TMI Blog1997 (1) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... come of Rs. 58,580, particulars thereof have not been made available but apparently it consisted of the following: Salary Rs. 34,820 Profession Rs. 28,323 Interest Rs. 22,637 -------------------------- Rs. 85,780 Less : Deduction under section 80C Rs. 27,200 -------------------------- Total Income Rs. 58,580 4. The assessee did not maintain any books of account for income from profession of Rs. 28,323. It was stated that the claim for the receipts and expenses were purely on estimate basis. In the circumstances, the Assessing Officer took aid of a Statement on oath, recorded on 6-7-1990 where the assessee had deposed as below: "4. Que. : How many patients do you see everyday and how many operations do you attend every day ? Ans. : I see on an average three to four new cases per day and one to two patients I operate everyday. 5. Que. : What are your fees ? Ans. : My consultation fees for new patient for 1988-89 was Rs. 30 per patient and now it is Rs. 50 per patient and old patients are not charged unless they come after a gap of four weeks. Major operations I charge Rs. 1,500 and the minor ones are treated for Rs. 120, 130 and the charges are fixed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessment year 1991-92 where the assessee had disclosed income from profession of Rs. 40,479 and an addition of only Rs. 3,274 has been made, which has been reduced to Rs. 2,500 in the first appeal. He submitted that this was the estimate made for assessment year 1991-92, for which the statement dated 6-7-1990 was relevant and the estimate for assessment year 1989-90 should not be sustained. 10. The learned councel further submitted that the income from profession of Rs. 15,817, shown for assessment year 1988-89, and Rs. 31,226, for assessment year 1990-91, had been duly accepted by the Assessing Officer. 11. It was also stressed by him that the assessee was a Urologist Surgeon and there was plenty of competition in this field. It was not possible to have a high professional income in this field with such a competition in the small place of Patna. For all these reasons he submitted that at most a nominal addition should be confirmed. 12. The learned Departmental Representative (D.R.), on the other hand, supported the assessment order and the order of the CIT(Appeals). He emphasised that it was not necessary to issue a notice under section 131 for recording of statement on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any effort of his own to ascertain the number of patients for consultancy or for operations. A little effort in this direction by him would have been very fruitful. In its absence we are of the opinion that the estimate made is excessive. The following reliefs are, therefore, directed to be given. 18. In consultancy charges, the rate of fee per patient is already taken as per statement. The numbers of working days in a month have not been specifically disputed before us. We confirm these figures. However, the number of new patients per day will be reduced from 10, as estimated by the Assessing Officer, to only 5 (no. given by the assessee was 3 to 4). 19. Similarly, the fees taken for major operation at Rs. 1500 is the same as per the assessee's statement and number of working days is taken as 24 which are confirmed. However, in respect of one patient every day, we direct that the estimate should be one patient for two days. The estimated receipt will, therefore, be reduced to half. 20. For minor operations, the fees was stated to be Rs. 120 to Rs. 130 whereas a fixed sum of Rs. 130 per operation has been estimated by the Assessing Officer. This will be reduced to an average ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 6-7-1990 when he appeared before the Assessing Officer in the inquiry for funalising the assessment for the assessment year 1989-90 which is the year under appeal is not binding on Assessing Officer. This contention of the assessee's counsel has, therefore, to be rejected, as being without any foundation. 2. I am unable to agree with the view of my learned Brother in para 17 that the estimate made by the Assessing Officer is excessive, particularly in relation to the estimate relating to the professional receipts in respect of major operations. My learned Brother has considered that major operation of one patient for two days could be reasonable. In my view the estimate made by the Assessing Officer in respect of professional receipts for major operations is quite fair and reasonable and not excessive. The assessee in his oath statement recorded on 6-7-1990 while answering question No. 4 has stated that he examined on average 3 to 4 new cases per day and one to two patients were being operated everyday. The oath statement of the assessee recorded on 6-7-1990 also does not lose its significance or validity on the specious plea of the assessee's A.R. that the assessee on 6-7-1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to the operations then the same is charged and collected from the patients operated. Such expenditure does not go to reduce the income of the Surgeon. 3. It is common knowledge and well known fact that any expenditure on medicines for post operative treatment are also charged and billed to patients, account and collected in most cases in advance and in rare cases at the time of discharging and relieving persons operated from the Nursing Home. No visiting Surgeon in a Nursing Home incurs any expenditure for performing any operations. There was thus no need for the Assessing Officer to give deduction of 40 per cent from the receipts from performing operations both major or minor. 4. The Assessing Officer, in my view, has not conducted the enquiry at the assessment stage in serious, effective and meaningful manner. Quite often, these days we come to know that Kidney transplant are being done by Urosurgeon who charge exorbitant fees for such Kidney transplant cases. Had the Assessing Officer taken pains and been little diligent and serious and examined the operation register; case sheets maintained by the Nursing Home and the anaesthetics register of the operations perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and request the Hon'ble President accordingly. Point For Reference: "Whether, on the facts and in the circumstances of the case, the estimate of income of the appellant by the Assessing Officer in a sum of Rs. 4,32,000 from major operations is fair and reasonable as held by the Judicial Member or whether it requires to be reduced by half 50 per cent as held by the Accountant Member ? THIRD MEMBER (ORDER) Per Shri G.D. Agrawal, A.M. --- There was difference of opinion between the members who disposed of this appeal. Following point of difference is referred to me by the Hon'ble President under section 255(4) of the Income-tax Act, 1961. Point For Reference: "Whether, on the facts and in the circumstances of the case, the estimate of income of he appellant by the Assessing Officer in a sum of Rs. 4,32,000 from major operations is fair and reasonable as held by the Judicial Member or whether it requires to be reduced by half 50 per cent as held by the Accountant Member." 2. The facts of the case are that the assessee is a reputed surgeon of Patna Medical College, Patna. He was also examining and operating patients in a private nursing home, named as Jeewak Saly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t one per day to be taken as one operation in every two days. (c) For Minor operation fee charged is to be reduced to Rs. 125 from Rs. 130 estimated by Assessing Officer. Except above, adjustment, remaining working of Assessing Officer was upheld. 5. The learned J.M., except for reduction in receipt from Major operation, agreed with the order of learned A.M. He was of the opinion that the estimate of professional receipt from Major operations worked out by the Assessing Officer in a sum of Rs. 4,32,000 is quite fair and reasonable and not excessive or high. He was also of the opinion that the Assessing Officer has been very lenient in giving 40 per cent deduction towards expenditure from receipts from operation charges both Minor and Major and the assessee is thus not entitled to 50 per cent relief as given by learned A.M. Thus the only point of difference is with regard to estimation of receipt from Major operation. 6. At the time of hearing before, me, learned counsel for the assessee argued at length. His arguments can be summarised as under :--- (a) The assessee is a associate professor in Patna Medical College. In addition to his salary income, he has income from p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer had right to make best judgment assessment. After accepting that the Assessing Officer had right to complete assessment, to the best of his judgment, learned A.M. was not justified in interfering with the estimate made by him Assessing Officer. (f) In view of above, she submitted that the order of the learned J.M. be upheld. That assessment made in preceding and subsequent years is not relevant, for determining income of this year, because every year is a separate and independent of each other. 8. I have carefully considered arguments of both the sides and have perused the material placed before me. The only issue before me is with regard to the estimation of receipt from Major operation. The assessee is a surgeon and associate professor in Patna Medical College. In addition, he also derives income from profession by way of consultation and operation in private nursing home. The assessee has shown net income of Rs. 28,323 from profession, The Assessing Officer estimated the some at Rs. 3,55,968. Detailed working of which is given in para 3. However, here I am concerned only with estimate of receipt from Major operation. The Assessing Officer has worked out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not brought on record any evidence to establish that assessee conducted one Major operation every day. In the absence of any direct evidence, we have to depend on fair estimate only, based on surrounding circumstances. The assessee is in full time employment as a associate professor in Patna Medical College. A person in full time employment, cannot be presumed to be conducting one Major operation every day in addition to two Minor operations. Moreover the assessed income of the assessee in the preceding subsequent cars, is certainly a guide, when estimate is to be made, comparative position of returned assessed income, as given by assessee is as under :--- Assessment Income from profession Income from Remark year shown profession assessed 1988-89 Rs. 15,817 Rs. 15,817 --- 1989-90 Rs. 28,321 Rs. 3,55,968 under appeal 1990-91 Rs. 31,226 Rs. 31,226 1991-92 Rs. 40,479 Rs. 43,7.53 CIT(Appeals) reduced addition to Rs. 2500 from the above chart it is clear that except for the year under appeal, assessed income of the assessee was between Rs. 15,817 to Rs. 43,753. In the year under consideration, income from profession, after the relief allowed by learned A.M. w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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