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2015 (10) TMI 1763 - JHARKHAND HIGH COURT

2015 (10) TMI 1763 - JHARKHAND HIGH COURT - TMI - Addition on undisclosed income - unexplained expenditure - evidence found during the course of search under Section 132 - ITAT deleted the addition - Held that:- Assessing Officer has committed an error in calculation of income of the respondent and the additions have been made on the basis of presumption and surmises and without any evidences on record. In the registers, which were seized bearing No. TKS-1 to TKS-12, some amount has been mention .....

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mber of patients also for two assessment years i.e. 1995-96 and 1996-97 as 1000. The Assessing Officer has also presumed the average rate of ₹ 2000/- per case, on the basis of cash memo seized for broken period running from 1st April, 1997 to 21st October, 1997. For this broken period the total receipt comes to ₹ 10,20,600/- and the total number of cases were 541 and, therefore, average comes to ₹ 2000/- per patient. Thus, the rate which was found out by the Assessing Officer i .....

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a Choudhary, Adv, Mr. Amrita Sinha, Adv JUDGMENT Per D N Patel, J 1. This appeal has been preferred by the Commissioner of Income Tax, Ranchi, against the judgment and order dated 13th April, 2006, passed by the Income Tax Appellate Tribunal, Ranchi Circuit Bench, Ranchi in I.T. (SS) No. 13/Pat/2004 for the block assessment year running from 1st April, 1987 to 27th October, 1997, whereby, the order passed by the Commissioner of Income Tax (Appeals), Jamshedpur, dated 30th October, 2003, has been .....

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the assessment year 1990-91 addition of ₹ 28826/- was made on the basis of cash memos, which were seized and marked as TKS-53, 54, 55, 56, 57, 59 and 60. Likewise, details of other years and the period are mentioned in para 6 of the order, passed by the Assessing Officer dated 29th October, 1999. It further appears from the facts of the case that on the basis of the registers, which were seized from the Nursing Home being TKS- 1 to 12, it has been pleaded by the appellant that medical trea .....

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s taken at the rate of 20%, which comes to ₹ 22,97,200/-. This amount is added back to the total income of the assessee as an undisclosed income for the block period running from 1988-89 to 1997-98 and for broken period running from 1st April, 1997 to 21st October, 1997. Against these additions made by the Assessing Officer vide order dated 29th October, 1999, appeal was preferred by respondent-assessee before the CIT(Appeals). The said appeal bearing No. 205/JSR/2001-02 was allowed by the .....

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dismissed by ITAT vide order dated 13th April, 2006 and, therefore, the present appeal has been preferred by the appellant in which the following substantive questions of law have been raised. (i) Whether, on the facts and in circumstances of the case, the Hon'ble ITAT was justified in upholding the order of the learned CIT(A) who has decided an addition of ₹ 22,97,200/- added as undisclosed income by the A.O. Based on seized materials marked as TKS-1 to TKS-12 and T.K.S.-33, and whet .....

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ing addition of ₹ 6,49,200/- made under Section 69C of the Income Tax Act, 1961, as unexplained expenditure based on seized materials as per provisions contained under Section 132 of the Income Tax Act, 1961? (iv) Whether, on the facts and in circumstances of the case, the Hon'ble ITAT while deleting the additions made properly appreciated the meaning of undisclosed income as defined under Section 158B(b) of the Income Tax Act, 1961? (v) Whether, on the facts and in circumstances of th .....

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terials which is the basis of the assessment order? (vii) Whether, on the facts and in circumstances of the case, the ITAT before passing the impugned order ought to have relied upon the judgment of Hon'ble Supreme Court decided in the case of Commissioner of Sales Tax, M.P. Vs H.M.E. Sujali H.M. Abdulali [90 ITR 271]? While admitting the appeal by a Division Bench of this Court, vide order dated 19th November, 2013 the following substantial questions of law were formulated: Whether on the f .....

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of the discharge of the patients, the total bill amount was paid in cash. These details have been mentioned in para 6 of the order passed by the Assessing Officer. No register was found for the assessment year 1995-96 and 1996-97 and, therefore, for those two years estimated patients were considered as 1000 per annum, as per the order of Assessing Officer. Thus, figure of the total patients came to 5743 and looking to the total receipt of ₹ 10,20,600/- on the basis of cash memo seized for .....

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which comes to ₹ 22,97,200/- and this amount is added back to the income of the assessee. It is submitted that for the assessment year 1989-90 the total receipt from the seized documents comes to ₹ 1,55,445/- and, the assessee has shown ₹ 19565/-in her income-tax return. Thus, from the seized registers and from the income tax return, the difference comes to ₹ 56,880/-. This amount is added to the income of the assessee as an undisclosed income of the assessee. Likewise fo .....

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isclosed income. It is submitted that these additions were, on the basis of the documents and the records, but, these aspects of the matter have not been properly appreciated either by the CIT(Appeals) or by the ITAT. The calculation of the addition is absolutely logical, true, correct and scientific in nature and in consonance with the provisions of the Income Tax Act, 1961. Hence the orders passed by CIT(Appeals) and ITAT deserve to be quashed and set aside and the aforesaid additions which ar .....

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by the patients. Secondly, the number of patients calculated by appellant is also on the basis of presumption and surmises. Moreover, the multiplication of ₹ 2000/- per patient is also baseless and, the same is not supported by any evidence. It is submitted that when any assessment is made for a block period, the said addition should be on the basis of the evidence on record and on the basis of the documents seized, but, in the facts of the present case, from the seized documents, these ad .....

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f the payment made to others for medicines etc. Whatever is paid by the patients is not an income of the respondent-assessee. Same is the logic regarding the addition for assessment year 1990-91 at ₹ 28826/- as well as for addition at ₹ 74341/- for assessment year 1992-93. It is thus, submitted that this appeal may not be entertained by this Court, because additions cannot be made by the Assessing Officer on the basis of presumption and surmises and without any basis of facts, for wh .....

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isters, which were seized bearing No. TKS-1 to TKS-12, some amount has been mentioned, which is received by the respondent assessee. The Assessing Officer has presumed that still further amount must have been paid by the patients, in cash. There is no evidence taken by the Assessing Officer, by examining any of the patients that he has paid any amount, in cash, over and above what is stated in the register. Not a single patient has been examined by the appellant for any of the block years or for .....

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