Income Tax Appellate Tribunal - Hyderabad
Siva Ram Hospitals, Karimnagar vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH 'B', HYDERABAD
BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND
SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
ITA Nos.1730 & 1309 /Hyd/08 Asstt. Year 2004-2005 and
2005-06
M/s Sivarama Hospitals,
Karimnagar. vs. ACIT, Circle 16 (2),
Katuvapalli village Hyderabad
PAN AIPQS0061B
Applicant by : Shri A.V.Raghuram,Advocate
Respondent by : Smt. Nivedita Biswas, DR
ORDER
Per Shri Chandra Poojari, Accountant Member:
These appeals by the assessee are directed against different orders of CIT(A) for the above assessment years.
2. The grounds raised by the assessee are common in both the appeals and hence they are heard together for disposal by this common order.
3. Assessee raised the following grounds of appeal.
1. On the facts and in the circumstances of the case the order of the learned CIT(A) is erroneous, illegal and therefore not sustainable in law.
22. The learned CIT(A) erred in upholding the action of the assessing officer in selection of the appellant's case for scrutiny. The learned CIT(A) failed to appreciate that the assessing officer had violated the guidelines/procedure for selection of cases for scrutiny of non- corporate assessees prescribed by the CBDT.
3. The learned CIT(A) erred in holding that the appellant falls within clause (m) of para 2 of CBDT guidelines for FY 2005-06 on the alleged ground that most of the receipts of the appellant were professional receipts.
4. The learned CIT(A) failed to appreciate that the appellant M/s Sivarama Hospitals is a partnership firm falling under the category of Hospitals/Nursing Homes and that only one partner is a professional. The learned CIT(A) further failed to appreciate that other partners of the appellant are non-professionals and hence the income earned by the appellant cannot be treated as income earned by a professional.
5. The learned CIT(A) ought to have annulled/quashed the order of assessment in as much as the assessing officer grossly abused/violated the procedure prescribed by the CBDT for selection of returns/cases of non-corporate assessees for scrutiny for the FY 2005-
06.
4. The crux of the above grounds is that the assessee is a firm carrying on the business of nursing home/hospital, which could not be treated as a professional as such scrutiny norms as prescribed in the Instructions by CBDT guidelines for ay 2005-06 vide clause No.'m' is applicable instead of 'h' applied by the assessing officer. Further, for supporting his claim, the learned counsel for the assessee relied on the following case law.
1. 128 ITR 727 (Madras) CIT v. Dr.V.K.Ramachandran128 ITR 727 (Madras)
2. Dr.P.Vadamalayan v. CIT74 ITR 94 (Madras)
3. Wiseburgh v. Domville 30 ITR 295 (1956) (In the Court of Appeal)
4. CIT v. Smt.Nayana P.Dedhia 270 ITR 572 (AP)
5. CIT v. Upasana Hospital 225 ITR 845 (Ker) 3
6. Gopaldas Dahyabhai Lavsi v. CIT 108 ITD 534 (Guj)
5. On the other hand, the learned Departmental Representative submitted that assessee is a professional. As such clause 'm' of the above circular is applicable and she relied on the following case law.
1. Yogesh Kumar & Sons (HUF) v. Assessing officer Ward 1(3), Bhatinda 117 ITD 288 (Amr)
6. We have heard both sides and perused the material on record. We have carefully gone through the facts of the case. In the present case, assessee is a partnership firm where Dr.Sivarama krishna was carrying on the business along with his family members. Profit and loss Account shows income from various professional receipts for rendering services. As per Board Circular clause 'h' is applicable to following classes of assessees.
Clause 'h': cases of universities, educational institutions, hospitals, nursing homes and other institutions for rehabilitation of patients (other than those, which are substantially financed by the Government, the aggregate annual receipts of which exceed Rs.10 crore in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and Rs.5 crore or above in other places ( Ref. sec.10(23C) & rule 2BC) Clause 'm' is applicable to following classes of assessees. Clause 'm' : All cases of professionals withgrossreceipts of Rs.50 lakh or more and income declared is less than 20% of gross professional receipts.
Now, the contention of the assessee is that the carrying on medical profession by the assessee falls under the purview of clause 'h'. We have carefully gone through this clause. This clause is applicable to the assessees mentioned therein with a reference to claim of benefit u/s 10(23C) and Rule 2BC. In the present case, it is admitted fact 4 that assessee do not fall under the exempted category and an assessee engaged in rendering medical services appropriately falls under category 'm'. as such selection of the cases for scrutiny in these assessment years is correct. We do not find any infirmity in the order of the CIT(A). Coming to the case law relied upon by the learned counsel for the assessee, they are delivered under different context and circumstances and the case takes colour from its facts. As such, the above case law cannot be made applicable to the facts of the present case. In our opinion, the department has not deviated from the CBDT Circular and no interference is called for from us. The appeals of the assessee are dismissed.
7. In the result, appeals of the assessee are dismissed.
Order pronounced in the open Court on 20 -11-2009
Sd/- sd/-
(N.R.S. GANESAN) (CHANDRA POOJARI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dt/- 20-11-2009.
*vnr
Copy forwarded to:
1. Shri A.V.Raghuram & B.P.Rajulu, Advocates, No.6-3-240/3, Saradadevi Street, Premnagar, Khairatabad, Hyderabad-500
004.
2. ACIT, Karimnagar.
3. CIT(A)III, Hyderabad.
4.CIT, AP, Hyderabad.
5.. The D.R., ITAT, Hyderabad.