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TMI Blog1992 (2) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ecologist. She also sits at Raghu clinic for consultation and does surgery. The accounting period for both the assessees ended on 30th June, 1984 and 30th June, 1985 for the asst. yr. 1985-86 and 1986-87 respectively. 3. ITA No. 589/JP/89 (Filed by Dr. A.S. Meenawat for asst. yr. 1986-87) : For the asst. yr. 1985-86 he filed his return on 23rd July, 1985 declaring an income of Rs. 17,170 and assessment was completed on 18th Oct, 1985 under s. 143(1). Subsequently it was reopened under s. 143(2)(b) as a selective scrutiny case on 16th March 1988 statement of Dr M.S Meenawat was recorded on 26th Oct., 1987 and of his technicians Svs. Pradeep Dixit and Shakil Ahmed under s. 131. Dr. A.S. Meenawat was cross-examined on 10th March, 1988. The first ground relating to the validity of the reopening of the assessment was a first proceeded with but later on not pressed after the Department filed papers regarding the proposal and the approval of IAC on 16th March, 1988. This ground, therefore, no longer survives for our consideration. 4. The next ground relates to the addition of Rs. 5863 by way of consultancy fee received by the appellant. Out of the total disclosed professional receipts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is that although the books of account of the assessee remained the same, they were apparently believed so far as the testing fee and other income are concerned. Secondly, the practice understandably followed by the assessee was that daily case diary (rough or kacchi diary) was noted daily whereas the entries in the cash book were made after every 5-6 days by the assessee when he had leisure and time. There is no basis, material, or justification for the inference that the assessee wrote both the diaries with different pens at one sitting. From different pens entries may as well have been made at different times. If the expert's report was to the contrary, it should have been put to the assessee so that the expert could be examined and his statement taken as to whether such an opinion could be given and as to the scientific basis therefor. Inspite of opportunity the Departmental representative could not lay hands on the report of the expert either in the folder for the asst. yr. 1986-87 or in any other folder. The drawing of such adverse and drastic inferences from undisclosed and untested materials is difficult to support or separate from bare suspicion. It cannot command credenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation letter had been given by one Shri. P. C. Bohra working with M/s Mahaveer Ghee Bhandar, Ahmedabad. Though he considered the addition to be justified, he did not sustain it on the ground that a separate addition of Rs. 5863 was being maintained as undisclosed consultancy receipts. 9. We have considered the rival submissions. Shri P. Raj Jain and P. C. Bohra appear to be one and the same person. His account and confirmation had been filed. If the notice under s. 131 remained unserved on him, it does not mean that his identity was not established. He had given another loan of Rs. 25,000 in the asst. yr. 1986-87 which the ITO accepted. We, therefore, hold that the cash credit was a genuine one and that no addition could be warranted with reference thereto. 10. The last ground relates to the charging of interest under s. 215. The learned Dy. Commissioner(A) has already directed the Assessing Officer to recompute the interest taking into account the reliefs granted. The ground is, therefore, purely consequential. We direct accordingly. 11. ITA No. 503/JP/89 (Filed by the Department for the asst. yr. 1985-86 in the case of Dr. A.S. Meenawat) : The first ground in the departmenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced on 17th Feb., 1988 and 19th Feb., 1988 but was not produced by the assessee. But as already observed, the assessment proceeding for the assessment year in question themselves commenced only on 16th March, 1988. Therefore, the ITO's observation cannot be accepted. The learned Dy. Commissioner(A) accepted that her confirmation was filed. Thus this addition was unwarranted on facts and was rightly deleted. 17. So far as Shri P. Raj Jain is concerned, we have already held earlier that this cash credit could not be held to be unexplained. Thus the deletion of the addition with reference to him is also upheld (though on a different ground). 18. So far as Shri Narain Dariyani is concerned, it appears that he was produced and examined under s. 131. He was a technician in the Medical College since 1968. He used to get Rs. 1800 per month at the assessee's clinic since 1983-84 as a culture assistant @ Rs. 225. He confirmed the cash credit and said that this loan had been to taken to install a machine for culture as the assessee did not at that time have ready funds. He also said that he received back the amount in 1987. Since there is nothing in the said statement to discredit his test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment was completed on 18th Oct., 1985 under s. 143(1) on the basis of the return dt. 23rd July, 1985 in which the returned income was Rs. 12,986. However, the assessment was reopened under s. 143(2) (b) on 16th March, 1988. 23. An additional ground was permitted to be raised (on the basis of the application dt. 17th Jan., 1990) regarding the validity of the reopening of the assessment under s. 143(2)(b). However, since at the time of the hearing of the appeal, the Department having filed the necessary papers, it was not pressed, it no longer survives for our consideration. 24. The first ground relates to the cash credit of Shri Pradeep Dixit, the technician or assistant in the laboratory of Dr. A.S. Meenawat. He was examined on 23rd July, 1988. Dr. Jyoti Meenawat was also examined on 16th March, 1988. After examining these statements the ITO disbelieved the cash credit saying that there was contradiction in the two statements regarding the manner in which loan was given. 25. In appeal, the learned Dy. Commissioner(A) confirmed the addition doubting the capacity of Shri Pradeep Dixit to advance the loan. 26. We have considered the rival submissions. Even though Shri Pradeep Dix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee were only Rs. 3650 concerning that her expenses could not be less than Rs. 10,000 (after considering the expenses met by the Dr. A.S. Meenawat, the ITO made an addition of Rs. 6,350 on this account. 34. In appeal, the addition was reduced by the learned by Dy. Commissioner(A) to Rs. 3,350. 35. Before us on behalf of the assessee Shri U.C. Jain argued that under s. 69C no addition could be made unless there was positive evidence for incurring expenditure. He also relied upon the decision of Bombay High Court in J.S. Parker vs. V.B. Paleker & Ors. (1974) 94 ITR 616 (Bom). On the other hand, the learned departmental representative relied upon the orders of the IT authorities. 36. We have considered the rival submissions. It is not under dispute that the major expenses in the house-hole are borne by Dr. A.S. Meenawat in whose hands addition was made. Therefore, in the absence of specific evidence to show that for her own out of pocket expenses, the assessee would have spent more than Rs. 3,650 withdrawn by her, we find no warrant or justification for any addition. The addition is accordingly deleted. 37. The last ground relating to interest under s. 217 is of a consequential n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see couple cheques of Rs. 1500 each separately. The ITO could not allow mere suspicion to prevail over reliable evidence when no further enquiries were made to confirm the suspicion. The evidence allays and removes any possible suspicion. On facts, therefore, we maintain the deletion of this addition. 42. ITA No. 588/JP/89 (filed by the assessee Dr. Jyoti Meenawat for the asst. yr. 1986-87) : Originally, assessment was completed under s. 143(1) on the basis of the return filed on 2nd May, 1986 declaring an income of Rs. 16,340. However, the assessment was reopened under s. 143(2) (b) on 16th March, 1988. 43. An additional ground was permitted to be raised (on the basis of the application dated 17th Jan., 1990) regarding the validity of the reopening of the assessment under s. 143(2) (b). However, since at the time of the hearing of the appeal, the Department having filed the necessary papers it was not pressed, it no longer survives for our consideration. 44. The first ground relates to the addition of Rs. 2,000 as income under s. 28 of the IT Act. The assessee received 4 gifts of Rs. 5,009 each from Svs. Naveen Mathur, Mahaveer Sisodia and Miss Nain Tara Masih and Shri Shashi S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er husband had treated him and his family without charging any consultation or laboratory fee. He is an old family friend. Mrs. Sisodia stated that in 1983-84 Dr. A.S. Meenawat had treated her for her kidney trouble. She was looked after by the assessee during her pregnancies. Miss Nain Tara Masih was a typist-cum-clerk in Vijaya Bank. She was treated for chronic asthma, peptic ulcer and diabetes by Dr. A.S. Meenawat without any charges. Her brother-in-law is an intimate friend of the assessee couple. She stated that the gift was a kind gesture. Shri Naveen Mathur is also a University teacher. He is the brother-in-law of Dr. A.S. Meenawat. He also received treatment for his heart trouble and typhoid etc. Free. Thus all these gifts emanated from old intimate friends or relatives from whom the assessee couple had understandably not been charging any fee. The gifts were not related to any specific treatment and were gestures of kindness, love and affection and were of a personal nature. The quid pro quo element is not established. Even then the apportionment out of the gifted amounts to the extent of Rs. 500 each by way of income under s. 28 by the learned Dy. Commissioner(A) was with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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