Rc/75/2001 Of Commissioner Of Income Tax Ap Hyd v. Dr Evita Fernandez

HON'BLE SRI JUSTICE G.CHANDRAIAH & HON’BLE SRI JUSTICE CHALLA KODANDA RAM REFERRED CASE No.75 OF 2001 ORDER:- (per Hon’ble Sri Justice Challa Kodanda Ram) At the instance of the Revenue, below mentioned question of law has been referredfor the opinion of this Court which arises from the order of the Tribunal dated 11.12.1996 inI.T.A.No.343/Hyd/1996, for the assessment year 1991-92. “Whether on the facts and circumstances of the case, the deletion of the entireestimated income of Rs.8 lakhs made by the Assessing Officer on account ofthe alleged suppression of receipts from out-patients/consultation fee issustainable in law and whether the finding reached by the Tribunal can becharacterized as perverse and irrational?” 2. The assessee is a leading Gynecologist running a maternity hospital. There was asurvey conducted in the premises of the assessee and statements were recorded. Certainbooks of accounts were also impounded. Assessing Officer found that the assessee was notmaintaining any books of accounts. She was also not maintaining any register showing thereceipts of consultation fees from patients. During the course of hearing, the assessingofficer also recorded a statement of the assessee and on the basis of the said statement, theAssessing Officer estimated a yearly income at Rs.9,00,000/-. The assessee disclosed thereceipts from out patients as only Rs.1,33,000/-. A sum of Rs.8,00,000/- was added asundisclosed income. When the matter was carried in appeal, the appellate authorityconfirmed the same. In further appeal, the Tribunal had come to the conclusion that therewas no material whatsoever for the assessing officer to arrive at a figure of Rs.8,00,000/- asthe collections from the out patients except the guess work which has been made by theassessing officer. 3. Heard Sri S.R. Ashok, learned standing counsel appeared for the Revenue and SriK.K. Viswanatham, learned counsel appeared for the assessee. 4. A reading of the order dated 11.12.1996 of the Tribunal would disclose that there wasabsolutely no material whatsoever based on which even a prima facie conclusion can bedrawn by the assessing authority come to a conclusion that an amount of Rs.8,00,000/- wasreceived by the assessee from the out patients. It is not in dispute that the assessee alsohas a maternity hospital and receipts are being shown with respect to the maternity hospital.The assessee’s income for the assessment years 1991-92 was Rs.1,82,450/- and for 1992-93 Rs.1,33,650/-. It may be useful to extract the para of “Estimation” from the AssessmentOrder to explain as to how the figure of Rs.8,00,000/- was arrived at by the assessing officerin the assessment order:-“Estimation: As per the statement given by the assessee at the time of survey and subsequentlyfor the asst. year 1992-93 that she saw 75 to 100 patients per day, statementrecorded on 23.1.1995 shows minimum number of patients per day was 60. In amonth excluding Sundays total number of patients will be 1560. Out of this reduced3% to 4% patients from whom no consultation fee was charged. Minimum numberof patients who paid consultation fee, in a month, would be about 1500/-. Theaverage consultation fee charged Rs.50/- (as the charges anywhere between 45 to60 during that year.) Hence the yearly income from O.P. is as under:- 1,500 X 50/- . Rs.75,000/- per month 75,000 X 12 .. Rs. 9,00,000/- yearly income. Relating to this Rs.9 lakhs, conservative estimate, the assessee had shown O.P.receipt of 1.33 lakhs only, for the relevant asst. year 1992.93. This shows there issuppression of receipt under the head O.P. at least to the tune of Rs.8 lakhs.” 5. Except the statement recorded at the time of survey, there is no other basis for the 1,500 X 50/- . Rs.75,000/- per month 75,000 X 12 .. Rs. 9,00,000/- yearly income. Relating to this Rs.9 lakhs, conservative estimate, the assessee had shown O.P.receipt of 1.33 lakhs only, for the relevant asst. year 1992.93. This shows there issuppression of receipt under the head O.P. at least to the tune of Rs.8 lakhs.” 5. Except the statement recorded at the time of survey, there is no other basis for the assessing officer which was confirmed by the first appellate authority to arrive at the saidfigure of Rs.8,00,000/-. In that view of the matter, as rightly contended by the learnedcounsel for the assessee that the entire conclusion drawn by the assessing officer being onthe surmises and conjunctures and in the absence of any concrete evidence even remotelysuggesting the figure of Rs.8,00,000/- having been received by the assessee, the Tribunalwas justified in ordering deletion of the addition as a suppressed collections. Inasmuch asthe order of the Tribunal is based on the appreciation of facts on record and there being noother material placed before us, notwithstanding the fact that a question of perversity andirrationality has been raised, we have no other option other than rejected the question andanswering the same in favour of the assessee and against the revenue. 6. Accordingly, the Referred Case is rejected declining to answer the question as thesame is based purely on question of fact. No order as to costs. Miscellaneous Petitions, ifany pending, in this referred case shall stand closed. _____________________ G. CHANDRAIAH, J Date: 25.02.2014.Gk ____________________________ CHALLA KODANDA RAM, J HON'BLE SRI JUSTICE G.CHANDRAIAH & HON’BLE SRI JUSTICE CHALLA KODANDA RAM Gk. REFERRED CASE No.75 OF 2001 Date:25.02.2014