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TMI Blog2012 (4) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin-top:0cm; mso-para-margin-right:0cm; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0cm; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} <![endif]--> SHRI D K TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER For the Revenue :- Shri Rahul Kumar, Sr. DR For the Assessee:- Shri R N Vepari, AR O R D E R PER D K TYAGI (JM):- This appeal by the Revenue and cross objection filed by the assessee are directed against an order dated 15-07-2008 passed by the Learned Commissioner of Income-tax (Appeals)-I, [hereinafter referred to as the learned CIT(A) ] Surat for Assessment Year (AY) 2000-01. The grounds raised by the Revenue in their appeal are as under:- ITA no.3203/Ahd/2008 [Revenue s Appeal]: [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curing admission in M.B.B.S. course at D.Y.Patil Medical College and Hospital run by M/s Ramrao Adhik Education Society, Worli, Mumbai for his son Shri Ashish Bhootra during FY 1999-2000. This specific information was collected by Investigation Wing, Pune during the course of search and seizure operation u/s 132 conducted at the premises of M/s Ramrao Adhik Education Society. Since this payment was not reflected in the return, the AO reopened the assessment u/s 147 of the Act and notice u/s 148 was issued. In response, the assessee filed his return of income showing total income of ₹ 6,50,451/-. During the assessment proceedings, the assessee agreed that he had committed a mistake in not showing the capital gain of ₹ 32,321/- which was shown in the original return. Therefore, the original returned income of ₹ 6,82,772/- was adopted by the AO as returned income in this return filed in reply to notice u/s 148 of the Act. During the assessment proceedings, the AO asked as to why the amount of ₹ 18,27,500/- paid as capitation fee should not be added to the total income of the assessee as representing unexplained income. It was pointed out by the AO in his let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue. This explanation of the assessee was not acceptable to the AO and he proceeded to make the addition for the following reasons:- (i) The reopening of the assessment was well within the law as the information was received from the outside party during search and seizure in respect of the assessee paying capitation fee for the admission of his son in a Medical College for MBBS course, even though his son has secured only 63% marks in 12th standard. (ii) Even though son of the assessee was an independent assessee but he did not have any income or source of income from which he could have been paid the capitation fee and, therefore, the capitation fee as evidenced by the Page No. 19 27 of the diary seized during the course of search seizure in the case of Ramrao Adhik Education Society could have been paid only by Shri Ashish Bhootra's father i.e. the assessee. 4 Aggrieved, the assessee filed an appeal before the first appellate authority and objected to the addition on following grounds:- (a) No cross examination of the person on whose statement and seized material the appellant's case was reopened has been allowed to the appellant. (b) The appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of entries in the seized diary and the same has not been challenged by the concerned assessee group including M/s. Ramrao Adhik Education Society, and no cross examination has been asked. Hence, it is suggested that the request of your assessee to cross examine him needs to be contested as misplaced and without locus standi, particularly in view of provisions of section 132(4A) of the Act. However, you may taken necessary directions from your superiors. 4 It will also be not out of place to mention that the assessee M/s. Ramrao Adhik Education Society had filed a Settlement application before the Settlement Commission Mumbai, wherein the donations received from the students have been surrendered. Order under section 245D.(4) of the Act has been passed in the case of Dr. D.Y. Pat/7 Group vide order dated 24.03.2008 and the application has been settled substantially. The assessee group has surrendered the donations received from the students as unaccounted receipts and the same may be brought to the knowledge of the CIT(A), as fait accompli. The relevant portion of the confidential annexure of the Settlement application herewith (Statement 1, 2 4) for your ready reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, surrendered any of the amounts that may have been received from students or others and that no list of students was furnished to the Hon'ble Settlement Commission. 5 The gist of the reply given by the DCIT, CC-2, Mumbai, is as follows:- -That the Hon'ble Settlement Commission has passed the order u/s. 245D(4) dated 24/03/08 r.w. order u/s.154, dated 26/05/08, in the group of cases, settling the cases of the D.Y. Patil group fro A.Y. 2000-01 to 2006-07. -That the department has submitted the computation of undisclosed income of the D.Y. Patil group trust, i.e. Ramrao Adhik Education Society, computing the undisclosed income at ₹ 77,33,72,200/-. -That in the application for settlement, the assessee trust had disclosed unaccounted donations from students at ₹ 7448.62 lakhs. -That the donations/capitation fees received from the students has been offered by the trust in lump sum and that there is no individual bifurcation. It is further stated by him that it can be presumed that offer of additional income by the assessee includes all donations made the students, including Shri Ashish Bhootra. Both the Remand Reports obtained from the AO were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned CIT(A) deleted the addition made by the AO by observing as under:- 6.2 With respect to the ground No.2 3, it is seen that the A.O. has failed to provide cross-examination of Shri Shashikant Mandavkar, who had given a statement that the diary containing the noting regarding donation of ₹ 18,27,500/- was written by him and he had received the cash for the purpose of admission of Shri Ashish Bhootra. The cross-examination opportunity was not given by the AO during the assessment proceedings. Therefore, at the behest of the appellant, the AO was again asked to give the cross-examination opportunity as discussed above, but the AO expressed his inability to do so. In a further remand report, the AO has stated that even the AO of the trust, i.e. DCIT, CC-2, has stated that the surrender of donation did not give break-up of donation by the students individually and the trustees have also stated that they have not surrendered any amount Individually. In view of this reason, it is clear that the statement of Shri Mandavkar cannot be admitted as evidence following the settled position of law as enunciated in the decision of the Hon'ble Delhi High Court in the case of SM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bifurcation. The same facts were reiterated by the Trust in its letter furnished in pursuance to the query raised in remand report proceedings. Concluding his arguments, the learned DR submitted that in the light of the admission made by the Trust as well as admission of Shri Shashiknt J Mandavkar in his statement on oath u/s 132(4) of the Act, it is absolutely clear that the assessee has made payment of capitation fee of ₹ 18,27,500/- to the Trust for securing admission of his son in MBBS course and therefore the addition made by the AO may kindly be sustained and the order passed by the learned CIT(A) may kindly be set-aside. 6 The learned counsel for the assessee, on the other hand, placing reliance on the submissions made before the learned CIT(A), further submitted that the Revenue has failed to give cross examination of Shri Shashiknt J Mandavkar to assessee on whose statement addition has been made. This statement is also a general statement as nowhere in this statement, the name of the assessee has appeared and therefore, the same cannot be used by the Revenue for making this addition. It was further submitted that the seized documents on the basis of which this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Society, in cash for securing admission of his son Shri Ashish Bhootra in MBBS course in D.Y. Patil Medical College and Hospital, mainly on the basis of (i) statement of Shri Shashikant J Mandavkar, clerk of M/s Ramrao Adhik Education Society, Worli, Mumbai from whose diary the information regarding the payment of capitation fee paid by the assessee was elucidated; and (ii) surrender of donation by M/s Ramrao Adhik Education Society, Worli, Mumbai before the Settlement Commission. The assessee s consistent contention has however been that no capitation fee was paid to the Society for admission of Shri Ashish Bhootra and admission was given to him due to personal contacts of assessee. The assessee also wanted cross examination of Shri Shashikant J Mandavkar on the basis of whose statement, re-assessment proceedings were initiated and addition was made. The assessee has also questioned the another basis of making this addition in the hands of the assessee that the surrendered amount by D.Y.Patil Medical College and Hospital before the Settlement Commission included the alleged donation of the assessee to get his son admitted in the MBBS Course. 8 There is no dispute about the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has rightly deleted the addition and the order passed by him is hereby upheld. C O No.284/Ahd/2008 By Assessee:- 9 In the cross objection, the assessee has challenged the reopening of assessment u/s 147 of the Act by taking the following ground:- [1] On the facts and circumstances of the case and as per law, the learned CIT(A) ought to have held that the reopening of the assessment was bad in law more particularly because the name of the appellant was not in the so called diary and related papers based on which reopening was done were not signed. 10 The learned CIT(A) has dealt with this issue as under:- 6.1 I have considered the submission made by the appellant and the observation of the AO. As regards ground No.1 is concerned, the reopening of the assessment is valid. The only reason advanced by the appellant is that there is no objective satisfaction on the part of the AO for reopening the assessment and no proper evidence was brought on record for opening the assessment. The appellant also argued that the reopening is wrong because the name mentioned in the diary was that of assessee's son and not that of the assessee. All these arguments are not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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