date 14-03-2011
Assessment Year 2005-2006
Appeal Filed On 25-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND D. C. AGRAWAL AM) ITA NO.922/AHD/2009 A. Y.: 2005-06 BRIJ BASANT HOSPITALS PVT. LTD. 23 HATKESH SOCIETY DARPAN 5 ROADS NAVRANGPURA AHMEDABAD VS THE INCOME TAX OFFICER WARD-1 (2) AHMEDABAD PA NO. AABCB 7677 A (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. DIVATIA AND M. K. PATEL AR RESPONDENT BY SHRI MANDIT NAGPAL SR. DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-VI AHMEDABAD DATED 19 TH DECEMBER 2008 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: 1. IN LAW AND ON FACTS THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.12 13 510/- MADE BY THE AO ON ACCOUNT OF INCREAS E IN MEDICINE EXPENSES. (2) IN LAW AND ON FACTS THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE O F RS.59 288/- OUT OF INTEREST EXPENSES MADE BY THE AO . 2. THE AO NOTED THAT THE ASSESSEE HAS SHOWN HOSPITA L INCOME OF RS.34 08 510/- AND CLAIMED EXPENSES AMOUNTING TO RS .23 72 403/- ITA NO.922/AHD/2009 BRIJ BASANT HOSPITALS PVT. LTD. VS ITO WARD-1(2) A HMEDABAD 2 ON ACCOUNT OF MEDICINE EXPENSES WHICH IS 69.60% OF THE TOTAL RECEIPTS. THE AO NOTED THAT THE EXPENSES SEEM TO BE HIGH IN COMPARISON TO RECEIPTS IN THE CASE OF PRIVATE HOSPI TALS. THE ASSESSEE WAS ASKED TO SUBMIT THE NAME AND ADDRESS OF THE PAR TIES FROM WHOM PURCHASES EXCEEDING RS. 25 000/- WERE MADE ALONG WI TH COPIES OF THE ACCOUNTS. INQUIRY U/S 133(6) OF THE IT ACT WAS CONDUCTED. THE ASSESSEE WAS ASKED TO PRODUCE PATIENTS CASE RECORD ALONG WITH LEDGER ACCOUNT AND BANK STATEMENT CASH BOOK PURCH ASE/SALE REGISTER STOCK REGISTER AND VOUCHERS ETC. THE ASSE SSEE HOWEVER DID NOT PRODUCE THE BOOKS OF ACCOUNT AND PATIENTS CASE RECORD ETC. THEREAFTER THE LIST OF PATIENTS AND DETAILS OF MED ICINE EXPENSES WAS SUBMITTED ALONG WITH REPLY. THE AO COMPARED THE MED ICINE EXPENSES AND PROFESSIONAL INCOME IN THE PRECEDING ASSESSMENT YEARS AND FOUND THAT MEDICINE EXPENSES HAVE INCREASED. THE LE TTERS ISSUED U/S 133(6) OF THE IT ACT WAS ISSUED TO 8 DIFFERENT PART IES. HOWEVER NO SUBMISSION WAS RECEIVED FROM 5 PARTIES. NO CONFIRMA TION IS PRODUCED. THE DETAILS DID NOT TALLY WITH THE BOOKS OF ACCOUNT . THE ASSESSEE FILED REPLY TO EXPLAIN RISE IN MEDICINE EXPENSES BECAUSE IT WAS PART OF PROFESSIONAL RECEIPT AND COST OF MEDICINE ENHANCED. THE AO DID NOT ACCEPT THE REPLY OF THE ASSESSEE. THE AO THEREFORE NOTED THAT REASONABLE RATIO OF MEDICINE EXPENSES TO PROFESSION AL INCOME OF 34% HAS BEEN SHOWN BY THE ASSESSEE IN THE ASSESSMENT YE AR 2000-01 IS TAKEN AND ACCORDINGLY DISALLOWANCE OF RS.12 13 510/ - WAS MADE. SO FAR AS INTEREST EXPENSES IS CONCERNED INTEREST FRE E LOANS HAVE BEEN GIVEN TO SHRI MUKESH BANSAL WHO IS ONE OF THE DIRE CTORS OF THE ASSESSEE COMPANY WHICH WAS OUTSTANDING AT THE END O F THE YEAR AT RS.9 87 312/- AND THE ASSESSEE INCURRED INTEREST EX PENSES OF ITA NO.922/AHD/2009 BRIJ BASANT HOSPITALS PVT. LTD. VS ITO WARD-1(2) A HMEDABAD 3 RS.59 288/-. THE ASSESSEE EXPLAINED THAT SAID LOAN WAS GIVEN FROM THE INTEREST FREE UNSECURED LOAN FROM ANOTHER DIREC TOR. THE INTEREST IS PAID BY THE COMPANY IN RESPECT OF TERM LOAN FROM BA NK AGAINST PURCHASE OF MEDICAL EQUIPMENT AND AS SUCH INTEREST IS NOT DISALLOWABLE. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND MADE DISALLOWANCE OF R.59 288/-. THE ASSESSEE F ILED DETAILED SUBMISSION BEFORE THE LEARNED CIT(A) WHICH IS INCOR PORATED IN THE APPELLATE ORDER AND THEREAFTER THE LEARNED CIT(A) R EPRODUCED THE ASSESSMENT ORDER IN THE APPELLATE ORDER. THE LEARNE D CIT(A) THEREAFTER WITHOUT CONSIDERING THE EXPLANATION OF T HE ASSESSEE AND WITHOUT PASSING REASONED ORDER CONFIRMED THE ADDITI ONS. IT WOULD SHOW THAT THE LEARNED CIT(A) WITHOUT CONSIDERING TH E REPLY AND EVIDENCES ON RECORD MERELY CONFIRMED THE ORDER OF T HE AO WITHOUT PASSING REASONED ORDER. ACCORDING TO SECTION 250 (6 ) OF THE IT ACT THE LEARNED CIT(A) IS REQUIRED TO PASS REASONED ORD ER ON EACH AND EVERY ASPECT OF THE MATTER. MERE INCREASE IN MEDICI NE EXPENSES IS NO GROUND TO CONFIRM THE ADDITION. THERE WAS NO REASON TO FOLLOW THE EXPENDITURE INCURRED BY THE ASSESSEE IN ASSESSMENT YEAR 2000-01 UNLESS THE FACTS ARE SAME. THE LEARNED CIT(A) FAILE D TO NOTE THAT IN SUCCEEDING YEARS FROM 2000-01 THE RATIO OF MEDICIN E EXPENSES HAVE INCREASED IN THE RATIO OF 55.03% 55.00% AND 65.66% IN ASSESSMENT YEARS 2002-03 2003-04 AND 2004-05.. THE APPEAL IS FOR ASSESSMENT YEAR 2005-06. IT MEANS BOTH THE AUTHORITIES BELOW D ID NOT DISTURB HIGHER PERCENTAGE OF EXPENSES. SIMILARLY FOR PAYME NT OF INTEREST THE ASSESSEE EXPLAINED THAT LOAN HAS BEEN TAKEN IN EARL IER YEAR AND NO NEW LOAN HAS BEEN TAKEN. THE TERM LOAN HAS BEEN UTI LIZED FOR THE PURPOSE OF PURCHASE OF MEDICAL EQUIPMENT. THEREFORE THE LEARNED ITA NO.922/AHD/2009 BRIJ BASANT HOSPITALS PVT. LTD. VS ITO WARD-1(2) A HMEDABAD 4 CIT(A) WAS BOUND TO DECIDE THE ISSUE CONSIDERING TH E EVIDENCES AND MATERIAL ON RECORD. AGAIN THE LEARNED CIT(A) WITHO UT DISCUSSING THE FACTS AND WITHOUT GIVING REASONS FOR DECISION CONFI RMED THE ADDITION ON ACCOUNT OF INTEREST. IT WOULD THEREFORE SHOW T HAT THE MATTER REQUIRES RECONSIDERATION OF THE LEARNED CIT(A). WE ACCORDINGLY SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE B OTH THE GROUNDS TO HIS FILE WITH DIRECTION TO RE-DECIDE BOTH THE GROUN DS BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LEARNED CIT(A) SHALL DISCUSS ALL THE FACTS AND SUBM ISSIONS OF THE ASSESSEE IN HIS ORDER AND SHALL PASS REASONED ORDER ON EACH AND EVERY SUBMISSION OF THE ASSESSEE DISCUSSING THE EVI DENCES ON RECORD. MERE REPRODUCTION OF THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER IN THE APPELLATE ORDER WOULD N OT SERVE THE PURPOSE AND MANDATE OF LAW. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 -03-2011 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 14-03-2011 LAKSHMIKANT/- ITA NO.922/AHD/2009 BRIJ BASANT HOSPITALS PVT. LTD. VS ITO WARD-1(2) A HMEDABAD 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD