DR AFTAB ASHRAFUDDIN KHAN,KOLKATA vs. PCIT, KOLKATA -8, KOLKATA

The assessee in the present case is an individual, who is Doctor by profession. The return of income for the year under consideration was filed by him on 29.09.2008 declaring total income of Rs.72,49,064/-. In the assessment completed under section 143(3) vide an order dated 05.03.2013, the total income of the assessee was determined by the Assessing Officer at Rs.76,16,490/-. The records of the said assessment subsequently came to be examined by the ld. CIT and on such examination, he was of the view that there are following errors in the ./2015 Assessment year: 2010-2011 Page 2 of 5 order of the Assessing Officer passed under section 143(3), which are prejudicial to the interest of the Revenue:- “In his P&L A/c. the assessee has debited Rs.83,300/- on account of rent and Rs.8,11,000/- under the head salary. The A.O. disallowed salary expenses amounting to Rs.50,000/- only and other expenditure i.e. Rs.7,61,000/- on account of salary and Rs.83,100/- on account of rent totalling to Rs.8,44,100/- were allowed. In view of an agreement with the Apollo Gleneagles Hospital, Kolkata with the assessee, the assessee was not supposed to practice outside in any form. Therefore, allowing Rs.8,44,000/- was also not in order.

(ii)The assessee has shown income from House Property at Rs.(-)1,50,000/- in his computation of income on account of Interest payable U/s.24(b) and the AO accepted it as loss of previous year at the time of assessment of his income. However in his balance sheet as on 31.03.2010 and Profit and Loss account for the period from 01.04.2009 to 31.03.2010 for the assessee has shown neither any hawse building loan nor any expenditure booked on interest payment on such loan. The House Property has been registered on 09.09.2011 in the period relating to Assessment Year AY-2012-IS and not A.Y-2010- 11. Hence the loss on House Property claimed by the assessee was wrongly allowed by the AO.

A notice under section 263, therefore, was issued by the ld. CIT requiring the assessee to show-cause as to why the order passed by the Assessing Officer under section 143(3) should not be revised on the above issues. In reply, written submissions were filed by the assessee, which were not found to be acceptable by the ld. CIT for the following reasons:- “(a) With regard to issue raised in Para No, 2(i): In his submission ated 25.03.2015 the A/R of the assessee has strongly denied that there was any such agreement between the assessee and Apollo Gleneagles Hospital, Kolkata, which restricts him from practising outside in ./2015 Assessment year: 2010-2011 Page 3 of 5

We have heard the arguments of both the sides and also perused the relevant material available on record. Although the ld. CIT by his ./2015 Assessment year: 2010-2011 Page 4 of 5 impugned order passed under section 263 has set aside the order passed by the Assessing Officer under section 143(3) on the basis of three errors pointed out by him, the ld. counsel for the assessee has submitted that the assessee wants to challenge the impugned order of the ld. CIT only in respect of one issue relating to the allowability of expenses claimed on rent and salary. In this regard, he has invited our attention to the relevant portion of the written submissions made before the ld. CIT during the course of proceedings under section 263 to show that it was specifically brought to the notice of the ld. CIT that there was no such agreement between the assessee and Apollo Gleneagles Hospital, Kolkata restricting the assessee from practicing outside. He has submitted that the offer letter dated 30.09.2002 putting such restriction was not relevant for the year under consideration, i.e. assessment year 2010-11 and the ld. CIT, therefore, was not correct in placing reliance on the same. However, as rightly submitted by the ld. D.R., the offer letter dated 30.09.2002 restricting the assessee from practicing outside in any firm independently was available on record and in the absence of anything to show that such restriction was removed, there was an error in the order of the Assessing Officer in allowing the claim of the assessee for rent and salary without making the required enquiry as called for in the facts and circumstances of the case. Moreover, the ld. CIT vide his impugned order passed under section 263 has not decided this issue relating to the assessee’s claim for deduction on account of rent and salary expenses on merit and has merely directed the Assessing Officer to consider the same afresh after making the necessary enquiry. The assessee, therefore, is free to make out his case on this issue by establishing that there was no such restriction on him in the year under consideration and he was free to practise independently on his own. In our opinion, the enquiry as required in the facts and circumstances of the case thus was not made by the Assessing Officer before allowing the claim of the assessee for deduction on account of rent and salary expenses and the order passed by him under section 143(3) allowing the claim of the assessee without conducting the necessary enquiry was erroneous as well as prejudicial to ./2015 Assessment year: 2010-2011 Page 5 of 5 the interest of the revenue as rightly pointed out by the ld. CIT. In that view of the matter, we uphold the impugned order of the ld. CIT passed under section 263 and dismiss this appeal filed by the assessee.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on August 10, 2016. Sd/- Sd/- (S.S. Vishwanethra Ravi) (P.M. Jagtap) Judicial Member Accountant Member Kolkata, the 10th day of August, 2016 Copies to : (1) Dr. Aftab Ashrafuddin Khan, C/o. V.N. Purohit & Co., Chartered Accountants, Diamond Chambers, Unit-III, 4th Floor, Suit No. 4G, 4, Chowringhee Lane, Kolkata-700 016