COMMISSIONER OF INCOME-TAX VS K. BHASKARAN
1996 P T D 658
[212 I T R 169]
[Kerala High Court (India)]
Before T. L. Viswanatha Iyer and Mrs. K. K. Usha, JJ
COMMISSIONER OF INCOME-TAX
versus
K. BHASKARAN
Original Petition No. 13493 of 1991-S, decided on 05/10/1994.
(a) Income tax---
---- Reference---Income---Hospital---Finding that amounts added as income of assessee had been paid to specialist doctors---Tribunal justified in deleting addition---No question of law arose---Indian Income Tax Act, 1961.
There were some specialist doctors attending in the assessee's hospital, who were being paid salary. According to the assessee, in respect of the specialist services rendered by them to particular patients, charges were collected from the patients and paid over to the specialist doctors for the work done by them. This amount claimed by the assessee as paid to three of the doctors was assessed in the hands of the assessee based on the denial by three of the five doctors of having received any such amount from the assessee. The Tribunal found on an appreciation of the evidence that the amount in question had been paid over to the specialist doctors and was not, therefore, the income of the assessee. Another addition which was made by the assessing authority, but which was deleted by the Tribunal was the amount of Rs.3,81,950 which related to operation theatre and other charges. According to the assessee, he had been giving remission to patients and, therefore, the operation theatre and other charges had not been included in the various bills. The assessing authority, however, noted that out of 654 operations performed by the assessee 491 cases were those in which no operation theatre or other charges had been included. On an application to direct reference:
Held, that it was on appreciation of the materials available on record that the Tribunal came to the conclusion that the amount of medical attention charges added by the assessing authority was actually the amount paid to the specialist doctors, that it was not income in the hands of the assessee and that, therefore, the addition under that head was liable to be deleted. The Tribunal was justified in its conclusion and no question of law arose from it.
(b) Income-tax---
----Reference---Income---Hospital---Amount added on account of theatre and labour room charges---Findings that charges had been omitted in certain bills-- Question whether Tribunal justified in deleting addition---Question of law-- Indian Income Tax Act, 1961.
The question whether the Tribunal was justified on the materials before it in holding that the addition made by the assessing authority under the head "Operation theatre, labour room charges, etc." was liable to be deleted from the assessment, was a question of law.
P. K. R. Menon and N. R. K. Nair for Petitioner.
G. Sivarajan for Respondent.
JUDGMENT
T. L. VISWANATHA IYER, J.---The following questions of law are sought to be referred to this Court in this petition under section 256(2) of the income Tax Act, 1961:
" 1. Whether, on the facts and in the circumstances of the case, the Tribunal is right,--
(i) in holding that the medical attention charges did not constitute the income of the hospital?
(ii) in deleting the addition?
(iii) in law and fact in discarding and disbelieving the evidence of Dr.Vijayan, Dr. Srikumar and Dr. Sasikumar?
(iv) in interfering with the addition made by the Officer accepting the statements of the above doctors?
2. Whether, on the facts and in the circumstances of the case and also in view of the withdrawal of similar claim by the assessee for the assessment year 1985-86 (vide enclosure), the Tribunal is right and had materials ' to accept the contention of the assessee that concession had been granted in the matter of operation theatre charges... and is not the acceptance of 'contention' bad and unsupported by evidence and materials?
3. Whether, on the facts and in the circumstances of the case,--
(a) the Tribunal is right in law and fact in deleting the addition sustained by the Commissioner (Appeals)?
(b) did the assessee discharge the burden of proof?"
The first question relates to, the deletion of what was termed medical attention charges from the assessment. There were some specialist doctors attending in the hospital, who were being paid salary. According to the asses see, in respect of the specialist services rendered by them to particular patients, charges were collected from the patients and paid over to the specialist doctors for the work done by them. This amount claimed by the assessee as paid to the doctors was assessed in the hands of the assessee based on the denial by three of the five doctors of having received any such amount from the assessee. Two of the doctors had agreed that they have received this amount; and the amount received by them was deleted from the assessment by the assessing authority himself. The Commissioner (Appeals) confirmed the assessment under this head, but the Tribunal found on an appreciation of the evidence that the amount in question had been paid over to the specialist doctors and was not therefore the income of the assessee. The discussion under this head is seen in paragraphs 13 to 16 of the order. Particularly, it must be noted that at the time of inspection of the hospital certain working sheets were seized which disclosed the amount paid to the doctors. There were also envelopes containing slips which were stated to be in the handwriting of the specialist doctors of the amount due to them from particular patients The envelopes also contained cash for payment to the doctors. The amounts mentioned in the working sheets tallied with the nothings in the slips in the envelopes, which slips also contained the name of the in patient and also the name of the doctors. It was also a significant factor that two of the specialist doctors had admitted that they have received the amount in cash from the assessee for the specialist services rendered by them to particular patients. It was in the background of these facts and appreciation of the materials available on record that -the Tribunal came to the conclusion that the amount of medical attention charges added by the assessing authority was actually the amount paid to the specialist doctors, that it was not income in the hands of the assessee and that, therefore, the addition under that head was liable to be deleted.
We find on a perusal of the order of the Tribunal that the matter had been discussed with reference to relevant matters. The finding arrived at by the Tribunal is certainly a view of the matter that could be reached on an appreciation of the available materials in the case and it could not for any reason be stated as either perverse or unsupported by materials. We are not, therefore, satisfied that any question of law arises out of the order of the Tribunal in so far as this finding is concerned. We, therefore, decline to refer tire first question raised by the Revenue.
Another addition which was made by the assessing authority, but which was deleted by the Tribunal was the amount of Rs.3.81,950 which related to operation theatre and other charges. According to the assessee he had been giving remission to patients and that it was therefore teat operation theatre acid other charges had not been included in the various bills. The assessing authority however, noted that out of 654 operations performed by 'he assessee, 491 cases were those in which no operation theatre or other charges had been included. He had appended to the assessment order a list of those cases where operation theatre and other charges were omitted to be noted in the bills. We are satisfied on a perusal of the order of the Appellate Tribunal that a question of law arises 8 out of the order in so far as it relates to operation theatre and other charges and that it is liable to be referred to this Court under section 256(2) of the Income Tax Act, 1961. So far as the third question is concerned, it is only a general question which relates to both questions Nos. 1 and 2.
On the above discussion, we are satisfied that the following question of law is liable to be referred to this Court in so far as it relates to the operation theatre and other charges made mention of in question No.2 raised by the Revenue, namely:--
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified on the materials before it in holding that the addition made by the assessing authority under the head 'Operation theatre, labour room charges, etc.' was liable to be deleted from the assessment?"
This will cover all the aspects of the case which the Revenue seeks to get referred to this Court by questions Nos. 2 and 3 framed in the reference application in relation to this head. So far as the first question is concerned, we decline to refer this question.
Accordingly, the Income-tax Appellate Tribunal, Cochin Bench, is directed to state a case and refer the aforesaid question of law for the decision of this Court under section 256(2) of the Income Tax Act, 1961.
Communicate a copy of this judgment under the seal of this Court and the signature of the Registrar to the Income-tax Appellate Tribunal, Cochin Bench, for information and compliance.
M.B.A./1068/FOrder accordingly.