DCIT Vs Kalpana (ITAT Chennai)
In the case of DCIT v. Kalpana, the Income Tax Appellate Tribunal (ITAT) Chennai has affirmed a hospital’s eligibility for a tax deduction under Section 35AD of the Income-tax Act, 1961. The dispute centered on whether Guru Hospital, a proprietary concern of the assessee Kalpana, met the statutory requirement of being a 100-bed hospital to claim the deduction. The Assessing Officer (AO) initially disallowed the claim of ₹13,02,56,562, citing a physical inspection and a Tamil Nadu Pollution Control Board certificate that indicated the hospital had only 60 beds and was approved for just 18 beds, respectively. The AO also found discrepancies with purchase bills for hospital beds, alleging some were fraudulent.
The assessee appealed to the Commissioner of Income Tax (Appeals), or CIT(A). Following a directive from the High Court, which mandated a fresh hearing, the assessee provided a range of additional evidence to the CIT(A). This evidence included a corrected certificate from the Joint Director of Medical and Rural Health Services, Madurai District, which revised an earlier erroneous certification to reflect a 100-bed capacity. Further evidence included bank loan documents from 2011, newspaper publications from 2013, and insurance certifications, all consistently referencing a 100-bed facility. Additionally, the assessee pointed to government records and the state’s Covid-19 portal, which also recognized the hospital as having 100 beds, although the relevance of the Covid-19 portal for the assessment year 2013-14 was contested by the Revenue.
