2009 (12) TMI 716 - AT - Income Tax

Summary

Issues Involved:
1. Double addition of Rs. 18,87,000 as capitation fees.
2. Deletion of addition of Rs. 14,33,132 on account of salary paid and received back.
3. Deletion of addition of Rs. 9,41,945 on account of salary paid and received back for the assessment year 2006-07.

Summary:

Issue 1: Double Addition of Rs. 18,87,000 as Capitation Fees

The Revenue contended that the learned Commissioner of Income-tax (Appeals) erred in treating the receipts of Rs. 18,87,000 as 'double addition' and accepting it as advance fees. The assessee argued that the addition of Rs. 3,60,400 was without basis as it would result in double taxation. The Tribunal found that the amount of Rs. 18.37 lakhs was already declared by the assessee as income, either as advance fees or included in tuition fees. Therefore, no additional amount could be justified. The Tribunal allowed the assessee's ground and rejected the Revenue's grounds.

Issue 2: Deletion of Addition of Rs. 14,33,132 on Account of Salary Paid and Received Back

The Revenue challenged the deletion of Rs. 14,33,132 made by the Assessing Officer on account of salary paid to employees and received back. The Tribunal noted that the Assessing Officer based his addition on the statement of one employee, while ignoring the statements of 11 other employees who confirmed receiving their full salary. The Tribunal upheld the learned Commissioner of Income-tax (Appeals)'s decision, finding no good reason to interfere, and dismissed the Revenue's ground.

Issue 3: Deletion of Addition of Rs. 9,41,945 on Account of Salary Paid and Received Back for the Assessment Year 2006-07

The Revenue raised a similar issue for the assessment year 2006-07 regarding the deletion of Rs. 9,41,945. Both parties agreed that this issue could be decided on similar lines as the previous year's issue. The Tribunal decided in favor of the assessee, dismissing the Revenue's ground.

Conclusion:

In the combined result, both appeals of the Revenue were dismissed, and the appeal of the assessee was allowed. The order was pronounced in the open court on December 4, 2009.