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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & Ms. SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 2 of 8 These three appeals by the Revenue, three Cross Objections and an appeal by the assessee are filed against different orders, all dated 25.07.2019, passed by the CIT(A-5), Vadodara for the Assessment Years 2013-14, 2014-15, 2015-16 & 2015-16 and were heard together. As a matter of convenience, therefore, all these Appeals & Cross Objections are being disposed of by way of this consolidated order.
The grounds of appeals raised by the Revenue in its Appeals are as under : -
IT(SS)A No.482/Ahd/2019 - A.Y. 2013-14
“1 On the facts and in the circumstances of the case and in law, whether the Ld. CIT (Appeals) erred in allowing the deduction under section 80IB(11C) of Rs.2,09,06,738/-, without appreciating that factual position found during search & seizure proceedings u/s. 132 of the Act was not substantiate the claim of the assessee u/s. 80IB(11C) as the assessee was not satisfying all the conditions as laid down u/s. 80IB(11C) of the Act.”
IT(SS)A No.483/Ahd/2019 - A.Y. 2014-15
“1 On the facts and in the circumstances of the case and in law, whether the Ld. CIT (Appeals) erred in allowing the deduction under section 80IB(11C) of Rs.2,35,47,826/-, without appreciating that factual position found during search & seizure proceedings u/s. 132 of the Act was not substantiate the claim of the assessee u/s. 80IB(11C) as the assessee was not satisfying all the conditions as laid down u/s. 80IB(11C) of the Act.”
ITA No.1522/Ahd/2019 - A.Y. 2015-16
“1 On the facts and in the circumstances of the case and in law, whether the Ld. CIT (Appeals) erred in allowing the deduction under section 80IB(11C) of Rs.3,64,96,517/-, without appreciating that factual position found during search & seizure proceedings u/s. 132 of the Act was not substantiate the claim of the assessee u/s. 80IB(11C) as the assessee was not satisfying all the conditions as laid down u/s. 80IB(11C) of the Act.”
The grounds raised by the Assessee in its Cross Objections are as under : -
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 3 of 8
C.O. No.8/Ahd/2020 - A.Y. 2013-14
“1 The assessment order of Learned Assessing Officer (LAO) i.e., Deputy Commissioner of Income Tax, Circle 1(2)(1), Vadodara was erroneous and addition of Rs.2,09,06,738/- was made, aggrieved by the order of the LAO the assessee filed appeal with CIT(A)-5, Vadodara and on the basis of the facts the CIT(A)-5, Vadodara allowed the said deduction claimed by the appellant under section 80IB(11C) of Rs.2,09,06,738/-.
Since the appellant has complied with all the provisions of section 80IB(11C), Hon’ble CIT(A)-5, Vadodara allowed the appeal in favour of the assessee after due consideration of facts of the case and judicially applying his mind, therefore request your good selves to consider the facts and dismiss the appeal filed by the DCIT Circle1(2)(1), Vadodara.”
C.O. No.9/Ahd/2020 - A.Y. 2014-15
“1 The assessment order of Learned Assessing Officer (LAO) i.e., Deputy Commissioner of Income Tax, Circle 1(2)(1), Vadodara was erroneous and addition of Rs.2,35,47,826/- was made, aggrieved by the order of the LAO the assessee filed appeal with CIT(A)-5, Vadodara and on the basis of the facts the CIT(A)-5, Vadodara allowed the said deduction claimed by the appellant under section 80IB(11C) of Rs.2,35,47,826/-.
Since the appellant has complied with all the provisions of section 80IB(11C), Hon’ble CIT(A)-5, Vadodara allowed the appeal in favour of the assessee after due consideration of facts of the case and judicially applying his mind, therefore request your good selves to consider the facts and dismiss the appeal filed by the DCIT Circle1(2)(1), Vadodara.”
C.O. No.10/Ahd/2020 - A.Y. 2015-16
“1 The assessment order of Learned Assessing Officer (LAO) i.e., Deputy Commissioner of Income Tax, Circle 1(2)(1), Vadodara was erroneous and addition of Rs.3,64,96,517/- was made, aggrieved by the order of the LAO the assessee filed appeal with CIT(A)-5, Vadodara and on the basis of the facts the CIT(A)-5, Vadodara allowed the said deduction claimed by the appellant under section 80IB(11C) of Rs.3,64,96,517/-.
Since the appellant has complied with all the provisions of section 80IB(11C), Hon’ble CIT(A)-5, Vadodara allowed the appeal in favour of the assessee after due consideration of facts of the case and judicially
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 4 of 8 applying his mind, therefore request your good selves to consider the facts and dismiss the appeal filed by the DCIT Circle1(2)(1), Vadodara.”
The grounds of appeal raised by the Assessee in its Appeal are as under : -
ITA No.1512/Ahd/2019 - A.Y. 2015-16
“1 The Commissioner of Income Tax Appeals has erred in disallowing Ground no.02 being the Bullion purchased by the appellant for which necessary documentary proofs/evidences produced during the appellate proceedings.
The appellate order of Commissioner of Income Tax Appeals, Vadodara is erroneous, without considering the facts of the case and hence bad-in- Law and Void-ab-initio.
Your appellant therefore prays to delete the addition made by the Assessing officer.
The assessee is engaged in the Medical Profession as a Consulting Urologist, and running a Hospital in the name of Uro Care Hospital. A survey under Section 133A of the Income Tax Act, 1961 was conducted on 03.12.2014 by the DCIT, Circle- 1(2), Baroda at the business premises of the assessee. During the survey proceedings, it was found that cash amounting to Rs.26,68,850/- was kept inside the premises. Statement of the assessee was recorded under Section 131 of the Act and the assessee was asked to clarify the source of the said cash and also to clarify whether the cash is reflected in the regular books of account of the Uro Care Hospital or not. In response to the same, the assessee submitted that the cash represents the receipts of M/s Uro Care Hospital, however, no books of account in respect of Uro Care Hospital were maintained during the F.Y. 2014-15 i.e. year of survey. Accordingly, the Assessing Officer issued notice u/s.153A of the Act dated 27.03.2015 requiring the assessee to furnish return of income within 30 days from the service of the notice. In compliance to the notice, the assessee filed his return of income under Section 153A of the Act on 23.04.2015 declaring total income of Rs.26,51,170/- after claiming deduction under Section 80IB(11C) of the Act of Rs.2,09,06,738/-. Subsequently, notices under Section 143(2) of the Act and under Section 142(1) of the
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 5 of 8 Act were issued and duly served upon the assessee. The assessment under Section 153A read with Section 143(3) of the Act was finalized on 14.12.2016 determining total income at Rs.2,35,57,905/- making disallowance under Section 80IB(11C) of the Act amounting to Rs.2,09,06,738/-.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed appeal of the assessee.
The Ld. DR submitted that the CIT(A) erred in allowing deduction under Section 80IB(11C) of the Act without appreciating the fact that cash amounting to Rs.26,68,850/- was kept inside the premises during the survey and after issuance of notice under Section 153A of the Act. The assessee has filed return of income and no books of account were maintained during the F.Y. 2014-15. During the search and seizure operation under Section 132 of the Act, the assessee never substantiated the claim under Section 80IB(11C) of the Act as the assessee was not satisfying all the conditions as laid down under Section 80IB(11C) of the Act. The Ld. DR submitted that the Hospital was started in 2011 but after conducting survey it was found that capacity of the hospital is less than 100 beds which is mandatory condition for claiming section 80IB(11C) of the Act. The Ld. DR further submitted that the staff were also less and the equipments were not adequate to treat the patients as per the required conditions under the provisions of Section 80IB(11C) of the Act.
The Ld. AR submitted that during the survey, the statement under Section 132 of the Act was recorded and not under Section 133(C) of the Act the statement was recorded and thus it does not stand any validity in the eyes of law. The Ld. AR further submitted that the statement was retracted. The Ld. AR further submitted that allegation of the Assessing Officer that the Hospital does not have 100 beds capacity to claim deduction under Section 80IB911C) is not proper as the assessee has the capacity of treating 100 patients at a time and there are 100 beds equipped with medical requirements. The Ld. AR further submitted that the registration and the mandate required for 100 beds in a Hospital has been complied with and thus the local Municipal Corporation, Vadodara granted the desired certificate. As regards the
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 6 of 8 Nurses and Doctors, the ld. AR submitted that there is Memorandum of Understanding which was entered into with other Hospital Administration which says that in emergency situations and if required additional staff will be supplied especially efficient Nurses and Doctors.
We have heard both the parties and perused all the relevant material available on record. From the perusal of the documents submitted before the Assessing Officer as well as before the CIT(A) it can be seen that the local authority i.e. Vadodara Municipal Corporation has issued certificate after verifying all the aspects related to 100 beds capacity in the Hospital and granted registration and permission to run the Medical Facility Centre (Hospital). Thus, there was no doubt as to the required condition of 100 beds Hospital in assessee’s case as per the conditions laid down under Section 80IB(11C) of the Act. Besides this, the assessee has also submitted the Minutes of Understanding in respect of additional supply of expertise such as Doctors and Nurses with other Hospital. Thus, merely on the basis of statement which were later on retracted cannot be taken into account for determining not to grant deduction under Section 80IB(11C) of the Act to the assessee. The CIT(A) has rightly deleted this addition. Thus, IT(SS)A No.482/Ahd/2019 for A.Y. 2013-14 filed by the Revenue is dismissed.
As regards to Cross Objection No.8/Ahd/2020 (in IT(SS)A No.482/Ahd/2019) for A.Y. 2013-14, the same is in support of CIT(A)’s finding in respect of the deduction claimed by the assessee under Section 80IB(11C) which is allowed by the CIT(A). The Cross Objection filed by the assessee is, therefore, allowed.
As regards IT(SS)A No.483/Ahd/2019 for A.Y. 2014-15, the same is identical to IT(SS)A No.482/Ahd/2019 for A.Y. 2013-14 and hence the Revenue’s appeal is dismissed and C.O. No.9/Ahd/2020 for A.Y. 2014-15 filed by the assessee is allowed.
As regards ITA No.1522/Ahd/2019 for A.Y. 2015-16, the same is identical to A.Y. 2013-14 and hence the Revenue’s appeal is dismissed and C.O. No.10/Ahd/2020 for A.Y. 2015-16 filed by the assessee is allowed.
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 7 of 8 11. As regards ITA No.1512/Ahd/2019 for A.Y. 2015-16 filed by the assessee, the return of income in response to notice under Section 153A of the Act declaring total income at Rs.59,60,880/- was filed by the assessee on 23.04.2015. The total income was assessed at Rs.4,35,95,804/- thereby making addition under Section 69A of the Act relating to Unexplained Bullion (Rs.11,38,410/-) and disallowance under Section 80IB(11C) of the Act.
The Ld. AR submitted that the Bullion purchased by the assessee during the relevant A.Y. was explained before the Assessing Officer with necessary documentary proof. Thus, the Assessing Officer as well as the CIT(A) was not right in making addition in respect of unexplained bullion. The Ld. AR submitted that proper Balance Sheet along with the Schedule-D explaining the purchase of bullion was submitted before the Assessing Officer which was audited under Section 44AB of the Act. The transactions pertaining to bullion in cash was not bogus and was purely with the intention to do investment out of the cash available on hands. Bill books and the bills of the seller of the bullion i.e. C.H. Jewellers Pvt. Ltd. is not maintained by the assessee and hence the observations of the Assessing Officer that the bills were made by the same person cannot be the basis of making this addition. Ld. AR submitted that the bills of the bullion purchased on various dates worth Rs 11,38,410/- was duly accounted for in the books of account of the assessee and the same bullion was then converted into “Gold Kada Jewellery” and the making charges of Rs.2,000 was also paid by the assessee in cash which is also duly accounted for. Ld. AR further submitted that the investment made by the assessee in bullion cannot be termed as unexplained investment under Section 69A of the Act.
The Ld. DR relied upon the Assessment Order and the order of the CIT(A).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that bullion purchased by the assessee has been properly reflected in the books of account and the Balance Sheet with the detailed explanation given in Schedule-D. From the perusal of records, it can be seen that all the purchases made is in the cash mode still the bills were properly maintained by the
IT(SS)A Nos.482 & 483/Ahd/2019, ITA Nos.1522 & 1512/Ahd/2019& CO Nos.8, 9 & 10/Ahd/2020 A.Ys. 2013-14, 2014-15, 2015-16 & 2015-16 Page 8 of 8 assessee and the said evidence were produced before the Assessing Officer as well as before the CIT(A). Thus, the assessee has explained investments and also explained the conversion of that investment into jewellery in the later years. Thus, this cannot be termed as unexplained investment under Section 69A of the Act. The CIT(A) has overlooked the evidences produced by the assessee and hence appeal of the assessee being ITA No.1512/Ahd/2019 for the A.Y. 2015-16 is allowed.
In the result, all the three appeals filed by the Revenue are dismissed and all the three Cross Objections filed by the assessee are allowed and ITA No.1512/Ahd/2019 for A.Y. 2015-16 filed by the assessee is also allowed.
Order pronounced in the open Court on this 3rd day of August, 2022.
Sd/- Sd/- (ANNAPURNA GUPTA) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 3rd day of August, 2022 PBN/*
Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY
Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad