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TMI Blog2016 (1) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... and there was a clear-cut strategy to not only evade taxes, but also to file inaccurate particulars of income even after search operation. As such, by placing reliance on the judgment of the Supreme Court in the case of B.A.Balasubramaniam & Bros. Co. v. CIT (1998 (1) TMI 7 - SUPREME Court) , we have no hesitation in confirming the penalty impugned u/s 271(1)(c) of IT Act, 1961. - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... t he could have done a maximum of about 400 to 450 operations in 7 years period from assessment year 2002-03 to 2008-09. He has also stated that he has to have two assistants to carry out the operation to whom 1/3rd of the money received by the assessee for surgery has been paid. Therefore, the net receipt for these operations would be in the region of ₹ 8000 to ₹ 10000/- per operation. The assessee has included the income derived from these operations also in the regular return of income. 3.5 It was submitted before the lower authorities that for the assessment year 2002-03 and 2003-04 the assessee had received the payment from Dr L.Srinivasan by cheques. The average sum received per operations is ₹ 10000/- to ₹ 15000/- out of which he had spent 1/3rd to pay his assistants. However, the assessing officer has completely ignored the above statements given by Dr L.Srinivasan and the assessee. He has taken the statement given by Dr P. Ravichandran on 29.12.2007 that he has paid maximum of ₹ 1,00,000/- towards surgeon fee for these operations. 3.6 The assessing officer based on the statement of Dr. Ravichandran assumed the receipts of ₹ 70000/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & CO Nos. 14 to 18/Mds/2012 for these assessment years. 3.9 After considering the submission of both the sides, the Tribunal vide order dated 18.4.2013 has fixed the number of cases done at MIOT hospital at 120 and 450 cases at Bharathiraja hospital, both together comes to 570 cases and the Tribunal allowed the expenditure of ₹ 12,000/- per case as against ₹ 9000/- allowed by the CIT(Appeals) and re-determined the income of the assessee for these assessment years. 4. It is pertinent to note that on the quantum addition, the finding of the Tribunal in ITA Nos. 2007 to 2011/Mds/12 and & CO Nos. 14 to 18/Mds/2012 dated 18.4.2013 is as follows : "22. We have heard the rival contentions and perused the orders of the lower authorities. Assessments of both the assessees here, have as its base, the search done in the residential premises of Dr. P. Ravichandran, who was admittedly heading a Nephrology unit, which was inter alia doing renal transplants. It is not denied by either of the assessees that they had assisted Dr. P. Ravichandran. Dr.Deepak Lemech was doing the donor nephrectomies whereas Dr.L.Srinivasan was doing the recipient nephrectomies. Vis-à-vis t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has any evidence been produced by the assessees to show that these were done by a team in which assessees were not part. Similarly assessees have also not produced any record to prove that 104 numbers of transplants were done by them free of cost for M/s.Kidney care Trust. Considering the various difficulties in exactly ascertaining the number of operations done by the assessees at Bharathiraja Hospital, we are of the opinion that an estimate of 450 will render justice. Thus, total number of operations done by the assessees considering both MIOT hospital as well as Bharathiraja Hospital can be taken as 570. Thus, vis-à-vis the number of operations done by the assessees, we set aside the orders of the lower authorities below and direct the Assessing Officer to adopt such number at 570 and apportion it in the same ratio as done at table at para 9 above. 23. Coming to the aspect of the fees received by the assessees from Dr. P. Ravichandran, it is not disputed that both assessees had not maintained any records for the receipts from Dr. P. Ravichandran. Assessees had mentioned that amount received per operation was only ₹ 45,000/- at the maximum against which Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the opinion that expense of ₹ 12,000/- per case can be considered reasonable. Orders of the authorities below are set aside on this aspect and the Assessing Officer is directed to recompute the income of respective assessees considering the expense for each transplant at ₹ 2,000/-. Cross objection of the assessees on this issue is partly allowed." 5. After this, the Assessing Officer took up the case for levy of penalty u/s.271(1)(c) of the Act and he levied penalty for the assessment years under consideration is as under : A.Y. Penalty 2003-04 ₹ 4,72,500/- 2004-05 ₹ 2,88,090/- 2005-06 ₹ 1,90,850/- 2006-07 ₹ 3,21,000/- 2007-08 ₹ 2,40,330/- Against this, the assessee went in appeal before the CIT (Appeals). 6. On appeal, the CIT(Appeals) confirmed the penalty on the reason the assessee has not maintained any reliable record for the number of surgeries conducted and the fee received thereon. Further, the CIT(Appeals) observed that due to the efforts of the AO, on verification of the seized material, the assessee was found to have carried out surgeries on a large scale and collecting fee thereon outside the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, for all these assessment years, it is directed to estimate the number of operations under the prescribed ratio as mentioned by the Tribunal in para 9 of its order and in respect of fees, it was directed to estimate the same at ₹ 22,500/- per person. The ld. AR contended that the conclusion of the Assessing Officer is based on estimation of income and it is not appropriate levy of penalty in these cases. He relied on the decision of the Supreme Court in the case of CIT v. Suresh Chandra Mittal (251 ITR 09). 8. Thus, according to the ld. AR, there was a difference of opinion as regards the estimated income of the assessee. Since the lower authorities and the Tribunal adopted different estimates in assessing the income of the assessee, it could not be said that the assessee had concealed the particulars of income so as to levy penalty u/s. 271(1)(c) of the Act. Since there was a difference between the returned income and assessed income due to difference of opinion about estimated rate of fees for surgery, it cannot be said that there is concealment of income and penalty cannot be levied. But in the present case, the assessee has not maintained any books of account so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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