Dr. Deepak M. Ranade, Pune V. Asstt.CIT, Cir.-5, Pune, Pune

ITA 6/PUN/2006

• Counselvise Citation: 624514 RSA 2006
• Duration Of Justice: 5 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 02-01-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANT KUMAR LEUVA
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Gift; Additional evidence; Difference of opinion; Revised return
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) SR. NO. ITA NO. ASSTT.YEAR APPELLANT V/S. RESPONDENT 1. 6/PN/2006 2002 - 03 DR. DEEPAK RANADE, C/O KHANDELWAL JAIN & ASSOCIATES, CAS 1 ST FLOOR, ALANKAR CINEMA BLDG., PUNE 411 001, PAN : NOT AVAILABLE ASSTT. CIT, CIR 5, PUNE 2. 455/PN/2008 2002 - 03 - DO - - DO - 3. 845/PN/2007 2003 - 04 - DO - ITO, WARD 5(3), PUNE 4. 543 /PN/20 08 200 2 - 03 DCIT, CIR 5, PMT BLDG., 3 RD FLOOR, SWARGATE, PUNE 411 037 DR. DEEPAK M. RANADE, 6-C/18, SIDDHARTH NAGAR, D.P. ROAD, AUNDH, PUNE 411007 5. 237 /PN/20 06 200 2 - 03 ACIT, CIR - 5, PMT BLDG., SWARGATE, PUNE - DO - 6. 976 /PN/20 07 200 3 - 04 - DO - - DO - ASSESSEE BY : SHRI NILESH KHANDELWAL DEPARTMENT BY : SHRI HEMANT KUMAR LEUVA ORDER PER I.C. SUDHIR JM ITA NO. 6 & 237/PN/2006 THE ASSESSEE HAS QUESTIONNED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS : ITA NO. 6/PN/2006 1. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW IT BE HELD THAT ASSESSMENT PROCEE DINGS COMPLETED BY THE ASSESSING OFFICER INVIOLATION OF RULES OF NA TURAL JUSTICE & WITHOUT RESUMING JURISDICTION IN TERMS OF RELEVANT PROVISION OF THE ACT FOR PROCEEDING WITH THE ASSESSMENT IS NOT TENAB LE IN LAW, BAD IN LAW NULL & VOID & VITIATED. THE ORDER PASSED BY TH E ASSESSING OFFICER BE CANCELLED. IT FURTHER BE HELD THAT THE FIRST APPELLATE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 2 AUTHORITY IS NOT JUSTIFIED IN HOLDING THAT GRIEVANC E RAISED IN CONCERNED GROUND OF APPEAL DOES NOT SURVIVE. 2. WITHOUT PREJUDICE TO GROUND NO.1 & IN THE ALTERN ATIVE ON FACTS & CIRCUMSTANCE PREVAILING IN THE CASE & AS PER PROV ISIONS OF LAW IT BE HELD THAT, A) I) THE INCOME FROM HOUSE PROPERTY OF RS. 1,05,000/- ASSESSED AND SEPARATELY ADDED BY THE ASSESSING OFFI CER & CONFIRMED BY THE FIRST APPELLATE AUTHORITY IS UNJUSTIFIED, IMPROPER & CONTRARY TO SCHEME AND PROVISIONS OF THE ACT & FACTS PREVAILING IN THE CAS E. THE ADDITION SO MADE BE DELETED. IT FURTHER BE HELD TH AT THE SEPARATE ADDITION SO MADE WOULD AMOUNT TO DOUBLE ADDITION. THE APPELLANT BE GRANTED JUST & PROPER R ELIEF IN THIS RESPECT. II) IN THE ALTERNATIVE THE MEDICAL EXPENSES ON ACCO UNT OF PURCHASE OF MEDICINE FROM AVADHI MEDICAL STORE OF RS.4,76,623/- BE ALLOWED AS DEDUCTIBLE AMOUNT. JUS T & PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS R ESPECT. B) THE FINDINGS OF THE FIRST APPELLATE AUTHORITY WH ILE DECIDING ISSUE IN RESPECT OF ASSESSABLE PROPERTY INCOME IS C ONTRARY TO THE FACTS PREVAILING IN THE CASE & IS PERVERSE. C) ADDITION OF RS.26,49,652/- MADE BY THE ASSESSIN G OFFICER & PARTLY CONFIRMED BY THE FIRST APPELLATE AUTHORITY O N ACCOUNT OF ALLEGED NBNR REGISTER RECEIPTS IS UNJUSTIFIED, UNWARRANTED. I T FURTHER BE HELD THAT THERE IS NO SCOPE FOR MAKING A NY ADDITION ON ACCOUNT OF NBNR REGISTER RECEIPT. THE ADDITION MADE BY THE ASSESSING OFFICER & PARTLY SUSTAINED BY THE FIRST A PPELLANT AUTHORITY BE DELETED. THE APPELLANT BE GRANTED JUST & PROPER RELIEF IN THIS RESPECT. D) ADDITION OF RS.11,80,056/- MADE BY THE ASSESSING OFFICER & PARTLY CONFIRMED BY THE FIRST APPELLATE AUITHORITY DISALLOWED/ ADDED ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 3 ON ACCOUNT OF CUT OUT CHARGED IS UNJUSTIFIED, UNWAR RANTED & IS NOT IN ACCORDANCE WITH THE PROVISIONS OF LAW. IT FURTHER BE HELD THAT OBSERVATION MADE BY THE FIRST APPELLATE AUTHORITY A RE BASED ON ERRONEOUS PREMISES. THE CLAIM BE ALLOWED IN FULL A S PER PROVISIONS OF LAW & FACTS PREVAILING IN THE CASE. THE APPELLA NT BE GRANTED JUST & PROPER RELIEF IN THIS RESPECT. WE HAVE HEARD AND CONSIDERED ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND MATERIA L AVAILABLE ON THE RECORD. GROUND NO.1 2. AT THE TIME OF HEARING, THE LD. A.R. SUBMITTED T HAT THE ASSESSEE DOES NOT WISH TO PURSUE THIS GROUND. THE GROUND I S ACCORDINGLY REJECTED AS WITHDRAWN. GROUND NO. 2 3. THE FIRST ADDITION QUESTIONNED IN THIS GROUND IS THE INCOME FROM HOUSE PROPERTY AT RS.1,05,000/- AND IN THE ALTERNAT IVE, IT HAS BEEN STATED THAT THE MEDICAL EXPENSES ON ACCOUNT OF PURCHASES O F MEDICINES FROM AVADHI MEDICAL STORE OF RS.4,76,623/- BE ALLOWED AS DEDUCTIBLE AMOUNT. THE RELEVANT FACTS ARE THAT ASSESSEE A NUERO SURGEO N RUNS HOSPITAL WHEREIN M/S. AVADHI MEDICAL STORE WAS A TENANT. RS . 10 LAKH WAS DEPOSITED BY M/S. AVADHI MEDICAL STORE WITH THE ASS ESSEE TO RUN A MEDICAL SHOP IN THE NURSING HOME. A SURVEY WAS CON DUCTED AT THE PREMISES OF THE ASSESSEE. SINCE THE ASSESSEE HAD NO T SHOWN ANY INCOME FROM THE HOUSE PROPERTY, THE A.O MADE THE ADDITION OF RS.1,05,000/- ON ACCOUNT OF INCOME FROM HOUSE PROPERTY. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE CONTENDED THAT NO QUESTIO NS WERE ASKED BY THE A.O. IN RESPECT OF INCOME FROM HOUSE PROPERTY A T ASSESSMENT STAGE. ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 4 IT WAS MENTIONED THAT THE RENT WAS ADJUSTED AGAINST MEDICAL BILLS PAYABLE TO AVADHI MEDICAL STORES. IN SUPPORT, COPY OF LEDGER ACCOUNT AND CURRENT ASSETS SUMMARY OF THE HOSPITAL , I.E. SUPER TECH HOSPITAL IN THE BOOKS OF M/S. AVADHI MEDICAL STORES; AND SUMMARY OF DETAILS WHEREIN MEDICAL BILLS RECOVERED FROM PATIENTS ARE REFLECTED , WERE PRODUCED. THE LD CIT(A) ALLOWED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. LD CIT(A) INVITED THE REPORT OF THE A.O. ON THE ADDITIONAL EV IDENCE AND SUBMISSION MADE BY THE ASSESSEE ON THE ISSUE OF RENTAL INCOME . DURING THE REMAND PROCEEDINGS, ASSESSEE FILED CERTAIN PAPERS AND DOCU MENTS IN SUPPORT OF ITS CLAIM I.E. COPIES OF BILLS OF PATIENTS SHOWING RECOVERY OF MEDICINE CHARGES AS PER PAGE NUMBERS 1 TO 17 AS WELL AS DETA ILS WHEREIN THE MEDICAL BILL RECOVERED FROM PATIENTS ARE REFLECTED AT PAGE NUMBERS 87 TO 98 OF THE PAPER BOOK FILED BEFORE THE LD CIT(A). TH E RELEVANT EXTRACT OF THE REPORT OF THE A.O IS REPRODUCED HEREUNDER :- AFTER VERIFICATION OF ABOVE DOCUMENTS AND STATEME NTS FILED BY THE ASSESSEE IT IS SEEN THAT ASSESSEE HAS PURCHASED ME DICINE FROM AVADHI MEDICAL STORES OF RS.4,76,623/- AND HAS PAID RS.69,023/- TO M/S. AVADHI MEDICAL STORES. THUS AMOUNT PAYABLE T O M/S. AVADHI MEDICAL STORE ON ACCOUNT OF MEDICINES PURCHASED DUR ING A.Y. 2002- 03 IS RS. 4,07,591/-. IT IS ALSO VERIFIED FROM TH E BILLS ISSUED BY DR. DEEPAK RANADE TO VARIOUS PATIENTS ON ACCOUNT OF ME DICINE THAT HE HAS CHARGED MEDICINE CHARGES FROM VARIOUS PATIENTS . HOWEVER, THE ASSESSEE HAS NOT SHOWN ANY OUTSTANDING LIABILITY OF PAYMENT OF MEDICINE CHARGES TO M/S. AVADHI STORES IN THE BALAN CE SHEET NOR HAS SHOWN RECEIPTS OF RENT FROM M/S AVADHI STORES. THE ASSESSING OFFICER HAS, THEREFORE, CORRECTLY ASSESSED THE INCO ME FROM HOUSE PROPERTY. 4. THE LD CIT(A) ALSO INVITED COMMENT OF THE ASSESS EE ON THE REMAND REPORT OF THE A.O AND HAVE COME TO THE CONCLUSION T HAT THE SUBMISSION OF THE ASSESSEE THAT RENT WAS RECEIVED FROM M/S. AVAD HI MEDICAL STORES IN KIND HAS NOT BEEN SUBSTANTIATED. HE NOTED THAT TH E ASSESSEE HAD ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 5 PURCHASED MEDICINES FROM AVADHI MEDICAL STORE OF RS . 4,76,623/- AND MADE PAYMENT OF RS. 69,023/-. RS. 4,07,600/- WAS S HOWN AS DUE FROM THE ASSESSEE IN THE BOOKS OF ACCOUNT OF AVADHI MEDI CAL STORES. THE LD CIT(A) HAS ACCORDINGLY UPHELD THE ACTION OF THE A.O WITH THIS OBSERVATION THAT THE INCOME FROM HOUSE PROPERTY SHALL BE CHARGE ABLE TO INCOME TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY ON THE BASISOF ANNUAL VALUE TO BE DETERMINED IN ACCORDANCE WITH SECTION 23(1) O F THE INCOME TAX ACT AND THIS SECTION SAYS WHERE THE PROPERTY OR ANY PAR T OF THE PROPERTY IS LET, THE ALV IS TO BE DETERMINED ON THE BASIS OF T HE RENT RECEIVED OR RECEIVABLE. THE LD CIT(A) OBSERVED FURTHER THAT S INCE THE RECEIVABLE RENT IN THE PRESENT CASE IS RS. 12,500/- PER MONTH AND T HIS RENT WAS NOT ACCOUNTED FOR BY THE APPELLANT, THE A.O IS FULLY JU STIFIED IN BRINGING TO TAX AN AMOUNT OF RS. 1,05,000/- AS INCOME FROM HOUSE PR OPERTY. 5. BEFORE US, THE LD. A.R. SUBMITTED THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, PROVISIONS LAID DOWN U/S. 22 OF THE I.T.ACT ARE APPLICABLE INSTEAD OF SECTION 23(1) OF THE ACT AS APPLIED BY THE LD CIT(A). HE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. THE LD. A.R. ALSO REITERATED T HE ALTERNATIVE PLEA THAT MEDICAL EXPENSES ON ACCOUNT OF PURCHASES OF MEDICIN ES FROM M/S. AVADHI MEDICAL STORES OF RS. 4,76,683/- BE ALLOWED AS DEDU CTIBLE AMOUNT. IT WAS SUBMITTED THAT IN ANY CASE, THE AMOUNT RECEIVED FRO M PATIENTS TOWARDS MEDICINES PROCURED BY SUPERTECH HOSPITAL ON CREDIT FROM M/S. AVADHI MEDICAL STORES IS FORMING PART OF TAXABLE INCOME. THE LICENCE FEE RECEIVABLE FOR THE USES OF SPACE BY M/S. AVADHI MED ICAL STORES, IF AT ALL IS TO BE CONCERNED FOR ANY REASON, THEN INCOME OFFERE D BY WAY OF MONEY COLLECTED FROM PATIENTS TOWARDS CREDIT PURCHASES BY SUPERTECH HOSPITAL FOR THE MEDICINES SHOULD BE FIRST ADJUSTED. AS SUCH, T HERE WILL BE HARDLY ANY DIFFERENCE BETWEEN THE MEDICINE PURCHASE ON CREDIT FOR WHICH NO PAYMENT ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 6 HAS BEEN MADE TILL DATE AND OFFERED IN THE INCOME O F SUPERTECH HOSPITAL AND THE LICENCE FEE RECEIVABLE FROM M/S. AVADHI MED ICAL STORES. 6. THE LD. D.R., ON THE OTHER HAND, TRIED TO JUSTIF Y THE ASSESSMENT ORDER ON THE ISSUE. 7. CONSIDERING THE ABOVE SUBMISSIONS, WE DO NOT FIN D SUBSTANCE IN THE CONTENTION OF THE LD. A.R. AS THE FACT WHICH HA S NOT BEEN DENIED BY THE ASSESSEE IS , THE AGREED RENT PAYMENT BY M/S. AVADHI MEDICAL STORES TO THE ASSESSEE AT RS. 12,500/- PER MONTH. IT IS A LSO ADMITTED FACT THAT THE ASSESSEE HAD NOT SHOWN ANY INCOME FROM THE HOUS E PROPERTY. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND REASON TO INTER FERE WITH THE FIRST APPELLATE ORDER ON THE ISSUE UPHOLDING THE ACTION O F THE A.O IN BRINGING TO TAX AN AMOUNT OF RS. 1,05,000/- AS INCOME FROM HOUS E PROPERTY.. THE SAME IS UPHELD. THE ADDITION IS ACCORDINGLY AFFIRM ED. WE ALSO DO NOT FIND SUBSTANCE IN THE ALTERNATIVE ARGUMENT OF THE A SSESSEE SINCE ASSESSEE HAS FAILED TO ESTABLISH ITS SUBMISSIONS THAT RENT WAS RECEIVED FROM M/S. AVADHI MEDICAL STORES IN KIND. THE ALTERNATIVE PLE A RAISED IN THIS REGARD IS THUS REJECTED. 8. THE A.O. MADE ADDITION OF RS. 26,49,652/- ON ACC OUNT OF NO BILL NO RECEIPT REGISTER (NBNR). THE LD CIT(A) HAS GIVEN PART RELIEF AGAINST WHICH PARTIES ARE IN APPEAL. 9. THE RELEVANT FACTS ARE THAT DURING THE COURSE OF SURVEY, ONE REGISTER MARKED AS NO BILL NO RECEIPT REGISTER WA S FOUOND. IT WAS IN THE CUSTODY OF THE DEPARTMENT AS THE SAME WAS IMPOU NDED U/S. 131(3) OF THE ACT. THE ASSESSEE EXPLAINED THAT THE NAMES OF PATIENTS WHO CAME TO THE HOSPITAL APPEARED IN THE IPD REGISTER WHICH IS IN THE NATURE OF ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 7 ADMISSION REGISTGER. THE NAMES OF THE PERSONS APP EARING IN NBNR REGISTER WHICH WAS FOR THE PERIOD FROM NOVEMBER 200 1 TO FEBRUARY 2002 APPEARED IN THE IPD REGISTER AS NULL. THUS, THERE IS NO SCOPE FOR PRESUMING EXISTENCE OF PARTIES OTHER THAN THOSE WHO SE NAMES FIND PLACE IN THE IPD REGISTER. THE LD CIT(A) REMANDED THE MA TTER TO THE FILE OF THE A.O FOR VERIFICATION OF THE CLAIM OF THE ASSESSEE T HAT THE NAMES OF THE PATIENTS APPEARING IN THE NBNR REGISTER APPEARED IN THE IPD REGISTER AS NULL. HE ALSO DIRECTED THE A.O TO EXAMINE THE CLAI M OF THE ASSESSEE IN THIS REGARD AND ALSO THE CIRCUMSTANCES IN WHICH THE RECEIPTS IN NBNR REGISTER WERE NOT ENTERED IN THE REGULAR ACCOUNT OF THE ASSESSEE. THE A.O. REPORTED THAT THE NAME OF PATIENTS APPEARING IN NBNR REGISTER ARE APPERING IN IPD REGISTER, HOWEVER, SOME NAMES OF TH E PATIENTS DO NOT APPEAR IN THE IPD REGISTER AND TOTAL OF SUCH AMOUN TS NOT ENTERED IN IPD REGISTER IS RS.4,02,600/- WHICH INDICATE THAT RECEI PT OF RS.4,02,600/- IS NOT SHOWN IN THE BOOKS OF ACCOUNT. THE ASSESSEE CO MMENTED ON THE REPORT THAT MOST OF THE ENTRIES HAVE BEEN RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND AS SUCH THERE IS NO ESCAPEMENT OR CONCE ALMENT OF PARTICULARS OF INCOME IN THIS REGARD. WHATEVER HAS REMAINED TO BE INCORPORATED IS DUE TO OVERSIGHT WHICH IS NEGLIGIBLE IN AMOUNT AND DUE TO A CLERICAL ERROR THIS HAS HAPPENED SINCE THE HOSPITAL HAD RECENT LY STARTED WITH ITS FULL FLEDGED COMMERCIAL OPERATIONS, SUCH ISSUES ARE, HOW EVER, CONSIDERED WHILE DECLARING AND OFFERING ADDITIONAL INCOME FOR THE CONCERNED PERIOD. CONSIDERING THE SUBMISSIONS OF THE PARTIES, THE LD CIT(A) FOUND IT TO BE FAIR AND REASONABLE TO SUSTAIN ADDITION OF RS.5,52, 600/- OUT OF RS. 20,97,052/- MADE BY THE A.O ON ACCOUNT OF UNRECORDE D RECEIPTS. THUS, THE PARTIES ARE IN APPEALS BEFORE THE TRIBUNAL. 10. AFTER HAVING GONE THROUGH THE ORDERS OF THE LOW ER AUTHORITIES, WE FIND THAT THE LD CIT(A) HAS GIVEN HIS FINDING ON TH E ISSUE IN PARA NO.4.3 OF ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 8 THE FIRST APPELLATE ORDER. FOR READY REFERENCE, TH E CONTENTS OF SAID PARA NO.4.3 OF THE FIRST APPELLATE ORDER ARE BEING REPRO DUCED HEREUNDER : 4.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE MATERIAL ON RECORD. A PERUSAL OF PA RA 4.4 OF THE ASSESSMENT ORDER SHOWS THAT THE RECEIPT REFLECTED I N NO BILL NO RECEIPT REGISTER START FROM 1.4.2001 AND THE LAST D ATE IS 11.3.2002. THE TOTAL RECEIPT IS RS.5,66,227/- WHICH IS ADMITT EDLY NOT REFLECTED IN IPD RECEIPT REGISTER OUT OF THIS RS.5,66,227/-, THE APPELLANT HAS SHOWN INCOME OF RS. 3.5 LAKHS. IT WAS ARGUED BY TH E AUTHORISED REPRESENTATIVE THAT THE CORRECT FIGURE WHICH IS CON TAINED IN THE NBNR REGISTER AND NOT REFLECTED IN IPD REGISTER IS RS. 4,02,600/-. FROM THE REMAND REPORT IT IS CLEAR THAT THIS CONTEN TION OF THE APPELLANT IS FOUND TO BE CORRECT BY THE ASSESSING O FFICER. THUS, WE ARE IN A SITUATION WHERE THE APPELLANT HAS NOT SHO WN AN AMOUNT OF RS.52,600/- (RS. 4,02,600 RS. 3,50,000) WHICH WAS FOUND ENTERED IN NO BILL NO RECEIPT REGISTER AND NOT FOU ND AS REFLECTED IN IPD RECEIPT REGISTER. THE APPELLANTS CONTENTION I N THIS REGARD IS THAT THE DISCLOSURE OF INCOME AT THE TIME OF SURVEY WAS MADE TAKING INTO ACCOUNT AN OVERALL VIEW AND NO ENTRY WISE ANA LYSIS WAS DONE AND, THEREFORE, AMOUNT OF RS.52,600/- WAS NOT CONSI DERED AS INCOME. I HAVE PERUSED MATERIAL ON RECORD AND I AM OF THE C ONSIDERED VIEW THAT THERE IS NO JUSTIFICATION FOR NOT SHOWING AN AMOUNT OF RS.52,600/- WHICH REPRESENTS THE DIFFERENCE BETWEEN RS.4,02,600/- WHICH ADMITTEDLY IS UNACCOUNTED RECEIPT REFLECTED I N NBNR REGISTER AND RS. 3.5 LAKHS WHICH WAS DISCLOSED IN STATEMENT DURING THE COURSE OF SURVEY. SINCE THE FACTUM OF RECEIPT IS AD MITTED, SINCE THE FACTUM OF THIS RECEIPT NOT SHOWN IN ACCOUNTS IS ADM ITTED, THERE CANNOT BE ANY JUSTIFIABLE REASON TO NOT ACCOUNT FOR THIS RECEIPT AND SINCE EXPENSES IN RELATION TO THIS RECEIPT HAVE ALR EADY BEEN CLAIMED, THE ENTIRE RECEIPT REPRESENTS INCOME. THUS , IT IS HELD THAT THIS AMOUNT WAS WRONGLY OMITTED FROM BEING SHOWN AS INCOME. IT IS A FACT THAT THE ASSESSING OFFICER HAS NOT BEE N ABLE TO BRING A SINGLE INSTANCE WHERE AN UNRECORDED RECEIPT IS ENTERED IN NBNR REGISTER, BUT THE SAME IS NOT APPEARING IN MAS TER IPD REGISTER. HOWEVER, THE FACT REMAINS THAT THE UNRECO RDED RECEIPTS REFLECTED IN NBNR REGISTER ARE FOR ENTIRE YEAR. O N THESE FACTS, IT IS ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 9 VERY DIFFICULT TO ACCEPT THE APPELLANTS CONTENTION THAT NO BILL NO RECEIPT REGISTER CONTAINS IN ITS ENTIRETY THE UNAC COUNTED RECEIPT. IT IS ALSO DIFFICULT TO ACCEPT THE CONCLUSION OF TH E ASSESSING OFFICER THAT THE FIGURES AS CONTAINED IN THIS REGISTER, NAM ELY NBNR REGISTER REQUIRED TO BE EXTRAPOLATED FOR THE ENTIRE YEAR IN PROPORTION IN WHICH SUCH UNRECORDED RECEIPT IS REFLECTED PERIOD W ISE IN NBNR REGISTER. THUS, HAVING REGARD TO THE MATERIAL ON R ECORD AND TOTALITY OF FACTS & CIRCUMSTANCES, I AM OF THE CONSIDERED VI EW THAT IT WOULD BE FAIR AND UNREASONABLE IF ADDITION OF RS. 5,52,60 0/- IS SUSTAINED ON ACCOUNT OF UNRECORDED RECEIPTS AND THIS RS. 5,5 2,600/- COMPRISES OF RS. 52,600/- WHICH REPRESENTS THE DIFF ERENCE BETWEEN RS.4,02,600/- AS RECORDED IN NBNR REGISTER AND 3.5 LAKHS DISCLOSED IN THE STATEMENT RECORDED DURING THE COURSE OF SURV EY AND FIGURE OF RS.5 LAKHS WHICH IS HELD TO BE UNACCOUNTED RECEIPT NOT RECORDED IN THE NBNR REGISTER. THUS, APPELLANT GETS RELIEF OF RS. 20,97,052 (RS.26,49,652 5,52,600). WE FIND THAT THE FIRST APPELLATE ORDER ON THE ISSU E IS COMPREHENSIVE AND REASONED ONE AS THE LD CIT(A) HAS RESTRICTED THE AD DITION TO RS. 5,52,600/- WITH THIS OBSERVATION THAT A.O HAS NOT BEEN ABLE TO BRING A SINGLE INSTANCE WHERE AN UNRECORDED RECEIPT IS ENT ERED IN NBNR REGISTER, BUT THE SAME IS NOT APPEARING IN MASTER IPD REGISTE R. THE LD CIT(A) HAS OBSERVED FURTHER THAT THE FACTS ALSO REMAINS THAT T HE UNRECORDED RECEIPTS REFLECTED IN NBNR REGISTER ARE FOR ENTIRE YEAR, HEN CE IT IS VERY DIFFICULT TO ACCEPT THE ASSESSEES CONTENTIONS THAT NBNR REGISTE R CONTAINS IN ITS ENTIRETY THE UNACCOUNTED RECEIPT. THE LD CIT(A) HAS ALSO RIGHTLY OBSERVED THAT IT IS DIFFICULT TO ACCEPT THE CONCLUSIONS OF T HE A.O THAT THE FIGURE AS CONTAINED IN NBNR REGISTER REQUIRED TO BE EXTRAPOLA TED FOR THE ENTIRE YEAR IN PROPORATION IN WHICH SUCH UNRECORDED RECEIPT IS REFLECTED PERIODWISE IN NBNR REGISTER. THE RECEIPTS REFLECTED IN NBNR REG ISTER STARTS FROM 1.4.2001 AND THE LAST DATE IS 11.3.2002. THE TOTAL RECEIPT WAS RS. 5,66,227/- WHICH WAS NOT REFLECTED IN IPD RECEIPT R EGISTER. OUT OF THIS RS. 5,66,227/-, THE ASSESSEE HAD SHOWN INCOME OF RS. 3. 5 LAKHS, THE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 10 ASSESSEE SUBMITTED THAT THE CORRECT FIGURE WHICH W AS CONTAINED IN NBNR REGISTER AND NOT REFLECTED IN IPD REGISTER WAS RS. 4,02,600/-. THE A.O IN ITS REMAND REPORT ALSO FOUND IT CORRECT. THUS, THE LD CIT(A) CAME TO THE CONCLUSION THAT THE ASSESSEE HAD NOT SHOWN AN AMOUN T OF RS. 52,600/- (RS. 4,02,600 MINUS RS. 3,50,000) WHICH WAS FOUND E NTERED IN NBNR REGISTER AND NOT REFLECTED IN IPD RECEIPT REGISTER. IN THIS BACKGROUND, THE LD CIT(A) OBSERVED THAT RS. 5,52,600/- COMPRISES RS . 52,600/- WHICH REPRESENTS DIFFERENCE BETWEEN RS. 4,02,600/- AS REC ORDED IN NBNR REGISTER AND RS. 3.5 LAKHS DISCLOSED IN THE STATEME NT RECORDED DURING THE COURSE OF SURVEY AND THE FIGURE OF RS. 5,00,000/- W HICH IS HELD TO BE UNACCOUNTED RECEIPT NOT RECORDED IN THE NBNR REGIST ER. THE LD CIT(A) WAS THUS JUSTIFIED TO SUSTAIN THE ADDITION OF RS. 5,52, 600/- OUT OF RS. 26,49,652/- MADE BY THE A.O ON ACCOUNT OF ALLEGED N BNR REGISTER RECEIPT. THE FIRST APPELLATE ORDER ON THE ISSUE IS THUS UPHELD. 11. THE A.O MADE ADDITION OF RS.11,80,000/- ON ACCO UNT OF CUT OUT CHARGES. THE A.O DENIED THE CLAIM OF PAYMENT TO VAR IOUS DOCTORS BY THE ASSESSEE FOR REFERRING THE PATIENTS TO HIM. THE AM OUNT WAS APPEARING IN CUT OUT REGISTER MAINTAINED BY THE ASSESSEE. THE SUBMISSION OF THE ASSESSEE REMAINED THAT THE ENTIRE AMOUNT WAS PAID T O DOCTORS IN CONNECTION WITH PROFESSIONAL SERVICES RENDERED BY T HEM, IN VIEW OF THE FACT THAT THE ASSESSEE, BEING A NEUROSURGEN, GETS T HE PATIENTS ON REFERENCE FROM THESE DOCTORS, WHO ARE ASSOCIATED AT VARIOUS STAGES OF TREATMENT. IT WAS SUBMITTED THAT THESE PAYMENTS A RE MADE DURING THE NORMAL COURSE OF BUSINESS AND HAVE WRONGLY BEEN DIS ALLOWED BY THE A.O. IT WAS SUBMITTED BY THE ASSESSEE THAT THE NAMES AN D ADDRESS OF THE DOCTORS TO WHOM THE PAYMENTS HAVE BEEN MADE ARE DUL Y RECORDED IN THE REGISTER AND ENTIRE PAYMENT IS MADE THROUGH CHEQUE. LD CIT(A) REMANDED THE MATTER TO THE FILE OF THE A.O FOR VERI FICATION OF THE CLAIM. ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 11 THE A.O WAS DIRECTED TO TEST CHEQUE FEW OF SUCH PAY MENTS AFTER TAKING INTO ACCOUNT THE QUANTUM OF PAYMENTS AND PERIOD OF PAYMENTS. THE A.O TEST CHECKED THE BANK ACCOUNT OF 4 DOCTORS ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE IN THIS REGARD. THESE DOCTOR S CONFIRMED THAT THEY HAVE RECEIVED THE REFERRAL FEES BY CHEQUE FROM THE ASSESSEE. THE ASSESSEE CLAIMED THAT THE ENTIRE AMOUNT WAS PAID TO THE DOCTORS IN CONNECTION WITH PROFESSIONAL SERVICES RENDERED BY T HEM. THE A.O VERIFIED THE DETAILS OF FEES PAID TO THE DOCTORS AND ALSO RE CORDED STATEMENTS OF FEW DOCTORS. THE CUT OUT FEE WAS PAID TO 14 DOCTOR S. ASSESSEE FURNISHED DETAILS AND LIST OF THESE DOCTORS ALONG WITH THEI R ADDRESSES AND PANS. THE A.O ALSO OBSERVED THAT THERE WERE SOME REGULAR HOSPITAL EXPENSES WHICH HAVE BEEN RECORDED IN THE CUT OUT REGISTER. TOTAL AMOUNT OF REGULAR EXPENSES RECORDED IN THE CUT OUT REGISTER W ERE RS. 5,94,572/-, RS.5,11,040/- BEING OF REGULAR EXPENSES AND RS. 83 ,532/- BEING OF CHEQUES ISSUED BUT NOT CLEARED. THE A.O VERIFIED AND OBSERVED THAT THESE EXPENSES DO NOT RELATE TO REFERRAL FEES BUT A RE REGULAR EXPENSES. ON THE BASIS OF REMAND REPORT, THE LD CIT(A) CAME T O THE CONCLUSION THAT AN AMOUNT OF RS. 5,94,572/- OUT OF THE TOTAL DISALL OWANCE OF RS. 11,80,000/- DOES NOT RELATE TO REFERRAL FEES. THE LD CIT(A) ACCORDINGLY DIRECTED THE A.O TO VERIFY THE CLAIM OF THE ASSESSE E AND EXCLUDE SUCH DISALLOWANCE INCLUDED IN RS. 11,80,000/- WHICH IS N OT RELATING TO PAYMENT FOR DOCTORS FOR MAKING REFERENCE. 12. IN SUPPORT OF THE GROUND, THE LD. D.R. HAS TRIE D TO JUSTIFY THE ASSESSMENT ORDER. 13. THE LD. D.R. ALSO REFERRED CLAUSE NO.6.4 OF THE MEDICAL COUNCIL OF INDIA NOTIFICATION DATED 11.3.2002 UNDER CHAPTER 6 (UNETHICAL ACTS) WHEREBY THE PHYSICIAN HAS BEEN RESTRAINED FROM GIV ING, SOLICITING, ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 12 RECEIVING, OFFERING TO GIVE, SOLICIT OR RECEIVING I N GIFT, GRATUTITY, COMMISSION OR BONUS UNDER CONSIDERATION OF OR RETUR N FOR THE REFERRING, RECOMMENDING OR PROCURING OF ANY PATIENT, FOR MED ICAL, SURGICAL OR OTHER TREATMENT. A COPY OF THIS NOTIFICATION HAS BEEN FU RNISHED. 14. THE LD. A.R. HAS QUESTIONNED FIRST APPELLATE OR DER RESTRICTING THE ADDITION WITH THIS SUBMISSION THAT ENTIRE AMOUNT WA S PAID TO THE DOCTORS IN CONNECTION WITH PROFESSIONAL SERVICES RENDERED B Y THEM. THE ASSESSEE BEING A NEUROSURGEON GETS THE PATIENTS ON REFERENCE OF THESE DOCTORS WHO ARE ASSOCIATED WITH THE PATIENTS AT VARIOUS STAGES OF TREATMENT. THE LD. A.R. ALSO SUBMITTED THAT ON AN IDENTICAL ISSUE IN THE CASE OF DR. SUHAS P. HARDAS V/S. ITO, ITA NO. 368/PN/2007 AND OTHER, THE PUNE BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 5 TH FEBURARY 2010 ON THE ISSUE HAS SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMANDED TH E MATTER TO THE FILE OF THE A.O TO DECIDE THE ISSUE AFRESH. A COPY OF THIS ORDER HAS BEEN FILED BY HIM. 15. CONSIDERING THE ABOVE SUBMISSIONS AND THE ORDE R DATED 5 TH FEBRUARY 2010 OF THE TRIBUNAL IN THE CASE OF DR. SU HAS P. HARDAS (SUPRA) CITED BY THE LD. A.R, WE DO NOT FIND REASON TO INTE RFERE WITH THE FIRST APPELLATE ORDER ON THE ISSUE. THE A.O HAS DENIED T HE CLAIMED PAYM,ENT OF RS. 11,80,000/- TO THE DOCTORS WHO REFERRED THE PATIENTS TO THE ASSESSEE ON THE BASIS THAT IN SUBSTANCE, THE PAYMEN T IS MADE FOR SOLICITING PATIENTS. SUCH PAYMENTS ARE AGAINST PU BLIC POLICY AND AGAINST THE POLICY LAID DOWN BY MEDICAL COUNCIL OF INDIA WH ICH IS PROFESSIONAL BODY REGULATING THE MEDICAL PROFESSION. IN THIS REGARD, THE DECISION OF SUPREME COURT IN THE CASE OF CIT V/S. MADDI VENKATA RATNAM & CO. PVT. LTD., 229 ITR 534 (SC) HAS ALSO BEEN RELIED UPON. THE LD CIT(A) PRINCIPALLY AGREED WITH THE A.O BUT HAS RESTRICTED THE DISALLOWANCE ONLY TO THE AMOUNT WHICH HAS BEEN REALLY PAID TO SUCH DO CTORS WHO REFERRED THE PATIENTS TO THE ASSESSEE AND IN THIS REGARD, HE HAS SET ASIDE THE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 13 MATTER TO THE FILES OF A.O TO VERIFY THE CLAIM OF T HE ASSESSEE THAT OUT OF RS.11,80,000/- AN AMOUNT OF RS. 5,95,572/- DOES NOT RELATE TO THE PAYMENT MADE TO SUCH DOCTORS. WE DO NOT FIND REAS ON TO INTERFERE WITH THE FIRST APPELLATE ORDER WHEREBY THE LD CIT(A) HAS RIGHTLY DIRECTED THE A.O TO VERIFY THE CLAIM OF THE ASSESSEE AND RESTRIC T THE DISALLOWANCE UPTO THE AMOUNT WHICH HAS BEEN PAID TO THE DOCTORS WHO H AD REFERRED THE PATIENTS TO THE ASSESSEE, SINCE IT WAS MADE FOR SOL ICITING PATIENTS WHICH IS AGAINST INSTRUCTION OF MEDICAL COUNCIL OF INDIA. I N THE CITED ORDER DATED 5 TH FEBRUARY 2010 OF THE TRIBUNAL IN THE CASE OF DR. S UHAS P.HARDAS (SUPRA), THE TRIBUNAL HAS GIVEN FOLLOWING FINDING :- 7. CONSIDERING ABOVE SUBMISSIONS WE COME TO THE CO NCLUSION THAT UNDISPUTEDLY BOTH THE REFERRING DOCTORS AND RE FERRED DOCTOR HAD CHARGED THEIR PROFESSIONAL FEES ETC FOR THEIR RESPE CTIVE SERVICES RENDERED BY THEM TO THE PATIENTS, HENCE THE PAYMENT MADE BY THE REFERRED DOCTOR I.E. APPELLANT TO THE DOCTORS WHO H AD REFERRED THE PATIENTS TO THE APPELLANT CANNOT IN ANY WAY BE TREA TED AS PART OF THE PAYMENT AGAINST THE SERVICES RENDERED TO THE PA TIENTS BY EITHER OF THE TWO I.E. THE REFERRING DOCTORS AND THE REFER RED DOCTOR. THE ASSESSEE HAS ALSO FAILED TO ESTABLISH THAT THE PAYM ENT IN QUESTION WAS MADE TO THE DOCTORS AGAINST THEIR ASSISTANCE TO THE ASSESSEE IN TREATING THE PATIENTS REFERRED BY THEM. IN SUCH A SITUATION THE ONLY INFERENCE CAN BE DRAWN THAT THE CLAIMED PAYMENT M ADE BY THE REFERRED DOCTOR TO THE REFERRING DOCTORS WAS FOR SO LICITATION OF PATIENTS AS ALLEGED BY THE A.O. THE LD. AR BEFORE US HAS FAILED TO REBUT THIS ALLEGATION OF THE A.O SATISFACTORILY WIT H SUPPORT OF ANY EVIDENCE. SO FAR AS APPLICABILITY OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MADDI VENKATARATNAM & CO PVT. LTD. VS. CIT (SUPRA) IN THE PRESENT CASE IS CONCERNED WE ARE OF THE VIEW THAT THOUGH FACTS IN THAT CASE ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE BUT THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT THEREIN IS VERY MUCH APPLICABLE IN THE PRESENT CASE . THE RATIO LAID DOWN THEREIN IS THAT THE EXPENDITURE INCURRED FOR E VADING THE PROVISIONS OF THE ACT AND ALSO THE PENALTY LEVIED F OR SUCH EVASION COULD NOT BE ALLOWED AS DEDUCTION AS IT WOULD BE AG AINST PUBLIC POLICY TO ALLOOW THE BENEFIT OF DEDUCTION UNDER ONE STATUTE, OF ANY ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 14 EXPENDITURE INCURRED IN VIOLATION OF THE PROVISION S OF ANOTHER STATURE OR ANY PENALTY IMPOSED UNDER ANOTHER STATUT E. 7.1 IN THE CASE OF MADDI VENKATARATNAM & CO. PVT. L TD. VS. CIT (SUPRA) BEFORE HONBLE SUPREME COURT ADMITTEDLY TH E ASSESSEE HAD INDULGED IN A TRANSACTION IN VIOLATION OF THE PROVI SIONS OF THE FOREIGN EXCHANGE (REGULATION) ACT. UNDER SUCH CIRCUMSTANMC ES THE HONBLE SUPREME COURT WAS PLEASED TO HOLD THAT THE ASSESSEE WAS EXPECTED TO CARRY ON THE BUSINESS IN ACCORDANCE WIT H LAW. IF THE ASSESSEE CONTRAVENED THE PROVISIONS OF THE FOREIGN EXCHANGE (REGULATION) ACT TO CUT DOWN ITS LOSSES OR TO MAKE LARGER PROFITS WHILE CARRYING ON THE BUSINESS IT WAS ONLY TO BE AC CEPTED THAT PROCEEDINGS WOULD BE TAKEN AGAINST THE ASSESSEE FOR VIOLATION OF THAT ACT. 7.2 HERE IN THE PRESENT CASE BEFORE US IT IS YET T O BE ESTABLISHED AS TO WHETHER BY PAYING AN AMOUNT TO THE DOCTOR AGA INST A PATIENT REFERRED BY HIM / HER TO THE APPELLANT THE APPELLAN T HAS VIOLATED SOME SPECIFIC PROVISIONS OF LAW. UNDER THESE CIRCU MSTANCES THE A.O WAS NOT JUSTIFIED TO DISALLOW THE CLAIMED EXPENDIT URE INCURRED ON PAYMENT TO DOCTORS WHO REFERRED PATIENTS TO ASSESSE E ON THE PRESUMPTION THAT IT WAS AGAINST PUBLIC POLICY. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE LAW AUTHORITIES REMAND THE MATTER TO THE FILE OF THE A.O TO DECIDE THE ISSUE AFRESH AFTER AS CERTAINING FIRST FROM THE AUTHORITY CONCERNED AS TO WHETHER CLAIMED PAYME NT BY THE ASSESSEE TO THE DOCTORS AGAINST REFERRED PATIENTS T O THE ASSESSEE IS PROHIBITED UNDER SOME SPECIFIC PROVISIONS OF THE R ELATED LAW AND DECIDE THE ISSUE AFRESH IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MADDI VENKATARATNAM & CO. PVT. LTD. VS.CIT (SUPRA) AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. THE GROUND NO. 1 IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 16. FROM THE ABOVE FINDING OF THE TRIBUNAL, IT IS C LEAR THAT ON AN IDENTICAL ISSUE RAISED THEREIN, THE TRIBUNAL WAS IN AGREEMENT WITH THE INFERENCE DRAWN BY THE A.O THAT THE CLAIMED PAYMENT MADE BY THE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 15 REFERRED DOCTOR TO THE REFERRING DOCTOR WAS FOR CON SULTATION OF PATIENT BUT THE MATTER WAS SET ASIDE TO THE FILE OF A.O TO DEC IDE THE ISSUE AFRESH AFTER ASCERTAINING FIRST FROM THE AUTHORITY CONCERN ED AS TO WHETHER THE CLAIMED PAYMENT BY ASSESSEE TO THE DOCTORS AGAINST REFERRED PATIENTS IS PROHIBITED UNDER SOME SPECIFIC PROVISIONS OF RELAT ED LAW AND DECIDE THE ISSUE AFRESH IN VIEW OF THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF MADDI VENKATARATNAM & CO. PVT. LTD. V/S. CIT (SU PRA). THUS, IT APPEARS THAT TO AVOID MULTICIPLICITY OF LITIGATION, THE MATTER WAS SET ASIDE TO THE A.O TO PASS A SPEAKING ORDER REFERRING SPE CIFIC PROVISIONS OF THE RELATED AUTHORITY WHEREBY SUCH PRACTICE BY THE DOCT ORS HAS BEEN PROHIBITED. IN THE PRESENT CASE, THE RELEVANT NOTI FICATION DATED 11 TH MARCH 2002 OF MEDICAL COUNCIL OF INDIA PUBLISHED IN PART III, SECTION 4 OF GAZETTE OF INDIA DATED 6 TH APRIL 2002 HAS BEEN SUPPLIED, WHEREIN CHAPTER 6 DEALS WITH UNETHICAL ACTS. THE RELEVANT CLAUSE NO. 6.4 UNDER THE HEAD REBATES AND COMMISSION READS AS UNDER : 6.4.1 A PHYSICIAN SHALL NOT GIVE, SOLICIT, OR RE CEIVE NOR SHALL HE OFFER TO GIVE SOLICIT OR RECEIVE, ANY GIFT, GRATUIT Y, COMMISSION OR BONUS IN CONSIDERATION OF OR RETURN FOR THE REFERRI NG, RECOMMENDING OR PROCURING OF ANY PATIENT FOR MEDICAL, SURGICAL O R OTHER TREATMENT. A PHYSICIAN SHALL NOT DIRECTLY OR INDIRECTLY, PARTI CIPATE IN OR BE A PARTY TO ACT OF DIVISION, TRANSFERENCE, ASSIGNMENT, SUBORDINATION, REBATING, SPLITTING OR REFUNDING OF ANY FEE FOR MED ICAL, SURGICAL OR OTHER TREATMENT. 6.4.2 PROVISIONS OF PARA 6.4.1 SHALL APPLY WITH EQUAL FORCE TO THE REFERRING, RECOMMENDING OR PROCURING BY A PHYSICIAN OR ANY PERSON, SPECIMEN OR MATERIAL FOR DIAGNOSTIC PURPOSES OR OTH ER STUDY / WORK. NOTHING IN THIS SECTION, HOWEVER, SHALL PROHIBIT PA YMENT OF SALARIES BY A QUALIFIED PHYSICIAN TO OTHER DULY QUALIFIED PE RSON RENDERING MEDICAL CARE UNDER HIS SUPERVISION. ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 16 IN THE PRESENT CASE, THE VERY NAME OF THE REGISTER I.E. CUT OUT REGISTER MARKING EXPENSES OTHER THAN CONSULTANCY FEES ITSELF JUSTIFY THE ACTION OF THE A.O IN COMING TO THE CONCLUSION THAT THE PAYMEN T MADE TO THE DOCTORS WHO REFERRED THE PATIENTS TO THE ASSESSEE W AS FOR SOLICITING PATIENTS. IT IS ALSO BECAUSE IN GENERAL PRACTICE, B OTH THE REFERRING DOCTORS AND REFERRED DOCTOR CHARGED THEIR PROFESSIONAL FEES ETC. FOR THEIR RESPECTIVE SERVICES RENDERED BY THEM TO THE PATIEN TS, HENCE THE PAYMENT MADE BY REFERRED DOCTOR I.E. APPELLANT TO THE DOCTO RS WHO HAD REFERRED THE PATIENTS TO THE APPELLANT CANNOT IN ANY WAY BE TREATED AS PART OF THE PAYMENT AGAINST THE SERVICES RENDERED TO THE PATIEN TS BY EITHER OF THE TWO I.E. THE REFERRING DOCTORS AND THE REFERRED DOC TOR. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER ON THE ISSUE. THE SAME IS UPHELD. THE GROUND NO. 2 IS ACCORDINGLY REJECTED. ITA NO. 237/PN/2006 17. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDE R ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.20,97,052/- OUT OF TOTAL ADDITION OF RS.26,49,652/- MADE ON ACC OUNT OF RECEIPTS RECORDED IN THE NBNR REGISTER WHICH CONTAINED THE R ECEIPTS NOT SHOWN IN THE BOOKS OF ACCOUNTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS. 20,97,052/- WHEN IN FACT THE ASSESSING OFFICERS ACTION IN EXTR APOLATING THE UNACCOUNTED RECEIPTS OF RS.4,02,600/- FOUND IN THE NBNR REGISTER IMPOUNDED DURING THE COURSE OF SURVEY U/S. 133A AND FOR WHICH NO EXPLANATION COULD BE OFFERED BY THE ASSESSEE, IS JU STIFIABLE IN VIEW OF SUPREME COURT DECISION IN THE CASE OF CIT VS. H. M. ESUFALLY H.M. ABDULLAH 90 ITR 271. ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 17 18. THE ISSUE RAISED IN THE ABOVE GROUNDS HAS ALREA DY BEEN ADJUDICATED UPON HEREINABOVE, IN GROUND NO. 2 OF THE APPEAL REF ERRED BY THE ASSESSEE. FOLLOWING THE DECISION TAKEN THEREIN, TH E GROUND NOS. 1 & 2 DO NOT SURVIVE. THESE GROUNDS ARE THUS REJECTED. 19. IN RESULT, BOTH THE APPEALS ARE DISMISSED. ITA NO. 455/PN/2008 20. IN THIS APPEAL, THE ASSESSEE HAS QUESTIONNED F IRST APPELLATE ORDER PARTLY CONFIRMING THE PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT. 21. THE RELEVANT FACTS ARE THAT THE A.O INITIATED P ENALTY PROCEEDINGS U/S. 271(1)(C ) OF THE ACT ON THE ADDITIONS SUSTAI NED BY THE LD CIT(A) MADE ON ACCOUNT OF UNRECORDED ENTRIES IN THE BOOKS OF ACCOUNT, DISALLOWANCE MADE ON ACCOUNT OF PAYMENT TO THE DOCT ORS WHO REFERRED THE PATIENTS TO THE ASSESSEE AND ADDITION MADE ON A CCOUNT OF HOUSE PROPERTY. THE A.O MADE ADDITION OF RS.26,49,652/ - ON ACCOUNT OF NBNR REGISTER RECEIPTS RS.11,80,056/- ON ACCOUNT OF CUT OUT CHARGES, RS.1,05,000/- ON ACCOUNT OF PROPERTY INCOME AND RS. 2,88,000/- ON ACCOUNT OF LABORATORY CHARGES. THE LD CIT(A) RESTRI CTED THE ADDITION TO RS. 5,52,600/- ON ACCOUNT OF NBNR REGISTER RECEIPTS , RS.5,86,428/- ON ACCOUNT OF CUT OFF CHARGES, RS. 1,05,000/- INCOME F ROM HOUSE PROPERTY AND DELETED THE ADDITION MADE ON ACCOUNT OF LABORAT ORY CHARGES. THUS, ADDITION OF RS.42,22,708/- MADE BY THE A.O REDUCED TO RS.12,43,028/- BY THE LD CIT(A). THE UNDISPUTED FACTS ARE THAT A SURVEY WAS CONDUCTED BY THE DEPARTMENT ON THE HOSPITAL PREMISES OF THE A SSESSEE WHERE RECORDS MAINTAINED BY ASSESSEE PERTAINING TO HIS HO SPITAL ACTIVITY WERE VERIFIED AND CERTAIN DISCREPANCIES WERE NOTED BY T HE SURVEY PARTIES. THE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 18 ASSESSEE, A NEUROSURGEON, RUNNING THE HOSPITAL,AFT ER REALIZING AND CONSIDERING SUCH DISCREPANCIES BROUGHT TO HIS NOTIC E BY THE SURVEY PARTIES DECLARED CERTAIN ADDITIONAL INCOME. THE ASS ESSEE FILED REVISED RETURN OFFERING ADDITIONAL INCOME IN AGGREGATE AT RS. 25,00,000/-. THE ASSESSMENT WAS FRAMED AND CERTAIN ADDITIONS AS DISC USSED ABOVE WERE MADE IN DIFFERENT HEADS. THE LD CIT(A) HAS REDUCED SUCH ADDITIONS UNDER SOME HEADS AND THUS, HAS GIVEN SUBSTANTIAL RELIEF TO THE ASSESSE. THE A.O INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C ) ON THE ADDITIONS SUSTAINED BY THE LD CIT(A). THE TRIBUNAL HAS UPHEL D THE FIRST APPELLATE ORDER. IN OTHER WORDS, THE TRIBUNAL HAS UPHELD THE ACTION OF LD CIT(A) IN RESTRICTING THE ADDITIONS AND THEREBY GIVING RELIEF TO THE ASSESSEE PARTLY. 22. IN SUPPORT OF THE GROUND, THE LD A.R. HAS REITE RATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE S UBMITTED THAT THE ASSESSEE FILED REVISTED RETURN OFFERING ADDITIONAL INCOME IN AGGREGATE RS. 25,00,000/- INCLUDING THAT OF RS.3,50,000/- BY THE ASSESSEE AS WAS AGREED BY ASSESSEE BEFORE THE SURVEY PARTY. IN HIS STATEMENT RECORDED BY DEPARTMENTAL AUTHORITY ON 21 ST FEBRUARY 2004 AND TO THE QUESTIONS AND ANSWERS APPEARING IN SUCH STATEMENTS OF THE ASS ESSEE, IT HAS BEEN MADE CLEAR THAT THE AMOUNT OFFERED BY ASSESSEE WAS ON ESTIMATE BASIS AND WITH A VIEW TO BUY PEACE OF MIND AND TO AVOID A LL POSSIBLE FUTURE LITIGATION IN THIS RESPECT. THE ASSESSEE FILED REV ISED RETURN TO RECTIFY ANY INADVERTENT MISTAKE, IF COMMITTED BY THE ASSESSEE, WHILE FILING THE ORIGINAL RETURN. ON FURTHER VERIFICTION OF RECORD, DURING THE ASSESSMENT PROCEEDINGS AND REMAND PROCEEDINGS, THE AMOUNT HAS BEEN WORKED OUT AT RS. 4,02,600/- WHICH WAS RAISED AS RS.5,52,600/ - AND SUSTAINED IN QUANTUM APPEAL BY THE FIRST APPELLATE AUTHORITY. THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS.4,33,131/- IN ORIGINAL RETURN WHICH WAS REVISED TO RS.7,83,131/- WHILE FILING THE REVISED R ETURN. HOWEVER, FOR THE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 19 PURPOSE OF QUANTIFYING PENALTY, THE A.O HAS CONSID ERED THE INCOME DECLARED IN ORIGINAL RETURN ONLY. 23. THE LD. D.R., ON THE OTHER HAND, TRIED TO JUSTI FY THE FIRST APPELLATE ORDER SUSTAINING THE PENALTY. 24. HAVING GONE THROUGH THE ORDERS OF THE AUTHORIT IES BELOW, WE FIND THAT THE LD CIT(A) HAS PASSED A COMPREHENSIVE AND REASONED ORDER WHILE DEALING WITH THE ISSUE. HE HAS SUSTAINED THE PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT ON THE CONCEALED INCOME OF RS .4,02,600/- (RS.3,50,000/- DISCLOSED BY THE ASSESSEE IN THE REV ISED RETURN OF INCOME + RS. 52,600/- FOR SUPPRESSED RECEIPTS NOT SHOWN IN THE REVISED RETURN ) ON THE BASIS THAT A REVISED RETURN CAN BE SAID TO B E POSSIBLE ONLY WHERE IT IS BONAFIDE IN THE SENSE THAT OMISSION SHOULD HAVE BEEN DUE TO INADVERTANT MISTAKE AND NOWHERE THERE WAS DELIBERAT E CONCEALMENT. WE FULLY AGREE WITH THE OBSERVATION OF THE LD CIT(A). THE FACT OF REVISED RETURN BECOMES RELEVANT FOR THE ASSESSEE WHO COULD NOT AVOID THE CONSEQUENCE OF DELEBERATELY FALSE ORIGINAL RETURN B Y FILING A REVISED RETURN AFTER THE CONCEALMENT HAS BEEN DETECTED BY THE A.O. THERE REMAINED NO DISPUTE THAT REVISED RETURN OF INCOME WAS FILED DIS CLOSING AN AMOUNT OF RS. 3.5 LAKHS ON ACCOUNT OF ENTRIES MADE IN THE NBN R REGISTER WHICH WAS NOT SHOWN IN THE BOOKS OF ACCOUNT. FURTHER, AMOUNT OF RS.52,600/- ENTERED IN NBNR REGISTER AND NOT SHOWN IN THE REGUL AR BOOKS OF ACCOUNT IS ALSO NOT IN DISPUTE. WE THUS UPHOLD THE ACTION OF THE LD CIT(A) IN THIS REGARD. THE LD CIT(A) HAS ALSO UPHELD THE PENALTY LEVIED ON CONCEALED INCOME OF RS.1,05,000/- ON ACCOUNT OF INCOME FROM H OUSE PROPERTY ON THE BASIS THAT UNDISPUTEDLY, THE RECEIVABLE RENT WA S RS.12,500 PER MONTH WHICH WAS NOT ACCOUNTED FOR BY THE ASSESSEE. IN O THER WORDS, THE ASSESSEE HAD NOT SHOWN THE AMOUNT OF RENT UNDER THE HEAD INCOME FROM HOUSE PROPERTY WHICH WAS UNDISPUTEDLY RECEIVABLE BY HIM AND NO ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 20 ENTRIES OF PURCHASE OF MEDICINES OR PAYMENT THEREOF WAS ADJUSTED AGAINST IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. SINCE TH E ASSESSEE HAD NOT SHOWN THE INCOME FROM HOUSE PROPERTY WITHOUT ANY B ONAFIDE REASON, IN OUR VIEW, THE LD CIT(A) HAD RIGHTLY SUSTAINED THE P ENALTY LEVIED ON THE SAID ADDITION. THE LD CIT(A) HAS DELETED THE PENAL TY LEVIED ON OTHER ADDITIONS SUSTAINED BY THE FIRST APPELLATE AUTHORIT Y. THE REVENUE IS IN APPEAL AGAINST THOSE ACTIONS OF THE LD CIT(A). SIN CE THE PENALTY SUSTAINED BY THE LD CIT(A) IS ON THE ADDITIONS WHER EIN THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE, WE DO NOT FIND REASON TO INTERFERE THEREWITH. THE FIRST APPELLATE ORDER IN THIS REGAR D IS THUS UPHELD. THE GROUND IS THUS REJECTED. 25. IN RESULT, APPEAL IS DISMISSED. ITA NO. 543/PN/2008 26. THE REVENUE HAS QUESTIONNED FIRST APPELLATE ORD ER ON SEVERAL GROUNDS INVOLVING A SOLE ISSUE AS TO WHETHER THE LD CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) ON T HE ADDITION OF RS. 5,85,428/- MADE ON ACCOUNT OF DENIAL OF REFERRAL FE E PAYMENTS. 27. WE HAVE ALREADY DISCUSSED THE RELEVANT FACTS ON THE ISSUE OF REFERRAL PAYMENT CLAIMED TO HAVE BEEN MADE BY THE A SSESSEE TO THE DOCTORS WHO USED TO REFER THE PATIENTS TO THE ASSES SEE. THE A.O HAD ACTUALLY DISALLOWED RS. 11,80,056/- ON ACCOUNT OF T HE CLAIMED PAYMENT OF RS. 11,80,056/-, BUT THE LD CIT(A) HAS RESTRICTED T HE SAME TO RS. 5,85,428/- WHICH WAS ACTUALLY FOUND TO BE MADE TO T HE DOCTORS WHO HAD REFERRED THE PATIENTS TO THE ASSESSEE AS PER CUT OU T REGISTER, SINCE THE SAME IS A PROHIBITED PRACTICE AS PER MEDICAL COUNC IL NOTIFICATION DATED 11 TH MARCH 2002. THE A.O. LEVIED PENALTY U/S. 271(1)(C ) OF THE ACT ON ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 21 THIS ADDITION OF RS.5,875,428/- SUSTAINED BY THE LD CIT(A). THE LD CIT(A) HAS, HOWEVER, DELETED THE PENALTY ON THE BA SIS THAT THE ASSESSEE HAD NOT FURNISHED ANY INACCURATE PARTICULARS OF INC OME BUT IT WAS A MATTER OF DIFFERENCE OF OPINION BETWEEN THE DEPARTM ENT AND THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE REMAINED THAT THE AMOUNT RECEIVED BY THOSE DOCTORS AS CONSULTATION FEES WAS SHOWN BY THEM AS THEIR INCOME. IT IS ALSO A FACT THAT THE AMOUNT OF REFERRAL FEE/CONSULTATION FEE WAS DEBITED TO THE PROFIT & LO SS ACCOUNT. 28. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE P ARTIES, WE DO NOT FIND REASON TO INTERFERE WITH THE FINDING OF THE LD CIT(A) WHILE DELETING THE PENALTY, AS DISCUSSED ABOVE. THE REQUIREMENT FOR IMPOSING PENALTY U/S. 271(1)(C ) IS THAT THERE MUST BE CONCEALMENT O F PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF BY THE ASSESSEE RELATING TO THAT ADDITION/INCOME. HERE IN THE PRESENT CASE, TH E AUTHORITIES BELOW HAVE JUSTIFIED DISALLOWANCE OF THE AMOUNT WHICH WAS PAID TO THE DOCTORS WHO HAD REFERRED PATIENTS TO THE ASSESSEE ON THE B ASIS THAT SUCH PAYMENT WAS AGAINST THE PUBLIC POLICY. IT IS NOT T HE CASE OF THE REVENUE THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE A SSESSEE RELATING TO THE ADDITION OF RS. 5,85,428/-. IT WAS ONLY DUE TO DIF FERENCE OF OPINION BETWEEN THE ASSESSEE AND THE REVENUE. THE EXPLANAT ION OF THE ASSESSEE REMAINED THAT THE PAYMENTS MADE BY THE ASSESSEE TO THOSE DOCTORS WERE AGAINST THE SERVICES RENDERED BY THOSE DOCTORS TO T HOSE PATIENTS BEFORE AND AFTER THE TREATMENT. UNDER THESE CIRCUMSTANC ES, WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER DELETING THE PENALTY IN QUESTION. THE SAME IS UPHELD. THE ISSUE IS THUS DECIDED AGAINST T HE REVENUE. THE RELATED GROUNDS ARE DISMISSED.. ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 22 29. IN THE RESULT, APPERAL IS DISMISSED. ITA NO. 845/PN/2007 (ASSESSEE ) ITA NO. 976/PN/07 ( REVENUE) 30. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORD ER ON THE FOLLOWING GROUNDS : 1. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW IT BE HELD THAT THE INCOME FROM H OUSE PROPERTY OF RS.1,05,000/- ADDED SEPARATELY BY THE ASSESSING OFF ICER & CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IS UNWARRANTED, UNJUSTIFIED & CONTRARY TO THE PROVISIONS OF LAW. IT FURTHER BE HELD THAT THERE IS NO SCOPE FOR MAKING ANY SEPARATE ADDITION OF RS.1,0 5,000/- ON ACCOUNT OF INCOME FROM HOUSE PROPERTY. THE ADDITIO NS SO MADE BE DELETED. THE APPELLANT IN THE ALTERNATIVE BE GRANT ED CONSEQUENTIAL RELIEF CONSIDERING ALL FACTS PREVAILING IN THE CASE . THE APPELLANT BE GRANTED JUST & PROPER RELIEF IN THIS RESPECT.S 2. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW IT BE HELD THAT DISALLOWANCE OF R S.3,94,346/- MADE BY THE ASSESSING OFFICER & CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IS UNWARRANTED, UNJUSTIFIED & CONTRARY TO THE PROVI SIONS OF LAW & FACTS PREVAILING IN THE CASE. THE DISALLOWANCE/ADDI TION OF RS.3,94,346/- DIRECTED /CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BE DELETED. THE APPELLANT BE GRANTED JUST & PROPER RE LIEF IN THIS RESPECT. 31. THE REVENUE ON THE OTHER HAND HAS IMPUGNED FIRS T APPELLATE ORDER ON FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS CONTRA RY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(APPEALS) GROSSLY ERRED IN REDUCI NG THE DISALLOWANCE OF RS. 19,63,603/- TOWARDS CONSULTANCY CHARGES TO RS.3,94,356/-. ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 23 3. THE LEARNED CIT(APPEALS) GROSSLY FAILED TO APPRE CIATE, AMONG OTHER THINGS, THAT THE ASSESSEE HIMSELF HAD INITIA LLY TOTALLED THE REFERRAL FEES AT RS. 11,80,056/- AND, THEREFORE, IT WAS NOT JUSTIFIED TO QUANTIFY SUCH CHARGES AT RS.3,94,356/- ONLY. 4. THE LEARNED CIT (APPEALS) GROSSLY ERRED IN DELET ING THE ADDITION OF RS. 2,88,000/- MADE ON ACCOUNT OF LAB C HARGES BY FOLLOWING THE ORDER OF THE PREDECESSOR CIT (APPEALS ) FOR THE A.Y. 2002-03 WHEREAS THE PREDECESSOR HAD DELETED THE ADD ITION FOR THE SAID EARLIER A.Y. ON THE BASIS OF THE A.OS REMAND REPORT. GROUND NO. 1 (ASSESSEE) 32. IN THIS GROUND, THE ASSESSEE HAS QUESTIONED SUS TAINING ADDITION OF RS.1,05,000/- MADE BY THE A.O ON ACCOUNT OF INCOME FROM HOUSE PROPERTY. UNDER THE SIMILAR FACTS AND CIRCUMSTANC ES, AN IDENTICAL ISSUE RAISED IN THE APPEAL PREFERRED BY THE ASSESSEE IN T HE A.Y. 2002-03 HEREIN-ABOVE HAS BEEN ADJUDICTED AGAINST THE ASSESS EE. FOLLOWING DECISION THEREIN, THE GROUND NO. 1 IS REJECTED. GROUND NO. 2 (ASSESSEE) AND GROUND NO. 2 & 3 (REVEN UE) 33. THE RELEVANT FACTS ARE THAT THE ASSESSEE CLAIME D RS. 19,63,603/- AS CONSULTANCY CHARGES PAID BY HIM TO THE DOCTORS. TH E A.O. DID NOT AGREE AND DISALLOWED THE ENTIRE AMOUNT OF RS.19,03,603/- ON THE BASIS THAT THESE WERE REFERRAL CHARGES MADE TO DOCTORS FOR SOL ICITING PATINETS AND THE ASSESSEE WAS INDULGING IN UNFAIR PRACTICE. THE CON TENTION OF THE ASSESSEE ON THE CONTRARY REMAINED THAT THE PAYMENTS MADE TO WARDS CONSULTANCY FEES WERE BY CROSSED CHEQUES AND IDENTITY OF EACH O F THE PERSONS TO WHOM THE PAYMENT HAD BEEN MADE, COULD BE PROVED. T HE ASSESSEE CONTENDED THAT THE ENTIRE AMOUNT WAS NOT REFERRAL FEES BUT ACTUAL FEES PAID FOR SERVICES RENDERED BY THE SPECIALIST DOCTOR S WHO WERE CALLED UPON TO GIVE SPECIFIC TREATMENTS TO THE PATIENTS ALREADY HOSPITALIZED. IT WAS ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 24 SUBMITTED THAT ASSESSEE IS A NEUROSURGEON AND IF AN Y OTHER COMPLICATION AROSE, THE OTHER SPECIALIST HAD TO BE CALLED FOR, F OR WHICH PAYMENT WAS REQUIRED TO BE MADE. AS PER THE ASSESSEE, THE A.O H AS INCORRECTLY CONSIDERED THE ENTIRE PROFESSIONAL FEES AS NOT ALLO WABLE WHEN THE REFERRAL FEES WAS IN FACT ONLY A PART OF THE TOTAL AMOUNT DE BITED TO THE PROFIT & LOSS ACCOUNT. DURING THE COURSE OF APPELLATE PROCE EDINGS, THE A.O CONFIRMED THAT THE REFERRAL ENTRIES APPEARING IN TH E CUT OUT REGISTER WERE TOTALLING TO RS.7,17,152/- AND THE AMOUNT OF RS. 1 9,63,603/- PERTAINED TO THE TOTAL CONSULTANCY CHARGES DEBITED TO THE PRO FIT & LOSS ACCOUNT. OUT OF THE AMOUNT OF RS. 7,17,152/-, FURTHER AMOUNT OF RS. 1,54,780/- WHICH WERE CHEQUE ISSUED BUT CANCELLED AND AMOUNT OF RS. 1,68,026/- WERE SALARY PAID TO INHOUSE DOCTORS WAS TO BE EXCLUDED AND THEREFORE, THE REFERRAL FEES PAID TO VARIOUS DOCTORS AS APPEARING IN THE CUT OUT REGISTER WAS ONLY RS. 3,94,346/-. THE LD CIT(A) HAS THUS UP HELD THE DISALLOWANCE TO THE EXTENT OF RS. 3,94,346/-. THE SAME HAS BEEN QUESTIONNED BY THE ASSESSEE. THE REVENUE HAS QUESTIONNED THE RELIEF GI VEN BY THE LD CIT(A) OF RS.15,69,257/- OUT OF RS. 19,63,603/- DISALLOWED BY THE A.O. 34. IN SUPPORT OF GROUND NO.2 (ASSESSEE), LD. A.R. HAS BASICALLY REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORI TIES BELOW, WHEREAS IN SUPPORT OF GROUND NOS. 2 & 3 (REVENUE), THE LD. D.R. HAS PLACED RELIANCE ON ASSESSMENT ORDER. 35. CONSIDERING THE ABOVE SUBMISSIONS, AND FOLLOWIN G OUR DECISION ON THE ISSUE IN THE APPEALS FOR THE A.Y 2002-03 DISCUS SED HEREIN-ABOVE, WE ARE OF THE VIEW THAT THERE WAS NO INFIRMITY IN THE ACTION OF THE AUTHORITIES BELOW IN NOT ALLOWING THE CLAIMED PAYMENTS BY THE ASSESSEE TO THE DOCTORS FOR SOLICITING PATIENTS AS THE SAME IS PROH IBITED BY THE MEDICAL COUNCIL OF INDIA VIDE NOTIFICATION DATED 11 TH MARCH 2002. THE AUTHORITIES ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 25 BELOW THUS CAN BE JUSTIFIED IN DISALLOWING ONLY SUC H AMOUNT AND NOT OTHER AMOUNT WHICH WAS GENUINELY SPENT. IT HAS NOT BEEN DISPUTED BEFORE US THAT AS TO HOW THE LD CIT(A) WAS NOT JUSTIFIED IN C OMING TO THE CONCLUSION THAT IT WAS THE PAYMENT OF RS.3,94,346/- ONLY SHOW N IN THE CUT OUT REGISTER WHICH WAS PAID TO THE DOCTORS WHO HAD REFE RRED PATIENTS TO THE ASSESSEE. THE LD CIT(A) WAS THUS JUSTIFIED IN REST RICTING THE DISALLOWANCE TO RS. 3,94,346/- OUT OF THE TOTAL DISALLOWANCE OF RS. 19,64,603/- MADE BY THE A.O IN THIS REGARD. THE LD CIT(A) IN PARA N O. 4.3 HAS GIVEN REASON FOR ARRIVING OUT AT SUCH DISALLOWANCE OF RS.3,94,34 6/- OUT OF THE DISALLOWANCE MADE BY THE A.O. WE THUS ARE NOT INCL INED TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUND NO. 2 (ASSESSEE) AND GROUND NO. 2 & 3 (REVENUE) AR E THUS REJECTED. GROUND NO.4 (REVENUE) 36. THE A.O MADE ADDITION OF RS. 2,88,000/- BASED O N THE STATEMENT OF SMT. SANGEETHA JADHAV, SAYING THAT SHE HAD BEEN WO RKING AS LABORATORY TECHNICIAN AND GET 40% OF THE TOTAL RECEIPT OF LABO RATORY TESTS. THE A.O OBSERVED THAT TOTAL CHARGES FROM LAB TESTS IS RS. 40,000/- OUT OF WHICH 40% I.E. RS. 16,000/- WERE PAID AND REMAINING OF RS . 24,000/- WAS KEPT WITH THE ASSESSEE. ACCORDINGLY, RECEIPT ON ACCOUNT OF LABORATORY CHARGES WAS ESTIMATED FOR THE ENTIRE YEAR AT RS. 24000/- P ER MONTH MULTIPLIED BY 12 MONTHS = RS. 2,88,000/-. THE SAME WAS ADDED AS SUPPRESSED RECEIPTS ON ACCOUNT OF LABORATORY CHARGES TO THE TO TAL INCOME OF THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE A.O HAD NOT RAISED A SINGLE QUERY IN RESPECT OF THE LAB CHARGES RECEIVED BY THE HOSPITAL DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE HOSPITAL IS COLLECTING THESE ON ACCOUNT OF LAB CHARGES IN THE BILLS RAISED TO THE P ATIENTS FROM TIME TO TIME. IT WAS SUBMITTED THAT SIMILAR ISSUE WAS RAI SED BEFORE THE LD CIT(A) ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 26 IN THE A.Y. 2002-03 AND THE ENTIRE ADDITION MADE ON ACCOUNT OF LAB CHARGES WAS DELETED BY THE FIRST APPELLATE AUTHORI TY. THE LD CIT(A) FOLLOWING ITS EARLIER DECISION IN THE A.Y. 2002-03 HAS DELETED THE ADDITION MADE ON ACCOUNT OF LAB CHARGES. 37. IN SUPPORT OF THE GROUND, THE LD. D.R. HAS PLAC ED RELIANCE ON THE ASSESSMENT ORDER IN THIS REGARD WHEREAS THE LD A.R. TRIED TO JUSTIFY FIRST APPELLATE ORDER ON THE ISSUE. 38. HAVING GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW, WE FIND THAT IN THE A.Y. 2002-03, THE LD CIT(A) HAS DELETED SIMIL AR ADDITION ON THE BASIS THAT THIS AMOUNT OF RS. 2,88,000/- WAS FULLY RECORDED IN THE BOOKS OF ACCOUNT AND CONSIDERED FOR THE INCOME TAX. THER E IS NO REBUTTAL BY THE DEPARTMENT ON THIS FINDING OF THE LD CIT(A). W E, THUS, DO NOT FIND REASON TO INTERFERER WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. GROUND NO. 4 IS ACCORDINGLY REJECT ED. 39. IN RESULT, BOTH THE APPEALS ARE DISMISSED. 40. TO SUM UP THE RESULTS, ALL THE APPEALS ARE DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH J UNE 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH JUNE, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT II, PUNE 4. THE CIT- (A) II, PUNE ITAS 06 & 237/ PN/2006, 845/PN/2007ETC., DR. DEEPAK RANADE. A.Y.2002-03, ETC., PAGE OF 27 27 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE