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TMI Blog1975 (11) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ll presently state, find it extremely difficult to subscribe to the estimate of a net income of Rs. 94,474 was made by the ITO and sustained by the AAC for asst. yr. 1970-71 and Rs. 95,000 net made by the ITO was sustained to the extent of Rs. 75,000 by the AAC for asst. yr. 1971-72. So we have to make an estimate of our own. 2. The sheet-anchor of the estimate is the computation of the gross collection of the assessee from his patients for asst. yr. 1970-71 at a figure of Rs. 1,40,588 from which expenditures were deducted to reach at the net income for asst. yr. 1970-71. Then for want of better materials the ITO accepted the same figure for the succeeding asst. yr. 1971-72. In order to understand how this figure was arrived at, we will faithfully reproduced what the ITO said in the assessment order for asst. yr. 1970-71:— "The IT Inspector duly authorised by the ITO inspected the assessee's premises and made an on the sport study of the assessee's professional activity. The inpatient and outpatient tickets giving the names and addresses of his patients and the amount of fees including consultation and treatment, were collected for closer study. These tickets were listed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, at least we could find out none, in the totalling to reach the aggregate. But the crucial test is to cross-check and find out whether the figure of receipts shown in the list against each ticket number are correct figures of the correct amount received in the accounting year relevant to the asst. yr. 1970-71. As regards the availability of these tickets, which were at one time with the ITO, for our scrutiny, the explanation of the Departmental Representative is that those were returned to the assessee. But there is no documentary evidence to prove that fact. The assessee denies having received back all these tickets. According to him, he received only a few (i.e., tickets for the first three months or so). Those were produced by the assessee before us. We need not make any investigation and find out on whose door the fault should lie for non-production of the tickets before us. If on our examination the figures in the list tallied with at least that of the tickets produced before us by the assessee, we would have proceeded on the basis that the figure of Rs. 1,40,588 is a correct figure. But unfortunately we find that there are material discrepancies which strike at the root o t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But actually the gross collection revealed by these tickets for asst. yr. 1970-71 is only Rs. 573. 5. So the conclusion is inevitable in this case that the figure of Rs. 1,40,588 said to be the gross collection for asst. yr. 1970-71 takes in not only that year's collection but also certain amounts received in the next asst. yr. 1971-72. How much is that amount received in the next accounting year so included in this Rs. 1,40,588 is anybody's guess. But that it includes next year's receipts also is a fact certain, positive and established in the case. So we are not prepared to make an estimate on the basis of this figure of Rs. 1,40,588 which is materially defective in its computation. 6. The ITO attempted to support the estimate of net income of Rs. 94,474 for asst. yr. 1970-71 on another line of reasoning to which we shall now advert to. The ITO found that the assessee, in the accounting year relevant to asst. yr. 1970-71, had deposited Rs. 49,000 in the bank in his name as well as in the name of his wife and two minor children. That fact is not disputed. But how much in the names of each, in how many instalments and on what dates are these deposits made is not made known to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... menced only in January, 1972. So it cannot be said that for fear of detection, the assessee did not make any investment in asst. yr. 1971-72. There is no evidence of any similar investment in the asst. yr. 1969-70 immediately prior to asst. yr. 1970-71. All these go to show that there is no basis for the premise or inference that all these expenditures of Rs. 97,437 came out only from that year's professional income. The assessee was not asked to explain the source of investment of Rs. 49,000 in bank, Rs. 24,500 in building and Rs. 6,500 in compound wall, an aggregate of Rs. 80,000. It may as well be that it came for the past savings of the assessee or from some other source like agricultural income etc. This investment of Rs. 80,000 is a singular instance in this particular assessment year. It cannot be therefore inferred that it came from out of that year's professional earnings of the assessee. So it is not at all safe to make an estimate on the basis that the assessee had the capacity to spend Rs. 97,437 in the relevant accounting year from out of the income earned in that accounting year alone. 7. So the only method is to make an estimate in accordance with the facts and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is that these deposits in the name of his wife and minor children represent profits of a rubber plantation owned by a firm of six partners of which the assessee is the managing partner. We also are not impressed with this explanation. It has to be rejected because it does not accord with the facts of life. It militates against the ordinary possibilities and probabilities. If it is the profits of that rubber plantation why was it not deposited in the name of that plantation or at least in the name of any one of the other five partners or that of the assessee-managing partner and why should it wand its way to get deposited in three separate accounts in the name of the wife and two minor children of the managing partner? These questions can fetch no satisfactory answers. We need not discuss much about the veracity of this explanation which on the face of it appears to us as inherently improbably against the ordinary human conduct and contrary to the ordinary course of events in life. 11. So if we reject the explanation, it follows as an inevitable conclusion that these are earnings or moneys of the assessee deposited, that is transfer without consideration to the wife and his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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