1997 PLP 826 (PTD)

ASHFAQ AHMED (ACCOUNTANT MEMBER).--This appeal filed by the assessee-appellant relating to the assessment year 1989-90 has assailed the order of the C.I.T.(A) Zone-II, Multan, dated 20-11-1991.

2. The brief facts of the case are that the appellant filed return for the year under review declaring total income at Rs. 320,

591. The return was accompanied with the compution chart. Salary certificate from Nishtar Medical College, Multan, certificate of 35 % share income from Nishtar Hospital, certificate of receipts regarding treatment charges from Shifa Poly Clinic, photo copy of Insurance receipts. Photo copies of N.I.Ts/D.S.Cs. and letter showing number of shares front B.T.N. Limited, Burewala, Zakat Certificates and bank statement. During the previous years the assessee's assessed income had exceeded Rs.100,000, therefore, the assessee's case was processed under normal law. Books of accounts were duly produced before the assessing officer, which were examined by him, The assessee had shown gross receipts from private practice at Rs.226,650 against which the expenses were claimed at Rs.54,

053. The assessing officer discarded the declared receipts for the reasons that the same are not fully verifiable and the expenses have been claimed on estimate basis and also not fully vouched. Keeping all these factors into consideration the assessing officer issued a notice under section 62 which was duly served upon on the assessee and the same has been incorporated in the body of the assessment order. For the reasons recorded in the notice the assessing officer adopted the number of operations per week at 2 and working period at 37 weeks. Therefore, the gross receipts were suggested to be adopted at Rs.2,96,000.

3. The assessee-appellant filed a written reply to the above said notice issued under section

62. This detailed reply of the assessee has also been incorporated in the body of the assessment order. This detailed reply was discarded by the assessing officer and for the reasons recorded in the body of the assessment order, he determined the assessee's income from consultation at Rs. 608,

110. After allowing expenses at Rs.50,000 and making certain add backs in the profit and loss account expenses the assessee's total income was arrived at Rs. 695,088.

4. Feeling aggrieved with the assessment order the assessee went in appeal before the CIT(A) who vide his impugned order held that rejection of account version has not been assailed by the assessee or his counsel before him. But at the same time the assessing officer has not brought on record any material to prove that the appellant was conducting operations at places other than those disclosed by the assessee. Taking into account these factors the appellant's gross receipts from operations were reduced to Rs.75,000 which was inclusive of share from hospital and Shifa Poly Clinic. With regard to the number of patients the arguments put forth by the learned counsel for the appellant found favour with the CIT(A). In this respect it was held by the CIT(A) that the appellant was not confronted on the issue of the alleged visit to the clinic. It was further held by the CIT(A) that the number of patients in clinic definitely include attendants and relatives. The CIT(A) taking into account all the aspect of the case, including the age of the appellant, his official duties and other social and educational commitments, reduced that number of patients to

8. By adopting number of working days at 250 and daily patients at 8 at the rate of Rs. 150 per patient the CIT(A) adopted the receipts at Rs.300,

000. The expenses as allowed by the assessing officer were found reasonable and the same were confirmed. The assessee still feels aggrieved with the relief allowed by the CIT(A), hence this second appeal before us.

5. During the course of the hearing before us, the learned counsel appearing on behalf of the assessee-appellant has vehemently contested the rejection of accounts on the ground that no defect has been pointed out by the assessing officer in them. It was further submitted by the learned A.R. that the report of the Inspector has not been confronted to the appellant and even the date of the visit of the Inspector has not been given which might not relate to the year under consideration. It was argued that rejection of accounts version and estimation of receipts are based on suspicion and presumption. It was further submitted by the learned counsel for the appellant that the C.I.T.(A) was wrong to say that the appellant did not object to the rejection of accounts before him. The learned counsel for the assessee submitted a copy of grounds of appeal which was taken up before the C.I.T.(A) in which the ground regarding rejection of book version was duly taken. The learned counsel for the appellant further stated that the assessee has history of acceptance of accounts particularly in the, immediately preceding assessment year of 1988-89 the declared version of the assessee stood accepted.

6. We have heard the learned authorized representatives of both the parties. The learned A.R. appearing on behalf of the revenue has supported the orders passed by the officers below in this case. However, we are of the considered view that the learned counsel for the assessee has been able to make out a case for acceptance of the declared version of the assessee. The CIT(A) has himself said in his appellate order that the assessing officer has not brought on record any material to prove that the appellant was conducting any other business then the one disclosed by the assessee. The CIT(A) has also held that the appellant was not confronted with the issue of alleged visit of the official to the clinic. Ali these factors sufficiently prove that the appellant's declared version merited acceptance. In this view of the matter, we order that the appellant's declared version should be accepted particularly in view of the treatment meted out to the appellant in the immediately preceding year of 1988-89 when the appellants declared version was accepted.

7. As a result of the above discussion the appeal filed by the assessee? appellant succeeds accordingly. M.B.A./178/T????????????????????????????????????????????????????????????????????????? Order accordingly.