TaxTMI 
TaxTMI 
1999 (2) TMI 672
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...., where the appellant has been running the aforesaid sex and health and beauty clinics. Her family members have also been working with her as salaried employees. She has set up three branches of her sex and health clinic in Mumbai. The first one was set up at Borivili in 1991, the second one at Charni Road in May 1995 and the third one at Dadar in November 1995. A search was conducted at the residential and business premises of the appellant on 26-3-1996. During the search, the following cash was found : - (1) At the residential premises situated at Flat Nos. 201, 202 and 203-A, Lancelot Building, Borivili (West), as per Panchanama dated 27-3-1996. Rs. 49,36,500 (2) At Clinic, at 15, Ghamat Terrace, Senapati Bapat Marg, Dadar (West), as per Panchanama dated 26-3-1996 Rs. 32,400 A substantial portion of the above cash, excluding a small portion, was offered to tax as the unexplained income of the appellant. 2. During the search, it was also noticed that the appellant and her above mentioned family members received substantial gifts from certain non-residents out of their NRE Accounts in different years, in the names of the aforesaid family members of the ....
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....ri Nagar, S.V. Road, Borivili (W), Mumbai-92. Rs. 3,41,000 Dr. Sohanlal Gupta (2) Flat No. 504-B, Mermaid-I, Plot No. 32/33 Sector 11, C.B.D., Belapur, New Mumbai. Rs. 8,60,000 -do- (3) Flat No. 506, 5th floor, `C' Wing, Bldg. No.4. Phase-II, Powai Vihar, Powai, Mumbai-76. Rs. 7,00,000 -do- (4) Shop No. 7 (Proposed bldg.), Trimbhak Tower, Plot No. 86, Sector 15, C.B.D., Belapur, New Mumbai. Rs. 8,02,700 -do- 1 2 3 4 (5) Flat No. 806, 8th flr., Punit Tower-2, Plot No. 53, Sector No. 11, CBD Belapur, New Mumbai. Rs. 4,25,750 Dr. Rajrani Gupta (6) Office 1001/1002, 10th flr., (Proposed bldg.), Bay-view Tower, Flat No. 7, Sector No. 11 CBD, Belapur, New Mumbai) Rs. 13,88,000 -do- (7) Flat (Number not given), 7th flr., Akashganga, Plot No. A-21, Oshiwara, Bombay. Rs. 6,00,000 -do- (8) Flat No. 201-A, Lancelot Bldg., Opp. Shastri Nagar, S.V. Road., Borivili (W), Mumbai-92. Rs. 4,03,877 Dr. Sohanlal (HUF) (9) Flat No. 202-A, Lancelot Bldg., Opp. Shastri Nagar, S.V. Road., Borivili (W), Mumbai-92. Rs. 5,58,780 -do- (10) Flat No. 203-A, Lancelot Bld....
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....r : - Cash found at the time of search as on 26-3-1996 (inclusive of Rs. 300 found at Borivili and Rs. 911 found at Charni Road clinics) Rs. 49,70,111 Less : Cash balance in the personal books as on 26-3-1996 Sohanlal Gupta (Dental Clinic A/c. Book) 44,515 Arunkumar Gupta 10,412 Renu Gupta 24,287 Sohanlal Gupta (HUF) 9,888 Aakanksha Grand daughter. 465 89,567 48,80,544 Less :Cash balance in the books of account of clinics as on 26-3-1996 : Kayakalp Internationals 1,83,428 Kayakalp International (Export) 21,476 2,04,904 Excess Cash 46,75,640 It may be observed that the appellant worked out the above excess cash of Rs. 46,75,640 on the basis of the cash balances reflected in the cash books of the different family members, inclusive of the grand daughter of the appellant, Aakanksha. After working out the unexplained cash at the above figure of Rs. 46,75,640, an amount of Rs. 39,74,375 was offered as the income of the appellant and the balance of Rs. 7,01,265 was offered in ....
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....f updating them upto 26-3-1996 were not furnished. In this view of the matter, we delete the addition of Rs. 1,24,360. 6. The gist of the next objection is that the AO erred in making the addition on account of NRI gifts of Rs. 4,06,080, as per following details : - Assessment Year Gift Amount Premium 1994-95 25,000 2,000 1995-96 3,51,000 28,080 Total 3,76,000 30,080 The AO observed that the members of the family of the appellant had received substantial gifts and this was only a mode of converting black money into white. Particularly with reference to the NRI gifts, it is mentioned that there was no relationship at all between the donors and the appellant or the members of her family and it is inconceivable that they developed such close relationship with the donors, as alleged by the appellant, in a short span of three to four years after their coming to Mumbai from Bhatinda, Punjab. It is also mentioned that the gifts received from the NRIs have no relevance to any particular occasion like marriage or birthday and there was no reciprocation by the appellant. It is further mentioned that the gifts are supported by informal lette....
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....yet (one month). Myself and my wife are Income-tax assessees. I have a flat situated at 411-C, Lancelot S.V. Road, Borivili (W). It was purchased in the year 1993-94 for about Rs. 4/5 lacs. My wife is not having any property in her possession but booked a flat in Lalbaug and same is under construction. I am holding Indian Passport No. . . . . dated 21-12-1995 issued at Bombay but never visited abroad. My wife also hold Indian passport. She also never visited abroad. I am maintaining S.B. A/c. with SBI No. Borivili (W) Branch A/c. No. 18117. My wife also had Bank A/c. with same Bank. Daughter also. Regarding the gifts received by me and my wife and my daughter, I state that I have received from NRE cheques of totalling Rs. 12,50,000. (Twelve lacs fifty thousand) and my wife received NRE cheque of Rs. 2,11,000 (Two lacs eleven thousand) and my daughter received cheque of Rs. 50,000 (Fifty thousand) drawn from different NRE holders residing in different foreign countries from their accounts maintaining with Hongkong Bank, United Bank of India, Bombay Merchant Bank, Bank of America in Bombay. I will furnish the full name and addresses of the persons from whose NRE accounts I receive....
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....nt Indian Accounts maintaining with different Indian Bank in Bombay, I state that I received Ten Cheques of N.R.E. A/cs totalling to Rupees thirteen lakhs sixty thousand (Rs. 13,60,000) and my wife also received two cheques of three lacs seventy six thousand (Rs. 3,76,000) from different N.R.I.'s A/c maintaining in Bombay I paid to the N.R.E. a/c holders 8% (eight) premium alongwith the cheques amount as a compensation for the amounts received. This cheque amount and the compensation for received with N.R.E. cheques was paid by cash. The source of Indian currency for the N.R.E. cheques received was from family savings from time to time. I have no A/c. for the Indian currency raised for the payment of N.R.E. cheques. My wife also not having any book of account for the Indian currency paid to the N.R.I.s for the cheque received from their accounts. The persons from whom myself, my wife and my son, daughter-in-law and grand daughter received N.R.E. cheques from their accounts in different Banks in Bombay are not related to us. These persons are permanently employed different foreign countries. We received N.R.E. cheques from them when they visited India directly from the persons. ....
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....nd my whole family will be in trouble. I will be arrested and detained under COFEPOSA. I became nervous and being professional man got afraid and wrote down what was dictated to me and asked to sign the same. The Statement got over at about 4 p.m. and I was told to come again when called by them. Thus in the said circumstances I say that my statement is neither true nor voluntary statement nor by consent. I have not purchased gift cheques against cash payments. I hereby deny the said statement and want to place it on record." The retraction of Dr. Sohanlal Gupta is dated 7-11-1996 (received in the Directorate Office on 11-11-1996) and may be seen at page 132 of the APB and it reads as follows : - "I was called in the office of the Enforcement Department through message from my son. Accordingly I have attended the office today at 12.30. 2. The Officer started interrogating me at 2.00 p.m. and told me that he knew everything about the receipt of gift cheque in lieu of cash payments from certain Seamen and he has told me that he would dictate the said statement to me which I will have to write down as per his dictation. I told the officer that I knew the Seamen personal....
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....is also placed upon the decision of the Tribunal in the case of Asstt. CIT v. Mrs. Sushiladevi S. Agarwal (1994) 50 ITD 524 (Ahd.) in which it was observed in para 7 that the search is an invasion on the privacy of a citizen, and that what is stated by a deponent on the search day should not be taken as the whole truth, particularly when there is a subsequent retraction. It is also pleaded that the appellant had furnished the pass books of the donors from which the gift cheques were issued to the appellant and her family members and their addresses were also furnished and the confirmatory letters were either furnished or seized during the raid and so the initial onus lying on the appellant and her family members of proving the gifts in question was discharged. In this context, the learned counsel for the appellant relied upon the decision of the Apex Court in the case of Parimisetti Seetharamma v. CIT (1965) 57 ITR 532for the proposition that the onus is on the Department and not on the assessee to prove that the apparent is not the real, or that in the present case the gifts are not genuine. He has also relied upon the decision of the jurisdictional High Court in the case of CIT v....
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....for bringing the NRI gifts to tax as the undisclosed incomes of the family members. 8. The learned Departmental Representative on the other hand mentioned firstly that the appellant had adopted delaying and evasive tactics. It is mentioned that while the search action took place on 26-3-1996 and a notice calling for the return under section 158BC of the Income-tax Act was issued as early as 27-6-1996, the appellant filed the return, after several reminders, only on 6-3-1997, i.e., after a lapse of about eight months from the date of issue of the said statutory notice and towards the close of the statutory period available to the Assessing Officer for the completion of the assessment, which ended on 31-3-1997. Secondly, it is mentioned that the acquisition of as many as 15 properties by the family members within a period of about five to six years of their migration to Bombay from Punjab and the receipt of gifts to the tune of Rs. 40 lakhs by the various family members as well as the seizure of cash of about Rs. 50 lakhs are all tell-tale signs of accumulation of black money. The learned DR invited our attention to the letters received from the non-residents which were seized dur....
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....ing device. The learned DR also mentioned that some of the so-called donors have given multiple gifts and this is also a feature that proves the incredibility of the version of gifts. In this context, he filed a statement which indicates the following multiple gifts by the same donors : Sr. No. Name of the donor Name of the donee Amount (Rs.) Date (1) Francis Vaz (Rs. 2,00,000) (1) Dr. Sohanlal Gupta(2) Dr. Arunkumar Gupta 1,00,0001,00,000 7-3-199425-8-1995 (2) A.T. Dianold(Rs. 2,25,000) (1) Sohanlal Gupta(2) Sohanlal Gupta(3) Sohanlal Gupta 50,0001,00,00075,000 29-6-199413-12-199514-2-1996 (3) Trevor Castilliro (Rs. 12,00,000) (1) Sohanlal Gupta(2) Arunkumar Gupta(3) Arunkumar Gupta(4) Arunkumar Gupta 2,50,0003,00,0001,50,0005,00,000 23-02-199629-8-199420-12-199519-2-1996 It is also pleaded that the donors were not produced for the examination of the Assessing Officer even though specifically required and as the onus of proving the gifts, which are on par with cash credits, lies on the appellant, it must be held that the version of the gifts is not proved at all. Ultimately, the learned DR pleaded that human ....
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....ge in a good number of the letters is identical. Just to illustrate, a letter dated 29-9-1995 addressed by one Darshan Singh Raina, a donor, to Mr. Sohanlal Gupta, which may be seen at page 16 of the APB filed along with the appeal memo, reads as follows : "From : Darshan Singh Raina Starship Management Ltd., 801, Brickel Avenue, Suit 1002, Miami Florida 33131 U.S.A. Date : 21-9-1995 To, Mr. Sohanlal Gupta 201-A, Lancelot, S.V. Road, Borivili (W), Bombay-92 My Dear Sohanlalji, By the Grace of God, I trust this letter will find you and your family in the best of health and spirits. Likewise I am also keeping fine. I am enclosing herewith a cheque No. 001437, dated 21-9-1999, for Rs. 4,00,000 (Rs. Four Lakhs only), drawn on Bank of Baroda, N.R.E. Branch, Veena Nagar, Mulund (W), Bombay 400 080, India, issued out of my N.R.E. Account No. 75016, the same has been accepted by you as per our oral talk. I have made this gift to the amount of Rs. 4,00,000 to you out of natural love and affection and the high esteem and regards that I have for you. Henceforward you are the sole owner of the proceeds of this gift and can enjoy the same as you may deem fit and proper. I have ma....
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....typewriters on which the letters are produced seem to be the same. Of course, in his rejoinder, the learned counsel for the appellant sought to explain away such similarities on the ground that the appellant herself had prepared all the evidence in this regard and that is how the letters and the deeds bear such similarities. We have to mention that the learned counsel for the appellant has taken this position only in his rejoinder and not at any stage before that. Because the learned counsel for the appellant saw the force of the argument of the Department in this regard, it appears, he resorted to this stand. Legal evidence cannot normally be prepared in the form of personal letters replete with personal enquiries and endearments. Apart from that, one cannot see how all the donors belong mainly to one category, i.e., sailors on foreign ships, as they are admitted to be by Dr. Sohanlal Gupta and Dr. Arunkumar Gupta before the FERA authorities. We are aware that the gift received by the appellant of Rs. 3,51,000 in the year of account relevant for the assessment year 1995-96 is from one Keshav Govind Jadhav and is supported by a gift deed dated 27-7-1994 and the donor is a resident ....
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....itworthiness of the donor is proved and if required the subsequent entries in the pass book could also be proved. What is to be seen is that when the assessment was being completed in the early part of 1997, the appellant could file before the Assessing Officer only copies of pass books of the donors in support of their addresses and the copies of the pass books before the entries relating to the encashment of the cheques were recorded therein. If the gifts in question had been made because of long-standing family relationship, as alleged, the appellant would have been aware of the present whereabouts of the donors. It is inconceivable that none of the donors had changed their addresses after they obtained the passports. If the version of long-standing family relationship is true, the appellant could also have produced before the Assessing Officer himself the updated passbooks reflect- ing the debits of the alleged gifts. The matters as they stand, to our mind, indicate only a money-laundering device where the copies of the passports, personal letters, gift deeds, copies of the pass books, etc., were all obtained simultaneously with the exchange of the cheque money and cash money b....
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.... wherein the head-note reads as follows : - "It is not in all cases that by mere rejection of the explanation of the assessee, the character of a particular receipt as income can be said to have been established; but where the circumstances of the rejection are such that the only proper inference is that the receipt must be treated as income in the hands of the assessee, there is no reason why the assessing authorities should not draw such an inference. Such an inference is an inference of fact and not of law. . . . . . . . In considering probabilities properly arising from the facts alleged or proved, the Tribunal does not indulge in conjectures, surmises or suspicions." To our mind, the above decision is an authority for the proposition that the Tribunal is entitled to consider probabilities arising from the facts alleged for sustaining or deleting an addition and this is exactly what we have sought to do in respect of the issue regarding the NRI gifts received by the appellant. The same view is reiterated by the Apex Court in the case of Sumati Dayal, cited supra, by the learned DR. We may also mention that in the case of Shama Raising Chandel v. ITO (1992) 41 ITD 212, ....
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....of Rs. 72,251 brought to tax by the AO for the assessment year 1993-94, there is a gift from an NRI, Shri Francis Bosco Vaz, of Rs. 11,000. For the assessment year 1994-95, the gifts received were of the order of Rs. 1,07,704, which included the following NRI gifts : - (1) Shri Tarsem Gill Rs. 5,000 (2) Shri Pandi Nadar Iyadurai Rs. 5,100 (3) Shri Murtuza Hussain Jangad Rs. 25,000 (4) Shri Soans Lambert Noel Rs. 3,400 (5) Shri Krishnamurthy Suresh Rs. 13,000 Out of the above five NRI gifts included in the amount of Rs. 1,07,704, the gift received from Shri Murtuza Hussain Jangad of Rs. 25,000 has been considered in the category of NRI gifts and it was added by the AO as the income of the appellant. The remaining four NRI gifts received in the year of account relevant for the assessment year 1994-95 have been erroneously considered as domestic gifts and brought to tax in the amount of Rs. 82,704 (1,07,704 25,000) as mentioned in the ground taken by the appellant. We have already taken the view that the NRI gifts are part of the money laundering design admitted by the appellant. We do not see any reason to make an exception in....
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....ithdrawn from those firms and deposited with the appellant. It is also mentioned that they were all considered in the regular assessment for assessment year 1993-94 and no new material was seized during the search which cast any doubt on these loans. The details of the loans and the affidavits of the creditors are available at pages 169 to 174 of the APB. We do not find any suspicious features about these credits. Apart from that, as already mentioned, the ratio of the decision of the Tribunal in the case of Sunder Agencies (supra). squarely applies to these loans just as we have held this decision to apply in the case of domestic gifts received by the appellant. Accordingly, we delete the addition on account of loans along with the interest thereon of Rs. 82,876. 14. The next ground is that the AO erred in making the addition under section 69B of the alleged undisclosed investment in certain properties as follows : - Assessment Year Amount Rs. 1994-95 9,25,333 1995-96 6,83,833 Total 16,09,166 The AO mentioned that the appellant and her family members acquired certain properties numbering 15, the details of which we have already given here in....
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....the members of her family and it reflected only the information obtained on general enquiry by some of the employees about the prevailing market rates and as such no addition could be made on the basis of the seized paper in the present case. It is also pleaded that there are no comparable cases for the properties at (1) and (2) above, i.e., Punit Tower and Bay-View Tower, among the sale instances given by the Appropriate Authority. It is also pleaded that in respect of the property at Oshiwara, the appellant had made the investment in lumpsum before the construction had begun, which was quite risky, and so the builder had given a concession of about Rs. 4 lacks and this fact is supported by a letter given by the builder himself, which can be seen at page 178 of the APB. The letter given by the builder, Agrawal Builders & Developers, reads as follows : - "15th March 97 To Whom Soever This May Concern We hereby declare and confirm that Smt. Rajrani Gupta w/o Dr. Sohan Lal Gupta has booked a Flat admeasuring 1,000 sq. ft. super covered area, in our Akashganga Co-op. Hsg. Society, on Plot No. A-21, Oshiwara, Bombay for an aggregate value of Rs. 6,00,000 (Rupees Six lakhs only....
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....of Akashganga property, there is sufficient reason by way of advance payment which explains the low cost of acquisition. The explanation offered by the appellant regarding the nature of the properties cannot be thrown out as incredible. The decision of the Hon'ble Rajasthan High Court in the case of Smt. Amar Kumari Surana (supra), is distinguishable, as in that case the assessee could not furnish any explanation for the low cost of acquisition compared to the prevailing market rate, whereas the appellant has given sufficient reasons as to why her cost of acquisition was on the low side. In the circumstances, we delete the addition of Rs. 16,09,166. 18. The next ground is that the AO erred in making an addition of Rs. 3,72,520, being alleged undisclosed sale consideration in respect of the sale of flat by the appellant to the HUF of which her husband is the Karta, i.e., Sohanlal Gupta (HUF). The appellant had sold a property, i.e., Flat No. 202-A, Lancelot Building, S.V. Road Borivili (W), to Sohanlal Gupta (HUF), for a consideration of Rs. 5,58,780 vide an agreement dated 14-5-1993. In the assessment of Sohanlal Gupta (HUF), the AO made an addition of Rs. 3,72,520 in respec....
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.... the vouchers were obtained only as a safeguard against certain contingencies like certain employees leaving service without accounting for the advances received. It is claimed that the blank vouchers obtained were never utilised. 23. We find that the Assessing Officer has not spelt out which expenditure is suspected to have been inflated. No linkage is established between the blank vouchers obtained and the inflation of any particular expenditure. In the circumstances, we have to delete the ad hoc addition of Rs. 50,000 each made for the assessment years 1994-95 to 1996-97. 24. The next ground is that the Assessing Officer erred in making an addition of Rs. 15,300, being alleged unexplained investment in the clinic at Charni Road. The appellant incurred some expenditure by way of repairs and renovation to her clinic situated at Land Mansion, 3rd floor, Charni Road, Mumbai. The account of the contractor, M/s. Ghanshyam & Co., who carried out the repairs and renovation work, was seized during the search. When the appellant was required to furnish details of the expenditure incurred on renovation, she furnished the details which included an amount of Rs. 76,000 shown to have be....
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....in that so far as Panther Advertising is concerned, the bills issued by them to the appellant reflected the payment of discount by them at 7.5% and the same is noted in the seized papers as commission receipts. In this context, he invited our attention to a copy of the bill dated 2-5-1995 issued by Panther Advertising to the appellant in the name of Kayakalp International which may be seen at page 200 of the APB. The bill indicates the discount received by the appellant at Rs. 1,196. It is further pleaded that so far as Chintamani Advertising is concerned, it reflected only the payments made for rent towards hoardings on railway platforms and no such commission is received in respect of rent paid to railways. 28. We are not convinced by the explanation given by the learned counsel for the appellant. Annexure `F' to the assessment order indicates entries relating to commission from 28-12-1992 onwards. It is true that even if the bills issued by Panther Advertising reflect the discount allowed by them, no co-relation is established between the seized papers and the entries made in the books. The explanation offered by the learned counsel for the appellant does not explain the ....
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....elate to the financial years 1993-94 to 1995-96 and on the basis of the entries made in these forms, he estimated the undisclosed receipts of these years at Rs. 1.5 crores. He mentioned at page 24 of his order that the amounts recorded in these forms were reflected in the books of account for income-tax purposes. He further observed that four patients located during the search, i.e., Shri Vishwanath S. Jadhav, Shri Sachinkumar Shetty, Shri Deepak Joshi and Shri Mohd. Ismail were examined on oath during the search and in their statements they gave the details of payments made by them to the appellant but such payments do not tally with the entries recorded in the patients' forms of these four patients. He also mentioned that as per the patients' history forms, the appellant has been receiving some fees in kind like ring, shares and painting. So while admitting that the entries in the patients' history forms tallied with the entries in the books of account, the Assessing Officer came to the conclusion that all the patients' history forms themselves do not reflect the entire quantum of the fees received by the appellant or the fees recorded in kind. As already mentione....
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....further estimated the receipts of earlier two years on the same lines with the following remarks : "If on similar basis, the receipts of earlier two years are estimated when the Charni Road and Dadar Clinics were not existing as claimed by the assessee then for two years her receipts comes to Rs. 1,25,20,000 (20,000 x 313 x 2). For these two years the receipts have been taken at Rs. 20,000 only in view of her claim that all patients used to come to Borivali Clinic during these two years. So the total receipts by this method will come to Rs. 2,50,40,000. If the deduction is allowed out of the total receipts on account of receipts shown and expenditure claimed by the assessee during last three years of Rs. 69,50,798 and Rs. 16,30,000 on account of the fact that Charni Road and Dadar Clinics have not run for the full year, then again the estimated undisclosed income comes to more than Rs. 1.5 crores." Thus the Assessing Officer mentioned that the estimate of the income for the assessment years 1994-95, 1995-96 and 1996-97 at Rs. 1,50,00,000 on the basis of the entries in the patients' history forms is corroborated by the estimate on the basis of the cash seized from Dr. Arun....
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.... the incorrectness of the estimate of clinic income and it is mentioned therein that there is no basis for the Department's estimate of fees of Rs. 5,000 per patient in the aggregate or to apply this rate for the entire period of estimation from 1-4-1993 to 26-3-1996. It is also mentioned that there are several instances where the appellant herself had shown receipts of Rs. 15,000, Rs. 13,500 and Rs. 15,000 (per visit of a patient) and such instances are recorded in the patients' forms, as can be seen from the compilation of patients' forms, given in the Departmental Paper Book at pages 6, 27, 31 etc. As against five visits per patient estimated by the Assessing Officer, the appellant had also furnished on sample basis average number of visits of 1.1 (File No. B-1), 1.5 (File No. B-2), 1.3 (File No. D-1) and 1.4 (File No. D-2). The learned counsel has also invited our attention to certain pages of APB-II containing the fact that all the patients were not charged and even all the visits were not charged. It is also mentioned that there was an understanding that if the patient is not cured within the stipulated period, later visits will not be charged. The written submiss....
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....ges 11 to 15. (b)Not made any allowance for free consultation and where no treatment is involved pages 16 to 20. (c)Also not taken into consideration cases where the consultation as also treatment is free sample forms attached pages 21 to 25. (d)Further, no cognisance is taken of those cases no medical treatment is given. Only consultation is involved at Rs. 200 to Rs. 300 sample forms attached pages 26 to 30. (e)While coming to the conclusion that some forms were missing, the Assessing Officer did not take into account that in many cases, the patients had shifted from Borivili Clinic to Dadar/Charni Road Clinics and vice-versa sample forms pages 31 to 35. (f)The Assessing Officer has also not taken into account those cases where the treatment was given free after certain number of visits for the reasons explained in the course of proceedings or where the period of treatment has crossed the assured time frame of cure, etc. sample forms attached pages 36 to 40. (g)The Assessing Officer has also erred in taking into account the history sheets belonging to the period prior assessment year 1994-95. In view of this, his estimate determined on the basis of the clinic in....
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....e, since not in operation in assessment year 1994-95 and 1995-96 Rs. 8,99,250 (c)Charni : Road As per patients register recorded in accounts since no declaration was made in respect of this clinic, restricted to assessment year 1996-97 only as this clinic was not in operation in earlier two years Rs. 4,25,675 Rs. 99,16,775 Less : Receipts shown in the accounts in last three years in the accounts of Kaya Kalpa International (excluding the receipts of beauty clinic of Mona Lisa) Assessment Year 1994-95 19,67,375 Assessment Year 1995-96 20,55,803 Assessment Year 1996-97 26,05,492 Rs. 66,28,670 Difference Rs. 32,88,105 Cash declared Rs. 39,74,375 Cash credits surrendered Rs. 3,50,000 Rs. 43,24,375 It must be highlighted and taken note of that when Dr. Arun Kumar Gupta made the declaration under se....
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....that all the receipts noted in the patients' forms seized during the search were not reflected in the books of account, even though that was not the stand of the AO himself, as we indicated herein before. He had initially given a letter dated 4-8-1998 on the basis of some selected history sheets in which it was mentioned as follows : - "(D)The analysis of history sheets clearly shows that the assessee was not recording all the receipts from all the visits of the patients, which clearly reflects from low percentage of recording. The average visit of the patients was much more than the reasonable estimate made by the Assessing Officer. The average made for receipt of Rs. 1,000 per visit is also very much reasonable in view of the above example. The above facts are based on the inventories made of history sheets of the patients during the search operations. The copy of Annexure B-8 and D-9 are enclosed for your reference." However, as this contention went to the root of the problem, we specifically gave an opportunity to the learned DR to verify, with the assistance of the learned counsel for the appellant, whether all the receipts noted in the patients' forms w....
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....lves do not record that every patient was charged and so to that extent there was suppression of income in respect of those patients who are not charged as per the patients' forms. It is also pleaded that the appellant was afforded an opportunity to obtain zerox copies of the patients' statements and the appellant did not request for a specific opportunity of cross-examining those patients. Even though the statements of two of the patients were taken before Dr. Arun Kumar Gupta, even he did not ask for any opportunity for cross-examining the four patients. In this context, in support of the proposition that the version of the depositions of the patients can be taken as a basis for estimation of the professional income notwithstanding the fact that they were not allowed to be cross-examined, the leaned DR relied upon the decision of the Hon'ble Calcutta High Court in the case of Kishanlal Agarwalla v. Collector of Land Customs AIR 1967 Cal. 80. Further, it is claimed that in respect of the statements recorded in the course of action under section 132, the procedural requirement of cross-examination need not be complied with as this is only an investigative stage of the p....
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....e learned DR file before us are insignificant and at any rate are explained. The learned counsel for the appellant has also filed before us an analysis of the patients' forms contained in File No. B-1 (Borivili) as per which the total number of patients were 46 but the total number of visits were only 49, i.e., the average visit per patient was only 1.06 as against 5 adopted by the AO while estimating the average receipts of Rs. 2,34,10,000 at page 25 of his order. Similar is the position in respect of file B-2 (Borivili) which has 128 patients and the average visits per patient in this file works out to 1.5. In file No. D-1 (Dadar), which has 147 patients, the number of visits is only 184, which works out to average visit per patient of 1.25. In file No. D-2 (Dadar), the total number of patients is 121 and the average visit per patient is only 1.42. It cannot also, to our mind, legitimately be argued that the fees received are not recorded in the patients' forms because that is the seized material on the basis of which estimation of undisclosed income is sought to be made and the entries made in such seized material must be regarded as reflecting the correct position. The ....
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.... power of attorney, Smt. Rajrani Gupta was mentioned as the owner of the property in question. The Assessing Officer has reproduced the relevant portion of the general power of attorney, which reads as follows : - "Whereas I am the owner and seized and possessed of or otherwise and sufficiently entitled to a Building property situated at and known as "Monalisa", Mall Road, Dist. Bhatinda, Punjab being the commercial premises, single storied building, total area adm. 2528 sq. ft." Having held on the basis of the above narration in the general power of attorney that the appellant was the owner of the property, he proceeded to disallow the deduction under section 54 on the other grounds, into which we need not go in this order for the reasons mentioned hereunder. 37. Before us, the learned counsel for the appellant pleaded that the appellant was described as the owner of the property in the power of attorney only because the property stood in the name of the appellant. It is also mentioned that the appellant was a member of Dr. Sohanlal Gupta (HUF) and simply because a property owned by an HUF stands in the name of a particular member, the HUF cannot be divested of the owners....