×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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These are the appeals filed by assessee against the consolidated order of CIT(A)-2, Bhubaneswar, all dated 11.03.2019, for the assessment years 2010-2011 to 2015-2016, out of which six appeals are arising out of the order dated 14.07.2017, passed by the AO u/s.153A of the Act and another appeal for the assessment year 2016- 2017, is arising out of the order dated 14.07.2017 passed by the AO u/s.143(3) of the Income Tax Act, 1961 (in short ‘the Act’).
2. First of all, for clarity, we would like to mention the date of orders of the authorities below at different stages for different assessment years in respective appeals, as under :-
3. Since the issues involved in all the appeals are identical to each other, except different in figure, therefore, with the consent of both the parties, all the appeals are heard analogously and disposed off by this consolidated order. For the sake of convenience, we shall take into consideration the facts and grounds mentioned in IT(SS)A No.36/CTK/2019 for the assessment year 2010-2011 for deciding all the appeals. Grounds taken by the assessee in the said appeal for assessment year 2010-2011 are as under :-
Addition of Rs.5,46,000/-
(a) For that the learned AO is erred in making addition of Rs.5,46,000/- thereby unsettling a settled position of law in absence of any incriminating materials seized in course of search and seizure operation that too in a piece meal/ad hoc basis.
(b) For that any other grounds incidental to the grounds of this case may kindly be permitted to urge at the time of hearing of this case;
(c) For that any other evidences incidental to this case may kindly be permitted to adduce at the time of hearing of this case.
4. The assessee company is in the business of healthcare and owns a super specialty hospital in the name and style 'Ashwini Hospital'. There was a search and seizure operation u/s.132 of the Income Tax Act, 1961 conducted on 03.09.2015 at the business premises of the assessee at Cuttack and residential premises of its directors at Cuttack and Bhubaneswar. Subsequently, notices u/s. 153A of I.T. Act, 1961 were issued and orders u/s. 153A of I.T. Act, 1961 were passed for the six assessment years i.e.A.Y.2010-2011 to 2015-2016 and for the assessment year 2016-2017 the AO framed the assessment u/s.143(3) of the Act. During the course of assessment proceedings for the six assessment years, the Assessing Officer found that the assessee has claimed rent and salary in respect of information centres located at seventeen places in Odisha and neighbouring states. According to the Assessing Officer, the expenses are not fully genuine and he disallowed in the following manner for the respective assessment years under consideration :-
For the assessment year 2014-2015, the AO allowed 30% of the expenditure claimed by the assessee and added balance of 70% i.e. Rs.21,37,800/- on account of rent and salaries paid to the employees. The AO further added Rs.70,00,000/- on account of unexplained investment and framed the assessment accordingly.
5. Aggrieved from the order of AO, the assessee preferred appeal before the CIT(A), however, the CIT(A) after considering the submissions of the assessee and findings of AO, the CIT(A) observed that it cannot be denied that the assessee has established information centres at seventeen places in rented premises and has appointed staff members to facilitate treatment of patients from these places at its hospital in Cuttack. Accordingly, the CIT(A) restricted the disallowance to 30% of the total expenditure claimed by the assessee in the following manner for the respective assessment years under consideration :-
For the assessment year 2014-2015, the CIT(A) partly deleted the addition made by the AO on the total expenditure claimed by the assessee after restricting to 30% and confirmed the addition made by the AO on account of unexplained investment.
6. Now, against the above order of CIT(A), the assessee is in further appeals before the Tribunal for the respective assessment years under consideration.
7. At the outset, ld. AR of the assessee submitted that the assessee does not want to press legal ground challenging the addition made by the AO and partly confirmed by the CIT(A) on the ground that the additions have been made in absence of any incriminating material seized during the course of search and seizure operation in the piecemeal and adhoc basis. Therefore, the legal ground of assessee on the said point is dismissed as not pressed.
8. As agreed by both the parties, we a e taking of IT(SS)A No.36/CTK/2019 for the A.Y.2010-2011 as a lead case and grounds agitated by the assessee in this appeal have been reproduced hereinabove in para 3 (supra). Keeping in view the consent of the learned representatives of both the sides that the facts and circumstances of the case in all seven appeals pertaining to the addition made by the AO and partly confirmed by the CIT(A) on account of total claim of expenditure and rent paid towards information centers.
9. We have heard the rival submissions of both the parties and carefully perused the relevant material placed on the record of the Tribunal.
10. Ld. Counsel of the assessee submitted that the assessee has submitted audited books of accounts during the course of assessment proceedings and the AO without pointing out any discrepancy or defects made therein has made addition by way of dismissing the 70%