2002 (2) TMI 1279 - AT - Income Tax

Summary

Issues:
1. Deletion of addition in professional income.
2. Deletion of addition received from a foreign society.
3. Deletion of unexplained expenses.

Issue 1: Deletion of addition in professional income:
The Assessing Officer estimated the net income from the profession of a heart specialist, making an addition of Rs. 28,000. However, the CIT(A) deleted this addition based on the list of patients produced, past history, and facts of the case. The appellant argued that the Assessing Officer ignored past history and failed to negate the detailed list of patients and fees charged. The ITAT found that the Assessing Officer proceeded on presumptions without specific material and declined to interfere with the CIT(A)'s order, noting that the declared receipts were better than past years.

Issue 2: Deletion of addition received from a foreign society:
The appellant received Rs. 85,000 from a foreign society, claiming it as a gift and non-taxable. The Assessing Officer treated it as casual income under section 10(3) of the Act. The CIT(A) held that the amount was indeed a gift, supported by a detailed letter and telegram from the society, which the Assessing Officer had not considered. The ITAT, considering relevant case laws and evidence, upheld the CIT(A)'s decision, stating that the amount was a gift out of personal regard and admiration, not related to professional services.

Issue 3: Deletion of unexplained expenses:
The Assessing Officer added Rs. 25,000 as unexplained expenses for a visit to Germany, linking it to the estimated income from private practice. The CIT(A) accepted the explanation provided, including confirmatory letters and sources of expenditure, and held that the Assessing Officer failed to establish the alleged unexplained expenditures. The ITAT found that the explanation submitted was not rebutted, and the CIT(A) correctly examined the source of expenditure, declining to interfere with her decision. The appeal of the revenue was dismissed.

In conclusion, the ITAT upheld the CIT(A)'s decisions on all issues, emphasizing the importance of considering evidence, past history, and legal principles in determining additions or deletions in income assessments.