1997 (5) TMI 77 - AT - Income Tax

Summary

Issues: Dispute over additions to declared professional receipts by Assessing Officer for assessment years 1988-89 and 1989-90.

The judgment involved a dispute regarding the additions made by the Assessing Officer to the declared professional receipts of the assessee for the assessment years 1988-89 and 1989-90. The Assessing Officer had made additions of Rs. 46,250 and Rs. 56,100 for the respective years. The case revolved around the Assessing Officer's findings that the assessee, a reputed Orthopaedic Surgeon, had not disclosed all operations conducted, leading to suspicions of undeclared income. The Assessing Officer estimated professional receipts not disclosed by the assessee, resulting in the impugned additions. The learned CIT (Appeals) partly accepted the assessee's explanation but still confirmed the additions, disagreeing with the assessee's assertion that the unaccounted operations were free of charge due to personal relations or compassionate grounds.

The assessee contended that a significant number of operations were conducted free of charge due to the doctor's benevolence towards patients of smaller means. The assessee argued that the Assessing Officer had no evidence to prove that fees were charged for the alleged unaccounted operations, emphasizing that the burden of proof should not be on the assessee to demonstrate non-charging of fees. The Departmental Representative argued that the Assessing Officer based the assessment on gathered material and that the burden of proof lay with the assessee to establish the operations were free of charge. However, the Tribunal noted that suspicion alone cannot lead to conclusions of income suppression and that burden of proof generally lies with the revenue, not the taxpayer, to establish understatement of income, unless specific legal provisions dictate otherwise.

The Tribunal, after considering the submissions and perusing the orders of the lower authorities, disagreed with their conclusions. The Tribunal found the explanation given by the assessee regarding the free operations plausible, noting that instances of altruism exist in the medical profession. The Tribunal emphasized that suspicion, without concrete evidence, cannot be equated to proof of income concealment. Additionally, the Tribunal highlighted that burden of proof regarding understatement of income typically rests with the revenue, and in the absence of specific legal provisions shifting this burden to the assessee, the burden should not be placed on the taxpayer. Consequently, the Tribunal directed the deletion of the additions to the returned income, allowing both appeals in favor of the assessee.