ITAT Restricts Hospital Receipt Addition to 5%, Deletes Diary-Based Unexplained Income Additions

Neelam Gupta Vs DCIT (ITAT Chandigarh)

Software Difference Is Not Entire Undisclosed Income & Diary Scribbles Cannot Become Crores: ITAT Restricts Hospital Receipts Addition to 5%

The Chandigarh Bench of the ITAT has granted substantial relief to a doctor running a multispeciality hospital by holding that a difference between receipts appearing in hospital-management software and regular books cannot automatically be treated as undisclosed income in its entirety. Considering duplication of entries, collection of old balances, patient advances & corresponding unrecorded expenses, the Tribunal restricted the addition to 5% of the differential receipts as business/professional income.

The ITAT also deleted additions based on recurring-deposit assumptions and uncorroborated diary notings, including a remarkable addition of ₹1.40 crore allegedly representing donation paid for the assessee’s son’s medical admission.

Hospital Software Showed Higher Receipts

The assessee, an MD in Radiology, had served with the Himachal Pradesh Government from 1993 to 2005 and thereafter established M/s Akash Multispeciality Hospital in 2008. She disclosed pension, professional income from the hospital & interest income.

During a survey u/s 133A on 22-02-2019, the Department examined data from the hospital’s Hospital Management Software (“HMS”). The receipts reflected in HMS were higher than those recorded in the audited accounts maintained through Tally. The AO consequently alleged suppression of receipts and made additions of:

• ₹37.13 lakh for AY 2016-17
• ₹79.18 lakh for AY 2017-18
• ₹83.16 lakh for AY 2018-19

The assessee explained that HMS was used for patient management & billing and not for finalisation of accounts. Its collection summaries included patient advances, final bills issued subsequently, old outstanding collections, pending amounts, pharmacy collections and reimbursement-related entries. This resulted in duplication or inflation of apparent receipts.

The Tribunal did not accept the contention that the software remained under trial for several years. Nevertheless, it held that the mere difference between two sets of data could not automatically be treated as undisclosed income.

Unaccounted Receipts Must Be Taxed on Net Basis

The Department itself alleged that substantial payments were made to visiting doctors outside the regular books. Such payments were estimated at approximately ₹84 lakh annually, whereas only ₹25.40 lakh was recorded in the accounts, leaving an expenditure gap of ₹58.60 lakh.

The ITAT held that where unaccounted receipts are alleged, the corresponding expenditure intimately connected with those receipts must also be considered. It is only the net income element, and not the entire gross receipt, that can ordinarily be brought to tax.

Considering the possible duplication in HMS entries, collection of old balances, reimbursements and unrecorded professional expenditure, the Tribunal restricted the addition to 5% of the differential receipts for all three years. The amount was directed to be assessed as normal business/professional income, thereby also displacing its treatment as unexplained income u/s 69C read with section 115BBE.

RD Addition Assumed Deposits Even on Bank Holidays

The AO made a recurring addition of ₹12.77 lakh for each year, proceeding on the assumption that the assessee deposited ₹3,500 every day for all 365 days into recurring-deposit accounts belonging to her husband, Dr. Bhupesh Gupta.

The ITAT found that the calculation was made without examining the actual bank accounts. The AO had mechanically presumed deposits even on Sundays & public holidays when banks remained closed.

More importantly, the same deposits had already been examined in the husband’s appellate proceedings. The CIT(A) had found that the actual deposits were substantially lower and that the husband’s cash professional income was sufficient to explain them. The additions in his hands had been deleted for most years.

The Tribunal therefore held that the same amounts could not again be sustained in the assessee’s hands and deleted the entire recurring-deposit additions for all four years.

Diary Entries Without Corroboration Are Dumb Documents

For AYs 2018-19 & 2019-20, the AO made additions based upon notings in an impounded diary concerning alleged property purchases, construction expenditure and payments to contractors, electricians, architects & intermediaries.

The ITAT observed that these were bald entries without basic particulars such as dates, names of parties, mode of payment or proper description. No enquiry was conducted from any alleged recipient and no independent material established that the payments had actually taken place.

Relying upon CBI v. V.C. Shukla and Common Cause v. Union of India, the Tribunal held that loose sheets or diaries, not maintained as regular books of account, cannot independently fasten liability without corroborative evidence. Several notings also related to a college operated by a separate assessee, Jagdish Chand Memorial Trust.

Accordingly, diary-based additions of ₹47.48 lakh & ₹25,000 for AY 2018-19, and ₹15.50 lakh & ₹7 lakh for AY 2019-20, were deleted.

“140” in a Diary Could Not Become ₹1.40 Crore Donation

The AO interpreted a rough noting on the reverse of a diary page as recording a donation of ₹1.40 crore for securing the assessee’s son’s admission to an MD Gynaecology course.

The document contained unclear figures with side notings such as “total 140” and “61 balance”. It did not mention any date, year, payer or payee. Without conducting any verification from the medical college, the AO assumed that “140” meant ₹1.40 crore paid in cash.

The ITAT termed it a “dumb document”. The assessee had demonstrated that actual college fees of approximately ₹78.57 lakh, including hostel charges, were paid through banking channels against receipts. In the absence of evidence of any cash exchange, the addition rested entirely on conjecture & surmise and was deleted.

Author’s Comments

The decision draws two valuable lines. First, data mismatch may justify enquiry but not automatic taxation of the entire difference. Where gross unaccounted receipts are inferred, directly connected expenditure and the embedded profit must also be considered.

Second, section 292C creates a rebuttable presumption regarding seized documents; it does not give the AO licence to convert every vague numeral into unexplained crores. A diary notation must still be intelligible, connected to the assessee and supported by surrounding evidence.

The assessee obtained substantial relief on merits, though the legal grounds challenging reopening were not adjudicated because no substantive arguments were advanced.

Cases Discussed

CBI v. V.C. Shukla (1998) 3 SCC 410 — The Tribunal relied on the Supreme Court decision concerning the evidentiary value of loose sheets or diaries not maintained as regular books of account.

Common Cause (A Registered Society) v. Union of India [2017] 77 Taxmann.com 245 / 245 Taxman 214 / 394 ITR 220 (SC) — relied upon for the principle concerning the evidentiary value of uncorroborated records. The decision continues to be cited in income-tax tribunal proceedings concerning loose papers and uncorroborated entries.

Chiranji Lal Steel Rolling Mills, 84 ITR 222 (P&H) — relied upon by the assessee in support of the challenge to the diary-based additions.

Khazan Singh, 304 ITR 243 — relied upon by the assessee concerning the evidentiary basis for additions.

FULL TEXT OF THE ORDER OF ITAT CHANDIGARH

1. Aforesaid appeals by assessee for Assessment Years (AY) 2016-17 to 2019-20 have substantially identical facts as well as issues. First, we take up appeal for AY 2016-17 which arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 27.08.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 143(3) of the Act on 26.09.2021. The registry has noted delay of 72 days in these appeals, the condonation of which has been sought by Ld. AR. Considering the period of delay, the delay is condoned and the appeals are admitted for adjudication. The assessee’s grounds of appeal read as under:

1. That the Ld. CIT(A) has erred in dismissing the appeal of the assessee and has also erred in confirming the order of Assessing Officer in assessing the income at Rs.71,96,393/-.

2. That the Ld. CIT(A) has erred in confirming the action of the Assessing Officer with regard to issuance of notice u/s 148 as there was neither any valid reason to believe that the income of the assessee has escaped assessment and also the approval have been granted by the higher authorities in a mechanical manner.

3. a). Notwithstanding the above said ground of appeal, the Ld. Assessing Officer has erred in confirming the addition of Rs.37,13,653/- on the basis of unreliable software data which has no authenticity in the eyes of law and condition precedent to admissibility of evidence by way of electronic record as per Section 65(4) of the Indian Evidence Act, 1872 has not been complied in view of the judgment of Hon’ble Madras High Court in the case of M/s Vertivel Minerals Vs ACIT, reported in 129 taxman.com 126.

b) That even no enquiries, whatsoever had been made before making the addition and there is no tangible material on record as well and the addition have been made against the facts and circumstances of the case.

4. That the Ld. CIT(A) has erred in confirming the addition of Rs.12,77,500/- on account of deposit in RD Account of her husband, who is a separate assessee and also since the separate addition has already been made in the hands of husband for the same year and, as such, there is no basis of making the addition.

5. That the Ld. CIT(A) has erred in applying the provisions of Section 115BBE of the Income Tax Act.

6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.

2. The Ld. AR advanced arguments assailing the impugned additions and referred to various case laws in support of the same. The Ld. Sr. DR also advanced arguments and referred to the findings of lower authorities. Having heard rival submissions and upon perusal of case records, our adjudication would be as under.

3. Assessment Proceedings

3.1 The assessee being resident individual is stated to be a proprietor of M/s Akash Multispecialty Hospital at Nalagarh, District Solan (HP) since the year 2008. The assessee is MD in Radiology and was in service with HP Government from years 1993 to 2005 and thereafter, she started her own hospital in the year 2008. During the year under consideration, the assessee disclosed income from pension, professional income from hospital and interest income in her return of income filed u/s 139(1) on 07.10.2016 at Rs.22.05 Lacs. 3.2 The assessee’s case was reopened pursuant to survey action u/s 133A at assessee’s business premises on 22.02.2019 wherein the statement of the assessee was recorded. The software (Hospital Management Software- in short ‘HMS’) as installed at the hospital for patients management was also seized. It was alleged that receipts as per software did not match with the audited financial statements of the assessee for various assessment years. During the course of assessment proceedings, a notice u/s 148 was issued by Ld. AO for this year on 25.03.2021 which was followed by notices u/s 143(2) and 142(1) calling for various details from the assessee. The twin issues as identified by Ld. AO on the basis of survey findings were suppression of sales and deposits in RD account of Dr. Bhupesh Gupta (Husband of the assessee).

3.3 Suppression of Sales

A collection summary was found during survey for the period 01.04.2015 to 31.03.2016 which was confronted to the assessee. In reply to Q. No.12 of the statement, she was confronted with the fact that the total receipts declared were Rs.195.24 Lacs whereas as per authentic records as obtained from the hospital management system (HMS), the receipts were for Rs.232.38 Lacs. The assessee could not state the reasons for the same. In reply to Q. No.8, it was stated that the books of accounts were maintained in computer at the basement. In reply to Q. No.15, it was stated by her that some patients paid amount in cash which is kept by Dr. Bhupesh Gupta. The Ld. AO sought corroboration of suppression of sales by alleging that the assessee made cash payment to visiting doctors out of these unaccounted sales. The same was admitted in the statement of Dr. Bhupesh Gupta vide reply to Q.Nos.20 & 21 of his statement. It was also stated that an amount of Rs.7 to 8 Lacs was being given as salary to visiting Doctors by the hospital. The salary would translate into yearly payment of Rs.84 Lacs whereas the assessee reflected salary expenses of Rs.25.40 Lacs in the regular books. Accordingly, an opinion was formed that significant part of unaccounted sales was given as cash payment to visiting doctors. The very fact that the hospital was making cash payments to doctors outside its regular books of account establishes the existence of out-of-book sales through which such payments were funded.

The assessee refuted the allegation of Ld. AO on the ground that regular books were maintained on Tally Software whereas the hospital also installed HMS (Hospital Management System) software for recording of daily transactions. The software was under trial. The staff was not fully conversant to run the operating system of HMS software. The above sales figures were taken from collection summary from the said software. The summary includes advance received from the patients, gross final bills of the patients without adjustment of these advances, old payments received, pending amount collection from patients, receipts from indoor patients for purchase of consumables from outside etc. After suitable adjustments, the correct receipts were reflected in the financial statements and therefore, there was no suppression of sales as alleged. The assessee also denied having paid money in cash and stated that consultancy charges were paid through banking channels only after deduction of tax at source. However, all such arguments stood rejected by Ld. AO on the ground that the documents were taken from the software system of the hospital and duly confronted to the assessee during survey wherein the assessee could not explain these documents and stated that her husband Dr. Bhupesh Gupta looked after the operations and accounts of the hospital. The said fact was verified from Dr. Bhupesh Gupta himself. The documents remained unexplained and undisputed. During survey neither assessee nor her husband doubted the veracity and authenticity of the information as extracted from the software. The said information remains undisputed. The statement of the assessee and her husband was consistent and corroborative. The was evidence of sales suppression as well as payment to outside doctors and the unaccounted transactions were traced at both ends. There was evidence to show generation of cash and consumption of cash. The software was being used for five years and therefore, the arguments of the assessee in that regard were to be disregarded. Finally, the sales suppression for Rs.37.13 Lacs pertaining to this AY was added as undisclosed sales of the assessee while framing the assessment. Similar additions of Rs.79.18 Lacs and Rs.83.16 Lacs were made for AYs 2017-18 & 2018-19.

3.4 Unexplained deposits in RD account of Dr. Bhupesh Gupta

In her statement, the assessee mentioned that Dr. Bhupesh Gupta was being provided monthly salary of Rs.50,000/- in addition to daily RD deposits of Rs.3,500/-. However, these were not reported in the regular books as expenses. The reply of the assessee in reply to Q.No.25 was as under: –

We are paying Rs.50,000/- per month as salary to Dr. Bhupesh Gupta. Other than salary, we are depositing two RD of Rs.2,000/- and Rs.1,500/- per day with Parwanoo Urban Co-operative bank and Bhagat Bank respectively.

When confronted during assessment proceedings, the assessee stated that no salary was paid to Dr. Bhupesh Gupta. He was paid consultancy charges @Rs.50,000/- per month on which TDS was deducted. At the time of survey, the assessee could not differentiate between salary or consultancy charges due to mental pressure from survey officers. The consultancy charges were fully recorded in regular books. The assessee did not pay / deposited any amount in the shape of RD directly into the bank account of Dr. Bhupesh Gupta rather these deposits may be made by Dr. Bhupesh Gupta himself from his own sources. The Ld. AO partially accepted the claim of the assessee since consultancy charges were found recorded in regular books of accounts and due TDS was deducted against the same. However, the explanation with respect of RD claim was not accepted and Ld. AO accordingly made addition of Rs.12.77 Lacs u/s 69C r.w.s. 115BBE in all the four Assessment Years. Finally, the assessment for this year was framed after making twin additions as above.

4. Appellate Proceedings

4.1 The assessee raised various legal grounds and also assailed impugned additions on merits. It was, inter-alia, stated that there was no tangible material to reopen the case of the assessee. Further, statements recorded during survey proceedings would not hold much evidentiary value as supported by various judicial decisions. It was also contended that the HMS software was not reliable since it had major defects. On merits, it was stated that the regular books were maintained on Tally Software but daily transactions were recorded on HMS software which was under trial. The hospital staff was not fully conversant to run the said software. The differential arose because of double entry only. The assessee hospital was empaneled with Health safety & Regulation, Himachal Pradesh Department and under such scheme, HP government employees were treated in the hospital. So, practically the amount is received in advance from the said patients at the start of the treatment and since the said patient needs to get the reimbursement from the government, separate bills were issued to them after the treatment. This results into double entry of the amount from the same patient. The hospital software was thus, not at all, reliable. The actual basis for finalizing the books of accounts was the entries made in the Tally Software. The problem of double entry was not solved by the software even till date and therefore, the data of software was not considered by the assessee for final accounts purposes. On the issue of additions of RD deposits, attention was drawn to first appellate order in the case of Dr. Bhupesh Gupta wherein a finding was rendered that his cash professional income was much more than RD deposits and therefore, there was no question of making this addition in the hands of the assessee.

4.2 The legal grounds stood rejected by Ld. CIT(A). On merits, the findings have been rendered at para-8 onwards of the impugned order. It was observed by Ld. CIT(A) that the said software was being used at the hospital for past several years. The system was employed for billing, receipts and management of patients transactions, all of which were central to the functioning of a modern hospital. It was not plausible that hospital of this scale would continue to use defective software for five years without rectification or replacement. If duplication of inflation of figures was observed, the assessee should have furnished correspondence with the software vendor or any other internal records pointing out the errors or technical reports identifying such faults. No such material was shown by the assessee and therefore, bare assertion was insufficient. At no point of survey, the correctness of the data was questioned by the assessee. On the contrary, statement of the assessee and her husband corroborated one another. It was duly admitted that the monthly payment of Rs.7-8 Lacs was being paid to visiting Doctors which translate into annual payment of Rs.84 Lacs as against disclosure of Rs.25.4 Lacs in the regular books. The huge disparity clearly indicates that substantial payments were made outside the books which could have been funded from unaccounted receipts only. Therefore, addition of sales suppression u/s 69C r.w.s. 115BBE was confirmed for all the three years. Going by the statement of the assessee during survey proceedings, the addition of RD deposits was also confirmed, for all the years. The application of higher rate of tax u/s 115BBE on twin additions was also confirmed. Aggrieved, the assessee is in further appeal before us.

4.3 In AY 2018-19, Ld. AO made another addition of cash payments which was based on diary marked as Annexure A-2 which was impounded during survey. The said diary was stated to be maintained by the assessee or her husband. On examination, it was found that it contained several entries of cash transactions relating to property purchase, building construction and other investments which include payment to property mediators, contractors, electricians and architects. These papers were in the shape of hand-written pages which were confronted to the assessee. These pages were stated to be written by assessee’s husband and Shri Harish Kumar Sharma (Administrator). During survey statement, these pages were explained by the assessee to be unexplained payments to various persons. However, during assessment proceedings, the assessee dismissed the evidentiary value of these records terming them as dumb documents without any corroboration. It was contended that these pages could not be treated as books of accounts and there was no evidence linking them with her business or income. However, Ld. AO rejected the same on the ground that these were not stray papers but dairy in which daily financial dealings were recorded. The entries were corroborated by statement of the assessee as well as real-life events such as donation payment for her son’s admission and construction work. This nexus, as per Ld. AO, elevated evidentiary worth of the dairy. The Ld. AO quantified unexplained investments for this year at Rs.47.48 Lacs which was added u/s 69 r.w.s. 115BBE. Another addition of Rs.25,000/- was made u/s 69C which represent unexplained expenditure in the shape of cash payment to Shri Jitender Kumar (electrician). Similar addition u/s 69, for AY 2019-20, was quantified at Rs.15.50 Lacs.

During first appeal, the assessee reiterated that the impounded dairy was rough notings on loose papers without any corroborative evidence linking them with any actual investments made by the assessee. It is well settled law that loose sheets or dumb documents by themselves could not be treated as books of account nor could they form the sole basis of addition unless supported by independent evidence. The conclusion that notings represent actual expenditure was mere presumption without any verification. The entries were vague, lacked even basic details such as dates of transaction, names of parties or identifiable proprieties and therefore, the same could not be relied upon to infer undisclosed investment, particularly in the absence of any corroboration thereof. Therefore, the impugned additions were unjustified and liable to be deleted.

The Ld. CIT(A), however, referred to the provisions of Sec.292C which provide that any books of account or document found in the possession of the person during survey may be presumed to be belonging to that person and its contents to be true. The statutory presumption was not rebutted by the assessee with any cogent evidence. Mere denial do not discharge the required onus. The correlation of these entries with real life events such as donation for assessee’s son would indicate that the dairy contained record of actual financial transaction and the same was not a casual notebook. Therefore, the impugned additions were confirmed against which the assessee is in further appeal before us.

4.4 Another addition made in AY 2018-19 was on account of alleged donation payment for assessee’s son Shri Akash Gupta. The addition was made on the basis of Page No.28 (backside) of Annexure-2 which allegedly recorded a payment of Rs.140 Lacs as donation for securing admission of assessee’s son Shri Akash Gupta to MD Gynae at Santosh Medical College. In survey statement, the assessee admitted to have the payment. But during assessment proceedings, the assessee denied having made any such payment contending that only Rs.78.57 Lacs were paid as course fees including hostel charges and all such payments were made through banking channels only. She maintained that no donation was ever paid and contended that the impounded document was a dumb document. However, going by her statement, Ld. AO made addition of Rs.140 Lacs as unexplained expenditure u/s 69C and added the same to the income of the assessee.

During first appeal, identical arguments were taken by the assessee. It was stated that diary entry was a loose noting with no evidentiary value and could not override verifiable records of actual payments. The Ld. AO heavily relied upon assessee’s survey statement which would have no evidentiary value unless supported by independent material. The Ld. CIT(A) observed that the diary was not a stray noting but part of a systematic diary meticulously maintained for recording major financial dealings. There was categorical admission in the statement. Therefore, the impugned addition was confirmed against which the assessee is in further appeal before us.

4.5 In AY 2019-20, Ld. AO made another addition of Rs. 7 Lacs which was on the basis of notings on Page-11 of Annexure A-1 which recorded investment in land for Rs.7 Lacs. The assessee denied having made any such investment and contended that the notings in a rough diary could not, by themselves, establish that the transaction had actually taken place particularly in the absence of any corroborating material. However, Ld. AO made addition u/s 69 for Rs.7 Lacs. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us.

Our findings and Adjudication

5. From the enumerated facts, it emerges that the assessee, along with her husband Dr. Bhupesh Gupta, is running the stated hospital since the year 2008. The assessee is MD in Radiology. The assessee was subjected to survey action by the department u/s 133A on 22.02.2019 wherein the statement of the assessee was recorded. During survey, the software as installed in the Hospital was also seized by the department. It was alleged by the department that the receipts as per said software do not match with the audited Balance Sheet and Profit and Loss account of the respective Assessment Years and certain additions have been made in the hands of the assessee for alleged suppression of sales. The year-wise additions as made for various AYs and the grounds taken by the assessee, for ease of reference, could be tabulated as under: –

6. First, we take up the issue of alleged suppression of sales. The dispute before us relates to the addition made by Ld. AO on account of alleged suppression of receipts on the basis of the data extracted from the HMS software installed at the hospital. The undisputed position that emerges is that the assessee has maintained its regular books of account on Tally software and the financial statements were prepared on the basis of such books. The Ld. AO, however, has proceeded to determine the alleged suppression of receipts by comparing the figures reflected in the HMS software with the receipts recorded in the regular books of account. It could be seen that the software was being used by the assessee for the past many years and therefore, the argument that the software was under trial could not be accepted. The said argument remains unsubstantiated. However, on the given facts, it is quite discernible that the difference in receipts, by itself, could not automatically be treated as undisclosed income of the assessee. The assessee has consistently explained that the HMS software was being used for patient management and billing purposes and was not the basis on which the final books of account were prepared. It has further been explained that the data contained various components which could result in duplication or inflation of the apparent receipts, including advances received from patients, subsequent generation of final bills, old outstanding collections, pending amounts and other patient-related transactions. The assessee has also explained the peculiar manner in which payments were received from government employees / patients covered under the relevant scheme. The Ld. AR, on sample basis, has tabulated various such duplicate payments in the paper-book to canvass the point that the receipts as mentioned in the software could not be considered to be the actual receipts. The summary of receipts as extracted on Page No.3 of the assessment order would show that the receipts include hospital consumable collection, old balance collection, pharmacy collection and pending amount collection. All these items represent reimbursements and old balance collection which could not be considered to be pure income of the assessee for this year. Another undisputed finding by lower authorities is that out of such receipts, the assessee has made payment to the visiting doctors which constitute substantial expenses for the assessee. Such expenses as booked in the regular books of accounts were much less than the expenses incurred by the assessee. The Ld. AO has rendered a finding that the actual salary would translate into yearly payment of Rs.84 Lacs whereas the assessee reflected salary expenses of Rs.25.40 Lacs in the regular books. That leaves substantial gap of Rs.58.60 Lacs which cover substantial portion of difference in receipts. It is trite law that unaccounted receipts are to be taxed on net basis i.e., related intimate expenses incurred out of such receipts are also to be considered while computing the net income of the assessee. Therefore, on the given facts and circumstances of the case, we would hold that the addition of 5% of difference in receipts would meet the end of justice. The Ld. AO is directed to restrict the impugned additions, in all three years, to the extent of 5% of difference in receipts. The said estimation would be sufficient enough to plug the leakage of revenue. The same would be considered as business / professional income of the assessee. We order so. The corresponding grounds of appeal stand partly allowed, in all the three years.

7. The next issue, in all the years, is addition of RD deposits for Rs.12.77 Lacs. This addition is made on the allegation that the assessee has deposited sum of Rs.3500/- per day for all 365 days of the year without actual examination of bank account. In the process, Ld. AO has assumed deposits even on Sundays and Public Holidays when the banks are closed. We further find that the said issue of deposit has already been considered on merits in the first appellate order in the case of Dr. Bhupesh Gupta. The Ld. CIT(A), vide common order dated 27.01.2025, at para 6.1, observed that the actual deposits were much less than computed value of Rs.12.77 Lacs. Further, cash earnings of Dr. Bhupesh Gupta were significant enough to cover these deposits. Finally, the impugned addition was deleted for all the years, except for AY 2017-18 wherein the addition was restricted to the extent of Rs,3.14 Lacs. This being so, the impugned addition, in the hands of the present assessee, could not be sustained, in any manner. By deleting this addition, in all the years, we allow the corresponding grounds of appeal. The appeals for AYs 2016-17 and 2017-18 stand partly allowed.

8. The next issue, in AY 2018-19 is additions of Rs.47.48 Lacs & Rs.0.25 Lacs. Similar additions of Rs.15.50 Lacs & Rs.7 Lacs have been made in AY 2019-20. These additions are on the basis of notings in a diary which was marked as Annexure A-2 as impounded during survey. On analysis, it has been deciphered that it contains several entries of cash transactions relating to property purchase, building construction and other investments which include payment to property mediators, contractors, electricians and architects. Upon perusal of all these entries as extracted in the assessment order, it could be seen that these are bald entries which do not bear even the basic details i.e., name of the party, mode of payment, description of payments etc. It is also discernible that there is no independent corroboration of these payments. Though Ld. AO has alleged the cash payments, however, no independent enquiry has been conducted during the course of assessment proceedings from any of the parties to substantiate any payment. These entries, at the best, are to be regarded as dumb entries which, in the absence of any corroboration thereof, is incapable of sustaining the addition on standalone basis. The Hon’ble Supreme Court, in the case of CBI v. V.C. Shukla 1998 taxmann.com 2155 (SC) clearly held that loose sheets or diaries, not being books of account regularly kept in the course of business, are not admissible evidence. The Court observed that entries made by one person in such documents, unless corroborated by independent evidence, cannot fasten liability on another. Similarly, in the case of Common Cause (A Registered Society) v. Union of India [2017] 77 Taxmann.com 245/245 Taxman 214/394 ITR 220 (SC), it was held that uncorroborated records would have no evidentiary value. The decision of Hon’ble Punjab & Haryana High Court in the case of Chiranji Lal Steel Rolling Mills (84 ITR 222) and also the decision in Khazan Singh (304 ITR 243), as cited by Ld. AR, duly supports the case of the assessee. We also find that Ld. AO, at Page Nos.54-55 of the order, has held that number of these payments have been made for a college which is a separate assessee in the name of Jagdish Chand Memorial Trust. The entries at Page Nos. 30,36,37,39 to 44 all relates to the said college. The remaining amounts are small notings which are in the nature of bald entries. On these facts, the corresponding impugned additions, as made in AYs 2018-19 & 2019- 20, stand deleted. We order so. The assessee succeeds in its respective grounds of appeal.

9. The last of the addition is for Rs.140 Lacs in AY 2018-19. The same is alleged to be donation paid by the assessee towards admission of her son in a college. The same is purely on the basis of rough, uncorroborated scribbling as found noted on backside of Page No.28 Annexure A-2. The non-descript dairy noting mentions Dr. Aakash fees with break-up of “5000000 (RTGS), 1100000 (RTGS) and 1800000 (Cash)” alongside a side-noting of “total 140” and “61 balance”. The same has been extracted at Page No.58 of the assessment order. Upon perusal of these entries, it could be seen that there is no mention of any date, year or the assessee’s / payee’s name. Even the figures are not clearly discernible. Without any independent verification, Ld. AO blindly assumed that the figure of “140” represent undisclosed cash payment of Rs.140 Lacs towards medical college tuition of assessee’s son. In our considered opinion, the said document is merely a dumb document. The presumption of figure “140” as cash payment of Rs.140 Lacs is without any basis. The assessee has well demonstrated that all the payments to the college were made through banking channels against receipt. The allegation of Ld. AO is not backed up by any independent verification or concrete evidence on record. It is trite law that no addition could be made on mere presumption, assumption, conjectures and surmises. Unless evidence of actual cash exchange is brought on record by way of any corroboration, this bald addition could not be sustained in the hands of the assessee. We order so. The assessee succeeds in its corresponding grounds of appeal. No substantive arguments on legal grounds have been urged in all the years. The appeals for AYs 2018- 19 & 2019-20 stand partly allowed.

10. All the appeals stand partly allowed.

Order pronounced on 15/09/2026