Commissioner of Income Tax Ap Hyd v. Dr Evita Fernandez

Telangana HC25 Feb 2014RC/75/2001

Case brief

AI extract

What is this about?

The High Court was referred a case to determine if the deletion by the Tribunal of an estimated income addition of Rs.8 lakhs was legal or perverse. The Court held the Tribunal was justified in deleting the addition as it was based on surmises without concrete evidence, and the question referred was declared based purely on facts.

What did the court decide?

The referred case is rejected declining to answer the question as it is based purely on a question of fact.

Commissioner of Income Tax Ap Hyd Vs Dr Evita Fernandez — Income Tax | Telangana HC (2014)

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HON'BLE SRI JUSTICE G.CHANDRAIAH

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HON’BLE SRI JUSTICE CHALLA KODANDA RAM

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REFERRED CASE No.75 OF 2001

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ORDER:- (per Hon’ble Sri Justice Challa Kodanda Ram)

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At the instance of the Revenue, below mentioned question of law has been referred for the opinion of this Court which arises from the order of the Tribunal dated 11.12.1996 in I.T.A.No.343/Hyd/1996, for the assessment year 1991-92.

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“Whether on the facts and circumstances of the case, the deletion of the entire estimated income of Rs.8 lakhs made by the Assessing Officer on account of the alleged suppression of receipts from out-patients/consultation fee is sustainable in law and whether the finding reached by the Tribunal can be characterized as perverse and irrational?”

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2. The assessee is a leading Gynecologist running a maternity hospital. There was a survey conducted in the premises of the assessee and statements were recorded. Certain books of accounts were also impounded. Assessing Officer found that the assessee was not maintaining any books of accounts. She was also not maintaining any register showing the receipts of consultation fees from patients. During the course of hearing, the assessing officer also recorded a statement of the assessee and on the basis of the said statement, the Assessing Officer estimated a yearly income at Rs.9,00,000/-. The assessee disclosed the receipts from out patients as only Rs.1,33,000/-. A sum of Rs.8,00,000/- was added as undisclosed income. When the matter was carried in appeal, the appellate authority confirmed the same. In further appeal, the Tribunal had come to the conclusion that there was no material whatsoever for the assessing officer to arrive at a figure of Rs.8,00,000/- as the collections from the out patients except the guess work which has been made by the assessing officer.

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3. Heard Sri S.R. Ashok, learned standing counsel appeared for the Revenue and Sri K.K. Viswanatham, learned counsel appeared for the assessee.

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4. A reading of the order dated 11.12.1996 of the Tribunal would disclose that there was absolutely no material whatsoever based on which even a prima facie conclusion can be drawn by the assessing authority come to a conclusion that an amount of Rs.8,00,000/- was received by the assessee from the out patients. It is not in dispute that the assessee also has a maternity hospital and receipts are being shown with respect to the maternity hospital. The assessee’s income for the assessment years 1991-92 was Rs.1,82,450/- and for 199293 Rs.1,33,650/-. It may be useful to extract the para of “Estimation” from the Assessment Order to explain as to how the figure of Rs.8,00,000/- was arrived at by the assessing officer in the assessment order:-

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“Estimation:

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As per the statement given by the assessee at the time of survey and subsequently for the asst. year 1992-93 that she saw 75 to 100 patients per day, statement recorded on 23.1.1995 shows minimum number of patients per day was 60. In a month excluding Sundays total number of patients will be 1560. Out of this reduced 3% to 4% patients from whom no consultation fee was charged. Minimum number of patients who paid consultation fee, in a month, would be about 1500/-. The average consultation fee charged Rs.50/- (as the charges anywhere between 45 to 60 during that year.) Hence the yearly income from O.P. is as under:-

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1,500 X 50/- . Rs.75,000/- per month

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75,000 X 12 .. Rs. 9,00,000/- yearly income.

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Relating to this Rs.9 lakhs, conservative estimate, the assessee had shown O.P. receipt of 1.33 lakhs only, for the relevant asst. year 1992.93. This shows there is suppression of receipt under the head O.P. at least to the tune of Rs.8 lakhs.”

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5. Except the statement recorded at the time of survey, there is no other basis for the

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assessing officer which was confirmed by the first appellate authority to arrive at the said figure of Rs.8,00,000/-. In that view of the matter, as rightly contended by the learned counsel for the assessee that the entire conclusion drawn by the assessing officer being on the surmises and conjunctures and in the absence of any concrete evidence even remotely suggesting the figure of Rs.8,00,000/- having been received by the assessee, the Tribunal was justified in ordering deletion of the addition as a suppressed collections. Inasmuch as the order of the Tribunal is based on the appreciation of facts on record and there being no other material placed before us, notwithstanding the fact that a question of perversity and irrationality has been raised, we have no other option other than rejected the question and answering the same in favour of the assessee and against the revenue.

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6. Accordingly, the Referred Case is rejected declining to answer the question as the same is based purely on question of fact. No order as to costs. Miscellaneous Petitions, if any pending, in this referred case shall stand closed.

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_____________________ G. CHANDRAIAH, J

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____________________________ CHALLA KODANDA RAM, J

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Date: 25.02.2014. Gk

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HON'BLE SRI JUSTICE G.CHANDRAIAH

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HON’BLE SRI JUSTICE CHALLA KODANDA RAM

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REFERRED CASE No.75 OF 2001

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Date:25.02.2014

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Gk.

Commissioner of Income Tax Ap Hyd v. Dr Evita Fernandez

Case brief

What is this about?

What did the court decide?

Commissioner of Income Tax Ap Hyd v. Dr Evita Fernandez

Case brief

What is this about?

What did the court decide?

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