TMI Blog2016 (1) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... operation. As such, by placing reliance on the judgment of the Supreme Court in the case of B.A.Balasubramaniam & Bros. Co. v. CIT (1998 (1) TMI 7 - SUPREME Court) , we have no hesitation in confirming the penalty impugned u/s 271(1)(c) of IT Act, 1961. - Decided against assessee. - ITA Nos. 2797, 2798, 2799, 2800 & 2801/Mds/2014 - - - Dated:- 20-11-2015 - Chandra Poojari, AM And G. Pavan Kumar, JM For the Appellant : Shri R Vijayaraghavan, Adv For the Respondent : Shri P. Radhakrishnan, JCIT ORDER Per Chandra Poojari, Accountant Member These appeals by the assessee are directed against different orders of the Commissioner of Income-tax(Appeals) dated 26.8.2014 for the above assessment years. Since, the issue involved in these appeals is common, these are clubbed together, heard together and disposed off by this common order for the sake of convenience. 2. The only common issue in these appeals is with regard to levy of penalty u/s. 271(1)(c) of the I.T. Act, 1961. 3. The facts of the case are that the assessee is a surgeon in profession. For these assessment years, the assessee filed the return of income offering following amount as professional inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the statement the assessee had stated that he was receiving a sum of ₹ 12000/- to ₹ 15000/- from Dr L.Srinivasan for carrying out the Kidney operation of the donors. He has also indicated that he could have done a maximum of about 400 to 450 operations in 7 years period from assessment year 2002-03 to 2008-09. He has also stated that he has to have two assistants to carry out the operation to whom 1/3rd of the money received by the assessee for surgery has been paid. Therefore, the net receipt for these operations would be in the region of ₹ 8000 to ₹ 10000/- per operation. The assessee has included the income derived from these operations also in the regular return of income. 3.5 It was submitted before the lower authorities that for the assessment year 2002-03 and 2003-04 the assessee had received the payment from Dr L.Srinivasan by cheques. The average sum received per operations is ₹ 10000/- to ₹ 15000/- out of which he had spent 1/3rd to pay his assistants. However, the assessing officer has completely ignored the above statements given by Dr L.Srinivasan and the assessee. He has taken the statement given by Dr P. Ravichandran on 29.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 9000/- per case. Against this quantum addition, the department filed appeal against the orders of the CIT(Appeals) and the assessee filed cross-objections before the Tribunal in ITA Nos. 2007 to 2011/Mds/12 and CO Nos. 14 to 18/Mds/2012 for these assessment years. 3.9 After considering the submission of both the sides, the Tribunal vide order dated 18.4.2013 has fixed the number of cases done at MIOT hospital at 120 and 450 cases at Bharathiraja hospital, both together comes to 570 cases and the Tribunal allowed the expenditure of ₹ 12,000/- per case as against ₹ 9000/- allowed by the CIT(Appeals) and re-determined the income of the assessee for these assessment years. 4. It is pertinent to note that on the quantum addition, the finding of the Tribunal in ITA Nos. 2007 to 2011/Mds/12 and CO Nos. 14 to 18/Mds/2012 dated 18.4.2013 is as follows : 22. We have heard the rival contentions and perused the orders of the lower authorities. Assessments of both the assessees here, have as its base, the search done in the residential premises of Dr. P. Ravichandran, who was admittedly heading a Nephrology unit, which was inter alia doing renal transplants. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that the initials mentioned against each is PRC only. However, there is no conclusive evidence to show that assessees were always the surgeons, when initial 'PRC' was mentioned. Neither has any evidence been produced by the assessees to show that these were done by a team in which assessees were not part. Similarly assessees have also not produced any record to prove that 104 numbers of transplants were done by them free of cost for M/s.Kidney care Trust. Considering the various difficulties in exactly ascertaining the number of operations done by the assessees at Bharathiraja Hospital, we are of the opinion that an estimate of 450 will render justice. Thus, total number of operations done by the assessees considering both MIOT hospital as well as Bharathiraja Hospital can be taken as 570. Thus, vis- -vis the number of operations done by the assessees, we set aside the orders of the lower authorities below and direct the Assessing Officer to adopt such number at 570 and apportion it in the same ratio as done at table at para 9 above. 23. Coming to the aspect of the fees received by the assessees from Dr. P. Ravichandran, it is not disputed that both assessees had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses at ₹ 9,000/- per case. Amount of ₹ 2,000/- estimated by the Ld. CIT(A) as payment to two staff nurses per operation is on the lower side. In the facts and circumstances, we are of the opinion that expense of ₹ 12,000/- per case can be considered reasonable. Orders of the authorities below are set aside on this aspect and the Assessing Officer is directed to recompute the income of respective assessees considering the expense for each transplant at ₹ 2,000/-. Cross objection of the assessees on this issue is partly allowed. 5. After this, the Assessing Officer took up the case for levy of penalty u/s.271(1)(c) of the Act and he levied penalty for the assessment years under consideration is as under : A.Y. Penalty 2003-04 ₹ 4,72,500/- 2004-05 ₹ 2,88,090/- 2005-06 ₹ 1,90,850/- 2006-07 ₹ 3,21,000/- 2007-08 ₹ 2,40,330/- Against this, the assessee went in appeal before the CIT (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies on the donor's kidney and the assessee has also not produced any record to prove the number of kidney transplantation operations done and corresponding fees collected for the same. So, the Tribunal came to the conclusion that it is fair to estimate 120 number of operations were done by the assessee in MIOT Hospital and 450 operations in Bharathiraja Hospital and totally it is estimated at 570 operations. Accordingly, for all these assessment years, it is directed to estimate the number of operations under the prescribed ratio as mentioned by the Tribunal in para 9 of its order and in respect of fees, it was directed to estimate the same at ₹ 22,500/- per person. The ld. AR contended that the conclusion of the Assessing Officer is based on estimation of income and it is not appropriate levy of penalty in these cases. He relied on the decision of the Supreme Court in the case of CIT v. Suresh Chandra Mittal (251 ITR 09). 8. Thus, according to the ld. AR, there was a difference of opinion as regards the estimated income of the assessee. Since the lower authorities and the Tribunal adopted different estimates in assessing the income of the assessee, it could not be sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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