TMI Blog2016 (11) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... e and in exercise of our power u/s 254(1) of the Act with a view to render substantial justice to both the parties , we confirm/sustain the addition to the tune of ₹ 7 lacs as undisclosed income in the hands of the assessee as against the addition of ₹ 12,19,055/- sustained by the ld. CIT(A). Thus, the assessee will get relief of addition of ₹ 5,19,055/- as undisclosed income as confirmed/sustained by the learned CIT(A) with the conditions that the assessee will deposit all due taxes and interest accrued thereon as per provisions of the Act on the additions sustained by us within 60 days of the receipt of this order. - I .T.A. No.7617/Mum/2013, I .T.A. No.7618/Mum/2013 - - - Dated:- 14-9-2016 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri Hari Raheja For Thhe Revenue : Shri A. Ramachandran ORDER PER RAMIT KOCHAR, Accountant Member These two appeals, filed by the two different assessees being ITA No. 7617/Mum/2013 ITA No. 7618/Mum/2013, are directed against the two separate appellate orders both dated 24th October, 2013 passed by the learned Commissioner of Income Tax (Appeals)- 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of survey. On verification of the receipt book, the A.O. noted that in many cases there were amounts written as received on the reverse of the receipts , which were higher than the amounts of fees recorded in the receipts issued to the patients. These receipts were impounded u/s 131(3)(a) of the Act vide orders dated 21-12-2004. On comparison of the receipt books with the regular books of accounts maintained by the assessee , the AO observed that there is a difference in amount of ₹ 76,81,210/- which has not been recorded in the books of account. With regard to this, the assessee explained that the inscription written in the reverse side of the receipt indicates that total fees received from the patient on a particular day in all the three entities i.e. Dr. Aniruddha Malpani , Malpani Infertility Clinic and the assessee. It was observed by the AO from the receipt book of Dr. Aniruddha Malpani, that similar amounts have been inscribed as the amount received at the reverse of the receipts. When it was confronted to the assessee , the assessee submitted that similar amounts written on the back side of the receipt of Dr. Aniruddha Malpanai and the assessee proved that the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received the differential amount which has not been recorded in the regular books of accounts. Further, no supplementary evidences has been submitted by the assessee in support of her contention that the actual fees received is a lesser amount than as compared to the rate card. The A.O. observed that the fact that the professional charges being charged for the treatment given by the assessee and her related entities are more than the fees given in the rate card is evident form receipt no 2031 of the assessee and receipt no 1820 of Dr. Anirudha Malpani , wherein combined all the three entities have accepted the professional fees of ₹ 98,000/- ( in addition to the anesthetist s fees of ₹ 2,000) for the treatment referred to as IVF, whereas in the rate card the professional fees were ₹ 25,000/- to ₹ 60,000/-. The A.O. observed that in certain cases , the assessee has not furnished the nature of the treatment or the range of fees being collected for the treatment. In such cases and also in the cases where there is considerable difference between the amount reflected in the books of accounts and the range of fees as summarized in the book How to have a Baby O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted to the AO vide letter dated 22-1-2005, hence, the same could not be treated as additional evidence and the AO should have conducted necessary enquiries as directed by the Ld.CIT(A). It has also been contended that the addition cannot be mode on the basis of rates published in one Book particularly when the amount written on the back of the receipt was accepted by the AO himself where these amounts were found to be within the range of fees received by all the 3 entities. It has also been contended that cross-verification of the patients could have been supplementary evidence which inspite of specific request, was not carried out, hence, the addition was merely based on conjectures and surmises. In this background, we find that the addition has been made on account of difference in amounts acknowledged on the reverse side of the receipts not falling within the range as published in the Book and in respect of a few cases where no details of treatment have been mentioned. We further find that there are instances where the amount distributed amongst the three entities is more than the amounts to have been received from the patients, hence, it cannot be said that the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be restored to the file of the Ld.CIT(A) for fresh adjudication of both the cases as per law. Accordingly, we restore the same to the file of the Ld.CIT(A) for this purpose to do so after giving adequate opportunity of hearing to the assessee and after taking into consideration our findings hereinabove. Thus, the ground of both assessees stand allowed for statistical purposes. In order to meet with the directions of the tribunal, the learned CIT(A) in the second round of litigation forwarded to the AO , the written submissions filed by the appellant, asking the AO to make further enquiries by calling the concerned parties for examination Accordingly, the AO filed his remand report before the learned CIT(A) on 17.10,2012, as follows: Assessee submitted confirmation from 22 parties vide letter dated 15.3.2012. It was noticed that out of 22 parties 11 were out of Mumbai. Initially 133(6} was issued to 2 parties Out of those 1I parties in Mumbai, both were returned unserved. Further, an attempt was made by issuing letter u/s 133(6) to 13 more parties out of list of 88 parties submitted by the assessee vide letter dated 21.2.2012. Out of these 13 parties In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght confirmation 14 Naffesa Begum Unserved Not known 15 Reshma Tagore served No reply It is therefore, submitted that most of the patients could not be traced. Hence, the authenticity of the transactions could not be verified. Thus, the issue may be decided on merits. The above report was confronted by the learned CIT(A) to the assessee for rebuttal. The assessee, vide letter dated 17.12.2012, submitted as follows: 1. The appellant has in accordance with the direction of the Hon. Tribunal given the address of patients wherever available and the details of various receipts and how the same are accounted for in the hands of the 3 entities and also the comparative analysis of the same with the rate card. 2. In the fresh remand proceedings the assessing officer has merely summoned 15 patients out of which 4 patients have confirmed the payment as per the appellant's records. 3. In two cases the assessing officer state that the summons have served but there is no reply. The appellant submits that in such a si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttached herewith. The new address of the patient is as follows:- 204, second floor, Rashmi Avenue Cooperative Housing Society Ltd. Kandivali East, Mumbai. i) Nafissa Begum - inquiries revealed that she is left from there. 5. From the above it would be seen that the assessing officer has sent summons to a few people some of whom have responded, some whether summons had been served have chosen not to respond, and in some cases where patients have moved out from the respective residences, it is not possible to locate the after so many years. After considering the above reply of the assessee, the learned CIT(A) directed the A.O. to verify the remaining parties ; out of the 55 names provided by the assessee. The A.O. was also asked to examine the claim of the assessee with regard to the double addition in the hands of the assessee and his wife. The A.O. accordingly submitted his second remand report dated 05-06-2013 which is as under:- It is submitted that, initially notices u/s 133(6) were sent to 15 parties out of 88 parties, status of the same was discussed in detail vide remand report dated 17.10.2012. Vide letter dated 24.12.2012 assessee was asked to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een that total amount received by each has been shown in their return of income in relevant financial years. Moreover many of the entries in chart were reconciled on test check basis with the bill/receipt books impounded during survey. It was found that amount which has been written behind the receipt is the cumulative figure which has been further distributed among Aniruddha Malpani, Anjali Malpani Malpani Infertility clinic and same amount is getting reflected in receipts in their name. Hence the some may be decided on merits. Against the above remand report of the A.O. the assessee submitted the reply before learned CIT(A) which is as under:- a) As directed by the tribunal, the AO has not given instances of comparative cases. (b) The tribunal has held that addition in the case of 55 patients is unjustified. Therefore, the directions to examine these patients is not justified. (c) In the case of 77 patients, there has been a double addition, as their names appeared in both the appellant's and Anjali's order. The assessee has attached a list of such cases. (d) In the case of 8 patients, if aggregate addition in both the cases is conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee does not need to contact them any time and on the contrary they have to contact the doctors in case they have any further consultation to do. (g) The appellant has relied upon the following decisions: 1. 87 ITD 69 (Mum) (TM) Kumar Agencies 2. C1T v . Calcutta Discount Co. Ltd. [1973]91 ITR 8 (SC) 3. Marghabai Kishabai Patel Co. v. CIT [1977] 108 ITR 54 (Guj) (h) The appellant has objected to relying upon the rate list published in his book, on the grounds, that the same was only indicative. The assessee also filed before learned CIT(A) a comprehensive reconciliation of the amounts charged in the books of account, amounts reflected behind the receipts, reason for the difference, complete address of the patient and the instances of double addition. The ld. CIT(A) observed that the receipts books were impounded two years after the date of the survey u/s.133A of the Act on 17th January, 2002. It was not mentioned in the assessment order of any statement which was recorded during the survey operations wherein these receipt books, having apparently incriminating notings were confronted to the assessee. It appears that the A.O. kept silent for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bill/receipt books impounded during the survey . It was found that amounts which has been written behind the receipt is the cumulative figure which has been further distributed among Aniruddha Malpani, Anjali Malpani Malpani infertility clinic and same amount is getting reflected in receipts in their name. Hence the same may be decided on merits. The assessee filed three charts to reconcile the differences. The first chart comprises double additions. Second chart comprises the cases where the amount credited to the books is more than the rate list. The third list shows list of the cases where additions have been made even though the amounts credited to the books is as per the range of the rate list. The ld. CIT(A) observed that the only issue now is with respect to verification from the patients. The ld. CIT(A) observed that the A.O. had sent notices u/s 133(6) of the Act to 88 patients , out of which only four parties responded and the remaining parties did not responded to the notice or the notices could not be served. The four parties who responded confirmed the amount. As per learned CIT(A), there is no instance which has come to the light that there is a discrep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue on 17.01.2002 in the premises of the assessee. No incriminating material was found and seized. No statement was recorded by the Revenue. The ld. Counsel submitted that the books of account were produced before the Revenue during the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act. The receipts books were produced during the course of assessment proceedings which were impounded by the AO on 21.12.2004 during the course of assessment proceedings on the grounds that the amount inscribed at the back of the receipt is not tallying with books of accounts while the fact of the matter is that the amount inscribed at the back of the receipt consisted of four components viz. assessee s fees, assessee s husband fee (Dr. Aniruddha Malpani), Malpani Infertility Clinic charges and anesthetist fee. The total fees is accounted for in the hands of all the four persons which has been offered for taxation and there is no shortfall in the recording of fee as inscribed at the back of receipt book viz.-z-viz. books of accounts of all four persons. It is also the say of the revenue that the fees charged is less than the range of fee specified in the book nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts with the lapse of time had changed their addresses in this interim period and it is virtually now impossible for both Revenue and the assessee to trace them to get their confirmation / verification of fees paid. It was submitted that an honest attempt was made by the assesssee to seek confirmations from the patients which is borne out from the records. The Tribunal directed to get confirmations from the patients and also to reconcile the fee as stated at the back of receipt book and books of accounts of all the four entities for which the consolidated fees was received by the assessee. It is submitted by the learned counsel of the assessee that it is an old litigation which is now 14-15 years old and this is second round of litigation. The ld. Counsel for the assessee submitted keeping in view virtual impossibility of complying with the orders of the Tribunal in first round of litigation to get verification / confirmation from patients on the part of the assessee as well Revenue , and also in order to buy peace of mind and to end this protracted litigation which is time consuming and also expensive , the assessee in its sincere desire want to settle this matter and accept the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of litigation has , inter-alia, directed to get these amounts confirmed/verified from patients. The Revenue and the assessee both made an attempt to get the amount confirmed but the same could not be confirmed from all the patients as the patients after a long gap of period are now not available/traceable. The patients from whom confirmation was received confirmed the amount which is recorded in books of accounts by these four entities and nothing incriminating has come on record as their confirmation did not reflect any discrepancies in the amount paid by them and the amounts recorded in the books of accounts of these four entities. Rest of the patients are now not available/traceable despite efforts made by the assessee and the Revenue and virtually it has gone into realm of impossibility as the patients have either moved/changed addresses or were out of Mumbai/India and hence their present location is not traceable as around 14-15 years have elapsed. We could see the difficulty of both the revenue as well the assessee to get confirmation/verification from all the patients now after a gap of 14-15 years as the patients are now not traceable/available. The assessee has come forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76,400/- amounting to ₹ 8,33,355/- only. 2. The appellant submits that the CIT(A) ought to have allowed relief in respect of the entire addition amounting to ₹ 17,56,110/- looking to the fact that the Assessing Officer has in the remand proceedings accepted the claim of double addition of the entire amount confirming that the the total amount received by each has been shown in their return of income in the relevant year. 3. The appellant submits that having produced some patients even after' a period of 10 years the Assessing Officer has not brought any material on record to show any error in the receipts maintained and declared by the appellant nor established that the appellant has received more than what has been declared thus justifying the deletion of the entire addition of ₹ 17,56,110/-. 4. The appellant prays that inspite of the Assessing Officer not making any adverse finding, the CIT(A) has erred in not granting relief in respect of the entire addition of ₹ 17,56,110/-. 9. The facts in the instant appeal are identical to the facts of the case in appeal in the case of wife of the assessee, Dr Anjali A Malpani which we have adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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