B.P. JAIN, A.M. OREDR These are two cross-appeals of Revenue and assessee which arise from order of learned CIT(A)-Central, Jaipur dt. 20th Aug., 2004 for block period from 1st April, 1989 to 1st Feb., 2000. grounds raised by assessee are as under : 1. learned CIT(A) erred in not declaring bad in law and annulling assessment order dt. 29th April, 2002 passed under s. 158BC r/w s. 143(3) of IT Act, 1961 for block period asst. yr. 1990-91 to asst. yr. 1999-2000 and asst. yr. 2000-01 upto 1st Feb., 2000 and he failed to appreciate that block assessment order has been passed in violation of s. 158BB of IT Act and is based on information or evidence found as result of survey under s. 133A of IT Act or on basis of subsequent inquiries made on matters found as result of survey under s. 133A of IT Act. 2. assessee did not press ground No. 1, same is dismissed as not pressed by counsel for assessee. 3 . Ground Nos. 2 and 3 of assessee s appeal [IT(SS)A No. 74/Jp/2004] and ground No. 1 of Revenue s appeal [IT(SS)A No. 79/Jp/2004] are common and hence all grounds are being taken up together as under. 4. Ground No. 2 of assessee : On facts and in circumstances of case, learned CIT(A) erred in confirming suppression in number of patients by estimating number of patients at 2,250 for asst. yr. 1999-2000 and 2,000 for asst. yr. 1998-99 more so when no material was found to show that assessee was suppressing number of patients particularly when number of patients for asst. yr. 2000-01 (upto 31st Jan., 2000) was taken at 2,223, at same figure which is shown by seized patients diary kept by assessee in normal course of business. 5. Ground No. 3 of assessee : On facts and in circumstances of case learned CIT(A)-Central erred in confirming addition of Rs. 1,25,000 (asst. yr. 1998-99), Rs. 1,29,000 (asst. yr. 1999-2000) and Rs. 1,11,150 (asst. yr. 2000-01 upto 31st Jan., 2000) totalling to Rs. 3,65,150 on account of undisclosed consultation fees. 6. Ground No. 1 of Revenue : On facts and circumstances of case, learned CIT(A) has erred in deleting suppression of professional receipts for asst. yrs. 1990-91 to 1997-98 ignoring facts that several materials and evidences gathered in form of statements of patients and employees for asst. yrs. 1998-99 to 2000-01 which were sufficient to estimate income for period falling under block period. 7. brief facts of ground Nos. 2 and 3 of assessee and ground No. 1 of Revenue are that search and seizure proceedings were carried out at residence and business premises (clinic) of assessee located at A-66-AB, Subhash Nagar Shopping Centre, Shastri Nagar, Jaipur on 1st Feb., 2000 which were concluded on 28th April, 2000. Before that survey proceedings were carried out on assessee on 31st Jan, 2000. Certain assets along with loose papers and documents were found. assessee is Doctor by profession and working as professor in T.B. Hospital, Jaipur. During block period, in addition t o income from salary, he has also derived income from private practice of consulting patients at his clinic. assessee was founder member and secretary of M/s Agrasen Medical & Research Society and society s office was located in his house. During search proceedings it was observed that assessee was engaged in suppression of receipts from his private practice and was also receiving commission from diagnostic centre for referring patients and this commission income has not been disclosed in regular returns. Such undisclosed income has been invested mostly in construction of residential house and clinic, etc. and part of undisclosed income was converted by assessee in tax-free export income in name of his wife. 8 . As per para 5.1 of AO s order, in case of doctors working in Government, fee for visiting patient is governed by State Government Service Rules. From April, 1989 to July, 1994, it was prescribed at Rs. 30 and from July, 1994 to March, 1995 it was Rs. 40 and from March, 1995 onwards it was Rs. 50 and during non-visiting hours prescribed fee from April, 1989 to July, 1994 was Rs. 40 and from July, 1994 to March, 1995 it was Rs. 50. non- Governmental doctors, in view of AO were charging Rs. 100 to 200 during this period whereas Governmental doctors also charged similar amount but did not issue receipt to patients in general. receipt for prescribed fees is issued, if demanded by patient. 9 . During course of survey on 31st Jan., 2000 statements of Sh. Ramlal, patient (paper book 119) and Sh. Ravi Anand Kaushik, employee (paper book 120-122) were recorded. As per statement of Sh. Ram Lal patient as per question Nos. 3 and 4 asked during course of survey, assessee had charged Rs. 100 from said patient. As per statement of Sh. Ravi Anand Kaushik, employee as per question No. 7 assessee is receiving Rs. 100 but issuing receipt of Rs. 50 only. Through verbal conversation with other patients and assessee himself confirmed that visiting/consultation fees of Rs. 100 were charged per patient. During course of search proceeding on 1st Feb., 2000, statement of Sh. Jitendra Sahni S/o late Sh. S.R.Sahni R/o 417-B, Adarsh Nagar, Jaipur (paper book 130-132) was recorded that when he came for first time in January, 1999 to clinic of assessee, he had paid Rs. 100 for visiting and receipt which was not issued to him and on each of 15 to 16 occasions he had paid Rs. 100 and no receipt was ever issued to him. patients diary was furnished by assessee to AO during course of assessment proceeding showing number of patients as 2,232 from 1st April, 1999 to 31st Jan., 2000. AO gave show-cause notice to assessee estimating number of patients at 2,600 and total receipts for 10 years at Rs. 26,00,000 plus fees for period 1st April, 1999 to 31st Jan., 2000 at Rs. 2,23,200 i.e., total receipts at Rs. 28,23,200. And assessee s reply in response to said show-cause as per para 5.5 of AO s order at pp. 5 to 8 was as under : "5.5 Assessee in his letter dt. 5th Feb., 2002 submitted as follows : (i) We object to your observation that assessee is charging Rs. 100 as consultation fee but showing receipt of Rs. 50 only because of restriction of State Government Service Conduct Rules. assessee has shown receipt from private practice according to fee charged by him. assessee charged fee of Rs. 30 (Rs. 40 after consultation hours) from April, 1989 to July, 1992, Rs. 40 (Rs. 50 after consultation hours) from July, 1994 to March, 1995 and Rs. 50 from March, 1995 to till date as consultation fee from patients. (ia) In receipt book seized at A-1 to A-10 from April, 1999 to 22nd Nov., 1999 some of original receipts are lying in receipt books due to reason that some patients do not take receipt and thus original receipt remains in book. assessee has issued receipt for amount which he has charged f r o m patients as consultation fee. There is no suppression of professional receipt. (ii) You have mentioned that during course of search, statement of one of patients Shri Jitendra Sahni was recorded who stated that assessee has charged fee at Rs. 100 from him. He has also stated that assessee has not issued receipt to him. This is true that from this patient assessee charged fee of Rs. 100 for reason that patient was suffering from rare disease called sarcoidosis. In fact assessee has done spromemetry test (PFT) of this patient and hence Rs. 50 is charged for such test. Thus on account of consultation fee charged is Rs. 50 only. assessee has clarified this fact in his statement recorded on 15th May, 2000 in reply to question No. 4 himself that he has never asked for receipt. He also stated that he visit to assessee s clinic for his treatment and he is not concerned with receipt. We may further mention that assessee donated PFT machine to blind Sanasthan known as M/s Louis Braille Dristihin Vikas Sansthan. From 1st April, 1999, it was installed at clinic of assessee and it was decided that whatever receipt would be there on account of PFT test, it would be receipt of that Sansthan (trust). For this purpose receipt book of Sansthan is also kept at clinic of assessee. (iii) You mentioned that statements of other patients including Ramlal of Achrol were recorded during survey under s. 133A wherein they have admitted of paying fee of Rs. 100 as consultation fee and for that no receipt is issued. We request you to provide copy of statements of patients recorded during survey proceedings so that we can give our reply. So far as statement of Ramlal is concerned we may mention that statement was taken under pressure. His affidavit stating fact that assessee charged fee of Rs. 50 only is enclosed. We may also mention that during search Departmental authorities examined other patients and recorded statements who have stated that they paid fee of Rs. 50 as consultation fee. assessee in his statements recorded on 15th May, 2000 in reply to question No. has stated fact that statements of 4-5 patients were recorded who stated that assesses charged fee of Rs. 50 s consultation fee. affidavits of 3 patients who were examined by Departmental authorities during search are enclosed. (iv) During survey statement of employee Mr. Ravi Anand was recorded on 31st Jan., 2000, wherein he stated that assessee charges fee of Rs. 100 and gives receipt of Rs. 50 only. This statement was recorded by survey party under pressure. Mr. Ravi in his statement in reply to Q.No. 4 has clearly mentioned that there are two receipt books, one is of doctor himself for consultation fee and another is of M/s Louis Braille Dristihin Vikas Sansthan of PFT test done to patient. When ever PFT test is done Ravi clarifying (sic) above fact has already been filed with return. Even otherwise there is no signature of officer who has taken statements and therefore no credence to such statement be given. Further you yourself have also examined Mr. Ravi Anand on 23rd Jan., 2002 to 25th Jan., 2002 at your office. We request you to provide copy of his statement recorded by you. (v) There is no documentary evidence found in search to indicate that assessee charges fee of Rs. 100 as consultation fee from patients. Simply on basis of statement of one patient that assessee charged consultation fee at Rs. 100 from patients. assessee in his statements has clarified fact that why Rs. 100 is charged from this patient. At time of search 4-5 patients present there were examined by search party. They all stated that assessee charged consultation fee at Rs. 50 per visit. Their affidavits are enclosed. (vi) In statements of assessee recorded on 31st Jan., 2000 during survey proceedings in reply to question No. 11 it is noted by survey party that assessee charges Rs. 100 as fee from patients but receipt is being given for Rs. 50. This was written by survey party at their own in spite of reply of assessee that he charges Rs. 50 only. assessee, therefore, while signing statements has mentioned correct fact and noted in his handwriting at end of page that he charges only Rs. 50 as consultation fee from patients. (vii) From above it is very much clear that assessee charges Rs. 50 as consultation fee. Whenever test is carried out to any patient from PFT machine assessee charged Rs. 50 for such test. However after April, 1999 receipt from such machine accrued to Louis Braille Dristihin Sansthan as assessee donated PFT machine to this Sansthan. office bearer of Sansthan kept receipt book of Sansthan at clinic of assessee so that whenever any test is done from this machine receipt is issued from receipt book. This receipt is income of this Sansthan. assessee has nothing to do with such receipt. office bearer of this Sansthan visits every month to clinic of assessee and collects amount and makes sign on backside of last receipt. receipts are recorded in books of account of Sansthan. This is registered society under s. 12A of IT Act. It files its return regularly. You yourself have called and verified books of Sansthan on 25th Jan., 2002. (viii) In your letter you have estimated professional receipt of assessee for block period at Rs. 28,23,000 by estimating number of patients at 2,600 per year and fee charged at Rs. 1,000 each. We object to this estimation for following reasons : (a) There is no basis of estimating number of patients seen at 2,600 in preceding years on basis of number of patients seen in current year, i.e., year of search. You have mentioned that from patient diary found it reveals that assessee provided consultancy to about 2,232 patients during financial year 1999-2000 (upto date of search) This is correct and reflected in regular return. However this cannot be basis for estimating number of patients for preceding years. Further there is no evidence found. For this purpose reliance can be placed on following decisions : (i) CIT vs. Rajendra Prasad Gupta (2001) 166 CTR (Raj) 83 : (2001) 248 ITR 350 (Raj); (ii) Ramraj Soni vs. Asstt. CIT 21 TW 667 (Jp); (iii) Mustaq Ahmed & Ors. vs. Asstt. CIT (2000) 66 TTJ (Jp) 305 : 22 TW 25 (Jp). (b) During block period assessee was posted at various places as mentioned in chart enclosed herewith. At new places like Bikaner, Udaipur where assessee was quite unknown there cannot be consultancy to extent which is provided at Jaipur. At Bikaner assessee was residing at residence of District Collector, Bikaner and was not providing any consultancy. Further during period July, 1992 to June, 1994 assessee was at Chandigarh and doing DM course and at that time he was not providing consultancy. This fact also corroborates from return of assessee wherein he has mentioned that there was no income from private practice from 25th July, 1992 to 30th June, 1994. Thus estimation of 2,600 patients per year over block period is imaginary and has no basis. (c) You have presumed fee charged from each patient at Rs. 100 which i s incorrect. As explained above assessee is charging fee of Rs. 50 as consultation fee at time of search. Thus presumption of charging fee of Rs. 100 from each patient over block period is imaginary, arbitrary and without any basis. (d) In block assessment no addition can be made on basis of assumption and presumption. scheme of Chapter XIV-B does not give power to draw presumptions in regard to undisclosed income. For this purpose reliance is placed on following decisions : (i) Smt. Neena Sayal vs. Asstt. CIT (2000) 69 TTJ (Chd) 516 : (1999) 70 ITD 62 (Chd); (ii) Khyali Lal Chaplot vs. Asstt. CIT 22 TW 276 (Jp); (iii) Ashwani Kumar Bhardwaj vs. Dy. CIT 21 TW 358 (Jp); (iv) Holiday India Travels N Tours vs. Asstt. CIT 22 TW 494 (Jp); (v) Premalata Kedia vs. Dy. CIT 22 TW 481 (Jp); (vi) Smt. Rajrani Gupta vs. Dy. CIT (2000) 66 TTJ (Mumbai) 582. In view of above professional receipt estimated by you at Rs. 28,23,000 for block period is hypothetical, imaginary, arbitrary and without any basis." 10. Sh. Jitendra Sahni was again examined by AO on 22nd Feb., 2000 where Jitendra Sahni expressed that fees of Rs. 100 was paid by him on every visit. relevant part of statement recorded of Sh. Jitendra Sahni is as per para 5.6 at pp. 9 and 10 of AO s order. assessee furnished affidavit of Sh. Ravi Anand Kaushik in which Ravi Anand Kaushik had stated that whenever PFT test was being done, only then Rs. 50 receipt was issued from M/s Louis Braille Dristihin Vikas Sansthan and accordingly Sh. Ravi Anand Kaushik was examined again on 24th Jan., 2000. As per question No. 7 at p. 11 of AO s order Sh. Ravi Anand Kaushik stated that assessee had charged Rs. 100 from patient and receipt of Rs. 50 was being prepared by him. Mr. Ravi Anand Kaushik during examination said to AO (not part of his statement) that he will not speak against assessee, else he shall be deprived of his job. Therefore AO was of view that earlier statement of Mr. Ravi Anand Kaushik was denied under pressure of relinquishment of his job. Sh. Ramlal was not produced again by assessee for examination. assessee produced affidavits of following three persons/patients : 1. Sh. Laxman Singh S/o Shri Ram Swaroop Singh 2. Shri Sita Ram S/o Shri Bhanwar Lal 3. Smt. Uma Devi W/o Shri Ratan Lal Gupta All these three persons came to visit assessee on date of search, i.e., on 1st Feb., 2000 and they had conveyed search party of IT Department of paying Rs. 50 only as visiting fees. However their statements were not recorded by search party. These three persons were produced before AO and w e r e examined by AO who had confirmed to have paid Rs. 50 as consultation fees to assessee. statement of Smt. Uma Devi that in search party people were wearing black coat and with this statement of Smt. Uma Devi AO made observation that statements of all persons are not genuine and are not believable and affidavits have been collected under undue influence of assessee. On 18th Feb., 2000 assessee produced some affidavits confirming that Rs. 50 had been charged as consultation fees by assessee. AO disbelieved affidavits because language of all affidavits was similar and uniform and nothing had been mentioned about specific dates, on which date they visited clinic of assessee and no receipt was produced by persons who had given affidavits. AO made observation that these affidavits also appeared to be corrected under influence of patient and doctor-assessee. 11. Certain patients were also referred from Government dispensaries to assessee and one of such patients Smt. Jamila Bano was examined on 7th March, 2002 who had confirmed to have paid Rs. 100 but no receipt of consultation fees and of test from Louis Braille Dristihin Vikas Sansthan was given (refer pp. 14-15 of AO s order). 12. Smt. Chhoti Devi was also examined who had also confirmed to have paid Rs. 100 to assessee and no receipt was issued to her (refer p. 15 of AO s order). 13. secretary Sh. O.P. Aggarwal along with his associate Sh. Dharam Pal Jain of M/s Louis Braille Dristihin Vikas Sansthan were examined by AO and have confirmed to AO that assessee had agreed to donate machine to said institution and receipt book was placed with assessee at his clinic and income from machine was used to be collected on monthly basis and entered in books of account of institution. AO was of view that agreement is fabricated and there is irregularity in maintenance of said institution as per reasons mentioned in his order vide para 5.7 at pp. 16-18 of AO s order. AO further pointed out certain irregularity in maintenance of receipt books of consultancy fees as per para 5.8 of his order. After considering contention of assessee AO estimated consultancy fees at Rs. 11,30,200 out of which assessee had declared Rs. 3,49,280 and balance of Rs. 6,46,746 was calculated as net undisclosed receipts by assessee as per para 5.10 at pp. 22-23 of his order as under : "5.10 As far as objection of estimation of number of 2,600 patients in all years of block period is concerned, it has been considered sympathetically, in view of reply that he remained on higher studies at Chandigarh for some period and his posting at other stations like Bikaner and Udaipur leading to lesser amount of consultation fee. Therefore, for period from 1st April, 1989 to 31st March, 1999, number of patients has been estimated keeping in view patients already shown by assessee in regular returns and progressive growth in number of patients. Further, in view of above discussion, I hold that assessee has charged Rs. 100 from each patient for period from 1st April, 1999 to 31st Jan., 2000. During this period 2,223 patient have been consulted by assessee. Therefore assessee has suppressed consultation fee of 2,223 x 50 = Rs. 1,11,150 for this period. For remaining period of block period from 1st April, 1989 to 31st March, 1999, estimation of professional receipts is done on point that assessee charged double fees as prescribed by Government. assessee himself has shown growth in professional receipts till period 1993-94. However after 1995-96 sharp decline in professional receipts has been observed. receipts for period 1995-96 to 1997-98 are even less than receipts shown for earlier years, whereas prescribed fees had been raised by Government to Rs. 50 from Rs. 30. Further course assessee pursued at PGI, Chandigarh added to his reputation. There would have been increase in numbers of patients. Therefore estimation has been done considering two points, one suppression on account of fees taken n d secondly, suppression on account of number of patients. estimation for period from 1st April, 1989 to 31st March, 1999 made is as per p. 23 of AO s order." 14. learned CIT(A) after considering submission of counsel for assessee had retained addition of Rs. 3,65,150, i.e., addition of Rs. 1,25,000 in asst. yr. 1998-99, Rs. 1,29,000 in asst. yr. 1999-2000 and Rs. 1,11,150 in asst. yr. 2000-01 and deleted balance, as per reasons mentioned in his order from pp. 40 to 45. 1 5 . We have heard parties. Initially assessee s premises were surveyed on 31st Jan., 2000 and thereafter search was carried on assessee on 1st Feb., 2000. During course of survey statements of one patient Sh. Ramlal (paper book 119) and Sh. Ravi Anand Kaushik, employee o f assessee (paper book 120-122) were recorded. During search and seizure operation statement of Sh. Jitendra Sahni patient was recorded on 1st Feb., 2000 (paper book 130-132). No incriminating document was found by search party during course of search. assessment by AO under s. 158BC is based on statements taken at time of survey and search, and during course of assessment proceedings and as per various affidavits/statements or other material produced by assessee during course of assessment proceedings. As per AO s observation assessee has suppressed number of patients and also consultancy fees. number of patients suppressed as estimated by AO as against number of patients declared by assessee in regular return worked out by AO are as under : Number of Asst. Number of patients shown In patients estimated yr. regular return as worked out by AO by AO 1999- 1920 2500 2000 l998- 1500 2100 99 1997- 536 1000 98 1996- 504 1200 97 1995- 460 1000 96 1994- 95 1993- 512 600 512 600 94 1992- 924 1200 93 1991- 1781 1000 92 1990- 485 600 91 16. argument of counsel for assessee in this regard was that there was no information or material with AO that assessee has suppressed number of patients. AO has worked out number of patients as 2,223 for period 1st April, 1999 to 31st Jan., 2000 on basis of patients diary (para 5.3) of AO s order where assessee had furnished during course of assessment proceedings photocopy of patients diary claiming as it maintained in regular course of profession of assessee. This working leads to conclusion that AO himself has accepted that there was no suppression of patients in year 1999-2000. As per AO assessee has suppressed number of patients in asst. yr. 1990-91 to asst. yr. 1999-2000 as per chart discussed above and large variation in number of patients is without any material seized during course of search proceedings or even survey proceedings and, therefore, all these estimations by AO are based without any cogent evidence and material, and based on purely suspicion, surmises, conjectures and imagination as argued by counsel of assessee. 17. AO had made observation that assessee charged Rs. 100 fees as consultation over and above as prescribed by Government in all years falling in block period and his fees depends upon name and fame in t h e market which does not remain constant in all years. There was no material with AO for making estimation for asst. yrs. 1990-91 to 1999- 2000 in absence of any information or material with AO or search/survey party. As argued by counsel for assessee and also as submitted by assessee before AO vide his letter dt. 5th Feb., 2000 (refer para 5.5 of AO s order) that assessee during block period was posted at various places mentioned in chart submitted before AO at places like Bikaner, Udaipur where assessee was quite unknown and could not carry consultancy at those places. In view of this additions made by AO for asst. yr. 1990-91 to asst. yr. 1997-98 were rightly considered by learned CIT(A) to be without any cogent material and, therefore, learned CIT(A) has rightly deleted said addition. As regards balance of additions AO has relied upon various statements recorded at different times which are discussed hereunder : 1. Statement of Sh. Jitendra Sahni : As per statement of Sh. Jitendra Sahni (paper book 130-132), recorded on 1st Feb., 2000 during search proceedings, Sh. Jitendra Sahni has confirmed to have paid Rs. 100 to assessee and no receipt for same was asked by Sh. Jitendra Sahni from assessee or any employee of assessee. bifurcation of Rs. 100 was clarified by assessee in his statement recorded on 15th May, 2000 in reply to question No. 9 (paper book 165-166). lung flow test (PFT test) was carried out by assessee on every visit and assessee charged Rs. 100 on every visit have been confirmed by Sh. Jitendra Sahni in his statement recorded on 1st Feb., 2000. assessee does not dispute that Rs. 100 per visit were not charged from Sh. Jitendra Sahni. search party has not asked any question to Sh. Jitendra Sahni about bifurcation of Rs. 100 paid by him to assessee. At same time he has confirmed that lung flow test is done by assessee on each occasion he visits assessee. Therefore, presumption can be easily made that whatever tests are done by assessee along with consultation, total charges of same are Rs. 100 which has been paid by Sh. Jitendra Sahni to assessee. AO has not brought any material of whatsoever kind, to prove that assessee has charged Rs. 100 as consultation fees and balance Rs. 50 have been charged for lung flow test (PFT test). In such circumstances, statement of Sh. Jitendra Sahni and clarification by assessee in his statement recorded as discussed above gives presumption that assessee is charging from patient Sh. Jitendra Sahni Rs. 50 for consultancy and balance of Rs. 50 are charged for lung flow test and AO was not justified in coming to conclusion that Rs. 100 are charged from not justified in coming to conclusion that Rs. 100 are charged from patient Sh. Jitendra Sahni as Rs. 100 and accordingly has wrongly made application in general for calculation of suppression of receipts. Regarding lung flow test (PFT test) matter shall be discussed later in part of this order. 2. Statement of Sh. Ravi Anand Kaushik : statement of Sh. Ravi Anand Kaushik, employee of assessee was recorded on 31st Jan., 2000 during course of survey (paper book 120-122). As per statement, Sh. Ravi Anand Kaushik has stated in Q. No. 7 (paper book 121) that assessee is charging Rs. 100 but receipt of Rs. 50 is issued by said employee for giving to patient. In this regard assessee had clarified by way of affidavit of Sh. Ravi Anand Kaushik (paper book 133). In affidavit Sh. Ravi Anand Kaushik has stated that his job is to weigh patient, to measure respiration counts in PFT machine and to issue receipt of fees and assessee received Rs. 50 as his fees for which receipt is issued by Sh. Ravi Anand Kaushik and balance of Rs. 50 for PFT test taken are given to M/s Louis Braille Dristihin Sansthan. Sh. Ravi Anand Kaushik has clarified bifurcation of Rs. 100 which has been stated by him during course of statement on 31st Jan., 2000 by way of affidavit as discussed above. Sh. Ravi Anand Kaushik was examined by AO on 24th Jan., 2000 where he has said that if he would speak against assessee, he will be deprived of his job. assessee asked for statement given by Sh. Ravi Anand Kaushik dt. 24th Jan., 2000 which was never given (paper book 91). This time also Sh. Ravi Anand Kaushik has stated that Rs. 100 are charged from patients. After appreciation of facts as discussed above, survey party or AO has never put up question before Sh. Ravi Anand Kaushik regarding bifurcation of fees of Rs. 100 and verbal statement which has not been recorded by AO that Sh. Ravi Anand Kaushik has said that he will be deprived of his job if he speaks against his employer, does not carry any evidentiary value in absence of any confirmation from Sh. Ravi Anand Kaushik during course of his statement. affidavit submitted by Sh. Ravi Anand Kaushik has not been disproved by AO and AO has not brought any material against what has been stated in affidavit by Sh. Ravi Anand Kaushik. In such circumstances, assessee cannot be said to have been charging Rs. 100 as consultation fees as against what is declared by assessee, i.e., Rs. 50. presumption can very well be made that assessee was charging Rs. 100, i.e., Rs. 50 as consultation fees and balance of Rs. 50 for PFT test. There is no dispute as regards charging of Rs. 100 from patients as stated by Sh. Ravi Anand Kaushik. Therefore, presumption by AO for calculating suppression of receipts on basis of statement of Sh. Ravi Anand Kaushik is not justified. 3. Statement of Sh. Ramlal (paper book 119) : statement of Sh. Ramlal, patient was recorded on 31st Jan., 2000 during course of survey where he has confirmed to have paid Rs. 100 to assessee as fees. counsel for assessee has argued that said statement has not been recorded on oath. No question was asked by survey party regarding bifurcation of Rs. 100 paid by patient Sh. Ramlal, to assessee. In this regard assessee has filed affidavit of Sh. Ramlal (paper book 133-A) wherein Sh. Ramlal had stated that Rs. 50 are charged for examination and consultancy and he has denied that he had stated that Rs. 100 were paid by him. Sh. Ramlal was witness of Department who had retracted earlier by sworn affidavit and it was duty of AO to issue summons under s. 131 to Sh. Ramlal and assessee had made specific request to summon him under s. 131 and call him for examination (paper book 110, para 2) but AO did not summon Sh. Ramlal, has been argued by counsel for assessee. In view of above discussion patient Sh. Ramlal has paid Rs. 50 as against what has been stated during course of survey which has been rebutted by him by way of affidavit and AO did not examine Sh. Ramlal thereafter in spite of specific request made by assessee. Therefore, AO is not justified in making calculation of suppression of receipts by assessee on basis of statement of Sh. Ramlal, patient. 4. Statements of other patients claimed as present on date of search : assessee claimed that during course of search following persons were also present and they have confirmed that Rs. 50 are paid to assessee as consultancy fees and they have filed affidavit before AO as under : (a) Sh. Laxman Singh (paper book 134) (b) Sh. Sita Ram (paper book 135) (c) Smt. Uma Devi (paper book 136) AO examined Laxman Singh and Sh. Sita Ram but no discrepancy has been found in affidavits submitted by them. As far as statement of Smt. Uma Devi is concerned, AO has noticed one discrepancy that Smt. Uma Devi stated that persons present during search were wearing black coat. AO s presumption in this regard was that all persons of search party were not wearing black coats and accordingly made further presumption that statement of Smt. Uma Devi is false. explanation of assessee in this regard was that Sh. Laxman Singh who is advocate was also wearing black coat and on this discrepancy whole of statement of Smt. Uma Devi cannot be rejected. By appreciation of fact as discussed above, we are of view that AO has not brought any material from statement of Smt. Uma Devi, which could prove that assessee has been charging Rs. 100 from each patient as consultancy fees. Since there was no mention of Rs. 100 in affidavit or statement given by Smt. Uma Devi, in such circumstances AO was not justified in coming to conclusion that assessee had charged Rs. 100 as consultancy fees over and above Rs. 50 as stated by Smt. Uma Devi. 5. Affidavits of other patients filed before AO : assessee filed affidavits of following persons confirming payment of Rs. 50 only as consultancy fees : (i) Sh. Vishnu Agarwal (paper book 150) (ii) Smt. Sampat Devi (paper book 151) (iii) Sh. Devendra (paper book 152) (iv) Sh. Jagdish Prasad Sharma (paper book 153) (v) Sh. Ramesh Chand Agarwal (paper book 154) (vi) Asha Singhal (paper book 155) (vii) Sh. Laxman Prasad Singhal (paper book 156) (viii) Smt. Geeta Devi (paper book 157) (ix) Sh. Sita Ram Bansal (paper book 158) (x) Sh. Om Prakash Sharma (paper book 159) AO rejected these affidavits. explanation of assessee in this regard was that assessee was prepared to produce these persons but AO was never interested in recording statement of these persons. One of above persons Sh. Om Prakash Sharma came to office of AO on 5th April, 2002 and again on 10th April, 2002, but his statement was not recorded. However Sh. Om Prakash Sharma directly sent letter to AO confirming that he has paid Rs. 50 to assessee as consultancy fees and balance of Rs. 50 were paid for PFT test. 6. AO had collected information that from Government dispensaries patients are referred to assessee and AO has examined two of them as under : (i) Sh. Abdul Jabbar was examined on 7th March, 2002 where he stated to have been charged Rs. 100 and he has not been given any receipt of same either by assessee or by Louis Braille Dristihin Vikas Sansthan. Similarly other patient Smt. Chhota Devi was also examined by AO who has also confirmed to have given Rs. 100. argument of counsel for assessee in this regard is that Sh. Abdul Jabbar, husband of Smt. Jamila Bano conveyed that total fee of Rs. 100 was paid to assessee and there was only one visit. Whereas patient (Smt. Jamila Bano) visited first time on 29th Sept., 1999, accompanying her son in emergency without referral by P&T. She was given drugs, based on prescription of assessee dt. 29th Sept., 1999 by P&T and P&T also referred her to assessee on next day, i.e., 30th Sept., 1999. On 2nd Oct., 1999, she again visited accompanying her husband. She paid total Rs. 100 and assessee issued two receipts of Rs. 50 each, one is dt. 29th Sept., 1999 and other is dt. 2nd Oct., 1999. Therefore, there is no discrepancy in total amount recorded i n books of account of assessee. copy of receipts was filed before AO by assessee. As regards statement of Smt. Chhota Devi, arguments of counsel for assessee were that material gathered from Smt. Chhota Devi was not brought to notice of assessee and opportunity t o cross-examination was not provided to assessee. Therefore, material whatsoever gathered from Smt. Chhota Devi cannot be used against assessee. dates of her visit have not been given in so-called letter. Why Smt. Chhota Devi was not called for examination, learned AO is silent on this vital issue. It is not ascertainable that whether Smt. Chhota Devi has stated on oath. assessee never charged Rs. 100 from Smt. Chhota Devi as visiting fees. After considering facts of statement in case of Abdul Jabbar and Smt. Chhota Devi, we are of view that no cogent material has been brought by AO, which could prove that assessee has been charging Rs. 100 as consultation fees over and above PFT test. Therefore, presumption by AO in calculating suppression of receipts on basis of statements of Sh. Abdul Jabbar and Smt. Chhota Devi is without any material and evidence. 7. M/s Louis Braille Dristihin Vikas Sansthan : As per statement of secretary of said Sansthan, Sh. O.P. Aggarwal who had stated and confirmed before AO that machine has been donated by assessee to said Sanstha and receipts of PFT test are collected by said Sanstha on monthly basis. AO alleged that agreement letter was fabricated and in this regard counsel for assessee had argued that there was oral acceptance of machine by said Sansthan and said oral acceptance was confirmed through written letter, which assessee received in September-October, 1999. letter is dated through rubber stamp as 8th Feb., 1999. This discrepancy is nothing but stamping of wrong date or use of letterhead pre-stamped for 8th Feb., 1999. secretary Sh. O.P. Aggarwal was examined by AO and AO did not put any question regarding said discrepancy. suspicion by AO, when secretary of Sansthan had been examined and no question with regard to suspicion in mind of been examined and no question with regard to suspicion in mind of AO was clarified by AO cannot lead to conclusion that PFT machine belonged to assessee and all receipts therefrom belonged to assessee thus coming to final conclusion that Rs. 100 are being charged as consultancy fees by assessee. 8. AO has pointed out certain irregularities in maintenance of account like certain receipts were lying in receipt books. argument of counsel for assessee in this regard was that most of patients are in hurry and they do not take receipts while leaving clinic and only such receipts were lying in receipt book. 1 8 . We are convinced with arguments of counsel for assessee because as per statements of many persons recorded as referred to as various pages of paper book placed before us by counsel for assessee and as per order of AO, it is clear that receipt of consultancy fees either was not given to patients or was not demanded by patients. Therefore, such receipts are bound to remain with assessee. Therefore, finding of such receipts during course of search/survey does not lead to conclusion adverse to assessee. Moreover assessee had been maintaining diary i n which number of patients had been computed from that diary by AO as 2,223. That means AO has accepted part of contents, i.e., number of patients of diary. AO is not justified in not accepting rest of content which does not suit him and which is without any cogent material which could be used against assessee as discussed above. Therefore as per irregularity of accounts, AO is not justified in coming to conclusion for calculation of suppression of receipts by assessee. 19. With above discussion, we are very clear that AO has made additions only on basis of suspicion, surmises and conjectures and without any material found during course of search or even any post-search material. counsel for assessee has relied upon various judgments which have been taken into consideration. In such circumstances AO is not justified in making any calculation of suppression of receipts on any account as against as submitted by assessee in returns of block period filed by assessee. Thus, ground Nos. 2 and 3 of assessee are allowed in favour of assessee and ground No. 1 of Revenue is dismissed in view of discussions made above. 20. Ground No. 4 of assessee and ground No. 2 of Revenue are common and, therefore, both grounds are discussed together as under. 21. Ground No. 4 of assessee : On facts and in circumstances of case learned CIT(A)-Central erred in confirming addition of Rs. 1,70,000 on account of alleged commission received from M/s Rajdhani X- Rays Rs. 68,000 and from M/s A.B. Diagnostic Centre Rs. 1,02,000 for period from 1st April, 1997 to date of search. 22. Ground No. 2 of Revenue : On facts and circumstances of case, learned CIT(A) has erred in deleting addition made on account of commission receipts. 23. brief facts in ground No. 4 of assessee and in ground No. 2 of Revenue are that as per AO s observation vide para 6.1 of his order at pp. 23-26 are as under : "It is generally found that doctors charge commission from diagnostic centres on basis of test referred by them. It is prevalent practice that commission is paid to doctors by diagnostic centres who refer case to them for test. evidences gathered during search and post-search inquiries also prove fact that assessee also received such commission. relevant evidences gathered during search and post-search inquiries are as follows : A. During course of search printed notepads of various diagnostic centres bearing their names and addresses had been found at assessee s residence which revealed that these were being used to refer patients to these centres. B. facts emerging from survey operation on 24th May, 2000 at M/s Rajdhani X-Rays are as follows : (i) When asked about rates of commission payment, Shri Kailash Sharma stated that he was paying 50 per cent of total receipts of various tests except X-Rays on which Rs. 25 per X-ray was paid as commission to doctors including Dr. Gupta. (ii) When asked about modus operandi Shri Kailash Sharma categorically admitted that he used to put name of doctors on receipt that referred patients and after fixed period he calculated total commission to be paid to doctors. He further stated that doctors to whom commission payment was high, payment was given as on weekly basis while others were paid on monthly basis. (iii) In response to question No. 15 Shri Kailash Sharma told that he was paying commission to Dr. Gupta for last 2-3 years because earlier Dr. Gupta was posted at Udaipur. (iv) When asked to quantify commission paid to Dr. Gupta, Shri Kailash Sharma furnished relevant details according to which total commission payment to Dr. Gupta between 1st April, 1999 to 1st Feb., 2000 works out to Rs. 15,680, i.e., approximately Rs. 1,750 per month. (v) It is further seen that assessee has not stopped of this practice of taking commission from diagnostic centres fees each after search and seizure operation. For period between 2nd Feb., 2000 to 23rd May, 2000 total commission of Rs. 4,265 has been received by you from M/s Rajdhani X-Rays as calculated and submitted by Shri Kailash Sharma. (c) relevant facts and evidences emerged from survey at business premises of M/s A.B. Diagnostic Centre, B-4, Subhash Nagar Shopping Centre, Jaipur on 24th May, 2000 are as follows : (i) During course of survey on 24th May, 2000 statement of Sh. Harish Agarwal, partner of M/s A.B. Diagnostic Centre was recorded. accounts and primary records have been maintained in peculiar manner at this centre so that commission to various doctors can be paid and still it does not appear in regular books of account. patients were being issued receipt on lab slips and not through regular receipt books. patients record register was maintained in which details of receipt and name of referring doctor are also maintained along with other details. Such patients record registers having nine columns found at time of survey for months of April and May, 2000 along with some lab slips. Importantly regular receipt books are written only upto April, 2000. Receipts corresponding to many lab slips were not issued and accordingly corresponding receipts were suppressed in regular books of account which were being written on basis of these receipt books and not on basis of lab slips or patients record register. It has been admitted by Shri Harish Agarwal in his statement (which was confirmed by other partner Dr. Charanjeet Bharara) that they were making receipts for entire month only once, i.e., after completion of each month on basis of patients record register after suppressing certain receipts. On basis of these receipts they used to make collection register which in turn were kept as primary record on basis of which regular books of account such as cash book and ledger were being prepared once receipt book and collection register are made and commission payment is made, original primary records i.e., patients record register and lab slips were being destroyed by them. Thus, neither total receipts of diagnostic centre nor receipts corresponding to patients referred by particular doctor will appear in collection register or in receipt book. Later on it was admitted by Dr. Harish Agarwal that out of these suppression receipts, commission payments were being made to various doctors. (ii) When asked about payment of commission to referring doctors, he admitted that M/s A.B. Diagnostic Centre paid commission to all doctors who referred patients regularly (question No. 11 of statement dt. 24th May, 2000). In reply to this question he specifically admitted that Dr. Gupta was also being paid commission by them on regular basis. This is also corroborated by fact that names of patients as per patients record register of M/s A.B. Diagnostic Centre were also appearing in patient-diary of Dr. Gupta for financial year 1999- 2000 of which photocopy was furnished in course of post-search inquiries. (iii) Regarding method and rate of payment commission he stated that they pay 30 per cent of total receipts of tests as commission to referring doctors in cash on monthly basis. At rate of 30 per cent commission on one X-ray comes to Rs. 24 by M/s Rajdhani X-Rays. Laser commission (30 per cent in stead of 50 per cent) payment of other tests by M/s A.B. Diagnostic cent in stead of 50 per cent) payment of other tests by M/s A.B. Diagnostic Centre can be understood in view of fact that partners of M/s A.B. Diagnostic Centre are qualified doctors while proprietor of M/s Rajdhani X-Rays is non- qualified person. (iv) When asked regarding source of payment of commission to doctors, Dr. Harish Agarwal stated that some receipts of amount equal to commission amount were not entered in collection register. amount collected on account of such receipts was used to made commission payments t o doctors. When he was asked to quantify amount of commission paid during financial year 1999-2000, he admitted that commission of approximately R s . 2000-3000 per month was being paid to Dr. Gupta. In April, 2000 total commission payment to Dr. Gupta on basis of actual patients register admittedly made by M/s A.B. Diagnostic Centre was Rs. 1,596 (question No. 2 of statement dt. 29th May, 2000). D. On broad estimate commission received by assessee from M/s A.B. Diagnostic Centre comes to Rs. 1,02,000 approximately from 1st April, 1997 to date of search at rate of Rs. 3,000 per month, similarly commission received from M/s Rajdhani X-Rays approximately comes to Rs. 68,000 from 1st April, 1997 to date of search at rate of Rs. 2,000 per month. From two diagnostic centres, it has been conclusively proved that assessee was taking commission from them for patients referred for various tests. Thus it can be inferred that assessee was charging such commission from other diagnostic centres/labs as well both at Jaipur and even Udaipur where assessee was posted from March, 1995 to March, 1997. This is further corroborated by fact that blank printed reference pads/letterhead of Dr. Wahi s Central Diagnostic Clinic, A-5, Chandpole, Jhotwara, Opposite Pareek School, near Power House and those of other laboratories were also found at your residence. (e) In view of all these facts and circumstances assessee was called upon to show cause why commission income from tests referred may not be estimated during entire block period in addition to Rs. 68,000 and Rs. 1,02,000 received from M/s Rajdhani X-Rays, M/s A.B. Diagnostic Centre, respectively for period from 1st April, 1997 to date of search." 24. assessee had filed written submission before AO during course of assessment proceedings on 5th Feb., 2002 which is reproduced vide para 6.2 at pp. 26 to 27 of AO s order as under : "The assessee has never received any commission from any diagnostic centre as alleged by you. In fact assessee does not recommend name of diagnostic centre to patients. patient is free to get his test done from any diagnostic centre which is suitable to him. assessee has no control over it. There is no documentary evidence found in survey/search of premises of assessee which indicate that assessee has charged commission from diagnostic centres. During course of search, blank printed notepads of diagnostic centres found from clinic/residence of assessee. These notepads are being left by various diagnostic centres that come to meet with assessee. assessee however, has never used these notepads for referring test to patients. Thus, simply on basis of blank notepad it cannot be alleged that assessee has charged commission from diagnostic centres. You have mentioned that survey has been conducted at premises of M/s Rajdhani X-Rays from where it has been established that assessee has received commission from them. You have also mentioned that statement of Mr. Kailash Sharma was recorded who told that he was paying commission to assessee from last 2-3 years and according to him total commission paid between period 1st April, 1999 to 1st Feb., 2000 works out to Rs. 15,680 and for period 2nd Feb., 2000 to 23rd May, 2000 works out to Rs. 4,265. In this regard we have to submit as under : (a) assessee requests to provide copy of evidence gathered from premises of M/s Rajdhani X-Rays, which establishes that assessee has received commission. It is also requested to provide copy of statements of Kailash Sharma. assessee would also like to cross-examine Mr. Sharma for which suitable date and time may be fixed. (b) There is no evidence found from premises of assessee, which indicates that assessee has received commission from M/s Rajdhani X-Rays. On basis of survey conducted at premises of other party or statement recorded of third person it cannot be alleged that assessee has received commission. We request you to provide copy of P&T account of diagnostic centres to establish that they have paid commission to assessee. 2. You have further mentioned that survey has been conducted at premises of M/s A.B. Diagnostic Centre and evidence gathered during survey proves that assessee has received commission from them. You have also mentioned that statement of Mr. Harish Agarwal, partner was recorded who admitted that during financial year 1999-2000 commission of Rs. 1,596 has been paid on basis of patients register. In this regard we have to submit as under : (a) assessee requests to provide copy of evidence gathered from premises of M/s A.B. Diagnostic Centre, which proves that assessee has received commission. It is also requested to provide copy of statements of Harish Agarwal. assessee would also like to cross-examine Mr. Agarwal for which suitable date and time may be fixed. (b) There is no evidence found from premises of assessee in survey/search which indicates that assessee has received commission from M/s Rajdhani X-Ray. On basis of survey conducted at premises of other party or statement recorded of third person it cannot be alleged that assessee has received commission. Kindly provide us copy of P&T account wherein commission payment is recorded by them. (c) assessee is not concerned as how books of account and other records are being maintained by diagnostic centre. You yourself have mentioned that Dr. Harish Agarwal admitted that out of suppressed receipts, commission payment was made to doctors. This establishes that there is no authentic record, which suggests payment of commission. said commission is being paid out of suppressed receipts on which they have to pay tax." 25. AO after considering submission of assessee vide para 6.3 of his order at pp. 27 to 28 held as under : "I have considered submission of assessee carefully. Assessee was provided copy of assessment of Shri Kailash Sharma, proprietor of M/s Rajdhani X-Rays and Shri Harish Agarwal, partner of M/s A.B. Diagnostic Centre. Assessee was allowed cross-examination of Shri Harish Agarwal. He again affirmed payment of commission to assessee during cross-examination. Assessee has asked to show commission in books of account. claim of assessee to show record of commission payment is not tenable as such payments have already been admitted as made out of books of account by Shri Harish Agarwal and Kailash Sharma. Sh. Harish Agrawal has already informed manipulation of books of account to give commission to doctors including Dr. P.R. Gupta therefore it is established beyond doubt that he was engaged in receiving commission from these two laboratories. Since letterheads of other laboratories have also been found from residence of assessee therefore receipt of commission from other laboratories cannot be denied. statements of Sh. Kailash Sharma and Sh. Harish Agarwal are valid evidences or material for determination of undisclosed income in view of various decisions discussed while dealing with issue of suppression of fee, therefore, receipt from commission is estimated as follows : Sl. Income Sources and period of income No. estimated Commission income from Rajdhani 1. X-Rays for period 1-4-1997 to date 68,000 of search Commission income from M/s A.B. 2. Diagnostic Centre for period 1-4-1997 1,02,000 to date of search Commission income from other diagnostic centres for block period 1-4- 3. 1,50,000 1990 to 1-2-2000 excluding period for pursuing course at Chandigarh 4. Total 3,20,000" 26. learned CIT(A) after considering submission of counsel for assessee deleted addition of Rs. 1,50,000 but confirmed addition of Rs. 1,70,000 as per reasons mentioned in his order at pp. 51 to 55. 2 7 . We have heard parties. AO observed that there is established practice in medical profession that doctors charge commission from diagnostic centres on basis of tests referred by them. During course of search printed notepads of various diagnostic centres were found at assessee s residence. survey operation was carried out on 24th May, 2000 on M/s Rajdhani X-Rays and M/s A.B. Diagnostic Centre, Jaipur. As regards survey on M/s Rajdhani X-Rays Sh. Kailash Sharma had stated that 50 per cent of total receipts except X-Rays are paid as commission to doctors including assessee. And he was paying commission to assessee from last 2-3 years and he has mentioned about amount of commission paid to assessee (refer p. 24 of AO s order). argument of counsel for assessee in this regard was that printed notepads of various diagnostic centres found at residence of assessee do not reveal that these were used by assessee to refer to patients to these centres and assessee has never received any commission from any diagnostic centre. These letterheads must have been left by diagnostic centres and blank letterheads found at residential premises of assessee do not serve any purpose that assessee had referred patients to various diagnostic centres and received commissions. If assessee has to refer patients to various diagnostic centres then normal practice which is acceptable can be that name of diagnostic centre has to be referred on letterhead of assessee. And if such letterheads of assessee are found at premises of diagnostic centres, only then presumption can be made that names of diagnostic centres have been referred by assessee. It is rather reverse way that letterheads that too blank letterheads are found at premises of assessee, which does not prove anything that assessee has received commissions from such diagnostic centres. statement of Sh. Kailash Sharma that commission is paid to doctors without any evidence cannot be relied upon. assessee had requested AO to give copy of P&L a/c or any other evidence to prove that commission had been paid to assessee but AO has not done so. In such circumstances only statement of third parties cannot be relied upon and cannot be used against assessee without any corroborative evidence. assessee had relied upon judgment in cases of : (a) Alok Agarwal vs. Dy. CIT (2000) 67 TTJ (Del) 109; (b) Monga Metals (P) Ltd. vs. Asstt. CIT (2000) 67 TTJ (All) 247. where it has been held that statement of third parties cannot be used without cross-examination which is in violation of principles of natural justice and such statement is nullity. 28. As regards survey on M/s A.B. Diagnostic Centre, Jaipur statement of Sh. Harish Agarwal, partner was recorded who has confirmed to have paid commission to assessee. When asked by AO whether said commission is being reflected in their regular books of account or not, Sh. Harish Agarwal, partner stated that it does not appear in regular books of account and receipts of M/s A.B. Diagnostic Centre are suppressed and after suppression records are maintained. original primary reports, i.e., patients record register and lab slips were being destroyed. Sh. Harish Agarwal further stated that out of suppressed receipts, commission payment is paid to various doctors (pp. 24-25 of AO s order). Few names of patients appearing in registers of M/s A.B. Diagnostic Centre were also appearing in registers of assessee. Sh. Harish Agarwal has further stated that approximately Rs. 2000-3000 are being paid to assessee. 29. After appreciation of fact in case of M/s A.B. Diagnostic Centre, we are of view that M/s A.B. Diagnostic Centre is maintaining books of account which are made after making suppression of receipts and as stated by Dr. Harish Agarwal after suppression of receipts, commission is paid to various doctors same does not hold good, in absence of any evidence produced by Dr. Harish Agarwal. His statement cannot be relied upon since he himself is maintaining books of account after making adjustments like suppression of receipts and no commission payment has been shown to have been paid to assessee. statement of Dr. Harish Agarwal was taken at back of assessee. Therefore any statement in absence of any positive or cogent evidence cannot be used against assessee by drawing adverse inference against assessee as held in case of Alok Agarwal vs. Dy. CIT (supra). Similarly no addition can be made on basis of information gathered from records of another person without establishing those belong to assessee and counsel for assessee has relied upon following decisions : (a) Premlal Kedia vs. Dy. CIT 22 TW 481 (Jp); (b) T.S. Venkatesan vs. Asstt. CIT (2000) 69 TTJ (Cal) 66 : (2000) 74 ITD 298 (Cal); (c) Prarthana Construction (P) Ltd. vs. Dy. CIT (2001) 70 TTJ (Ahd) 122. Dr. Harish Agarwal in his statement stated that practice of giving commission was started in April, 1998 and AO has estimated commission from 1st April, 1997 which means AO himself is not relying upon completely on statement of Dr. Harish Agarwal. observation of AO is that assessee has been receiving commission both at Jaipur and Udaipur whereas assessee was posted from March, 1995 to March, 1997 both at Jaipur and Udaipur. 30. Regarding commission from other diagnostic centre AO has made addition of Rs. 1,50,000 without any basis from 1st April, 1990 to 1st Feb., 2000. No material has been found at premises of assessee or even with any third party. addition is purely on surmises and conjectures and based on purely suspicion. learned CIT(A) has deleted addition. We affirm decision of learned CIT(A) in this regard. 31. As regards additions sustained by learned CIT(A) with regard to commission alleged to have been made by M/s Rajdhani X-Rays Rs. 68,000 and M/s A.B. Diagnostic Centre Rs. 1,02,000 have been discussed above and therefore in such circumstances and discussions held above, estimation made by AO is without any basis, cogent material or evidence which could prove that assessee has received commission. No material has been found during course of search at premises of assessee which could prove that assessee has received commission. Therefore counsel for assessee has relied upon decision in case of Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC) where it has been held that suspicion however strong cannot take place of proof. In such circumstances, AO was not justified in making additions on account of commission, as undisclosed income of assessee. Therefore, we reverse order of learned CIT(A) to extent of addition sustained by learned CIT(A). Thus ground No. 4 of assessee is allowed in favour of assessee and ground No. 2 of Revenue is dismissed. 32. Ground No. 5 of assessee is general in nature and does not require any adjudication. 33. In result IT(SS)A No. 74/Jp/2004 appeal of assessee is partly allowed and IT(SS)A No. 79/Jp/2004 appeal of Revenue is dismissed. *** DR. P.R. GUPTA v. DEPUTY COMMISSIONER OF INCOME TAX