ITAT relief to doctor, quashes addition of Rs 95 lakh allegedly paid as capitation fees for admitting his ward to MD Dermatology course
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Mumbai: In a respite to a doctor embroiled in protracted tax litigation, the Income-Tax Appellate Tribunal (ITAT) has quashed the addition of Rs 95 lakh allegedly paid as capitation fees by him for admitting his daughter to a post-graduate medical course, specializing in dermatology.
The I-T appellate tribunal quashed this addition, holding that the allegation was based only on the basis of scribbled notes found in the college during a search and seizure operation.
Income-tax (I-T) officials treated the amount of Rs 95 lakh reportedly paid by the doctor as “unexplained expenditure” and asked him to explain the source of income from which the expenditure was made. In other words, this meant it would be treated as income of the payer, in this case the doctor, on which income tax at 60 percent would be payable. With surcharge, cess and penalty, the aggregate rate of tax can be above 80 percent.
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