Dr. Salil Kumar Panja, Kolkata V. ACIT, Circle - 55, Kolkata

ITSSA 33/KOL/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7950 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 16-03-2010
• Assessment Year: misc
• Appeal Filed On: 11-11-2009
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: SOUMITRA CHOW DHURY; T K CHAKRABORTY
• Keywords: Gift; Block assessment
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , . ! . '# ) [BEFORE SRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM] ( #$ % $& ) ' / I.T(SS).A NO. 33/KOL/2009 # () *+/ BLOCK PERIOD: 01.04.1997 TO 30.04.2003 DR. SALIL KUMAR PANJA VS. ASSTT. COMMISSIONER O F INCOME-TAX, (PAN-AFTPP 1113 M) CIRCLE-55, KOLKATA. (-. /APPELLANT ) (/0-./ RESPONDENT ) & ( #$ % $& ) ' / I.T(SS).A NO. 35/KOL/2009 # () *+/ BLOCK PERIOD: 01.04.1997 TO 30.04.2003 ASSTT. COMMISSIONER OF INCOME-TAX, VS. DR. SALIL KUMAR PANJA CIRCLE-55, KOLKATA. (-. /APPELLANT ) (/0-./ RESPONDENT ) DATE OF HEARING: 16.11.2011 DATE OF PRONOUNCEMENT: 25.11.2011 FOR THE ASSESSEE: S/SHRI SOUMITRA CHOWDHURY & T. K. CHAKRABORTY FOR THE REVENUE : SHRI NIRAJ KUMAR '1 / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THESE CROSS APPEALS BY ASSESSEE AND REVENUE ARE ARI SING OUT OF ORDER OF CIT(A)- XXXVI, KOLKATA IN APPEAL NO.37/KOL/CIT(A)-XXXVI/AFT PP1113M/2005-06 VIDE DATED 29.09.2009. BLOCK ASSESSMENT WAS FRAMED BY ACIT, CI RCLE-55, KOLKATA U/S. 158BC/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) FOR BLOCK PERIOD 01.04.1997 TO 30.04.2003 VIDE HIS ORDER DATED 27.05.2005. 2. THE FIRST COMMON ISSUE IN THESE CROSS APPEALS IS AS REGARDS TO THE ORDER OF CIT(A) IN RESTRICTING THE UNDISCLOSED PROFESSIONAL FEES. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1 AND REVENUE HAS ALSO RAISED FOLLOWING GROUND: ASSESSEES GROUND NO.1: 1) FOR THAT THE LD. CIT(A) ERRED BOTH IN LAW AND IN FACT BY CONFIRMING THE ADDITIONS OF RS.2,50,000/-, RS.3,00,000/- AND RS.2,00,000/- AMOU NTING TO RS.7,50,000/- AS UNDISCLOSED 2 IT(SS)A 33 & 35/K/2009 DR. SALIL KR. PANJA BLOCK A.Y.01.04.1997 TO 30.04.2003 PROFESSIONAL FEES FOR THE ASSESSMENT YEARS 1998-99, 1999-2000 AND 2000-01 WITHOUT ANY BASIS, VALID REASONS AND LEGAL SANCTION. REVENUES SOLE GROUND: LD. CIT(A) WAS NOT CORRECT IN DIRECTING THE ASSESSI NG OFFICER TO ADOPT UNDISCLOSED PROFESSIONAL FEES AT LOWER FIGURE, THOUGH HE ACCEPT ED THAT THE ENTIRE FEE CHARGED BY THE ASSESSEE WAS NOT PROPERLY ACCOUNTED FOR. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE BRIEF FACTS ARE THAT THERE WAS SEARCH AND SEIZU RE OPERATION U/S. 132 OF THE ACT ON RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 30.04.2003 AND DURING THE COURSE OF SEARCH CERTAIN PERSONAL DIARIES WERE FOUND, INVENTORISED AS SP-1, SP-2 AND SP-3 AND SEIZED. ACCORDING TO ASSESSING OFFICER, FROM THESE DIARIES CERTAIN PROFE SSIONAL FEES COLLECTED FROM PATIENTS DURING 1997, 1998 AND 1999 WERE NOT DISCLOSED IN THE RETUR NED INCOME AND HENCE, THE ADIT AFTER INVESTIGATION, DETERMINED UNDISCLOSED INCOME ON ACC OUNT OF UNDISCLOSED PROFESSIONAL FEE AT RS.36,46,054/- FOR ASSESSMENT YEAR 1997-98 TO 1999- 2000 FALLING IN THE BLOCK PERIOD. THE ASSESSEE HAS FILED COMPLETE CHART OF INCOME ESTIMAT ED BY ADI, BY ASSESSING OFFICER AND FINALLY BY CIT(A) FOR THE BLOCK PERIOD 01.04.1997 TO 30.04. 2003 AS UNDER: SEIZED DIARY PERIOD (ASSTT. YEAR) INCOME ESTIMATED BY ADI (RS.) ESTIMATED BY A.O. (RS.) NO. OF PATIENT ESTIAMTED BY CIT (RS.) SP/1 SP/2 SP/3 1999 (2000-01) 1997 (1998-99) 1998 (1999-2000) 12,64,724/- 11,58,580/- 12,22,750/- 3,46,600/- 3,82,400/- 4,22,600/- 1733 1912 2113 2,00,000/- 2,50,000/- 3,00,000/- 4. THE ASSESSING OFFICER AFTER DETAILED EXAMINATION OF THESE DIARIES DETERMINED THE INCOME AS NOTED ABOVE IN THE CHART AND ASSESSED INCOME AT RS.11,51,600/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO RESTRICTED THE ADDITION ON ESTIMATE BASIS AS UNDER: A.Y. UNDISCLOSED FEES 1998-99 RS. 2,50,000/- 1999-2000 RS. 3,00,000/- 2000-2001 RS. 2,00,000/- RS. 7,50,000/- AGGRIEVED, AGAINST THE SAID ORDER, ASSESSEE AS WELL AS REVENUE BOTH FILED APPEALS BEFORE US. 5. WE FIND THAT CIT(A) HAS RESTRICTED ADDITION BY E STIMATING AND SUPPOSING THE AVERAGE FEE AND APPLIED TO WHOLE OF THE THREE YEARS. NO DO UBT HE HAS POINTED OUT THAT THE DAILY COLLECTIONS NOTED BY ASSESSING OFFICER ARE NOT PERF ECTLY DIVISIBLE BY NUMBER OF PATIENTS EXAMINED ON THAT DAY AND AVERAGE FEE WORKED OUT BY ASSESSING OFFICER IS SQUARELY WRONG AND 3 IT(SS)A 33 & 35/K/2009 DR. SALIL KR. PANJA BLOCK A.Y.01.04.1997 TO 30.04.2003 THE COMPUTATION DOES NOT TALLY WITH THE COMPUTATION OF ADI, BUT HE HAS ALSO NOT COMPUTED EXACTLY ON THE BASIS OF SEIZED DIARIES. HE ESTIMAT ED THE UNDISCLOSED FEE FOR THESE THREE YEARS AT RS.7.5 LACS. NOW, WHETHER ON ESTIMATE BASIS CAN AD DITION BE MADE IN THE BLOCK ASSESSMENT PARTICULARLY WHEN SEIZED MATERIAL IS FOUND. THE AS SESSING OFFICER AS WELL AS CIT(A) AFTER CONSIDERING THE SEIZED DIARIES INVENTORISED AS SP-1 TO SP-3 ESTIMATED THE UNACCOUNTED PROFESSIONAL RECEIPTS, BUT HAS NOT ACTUALLY GONE IN TO ACTUAL DETAILS OF DIARIES. WHEN A QUERY WAS PUT TO LD. COUNSEL FOR THE ASSESSEE, HE FAIRLY AGRE ED THAT A REASONABLE ESTIMATE WILL MEET THE END OF JUSTICE AND FOR THIS, HE STATED THAT NONE OF THE AUTHORITIES BELOW HAVE GONE INTO ACTUAL UNDISCLOSED PROFESSIONAL RECEIPTS EVEN THOUGH MATER IAL WAS BEFORE THE LOWER AUTHORITIES. LD. COUNSEL FOR THE ASSESSEE BEFORE US STATED THAT THE TOTAL ENTRIES RECEIVED IS NOT MORE THAN RS. 2 LACS AND IN THESE ENTRIES SOME CONTENTS ARE MISCELL ANEOUS ENTRIES LIKE BIRTH DAY GIFTS, TELEPHONE NOS., ENTRIES REGARDING VISITS OF PATIENTS ETC. BUT LD. COUNSEL STATED THAT A FAIR AND REASONABLE ESTIMATE WILL BE ACCEPTABLE TO ASSESSEE. ON THE OT HER HAND, THE LD. CIT, DR ALSO FAIRLY CONCEDED THAT A FAIR AND REASONABLE ESTIMATE WILL M EET THE END OF JUSTICE. 6. WE FIND THAT NONE OF THE AUTHORITIES BELOW HAVE GONE INTO DETAILS AND AS ADMITTED BY LD. COUNSEL FOR ASSESSEE THAT THERE MAY BE RECEIPTS TO THE TUNE OF RS. 2 LACS IN THESE DIARIES PERTAINING TO THE PERIOD I.E. ASSESSMENT YEAR 1998- 99, 1999-2000 AND 2000-01. HENCE, IN EVERY ENDEAVOR, WE ESTIMATE UNACCOUNTED PROFESSIONA L RECEIPTS AT RS.2 LACS FOR ENTIRE BLOCK PERIOD INCLUDING THESE THREE YEARS, WHICH WILL MEET THE END OF JUSTICE. ACCORDINGLY, WE SUSTAIN THE ADDITION AT RS. 2 LACS AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. ACCORDINGLY, APPEAL OF REVEN UE IS DISMISSED AND THE ISSUE OF ASSESSEES APPEAL IS PARTLY ALLOWED. 7. THE NEXT ISSUE IN ASSESSEES APPEAL IS AS REGARD S TO THE ORDER OF CIT(A) DISALLOWING THE EXPENDITURE INCURRED BY THE ASSESSEE TO EARN UNDISC LOSED PROFIT CLAIMED IN THE BLOCK RETURN. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. FOR THAT THE LD. CIT(A) ERRED BOTH IN LAW AND I N FACT BY DISALLOWING THE EXPENDITURE INCURRED BY THE APPELLANT AMOUNTING TO RS.63,414/- DURING THE BLOCK PERIOD TO EARN SOME UNDISCLOSED PROFIT, WHICH WAS DISCLOSED IN THE BLOC K RETURN AND TAX WAS PAID THEREON. 8. THE ASSESSING OFFICER WHILE FRAMING BLOCK ASSESS MENT DISALLOWED EXPENDITURE AT RS.57,196/- AGAINST THE UNDISCLOSED INCOME OF RS.63 ,414/-. THE CIT(A) ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER BY STATING THAT THERE CANNOT BE ANY EXPENSES AGAINST SUCH RECEIPTS. WE FIND THAT THE ASSESSEE HAS DISCLOSED THE INCOME FROM THE DEPOSITS MADE IN THE TWO BANK ACCOUNTS, WHICH IS OUT OF INTEREST INCOME AND DIVID END INCOME AND QUA THAT THERE IS NO SCOPE 4 IT(SS)A 33 & 35/K/2009 DR. SALIL KR. PANJA BLOCK A.Y.01.04.1997 TO 30.04.2003 FOR ANY EXPENDITURE AND AT ALL EXPENDITURE CAN BE A LLOWED AT BEST THAT CAN BE10% OF THE RECEIPTS. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALL OW EXPENSES OF RS.6,341/- AGAINST THIS INCOME. THIS ISSUE OF ASSESSEES APPEAL IS PARTLY ALLOWED. 9. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLO WED AND THAT OF REVENUE IS DISMISSED. 10. ORDER PRONOUNCED IN OPEN COURT ON 25.11.2011. SD/- SD/- . ! . '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !#) )) ) DATED :25TH NOVEMBER, 2011 23 (4$ 5 JD.(SR.P.S.) '1 6 / 7'*8- COPY OF THE ORDER FORWARDED TO: 1 . -. / APPELLANT DR. SALIL KUMAR PANJA, 117, VIVEKANANDA ROAD, KOLKATA-700 006. 2 /0-. / RESPONDENT, ACIT, CIRCLE-55, KOLKATA. 3 . 1( ( )/ THE CIT(A), KOLKATA 4. 1( / CIT, KOLKATA 5 . ?@ /( / DR, KOLKATA BENCHES, KOLKATA 0 // TRUE COPY, '1(A/ BY ORDER, $ /ASSTT. REGISTRAR .