Dr. Gurvinder Singh Randhawa vs Commissioner of Income Tax

Hemant Gupta, J.—The present appeal u/s 260A of the income tax Act, 1961 (for short "the Act"), is against the order dated November 17, 2011, passed by the income tax Appellate Tribunal, Bench "B", Chandigarh (for short "the Tribunal"), in I.T.A. No. 157/Chandi/2011 for the assessment year 2006-07. The assessee has claimed the following substantial question of law in the present appeal: Whether, under the facts and circumstances of the case and on the true and correct interpretation for the provisions of sections 29 and 145, while arriving at the ''chargeable income'', the action is sustainable in concluding the ''proceedings on presumption'' ignoring ''material fact'' containing ''material particulars'' on record?

The Assessing Officer during the course of the assessment made addition of Rs. 25,13,016 on account of undisclosed 247 surgeries at Rs. 10,174 per surgery on the basis of receipts for 1008 operations in a year at the average rate basis. The said order was affirmed by the Commissioner of income tax (Appeals), Patiala, vide order dated December 13, 2010 (annexure A-20). However, in appeal, the learned Tribunal reduced the quantum of addition at Rs. 8,000 per surgery. The learned Tribunal recorded the following findings:

During the appellate proceedings wherein numerous opportunities were allowed to the assessee to present his case vis-a-vis addition made by the Assessing Officer after rejecting the books of account. The assessee is not in appeal (amended grounds of appeal) against the rejection of books of account and objection raised is against the addition made on account of unaccounted surgeries. The Assessing Officer had made an addition of Rs. 25,13,016 on account of 247 surgeries at Rs. 10,147 per surgery. The learned counsel for the assessee without prejudice admitted to the aforesaid discrepancies but had objected to the rates of non-foldable surgeries to be applied, i.e., Rs. 6,000 per surgery, as per which the shortage works out to Rs. 14,82,000. In view of the admission of the assessee what discrepancies have crept in the books of account, we are in conformity of unaccounted surgeries merits to be made in the hands of the assessee. The assessee claims the average rate of surgery at Rs. 6,000 per surgery, whereas the Assessing Officer has applied the average rate of surgery at Rs. 10,174. No basis has been filed by the assessee to establish its case whereas the Assessing Officer had applied the average rate of surgery vis-a-vis total receipts declared for the year under consideration. In the entirety of facts and circumstances of the case we direct the Assessing Officer at apply the rate of Rs. 8,000 per surgery to compute the income of the assessee for 247 surgeries carried out during the year. Thus, ground No. 2 raised by the assessee is partly accepted.

Learned counsel for the appellant has vehemently argued that the average rate on which assessment was framed by the Tribunal at Rs. 8,000 is not reasonable, as it is not possible that all surgeries would give rise to income at the said scale. He relies upon the judgment of the hon''ble Supreme Court reported as The Commissioner of Sales Tax, Madhya Pradesh Vs. H.M. Esufali, H.M. Abdulali, Siyaganj, Main Road, Indore, and a subsequent judgment of the Bombay High Court reported as Commissioner of Income Tax Vs. M.K.E. Memon, wherein it has been held that the Assessing Officer cannot estimate the undisclosed income on arbitrarily basis.

We have heard learned counsel for the appellant and find that the substantial question of law framed does not arise for consideration.

The Tribunal in its order has mentioned that the appellant has admitted 247 undisclosed surgeries. The statement of the assessee was that Rs. 6,000 per surgery should be applied to determine the undisclosed income, whereas the Tribunal has reduced the rate of addition at Rs. 10,147 applied by the Assessing Officer to Rs. 8,000 per surgery.

We find that once the assessee has himself stated before the Tribunal that the average rate of the surgery be reduced to Rs. 6,000 per surgery, then now it is not open to the appellant to dispute that that the flat rate applied by the Tribunal is arbitrary. In fact, the average rate of surgery at Rs. 10,147 was based upon the number of surgeries performed by the appellant in one year and the income earned therefrom. The addition made by the Assessing Officer were based upon reasonable grounds, which may not be said to be arbitrary. In fact, the Tribunal was indulgent to the appellant in reducing the average rate to Rs. 8,000 per surgery.

Learned counsel for the appellant has further argued that a specific ground was raised before the Tribunal that the rejection of books of account is wholly unjustified and that the Tribunal has wrongly recorded in the order that the rejections of books of account was not disputed by the assessee.

We do not find any merit in the said argument as well. Mere fact that in the grounds of appeal, the appellant has raised a ground to assert that rejection of books of account is incorrect, is not sufficient to accept the argument of the appellant. The Tribunal has recorded the concession on the basis of the argument raised during the course of hearing. Therefore, the finding has been recorded by the Tribunal on the basis of proceedings at the time of hearing. The concession recorded during the course of hearing cannot be permitted to be disputed in appeal.

In view of the said fact, we do not find that any substantial question of law arises for consideration by this court. Dismissed.