ITO 11(2)-4 MUMBAI vs KURLA MATERNITY & SURGICAL NURSING HOME MUMBAI

आयकर अपील य अ धकरण आयकर अपील य अ धकरण आयकर अपील य अ धकरण आयकर अपील य अ धकरण, , , , मंबई यायपीठ मंबई यायपीठ ु ‘ए’ मंबई मंबई मंबई मंबई ु IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI ी ी ी ी पी पी पी पी.एम एम एम एम. जगताप जगताप जगताप जगताप, लेखा सद!य लेखा सद!य, एवं एवं एवं एवं ी ी ी ी अ#मत श%ला अ#मत श%ला ु , या&यक सद!य या&यक सद!य केकेकेके सम' सम' सम' सम' BEFORE SHRI P.M.

JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER आयकर अपील सं. / ITA no.

2923/Mum./2011 (&नधा)रण वष) / Assessment Year : 2006–07) Income Tax Officer Ward–11(2)–4, Aayakar Bhawan 101, M.K.

Road, Mumbai 400 020 ………….………. अपीलाथ, / Appellant बनाम v/s Kurla Maternity & Surgical Nursing Home New Excelsior Building A.K.

Nayak Road, Fort Mumbai 400 021 ..…….………. -.यथ, / Respondent !थायी लेखा सं./ Permanent Account Number – AAAFK1385J राज!व क0 ओर से / Revenue by : Mr.

S.K.

Singh &नधा)2रती क0 ओर से / Assessee by : Mr.

Subhash S.

Shetty सनवाई क0 तार ख ु / Date of Hearing – 08.08.2012 आदेश घोषणा क0 तार ख / Date of Order – 24.08.2012 आदेश आदेश आदेश आदेश / ORDER अ#मत श%ला अ#मत श%ला ु , या&यक सद!य या&यक सद!य केकेकेके 5ारा 5ारा 5ारा 5ारा / PER AMIT SHUKLA, J.M.

The present appeal preferred by the Revenue, is directed against the impugned order dated 3rd January 2011, passed by the learned Commissioner (Appeals)–III, Mumbai, for assessment years 2006–07, on the following grounds:– “1.

On the facts and in the circumstances of the case and in law, the Ld.

CIT(A)-3, Mumbai erred in directing the AO to substitute the addition of Rs.

13,39,030/- made on account of undisclosed sales of KURLA MATERNITY & SURGICAL NURSING HOME 2 medicines by the amount of gross profit compute @15% of the amount of medicines utilized.

2.

CIT(A)-3, Mumbai erred in directing the A.O. g the A.O. to substitute the addition of Rs.13,39,030/- made on account of undisclosed sales of medicines by the amount of gross profit computed @ 15% of the amount of medicines utilized since it is in contradiction of the findings of the facts and conclusion drawn thereon by her that the A.O’s conclusion of the sale of medicines was reasonable.

3.

The appellant prays that the order of the CIT (Appeals) on the above grounds be set aside and that of the Assessing Officer restored.” 12.

Brief facts of the case are that the assessee is a partnership firm, which runs maternity and surgical hospital under the name and style “M/s.

Kurla Maternity & Surgical Nursing Home”.

The Assessing Officer, during the course of assessment proceedings, on perusal of the books of account and Profit & Loss Account, noticed that the assessee has debited medicines purchased at ` 20,85,280, under the following heads:- S.no.

Particulars Amount (`) 1.

ECG Material 9,001 2.

Medicines 11,74,378 3.

O.T.

Material 4,29,212 4.

Pathology Re Agent 3,58,100 (Pathology Medicine) 5.

Sonography Material 17,375 6.

X–Ray Material 97,212 3.

On verification of ledger account of income and receipts, he observed that the medicines purchased have been used against professional receipts.

However, with regard to the medicines purchased for ` 11,74,374, the assessee has not shown use of these medicines against any of the professional use.

He, therefore, came to the conclusion that the assessee is running a medical store in the nursing home wherein no receipts / details with regard to the sale have been disclosed in the books of account.

Thus, after considering the profit margin of 15% in the sale of medicines, he made an addition of ` 13,39,030, as undisclosed business income.

The learned Commissioner (Appeals) conceded with the findings of the Assessing Officer that KURLA MATERNITY & SURGICAL NURSING HOME 3 sales of medicine to the extent of 11,64,378, is sales outside the books. the books.

However, he held that the Assessing Officer has not disputed the purchase of medicines, therefore, the learned Commissioner (Appeals) directed the Assessing Officer to re- compute the total cost of medicine purchased and utilized during the year from the details of opening stock plus purchases minus closing stock and apply the gross profit margin of 15%.

4.

Learned Departmental Representative submitted that the sale of medicines is, admittedly, outside the books of account, therefore, the addition made by the Assessing Officer on the entire sales is wholly justified.

5.

Learned Counsel for the assessee relied on the findings of the Commissioner (Appeals).

6.

After carefully considering the rival contentions and the findings of the Commissioner (Appeals) as well as the Assessing Officer, we do not find any reason to deviate from the findings of the Commissioner (Appeals) as he has rightly held that only a gross profit margin of 15% should be added after taking into consideration the opening stock, purchases and closing stock.

Since there is no dispute regarding the purchase, the reasoning given by the Commissioner (Appeals) is factually and legally correct.

Thus, we do not find any substance in the ground taken by the Revenue.

7. प2रणामतः राज!व क0 अपील खा2रज क0 जाती है । 10.

In the result, Revenue’s appeal is dismissed. आदेश क0 धोषणा खले यायालय म; <दनांकः ु 24th August 2012 को क0 गई । Order pronounced in the open Court on 24th August 2012 Sd/- पी पी पी पी.एम एम एम एम. जगताप जगताप जगताप जगताप लेखा सद!य लेखा सद!य P.M.

JAGTAP ACCOUNTANT MEMBER Sd/- अ#मत अ#मत अ#मत अ#मत श%ला श%ला श%ला श%ला ु या&यक सद!य या&यक सद!य AMIT SHUKLA JUDICIAL MEMBER मंबई मंबई मंबई मंबई ु MUMBAI, <दनांक <दनांक <दनांक <दनांक DATED: 24th August 2012 KURLA MATERNITY & SURGICAL NURSING HOME 4 आदेश क0 -&त#ल=प अ>े=षत / Copy of the order forwarded to: (1) &नधा)2रती / The Assessee; (2) राज!व / The Revenue; (3) आयकर आय? ु (अपील) / The CIT(A); (4) आयक ); (4) आयकर आय? ु / The CIT, Mumbai City concerned; (5) =वभागीय -&त&न ध, आयकर अपील य अ धकरण, मंबई ु / The DR, ITAT, Mumbai; (6) गाड) फाईल / Guard file. स.या=पत -&त / True Copy आदेशानसार ु / By Order -द प जे. चौधर / Pradeep J.

Chowdhury व2रG &नजी स चव / Sr.

Private Secretary उप / सहायक पंजीकार / (Dy./Asstt.

Registrar) आयकर अपील य अ धकरण, मंबई ु / ITAT, Mumbai