Tribunal partially allows appeals, upholds undisclosed income additions with tax payment conditions.

The Tribunal partly allowed the appeals, sustaining additions of Rs. 7,00,000/- in ITA No. 7617/Mum/2013 and Rs. 5,50,000/- in ITA No. 7618/Mum/2013 as undisclosed income, with conditions for payment of due taxes and interest. The decision aimed to settle the prolonged litigation and provide substantial justice to both parties.

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Issues Involved:
1. Double addition of income.
2. Verification of discrepancies between receipt books and actual income.
3. Reconciliation of amounts recorded in books of accounts.
4. Cross-verification of patient payments.
5. Compliance with Tribunal's directions for verification and reconciliation.
6. Settlement of prolonged litigation.

Issue-wise Detailed Analysis:

1. Double Addition of Income:
The assessee contended that the CIT(A) allowed only partial relief for double additions made by the AO, totaling Rs. 15,72,755/-, while the entire addition of Rs. 27,91,810/- should have been considered. The AO had accepted the claim of double addition during remand proceedings, confirming that the total amount received was shown in the returns of income for the relevant year. The CIT(A) gave relief of Rs. 7,56,955/- for double addition concerning 77 patients and an additional Rs. 8,15,800/- based on reconciliation charts, aggregating to Rs. 15,72,755/-. The balance addition of Rs. 12,19,065/- was confirmed by the CIT(A).

2. Verification of Discrepancies Between Receipt Books and Actual Income:
The AO noted discrepancies between amounts inscribed on the back of receipts and those recorded in the books of accounts, totaling Rs. 27,91,810/-. The assessee explained that the amounts written on the back of receipts represented the total fees received from patients, distributed among the assessee, her husband, Malpani Infertility Clinic, and the anesthetist. The AO accepted this explanation where amounts fell within the range of fees mentioned in the book "How to have a Baby – Overcoming Infertility," authored by the assessee and her husband.

3. Reconciliation of Amounts Recorded in Books of Accounts:
The assessee provided a comprehensive reconciliation chart detailing amounts charged, amounts recorded in books, reasons for differences, and instances of double addition. The CIT(A) noted that the AO agreed with the assessee's explanation in many instances, except where amounts did not tally with the published rate list. The Tribunal directed the CIT(A) to re-examine the issue and avoid double additions. The CIT(A) accepted the reconciliation and gave partial relief.

4. Cross-Verification of Patient Payments:
The Tribunal in the first round of litigation directed cross-verification of patient payments. The AO issued notices under Section 133(6) to 88 patients, but only four responded, confirming the amounts. The remaining patients either did not respond or could not be traced. The CIT(A) observed that after a span of 10 years, it was challenging to trace patients, but no discrepancies were found in the amounts confirmed by the four patients.

5. Compliance with Tribunal's Directions for Verification and Reconciliation:
The Tribunal's directions included verifying patient payments and reconciling discrepancies. The AO and the assessee made efforts, but many patients could not be traced due to the long lapse of time. The CIT(A) recognized the difficulty in verification after 10 years and gave partial relief based on the reconciliation provided by the assessee.

6. Settlement of Prolonged Litigation:
The assessee expressed a desire to settle the prolonged litigation and accepted the addition as may be decided by the Tribunal. The Tribunal, considering the virtual impossibility of further verification after 14-15 years, sustained an addition of Rs. 7,00,000/- as undisclosed income, giving relief of Rs. 5,19,055/- from the addition of Rs. 12,19,055/- confirmed by the CIT(A). The assessee agreed to pay all due taxes and interest on the sustained addition within 60 days.

Conclusion:
The Tribunal partly allowed the appeals, sustaining additions of Rs. 7,00,000/- in ITA No. 7617/Mum/2013 and Rs. 5,50,000/- in ITA No. 7618/Mum/2013 as undisclosed income, with conditions for payment of due taxes and interest. The decision aimed to settle the prolonged litigation and provide substantial justice to both parties.

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