2004 (10) TMI 257 - AT - Income Tax

2008 (7) TMI 847 - AT

Issues Involved:
1. Addition of Rs. 3,31,250 in AY 1997-98.
2. Addition of Rs. 12,80,411 in AY 1999-2000 and Rs. 15,61,616 in AY 2000-01.
3. Inflation of expenses of Rs. 5,22,350 in AY 1997-98.
4. Inflation of expenses of Rs. 7,80,000 in AY 1998-99.
5. Inflation of expenses of Rs. 48,000 in AY 1997-98.
6. Suppression of receipts of Rs. 25,000 in AY 1997-98.
7. Suppression of receipts of Rs. 2,06,000 in AY 1998-99.
8. Suppression of receipts of Rs. 62,700 in AY 1999-2000.
9. Suppression of receipts of Rs. 5,85,400 in AY 2000-01.
10. Unexplained expenses of Rs. 91,354, Rs. 29,400, and Rs. 15,750 in AYs 1997-98, 1998-99, and 1999-2000.
11. Unexplained expenses of Rs. 40,000.
12. Compulsory consideration for admission in various AYs.
13. Unexplained cash credit in various AYs.
14. Undisclosed income of Rs. 3,78,093 in AY 1996-97.
15. Denial of exemption under sections 10(22)/10(23C).
16. Exemption under section 11.

Detailed Analysis:

I. Addition of Rs. 3,31,250 in AY 1997-98:
The income was recorded in the P&L account filed before the search, thus it cannot be treated as undisclosed income. The adjudication of this ground depends on the exemption under section 10(22).

II. Addition of Rs. 12,80,411 in AY 1999-2000 and Rs. 15,61,616 in AY 2000-01:
The search occurred before the due date for filing returns for these years. The income was recorded in the books and disclosed in regular returns. Thus, it cannot be treated as undisclosed income under section 158BB(1)(d).

III. Inflation of expenses of Rs. 5,22,350 in AY 1997-98:
The AO based this addition on a loose paper found during the search. The matter is remanded back to the AO to re-examine the issue with reference to salary registers and vouchers.

IV. Inflation of expenses of Rs. 7,80,000 in AY 1998-99:
The AO calculated salary expenses based on a loose paper. The matter is remanded back to the AO for verification.

V. Inflation of expenses of Rs. 48,000 in AY 1997-98:
This addition is claimed to be a double addition. The matter is remanded back to the AO for verification.

VI. Suppression of receipts of Rs. 25,000 in AY 1997-98:
The AO found overwriting in receipts. The assessee's explanation was unsatisfactory. The addition is upheld.

VII. Suppression of receipts of Rs. 2,06,000 in AY 1998-99:
The AO found a discrepancy between the receipt book and the fees shown. The assessee's explanation was unsatisfactory. The addition is upheld.

VIII. Suppression of receipts of Rs. 62,700 in AY 1999-2000:
The AO found a discrepancy between the receipt book and the fees shown. The matter is remanded back to the AO for verification.

IX. Suppression of receipts of Rs. 5,85,400 in AY 2000-01:
The AO found a discrepancy between the receipt book and the printout. The matter is remanded back to the AO for verification.

X. Unexplained expenses of Rs. 91,354, Rs. 29,400, and Rs. 15,750 in AYs 1997-98, 1998-99, and 1999-2000:
These expenses were paid by trustees and added in their assessments. The matter is remanded back to the AO for verification.

XI. Unexplained expenses of Rs. 40,000:
The AO found a discrepancy in the payment for air-conditioners. The matter is remanded back to the AO for verification.

XII. Compulsory consideration for admission:
The AO treated donations as compulsory and not voluntary. The receipts were recorded in the books, thus they cannot be treated as undisclosed income. The addition is deleted.

XIII. Unexplained cash credit:
The AO found discrepancies in donation receipts. The receipts were recorded in the cash book, thus they cannot be treated as undisclosed income. The addition is deleted.

XIV. Undisclosed income of Rs. 3,78,093 in AY 1996-97:
The assessee did not file a return for this year despite having taxable income. The addition is upheld.

XV. Denial of exemption under sections 10(22)/10(23C):
The AO denied exemption on several grounds. The Tribunal held that the exemption cannot be denied in block assessment unless the claim is found to be false. The exemption is allowed as per regular assessments.

XVI. Exemption under section 11:
The arguments are the same as for section 10(22). The AO is directed to follow the findings of regular assessments.

XVII. Addition of Rs. 3,31,250 for AY 1997-98:
Since the exemption under section 10(22) is allowed, the addition is deleted.

Conclusion:
The appeal is partly allowed.

← Previous Next →