THE DCIT, (CENTRAL)-1, BHOPAL vs. M/S. AYUSHMAN DIAGNOSTIC PVT. LTD., BHOPAL
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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश/O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 25.04.2018 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“Ld. CIT(A)”], which in turn arises out of assessment-order dated 27.12.2017 passed by learned Dy. CIT, Central (I), Bhopal, [“Ld. AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the revenue has filed this appeal on following grounds:
(i) Ld. CIT(A) has erred in facts and circumstances of the case in allowing deduction to the assessee without appreciating the decision of the Hon'ble Supreme Court in the case of Goetze (India) P. Ltd. vs. CIT, (2006) 157 Taxman 1, wherein it is categorically held that the assessee Page 1 of 12
M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16 cannot amend a return of income filed by him for making a claim for deduction other than by filing a revised return. (ii) Ld. CIT(A) has erred in facts and circumstances of the case by deleting the addition of Rs. 5,00,00,000/- for assessment year 2015-16 made by AO on account of disallowance of subsidy received by the assessee in February, 2017, thereby treating the subsidy as capital in nature.”
The assessee-company filed its return of income of relevant AY 2015-
16 declaring negative total income (loss) of Rs. 12,45,75,252/-. In its P&L
A/c filed with return of income, the assessee credited a sum of Rs.
5,00,00,000/- in respect of a subsidy treating the same as ‘revenue
subsidy’. During assessment-proceeding, the assessee claimed before AO
that the subsidy was in fact a ‘capital subsidy’ and the same had been
wrongly offered as ‘revenue subsidy’ under a mistaken impression. The
assessee requested the AO to exclude it from total income. The AO, however,
rejected claim of assessee by observing thus:
“The contention of assessee that the amount of Rs. 5,00,00,000/- is incorrectly treated as revenue subsidy is not acceptable, it is evident that before receiving the subsidy a number of document are required to be filed before different authorities. Hence, the question of incorrect treatment of the subsidy does not arise. In support of the claim assessee furnished certain documents on going through the document it is seen that the subsidy pertaining to the documents filed by assessee was granted in February 2017 which is after the assessment year 2015-16. Hence, the document filed by assessee has no merit further, in the light of decision of Hon'ble Supreme Court in Goetze (India) Ltd. V. CIT, (2006) 157 Taxman 1, it has been held by Hon'ble Supreme Court that the assessee cannot amend a RoI filed by him for making a claim for deduction other than by filing a revised return. In this case the assessee has not revised the RoI. Considering all the facts on records the claim of the assessee is rejected.”
During first-appeal, the CIT(A), however, reversed the action of AO and
allowed assessee’s claim. The order of CIT(A) is extracted below for an
immediate reference:
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16
Now, the revenue is aggrieved by CIT(A)’s order and come before us in
this appeal.
Before us, Ld. DR for revenue supported the order of AO and
emphasized the findings made therein by AO. On the other hand, Ld. AR for
assessee defended the order of CIT(A) on the lines of reasoning noted by
CIT(A).
We have heard rival contentions of both sides and perused the orders
of lower-authorities.
There are two issues before us for adjudication i.e. (i) Whether the
assessee should be allowed the benefit of exclusion of the impugned sum of
Rs. 5,00,00,000/- from total income which was offered by assessee himself
in the return of income as a revenue receipt though under mistaken
impression; and (ii) Whether the impugned sum was really in the nature of
‘revenue subsidy’ or ‘capital subsidy’. The revenue has raised first issue in
Ground No. 1 and second issue in Ground No. 2.
So far as first issue involved in Ground No. 1 is concerned, it is now
well settled by several judicial rulings that though the AO cannot allow any
claim raised before him except by filing of revised-return which was
admittedly not filed by assessee in present case, this rider or restriction is
not applicable to appellate authorities. We believe that the CIT(A) has rightly
decided this question in favour of assessee by giving a cogent analysis in
Para No. 6.5 of his order re-produced earlier. Therefore, without repeating
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16 the contentions accepted by CIT(A) for the sake of brevity, we straightaway
subscribe to the view taken by Ld. CIT(A). Therefore, this ground of revenue
is dismissed.
Regarding second issue involved in Ground No. 2, we note several
aspects. Firstly, the AO has noted, in Para 3 of assessment-order re-
produced earlier, that the assessee furnished certain documents regarding
impugned subsidy. On going through those documents, the AO found that
the subsidy pertaining to the documents filed before him, was granted in
February, 2017 which was after AY 2015-16 involved in present case.
Therefore, the AO did not find any merit in the documents filed by assessee
in support of claim of ‘revenue subsidy’. This clearly shows that there is no
proper examination of the nature of impugned subsidy at the level of AO.
Secondly, while dealing this issue, the CIT(A) has mentioned in Para No. 6.2
of his order, re-produced earlier, that the assessee received subsidy under
‘Health Investment Policy, 2012’. The CIT(A) has mentioned some features of
‘Health Investment Policy, 2012’. But then, in the immediate next Para 6.3,
the CIT(A) has mentioned that the assessee was granted subsidy vide letter
dated 15.03.2017 under the terms and conditions stipulated in ‘Madhya
Pradesh Healthcare Investment Policy, 2016’. Thus, there is a clear
contradiction in the notings of CIT(A) in as much at one place he says that
the assessee received subsidy under ‘2012’ scheme and also mentions
features of ‘2012’ scheme but at another place he mentions that the
assessee was granted subsidy vide letter dated 15.03.2017 under ‘2016’
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16 scheme. This contradiction also supports the very stand of AO in
assessment-order that the subsidy pertaining to the documents filed before
him was granted in February, 2017 after expiry of AY 2015-16. Notably, the
assessment-year involved in present appeal is AY 2015-16 relating to
previous year 2014-15 and if the subsidy was granted vide letter dated
15.03.2017 as noted by CIT(A), how could the assessee credit subsidy to its
P&L A/c of the year ended on 31.03.2015? Was it so that the assessee
accounted for subsidy on accrual basis which is very much unlikely because
this type of practice is normally not followed for govt. subsidy. That apart,
the CIT(A) has also mentioned in Para 6.3 as under:
“On perusal of assessment-order, it is evident that Ld. AO has not raised any objection about the true nature of impugned subsidy. In other words, the claim of the appellant that impugned subsidy amount is not taxable being capital in nature has not been rejected on merits nor AO has expressed his views that said subsidy was of ‘revenue nature’ and therefore, liable to tax. The only reason for rejecting the claim of the appellant seems to me is because such claim was made through letter dated 17.12.2017 and not be filing revised return as held by Apex Court in the case of Goetze (India) Pvt. Ltd. Vs. CIT (supra). Bona fides and allowability of the impugned claim i.e. treating of subsidy amount as ‘capital subsidy’ has never been doubted by the Ld. AO.”
This observation of CIT(A) is contrary to the observation made by AO in as much as the AO has rejected assessee’s contention of ‘revenue subsidy’ in absence of documents or for not believing documents. Thus, the CIT(A)’s cannot be said to be a cogent order. Faced with this situation, we feel that it is very necessary to examine completed details and documents of subsidy i.e. under which scheme, the subsidy was received; when and how the assessee received subsidy; how it was accounted for in AY 2015-16, etc. Such a detailed probe is very necessary to arrive at an unambiguous conclusion. It is also to be mentioned that in the event it is found that it was a ‘capital subsidy’, it may further necessitate adjustment in cost of assets as per provisions of section 43(1) of the act. This aspect is also be checked by
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M/s. Ayushman Medical Diagnostic Private Limited ITA No.610/Ind/2018 Assessment year 2015-16 AO. Therefore, we think it most appropriate to remit this issue back to the file of AO for a deeper examination and afresh adjudication. The AO shall provide necessary opportunities to assessee and the assessee shall also avail those opportunities and place before AO proper details/documents. Ordered accordingly. This ground is allowed in these terms.
Resultantly, this appeal of revenue is partly allowed.
Order pronounced in the open court on 21.12.2023.
Sd/- Sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore िदनांक/Dated : 21.12.2023 CPU/Sr. PS 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 Indore Bench, Indore
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