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Income Tax Appellate Tribunal, BANGALORE BENCH “ C ”
Before: SHRI A.K. GARODIA & SHRI VIJAY PAL RAO
Per Shri Vijay Pal Rao, J.M. : This appeal by the assessee is directed against the order dt.9.11.2015 of Commissioner of Income Tax (Appeals), Gulbarga for the Assessment Year 2012-13.
The assessee has raised following grounds :
3. At the time of hearing, the learned Authorised Representative of the assessee has stated that the assessee does not press Ground No.7 and same may be dismissed as not pressed. The ld. DR has no objection in dismissing the ground. The Ground No.7 is dismissed as prayed.
4. Ground Nos.1 to 6 are relating to disallowance of deduction under Section 80 IB(11C) of the Income Tax Act, 1961 (in short 'the Act') .
5. The assessee is a partnership firm and carried out activities relating to medical profession in the name and style of M/s. Bidar City Scan Centre. A survey operation under Section 133A of the Act was carried out on 19.3.2012 in the business premises of the assessee. During the course of survey proceedings the statement of Dr. Rajsekhar Sedamkar, partner of the firm was recorded. In his statement an income of Rs.52,26,000 was disclosed on account of outpatient charges fees collected. Subsequently, the assessee filed return of income on 28.9.2012 admitting taxable income at NIL. After claiming the deduction under Section 80 IB(11C), the Assessing Officer denied the claim of deduction on the amount of Rs.52,26,000 on the ground that the said income was admitted as unaccounted income and voluntarily admitted by the assessee over and above the regular income. Therefore the Assessing Officer was of the view that the said addition of Rs.52,26,000 is not eligible for deduction under Section 80 IB (11C) of the Act. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) but could not succeed.
Before us, the learned Authorised Representative of the assessee has submitted that the said income admitted by the assessee during the course of survey was from the out-patients receipts and fees and therefore when the assessee is entitled for the deduction under Section 80 IB (11C) of the Act then the said income is also eligible for deduction. In support of his contention, he has relied upon the following decisions : a) Dt.25.11.2014 (ITO Vs. Vandana Properties) (Mum-Tribunal) b) CIT Vs. Ram Gopal Manda (203) 35 taxmann.com 229 (Raj.) He has further submitted that even for the Assessment Year 2013-14, the Assessing Officer has allowed the deduction under Section 80 IB (11C) of the Act to the assessee and therefore there is no dispute regarding the eligibility of deduction in respect of income from operating and maintaining the hospital.
On the other hand, the ld. DR has heavily relied upon the orders of the authorities below and submitted that but for the survey carried out at the business premises of the assessee, this income could not have been disclosed by the assessee. Since this income was not recorded in the books of account therefore the addition made by the Assessing Officer as undisclosed income
Section 80 IB (11C) of the Act. It is submitted that the addition made under those provisions are specifically excluded from the benefit of deduction. Thus the ld. DR has submitted that in this case when this income was not recorded in the books of account then the same is not eligible for deduction under Section 80 IB (11C) of the Act.
Having considered the rival submissions and relevant material on record, we note that a survey was carried out on 19.3.2012 prior to the closing of the F.Y. relevant to the assessment year under consideration. In the statement recorded during the survey, the partner of the assessee-firm admitted an income of Rs.52,26,000 out of the books of account but on the account of outpatient charges and fees collected. The assessee accordingly admitted the said income in the return of income filed for the year under consideration and claimed the deduction under Section 80 IB (11C) of the Act. There is no dispute that the income was disclosed in the return of income and the deduction was also claimed in the return of income. The Assessing Officer has accepted the said income of Rs.52,26,000 though it was treated as undisclosed income. We find that the Assessing Officer has not disputed the fact that the additional
income disclosed by the assessee during the survey pertains to the receipts from out-door patient. Therefore once the Assessing Officer has accepted the source of income from the operation of the hospital then the deduction under Section 80 IB (11C) of the Act cannot be denied on such income merely because at the time of survey this income was not found recorded in the books of account. It is pertaining to note that when the survey was conducted prior to the closure of the F.Y. and subsequently the assessee has admitted the income in the return of income then the deduction under Section 80 IB (11C) of the Act cannot be denied on such income once the source of the income is from operation of hospital. However we find that neither the Assessing Officer nor the CIT (Appeals) has examined the eligibility of the assessee of deduction under Section 80 IB (11C) of the Act by considering the various conditions as provided under the section. Therefore fulfilling of other conditions as provided under Section 80 IB (11C) of the Act has not been examined by the authorities below. Accordingly, in the facts and circumstances of the case, we set aside this issue to the record of the Assessing Officer for limited purpose of verifying the fact whether the assessee has otherwise satisfied the condition of Section 80 IB (11C) of the Act for the claim of deduction. Needless to say the assessee be given a proper opportunity of being heard.
In the result, the appeal is partly allowed for statistical purpose. Order pronounced in the open court on 30th Sept., 2016.