DR DEEPAK ARJUNDAS, CHENNAI V. ACIT , CHENNAI

ITA 924/CHNY/2022

AI Insights

The case involves Dr. Deepak Arjundas, a neurologist, who appealed against the orders of the Commissioner of Income Tax (Appeals) and the Assessing Officer, which pertained to the reassessment of his income for the assessment years 2011-12 to 2016-17. The reassessment was based on data obtained from a search and seizure operation at Apollo Hospitals, where Dr. Arjundas was a consultant. The Assessing Officer added a sum of Rs.5,52,155 to Dr. Arjundas's income, alleging that he had received unaccounted professional fees. The Tribunal found that the additions were made without proper verification and were based solely on the statement of a third party and unverified data, which did not meet the legal standards for such additions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128024 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-03-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 01-11-2022
• Other Referred Cases: Vasudev Fatandas Sawlani Vs Santosh Kumar, Raymond Woolen Mills Ltd. v. ITO And Others, Dr.Srinivasulu Reddy Ponnaluru v. ACIT, Dr.Thiruvengadam Prithviraj v. ACIT, M/s.Andaman Timber Industries Vs. Commissioner of Central Excise, Kolkatta-II, CIT vs Odeon Builders (P) Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Search and seizure; Principle of natural justice; Tangible material; Validity of assessment; Reason to believe; Reassessment proceedings; TDS; Set aside
• Section: 64; 13

Judgement Text

आयकर अपील सं./ITA Nos.924 to 929/Chny/2022 िनधा रण वष /Assessment Years: 2011-12 to 2016-17 Dr.Deepak Arjundas, No.228-A, Kilpauk Garden Road, Chennai-600 010. v. The Asst. Commissioner- of Income Tax, Non-Corporate Circle-10(1), Chennai. [PAN: AAFPD 1050 N] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Mr.S.Sundaraman, CA यथ क ओर से /Respondent by : Mr.P.Sajit Kumar, JCIT सुनवाई क तारीख/Date of Hearing : 08.03.2023 घोषणा क तारीख /Date of Pronouncement : 15.03.2023 आदेश / O R D E R PER BENCH: This bunch of appeals filed by the assessee are directed against separate but identical orders of the Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi, dated 05.09.2022, 06.09.2022 & 23.09.2022, and pertains to assessment years 2011-12 to 2016-17. Since, the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off, by this consolidated order. आयकर अपीलीय अिधकरण, ’सी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी मंजूनाथा .जी, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER ITA Nos.924 to 929/Chny/2022 :: 2 :: 2. The assessee has, more or less, raised common grounds of appeal for all the assessment years. Therefore, for the sake of brevity, grounds of appeal filed for the AY 2011-12, are re-produced as under: 1. The Assessing Officer (AO) erred both in law and in the facts of the case in making an addition of Rs.5,52,155/- u/s 28 of the Act, based on unverified data obtained in search and seizure proceedings in which the Appellant was never a part of. 2. The AO erred in reopening the assessment without any tangible material and based on a search and seizure operations of a third party in which the Appellant was never a part of. 3. The AO presumed that the data received from the Investigation Wing is correct and complete - even though the person from whom the information was obtained did not authenticate it as correct and complete. 4. The AO erred in not appreciating the fact that mere receipt of information does not lead to reason to believe that income has escaped assessment, for the incomplete or unverified information cannot lead the AO to neither cause nor justification or formation of reason to independently believe that income has escaped assessment. 5. The AO erred to notice that the unverified data obtained by the investigation wing of the income tax department in a case not related to the Appellant cannot lead to a live link between the material coming to the notice of the AO and the formation of belief regarding escapement of income, 6. The AO erred in not considering the fact that the Appellant was only a visiting doctor to M/s.Apollo Hospitals Enterprises Limited, Chennai ("Apollo") and even according to Apollo they do not have a list of patients treated by them, 7. Even assuming the data provided by Apollo is to be considered as information, the data provided by Apollo was totally incomplete, for the Appellant the data does not contains details of patients coming for the second visits/ patients referred by the other doctors in Apollo, hospital staffs, colleagues and their family members, government officials, VIPs, friends and relatives for which the Appellant does not collect any fess as per the guidelines of Apollo. Further, the appointments cancelled by the Appellant and by the patients have not been considered by the AO, 8. The AO erred in not considering the fact that in the case of the Appellant, patients pay the consultancy fees to Apollo and Apollo in turn pays to the Appellant through banking channels after deduction of TDS (by Apollo)- such receipts has been fully accounted by the Appellant and also offered to tax. 9. The AO erred in not appreciating the fact that the Appellant is following cash basis of accounting wherein the professional receipts should be received by the Appellant (and not by any third party) for the same to be taxed in the hands of the Appellant. 10. The Appellant In the light of the above prays that the reassessment proceedings be annulled and the addition of Rs.5,52,155/- made by the AO in the assessment be deleted. 3. The brief facts of the case are that the assessee Dr.Deepak Arjundas is a Medical Practitioner (Neurologist) had filed his return of income for the AYs 2011-12 to 2016-17, u/s.139(5) of the Income Tax Act, 1961 (in short ITA Nos.924 to 929/Chny/2022 :: 3 :: “the Act"). The cases have been, subsequently, re-opened u/s.147 of the Act, for the reasons recorded, as per which, income chargeable to tax had been escaped assessment on account of non-disclosure of certain professional receipts received from M/s.Apollo Hospitals, Chennai. Therefore, notice u/s.148 of the Act, was issued on 26.03.2018 and duly served on the assessee. The cases were taken up for scrutiny and during the course of assessment proceedings, the AO noticed that a search and seizure operations u/s.132 of the Act, was carried out on the Apollo Group of Hospitals, Chennai, on 05.01.2016. During the course of search, it was noticed that the assessee was working for M/s.Apollo Hospitals, as Consultant and received professional charges. It was further noted that the assessee charges fee separately which was not accounted in the books of the hospitals. A statement of oath of the Manager (Operations) Ms.Subhadra.G, was also recorded u/s.132(4) of the Act, who has confirmed Out Patients consultation fees collected directly by the Doctors and the same was not accounted in the books of accounts of the Hospitals. Further, related data of Out Patients who were seen by the Consultants along with fees structure of each Consultant over the years was obtained and analyzed. Based on the information collected during the course of search, the AO opined that although, the assessee has received consultation fees from M/s.Apollo Hospitals in cash as well as cheque, but has not offered professional fees received in cash. Therefore, the AO called upon the assessee to explain ‘as to why’ additions should not be made ITA Nos.924 to 929/Chny/2022 :: 4 :: towards professional fees received from M/s.Apollo Hospitals, Chennai. In response, the assessee submitted that he has received professional charges from M/s.Apollo Hospitals, in cheque after deduction of necessary TDS applicable as per law, and the same has been accounted in his books of accounts. Therefore, submitted that the question of making additions towards professional charges received from M/s.Apollo Hospitals, on the basis of Out Patients data, does not arise. The AO, however, was not convinced with the explanation furnished by the assessee and according to the AO, although, the assessee has received a sum of Rs.11,01,911/- as professional charges from M/s.Apollo Hospitals, but has offered a sum of Rs.5,49,756/- only in his return of income filed for AY 2011-12. Therefore, difference of Rs.5,52,155/- has been treated as income of the assessee u/s.28 of the Act. 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee challenged re-opening of assessment on the ground that there is no live nexus between reasons recorded for re-opening of assessment and information with the AO which is evident from the fact that the AO has formed reasonable belief of escapement of income on the basis of statement recorded from Manager (Operations) of M/s.Apollo Hospitals without independent verification of return of income filed by the assessee to ascertain escapement of income. The assessee had also challenged additions made towards difference between professional charges received and offered by the assessee as ITA Nos.924 to 929/Chny/2022 :: 5 :: income on the ground that no addition can be made on the basis of statement of the third party when the assessee has explained and also reconciled professional charges received from M/s.Apollo Hospitals, to his books of accounts. The Ld.CIT(A) after considering relevant submissions of the assessee and also taken note of various facts opined that re-opening of assessment based on reasons recorded by the AO is valid, because, there is a fresh tangible material in the position of the AO to form reasonable belief of escapement of income. As regards addition towards professional charges, the Ld.CIT(A) held that the assessee could not explain ‘as to how’ professional charges to be received from M/s.Apollo Hospitals, has been accounted in his books of accounts with necessary evidences. Therefore, rejected arguments of the assessee and sustained additions made by the AO towards professional charges. The relevant findings of the Ld.CIT(A) are as under: 6. Decision in appeal: 6.1 I have considered the facts and circumstances of the case submission of the appellant and perused the order u/s.143(3) r.w.s.147. Ground of appeal 1 is general in nature and does not require separate adjudication. 6.3 As per the second ground of appeal the appellant challenged the reopening of assessment proceedings u/s.147/148 of the Act on the ground that assessment was reopened "without any tangible material and based on a search and seizure operations of a third party in which the Appellant was never a part of." The assessment order has been perused and it is seen that the reason for reopening is on the ground that the appellant had not shown the consultation fees collected from patients seen through Apollo Hospital which information was collected through search proceedings on Apollo Hospital on 5.01.2016. In para 3.1 of the order the AO has stated that based on the data received from the Investigation Wing it was seen that the appellant had received consultation fees of Rs.10,42,300/- from Apollo Hospital which was prima facie not accounted for in his return for AY 2011-12. On the basis of this information the AO had reason to believe that income had escaped assessment and was therefore justified in reopening proceedings under section 147. In this regard reliance is placed on the case of Vasudev Fatandas Sawlani Vs Santosh Kumar, 2018-TIOL-2305-HC-AHM-IT, of Gujarat High Court where in the appellant’s writ petition was dismissed by the Hon'ble court by holding that when issuing notice for re- opening assessment, the AO is only required to show reasonable belief that income escaped assessment & is not required to establish the same beyond reasonable doubt. Similarly, in ITA Nos.924 to 929/Chny/2022 :: 6 :: the case of Raymond Woolen Mills Ltd. v. ITO And Others, the Hon'ble Supreme Court [1999] 236 ITR 34 (SC)/[1999] 152 CTR 418 (SC), held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. Similarly, in the case of Raymond Woolen Mills Ltd. v. ITO And Others, the Hon'ble Supreme Court [1999] 236 ITR 34 (SC)/[1999] 152 CTR 418 (SC), held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. Accordingly, this g/mmd of appeal is dismissed. 6.4 Grounds of appeal 3 to 10 pertain to the addition of Rs.5,52,155/- on account of undisclosed consultation fees and are adjudicated together. Before proceeding further the order of the AO is reproduced below for ready reference:- “The above submissions of the assessee have been considered carefully. The objections raised by the assessee for reopening the case were disposed off vide order dated 24.12.2018”. 3.4 During the course of proceedings, the list of outpatients for whom appointment was provided by the doctor and also later consulted, was obtained from M/s. Apollo Hospitals. Subsequently, information was collected from the present Assessing Officer of M/s. Apollo Hospitals, which had provided the no. of patients consulted and copy of sworn statement recorded from Smt. G. Subhadra, Manager (Operations), and Outpatient. In the sworn statement, Smt.G. Subhadra provided hard copy of fees charged by the doctors who were doing private consultation in Apollo Hospitals from 2012 onwards. The data included the name of the patient, appointment date and time taken, visit time and concluding time which was separately maintained for each doctor. Further it was stated that the doctors are free to charge Outpatient fees based on their experience and credentials. They have provided the details of out-patients consulted by the doctor during the A.Y.2011-12 to A.Y.2016-17 as per the appointment module in CD format. She also confirmed such fees collected by the doctors directly are not accounted in the books of M/s. Apollo Hospitals. The data as obtained from the hospital was provided to the assessee for his information. The total consultation charges were worked out as under: FY 2010-11 Fee per patient 700 for new patients & 500 for review patients Total consultations 1489 Status -consulted 990 (436 new patients + 554 review patients) Status – not consulted 499 Total fees received as consultation Rs.10,42,300/- (being 700 x 1489) Restricted to Rs.5,82,200 (being 436 x 700 + 554 x 500) 3.5 It is seen from thesubmissions that professional fees towards consultations from M/s.Apollo Hospitals for the AY 2011-12 offered by the assessee is Rs.5,49,756/- and all of such payments received were after deduction of TDS. The total receipts as arrived by this office is as under: Professional receipts with TDS from Apollo 5,19,711 Receipts without TDS from Apollo 5,82,200 Total Receipts to be shown as per this office 11,01,911 A show cause notice was issued to the assessee on 24.12.2018 giving an opportunity to explain the above difference. Since the assessee has not submitted any reply to the above ITA Nos.924 to 929/Chny/2022 :: 7 :: said show cause, it is presumed that the assessee has nothing further to state and assessment is completed by adding Rs.5,82,200/- to the total income as under: Total receipts to be shown as per this office Rs.11,01,911 Total receipts as per assessee’s letter Rs.5,49,756 Difference (Addition Now) Rs.5,52,155 4. Hence, after verification of all the details submitted the assessment is completed accepting the returned income as below: Income admitted Rs.1,54,78,586 Addition: Professional income u/s.28 (Para 2.5) Rs.5,52,155 Assessed income Rs.1,60,30,741 6.5 The submissions of the appellant have been perused. The appellant’s objections that the search of the Apollo Hospitals was unrelated to him and the information gathered during the search could not be used in his case, is not acceptable. It is a fact that the appellant was a consultant at Apollo Hospital and the data regarding the patients seen by him gathered from the hospital is attributable to him. Only for the reason that his statement was not recorded as a part of search proceeding it cannot be accepted that based on the information arising from the search, assessment proceedings could not be initiated against him. The appellant’s objections to the reliability of the data gathered from the hospital records is also not acceptable since all the information is computer based and retrieved during search proceedings and it cannot be held that the data is not genuine. The appellant's claim that the search was held on 5.1.2015 and the data was collected on 7.1.2016 i.e. after a year and accordingly it was unreliable, is incorrect. As noted by the AO the search was held on 5.1.2016 and the data collected from the hospital was a part of the search proceedings. 6.6 Coming to the appellant's contention that there is no basis for the AO estimating the consultancy fees for new patients at the rate of Rs.700/- and for old patients @ Rs.500/-; there is some truth in it. In the statement of Ms. Subhadra G., Manager (operations), Apollo Hospital the figure of Rs.700/- has not been mentioned anywhere. In fact in reply to question no. 6 she mentioned that the slab for OPD consultation fees was between Rs.450/- to Rs.500/- and there is no possibility for any doctor to charge above this rate. She also stated that she took over the job of managing outpatient services in the year 2012 and has no personal knowledge of the fees charged by the Doctors prior to October, 2012. In the assessment order, the AO has stated that the hospital provided the data which included the name of the patient, appointment date and time taken, visit time and concluding time which was separately maintained for each doctor. Further it was stated that the doctors are free to charge Outpatient fees based on their experience and credentials. But no detail has been given regarding the consultation fee of Rs.700/-. In view of the appellant's submissions and the statement of the Manager (Operations) it would be appropriate to calculate the consultancy fees earned by the appellant @Rs.500/-. 6.7 On the issue of the correct number of patients seen by the Doctor, the AO has estimated that out of total consultations of 1489 the number of patients who actually received consultation were 990 (436 new patients and 554 review patients). The appellant in the summary provided in the paper book has stated that out of 1489 patients, 745 patients did not get consultations for some reason or the other and only 744 patients were provided consultancy services. From the breakup provided, it is seen that the appellant has deducted 245 patients from the total number for the reason that the time as per the computerized appointment data sheet is shown as 12 AM i.e. midnight and hence, indicated an invalid appointment. The difference between the number calculated by the AO of 990 and the appellant’s 774 is due to the figure of 245 patients whose appointment time has been shown as 12 AM in the night. The list of 245 patients has been perused and it is seen that the date starts from 01.04.2010 and appointments have been consecutively given on various dates of April 2010. On the other hand, from the details of patients consulted by the Doctor the start date of appointments is 08.06.2010. Further, as per the list of details of OP receipts consulted by the Doctor submitted during appellate proceedings it is seen that the fees has been received from 01.04.2010. The fact that the appellant has himself shown receipt of ITA Nos.924 to 929/Chny/2022 :: 8 :: consultancy fees from 01.04.2010 disproves his contention that the appointments dated 01.04.2010 onwards and showing in time of 12 AM were not actual appointments is not correct. This is also borne out by the fact that even though he has shown receipts in April, May the appointment diary as per his submissions begins from 08.06.2010. It can only be deduced that the receipts pertain to the 245 appointments that the appellant is claiming to be invalid. Based on the discussion above, the appellant's contentions are not acceptable and the actual number of patients to whom consultancy has been rendered is fixed at 990 patients. Accordingly, the difference on account of consultancy fee earned by the appellant from Apollo Hospital but not routed through its books of accounts is calculated at Rs.4,64,955/- and the addition made by the AO is confirmed to that extent. These grounds of appeal are partially allowed. 5. The Ld.Counsel for the assessee submitted that the Ld.CIT(A) erred in upholding the re-opening of assessment without appreciating the fact that the reasons recorded by the AO to form reasonable belief of escapement of income, is having no nexus with information received from M/s.Apollo Hospitals, during the course of search. The Counsel further submitted that mere receipt of information does not constitute a reasonable belief that the income was escaped assessment. Further, incomplete or unverified information cannot buy any justification lead to the AO in forming a reasonable belief independently that income has escaped assessment. He further submitted that the Ld.CIT(A) is also erred in sustaining additions made by the AO towards professional charges u/s.28 of the Act, without appreciating the fact that the assessee has already accounted professional charges received from M/s.Apollo Hospitals, which is subjected to TDS as per law. Further, the assessee had also reconciled Out Patients data collected from M/s.Apollo Hospitals to his books of accounts and explained that for each of the assessment year income accounted by the assessee is more than the amount of professional charges quantified by the AO on the basis of Out Patients data collected from the Hospital. However, the AO and the Ld.CIT(A) simply made addition towards difference amount of ITA Nos.924 to 929/Chny/2022 :: 9 :: professional charges on the ground that the assessee could not explain with necessary evidences, amount received from M/s.Apollo Hospitals has been accounted in the books of accounts. In this regard, he relied upon by the decision of the ITAT Chennai Benches in the case of Dr.Srinivasulu Reddy Ponnaluru v. ACIT, in ITA Nos.673 to 678/Chny/2022 for the AYs 2011-12 to 2016-17, order dated 20.09.2022 and also the decision in the case of Dr.Thiruvengadam Prithviraj v. ACIT in ITA Nos.852 & 853/Chny/2020 for the AYs 2012-13 & 2013-14, order dated 08.09.2021. 6. The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A), submitted that it is a matter on record that the assessee has not accounted professional charges received from M/s.Apollo Hospitals in total. Further, the assessee has not maintained books of accounts as per Rule 6F of the Income Tax Rules, 1962, and thus, in the absence of relevant books of accounts, the AO was right in making addition towards unaccounted professional charges received from M/s.Apollo Hospitals on the basis of evidence collected during the course of search. Further, information collected during the course of search, clearly indicate that there is a difference between income received by the assessee from M/s.Apollo Hospitals and income accounted in the books of accounts for relevant to AY. Therefore, the AO has rightly made addition towards professional charges u/s.28 of the Act, and their orders should be upheld. 7. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The sole basis for ITA Nos.924 to 929/Chny/2022 :: 10 :: the AO to re-open assessment u/s.147 of the Act, is a search and seizure operation conducted u/s.132 of the Act, in the case of Apollo Group of Hospitals on 05.01.2016. During the course of search, it was noticed that the assessee was working for M/s.Apollo Hospitals as Consultant and received professional charges on his own, which was not considered as receipts of M/s.Apollo Hospitals. This fact has been admitted by the Manager (Operations) in her statement recorded u/s.132(4) of the Act. The AO has formed reasonable belief of escapement of income on the basis of statement of Ms.Subhadra.G and data of Out Patients collected from M/s.Apollo Hospitals. According to the AO, the assessee has given treatment to 1489 patients and charged Rs.700/- per patient. Thus, total fees received during the Financial Year relevant to the AY 2011-12 is approximately Rs.10,42,300/-, whereas, the assessee has accounted a sum of Rs.5,49,756/- in his books of accounts as per payment made by the M/s.Apollo Hospitals which was subjected to TDS as per the provisions of the Act. The AO while arriving at the above conclusion has considered the details collected from M/s.Apollo Hospitals and statement of Manager (Operations) and come to the conclusion that there is an escapement of income on account of non-disclosure of professional charges received from M/s.Apollo Hospitals. Thus, made addition towards differential amount of professional charges u/s.28 of the Act. It was the arguments of the assessee before the AO that professional charges received from M/s.Apollo Hospitals, has been accounted in his books of accounts in toto. The ITA Nos.924 to 929/Chny/2022 :: 11 :: assessee further claimed that although the list of Out Patients as per Hospital is more, but in many cases, the patients registered for consultation, but did not turn up. Further, in many cases they come up for follow-up treatment, for which, no fees is charged. In many cases, there are VIP patients and patients come under master health checkup, for which, no separate fees is charged. If you exclude these cases and compute amount received from the list of M/s.Apollo Hospitals, then amount offered by the assessee in his books of accounts is matching with amount quantified by the AO. Therefore, the question of escapement of income, does not arise. 8. We have given our thoughtful consideration to the reasons given by the Assessing Officer in light of arguments of the assessee and we do not ourselves subscribe to the reasons given by the Assessing Officer to make additions towards unaccounted professional charges received in cash for simple reason that except statement of an employee recorded during the course of search, the Assessing Officer has never brought on record any other evidence to support his finding that the assessee has received professional charges in cash from Apollo Hospitals. We further noted that although, there is a difference in professional charges admitted by the assessee in return of income for impugned assessment years, when compared to professional charges quantified by the Assessing Officer on the basis of number of patients registered with the name of assessee in Apollo Hospitals, but the assessee has explained difference and submitted ITA Nos.924 to 929/Chny/2022 :: 12 :: that he had treated certain patients without collecting charges and further, some of the patients though registered with Apollo Hospitals, but did not turn up for treatment. In our considered view, explanation given by the assessee that additions cannot be made on the basis of number of patients registered with Apollo Hospitals appears to be reasonable and bonafide. The Assessing Officer never disproved claim of the assessee with any evidences, but went on to make additions only on the basis of statement of a third party, that too without providing evidences and opportunity of cross examination to the assessee in violation of principles of natural justice. It is well settled principles of law by the decision of the Hon'ble Supreme Court in the case of M/s.Andaman Timber Industries Vs. Commissioner of Central Excise, Kolkatta-II (15 SCC 785), where it was categorically held that not allowing assessee to cross examine witnesses by the adjudicating authority, though statements of those witnesses were made on the basis of impugned order is a serious flaw, which makes the order nullity, inasmuch as it amounted to violation of principles of natural justice, because of which the assessee was adversely affected. Therefore, we are of the considered view that no addition can be made on the basis of statement of the third party alone, without any corroborative evidence. 9. We further noted that an identical issue has been considered by the co-ordinate bench of Chennai Tribunal in the case of Dr.Srinivasulu Reddy Ponnaluru v. ACIT, in ITA Nos.673 to 678/Chny/2022 for the AYs 2011-12 to 2016-17, order dated 20.09.2022, where the Tribunal by considering ITA Nos.924 to 929/Chny/2022 :: 13 :: facts and also very same search operations conducted by the Department in the case of M/s.Apollo Hospitals, opined that no addition can be made on the basis of the third party information gathered by the Inspection Wing of the Department. The relevant findings of the Tribunal are as under: 5. From facts, it emerges that the Doctor is an ENT specialist working as a consultant Doctor in Apollo Hospital. Based on search findings on Hospital, the consultation fee of the Doctor has been estimated and differential fee has been added to his professional income. The whole basis of the addition is statement of Smt. Subhadra G., the relevant portion of which read as under: - Q.3. please provide the consultation fees charged by the doctors using Apollo hospital premises from the period 01-04.2009 to till date? Ans: Total number of doctors is 225 (approx..). The seven doctors of nephrology department are permanent employees of Apollo hospitals working on guaranteed income. Rest of the doctors fix their own consultation fees. I took over the job of managing outpatient services in the year 2012. Out of my own interest I collected the datas regarding consultation fees charged by the doctors. I have provided a hard copy of the fees charged by the doctors in the year 2012 (Annexure 1). I have signed the same and authenticated it. The data was collected in the month of October 2012. We collected the fees charged by the doctors again in June 2015 (Annexure 2). It reflects the changes in fees collected between October 2012 and June 2015. It may not reflect the present fees charged by the doctors. But in 98% of the doctors, the fees may not have changed. Q4. Please provide me the details of number of outpatients treated in this hospital from the year 2009? Ans: I have asked our IT team to collect the details and I will be submitting the same by today as softcopy. Q5 Whether the cash collection is routed through the books of accounts of Apollo hospitals. If not why? Ans: The fees collected by the employed doctors of Apollo hospitals (i.e.) 7 doctors in the nephrology department are booked in the accounts of Apollo hospitals. The fees collected by the remaining doctors are not booked in our accounts. The nonemployee doctors have their discretion to fix their fees. They pay monthly rent of Rs.13,800 p.m. presently. In case of part-time Doctors, the rent is charged on an hourly basis. The fees charged by the non-employee doctors are not booked in the accounts of Apollo hospitals even before I took over. I am continuing the same procedure. Dr. Satyabhama, Director of Medical Services only has the final say regarding the fees of non-employee doctors and whether or not to book the same in the accounts of Apollo hospitals. Q6 Please provide the details of consultation fees received by the doctors for the consultations to patients in Apollo from 01-04-2009 to September 2012? Ans: As per the statement of Mrs. Sashikala, my predecessor, the for OPD consultation fees was between Rs.450-500. There is no possibility for any doctor to charge above this rate but there is no physical evidence available with us as proof. We will be able to provide the list of patients who were offered consultation during the period 01-04-2009 to September 2012 as a soft copy. ITA Nos.924 to 929/Chny/2022 :: 14 :: Upon perusal of above statement, it could be gathered that the Manager (Operations) merely act as data collector and has no idea about the exact fee charged by the Doctor from each of the patient. Further, she is not authorized to collect fees for non-employee Doctors. The fee is directly collected by the assessee’s staff and such fee is not accounted for in the Hospital’s books of account. Such category of doctors has discretion to fix their own fees and they merely pay monthly rent to the Hospital. The fees so collected by them are not booked in the books of Apollo Hospital. The range of fees being charged is only an estimated one and there is no physical evidence available before her. It could also be seen that apart from this statement, there is no corroborative evidence on record to support the working of Ld. AO. The estimate has been made merely on abstract figures. 6. It could also be seen that as per the submission of the assessee all out patients were not charged. The certain category of patients and review patients would not be charged if they visit within 15 days of first consultation. The fee prescribed by Apollo Hospitals for Master Health Check-up patients is Rs.150/- only. This being the case, the assessee Doctor cannot be expected to charge substantially higher amount as considered by Ld. AO and therefore, the estimation as made by Ld. AO could not be upheld. 7. We find that the whole basis of addition is the statement of Ms. Subhadra G. who does not possess any concrete data except abstract figures of number of patients. There is no corroborative evidence to support that so much of fees has been collected by the assessee from the patients. The assessee has also placed on record the certificate issued by Senior Vice-President (Finance) which clearly states that "the out-patient list maintained by the Information Technology Department of Apollo Hospitals includes several types of non-billed or non-charged patients also". The same supports the submissions of the assessee. 8. Pertinently, the assessee is a regular Income Tax Payer and works only in Apollo Hospital. His income averages to more than Rs.50 Lacs per year which could be tabulated as under: - AY Gross Fees as per Profit & Loss Account (Lacs) Gross Total Income Declared (Lacs) Net Taxable Income Declared (Lacs) 2011-12 71.31 45.04 43.89 2012-13 80.90 52.01 51.82 2013-14 92.55 53.85 51.29 2014-15 97.60 60.81 59.51 2015-16 98.48 58.16 56.21 2016-17 88.73 47.55 45.35 Based on above tabulation, it could not be accepted that the assessee would attempt to conceal income as estimated by Ld. AO. The Hon’ble Supreme Court in the case of CIT vs Odeon Builders (P) Ltd (2019) 110 Taxmann.com 64 (SC) has held that no addition can be made on the basis of third-party information gathered by the Investigation Wing of the Department. 9. Considering the facts and circumstances of the case, the impugned additions are not sustainable in law and therefore, we delete the impugned additions for all the years. Though the assessee has taken grounds challenging the validity of assessment proceedings also, however, these grounds have not been urged during hearing before us. Accordingly, no findings have been rendered on these grounds. 10. In this case, on the basis of facts available on record, we find that the basis for re-opening of assessment u/s.147 of the Act, is the statement of Manager (Operations) Ms.Subhadra.G and Out Patients details collected from the said hospitals. If you go through the statement of Ms.Subhadra.G, ITA Nos.924 to 929/Chny/2022 :: 15 :: we find that she does not possess any concrete data about number of patients treated and fees charged by the assessee except abstract figures of number of patients. There is no corroborative evidence to support that the assessee has charged fees from each and every patient as per list submitted by the Hospital. On the other hand, the assessee proved that Out Patients list maintained by the Hospitals, includes several types of non- billed and non-charged patients also. Moreover, the gross-receipts and income declared by the assessee for all these assessment years is over and above the amount of income quantified by the AO from the list collected from M/s.Apollo Hospitals. Therefore, we are of the considered view that the AO is completely erred in making addition towards difference amount of professional charges on the basis of Out Patients data collected from M/s.Apollo Hospitals and statement of Manager (Operations) Ms.Subhadra.G, without any corroborative evidence to suggest that the assessee has received so much professional charges from the Hospitals and further, the same has not been accounted in his books of accounts. Further, the assessee has analyzed Out Patients list given by the Hospitals with his books of accounts and also reconciled the amount of income accounted in his books of accounts for all these assessment years and claimed that income accounted by the assessee from M/s.Apollo Hospitals is more than the amount of income quantified by the AO from the list of Out Patients supplied by the Hospitals. Therefore, we are of the considered view that the AO is completely erred in making addition towards differential ITA Nos.924 to 929/Chny/2022 :: 16 :: amount of professional charges u/s.28 of the Act. The Ld.CIT(A) without appreciating the relevant facts, simply sustained the additions made by the AO and thus, we set aside the order of the Ld.CIT(A) and direct the AO to delete the addition towards professional charges u/s.28 of the Act, for the AYs 2011-12 to 2015-16. 11. In the result, appeals filed by the assessee for all the assessment years are allowed. Order pronounced on the 15 th day of March, 2023, in Chennai. Sd/- ( वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (मंजूनाथा.जी) (MANJUNATHA.G) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 15 th March, 2023. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकर आयु"/CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकर आयु" (अपील)/CIT(A) 6. गाड फाईल/GF