Dr. Gurvinder Singh Randhawa v. Commissioner Of Income Tax, Patiala

ITA No.135 of 2012 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 135 of 2012 (O&M) Date of decision: 30.01.2013 Dr. Gurvinder Singh Randhawa ...Appellant versus Commissioner of Income Tax, Patiala ...Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTAHON'BLE MS. JUSTICE RITU BAHRI Present:-Mr. Pankaj Jain, Advocate and Mr. Devender Goyal, Advocate for the appellant. HEMANT GUPTA, J.(Oral) The present appeal under Section 260A of the Income TaxAct, 1961 (for short 'the Act') is against the order dated 17.11.2011 passedby the Income Tax Appellate Tribunal Bench “B” Chandigarh (for short 'theTribunal) in ITA No. 157/Chandi/2011 for the assessment year 2006-07.The Assessee has claimed the following substantial question of law in thepresent appeal: “Whether under the facts and circumstances of the caseand on the true & correct interpretation for the provisions ofSection 29, 145, while arriving at the 'chargeable income',the action is sustainable in concluding the 'proceedings onpresumption' ignoring 'material fact' containing 'materialparticulars' on record?” The Assessing Officer during the course of assessment made addition of Rs.25,13,016/- on account of undisclosed 247 surgeries @Rs.10,174 per surgery on the basis of receipts for 1008 operations in ayear at the average rate basis. The said order was affirmed by theCommissioner of Income Tax (Appeals) Patiala vide order dated ITA No.135 of 2012 13.12.2010 (Annexure A-20). However, in appeal, the learned Tribunalreduced the quantum of addition @ Rs.8000/- per surgery. The learnedTribunal recorded the following findings:- “During the appellate proceedings wherein numerousopportunities were allowed to the assessee to present his casevis-a-vis addition made by the Assessing Officer after rejectingthe books of account. The assessee is not in appeal (amendedgrounds of appeal) against the rejection of books of account andobjection raised is against the addition made on account ofunaccounted surgeries. The Assessing Officer had made anaddition of Rs.25,13,016/- on account of 247 surgeries @Rs.10,147/- per surgery. The learned counsel for the assesseewithout prejudice admitted to the aforesaid discrepancies buthad objected to the rates of non-foldable surgeries to be appliedi.e Rs.6,000/- per surgery, as per which the shortage works outto Rs.14,82,000/-. In view of the admission of the assessee whatdiscrepancies have crept in the books of account, we areconformity of unaccounted surgeries merits to be made in thehands of the assessee. The assessee claims the average rate ofsurgery at Rs.6,000/- per surgery, whereas the Assessing Officerhas applied the average rate of surgery at Rs.10,174/-. No basishas been filed by the assessee to establish its case whereas theAssessing Officer had applied the average rate of surgery vis-a-vis total receipts declared for the year under consideration. Inthe entirety of facts and circumstances of the case we direct theAssessing Officer at apply the rate of Rs.8000/- per surgery tocompute the income of the assessee for 247 surgeries carriedout during the year. Thus ground No.2 raised by the assessee isparty accepted.” Learned counsel for the appellant has vehemently argued that the average rate on which assessment was framed by the Tribunal @Rs.8000/- is not reasonable, as it is not possible that all surgeries wouldgive rise to income at the said scale. He relies upon the judgment ofHon'ble the Supreme Court reported as CST vs. H.M. Esufali H.M Abdulali (1973) 90 ITR 271 and subsequent judgment of Bombay HighCourt reported as C.I.T vs. Dr. M.K.E. Memon, (2001) 248 ITR 310wherein it has been held that the Assessing Officer cannot estimate theundisclosed income on arbitrarily basis. We have heard learned counsel for the appellant and find thatthe substantial question of law framed does not arise for consideration. Learned counsel for the appellant has vehemently argued that the average rate on which assessment was framed by the Tribunal @Rs.8000/- is not reasonable, as it is not possible that all surgeries wouldgive rise to income at the said scale. He relies upon the judgment ofHon'ble the Supreme Court reported as CST vs. H.M. Esufali H.M Abdulali (1973) 90 ITR 271 and subsequent judgment of Bombay HighCourt reported as C.I.T vs. Dr. M.K.E. Memon, (2001) 248 ITR 310wherein it has been held that the Assessing Officer cannot estimate theundisclosed income on arbitrarily basis. We have heard learned counsel for the appellant and find thatthe substantial question of law framed does not arise for consideration. The Tribunal in its order has mentioned that the appellant hasadmitted 247 undisclosed surgeries. The statement of the assessee wasthat Rs.6000 per surgery should be applied to determine the undisclosedincome, whereas the Tribunal has reduced the rate of addition @Rs.10,147/- applied by the Assessing Officer to Rs.8000/- per surgery. We find that once the assessee has himself stated before theTribunal that the average rate of the surgery be reduced to Rs.6000/- persurgery, then now it is not open to the appellant to dispute that that theflat rate applied by the Tribunal is arbitrary. In fact, the average rate ofsurgery @ Rs.10,147/- was based upon the number of surgeries performedby the appellant in one year and the income earned therefrom. Theaddition made by the Assessing Officer were based upon reasonablegrounds, which may not be said to be arbitrary. In fact, the Tribunal wasindulgent to the appellant in reducing the average rate to Rs.8000/- persurgery. Learned counsel for the appellant has further argued that aspecific ground was raised before the Tribunal that the rejection of booksof accounts is wholly unjustified and that the Tribunal has wronglyrecorded in the order that the rejections of books of account was notdisputed by the assessee. We do not find any merit in the said argument as well. Mere fact that in the grounds of appeal, the appellant has raised a ground toassert that rejection of books of account is incorrect, is not sufficient toaccept the argument of the appellant. The Tribunal has recorded theconcession on the basis of argument raised during the course of hearing.Therefore, the finding has been recorded by the Tribunal on the basis ofproceedings at the time of hearing. The concession recorded during thecourse of hearing cannot be permitted to be disputed in appeal. In view of the said fact, we do not find that any substantialquestion of law arises for consideration by this Court. Dismissed. (HEMANT GUPTA) JUDGE ( RITU BAHRI ) JUDGE January 30, 2013G.Arora/Vimal