ACIT, COIMBATORE vs. SUDHA HOSPITAL, ERODE

In this appeal, the Revenue has taken altogether five grounds of which Ground Nos. 1 & 5 are general in nature needing no specific adjudication. This appeal was first posted for hearing on 27.06.2016. Despite notice being issued, none appeared for the assessee on that date. Hence the Bench directed issue of notice

Facts apropos are that the assessee a firm running a chain of hospitals called M/s. Sudha Hospitals was subjected to a search under section 132 of . the Income Tax Act, 1961 (herein after referred to as ‘the Act’) on 28.03.2012. Subsequent to search, notice u/s.153A of the Act was issued to the assessee. The assessee filed returns of income for various assessment years as under:-

During the course of assessment for the impugned assessment year, ld. Assessing Officer noted that partner of the assessee Shri. K. Sudhakar had in a statement recorded u/s.132(4) of the Act admitted a sum of �5.64 Crores as unaccounted professional receipts of the hospitals. The unaccounted receipts worked out by the assessee which was a part of the income disclosed in the above referred returns, were as under:-

Ld. Assessing Officer was of the opinion that there was unaccounted cash of �25,77,503/- found at the premises of said

Ld. Assessing Officer also found that assessee had not disclosed unaccounted stock of �32,41,117/- found from M/s. Sudha Hospital, Erode. Argument of the assessee was that such unaccounted stock was purchased using the cash withdrawals of �46,86,213/- made by Dr. K. Sudhakar from firm. As per the assessee the cash withdrawals were made out of unaccounted receipts admitted as income. This explanation was also not accepted by the ld. Assessing Officer.

Ld. Assessing Officer also found that assessee had acquired three properties on which there were on money payments to the tune of �1,30,72,500/-. As per ld. Assessing Officer, cross verification with two of the sellers proved on money payments. Submission of the assessee in this regard was that property was purchased by not by the firm but by various individuals in their respective names and properties

The ld. Assessing Officer considered unexplained cash, unexplained stock and unexplained investments as undisclosed income of the assessee apart from the returned income of �3,47,52,980/-.

Aggrieved, the assessee moved in appeal before ld. Commissioner of Income Tax (Appeals). The ld. Commissioner of Income Tax (Appeals) held that assessee has offered a sum of �2,76,93,838/- as unaccounted receipts from the profession, and hence there was no reasons to make any addition for difference in cash, or for difference in stock. In so far as, on-money payments for immovable properties were concern, ld. Commissioner of Income Tax (Appeals) was of the opinion that such on money payments, even if proved, could only be considered in the hands of the individuals in whose name the property stood. Thus, he deleted all the three additions.

Now before us, ld. Departmental Representative strongly assailing the order of the ld. Commissioner of Income Tax (Appeals)

As mentioned by us, nobody appeared on behalf of the assessee.

We have perused the orders of the authorities below. We have also heard ld. Departmental Representative carefully. It is not disputed that for the impugned assessment year assessee had filed return pursuant to notice u/s.153A of the Act disclosing an income of �3,47,52,980/-. Assessee has clearly mentioned that a sum of �2,76,93,838/- out of the above was unaccounted receipts in the hospitals. Being so, in our opinion there was no reason to make any addition for unaccounted cash of �25,77,500/-, or for unaccounted stock of �32,41,117/-. Both these were well explained by the undisclosed receipts returned by the assessee. So far as alleged on money payments for properties purchased were concerned, it is not disputed by the Revenue that the properties were not in the name of the firm but in the name of various individuals. Nothing is there on record to show that such individuals had purchased these properties on behalf of the assessee firm. In such circumstances, we are of the ITA No. 1039/Mds/2016 :- 7 -:

In the result, appeal of the Revenue in stand dismissed.