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TMI Blog2016 (6) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... seats and for receiving the cash as capitation fees and donations thereof. No additions on account of cash receipts as capitation fees/donations for management quota seats for MMS/PGDM courses at 'Welingkar' are to be made in the hands of the assessee in the case on hand for assessment years 2005-06 to 2011-12, since the substantive additions of the same income have been made in the hands of SPM, Pune who have challenged these additions on merits and have not so far challenged their assessments in appeal on the technical issue of in whose hands these additions are to be made and incomes are to be assessed. We also reiterate and uphold here the caveat laid down by the learned CIT(A) that in case the learned CIT(A) at Pune holds that the said income should be assessed in the hands of the assessee in the case on hand and not SPM, Pune, then the AO of Shri Uday N. Salunkhe will issue a show cause notice and can make the substantive assessment in this case after considering the assessee’s submissions in this regard. It is accordingly ordered. - Decided against revenue - ITA Nos. 6188 to 6194/Mum/2014 - - - Dated:- 6-5-2016 - Shri Jason P. Boaz, Accountant Member And Shri Sandeep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,030 7 2011-12 4,00,00,000 6,43,92,890 2.2 In coming to his decision in making the aforesaid additions in respect of alleged capitation fees received by the assessee on account of management quota seats given to the various candidates, on a protective basis, the Assessing Officer (AO) placed strong reliance on the statements of six persons who held various positions at 'Welingkar' and which were recorded during the search proceedings of 20.11.2010. These six persons, Samir Karkhanis (Head, Marketing Business Development), Smt. Kalpana Hans (Faculty - Computer (IT) Department), Shri Kanu Doshi (Dean - Finance), Shri Pandurang Pawaskar (Manager - Administration), Shri Prakash V. Bekhare (Peon) and Shri Ravindra Sumbhe (Peon) admitted in their statements that capitation fees/donations in cash was being accepted for admission against management quota seats. When confronted with the statements given by the aforesaid six persons (supra) the assessee pointed out that these six persons had retracted the statements given by them by way of affidavits on 16.12.2010 and that therefore these averment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. The learned CIT(A), vide the impugned order dated 31.07.2014 disposed off the assessee s appeal allowing the assessee partial relief. After considering the orders of assessment and the arguments put forward by the assessee, the learned CIT(A) observed that since the additions made by the AO are made only on protective basis, tax demands cannot be recovered from the assessee. The learned CIT(A) then held that should the concerned CIT(A) at Pune hold that the income is not to be assessed in the hands of SPM Trust at Pune and that the same additions are to be made and assessed substantively in the hands of the assessee or if at any stage of proceedings, SPM, Pune should challenge this findings, then the AO of the assessee could issue a show cause notice to the assessee and make the protective assessments into substantive assessments after hearing the assessee in the matter. Subject to the above caveat/findings, the learned CIT(A), without going into the arguments of the merits of substantive additions, which he observed were to be dealt with the concerned CIT(A), Pune dealing with the concerned SPM, Pune, held that there was merit in the grounds raised by the assessee that no addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these additions are not to be assessed in the hands of SPM, Pune but in the hands of the assessee in the case on hand, then the AO of the assessee should issue a show cause notice and make the protective assessments into substantive assessments for the concerned assessment years in the case on hand. The learned A.R. for the assessee contends that by rendering the decision the learned CIT(A) did in the impugned orders for assessment years 2005-06 to 2011-12, the Department can have no grievances as by virtue of the finding rendered, the learned CIT(A) has clearly protected the interests of Revenue in any contrary eventuality as laid down in the caveat, in respect of the issue in which hands the said additions of cash received on capitation fees/donations for management quota seats of MMS/PGDM in 'Welingkar' is to be then made. The learned A.R. submits that in these circumstances, Revenue s appeals ought to be dismissed. 4.4.1 We have heard the rival contentions of both the parties and perused and carefully considered the material on record in the context of the legal and factual matrix of the case. In the grounds raised, the Revenue assails the orders of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as capitation fees in respect of management quota seats and transporting the same to SPM, Trust at Pune. We find that apart from the assessee explaining the admission process in 'Welingkar' before the authorities below vide letter dated 20.03.2013, the learned CIT(A) has noted that SPM Trust, Pune has filed letter stating that they follow procedure as per norms of the regulatory authorities for admissions, but, however, if any additions are to be made on account of cash receipt of capitation fees/donation for management quota seats in 'Welingkar' they are to be made in the hands of the parent body, i.e. SPM Trust at Pune and not in the hands of the admission committee members or the assessee in the case on hand, either on substantive or protective basis. 4.4.4 In the present search and seizure action under section 132 of the Act conducted on 20.11.2010 at the premises of 'Welingkar' and others like the assessee in the case on hand, searches were also conducted at the premises of Shri Abhay Dadhe, Chairman, SPM Trust and Shri Anant Mate, Vice Chairman, SPM Trust. In his statement recorded on 20.11.2010, Shri Dadhe stated that as Chairman he was not empower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantive basis in the case of SPM, Pune. It is further submitted in the said letter that while SPM has challenged the orders of assessment in appeal objecting to the substantive additions on merits, they have not taken and will not take the stand that the substantive additions made in SPM, Pune should have been made in the hands of the members of the Admission Committee/members of Managing Council/Principal/Institute Heads, etc. 4.4.6 We find that the learned CIT(A) on examination of the composition of the Managing Council of SPM, Pune and the Admission Committee for the period relevant to assessment years 2005-06 to 2011-12 found that the name of the assessee in the case on hand does not appear in any of these two lists of Managing Council and Admission Committee members for the said period. It is also a matter of record that neither was any unexplained/ unaccounted cash found in the personal custody of the assessee in the course of search nor were any unexplained assets found in his case. We concur with the observations of the learned CIT(A) that while the assessee may have had a role to play in the admission process in respect of management seats at 'Welingkar' alongw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technical issue of hand in which it should be assessed and the challenge is only on merits. In the result, for statistical purposes, the ground of appeal no.1 is allowed. On a careful appreciation of the facts and circumstances of the case as discussed at paras 4.1 to 4.4.6 of this order, we concur with and uphold the decision of the learned CIT(A) (supra) that no additions on account of cash receipts as capitation fees/donations for management quota seats for MMS/PGDM courses at 'Welingkar' are to be made in the hands of the assessee in the case on hand for assessment years 2005-06 to 2011-12, since the substantive additions of the same income have been made in the hands of SPM, Pune who have challenged these additions on merits and have not so far challenged their assessments in appeal on the technical issue of in whose hands these additions are to be made and incomes are to be assessed. We also reiterate and uphold here the caveat laid down by the learned CIT(A) that in case the learned CIT(A) at Pune holds that the said income should be assessed in the hands of the assessee in the case on hand and not SPM, Pune, then the AO of Shri Uday N. Salunkhe will issue a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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