GOVERNMENT OF INDIA
MINISTRY OF FINANCE
INCOME TAX DEPARTMENT
National Faceless Assessment Centre
Delhi
*ITBA100045881537*
1. PAN AAIFH4571M
2. Name of the assessee HUSSAIN MULTISPECIALITY HOSPITAL
3. Address of the assessee 1 M/S HUSSAIN MULTISPECIALITY
HOSPITAL, JALANAGAR ROAD NEAR BDA
OFFICE, BIJAPUR 586102, Karnataka, India
4. Assessment Year 2016-17
5. Status FIRMS
6. Residential Status Resident
7. Date of service of Notice under section 143(2) As per Order Sheet
of the Income-tax Act
8. Date(s) of issue of Notice(s) under section 23/09/2021,10/12/2021
142(1) of the Income-tax Act
9. Order passed under section 143(3) r.w.s 263 read with section 144B of
the Income-tax Act
10. Date of Order 15/03/2022
11. DIN ITBA/AST/S/143(3)/2021-22/1040812866(1)
ASSESSMENT ORDER
.
.
. 2. The asssssee filedreturn of income for the assessment year 2016-17 on
16.10.2016 declaring total income of Rs. 34,75,810/-. Thereafter, the case was
selected for scrutinyunder Compulsory Manual Selection Scrutinyand the
assessment was completed u/s 143(3) on 30.11.2018 accepting the retuned income
of Rs. 34,75,810/- for the A.Y. 2016-17.
3. Subsequently, it was observed that the assessment order passed on
30.11.2018 was erroneous as it was prejudicial to the interest of revenue.
Accordingly, notice u/s 263 of the Act was issued on 17.02.2021 proposing to set
aside the assessment order dated 30.11.2018 on the following issue –
1. Non-disallowance of interest paid and claimed as revue expenditure.
2. Disallowance as per provisions of section 40(a)(ia).
Non-Disallowance of interest paid and claimed as revenue expenditure –
Note:- The website address of the e-filing portal has been changed from www.incometaxindiaefiling.gov.in to www.incometax.gov.in.
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/143(3)/2021-22/1040812866(1)
4. The assessee has shown loan of Rs1,00,01,051/- from
SSPattinSahakariSanstha against hypothecation of land and Hospital building.
Hospital building was constructed from 2014 to 2016 on a land which was purchased
on 23.12.2014 (as per purchase deed). Further, as per the assessee’s reply, the
opening ceremony of the Hospital was carried on 16.02.2016. On this loan amount,
the assessee has paid interest amounting to Rs.14,34,721/- to S S.
PattinSahakariSanstha and claimed the same as revenue expenditure in P&L a/c.
4.1 The assessee has also submitted vide its reply dated 03.02.2022 that even
the opening ceremony of hospital was done on 16.02.2016 though basement and two
stories were ready before 01.04.2015 i.e. on 01.09.2014 and was utilized for hospital
purposes. The reply of the assessee was duly considered while concluding the
assessment proceedings but not found tenable on the following observation from the
documents submitted by the asssessee and on perusal of the documents available
on record –
1. From the perusal of Form 3CB, column no. 18, it is seen that the assessee has
put the hospital to use on 16.02.2016 which is duly audited by the auditor.
1. Further, from the perusal of additions details of assets, duly certified by the
auditor, it is seen that other assets related to hospital were also added during
the same time which further established that the hospital building was put to
use on 16.02.2016 only. For example – Building amounting to Rs. 2,61,52,512/-
was put to use on 16.02.2016, Furniture & fitting amounting to Rs. 15,40,728/-
added and put to use on 28.02.2016, Plant & Machinery @ 15% amounting to
Rs. 30,12,028/- was added and put to use on 28.02.2016, Plant & Machinery @
40% was put to use on 19.01.2016 which is reproduced as below –
Addition details (From Point NO. 18)
Description S.No Date of Date of put Amount Adjustment on Total
of block of purchases to use a/c of amount
assets MODVAT/Exch
rate/subsidy
grant
Building 1 16.02.2016 16.02.2016 2,61,52,512 0 2,61,52,512
Page 2 of 6
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/143(3)/2021-22/1040812866(1)
@10%
Total of building @ 10% 2,61,52,512
Furniture & 1 30.09.2015 30.09.2015 1,73,500 0 1,73,500
fitting @ 10%
2 28.02.2016 28.02.2016 15,40,728 0 15,40,728
Total of Furniture & fitting @ 10% 17,14,228
Plant &1 01.10.2015 30,12,028 4,45,999 0 4,45,999
Machinery @
15%
2 28.02.2016 28.02.2016 30,12,028 0 30,12,028
Total of Plant & Machinery @ 15% 34,58,027
Plant &1 19.01.2016 19.01.2016 19,53,770 0 19,53,770
Machinery @
40%
Plant &1 29.01.2016 29.01.2016 65,061 65,061
Machinery @
60%
1. From the above, it is clear that the assessee has installed all the furniture &
filling along with Plant & Machinery in the month of January, 2016 and
February, 2016 when the hospital building was put to use for business
purposes i.e. at the time of inauguration of hospitalbuilding and was just
cooking a story just to avoid the tax implications. In view of the above, the
amount of interest of Rs. 14,34,721/- paid to S SPattinSahakariSanstha as
Page 3 of 6
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/143(3)/2021-22/1040812866(1)
claimed under the head “Interest on building loan” is to be disallowed as per
section 36(1)(iii) of the Income tax Act, 1961 given below –
“ As per proviso to section 36(1)(iii) of the Income tax Act, 1961, the amount of
the interest paid in respect of capital borrowed for the purpose of the business
or profession, is allowable under other deductions. However, proviso to the
said section is as under –
“Provided that any amount of the interest pad in respect of capital borrowed for
acquisition of an asset (whether capitalized in the books of account or not) for
any period beginning from the date on which such asset was first put to use,
shall not be allowed as deduction.”
4.2 Considering the above fact that the asset i.e. hospital building was put
to use on 16.02.2016, hence the interest payment for 11 months amounting to
Rs. 13,15,160/- is treated as capital expenditure and hence required to be
capitalized subject to depreciation of Rs. 65,758/-(Rs. 13,15,160 x @ 10% x
50%) and balance interest of Rs. 12,49,409/- (Rs. 13,15,160 – Rs.65,758 on
a/c of depreciation) is hereby disallowed and added back to the total income of
the assssee.
(Addition :Rs. 12,49,409/-)
4.3 Since the asssessee has furnished inaccurate particulars of its income, hence
penalty proceedings u/s 271(1)(C) of the Income tax Act are herewith initiated
separately.
ii) Disallowance as per provisions of section 40(a)(ia) -
5. It is also seen that the assessee has not deducted TDS on interest paid on
Building loan on Rs. 1,19,081/- (14,34,721 – 13,15,160). The assessee has been
asked to provide the details of TDS deducted on interest paid to S
SPattinSahakariSanstha on building loan. In its reply, the assessee submitted that it
dis not deducted TDS on this amount. The assessee has also submitted that the S
SPattinSahakariSanstha has taken this interest amount for calculating income tax
liability and we shall file Certificate from Sanstha u/s 201 of Income Tax, 1961.
5.1 The contention of the assessee has duly been considered while
completing the assessment proceedings for the year under consideration but not
accepted. Since, the assessee itself accepted that it did not deducted any TDS on
interest paid to S SPattinSahakariSanstha on borrowed loan for the purpose of
Page 4 of 6
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/143(3)/2021-22/1040812866(1)
HIsppital building, hence the amount of Rs. 35,724/- which is 30% of Rs. 1,19,081/- is
hereby disallowed u/s 40(a)(ia) of the income tax Act.
(Addition :Rs. 35,724/-)
5.2 Since the assessee has furnished inaccurate particulars of its income,
hence penalty proceedings u/s 271(1)(C) of the Income tax Act are herewith initiated
separately.
6. As per provisions of Section 144B of the Income Tax Act, 1961, show-cause
notice was issued to the Assessee on 10.03.2022 and Draft Asst Order was shared along
with show-cause notice, and hearing was fixed on 14.03.2022. No response has been
received in response to the show-cause notice. Submissions filed by the Assessee already in
response to notices have already been duly considered. Thus, no changes and variations are
done in the Draft Asst Order.
7. In view of the above discussions, the income of the assessee is
recomputed as under –
Income as declared Rs. 34,75,810/-
Addition:
1. as per para 4.2 Rs. 12,49,409/-
2. As per para 5.1
Rs. 35,724/-
Rs. 47,60,943/-
8. After considering the assessee’s submission and documents filed in response
to the statutory notices, the income of the assessee is assessed at Rs. 47,60,943/-
as per the computation sheet and the sum payable is determined as per the demand
notice. Initiate penalty proceedings u/s 271(1)(c) of the Act separately.
Page 5 of 6
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/143(3)/2021-22/1040812866(1)
Yours faithfully,
Additional / Joint / Deputy / Assistant Commissioner of Income Tax/
Income-tax Officer,
National Faceless Assessment Centre,
Delhi
Copy to:
Assessee
Yours faithfully,
Additional / Joint / Deputy / Assistant Commissioner of Income Tax/
Income-tax Officer,
National Faceless Assessment Centre,
Delhi
Signature Not Verified
Digitally signed by Vishesh
Prakash
Date: 2022.03.15 23:39:26 IST
Page 6 of 6
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
INCOME TAX DEPARTMENT
National Faceless Assessment Centre
Delhi
Computation Sheet
General Details
PAN AAIFH4571M Assessment 2016-17
*ITBA100045881590*
Year
Name HUSSAIN Address 1 M/S HUSSAIN
MULTISPECIALITY MULTISPECIALITY
HOSPITAL HOSPITAL ,JALANAGAR
ROAD NEAR BDA OFFICE
BIJAPUR 586102 ,Karnataka
India
Residential Resident Order Section 143(3) r.w.s 263
Status
DIN & ITBA/AST/S/115/202 Order Date 15/03/2022
Document 1-22/1040812917(1)
Number
SI.
No. Reporting Heads Amount as per Current Order (in Rs.)
HEADS OF INCOME
1. INCOME FROM HOUSE PROPERTY 0
INCOME FROM BUSINESS OR
2. PROFESSION 47,60,945
3. INCOME FROM CAPITAL GAINS 0
4. INCOME FROM OTHER SOURCES 0
ADJUSTMENTS OF CURRENT YEAR
5. LOSSES 0
TOTAL ( AFTER INTRA HEAD
6. 47,60,945
ADJUSTMENT) 6=(1+2+3+4)-5
LOSSES OF CURRENT YEAR SETOFF
7. 0
AGAINST 6
BROUGHT FORWARD LOSSESS SET
8. 0
OFF AGAINST (6-7)
GROSS TOTAL INCOME (INCLUDING
9. SPECIAL INCOME) 47,60,945
9=6-(7+8)
INCOME CHARGEABLE TO TAX AT
10. 0
SPECIAL RATE
11. DEDUCTION U/S 10A or 10AA 0
Note:- The website address of the e-filing portal has been changed from www.incometaxindiaefiling.gov.in to www.incometax.gov.in.
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/115/2021-22/1040812917(1)
DEDUCTIONS UNDER CHAPTER VI A
TOTAL DEDUCTIONS UNDER CHAPTER
12. 0
(VIA)
TOTAL INCOME AFTER DEDUCTIONS
13. (10A/10AA AND CHAPTER VIA) 47,60,950
13=(9-11-12)
NET AGRICULTURAL INCOME/ ANY
14. 0
OTHER INCOME FOR RATE PURPOSE
15. AGGREGATE INCOME 47,60,950
LOSS OF CURRENT YEAR TO BE
16. 0
CARRIED FORWARD
17. DEEMED TOTAL INCOME U/S 115JC 47,60,950
TAX DETAILS
TAX PAYABLE ON DEEMED TOTAL
18. 0
INCOME UNDER SECTION 115JC
19. SURCHARGE ON 18 ABOVE 0
20. EDUCATION CESS (ON 18+ 19 ABOVE) 0
TOTAL TAX PAYABLE ON DEEMED
21. TOTAL INCOME 0
21=(18+19 +20)
22. TAX AT NORMAL INCOME 14,28,285
23. TAX AT SPECIAL INCOME 0
24. REBATE ON AGRICULTURAL INCOME 0
TAX PAYABLE ON TOTAL INCOME
25. 14,28,285
(25=22+23-24)
26. SURCHARGE ON 25 ABOVE 0
27. EDUCATION CESS (ON 25+ 26 ABOVE) 42,849
GROSS TAX LIABILITY
28. 14,71,134
28=(25+26+27)
GROSS TAX PAYABLE (HIGHER OF 21
29. 14,71,134
AND 28)
CREDIT UNDER SECTION 115JD OF
30. 0
TAX PAID IN EARLIER YEARS
TAX PAYABLE AFTER CREDIT UNDER
31. 14,71,134
SECTION 115JD
TAX RELIEF
32. RELIEF U/S 90/90A 0
33. RELIEF U/S 91 0
TOTAL TAX RELIEF
34. 0
34=(32+33)
TOTAL INCOME TAX LIABILITY
NET TAX LIABILITY
35. 14,71,134
35=(31-34)
INTEREST PAYABLE
FOR DEFAULT IN FURNISHING THE
36. 0
RETURN ( SECTION 234A)
FOR DEFAULT IN PAYMENT OF
37. 1,46,202
ADVANCE PAYMENT ( SECTION 234 B)
FOR DEFERMENT OF ADVANCE TAX
38. 18,738
(SECTION 234C)
39. INTEREST U/S 234D 0
TOTAL INTEREST LIABILITY
40. 1,64,940
40=(36+37+38+39)
AGGREGATE INCOMETAX LIABILITY
41. 16,36,074
41=(35+40)
Page 2 of 3
AAIFH4571M- HUSSAIN MULTISPECIALITY HOSPITAL
A.Y. 2016-17
ITBA/AST/S/115/2021-22/1040812917(1)
PRE-PAID TAXES
42. TDS 0
43. TCS 0
44. ADVANCE TAX 9,00,000
45. SELF ASSESSMENT TAX 2,04,940
46. REGULAR TAX PAID 0
TOTAL TAXES CREDIT 47
47. 11,04,940
=(42+43+44+45+46)
TAX PAYABLE/REFUND
AMOUNT PAYABLE/REFUND AMOUNT
48. 5,31,134
48=(41-47)
INTEREST U/S 244A ON CURRENT
49. 0
AMOUNT
50. INTEREST U/S 244A(1A) 0
TOTAL AMOUNT PAYABLE/ REFUND
51. AMOUNT 5,31,134
51=(48+49+50)
REFUND ALREADY ISSUED (incl. interest
52. 0
u/s 244A and interest u/s 244A(1A) if any)
BALANCE AMOUNT
PAYABLE/REFUNDABLE
(incl. provisional Interest u/s 244A till
53. 5,31,134
current order and interest u/s 244A(1A) - if
any)
53 = (51-52)
54. INTEREST U/S 220(2) CHARGED (In Rs.) 0
AMOUNT PAYABLE/REFUNDABLE
55. 5,31,134
55=(53+54)
DEMAND IDENTIFICATION NO AGAINST
56. 2021201637003914945T
ORIGINAL DEMAND
*In case of refund, Refund Intimation cum Adjustment sheet will be issued subsequently
and separate communication will be sent for that.
Yours faithfully,
Additional / Joint / Deputy / Assistant Commissioner of Income Tax/
Income-tax Officer,
National Faceless Assessment Centre,
Delhi
Signature Not Verified
Digitally signed by Vishesh
Prakash
Date: 2022.03.15 23:43:36 IST
Page 3 of 3
