ROHIT GROVER,CHANDIGARH vs. PRINCIPAL COMMISSIONER OF INCOME TAX, CHANDIGARH

The brief facts of the case are that the assessee filed his return of income declaring total income of Rs. 55,11,460/-. Subsequently, the case was reopened under section 147 of the Act on the basis of information that the assessee had received a sum of Rs.3 ,98,00,000/- from M/s Vasan Healthcare Pvt. Ltd. towards transfer of “Right to carry the business during the year under consideration”. The assessment was completed under section 147 read with section 144/144B of the Act accepting the returned income.

1 Thereafter, the Ld. PCIT examined the assessment records and found that the Assessing Officer had failed to properly examine the nature and taxability of the said receipt of Rs.3.98.00.000/- . It was noticed that the assessee had claimed the said receipt as capital receipt not chargeable to tax, stating it to be goodwill of medical profession. However, as per the agreement with M/s Vasan Healthcare Pvt. Ltd., the transaction involved transfer of business along with infrastructure, equipment, client base and other commercial rights.

2 Accordingly, the Ld. PCIT initiated proceedings under section 263 of the Act on the ground that the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue.

3 The Ld. PCIT has observed that the Assessing Officer reopened the assessment under section 147 and issued notices under sections 148 and 142(1) of the Act. The assessee submitted replies and certain details; however, the Assessing Officer, without conducting detailed verification regarding the nature of receipt of Rs.3,98,00,000/-, accepted the returned income and completed the assessment at Rs. 55,11,460/-.

4 The assessment order does not reflect any meaningful inquiry or examination regarding the agreement with M/s Vasan Healthcare Pvt. Ltd., the nature of consideration received, or its taxability under the head capital gains or otherwise.

5 The Ld. PCIT, after examining the record, held that the Assessing Officer had failed to make necessary inquiries and verifications which were required in the facts of the case. It was observed that the assessee along with his wife was running a hospital on commercial lines and the transaction was in substance a transfer of business and not merely professional goodwill. The agreement clearly indicated transfer of infrastructure, equipment, clientele, approvals, and right to carry on business. Separate agreements existed for professional services, indicating that the consideration was not for professional goodwill alone. The Assessing Officer had not examined the agreement or verified the basis of the assessee’s claim.

6 Accordingly, the Ld. PCIT held that the assessment order was erroneous insofar as it was prejudicial to the interests of the Revenue and set aside the assessment with a direction to make fresh assessment after proper inquiry.

Against the order of the Ld. PCIT the assessee preferred in appeal before the Tribunal.

During the course of hearing none appeared on behalf of the Assessee.

Per contra, the Ld. DR relied on the order of Ld. PCIT.

We have heard the rival submissions and perused the material available on record. In the present case, we find that the AO, during the assessment proceedings, failed to examine or conduct inquiries regarding the assessee's agreement with M/s Vasan Healthcare Pvt. Ltd. The AO also failed to examine the nature of the consideration received and its subsequent taxability.

1 Furthermore, no inquiry or investigation was conducted regarding the professional goodwill claimed by the assessee in the proceedings before the lower authorities. Therefore, in our considered view, since the necessary inquiries were not made at the assessment stage regarding the issues discussed above,

2 We find no infirmity in the findings recorded by the Ld. PCIT in the order passed under Section 263. Accordingly, the appeal filed by the assessee is dismissed.

In the result, appeal of the Assessee is dismissed. Order pronounced on 27/04/2026 लिलत कुमार कृणव" सहाय (LALIET KUMAR) (KRINWANT SAHAY) "ाियक सद" /JUDICIAL MEMBER लेखा सद"/ ACCOUNTANT MEMBER AG आदेश की "ितिलिप अ"ेिषत/ Copy of the order forwarded to : 1. अपीलाथ"/ The Appellant

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File