1979 (11) TMI 120 - AT - Income Tax

Issues Involved:
1. Reduction of addition on account of suppressed professional receipts for the assessment years 1971-72 to 1976-77.
2. Deletion of addition on account of unexplained investment in fixed deposit in the name of the father of the assessee.
3. Deletion of addition on account of unexplained investment in gold ornaments and jewellery for the assessment year 1976-77.

Issue-Wise Detailed Analysis:

1. Reduction of Addition on Account of Suppressed Professional Receipts:

For the assessment year 1971-72, the Income Tax Officer (ITO) initially added Rs. 6,524 to the assessee's income for suppressed professional receipts linked with low withdrawals for household expenses. However, the Appellate Assistant Commissioner (AAC) reduced this addition to Rs. 1,000. The ITO had rejected the book results maintained by the assessee, a surgeon, due to discrepancies in the records of outdoor patients and the absence of proper billing and receipt books. The ITO estimated 10% of the gross receipts as suppressed income, but the AAC found that the receipts from outdoor patients would only amount to 1-2% of the total receipts and that the assessee had adequately proved that certain patients were not charged. The Tribunal upheld the AAC's decision, stating that no basis existed for the addition of Rs. 6,524 and that the ITO's rejection of the book results was justified. The appeal for the assessment year 1971-72 was dismissed.

For the assessment year 1972-73, the ITO determined the suppressed professional income at Rs. 12,000. The AAC reduced this to Rs. 1,000, and the Tribunal agreed, noting that irregularities found in the previous year could not justify assuming suppressed income for subsequent years. The appeal for 1972-73 was dismissed.

For the assessment years 1973-74, 1974-75, and 1975-76, similar grounds were raised regarding suppressed professional receipts and low withdrawals for household expenses. The AAC reduced the additions to Rs. 1,000 for each year, and the Tribunal confirmed these reductions, dismissing the appeals for these years.

2. Deletion of Addition on Account of Unexplained Investment in Fixed Deposit:

For the assessment year 1972-73, the ITO added Rs. 20,000 as unexplained investment in a fixed deposit in the name of the father of the assessee. The AAC deleted this addition, accepting the assessee's claim that the deposit was made by his father, who had substantial means and managed his family affairs well. The Tribunal upheld the AAC's decision, finding no reason to disbelieve the affidavits and statements supporting the assessee's claim. The appeal for this issue was dismissed.

For the assessment years 1973-74 and 1976-77, similar issues were raised regarding interest on the fixed deposit. The Tribunal confirmed the AAC's deletion of these additions, dismissing the appeals for these years.

3. Deletion of Addition on Account of Unexplained Investment in Gold Ornaments and Jewellery:

For the assessment year 1976-77, the ITO added Rs. 46,300 as unexplained investment in gold ornaments and jewellery found during a search. The AAC deleted this addition, accepting the assessee's explanation that the gold was received as 'Streedhan' at the time of his wife's marriage, supported by affidavits from family members and the custom of the community. The Tribunal upheld the AAC's decision, finding no reason to disbelieve the affidavits and statements. The appeal for this issue was dismissed.

Conclusion:

The Tribunal, after considering the evidence and arguments, dismissed all the appeals filed by the Revenue for the assessment years 1971-72 to 1976-77. The decisions of the AAC to reduce or delete the additions made by the ITO on account of suppressed professional receipts, unexplained investment in fixed deposits, and unexplained investment in gold ornaments and jewellery were upheld.

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