9911796707
TMI Blog2009 (12) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... -connected which read as under : I. T. A. No. 3804/Del/09 (for the assessment year 2007-08) (revenue s appeal) : 1. The learned Commissioner of Income-tax (Appeals) has erred both in law and on facts of the case in treating the receipts of Rs.18,87,000 as double addition even when he has categorically arrived at the finding that the amount involved was nothing but capitation fees as concluded by the Assessing Officer. 2. The learned Commissioner of Income-tax (Appeals) has further erred both in law and on facts of the case in accepting the receipt of Rs. 18,87,000 as advance fees and holding that out of the said receipt, a sum of Rs. 3,60,400 pertains to the assessment year 2007-08 and the balance pertains to subsequent assessment year when he himself has held that the said receipt was nothing but capitation fee . I. T. A. No. 3557/Del/09 (for the assessment year 2007-08) (assessee s appeal) : 1. On the facts brought on record before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) passing an order thereby making an addition of Rs. 3,60,400 while agreeing in his order that the addition of an amount of Rs. 18,87,000 treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,06,000 Anand Kr. S/o Arvind Kr. MBA Nil 1+fee 26,405 Raj Kr. S/o Ravinder Kr. Khandelwal. AIEEE College fee 32,000 Raj Kr. S/o Ravinder Kr. Khandelwal H.Fee H. fee 1,28,000 Anil Kataria, S/o Sukhbeer Kataria Mech. Mech. Nil In the books of account of the assessee, which were produced before the Assessing Officer, it was shown that Shri Manoj Kumar has paid Rs.1,00,000 on July 20, 2007 as advance fee and receipt No. 1 was issued to him for that. This advance was adjusted against his dues by issuing further receipt to him for Rs. 15,200 and Rs. 15,300 on February 17, 2006 and November 17, 2007. Accordingly, an amount of Rs. 48,780 stood adjusted and Rs. 41,220 was shown as outstanding to his credit. It is further noted by the learned Commissioner of Income-tax (Appeals) that similar was the position with regard to other students, names of which have been mentioned in the above paragraph. It is further noted by the learned Commissioner of Income-tax (Appeals) that similar information was found to be contained on page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in AICTE norms, nor in the prospectus/brochures of the Institute. The Assessing Officer made addition of this amount of Rs. 18.87 lakhs to the income of the assessee treating the same as undisclosed income of the assessee. Before doing that, the Assessing Officer asked the assessee to furnish clarification and after considering the reply of the assessee, the Assessing Officer has come to the conclusion. Being aggrieved, the assessee carried the matter in appeal before the learned Commissioner of Income-tax (Appeals). It was held by the learned Commissioner of Income-tax (Appeals) that the Assessing Officer was justified in holding that the amount of Rs. 18.87 lakhs constituted capitation fees received by the assessee but he was not justified to enhance the income of the assessee again by the same amount because the assessee has shown this amount as advance fees received by the assessee and the assessee is following the cash system of accounting. Thereafter, it is noted by the learned Commissioner of Income-tax (Appeals) on page 9 of his order that as per the details filed by the assessee, the second term fees received from these two students during the month of November, 2006 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee as advance fees whereas as per the Assessing Officer, the same is capitation fees received by the assessee. We find that the learned Commissioner of Income-tax (Appeals) has decided this aspect of the matter and it was held by him that the same is capitation fees received by the assessee and against this finding of the learned Commissioner of Income-tax (Appeals), there is no ground raised by the assessee or by the Revenue and hence this aspect has become final. We have to decide regarding the addition of Rs. 18.87 lakhs made by the Assessing Officer as undisclosed income out of which the learned Commissioner of Income-tax (Appeals) has confirmed the addition of Rs.3,60,400 and in this regard, we find that as per the Assessing Officer also, out of this amount of Rs. 18.87 lakhs, a sum of Rs. 50,000 was refunded to one student Shri Sandeep Kumar on September 2, 2006 and the balance amount is only Rs. 18.37 lakhs. Out of this, the assessee has credited an amount of Rs. 14,76,600 to the income and expenditure account under the head advance fees. Since this amount has been credited by the assessee to income and expenditure account, no addition can be made for this amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement, Shri Surinder Miglani stated that as per the college record, his salary was Rs. 13,150 per month but he was actually paid Rs. 10,000 per month. The Assessing Officer has further noted that similar statement was also recorded from 11 other persons whose names are mentioned in paragraph 10.6 of the assessment order and in those statements, these persons have confirmed having received the same amount of salary as being written in the books of the assessee but these statements were not considered by the Assessing Officer. The affidavit of Shri Surinder Miglani was also filed during the assessment proceedings wherein whatever had been recorded in the statement earlier during the course of search which was claimed to be not given under free consent but the Assessing Officer did not accept the affidavit of Shri Surinder Miglani that he was not an assessee when his statement was recorded and therefore his statement was not recorded under section 132(4) of the Income-tax Act, 1961. It was further held by the Assessing Officer that there was no material on record that the statement was recorded under duress. Under these facts, the Assessing Officer considered it reasonable to disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... names of these persons are mentioned in paragraph 10.2 of the assessment order. The Assessing Officer admits in the assessment order itself that all these statements were in favour of the appellant. However, he has rejected such evidence on the ground that the employees would speak in conformity with the interest of their employers. However, again the Assessing Officer cannot be held to be justified in rejecting the evidence as above on this ground. Whereas he has based his entire assessment order on the basis of statement of one such employee, he has ignored the statements of other 11 similar employees. If the statements of all these 11 persons are considered, the adverse inference drawn by the Assessing Officer against the appellant is not sustainable. In addition to the above evidence, the Assessing Officer has himself mentioned that he was making addition on the basis of certain circumstantial evidence. The circumstantial evidence may be important for deciding an issue in the assessment proceedings in a normal case. However, in my opinion, when an assessee is subjected to search and all the important premises are covered, there could not be any scope for making such huge addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re getting full salary as debited by the assessee in its books. We also find that the statement of one employee of Shri Miglani was also retracted by him by filing an affidavit. Under these facts, we find no good reason to interfere in the order of the learned Commissioner of Income-tax (Appeals) on this issue and hence we uphold the same. This ground of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed whereas the appeal of the assessee is allowed. Now, we take up the appeal of the Revenue for the assessment year 2006-07. The only ground raised by the Revenue reads as under : That the learned Commissioner of Income-tax (Appeals) has erred both in law and on facts of the case in deleting the addition of Rs. 9,41,945 made by the Assessing Officer on account of salary paid by the assessee to his employees and thereafter received back from them. It was agreed by both sides that this issue in the present year can be decided on similar lines as ground No. 3 of the Revenue s appeal for the assessment year 2007-08. In that year, ground No. 3 of the Revenue s appeal was decided by us in favour of the assessee as per paragraph 14 above. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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