I.T.As. Nos. 5416/LB of 2003 and 5804/LB of 2002, decided on 31st August, 2005. VS I.T.As. Nos. 5416/LB of 2003 and 5804/LB of 2002, decided on 31st August, 2005., 2006 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 952 (2005)

(a) Income Tax Ordinance (XXXI of 1979)---

----S. 62---Assessment on production of books of accounts, etc.---Assessee, a medical doctor---Estimation of income without any material--Validity---Assessing Officer passed assessment orders in a summary manner and estimates of income from operations was made without any material---First Appellate Authority allowed relief after detailed discussion and keeping in view material evidence such as certificate from the concerned hospital, history, of the case and on the basis of parallel cases---Finding of First Appellate Authority on the issues of "income from operations", "income from private practice" and treatment in respect of add backs in Profit & Loss account was confirmed by the Appellate Tribunal.

I.T.A. No. 701/LB of 2000, dated 28-10-2000 and 2001 PCTLR 155 rel.

(b) Income Tax Ordinance (XXXI of 1979)---

----S. 12(18)---Unexplained investment etc., deemed to be income---"Salami" received on the birth of daughter---Addition---Validity---Assessee showed in reconciliation statement a sum as "Salami" received on the birth of his daughter---Since amount was not received through crossed cheque, Assessing Officer proceeded to make addition under S.12(18) of the Income Tax Ordinance, 1979---Addition was deleted by the First Appellate Authority on the basis of judgment of High Court and observed that as per tradition of our society "Salami" was being given on the occasions of births, marriages and other ceremonies---First Appellate Authority was justified in deleting the addition in view of judgment of High Court---Order of First Appellate Authority was maintained by the Appellate Tribunal.

(2002) 85 Tax 354 ref.

Ahmad Shahab D.R. for Appellant.

Ahmed Nadeem Ahsan, I.T.P. and Muhammad Waseem Bilal for Respondents.

Date of hearing: 16th August, 2005.

ORDER

Titled two appeals have been filed at the instance of the Revenue calling in question the impugned order, dated 26-9-2002 (Assessment year 1999-2000) and order, dated 4-8-2003 (Assessment year 2000-2001). For the assessment year 1999-2000 the Revenue has objected to the acceptance of declared income from operations, reduction in income from private practice and miscellaneous expenses out of P&L account. For the assessment year 2000-2001 the Revenue has come up in appeal against the acceptance of declared version in respect of income from private practice, income from operations and deletion of addition under section 12(18). Since for both the years the Revenue has taken almost common grounds of appeal, the appeals are being decided through this consolidated order as under:--

2. Briefly stated the facts of the case are the assessee is an individual deriving salary income as doctor and from private practice. Returns for the two years were tiled declaring income of Rs.1,47,688 and Rs.1,61,000 respectively. Returns were accompanied by salary statements and tax payment receipts. Statutory notices were issued for both the years and complied with. Since no patient register was produced for the assessment year 1999-2000, the Assessing Officer rejected the declared version and proceeded to estimate receipts from private practice at Rs.1,80,000 and income from operations at Rs.2,50,000. After making add backs under the heads miscellaneous, petrol and miscellaneous repair, total income was assessed at Rs.4,46,838. For the assessment year 2000-2001 in spite of providing patient register income from private practice was adopted at Rs.90,000 on the plea that addresses of the patients were not provided. Income from operations was adopted at Rs.2,50,000 and after making some add backs under the heads . miscellaneous and car petrol, net income was determined at Rs.3,24,844. Moreover, an addition under section 12(18) at Rs.1,80,000 was also made since the transactions made was not through crossed cheque.

3. In appeal the learned CIT(A) for the assessment year 1999-2000, the learned CIT(A) ordered for acceptance of declared version in respect of income from operations on the basis of certificate from the concerned hospital and for the reason that in the immediately preceding year i.e. 1998-99, the ITAT vide I.T.A. No.701/LB of 2000, dated 28-10-200Q directed for acceptance of the declared version. Order for acceptance of the declared version on the same issue was also made for the assessment year 2000-2001 on the same basis. On the issue of income from private practice the estimate was reduced from Rs.1,80,000 to Rs.90,000 against the declared figure of Rs.35,000 for the assessment year 1999-2000 on the basis of a judgment reported as 2001 PCTLR 155. For the assessment year 2000-2001 the learned CIT(A) also order for acceptance of declared income from private practice at Rs.60,650 against the estimated income of Rs.90,000 in view of certain reported and unreported judgments of the Tribunal mentioned in the body of impugned order. However, a nominal relief was allowed in the P&L account for the assessment year 1999-2000 while add backs made for the assessment' year 2000-2001 were confirmed. In addition to this for the assessment year 2000-2001 addition made under section 12(18) was also deleted. Hence the instant appeals by the Revenue.

4. Both the parties have been heard and relevant orders perused. Bare scanning of the assessment orders for both the years show that the Assessing Officer passed assessment orders in a summary manner and estimates of income from operations was made without any material evidence. Similar is the position with the estimations made in respect of income from private practice. However, perusal of the impugned orders reveal that the learned CIT(A) allowed relief after detailed discussion A and keeping in view material evidence such as certificate from the concerned hospital, history of the case i.e. ITAT's order for the immediately preceding year and on the basis of other parallel cases cited in the body of impugned orders. The Revenue has failed to provide any material evidence in support of its contention. Keeping all these facts in view the findings of the learned CIT(A) on the issues of "income from operations", "income from private practice" and treatment in respect of add backs in the P&L account is confirmed for both the years under appeal.

5. Regarding addition under section 12(18) for the assessment year 2000-2001, the facts are that the assessee in the reconciliation statement showed a sum of Rs.1,80,000 as "Salami" received on the birth of his daughter. Since the amount was not received through crossed cheque, the Assessing Officer proceeded to make addition under section 12(18). On appeal the learned CIT(A) deleted addition in view of findings of the Honourable Peshawar High Court reported as (2002) 85 Tax 354 wherein it has been held that any amount received through crossed cheques, cash or any other banking channels was not liable to tax under section 12(18). B The learned CIT(A) also observed that as per tradition of our society "Salami" is being given on the occasions of births, marriages and other ceremonies. It was also observed by the learned CIT(A) that the Assessing Officer has failed to ascertain the true/genuine facts of the claim. The learned A.R. of the assessee reiterate that the assessee has not received lump sum amount of Rs.1,80,000 but the same was received from his in-laws, his near and dear ones in the shape of present of Rs.500 or Rs.1000. Therefore, keeping in view all the facts and circumstances of the case, we are constrained to observe that the learned CIT(A) was justified in deleting the addition in view of judgment of Honourable Peshawar High Court. The order of the learned CIT(A) on this issue is also maintained.

6. As a result appeals of the Revenue being devoid of any merits stand rejected.

C.M.A./9/Tax (Trib.)??????????????????????????????????????????????????? Revenue Appeal rejected.