Tribunal upholds additions to professional income, directs re-examination of cash credits, and restores disallowance.

The tribunal upheld the AO's addition of Rs.2.00 lakhs to the professional income for the assessment year 2006-07, overturning the Ld CIT(A)'s deletion due to lack of proper books of account. The tribunal also directed re-examination of Rs.4.00 lakhs cash credit from the spouse and Rs.10.00 lakhs from Priya Health Care, as neither the AO nor the Ld CIT(A) properly examined these additions. Additionally, the tribunal upheld the AO's addition of Rs.1,53,165/- from the sale of furniture, set aside the Ld CIT(A)'s deletion, and restored the AO's order on the disallowance under Section 80C(5)(iii) for the same assessment year. For the assessment year 2007-08, the tribunal directed re-examination of the Rs.5.00 lakhs contribution from the assessee's father and wife, setting aside the Ld CIT(A)'s deletion.

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Issues Involved:
1. Addition to Professional Income
2. Addition of Cash Credit from Spouse
3. Addition of Cash Credit from Priya Health Care
4. Addition of Cash Credit Relating to Sale of Furniture
5. Disallowance under Section 80C(5)(iii)
6. Addition of Contribution from Father and Wife

Issue-wise Detailed Analysis:

1. Addition to Professional Income:
The first issue pertains to the addition of Rs.2.00 lakhs to the professional income for the assessment year 2006-07. During the survey, it was noted that the assessee did not maintain proper books of account, and a staff member admitted that part of the collections was unaccounted. The AO estimated the suppression of professional receipts at Rs.2.00 lakhs based on the materials gathered. The Ld CIT(A) deleted this addition, relying on the decision of the jurisdictional High Court in the case of Paul Mathew & Sons, which states that statements taken during surveys do not have evidentiary value. However, the tribunal noted that the AO's addition was supported by the lack of proper books of accounts and the inability to provide a breakup of professional receipts. The tribunal restored the AO's addition, stating that the Ld CIT(A) misdirected himself by assuming the addition was based solely on statements.

2. Addition of Cash Credit from Spouse:
The second issue involves the addition of Rs.4.00 lakhs received from the assessee's spouse. The AO added this amount as income, suspecting it was used for the medical college admission of the assessee's son. The Ld CIT(A) deleted the addition, but the tribunal found that neither the AO nor the CIT(A) examined the cash credit as required by Section 68 of the Act. The tribunal set aside the Ld CIT(A)'s order and directed the AO to re-examine the issue.

3. Addition of Cash Credit from Priya Health Care:
The third issue is the addition of Rs.10.00 lakhs received from Priya Health Care. The AO did not verify the genuineness of the credit, and the Ld CIT(A) deleted the addition without examination. The tribunal noted that both authorities failed to examine the issue properly and set aside the Ld CIT(A)'s order, directing the AO to re-examine the issue.

4. Addition of Cash Credit Relating to Sale of Furniture:
The fourth issue pertains to the addition of Rs.1,53,165/- from the sale of furniture and fittings. The AO rejected the assessee's claim due to a lack of documentary evidence and assessed it as income. The Ld CIT(A) accepted the assessee's oral explanation and deleted the addition. The tribunal found that the assessee failed to substantiate the claim and upheld the AO's addition, setting aside the Ld CIT(A)'s order.

5. Disallowance under Section 80C(5)(iii):
The assessee conceded the ground relating to the disallowance made under Section 80C(5)(iii) of the Act. Consequently, the tribunal set aside the Ld CIT(A)'s decision and restored the AO's order on this issue.

6. Addition of Contribution from Father and Wife:
For the assessment year 2007-08, the AO added Rs.5.00 lakhs received from the assessee's father and wife, noting that deposits of identical amounts were made the previous day and neither were income tax assessees. The Ld CIT(A) deleted the addition without further examination. The tribunal found that the issue was not properly examined and set aside the Ld CIT(A)'s order, directing the AO to re-examine the issue.

Conclusion:
The tribunal allowed both appeals of the revenue for statistical purposes and dismissed the cross objections filed by the assessee. The orders of the Ld CIT(A) were set aside on several issues, and the matters were remanded to the AO for re-examination and appropriate decisions in accordance with the law.

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