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TMI Blog2013 (11) TMI 1740X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. was justified in making the addition. 3. The learned CIT(A) failed to appreciate that - a. The addition of ₹ 2 Crs. was made purely on presumptions and surmises and hence, the same ought to have been deleted. b. The assessee had never admitted receipt of ₹ 2 Crs. in this year and therefore, there was no reason to make the addition. c. The addition was made without any corroborative evidence that the assessee had actually received ₹ 2 Crs. in this year and hence, such an addition was not warranted at all. 4. The learned CIT(A) erred in misinterpreting the statement of the assessee recorded u/s 132(4) while confirming the addition of ₹ 2 Crs. and accordingly, the said addition made may kindly be deleted. 3. In sum and substance, the assessee has challenged the addition made by the Assessing Officer to extend of ₹ 2 Crores on the Protective basis in the hands of the assessee. The facts which are revealed from the record are as under. There was a search and seizure operation against the assessee u/s. 132(1) of the Income-tax Act on 20-07-2005. In the search and seizure operation the assessee's cabin in the Bharati Vidyapeeth, in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee by the Assessing Officer by holding that the assessee has earned the said amount in A.Y. 2004-05 on basis of his statement that he has deposited same amount in the account of the trust (BV) and whatever cash was found with him was earned in 15 days only. The Assessing Officer made the addition by observing that since the trust accounts are subjected to the Special Audit and the assessment of the trust i.e. Bharati Vidyapeeth are pending without prejudice to the stand taken by the Department, the amount of ₹ 2 Crores is brought to tax in the hands of the assessee on the Protective basis and the said addition has to be made on Substantive basis if the same would not have been made in the hands of the Bharati Vidyapeeth. The assessee challenged the addition before the Ld. CIT(A). The Ld. CIT(A) confirmed the addition made by the Assessing Officer on Protective basis. The operative part of the order of the Ld. CIT(A) is as under: 3.4. I have considered the submission of the appellant and gone through the facts of the case. It may be noted that same addition was made by the Ld. A.O. in the hands of the Bharati Vidyapeeth holding that the trust has collected the capitation f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo significant things which came out the reexamination of the assessee. In his statement recorded en 14.10.2005, in response to Q. No. 76 Shri Shinde had categorically stated that he is doing Consultancy business for the last two years. Now, on re-examination it has been stated that by him in response to Q. No. 18 on 29.10.2007 that the work of consultancy started in January 2005. A bare look at the return of income filed in response to 153A shows that what is stated now is wrong. The consultancy work cannot start in the month of January because at that time the process of admission does not start. The return for A Y 05/06 includes consultancy receipts of ₹ 2,00,00,000/- and that for AY 06/07 ₹ 7,25,00,000/-. If no such wok was carried out during FY 2004-05 how is it that the assessee has disclosed income of ₹ 2,00,00,000/- for AY 05-06. This shows that the assessee is not speaking truth and he has owned up the cash only to serve purpose of his master for the obvious reasons. From the above observation of the A.O., it is obvious that the subsequent statements represent afterthought and therefore, cannot be relied upon. Under the circumstances, various contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 2 Crores in the hands of the assessee in the A.Y. 2004-05. Moreover the Bharati Vidyapeeth trust has also denied any such receipt having been deposited by Shri Shinde in their Banks Accounts. We find no reason to sustain the addition of ₹ 2 Crores in the hands of the assessee which is merely based on some conflicting statement given by the assessee without any corroborative evidence and accordingly same is deleted. Accordingly, the grounds taken by the assessee are allowed. In the result, the assessee's appeal is allowed. 8. Now we take up the assessee's appeal for the A.Ys. 2005-06 and 2006-07 being ITA Nos. 247 & 248/PN/2012 for adjudication as the assessments involved in these appeals are inter-linked. The assessee has taken the following grounds in the A.Y. 2005-06: 1. The learned CIT(A) erred in confirming the addition of ₹ 2 Crs. in the assessee's hands when the learned A.O. had taxed the entire cash found in the course of search of ₹ 3,14,83,870/- without appreciating that it resulted in double addition and hence, the addition of ₹ 2 Crs. ought to have been deleted. 2. The learned CIT(A) erred in holding that there was no doubl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was partly out of the income of ₹ 1.25 Crs. declared by the assessee in this year and hence, when the A.O. had added the entire cash found of ₹ 3,14,83,870/- as income for A.Y. 2006 - 07, it resulted in double addition and hence, the income of ₹ 1.25 Crs. was not required to be taxed in this year. 7. The learned Assessing Officer erred in making addition of ₹ 3,14,83,870/- on account of Cash seized at the time of search without appreciating that the assessee himself admitted undisclosed income of ₹ 2 Crs. in AY 2005-06 and ₹ 1.25 Crs. in AY 2006-07 and hence, the undisclosed income declared by the assessee was much higher than the cash seized and accordingly, there was no reason to make further addition of ₹ 3,14,83,870/- which resulted in double addition. 10. As stated here-in-above during the course of search action against the assessee the cash of ₹ 3,14,83,870/- was found in his cabin which ownership was admitted by the assessee and as per his admission given in the statement recorded u/s. 132(4)/131(1), after the search the assessee also declared the said cash by splitting into two different assessment years i.e. A.Ys. 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has stated that he is doing consultancy business for the last two years. In his re-examination by the Department on 29-10-2007, he has stated that the work of consultancy started in January 2005. The Assessing Officer has observed that the said statement cannot be believed as the consultancy work cannot start in the month of January because at that time, the process of admissions does not start. In the opinion of the Assessing Officer the assessee is not speaking truth and he has owned up the cash only to protect his master for the obvious reasons. The Assessing Officer has also mentioned that the assessee remained under the employment of Bharati Vidyapeeth for a period of 21 months even after the management came to know that he was in possession of sum of ₹ 3.14 Crores and he is doing consultancy business without the knowledge of the BVP trust. 13. He accordingly brought to tax the entire amount of ₹ 3,14,83,870/- in the A.Y. 2006-07. The main plank of the argument of the Ld. Counsel is that the assessee has admitted that the amount of ₹ 3,14,83,870/- belonged to him and he has earned that income by misusing his position in the BVP trust and he has de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in A.Y. 2005-06 & A.Y. 2006- 07 by the assessee and the same cannot be sustained. Accordingly the said addition is deleted and relevant grounds taken by the assessee i.e. Ground Nos. 4 to 7 are allowed. 15. The next issue is the addition of ₹ 2,00,50,000/- sustained by the Ld. CIT(A). The identical addition was made in the hands of the Bharati Vidyapeeth in A.Y. 2006-07 and the relevant discussions and our finding are as under: 40. Per contra, the Ld. CIT (DR) argues that Shri Shinde was trusted employee of the trust and whatever he has done that is for the assessee trust or the trustees. We find force in the argument of the Learned Counsel. In the assessment on the basis of the documents seized from Shri Shinde, the Assessing Officer made very high pitch additions by presuming that whatever the figures are appearing in respect of 146 students all have got the admissions. He further proceeded by estimating the alleged capitation fee and worked out on the basis of the statement of Shri Shinde that whatever the cash was found with him that was in respect of 15 days admissions and he was indulged into the said affair in much more earlier period also. Nothing has been controv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34 students who were given the admissions in the institutions/courses of the BVP. The explanations of the assessee are general in nature. The assessee himself has admitted that he was using (or misusing) his position in BVP for helping the students to get the admissions in the institutions/courses run by BVP. He has also admitted in the statement that on many occasions the students use to get the admission on merit itself but he used to collect the money from those students also. He further stated in his statement that if any students approachs him for getting the admission then he used to collect a token amount and if any student did not get the admission that he is used to refund the said amount. We also find that the assessee could not co-relate the amount of the cash seized with the amount noted on the loose papers. Moreover, the assessee has also explained how he is using code figures in respect of his consultancy fees. Once he admits the contents of documents and also explains same then in such circumstances he can not cry that Ld. CIT(A) has wrongly sustained addition in his hand. In our opinion to the extent of ₹ 2,00,50,000/- the addition has to be sustained in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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