Dr. Ramesh Marutirao Nigade, Kolhapur V. ACIT Cent. Cir., Kolhapur

ITA 1167/PUN/2009

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72097 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-10-2012
• Assessment Year: misc
• Appeal Filed On: 22-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Keywords: Loose papers; Document seized; Opportunity of being heard; Corroborative evidences; Assessment record; Documents seized
• Section: 142(1); 131

Judgement Text

INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1167/PN/2009 (BLOCK PERIOD 01-04-1989 TO 18-11-2001) DR. RAMESH MARUTIRAO NIGADE, 1182/4, E WARD, TAKALA, KOLHAPUR. PAN NO. AAMPN 3885A .. APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. .. RESPONDENT ITA NO.1176/PN/2009 (BLOCK PERIOD 01-04-1989 TO 18-11-2001) DY. COMMISSIONER OF INCOME TAX, CIRCLE-1, KOLHAPUR. .. ASSESSEE VS. DR. RAMESH MARUTIRAO NIGADE, 1182/4, E WARD, TAKALA, KOLHAPUR. PAN NO. AAMPN 3885A .. RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI DEPARTMENT BY : SHRI MUKESH VERMA DATE OF HEARING : 11-07-2013 DATE OF PRONOUNCEMENT : 30-08-2013 ORDER PER R.K. PANDA, AM : THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED BY THE ASSESSEE AND THE SECOND ONE FILED BY THE REVENUE AND ARE DIRECTED AG AINST THE ORDER DATED 08- 05-2009 OF THE CIT(A) KOLHAPUR RELATING TO BLOCK P ERIOD 01-04-1989 TO 18- 11-2001. FOR THE SAKE OF CONVENIENCE, THESE WERE H EARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PAEDIATRICIAN AND IS IN PRACTICE SINCE 1988. A SEARCH U/S.132 OF THE IN COME TAX ACT WAS CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 18-11- 1999. IN RESPONSE TO NOTICE U/S.158BC THE ASSESSEE FILED THE RETURN OF INCOME DISCLOSING UNDISCLOSED INCOME OF ` 17 LAKHS. THE ASSESSMENT U/S.158BC(C) WAS COMPLETED BY THE ASSESSING OFFICER ON 28-11-200 1 DETERMINING THE TOTAL INCOME AT ` 48,85,655/-. 2.1 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) ON 17-09-2002. DURING THE APPELLATE PROCEEDINGS THE ASSESSING OFFI CER POINTED OUT THAT THE ASSESSEE HAS NOT PAID SELF ASSESSMENT TAX ON THE IN COME DISCLOSED AT ` 17 LAKHS TILL THE DATE OF FILING OF THE APPEAL AND THEREFORE THE APPEAL FILED BY THE ASSESSEE WAS NOT MAINTAINABLE AND VOID AB-INITIO IN TERMS OF SECTION 249(4)(A) OF THE INCOME TAX ACT, 1961. ACCORDINGLY THE CIT(A ) VIDE ORDER DATED 03- 10-2002 (FIRST ORDER) DISMISSED THE APPEAL FILED BY THE ASSESSEE HOLDING THE SAME AS VOID AB-INITIO. 2.2 SUBSEQUENTLY, THE ASSESSEE PAID DUE TAXES AND T HE CIT(A) DECIDED THE APPEAL VIDE ORDER DATED 25-10-2002 (SECOND ORDER) W HEREIN HE DETERMINED THE UNDISCLOSED INCOME AT ` 31,44,500/- AS AGAINST ` 48,85,655/- DETERMINED BY THE AO. BEING AGGRIEVED THE ASSESSEE AS WELL AS THE RE VENUE FILED APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE HAD ALSO FILED AN APPEA L BEFORE THE TRIBUNAL AGAINST THE ORDER PASSED BY THE CIT(A) DATED 03-10- 2002 ON 07-03-2007 WITH A REQUEST TO CONDONE THE DELAY. 3. THE TWO APPEALS OF THE ASSESSEE AND ONE BY THE D EPARTMENT WERE DECIDED BY THE TRIBUNAL VIDE ORDER DATED 18-04-2007 . THE TRIBUNAL SET-ASIDE THE ORDER OF THE CIT(A) DATED 03-10-2002 TO THE FIL E OF THE CIT(A) WITH A 3 DIRECTION TO DECIDE THE ISSUE ON MERIT AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AFTER CONDONING THE DEL AY. 4. SO FAR AS THE ORDER DATED 25-10-2002 BY THE CIT( A) (SECOND ORDER) IS CONCERNED THE TRIBUNAL HELD THAT THE CIT(A) COULD P ASS ONLY ONE ORDER IN RESPECT OF ONE APPEAL. THEREFORE, AFTER PASSING TH E FIRST ORDER ON 03-10-2002 THE SECOND ORDER PASSED ON 25-10-2002 WAS WITHOUT J URISDICTION. SINCE THE ASSESSEE HAS CHALLENGED THE ORDERS DATED 03-10-2002 AS WELL AS 25-10-2002 THE TRIBUNAL QUASHED THE SECOND ORDER DATED 25-10-2 002 PASSED BY THE CIT(A). ACCORDINGLY, IT WAS HELD THAT THE APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER DATED 25-10-2002 OF T HE CIT(A) ARE INFRUCTUOUS AND ACCORDINGLY THE SAME WERE DISMISSED. 5. COMING TO THE FACTS AGAIN, THE ASSESSING OFFICER , DURING THE ASSESSMENT PROCEEDINGS, NOTED THAT THE ASSESSEE HAS DECLARED U NDISCLOSED INCOME OF ` 17 LAKHS IN THE BLOCK RETURN, THE DETAILS OF WHICH ARE AS UNDER : SL.NO. NATURE OF THE ASSET/INCOME UNDISCLOSED AMOUN T (IN RS.) 1 FDRS AND INTEREST 471812 2 SHARES 87925 3 CASH 320075 4 HOSPITAL EQUIPMENT 16200 5 HOSPITAL BUILDING AND INTERIOR DECORATION 350000 6 INTERIOR DECORATION OF RESIDENCE 157000 7 CASH CREDITS 50000 8 DIFFERENCE IN BANK BALANCES 32081 9 OTHER POSSIBLE DISCREPANCIES IN ACCOUNTS/INVESTME NTS 214907 TOTAL 1700000 6. THE ASSESSING OFFICER NOTED THAT THE MANNER IN W HICH THE ASSESSEE SUBMITTED HIS UNDISCLOSED INCOME AS ABOVE IS NOT IN ACCORDANCE WITH THE MANNER SPECIFIED U/S.158BB NOR IN FORM NO.2B BEING THE RETURN PRESCRIBED FOR FURNISHING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE ASSESSEE HAS NOT WORKED OUT THE TOTAL INCOME INCLUDING UNDISCLOS ED INCOME FOR EACH OF THE 4 ASSESSMENT YEARS COMPRISED IN THE BLOCK PERIOD FROM THE AGGREGATE OF WHICH THE RETURN OR ASSESSED INCOME HAS TO BE REDUCED IN ORDER TO ARRIVE AT THE UNDISCLOSED INCOME. INSTEAD OF ADMITTING THE INCOM E YEAR-WISE THE ASSESSEE HAS FILED THE RETURN ADMITTING CERTAIN AMOUNTS AGAI NST SOME UNDISCLOSED ASSETS. THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER TH AT HE RETRACTED FROM HIS ADMISSION OF UNDISCLOSED INCOME OF ` 27 LAKHS IN HIS SWORN STATEMENT U/S.132(4) ON 18-11-1999 AS THE SAID ADMISSION WAS MADE IN A STATE OF CONFUSION. 7. THE ASSESSING OFFICER NOTED FROM THE STATEMENT R ECORDED U/S.132(4) ON THE DATE OF SEARCH THAT THE ASSESSEE HAD STATED THA T HE HAD ACCOUNTED FOR OPD RECEIPTS FULLY WHEREAS THE INCOME FROM OTHER PATIEN TS WERE NOT ACCOUNTED FULLY. HE HAD SUBMITTED THAT HE DID NOT FOLLOW ANY FIXED PATTERN OR RATIO WHILE OMITTING TO ACCOUNTING FOR THOSE OTHER RECEIPTS. I N REPLY TO ANOTHER QUESTION THE ASSESSEE HAD ADMITTED THAT HE DISCLOSED 60% OF OTHER PROFESSIONAL RECEIPTS. IN THE STATEMENT RECORDED U/S.131 BY THE DDI (INVES TIGATION) ON 26-11-99 THE ASSESSEE IN HIS REPLY TO QUESTION NO.8 HAD ADMITTED THAT HE HAD KEPT RECORDS OF HIS ACTUAL RECEIPTS IN NOTEBOOKS/LOOSE PAPERS AN D THAT AFTER THE REGULAR BOOKS WERE WRITTEN THE LOOSE SHEETS WERE DESTROYED. THE ASSESSING OFFICER EXAMINED THE VARIOUS SEIZED DOCUMENTS DURING THE CO URSE OF SEARCH WHICH REVEALED SUPPRESSION OF RECEIPTS IN A SYSTEMATIC MA NNER FOR THE PERIOD FOR WHICH THE SEIZED PAPERS/DOCUMENTS RELATE TO. HE NO TED FROM THE SEIZED DOCUMENTS THAT THE ASSESSEE HAS RECEIPTS FROM OPD P ATIENTS, HOSPITALISATION CHARGES DEBITED AS INDOOR FEES AND NURSERY CHARGES, SUPPLY OF MEDICINES ETC. HE NOTED THAT SEIZED NOTEBOOK NO.19 AS PER PANCHANA MA DATED 18-11-1999 CONTAINS DETAILS OF DAILY COLLECTIONS OF THE ASSESS EE FROM 15-07-1998 TO 31-8- 1999 ON ACCOUNT OF CONSULTATION CHARGES AND BILLS. SIMILARLY, LOOSE SHEETS OF 5 PAPERS SEIZED AT BUNDLE NO.21 OF PANCHANAMA CONTAIN ACTUAL COLLECTIONS FOR THE PERIOD 01-01-97 TO 14-05-97. PAGES 51, 52, AND 76 OF LOOSE SHEETS OF PAPERS SEIZED AS BUNDLE NO.28 OF ANNEXURE-A OF PANC HANAMA DEPICTS ACTUAL COLLECTIONS FOR 3 DAYS FROM 15-11-99 TO 17-11-99. 8. FROM THE SEIZED DOCUMENTS THE ASSESSING OFFICER NOTED THAT THE COLLECTIONS NOTED IN THESE DOCUMENTS ARE MUCH MORE THAN THOSE RECORDED IN THE BOOKS OF ACCOUNTS FOR THE CORRESPONDING PERIOD. THE BILL BOOKS SEIZED RELATE TO INDOOR FEE COLLECTIONS OF THE ASSESSEE FO R VARIOUS PERIODS. THE BILL BOOKS SEIZED SHOW THAT THE ASSESSEE HAS NOT ACCOUNT ED FOR THE COLLECTIONS MENTIONED IN THE BILL BOOKS IN MOST OCCASIONS AS HI S RECEIPTS IN THE BOOKS. FROM THE ABOVE, THE ASSESSING OFFICER CAME TO THE C ONCLUSION THAT THE ASSESSEE OMITTED TO ACCOUNT FOR A SUBSTANTIAL PART OF HIS PROFESSIONAL RECEIPTS IN THE REGULAR BOOKS MAINTAINED BY HIM. HE NOTED T HAT THE SEARCH OPERATIONS RESULTED IN SEIZURE OF EVIDENCE IN SUPPORT OF UNDIS CLOSED INCOME ONLY FOR A PART OF THE PREVIOUS YEAR COMPRISING IN THE BLOCK P ERIOD. FOR THE OTHER PERIODS EVIDENCE WAS NEITHER AVAILABLE NOR SEIZED SINCE THE ASSESSEE IN HIS STATEMENT RECORDED U/S.132(4) HAD ADMITTED THAT HE HAD SUPPRE SSED HIS PROFESSIONAL RECEIPTS 9. AFTER CONSIDERING THE VARIOUS UNEXPLAINED ASSETS , INVESTMENTS AND SUPPRESSED PROFESSIONAL RECEIPTS FOUND AS A RESULT OF SEARCH, THE AO DETERMINED THE UNDISCLOSED PROFESSIONAL INCOME AT R S.43,08,658/- AND THE UNDISCLOSED OTHER INCOME AT RS.5,76,997/- AND DETER MINED THE UNDISCLOSED INCOME AT RS.48,85,635/-. 10. BEFORE CIT(A) THE ASSESSEE VEHEMENTLY CHALLENGE D THE DETERMINATION OF UNDISCLOSED PROFESSIONAL RECEIPTS AS WELL AS UNDISC LOSED OTHER INCOME. IT WAS SUBMITTED THAT THERE WAS VIRTUALLY NO SUPPRESSION O F OPD RECEIPTS AS PER 6 STATEMENT U/S.132(4) EXCEPT IN A.Y. 1999-2000 DUE T O COMPUTER BLOCK OUT. IT WAS SUBMITTED THAT DUE TO EPIDEMIC IN THE MONTHS OF JULY AND AUGUST 1998 THE CHILDREN WERE HEAVILY SUFFERING FROM VARIOUS DISEAS ES FOR WHICH THE PROFESSIONAL RECEIPTS OF THE ASSESSEE WERE MORE FOR THE ABOVE TWO MONTHS. HOWEVER, THE SAME RATIO CANNOT BE APPLIED FOR THE E NTIRE BLOCK PERIOD. IT WAS ARGUED THAT THE AO HAS CONSIDERED 365 DAYS IN A YEA R AS THE NUMBER OF WORKING DAYS FOR THE ASSESSEE DOCTOR WHICH IS NOT P OSSIBLE SINCE HE HAS TO GO OUT STATIONS TO VISIT RELATIVES, ATTEND SOCIAL FUNC TIONS APART FROM TAKING HOLIDAYS. IT WAS SUBMITTED THAT THERE ARE ALSO CER TAIN EXPENSES WHICH WERE NOT RECORDED IN THE BOOKS AND THE AO HAS NOT GIVEN PROP ER CREDIT FOR THE SAME. FINALLY, IT WAS ARGUED THAT THE SUBMISSIONS DATED 27-011-2001 FILED BEFORE THE AO WERE NOT AT ALL CONSIDERED BY THE AO. 11. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) UPHELD THE ORDER OF HIS PREDECESSOR DETERMINING THE SUPPRESSED PROFESSIONAL RECEIPTS OF RS.28,90,000/- AND THE UNDISCLOSED INCO ME AT RS.5,54,500/- AS JUSTIFIED. THE RELEVANT OBSERVATIONS OF THE PREVIO US CIT(A) FOR DETERMINING THE SUPPRESSED PROFESSIONAL RECEIPTS AND UNDISCLOSE D INCOME AS WELL AS THE OBSERVATIONS OF THE PRESENT CIT(A) UPHOLDING THE SA ME ARE AS UNDER : 8. I HAVE PERUSED THE ASSESSMENT RECORD, THE SEIZ ED MATERIAL AND THE ASSESSMENT ORDER. FROM THE ANALYSIS OF THE SEIZED M ATERIAL, STATEMENTS OF THE APPELLANT AND OTHER RELATED PERSONS, SUBMISSIONS OF APPELLANT, ASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS, THE FOLL OWING PARAMETERS EMERGE FOR THE PURPOSE OF MAKING REASONABLE ESTIMATE OF SUPPRE SSION OF PROFESSIONAL RECEIPTS BY THE APPELLANT DURING THE BLOCK PERIOD : 1) THE SEIZED MATERIAL SHOWS SUPPRESSION OF PROF ESSIONAL RECEIPTS FOR INDOOR AND NURSERY PRACTICE OF THE APPELLANT FOR A. Y. 1997-98, 1998-99, 1999-2000 & 2000-01 (REFER PARA 6.4) ON A DAILY BAS IS 2) THERE IS VIRTUALLY NO SUPPRESSION OF OPD RECEI PTS AS POINTED OUT BY THE APPELLANT DURING THE STATEMENT U/S 132(4). THE EXCEPTION IS IN A.Y. 1999-00 DUE TO COMPUTER BLACK-OUT FOR 1-5-1998 TO 31-7-1998 (RS.38,995) AND 01.12.1998 TO 10.12.1998 (RS.32,116) 7 3) SUPPRESSION OF PROFESSIONAL RECEIPTS IS HIGHER DURING 'UNHEALTHY SEASON' IDENTIFIED FOR NEARLY 168 DAYS (FROM ONSET OF MONSOON TO DEWALI) IN A YEAR ROUGHLY 1-6- TO 15-11- AS COMPARED TO 'NORMAL' SEAS ON OF 197 DAYS (W.E.F. 16-11 TO 30-5-), THIS HAS BEEN DONE ON THE BASIS OF A. STATEMENTS OF APPELLANT U/S 132(4) AND U/S 131 OF THE I.T.ACT, 1961 AS WELL AS B. THE SEIZED MATERIAL FOR 'UNHEALTHY PERIOD IN A .Y. 1999-00 REVEALS SUPPRESSION OF RS.4272/- PER DAY WHEREAS SUPPRESSIO N IN A.Y. 1998- 99 FOR NORMAL SEASON ISRS.2108/- PER DAY. THUS, THE SEIZED MATERIAL ITSELF REVEALS THAT SUPPRESSION OF PROFESSIONAL REC EIPTS IN THE 'UNHEALTHY' SEASON IS ON RATHER HIGH SIDE. THE SUBMISSION OF THE APPELLANT RELATED TO EPIDEMIC DURING THE RELEVANT PREVIOUS YEAR RELEVANT TO A.Y. 99-00 HAS BEEN CONSI DERED AND ONLY 20% EXTRA SUPPRESSION HAS BEEN TAKEN FOR 'UNHEALTHY' SE ASON IN OTHER ASSESSMENT YEARS. 4) THERE IS CATEGORICAL ADMISSION BY THE APPELLA NT RELATED TO SUPPRESSION OF PROFESSIONAL RECEIPTS DURING THE BLO CK PERIOD AS A WHOLE, (EXTRACT FROM SUBMISSION U/S 142(1) DT. 9-10-2001 A LREADY QUOTED IN PARA 5.7 ABOVE). 5) SOME EVIDENCE IS ON RECORD THAT THE APPELLANT HAS VISITED OUTSTATIONS DURING THE BLOCK PERIOD (PAGE 1 & 2 OF BUNDLE NO.27) AND THUS HAS REDUCED HIS PROFESSIONAL RECEIPTS SUPPRESSION D URING THE PERIOD HE WAS AWAY. CONSIDERING THIS ASPECT AS WELL AS FOR ALLOWI NG BENEFIT OF BUSINESS GRAPH BEING LOWER ON SOME DAYS ESTIMATES OF UNDISCL OSED INCOME ARE REVISED DOWNWARDS BY 10% IN THIS APPELLATE ORDER FR OM THE UNDISCLOSED PROFESSIONAL RECEIPTS ESTIMATED FOR DIFFERENT ASSES SMENT YEARS IN PARA 7 ABOVE. 6) THERE IS VERY MEAGER EVIDENCE IN THE SEIZED M ATERIAL RELATING TO 'EXPENSES 1 WHICH HAVE BEEN BOOKED. THESE INCLUDE PAYMENT OF B ONUS / EXTRA SALARY (ONLY ONE PAGE FOR OCT. 1999 A-28/PAGE -1), OFFICE EXPENSES NOT BOOKED DURING THE VISIT OF THE APPELLANT OUTSIDE (P AGE 182 OF BUNDLE NO.27) F PAYMENT TO ACCOUNTANT / TAX CONSULTANT (RS.2650 - BUNDLE NO.28 PAGE-384) AND THE EXPENSES INDICATED ON THE SHEETS DISCLOSING PROFESSIONAL RECEIPTS. 7) THE CLAIM OF THE APPELLANT REGARDING PURCHASE OF MEDICINES, ALLEGEDLY REFLECTED ON PAGE 39 TO 43 AND PAGE 46 TO 48 OF BUNDLE NO. 28 OF LOOSE PAPERS IS INADMISSIBLE AND INCORRECT FROM THE SEIZED MATERIAL ITSELF AND ALSO APPELLANT'S OWN SUBMISSION DURING ASSESSME NT PROCEEDINGS. IN SO FAR AS THE APPELLANT'S CLAIM REGARDING TAKING HOLIDAYS AND BEING OUT STATION ETC. FOR DIFFERENT REASONS CONCERNED, T HERE IS OBVIOUS STRENGTH IN THE STATEMENT OF THE APPELLANT. HOWEVER, IT IS N OTED THAT THE ESTIMATE 8 OF UNDISCLOSED PROFESSIONAL RECEIPTS HAVE B EEN MADE FOR CERTAIN NUMBER OF DAYS ON THE BASIS OF SEI ZED MATERIALS AFTER INCLUDING THE ZERO RECEIPTS FOR HOLIDAYS. INFACT, ON THIS ISSUE, THE PRESENT AS SESSING OFFICER HAD SUBMITTED REPORTS EXCLUDING ZERO AND MINUS FIGURES O F SUPPRESSION FROM THE TABLES GIVEN IN THE ASSESSMENT ORDER AND A CASE FOR ENHANCEMENT OF RS. 24 LACS IN UNDISCLOSED PROFESSIONAL RECEIPTS WA S MADE. THIS EXERCISE DONE BY THE ASSESSING OFFICER, WOULD HAVE RESULTED IN INCORRECT RESULTS AS THE DAYS ON WHICH THE APPELLANT HAS SHOWN NIL RECEI PTS, BOTH IN THE SEIZED MATERIAL AND IN THE BOOKS OF ACCOUNTS ARE REQUIRED TO BE TAKEN FOR AVERAGE PURPOSES. TO MAKE POSITION VERY CLEAR, ONE OF THE P AGES ON WHICH FINAL WORKING HAS BEEN DONE BY THE ASSESSING OFFICER REGARDING SUPPRESSION OF INDOOR RECEIPTS IS GIVEN IN ANNEXURE-L TO THE APPEL LATE ORDER. AS PER THIS PAGE, FOR A. Y. 1997-98, THERE IS NO RECEIPT ON 01.01.1997, 04.01.1 997, 05.01.1997 ETC. THUS, THE HOLIDAYS HAVE BEEN INCLUD ED FOR AVERAGING OUT THE UNDISCLOSED PROFESSIONAL RECEIPTS AND THE CLAIM BEING MADE BY THE APPELLANT IN THIS REGARD. IS NOT CORRECT TO THIS E XTENT. 9.1. THE STAND TAKEN BY THE APPELLANT IS THAT HE COULD NOT BE EXPECTED TO BE WORKING ALL THE 12 MONTHS AND 30 DAYS IN A YEAR AT THE SAME SPEED AND NOT TAKE ANY HOLIDAYS OR NOT EVEN FAIL ILL. THE APP ELLANT HAS, THEREFORE, SOUGHT ABSENCE FROM THE PLACE OF WORK FOR NEARLY 30 DAYS IN A YEAR AND ACCORDINGLY REDUCED THE ESTIMATE OF SUPPRESSED PROFESSIONAL RECEIPTS. 9.2 PERUSAL OF THE SEIZED MATERIALS TENDS TO JUSTI FY THE STAND OF THE APPELLANT IN THIS REGARD. BUNDLE NO.27 SEIZED AT TH E TIME OF SEARCH RAISES A PRESUMPTION IN FAVOUR OF THE APPELLANT IN THIS REGA RD. IT IS SEEN THAT THE APPELLANT HAS VISITED AHMEDABAD ETC. DURING THE PER IOD 30.12.1996 TO 08.01.1997. DURING THAT PERIOD, THE RECEIPTS BY THE HOSPITAL OF THE APPELLANT ARE ONLY RS.22,805/- AND AGAINST THAT, EX PENSES OF RS.3,786/- HAVE BEEN SHOWN. THESE ARE AS PER PAGE NOS.1 AND 2 OF THE BUNDLE NO.27 SEIZED AT THE PREMISES OF THE APPELLANT. THUS, NOT ONLY A DILUTION IN THE PROFESSIONAL RECEIPTS, BUT ALSO EXTENT OF EXPENSES DURING A PERIOD OF 10 DAYS IS REFLECTED FROM THIS SEIZED MATERIAL IN BUND LE NO.27. WHILE THE ISSUE OF EXPENDITURE BEING LOOKED INTO THE BOOKS OF ACCOU NTS, IT WOULD BE REASONABLE TO GIVE A SUITABLE LOWER MULTIPLE FOR TAKING INTO ACCOUNT SUC H ACCOUNT AS ARE REFLECTED IN BUNDLE NO.27 OF THE SEI ZED MATERIAL. I ACCORDINGLY FEEL THAT IT WOULD BE IN THE INTEREST O F JUSTICE TO REDUCE THE ESTIMATES OF SUPPRESSED PROFESSIONAL RECEIPTS BY 10% THEREOF FOR DIFFERENT ASSESSMENT YEARS. 9.3 IN SO FAR AS THE APPELLANT'S CLAIM THAT THE SUPPRESSION OF GROSS RECEIPTS HAS BEEN FOR A VERY SHORT, BESIDES RELYING ON THE DISCUSSION MADE ALREADY IN THIS REGARD ON THE LEGAL ASPECTS IN WHICH THE DECISIONS OF HON. MUMBAI HIGH COURT SUPPORTS THE VIEW OF THE DEPARTME NT, IT MAY BE RELEVANT TO POINT OUT THAT THE DATA BASE IS BY NO S TRETCH OF IMAGINATION NEGLIGIBLE AS GIVEN HERE UNDER : 9 FOR A. Y. 1997-98 THE DATA IS AVAILABLE FOR 90 DAYS FOR A.Y. 1998-99 THE DATA IS AVAILABLE FOR 45 DAYS FOR A.Y. 1999-2000 THE DATA IS AVAILABLE FOR 45 DAY S FOR A.Y. 2000-2001 THE DATA IS AVAILABLE FOR 7 DAYS BESIDES THE ABOVE, I HAVE FOUND THAT THERE IS EVIDE NCE IN THE FORM OF UNDISCLOSED PROFESSIONAL RECEIPTS IN THE FORM OF PA GE NO. 28,27 (20.9.95), 26,24,23,22,21,19,17,16,12,11,10 (31.12.95 AN) 7 (3 0.12.96), 6 (30.12.1996 A.N) OF BUNDLE NO. 27 BUT NO ADDITION ON THE BASIS OF THESE IS BEING SUGGESTED AS THE DATES ARE NOT AVAILABLE IN MOST OF THE CASE. OF COURSE, THERE IS SUPPRESSION OF RECEIPTS EVIDENT FROM COMPA RISON OF THE DATED PAPERS AND THE BOOKS OF ACCOUNTS. 9.4 IN SO FAR AS THE CLAIM OF THE APPELLANT THAT T HE OBVIOUS MISTAKE IN REPLY TO QUESTION NO.30 HAS NOT BEEN TAKEN INTO ACC OUNT, PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THIS WAS NEVER UTILIZED IN FRAMING THE ASSESSMENT ORDER. FURTHERMORE, I DO NOT SEE ANY MIS TAKE THEREIN. THE APPELLANT HAS DISCLOSED RS.27 LACS AFTER CONSIDERING VARIOUS FACTS INCLUDING VDIS. THERE IS NO MATHEMATICAL SUBTRACTION OF RS.20 LACS FROM THE PRI MA- FACIE WORKING OF UNDISCLOSED PROFESSIONAL RECEIPTS FOLLOWING THE THUMB RULE OF 40%. THIS HAD BEEN DONE WITHOUT REFERENCE TO THE FACT OF NORMAL AND 'UNHEALTHY' SEASONS AND AS THE APPELLANT WAS APPARE NTLY AWARE OF THE CORRECT SITUATION, HE ESTIMATED HIS SUPPRESSED RECE IPTS AT RS.27 LACS INSTEAD OF THE BALANCE OF RS. 19 LACS. IT IS SEEN THAT THE APPELLANT HAS ADMITTED UNDISCLO SED INCOME OF RS.27 LACS AND FURTHER SUBMITTED THAT: 'EXACT YEAR WISE DETAILS/BIFURCATION WOULD BE SUPPL IED WITHIN 8 DAYS. HOWEVER, I HAVE TO STATE THAT THE ABOVE ADDITIONAL INCOME IS REPRESENTED BY CASH OF RS.6 LACS FOUND IN MY RESIDENCE, PERSONAL AND HOUSEHOLD EXPENSES NOT DISCLOSED DURING THE BLOCK PERIOD AS A/SO INVESTMENT IN HOSPITAL AND RESIDENTIAL BUILDINGS INCLUDING INTERI OR DECORATION AND FURNITURE ETC. I FURTHER STATE THAT THE ABOVE ADDIT IONAL INCOME ADMITTED BY ME AS UNDISCLOSED INCOME IS AFTER WELL THOUGHT AND AFTER GOING THROUGH THE SEIZED BOOKS, LOOSE SHEETS AND DOCUMENTS ETC.' THUS, HERE IS NO APPARENT MISTAKE IN THE SUBMISSION AND IN THE ADMISSION MADE BY THE APPELLANT IN QUESTION NO.30 O F THE STATEMENT U/S. 132(4). IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, T HE ESTIMATION OF SUPPRESSED PROFESSIONAL RECEIPTS FOR INDOOR AND NUR SERY WINGS IS TO BE DONE AS DISCUSSED IN NEXT PARAGRAPH. 9.6 SUPPRESSED PROFESSIONAL RECEIPTS ESTIMATED AFT ER TAKING INTO ACCOUNT HOLIDAYS AND BIFURCATION OF THE YEAR IN NOR MAL AND UNHEALTHY PERIODS ON THE BASIS OF SEIZED MATERIALS AND AS ADM ITTED BY THE ASSESSING OFFICER AND THE APPELLANT DURING APPELLATE PROCEEDI NGS ARE HOWEVER DIRECTED TO BE REDUCED BY 10% FOR TAKING INTO ACCOU NT FEATURES SUCH AS VISITS OF THE APPELLANT OUTSIDE STATION ETC AND FOR TAKING INTO ACCOUNT FEATURES SUCH AS SICKNESS OF THE APPELLANT ETC. ACC ORDINGLY, THE ESTIMATED UNDISCLOSED PROFESSIONAL RECEIPTS FOR DIFFERENT ASS ESSMENT YEARS ARE BEING REVISED AS UNDER AND FURTHER ALLOWANCES THEREFROM I S TO BE ALLOWED AS DISCUSSED IN LATER PARAGRAPHS: 10 FURTHER ADDITION IS REQUIRED TO BE MADE ON ACCOUNT OF OPD RECEIPTS DUE TO COMPUTER BLACK OUT FOR THE PERIOD 15.07.1998 TO 30. 07.1998 AND FOR THE PERIOD 01.12.1998 TO 10.12.1998 AMOUNTING TO RS.70, 000/-, 9.6.1 IN SO FAR AS THE FIGURES OF AY 1999-2000 IS CONCERNED, AN ADDITIONAL FEATURE WHICH HAS BEEN SUBMITTED BEFORE ME BY THE A PPELLANT DURING THE APPELLATE PROCEEDINGS IS A LETTER DATED 27.11.2001 ALLEGED TO HAVE BEEN FILED BY THE APPELLANT BEFORE THE ASSESSING OFFICER . I HAVE NOTICED FROM THE CASE RECORDS THAT THE LAST HEARING GIVEN TO THE APP ELLANT WAS ON 23.11.2001 AND THE NEXT DATE WAS GIVEN AS 27.11.2001. ORDER SHEET DATED.23.11.2011 IS QUOTED AS UNDER: 'DR.R.M.NIGADE ATTENDS WITH HIS A.R. SHRI. DOUNDE, ADVOCATE. THEY HAVE BEEN SHOWN THE NOTE BOOK (JAIN NOTE BOOK) AT SR.NO, 10 AND THE LOOSE PAPER BUNDLE NO.21 SEIZED VIDE PANCHNAMA DT. 18,11.1999. THE JAIN DELUXE NOTE BOOK SEIZED AT SR.NO. 19 CONTAIN THE NOTINGS OF DAI LY COLLECTION OF OPD, INDOOR AND NURSERY PROFESSIONAL RECEIPTS OF THE ASSESSES FROM THE PATIENTS FROM BOTH THE SESSIONS I.E.. MORNING & EVENING. DUE ANALYSIS OF THESE RECEIPTS DIARY DEPICTING THE PROFESSIONAL RECEIPTS , IT IS FOUND THAT THE OPD RECEIPTS HAVE NOT BEEN ACCOUNTED FOR AT ALL FOR THE PERIOD 15/7/98 TO 31/7/98 IN THE LEADER HOWEVER, DURING THE PERIOD 1. 8.98 TO 31.8.98 THE OPD RECEIPTS ARE REFLECTED IN THE LEDGER BUT THESE RECEIPTS AS PER THE LEDGER ARE SHOWN LESS THAN THE OPD RECEIPTS MENTIONED IN T HE SEIZED NOTE BOOK NO. 19. THUS, FOR A PERIOD OF 46 DAYS ITSELF, THE T OTAL OPD RECEIPTS ARE ACCOUNTED LESS BY RS. 39,920/-. SIMILARLY, THE INDOOR AND NURSERY RECEIPTS DURING T HE PERIOD 15.7.98 TO 31.8.98 ARE ACCOUNTED IN THE LEDGER LESS BY RS.2,38 ,540/- I.E. FOR A PERIOD OF 46 DAYS THE TOTAL NURSERY & INDOOR RECEIPTS AS COMP ARED WITH THE SEIZED NOTE BOOK AT SR.NO. 19 ARE FOUND RECORDED LESSER TO THE EXTENT OF RS. 2, 58, 540/- IN THE LEDGER SEIZED. LOOSE PAPER BUNDLE NO.21 SEIZED VIDE PANCHNAMA DATE D 18.11.99 CONSISTS OF PAPERS ON WHICH MORNING & EVENING NIGHT SESSIONS AND PROFESSIONAL RECEIPTS ARE NOTED (BEING INDOOR, NURSERY AND OPD F EES). THIS RUNS FOR THE PERIOD 11/1/97 TO 14/5/97. THE PROFESSIONAL RECEIPT S RECORDED ON THESE LOOSE PAPERS DRAFTS THE ACTUAL RECEIPTS AND THE SAME ARE PARTLY RECORDED/NOT RECORDED IN THE LEDGER I.E. THE REGULA R BOOKS OF ACCOUNT. ASSESSMENT YE AR UNDISCLOSED PROFESSIONAL RECEIPTS 1997 - 98 RS. 5,25,000 1998 - 99 RS. 7,50,000 1999 - 2000 RS. 12,80,000 2060 - 2601 RS. 4,75,000 TOTAL RS.30,30,000 11 THESE BOTH BUNDLE NO.19 &21 ARE SHOWN TO THE ASSESS EE IN THE PRESENCE OF HIS A.R. SHRI. DOUNDE, ADVOCATE & THE CHARTS PREPAR ED SEPARATELY FOR SR.NO. 19 & 21 ARE SHOWN TO HIM WHICH CLEARLY SHOW THE DIF FERENCE WHICH REPRESENTS THE UNDISCLOSED PROFESSIONAL RECEIPTS OF THE ASSESSEE DURING THESE PERIODS. THE ASSESSEE IS ASKED TO EXPLAIN AND SHOW CAUSE WHY HIS PROFESSIONAL RECEIPTS SHOULD NOT BE ESTIMATED FOR T HE SIMPLE REASON THAT IN THE ABSENCE OF SIMILAR NOTINGS OF FEE RECEIPTS FOR THE OTHER PART OF SAME PREVIOUS YEAR DOES NOT ALLOW AN INFERENCE THAT THE ASSESSEE HAS FAITHFULLY RECORDED THE RECEIPTS IN ENTIRETY FOR THE REMAINING PERIOD OF THE YEAR. IN SUCH CIRCUMSTANCES WHY IT SHOULD NOT BE NECESSARY T O ESTIMATE HIS PROFESSIONAL INCOME FOR THE PERIOD 1/4/96 TO 18/11/ 99 DURING WHICH THE SUPPRESSION OF RECEIPTS ARE EVIDENCED CLEARLY FROM THE SEIZED MATERIAL BEING BUNDLE NO.19 & 21 ALONG WITH OTHER SUPPORTING EVIDENCES. THE ASSESSEE IS REQUESTED TO FILE HIS SUBMISSIONS. THE FACT REGARDING NOT ACCOUNTING AT ALL OF OPD FEES FOR 21 DAYS FROM 11/7 /98 TO 31/7/98 AND 1/12/98 TO 10/12/98 HAS BEEN DISCUSSED & HIS EXPLAN ATION HAS BEEN CALLED FOR NEXT DATE 27.11.2001. (SD/- AUTHORISED REPRESENTATIVE) (SD/- ASSESSIN G OFFICER) 'IT APPEARS THAT DUE TO SOME INADVERTENT REASONS, T HE ASSESSING OFFICER COULD NOT TAKE INTO ACCOUNT THE SUBMISSION OF THE A PPELLANT DATED 27.11.2001. INFACT, IT IS SEEN FROM THE ORDER SHEE T AND THE CASE RECORDS THAT THE DRAFT ORDER WAS SUBMITTED BEFORE THE JCIT CENTRAL RANGE-1 PUNE FOR APPROVAL ON 26.11.2001 AND THE SAME WAS APPROVE D BY JCIT CENTRAL RANGE-L, PUNE ON 27.11.2001. THE ASSESSMENT ORDER W AS THEREAFTER PASSED ON 28.11.2001 9.6.2 COMING TO THE SPECIFIC POINTS RAISED IN THI S LETTER DATED 27.11.2001, IN SO FAR AS OPD FEES IS CONCERNED, THE APPELLANT HAS CITED THE PERIOD 31.07.1998 TO 31.08.1998 WHERE THE OPD RECEI PTS ARE RECORDED IN THE BOOKS IN EXCESS BY RS.4000/- AND FURTHER PERIOD FROM 01.01.1997 TO 26.02.1997 WHEREIN THE OPD RECEIPTS HAVE BEEN RECOR DED IN EXCESS BY RS.1700/- IN THE REGULAR BOOKS OF ACCOUNTS. THE APP ELLANT HAS REQUESTED THAT SUITABLE RELIEF MAY BE GIVEN. CONSIDERING THES E FACTS, THE ADDITION ON ACCOUNT OF OPD RECEIPTS LEFT OUT DUE TO COMPUTER BL ACK OUT AS MENTIONED IN THIS LETTER DATED 27.11.2001 A RE TAKEN AT RS. 60,000/- (REDUCTION OF RS.10,000/- FROM THE AMOUNT DISCUSSED ABOVE.) 9.6.3 IN SO FAR AS INDOOR FEES IS CONCERNED, THE A PPELLANT HAD MENTIONED IN THIS LETTER DATED 27 . 11 . 2001 THAT IN THE MONTHS OF JULY AND AUGUST, 1998 THERE WAS EPIDEMIC OF INFECTIOUS DISEA SE AND CHILDREN WERE HEAVILY SUFFERING FROM BRONCHI PNEUMONIA/BRONCHITIS ETC. AND THEREFORE THE RECEIPTS HEAVILY INCREASED DURING THESE PERIODS. A CCORDINGLY, THE APPELLANT HAS SUBMITTED THAT THE RATIO OF UNDISCLOSED RECEIPT S AT THIS PERIOD SHOULD NOT BE APPLIED AS FOR THE REST OF THE ASSESSMENT YE ARS. THE APPELLANT WAS 12 ASKED, TO SUBMIT ANY DOCUMENTARY EVIDENCE IN THIS R EGARD, BUT THE SAME HAS NOT BEEN PRODUCED. IT IS OF COURSE TRUE THAT T HE SUPPRESSION OF INDOOR RECEIPTS FOR A.Y. 1999-2000 DOES NOT APPARENTLY FIT INTO THE PATTERN/TREND REFLECTED IN A.Y. 1997-98, 1998-99 AND THEREAFTER A .Y. 200-01. CONSIDERING ALL THESE ASPECTS, IT WOULD BE REASONABLE TO GIVE A FURTHER RELIEF OF RS.2,00,000/- TO THE APPELLANT FOR A.Y. 1999-20000 IN ESTIMATING THE SUPPRESSION OF INDOOR RECEIPTS. ACCORDINGLY, FOR A .Y. 1999-2000 THE SUPPRESSION OF INDOOR PROFESSIONAL RECEIPTS IS BEIN G TAKEN AT RS.10,80,000/-. 9.6.4 IN SO FAR AS A Y. 2000-01 IS CONCERNED, WHI LE ESTIMATING THE PROFESSIONAL RECEIPTS, I HAVE NOT INCREASED THE SU PPRESSION BY 20% FOR THE UNHEALTHY PERIOD AS THE DAYS FOR WHICH INFORMATION HAS BEEN FOUND ARE FOR THE PERIOD FROM 11.11.1999 TO 17.11.1999. THESE AR E BORDERING DAYS FOR NORMAL AND UNHEALTHY SEASONS, NORMAL SEASON BEING F ROM 1 TH NOVEMBER TO 31 ST MAY AND THE UNHEALTHY SEASON FROM 1ST JUNE TO 15TH NOVEMBER. I HAVE, THEREFORE/WORKED OUT THE SUPPRESSION AT THE A VERAGE RATE FOUND FOR THE 7 DAYS AND IS THEREAFTER GIVEN A RELIEF OF 10% TO THE APPELLANT. 9.6.5 DURING A.Y. 1999-2000 WHEREIN WE HAVE RESUL TS FROM THE NORMAL MULTIPLIER WHICH DO NOT FIT IN TO THE PATTER N, WE HAVE TO BE GUIDED BY HON. MUMBAI & HON A.P HIGH COURT DECISIONS IN TH E CASES REFERRED TO ABOVE. WE OUGHT NOT TO BECOME ARBITRARY AND IGNORE RATIONALIZATION OF SUCH FEATURES. A COPY OF THE APPELLANT'S SUBMISSION DATED 27.11.2001 WAS PRODUCED BEFORE ME ON 12.09.2002 AND DISCUSSED IN T HE PRESENCE OF THE ASSESSING OFFICER ON 16.09.2002. IT IS TO BE REITER ATED THAT THE APPELLANT HAS NOT SUBMITTED ANY DOCUMENTARY EVIDENCE IN SUPPORT O F IT BUT ARGUED VEHEMENTLY REGARDING VERACITY OF THE FACTS FROM HIS PERSONAL KNOWLEDGE. 9.6.6 THE TOTAL SUPPRESSION OF THE PROFESSIONAL R ECEIPTS AFTER CONSIDERING ALL THE ABOVE FEATURES WORKS OUT TO RS. 28,90,000/-. THIS ESTIMATE OF PROFESSIONAL RECEIPTS TAKES INTO ACCOUN T ALL THE VERIFIABLE OBJECTION OF THE APPELLANT, THE SEIZED MATERIAL AND THE INFORMATION AVAILABLE IN THE RECORD DISCUSSED ABOVE IN THE ORDE R. 9.7 ONCE AGAIN, WE HAVE TO REFER BACK TO ANOTHER ASPECT IN THE STATEMENTS OF THE APPELLANT WHEREIN HE HAS CANDIDLY ADMITTED THAT HIS PROFESSIONAL PRACTICE WAS FINALLY SETTLED PROPERLY IN 1998. IT HAS BEEN ADMITTED BY THE APPELLANT AS UNDER IN THE REPLY DAT ED 19/11/2001 BEFORE THE ASSESSING OFFICER AS UNDER: 'DURING THE INITIAL STAGE I HAVE STARTED MY PRACTIC E IN DIFFERENT PLACES AND WAS TRYING TO SETTLE IN PRACTICE. ONLY AFTER STARTI NG OF PRACTICE IN NEW HOSPITAL LE. FROM MAY 1998 I SETTLED IN PRACTICE.' SIMILAR REPLY IS SUGGESTED IN THE STATEMENT U/S. 13 2(4). 13 10.7.1 IN THE BACKGROUND OF THESE FACTS, IT IS SEE N THAT AVERAGE SUPPRESSION FOR THE PERIOD OF 01.04.1997 TO 19.05.1997 AS PER S EIZED BUNDLE NO.21 IS RS.2,108/- PER DAY WHEREAS THE SUPPRESSION FROM 15. 07.1998 TO 31.08.1998 FOR 48 DAYS IS RS.4,272/- PER DAY. THUS, THERE IS M ULTIPLIER OF MORE THAN 100% IN THE RECEIPTS OF 'UNHEALTHY PERIOD OF IMMED IATELY SUCCEEDING YEAR (A.Y. 1999-2000) AS COMPARED TO RECEIPTS OF NORMAL PERIOD OF A. Y. 1998-99. 9.7.2 TWO OBVIOUS CONCLUSIONS COULD BE EASILY DR AWN FROM THE ABOVE: 1) THE MULTIPLIER OF 20% FOR THE UNHEALTHY PERIOD ADOPTED BY THE ASSESSING OFFICER GIVES A VERY REASONABLE ESTIMATE OF THE TRUE NATURE AND ACCORDING TO ABOVE, A MULTIPLIER OF 100% WOULD HAVE BEEN APPLIED IF MATHEMATICALLY & ARBITRARILY THE ESTIMATE WAS DRAWN . I HAVE, THEREFORE, TO HOLD THAT MULTIPLIER OF 20% FOR UNHEALTHY PERIOD GO ES MORE IN SUPPORT OF THE APPELLANT BY GIVING ME BENEFIT OF ALL POSSIBLE DOUBTS AND IS THUS VERY REASONABLE. 2) SECONDLY, IT HAS TO BE REALIZED THAT THE FIGURE S OF JULY / AUGUST 1999 COUPLED WITH THE SUBMISSION OF THE REGARDING EPIDEM IC IN JULY, 1999 TO AUGUST 1999 VEHEMENTLY ARGUED ON 12.09.2002 BEFORE ME (IN THE LIGHT OF LETTER DT 27.11.1999 WHICH WAS ADMITTEDLY SUBMITTED TO THE ASSESSING OFFICER AFTER THE DRAFT ASSESSMENT ORDER NAD BEEN P REPARED) A SUITABLE REDUCTION IN THE ESTIMATES OF SUPPRESSED PROFESSION AL RECEIPTS IS CALLED FOR. THIS HAS BEEN ACHIEVED BY DIRECTING REDUCTION OF RS .2LACS FOR THE ESTIMATE OF SUPPRESSED PROFESSIONAL RECEIPTS ARRIVED AT AFTE R APPLYING THE MULTIPLIERS AS IN THE OTHER YEARS. THIS HAS ALSO BEEN DONE WITH REFERENCE TO THE UNDISCLOSED PROFESSIONAL RECEIPTS FOR THE NEXT YEAR I.E. A. Y. 2000-01 FOR THE BROKEN PERIOD UPTO SEARCH. 10. AT THIS STAGE, IT IS RELEVANT TO POINT OUT THA T LARGELY IN VIEW OF THE VDIS 1997 DECLARATION OF RS.20 LACS, NO ADDITION FO R UNDISCLOSED PROFESSIONAL RECEIPTS UP TO A.Y. 1996-97 HAS BEEN D ONE. THE DECLARATION UNDER VDIS 1997 BY THE APPELLANT WAS AS UNDER: SR.NO. AMOUNT OF INCOME DECLARED ASSESSMENT YEARS TO WHICH THE INCOME RELATES DESCRIPTION OF ASSET AMOUNT 1 40,447 92-93 BANK DEPOSIT 40,447 2 1,86,201 93-94 ADDITIONAL AMOUNT FOR BANK DEPOSIT 1,86,201 3 51,400 94-95 51,400 4 40,555 95-96 40,555 5 7,38,186 96-97 7,38,186 6 4,00,000 95-96 & 96-97 CONSTRUCTION OF HOSPITAL 4,00,000 7 5,43,211 89-90 TO 96-97 ADDITIONAL AMOUNT FOR RESERVES 5,43,211 20,00,000 20,00,000 14 10.1 FURTHER, THERE IS NO MAJOR DISPUTE RELATED TO ADDITION OF UNDISCLOSED INCOME FOR OTHER THAN PROFESSIONAL RECE IPTS FOR A.Y.199Q-91 TO A.Y. 1999-2000. IT MAY ALSO BE POINTED OUT HERE THA T EVEN THE ADDITION MADE FOR A.Y. 1990-91 TO A,Y. 1996-97, WHEN ARE BAS ED UPON SEIZED MATERIALS, ARE DISCUSSED HEREUNDER: ASSTT YEAR AMOUNT TYPE 1990-91 RS. 5,600 SHARES AS PER APPELLANT'S ADMISSION BEFORE A.O ON 19.10.2001 THAT THESE AMOUNTS REPRESENT UNDISCLOSED INCOME OVER & ABOVE THE INCOME DECLARED UNDER VDIS 1997. ALL THESE ADDITIONS ARE ON THE BASIS OF SEIZED MATERIALS. 1991-92 RS. 10,000 FDRS 1992-93 RS. 10,447 FDRS 1993-94 RS. 79,101 FDRS 1994-95 RS. 86,058 FDRS & INTEREST 1995-96 RS. 41,262 SHARES, FDRS, SSN BONDS 1996-97 RS. 1,26,211 FDRS 68000 LIP 6695 CASH BAL. 50000 INT. ON BONDS 1512 10.2 THE ONLY ISSUE RAISED BY THE APPELLANT IS W ITH REGARD TO THE RENTAL INCOME FOR M/S. SHRIRAM MEDICAL STORES, WHIC H IS BEING RECEIVED BY THE APPELLANT @ RS.5,000/- PER MONTH. IT HAS BEEN S TATED BE THE APPELLANT THAT UP TO THE DATE OF SEARCH ONLY 71/2 MONTHS HAD EXPIRED AND AS SUCH THE TOTAL ADDITION THAT SHOULD HAVE BEEN MADE ON THIS A CCOUNT SHOULD BE RS.37,500/- AND NOT RS.60,000/- AS HAS BEEN DONE BY THE ASSESSING OFFICER IN PARA 9.11(II)(B). THUS, THE UNDISCLOSED INCOME OTHE R THAN THE PROFESSIONAL RECEIPTS FOR THE A.Y.2000-01 SHOULD BE REDUCED BY R S.22,500/-. THE STAND OF THE APPELLANT IN THIS REGARD IS CORRECT AND AS RELI EF IS ACCORDINGLY ALLOWED. THUS, THE UNDISCLOSED OTHER INCOME COMPUTED AT RS.5 ,76,997/- IN THE ASSESSMENT ORDER WOULD BE ONLY REDUCED TO RS.22,500 /- AND THUS THERE IS NO DISPUTE REGARDING ASSESSMENT OF RS.5.54.499/- FOR UNDISCLOSED 'OTHER INCOME AS HAS BEEN DONE BY THE ASSESSING OFFICER I N PARA 11 OF THE ASSESSMENT ORDER. 10.3 GROUND NO. 1 IS ACCORDINGLY PARTLY ALLOWED. T HE SUPPRESSION FROM PROFESSIONAL RECEIPTS IS WORKED OUT AT RS. 28, 90,000/- AND THE OTHER UNDISCLOSED INCOME AT RS.5,54,500/-. 16. IN THE ABOVE ORDER, THE ISSUE HAS BEEN DISCUS SED IN DETAIL IN ALL ITS ASPECTS. THE OBJECTIONS RAISED BY THE APPEL LANT HAVE ALSO BEEN CONSIDERED. I AM IN COMPLETE AGREEMENT WITH THE CIT (A) THAT IN CERTAIN SETS 15 OF CIRCUMSTANCES RESORT TO ESTIMATING UNDISCLOSED I NCOME IN SEARCH CASE IS PERFECTLY VALID SPECIALLY WHEN THERE IS EVIDENCE FO UND IF THE ASSESSEE HAD CONCEALED INCOME. THE CIT(A) HAS LAID DOWN CERTAIN PARAMETERS ON THE BASIS OF WHICH HE HAS MADE A BALANCE JUDGEMENT REGARDING UNDISCLOSED INCOME OF THE APPELLANT. I AGREE WITH THE ORDER AND ACCORD INGLY HOLD FOR REASON GIVEN IN THE ORDER DTD.25/10/02 THAT SUPPRESSION FR OM PROFESSIONAL RECEIPTS WORKS OUT AT RS.28,90,000/- AND OTHER UNDISCLOSED I NCOME AT RS.5,54,500/- IS UNREASONABLE ESTIMATE BASED ON THE EVIDENCE FOUN D AND IS JUSTIFIED. GROUND NO.1 IS PARTLY ALLOWED. 12. SO FAR AS THE ISSUE RELATING TO RELIEF ON ACCOU NT OF EXPENDITURE IS CONCERNED WE FIND THE LD.CIT(A) HEAVILY RELIED ON T HE ORDER OF HIS PREDECESSOR. THE RELEVANT OBSERVATIONS OF THE LD.C IT(A) ARE AS UNDER : 21. THE CLAIM OF THE APPELLANT HAD BEEN EXAMINED BY THE CIT[A], PUNE IN HIS ORDER NO. PN/CIT(A)-L/ACIT.CEN.CIR.KOP/1 96/ 02-03, DATED 25.10.2002. WHILE HE AGREED IN PRINCIPLE THAT EXPE NSES HAD NOT BEEN RECORDED AND HAD TO BE ALLOWED ON ESTIMATE. HE CONC EDED EXPENSES PRIMARILY ON THE BASIS OF EVIDENCE FOUND. THE APPEL LANT'S CONTENTION THAT WHILE THE ESTIMATION OF SUPPRESSED RECEIPTS WAS GEN EROUS, THE ALLOWANCE OF EXPENSES WAS EXTREMELY MEAGRE. THE APPELLANT ARG UED THAT THE SAME PRINCIPLE OF EXTRAPOLATION SHOULD BE FOLLOWED WHILE ESTIMATING EXPENSES. WHEN THERE WAS EVIDENCE FOUND OF UNRECORDED EXPENSE S IN THE SAME WAY AS THERE WAS EVIDENCE OF SUPPRESSED RECEIPTS. 22. THE APPELLANT SUBMITTED A CHART SHOWING THE AD DITIONS SUSTAINED AT THE LEVEL OF CIT(A), THE TOTAL TURNOVER INCLUDING T HE ADDITIONS, TOTAL EXPENSES ALLOWED INCLUDING UNRECORDED EXPENSES AND PERCENTAGE OF PROFIT THEREFROM. ACCORDING TO THIS CHART, THE PERCENTAGE OF PROFIT SHOWN IN THE BOOKS ALLOWED AND PROFIT ON ESTIMATED SUPPRESSED RE CEIPTS WAS AS UNDER : ASST. YEAR PROFIT AS A PERCENTAGE OF TURNOVER BOOKS ADDITIONS OVERALL 1997 - 98 49.92% 98.81% 32.65% M 998 - 99 39.7 3% 99.11% 33.61% 1999 - 00 39.50% 99.30% 35.40% 2000 - 01 51.84% 100% 37.5% AVERAGE 45.25% 99.30% 34.8% 16 23. THE APPELLANT SUBMITTED THAT THE OVERALL PROFI T AT MORE THAN 65% IN MOST OF THE YEARS SHOULD BE CONSIDERED WAS HIGHL Y UNREASONABLE FOR A HOSPITAL BUSINESS. IN SUPPORT THEREOF, THE APPELLAN T SUBMITTED PROFIT PERCENTAGE RETURN BY VARIOUS OTHER PEDIATRIC MEDICA L PRACTITIONERS CARRYING ON SIMILAR PROFESSION. THE FIGURES ARE AS UNDER: 24. ACCORDING TO THE ABOVE FIGURES, THE AVERAGE PRO FIT SHOWN OVER THE YEARS BY THE OTHER PROFESSIONALS IN THE SAME PROFES SION IS WORKED OUT IN THE RANGE OF 40 TO 47%; WHEREAS, IN THE CASE OF THE APPELLANT, THE PROFIT WORKED OUT IS MORE THAN 60% AS SHOWN AT PRE-PAGE. 25. THE FIRST CHART SHOWS THAT PERCENTAGE OF NE T PROFIT CALCULATED ON THE SUPPRESSED RECEIPTS IS 99.3% AVERAGE FOR A YEAR. SU CH KIND OF PROFITABILITY CARRIES THE UNDER LYING ASSUMPTION THAT THE EXPENSE S RELATED TO THE SUPPRESSED TURNOVER HAD ALREADY BEEN DEBITED IN THE BOOKS OF ACCOUNTS ALTHOUGH THE TURNOVER WAS NOT RECORDED. TO TEST HIS ASSUMPTION ONE SHOULD EXAMINE WHETHER THE NET PROFIT OF THE APPELLANT COM PARES FAVOURABLY THAT THE PROFIT RATIO OF OTHER PERSONS IN SIMILAR PROFES SION. IN A.Y. 2000-01, THE APPELLANT HAS RETURNED A NET PROFIT OF 51.84% AND I N A.Y. 1997-98, NET PROFIT OF 50%. THE AVERAGE PROFITABILITY OF OTHER PERSONS IN THE SAME PROFESSION WORKS OUT TO LESS THAN 45%. IN THE OTHER TWO YEARS , THE PERCENTAGE OF PROFITABILITY IS 40%, WHICH IS LESS THAN THE AVERAG E PROFITABILITY OF THE OTHER DOCTORS OF AROUND 4%. THE PROFITABILITY IN VARIOUS YEARS COMPARED TO THE OTHER DOCTORS WORKS OUT AS UNDER : 26. HOWEVER, IF THE OVERALL PROFITABILITY IS CONSIDERED INCLUDING SUPPRESSED RECEIPTS, THE AVERAGE PROFITABILITY PERC ENTAGE GOES DOWN TO 34.8% AS AGAINST AN AVERAGE OF 44% IN CASE OF OTHER DOCTORS IN THE SAME S.NO. NAME OF THE DOCTOR ASSTT. YEARS AVERAGE 98-99 99-00 00-01 1 DR. KITTUR -- -- 34.64 54.9 44% 2 DR. KARAVA 38.0 42.63 39.51 40.6 40% 3 DR. NIGADE 49.42 39.13 LOSS 51.84 46.9% AVERAGE 44.01% SI.NO. YEAR PROFIT/LOSS %AGE 1 1997-98 (+) 6% 2 1998-99 (-) 5% 3 1999-00 (-) 5% 4 2000-01 (+) 7% 17 SPECIALITY. IT CAN BE INFERRED FROM THE DATA THAT T HE APPELLANT HAD NOT RETURNED ACTUAL PROFITS IN THE BOOKS IN ALL THE YEA RS. THE PROFIT OF THE APPELLANT IS LOWER THAN THE AVERAGE IN 1998-99 & 19 99-2000. IN 1997-98 AND 2000-01, THE APPELLANT'S PROFIT PERCENTAGE IS M UCH HIGHER THAN THE AVERAGE 27. THE APPELLANT'S OWN PROFIT IN 1997-98 AND 2000 -01 IS IN THE RANGE OF 50%. IT CAN BE SAFELY ASSUMED THAT THIS PERCENTA GE OF PROFIT IS A REALISTIC ESTIMATE FOR THE APPELLANT ALTHOUGH THE AVERAGE PER CENTAGE FOR OTHER DOCTORS APPEARS TO BE LOWER AT 44%. IT WOULD BE IN THE INTEREST OF JUSTICE AND FAIR PLAY TO ALLOW SOME PERCENTAGE OF EXPENDITU RE WHILE MAKING THE ESTIMATE OF SUPPRESSED RECEIPTS. THE EVIDENCE OF SU PPRESSION OF RECEIPTS HAD BEEN FOUND FOR VARIOUS YEARS AND THE ESTIMATION MADE BY THE AO AND UPHELD IN THE APPELLATE ORDER DATED 25.10.2002 IS A S UNDER:- 28. THE ESTIMATE IS MADE BY EXTRAPOLATING THE EVID ENCE OF SUPPRESSED RECEIPTS FOUND FOR A CERTAIN PERIOD DURING A PARTIC ULAR YEAR TO THE ENTIRE YEAR. WHILE DOING SO, THE YEAR IS BROKEN INTO 'HEAL THY' AND 'UNHEALTHY' PERIOD. THE ESTIMATE OF SUPPRESSED RECEIPTS HAS BEE N TAKEN AT 20% HIGHER THAN HEALTHY PERIOD FOR THE UNHEALTHY PERIOD ESTIMA TED BY THE AO. IT IS EVIDENT THAT THERE HAS BEEN A GREAT DEAL OF ESTIMAT ION IN DETERMINATION OF SUPPRESSED RECEIPTS. IN CASE OF EXPENDITURE HOWEVER , THE SAME HAS BEEN ALLOWED MORE OR LESS ON EVIDENCE FOUND WITHOUT ANY SORT OF EXTRAPOLATION. THE CIT[A] IN THE ORDER DATED 25.10.2002 HAD HOWEVE R, MADE SOME EXTRAPOLATION AND ALLOWED DEDUCTION OF EXPENDITURE OF RS 3,00,000/- OUT OF ESTIMATED SUPPRESSED RECEIPTS OF RS 28,90,000/- WHI CH IS ROUGHLY 10%. THE APPLICANT'S CONTENTION IS THAT EXPENDITURE ON EARNI NG THE ESTIMATED TURNOVER SHOULD BE ALLOWED AND ONLY THE PROFIT EARN ED BE TAXED. 29. THE APPELLANT'S CLAIM IS THAT THE ESTIMAT E OF EXPENDITURE HAS BEEN MADE ARBITRARILY, NOT IN THE SAME METHODICAL MANNER EMPLOYED IS ESTIMATING RECEIPTS. IF A VIEW IS TAKEN THAT THE AP PELLANT HAS SUPPRESSED RECEIPTS ON A DAILY BASIS RELYING ON EVIDENCE FOUND FOR A SMALL PERIOD, THE SAME METHOD SHOULD BE FOLLOWED FOR EXPENSES. ASSTT. YEAR EVIDENCE FOR NO. OF DAYS AMOUNT (RS) ESTIMATED SUPPRESSION (RS) 1997-98 90 1,32,695 5,25,000 1998-99 45 92,965 7,50,000 1999-00 45 2,05,075 10,80,000 2000-01 7 15,582 4,75,000 TOTAL 250 4,46,317 28,90,000 18 30. THE CLAIM OF THE APPELLANT HAS FORCE. IT IS AN ACCEPTED FACT THAT IN CASE OF SUPPRESSION OF TURNOVER, ONLY THE PROFITS C OULD BE TAXED UNLESS OF COURSE IT IS PROVED THAT EXPENSES INCURRED IN RELAT ION TO THE SUPPRESSED TURNOVER HAS BEEN DEBITED TO THE BOOKS. SUCH IS NOT THE CASE. THE SUPPRESSED RECEIPTS ARE THEMSELVES AN EXTRAPOLATION BASED ON EVIDENCE FOUND. THE SAME METHOD SHOULD BE APPLIED TO EXPENSE S TO ARRIVE AT THE SUPPRESSED PROFIT TO BE BROUGHT TO TAX. EVIDENCE O F UNRECORDED EXPENDITURE HAS BEEN FOUND FOR ALL THE YEARS. 31. KEEPING IN VIEW THAT SOME OF THE EXPENSES HAVE BEEN RECORDED (EVIDENT FROM THE LOW MARGIN OF PROFIT DEC LARED IN THE BOOKS) AND THE PROFIT MARGIN OF 50% DECLARED BY THE APPELL ANT IN THE YEAR 2000- 01 AND 1997-98, IT WOULD BE REASONABLE TO ESTIMATE THE PROFIT AT 65% OF THE SUPPRESSED TURNOVER. IT SHOULD BE BORNE IN AND THAT THE APPELLANT RUNS A MEDICAL PRACTICE WHERE PROFITABILITY IS HIGH AND THERE IS NEGLIGIBLE WORKING CAPITAL, PAYMENTS BEING MADE IN ADVANCE IN MOST CASES. 32. IN VIEW OF THE ABOVE, THE APPELLANT IS GIVEN R ELIEF ON ACCOUNT OF EXPENDITURE AS UNDER : ASST. YEAR SUPPRESSED RECEIPTS (RS.) ALLOWANCE FOR EXPENSES (RS.) 1997 - 98 5,32,000 1,85,200 1998 - 99 7,57,500 2,65,125 1999 - 2000 12,90,000 4,57,500 2000 - 01 4,75,000 1,66,250 TOTAL 30,54,500 10,69,075 33. THE ASSESSING OFFICER IS DIRECTED TO ALLOW AN A MOUNT OF RS.10,69,075/- IN THE COMPUTATION OF INCOME FROM UN DISCLOSED SOURCES. 13. AGGRIEVED WITH SUCH ORDER OF CIT(A) THE REVENUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : GROUNDS OF APPEAL FILED BY THE REVENUE IN ITA NO.11 76/PN/2009 ARE AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN NOT TREATING THE APPEAL FIELD O N 24.12.2000 BY THE ASSESSEE AS NON MAINTAINABLE AS THE ADMITTED TAX WAS NOT PAID B Y HIM BEFORE THE FILING THE SAID APPEAL AND THUS PRESENT ORDER PASSED BY THE LD. CIT (A) ON 08.05.2009 IS BAD IN LAW? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE REPORT FOR ENHANCEMENT OF UNDISCLOSED INCOME BY RS 24,70,382/- VIDE LETTER NO 112 DATED 10.07.2002. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN REJECTING THE METHOD FOLLOWED BY THE AO AN D DIRECTED THE AO TO RESTRICT THE AMOUNT OF UNDISCLOSED INCOME AT RS.31,44,500/- BY C ONSIDERING DATES OF ZERO 19 RECEIPTS AND DATES OF (-) SUPPRESSION AND ALSO ERRE D IN GIVING RELIEF OF RS2,00,000/- FOR AY 2000-01, THOUGH THE ASSESSEE FAILED TO FURNI SH THE EVIDENCE IN SUPPORT OF HEALTHY PERIOD OF RECEIPTS. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND , MODIFY ANY OF THE GROUNDS OR RAISE ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HON'BLE TRIBUNAL WHICH MAY PLEASE BE GRANTED. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.1167/P N/2009 ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. C.I.T. (A) WAS NOT JUSTIFIED IN PARTLY CONFIRMING THE ESTI MATION OF PROFESSIONAL RECEIPTS TO WORKOUT THE UNDISCLOSED INCOME FOR THE ASSESSMENT P URPOSES IN BLOCK PERIOD UNDER CHAP. XVI-B AFTER SEARCH ACTION AND IN THE ABSENCE OF ANY DIRECT EVIDENCE FOUND OUT DURING THE COURSE OF SEARCH THE ESTIMATION OF R ECEIPTS AS CONFIRMED BY C.I.T. (A) IS AGAINST THE PROVISIONS OF THE LAW AND IT BE QUAS HED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. C.I.T.(A) WAS ALSO NOT JUSTIFIED IN CONFIRMING THE LEVY OF INTEREST U/S. 158-BFA (1) OF THE ACT. THE SAME BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW AND IN VIEW OF THE FACT THAT THE ISSUE OF LEVY OF SURCHARGE CONFIR MED BY LD. C.I.T. (A) RELYING ON THE JUDGMENT OF SUPREME COURT IN THE CASE OF C.I.T. VS. SURSH N. GUPTA 297 ITR 322, BUT SUBSEQUENTLY THE ISSUE HAS BEEN REFERRED TO LAR GER BENCH BY THE SUPREME COURT ITSELF IN THE CASE OF C.I.T. VS. VATIKA TOWNSHIP (P ) LTD. 2009 221 CTR SC 409. THE SURCHARGE BEING NOT LEVIABLE BE DELETED. 4. THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 14. SO FAR AS GROUND OF APPEAL NO.1 BY THE REVENUE IS CONCERNED, WE FIND IT IS THE GRIEVANCE OF THE REVENUE THAT THE LD.CIT( A) SHOULD HAVE TREATED THE APPEAL FILED ON 14-12-2000 AS NON-MAINTAINABLE SINC E THE ASSESSEE HAS NOT PAID THE ADMITTED TAX. WE FIND ON THE BASIS OF THE APPEAL FILED BY THE ASSESSEE ON THIS ISSUE, THE TRIBUNAL HAD ALREADY RESTORED TH IS ISSUE TO THE FILE OF LD.CIT(A) WITH A DIRECTION TO CONDONE THE DELAY AFT ER THE ASSESSEE HAS PAID DUE TAXES. IN OUR OPINION, THE REMEDY FOR THE DEPA RTMENT LIES ELSEWHERE AND CERTAINLY NOT BEFORE THE TRIBUNAL. SINCE THE ASSES SEE HAS PAID ADMITTED TAX SUBSEQUENT TO FILING OF THE APPEAL AND SINCE THE TR IBUNAL HAD DIRECTED THE CIT(A) TO PASS APPROPRIATE ORDER ON MERIT AFTER CON DONING THE DELAY, 20 THEREFORE, WE FIND NO MERIT IN THE GROUND OF APPEAL NO.1 BY THE REVENUE. ACCORDINGLY, THE SAME IS DISMISSED. 15. GROUNDS OF APPEAL NO.2 AND 3 BY THE REVENUE AND GROUND OF APPEAL NO.1 BY THE ASSESSEE RELATE TO PART RELIEF GIVEN BY THE LD.CIT(A) OUT OF THE SUPPRESSED PROFESSIONAL RECEIPTS AND UNDISCLOSED IN COME DETERMINED BY THE AO. 16. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS RELIED ON BY BOTH THE SIDES. ADMITTEDLY THE ASSESSEE WAS FOUND TO HAVE SUPPRESSED HIS PROFESSIONAL RECEIPTS SINCE HE WAS NOT ACCOUNTING FOR THE ENTIRE RECEIPTS, EVIDENCES OF WHICH WERE FOUND DURI NG THE COURSE OF SEARCH. UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER, IN OUR OPINION, WAS JUSTIFIED IN ESTIMATING THE PROFESSIONAL RECEIPTS OF THE BLOC K PERIOD. THE LD. COUNSEL FOR THE ASSESSEE ALSO COULD NOT POINT OUT ANY DISTI NGUISHABLE FEATURES SO AS TO TAKE A DIFFERENT VIEW OTHER THAN THE VIEW TAKEN BY LD.CIT(A) ON THIS ISSUE, I.E. RESORTING TO ESTIMATION OF PROFESSIONAL RECEIPTS. WE ACCORDINGLY UPHOLD THE ORDER OF LD.CIT(A) ON THIS ISSUE AND THE GROUND OF APPEAL NO.1 BY THE ASSESSEE IS DISMISSED. 16.1 NOW COMING TO THE GROUNDS RAISED BY THE REVENU E, WE FIND THE ASSESSING OFFICER WHILE ESTIMATING THE PROFESSIONAL RECEIPTS HAD CONSIDERED THE PROFESSIONAL RECEIPTS FOR 365 DAYS IN A YEAR WI THOUT ALLOWING ANY RELIEF TO THE ASSESSEE ON ACCOUNT OF ABSENT FROM PLACE OF PRA CTICE DUE TO OUTSTATION VISIT, HOLIDAYING ETC. THE ASSESSING OFFICER ALSO HAD NOT GIVEN DUE BENEFIT OF EXPENSES ESPECIALLY WHEN EVIDENCES FOR INCURRING OF SUCH EXPENSES WERE FOUND AND WHICH WERE NOT RECORDED IN THE BOOKS OF A CCOUNT. WE FIND 21 CONSIDERING ALL THESE ASPECTS THE CIT(A), ON THE BA SIS OF THE ORDER OF HIS PREDECESSOR, HAD GIVEN PROPORTIONATE RELIEF TO THE ASSESSEE WHICH IN OUR OPINION IS JUST AND PROPER UNDER THE FACTS AND CIRC UMSTANCES OF THE CASE. NOTHING DISTINGUISHABLE WAS BROUGHT TO OUR NOTICE B Y EITHER SIDE SO AS TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE LD.CIT( A) ON ACCOUNT OF DETERMINATION OF SUPPRESSED PROFESSIONAL INCOME AND UNDISCLOSED INVESTMENTS. THE ORDER OF LD.CIT(A) ON THIS ISSUE IS QUITE EXHAU STIVE WHICH HAS BEEN REPRODUCED ELSEWHERE IN THIS ORDER. FURTH ER, THE ORDER OF LD.CIT(A) IN OUR OPINION IS A REASONED ONE WHICH REQUIRES NO INTERFERENCE FROM OUR SIDE. WE ACCORDINGLY UPHOLD THE SAME. THE GROUNDS OF APP EAL NO.2 AND 3 BY THE REVENUE ARE ACCORDINGLY DISMISSED. 17. GROUNDS OF APPEAL NO.4 & 5 BY THE REVENUE BEING GENERAL IN NATURE ARE DISMISSED. 18. GROUND OF APPEAL NO.2 BY THE ASSESSEE RELATES T O CHARGING OF INTEREST U/S.158BFA(1) OF THE INCOME TAX ACT, 1961. 18.1 AFTER HEARING BOTH THE SIDES WE FIND THE AO LE VIED INTEREST U/S.158BFA(1) SINCE THE ASSESSEE DID NOT FILE THE R ETURN OF INCOME FOR THE BLOCK PERIOD U/S.158BC WITHIN THE PRESCRIBED TIME. IN APPEAL THE LD.CIT(A) UPHELD SUCH ACTION OF THE AO FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE US. WE FIND NO INFIRMITY IN THE ORDER OF LD.CIT(A) ON T HIS ISSUE. PROVISIONS OF SECTION 158BFA (1) IS MANDATORY AND THE AO HAS NO O PTION BUT TO LEVY INTEREST WHEN THE ASSESSEE IS IN DEFAULT. ACCORDIN GLY, THE ORDER OF CIT(A) UPHOLDING LEVY OF INTEREST U/S.158BFA(1) IS UPHELD. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 22 19. GROUND NO.3 OF THE ASSESSEE RELATES TO LEVY OF SURCHARGE U/S.113. AFTER HEARING BOTH THE SIDES WE FIND THE CIT(A) UPHELD TH E LEVY OF SURCHARGE U/S.113 RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPTA (SUPRA). IT IS THE CASE OF THE ASS ESSEE THAT SINCE THE MATTER HAS BEEN REFERRED TO A LARGER BENCH OF THE SUPREME COURT, THEREFORE, THE SAID DECISION IS NOT APPLICABLE AND THEREFORE SURCHARGE LEVIED U/S.113 SHOULD BE DELETED. WE FIND NO MERIT IN THE ABOVE ARGUMENT OF THE LD. AUTHORISED REPRESENTATIVE. UNLESS AND UNTIL THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPTA IS OVERRULED THE SAME I S THE LAW OF THE LAND. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER O F CIT(A) ON THIS ISSUE. THIS GROUND BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 20. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF AUGUST, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA ) JUDICIAL MEMBER ACC OUNTANT MEMBER PUNE DATED: THE 30 TH AUGUST 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A), KOLHAPUR 4. CIT, KOLHAPUR 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE