Income Tax Appellate Tribunal - Ahmedabad
Dr. Rajesh Babulal Patel,, Patan vs The Income Tax Officer, Ward-1,, Patan on 27 February, 2018
SMC-ITA No. 2118/Ahd/2014
Dr. Rajesh Babulal Patel Vs. ITO
Assessment year: 2009-2010
Page 1 of 5
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC" BENCH, AHMEDABAD
[ Before Shri Pramod Kumar, Accountant Member ]
ITA No. 2118/Ahd/2014
Assessment Year : 2009-10
Dr. Rajesh Babulal Patel ........................Appellant
Prop. of Keval Pathology Laboratory,
Subhadranagar,
At & Post - Patan
[PAN : ABZPP 0691 A]
Vs.
Income-Tax Officer .......................Respondent
Ward-1, Patan
Appearances by:
SN Divatia for the appellant
Sumit Kumar Varma for the respondent
Date of concluding the hearing : 01.12.2017
Date of pronouncing the order : 27.02.2018
O R D E R
1. This appeal, filed by the assessee, is directed against learned CIT(A)'s order dated 10th April 2014, for the assessment year 2009-10.
2. Grievances raised by the appellant are as follows:-
"1.1 The order passed u/s.250 on 10.04.2014 for A.Y.2009-10 by CIT(A), Gnr, confirming additions/disallowances made by AO is wholly illegal, unlawful and against the principles of natural justice.
1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant.
2.1 The Ld. CIT(A) has grievously erred in law and or on facts in confirming the following additions/disallowances:
a) Cash Payment to UGVCL Rs. 97,233/-
b) Cash credit u/s.68 Rs.38,000/-
c) Estimated gross receipts Rs.3,25,566/-
2.2 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) has grievously erred confirming above said additions/disallowances.
SMC-ITA No. 2118/Ahd/2014 Dr. Rajesh Babulal Patel Vs. ITO Assessment year: 2009-2010 Page 2 of 5 3.1 The Id.CIT(A) has grievously erred in rejecting the copy of case register produced during the appellate proceedings and thereby confirming the rejection of the books result made by AO.
3.2 That in the facts and circumstances of the case, both the lower authorities have erred in holding that the appellant had not maintained case register and thereby rejecting the copy thereof produced during the appellate proceedings.
3.3 The Ld.CIT(A) has grievously erred in confirming the estimation of medical receipts at Rs.50 lacs and applying net profit of 30% and thereby making an addition of Rs.3,25,566/-/-"
3. As evident from the above grounds of appeal, grievance of the assessee, in substance, is against learned CIT(A) confirming (a) the disallowance of electricity payments aggregating to Rs.97,233/-; (b) the cash credit addition of Rs.38,000/-; and
(c) professional income at Rs.3,25,566/-. I will take up these three issues one by one.
4. So far as disallowance of Rs.97,233/- on account of cash payment of electricity bills is concerned, the relevant facts are like this. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has made cash payments of Rs.97,233/-, for electricity bills, to Uttar Gujarat Vij Co.
Ltd. As these payments were in violation of section 40A(3), the Assessing Officer disallowed the same. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is not satisfied and is in further appeal before me.
5. Learned representatives fairly agree that the issue is now covered, in favour of the assessee, by a Third Member decision of this Tribunal in the case of Aruna Rani vs. ITO [(2017) 82 taxmann.com 391 (JPR-TM)]. I have also noted that Uttar Gujarat Vij Co. Ltd, being a wholly owned subsidiary of PSU - namely Gujarat Urja Vikas Nigam Ltd, is a public sector undertaking wholly owned by Gujarat Government. Learned Departmental Representatives, nevertheless, dutifully relied upon the stand of the authorities below.
6. Respectfully following orders of the Tribunal, in the case of Aruna Rani (supra) and by several Ahmedabad benches on the same lines, I uphold grievance of the assessee. The disallowance of Rs.97,233/- is, accordingly, deleted.
7. As regards the additions of Rs.19,000/- each in respect of unexplained cash credits, the relevant material facts are as follows. The assessee claimed to have borrowed Rs.19,000/- each from Smt. Sarmadaben Patel and Shri Keshavlal Patel. Even though the assessee had filed copies of account of these parties, the Assessing Officer added the same as unexplained cash credits, on the ground that the assessee has not submitted any supporting evidences. In appeal, it was explained by the assessee that these persons are his close relatives - aunt and grandfather respectively, the assessee filed confirmation from these parties and submitted that the assessee was never asked to furnish any further details at the assessment stage. However, the CIT(A) confirmed the addition and observed that SMC-ITA No. 2118/Ahd/2014 Dr. Rajesh Babulal Patel Vs. ITO Assessment year: 2009-2010 Page 3 of 5 the assessee has only furnished confirmations and no further details have been filed. The assessee is not satisfied and is in appeal before me.
8. I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.
9. I find that, as evident from the statement of facts before the CIT(A) as well, that the assessee had duly filed confirmations from his two relatives - namely Shri Keshavlal Patel (grandfather) and Smt Narmadaben Patel (aunt) and the Assessing Officer did not put any further questions to him during the assessment proceedings. Looking to these facts and as these are small amounts borrowed from close relatives, I am inclined to accept explanations of the assessee. I do not think it was a fit case for confirming the additions of Rs.38,000/- as unexplained cash credits. I, therefore, delete the same.
10. That takes me to the last of the disputed addition in this case, i.e. Rs.3,25,566/- on account of professional income.
11. As far as this addition is concerned, the relevant material facts are like this. When assessee, a doctor, was asked whether the assessee is maintaining any books of accounts under Rule 6F, the assessee submitted that "as per personal discussions and also during survey, we informed that the register was maintained in computer but due to technical problems, we could not access details". The Assessing Officer also noted that, going by assessee's own admission, the assessee had made cash payments of Rs.20,84,615/-. It was in this backdrop that the Assessing Officer proceeded to make an addition of Rs.3,25,566/- by observing as follows:-
"9. In view of the above facts and as the assessee is medical practitioner and as required, the assessee had not maintained the books of account as per Rule 6F(1)(2) & (3), I do not accept the book result shown by the assessee and as the assessee submitted details of cash of Rs.28,64,615/- as mentioned above out of total receipts of Rs.45,62,016/- is used for other purpose. Further the assessee is medical practitioner and having laboratory in the middle of the centre of Patan and most of the leading medical practitioners of Patan city are sending their patient to this laboratory and therefore, the receipts shown by the assessee is not acceptable and also in detail as discussed above the different aspects for not accepting the book result, I estimate the total receipt at Rs.50,00,000/- and considering net profit at an average rate if 30% of the said receipts, the net profit comes to Rs.15,00,000/- as against which the assessee had shown N.P. of Rs.11,74,434/- hence there is difference of Rs.3,25,566/- (Rs.15,00,000 - Rs.11,74,434) which the assessee shown under receipts and therefore an amount of Rs.3,25,566/- is added to the total income on this issue and penalty u/s. 274 r.w.s. 271(1)(c) of the Act initiated separately for furnishing inaccurate particulars of income."
12. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. Learned CIT(A), in his detailed analysis, observed as follows:-
SMC-ITA No. 2118/Ahd/2014 Dr. Rajesh Babulal Patel Vs. ITO Assessment year: 2009-2010 Page 4 of 5 "9.5 I have considered the facts of the case, assessment order, submission made by the appellant, remand report and the rejoinder filed by the appellant.
On the issue, I find that AO had specifically asked the appellant during the remand proceedings to be present before him along with the person/agency personnel in getting the data accessed. But, appellant did not attend before him nor any personnel attended before the AO. Therefore, the AO is of the view that the appellant is making up stories of computer virus and did not present himself before the AO. The AO is of the opinion that appellant has during the appellate proceedings made up the entire case register to be produced during the appellate proceedings to match his cash credits in the banks and to suppress the turnover.
The appellant has contended before me that the AO has failed to appreciate that when the hard disk was impounded by survey party and copy from such record was required the primary burden lie upon the AO to get it opened and furnish copy to the appellate authority. Secondly, when the impounded disk was to be opened by the agency of the appellant, the AO should have addressed a letter to the appellant and given written authority to the agency because the agency contacted by the AR of the appellant refused to open it without such written letter and he was busy. Further, the appellant has contended that the AO should have contacted the computer agency who is looking after the maintenance and other work of the entire department and thirdly the AO should have examined the case register as produced before him and pointed out alleged made up entries. The appellant contents that the AO has sought to take advantage of his own inability to get the disc opened.
After considering the entire facts, I find that the AO had during the remand proceedings specifically written a letter No.ITO Wd.I/PTN/Remand Report / RBP/2013-14 dated 21/02/2014 specifically requesting the appellant to remain present in his office on 28/02/2014 along with the person/agency personnel who helped the appellant in getting the data accessed and files opened. But, appellant has not complied to the specific directions of the AO. It was the appellant who has to open the disc to prove his case, which the appellant has totally failed and has also not cooperated with the AO. The appellant during the appellate proceedings cannot take the plea that he was not granted opportunity as I find that such opportunity has been granted to the appellant by the AO during the remand proceedings. Moreover, the onus of burden lies upon the appellant to open the disc and to submit the required details called for by the AO. In absence of any evidences produced by the appellant before the AO during the assessment proceedings as well as during remand proceedings and considering the comments of the AO in the report submitted, the addition made by the AO of Rs.3.25.566/- is hereby confirmed The relevant ground, appeal is rejected."
13. The assessee is not satisfied and is in further appeal before me.
SMC-ITA No. 2118/Ahd/2014 Dr. Rajesh Babulal Patel Vs. ITO Assessment year: 2009-2010 Page 5 of 5
14. I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position.
15. I find that the assessee has not been able to produce books of accounts on the ground that "due to virus problem in his (the assessee's) computer, it could not be opened" and all that the assessee has been able to produce is an audited set of year end accounts. In the absence of any supporting evidence, I am not inclined to accept the results shown by these financial statements. I am in considered agreement with the detailed reasoning set out by the CIT(A) and I approve the same. Accordingly, the impugned addition of Rs.3,25,566/- is confirmed.
16. In effect thus, the assessee gets part relief to the extent of deletion of disallowance of Rs.97,233/- and deletion of cash credits to the tune of Rs.38,000/-.
17. In the result, the appeal is partly allowed. Pronounced in the open court today on the 27th February, 2018.
Sd/-
Pramod Kumar
(Accountant Member)
Ahmedabad, the 27th day of February, 2018
**tb8pbn
Copies to: (1) The appellant
(2) The respondent
(3) Commissioner
(4) CIT(A)
(5) Departmental Representative
(6) Guard File
By order
TRUE COPY
Assistant Registrar
Income Tax Appellate Tribunal
Ahmedabad benches, Ahmedabad
1. Date of dictation: ....order prepared as per five pages manuscripts of Hon'ble AM, which is attached ......12.02.2018....
2. Date on which the typed draft is placed before the Dictating Member: .. 12.02.2018....
3. Date on which the approved draft comes to the Sr. P.S./P.S.: .27.02.2017..... .
4. Date on which the fair order is placed before the Dictating Member for Pronouncement:... 27.02.2017
5. Date on which the file goes to the Bench Clerk : .. 27.02.2017...
6. Date on which the file goes to the Head Clerk : ..................................
7. The date on which the file goes to the Assistant Registrar for signature on the order: ......