9911796707
TMI Blog2020 (5) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... id not receive any adverse reply from the students. Even though the AO has observed that huge cash was seized during the course of search, yet it was shown by the assessee that all those cash are accounted for in the books of accounts. As noticed that the Ld CIT(A) has agreed with the inferences drawn by the AO. The discussions made in the preceding paragraph would also show that the assessing officer has only drawn certain inferences on surmises and conjectures. Hence we are unable to sustain the view taken by Ld CIT(A) on this issue. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition made in AY 2009-10 towards suppression of fee on MBBS Management Quota. - Decided in favour of assessee. Addition towards suppression of fees under P.G admission - suppression of fee receipts of Post graduate seats - AO has made this addition on the basis of certain documents pertaining to the AY 2009-10 and 2014-15 - HELD THAT:- AO did not conduct any independent enquiry either with the students or their parents or with any other person related to those students in order to find out the truth. He also not brought any material on record to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has not shown that any such complaint was received against the assessee by the State Government or Association. Assessee has explained that the letters issued to the prospective students, which were seized by the revenue, pertained to management quota seats. The revenue has seized letters issued to four students, out of which only two students have joined under COMED-K category. The assessee has furnished confirmation letters obtained from those two students confirming that they have paid only prescribed fees. We notice that the AO did not disprove the contents of the confirmation letters. In any case, those letters pertained to AY 2014-15 and not to the assessment year 2009-10, which is under consideration. AO has not conducted any enquiry with any of the students or their parents or any other person to support the inference drawn by him that the fees applicable to management quota seats were collected from the students admitted under cancelled seats of COMED-K category. The detailed discussions made by the Ld CIT(A) would show that the assessee has answered all the queries raised by the AO in this regard and none of the said explanations have been proved to be wrong by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment years 2008-09 to 2013-14 were re-opened u/s 153A of the Act. The assessee filed returns of income for the above said years and also for AY 2014-15 claiming exemption u/s 11 of the Act. The assessing officer, however, completed the assessments rejecting the claim of exemption u/s 11 of the Act and also making additions towards suppression of fees. The claim of exemption u/s 11 was rejected, since the application filed by the assessee seeking registration u/s 12A of the Act had been rejected and the matter was in appeal proceedings. The appeals filed by the assessee before ld CIT(A) were partly allowed and hence both the parties are in appeal before us challenging the decision taken by Ld CIT(A) against each of them. 7. In AY 2009-10, the assessing officer made following additions relating to suppression of fees:- (a) Addition of ₹ 1.85 crores relating to fee charged for MBBS seats under Management/NRI quota (b) Addition of ₹ 5.22 crores relating to fee charged for MBBS seats under COMED-K cancellation seats. (c) Addition of ₹ 1.75 crores relating to fee charged for PG Courses. 8. The back-ground of these additions are discussed in brief. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmission into MBBS management quota seats and the latter documents disclosed the actual amount accounted for. The assessing officer has scanned pages 84 to 86 in the assessment order for AY 2009-10 at pages 6 and 7. These documents disclosed the details of amount agreed to be paid by the students, amount received through Bank and amount received by way of cash. These documents contained one more column "Remarks", wherein it was mentioned either as "Agreement" or "No dues". The AO also called for the details of students admitted in the year relevant to AY 2009-10 and fees collected from them. He noticed that the name of students matched with the names mentioned in the seized documents. In respect of some of the students, the manner of collection of fees, the amount collected also matched. Hence, the assessing officer came to the conclusion that the contents of seized documents are true and represent actual facts. He further noticed that, in some cases, the cash portion of fee has not been accounted for. The AO also noticed that the search officials have seized certain documents titled as "Visitors slips" pertaining to the FY 2013-14. In these slips also, agreed amount for admissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry maintained by the P.A of the Chairman named Mr.Manjunatha, wherein fees pertaining to admissions pertaining to the financial year 2013-14 was found noted. The said diary is marked as "A-1/BRAMC/2". The amounts mentioned in the diary did not match with the amount accounted for in the books of accounts. Accordingly, the AO concluded that the assessee-trust is not accounting for the amounts collected by way of cash. When these aspects were confronted with the assessee, it disowned the documents seized from the residence of the Chairman Shri P L Nanjundaswamy and also the diary maintained by Mr. Manjunatha. It was submitted that the Chairman has the authority to determine the fees for management quota and the amount received from the candidates as determined by the Chairman have been fully accounted for. It also stated that the action shall be taken if the chairman has collected money outside the books. The AO, however, expressed as under:- "…. the siphoning of funds does not mean that income has not accrued to the trust. If the trust finds any breach of trust by the Trustees, then it is for the trust to deal with the trustees as per the Trust Deed/Indian Trust Act, 1882. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the apparent is not real. (f) The documents seized, the statement recorded and huge cash seized combined together gives rise to a reasonable belief that the admission fee charged is not fully accounted in the books of account. There is no transparency in the admission process. The assessee has failed to rebut the presumption. (g) The corroborative evidences, wherever possible, have been gathered. There cannot be conclusive proof in respect of such cases, as all the actions will be covered up and the evidences will be destroyed after the event. The circumstantial evidences gathered by the Investigation wing and the facts marshalled by the Assessing Officer are enough to draw a reasonable conclusion that there is suppression of receipts. 16. The assessee is aggrieved by the decision rendered by Ld CIT(A) on this issue. The Ld A.R submitted that the assessing officer has placed his reliance on the documents seized from the residence of the then Chairman Shri P L Nanjundaswamy. Those documents do not bear signature of anyone and they are dumb documents, which could not have relied upon by the AO. She submitted that the assessee is also not aware of the existence of such kind of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered during the course of search reveal that the assessee has been collecting money over and above that recorded in the books of accounts. The documents recovered from the residence of Chairman disclosed the actual collections made by the assessee for giving seats under Management quota for MBBS seats. The fact that the assessee is collecting amount outside the books is further corroborated by the visitors' slips and diary maintained by the P.A to the Chairman. Hence the Ld CIT(A), on noticing that the AO has reached logical conclusion, has confirmed the addition made by the AO. 19. We heard rival contentions and perused the record. We notice that the very foundation for making this addition in AY 2009-10 is the document seized from the residence of the Chairman Shri P L Nanjundaswamy. The contention of the assessee is that it is not aware of existence of any such document and accordingly it has disowned the same. It was also contended that the said document is a dumb document. We notice that the said document was not made available to the assessee by the assessing officer, but its contents were made known to it. According to the assessee, the Chairman of the Medical college of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee but also appropriated the same for personal benefit. Please state whether you have accounted for it and where. Ans.: Amounts have been partly remitted into the bank." The AO has interpreted from the answer given that the entire amount collected by way of cash has not been accounted for. The assessee, while disputing the interpretation given by the AO, has given following explanations before Ld CIT(A):- " Further, at para 14.17 of the assessment order, the AO relies on the sworn statement of Mr. P L Nanjundaswamy recorded under Section 131 of the Act where, to a question posed as to whether the amounts reflected in seized material A1/PLN/3 were accounted for, he states that the amount were partly remitted to the bank. The AO in the very next sentence concludes that the entire money which was received at the time of admission was not accounted for in the books of account of the Appellant. The Appellant submits that such a conclusion is wholly misplaced. The appellant submits that the AO has not taken note of the fact that Mr. P L Nanjundaswamy states that some amount has in fact been remitted to the bank and has been duly accounted for. In any event, the AO has not made avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e end of the negotiations with the candidates opting for admission under our institution. Normally, the payments towards admission of the candidates are received in installments over a period of time. The agreed amount was finally brought down for various reasons. In the year 2008-09, our college was derecognized by the Medical Council of India (MCI), when the students became aware of it, they were apprehensive and some wanted to cancel the admission or reduction in the agreed amount. They were assured of getting the recognition issue solved, but unfortunately, we failed to get the recognition. Subsequently, they declined to make the balance of the agreed amount in view of the college de-recognition by MCI. There were also other reason like recommendations from important persons, inability on the part of the candidates to comply and to settle on the agreed amount decided in the initial part of the negotiation, and hence the amount of ₹ 3,53,08,650/- has been accounted." We notice that Shri P L Nanjundaswamy has clarified as to why there is difference in the amounts mentioned in the seized documents and the amount actually accounted for. We notice that the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below. In any event, mere seizure of cash cannot lead to a conclusion that amounts over and above the accounted income was received by the Appellant." The assessee has clarified that the amounts mentioned in the visitors slips are only indicative figures and do not refer to actual amounts collected. During the course of arguments, the Ld A.R also pointed out that not all, but only some students whose name was found in the Visitors slips have taken admission. This fact would support the submission of the assessee that the Visitors slips are filled in at the time of enquiry and do not represent actual amount collected. 23. Another important point brought out by the assessee in the explanations submitted before Ld CIT(A) relate to the Cash seized during the course of search. In the assessment order, the AO has mentioned that substantial cash and jewellery was found and seized from the residence of trustees during the course of search. It is pertinent to note that the assessing officer has not made any addition towards unaccounted cash in any of the years. In the explanations furnished before ld CIT(A), which are extracted above, the assessee has also made it clear that the cash fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounts. 25. The next important issue is the reliability of the documents seized from the residence of the Chairman, Shri P L Nanjundaswamy. The AO has fully relied upon those documents and accordingly concluded that the assessee has collected fees as mentioned in those documents. The AO has also taken support of certain Visitors slips and diary maintained by the P.A to the Chairman to vindicate that the assessee has been collecting fees over and above that accounted for in the books of accounts. The visitors' slips and the diary maintained to P.A were related to the financial year relevant to AY 2014-15. It is not the case that the assessee has accepted the entries made in those documents. The assessee has given explanations with regard to those documents also stating that they are at negotiation stage. In respect of visitors' slips, the Ld A.R pointed out that all the students mentioned in those visitors' slips have not taken admission, meaning thereby, it vindicates the explanations of the assessee that the amount mentioned therein are at initial negotiation stage. With regard to the diary maintained by the P.A of the Chairman, the assessee has stated that it is not aware a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation. I, therefor, decline to interfere in this respect. We notice that the assessee has contended that the presumption to be entertained in such kind of situation is that the students have only confirmed the payments which have been duly accounted for by the assessee, i.e., no adverse report was given by any of the students. We notice that the Ld CIT(A) has also accepted the above said contentions of the assessee. In the highlighted portion in the decision rendered by the Ld CIT(A), we notice that the first appellate authority has expressed the view that the question of parting with the information collected behind the back of the assessee would arise only, if there is something adverse to the interests of the assessee, meaning thereby, there is possibility that the AO did not receive any adverse information. Hence, we find merit in the submissions of the assessee that the presumption should be that the students have confirmed that the fees accounted for by the assessee only have been paid by them. In effect, there was no adverse material to corroborate the view taken by the AO that the assessee has collected any amount over and above that has been accounted for. 27. The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutions so far" also tilts the balance in favour of the assessee. It disproves the department's allegation of involuntary collection of amounts. That apart, the order passed under Section 264 of the Act for the assessment years 1998-1999 to 2001-2002 clearly states that the donation received from students or the parents is not compulsory in nature and, therefore, the same is not capitation fee. There is no material to controvert this fact which is to the knowledge of the department. No endeavour is made to sustain the allegation of involuntary donation. In any event, as rightly held by the Tribunal, it is not relevant in the present case as the allegation is violation of Section 13 r/w Section 11 of the Act." 28. In the case before Hon'ble Madras High Court the question, inter alia, was collection of Capitation Fees from students who were admitted in the management quota by the assessee running educational institutions. The Hon'ble Madras High Court noticed that the assessing officer has not conducted any enquiry with students or parents or others. The cash seized during the course of search was accepted as not belonging to the assessee. The assessee's claim t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounts mentioned against the candidates named Dr. N.S. Rajitha, Dr. Mary Sowmya and Dr. Sunil Patil were ₹ 1.10 crores, ₹ 1.20 crores and ₹ 1.35 crores respectively. However, amounts accounted for in the books of accounts were found to be ₹ 60.04 lakhs, ₹ 58.91 lakhs and ₹ 65.00 lakhs respectively. The search team also found certain documents titled as "Agreement", "Endorsement" pertaining to FY 2008-09 relating to AY 2009-10. In those documents also, certain amounts were noted as agreed amounts. The AO has noticed that the amounts mentioned amounts of ₹ 63.00 lakhs, ₹ 25.00 lakhs and ₹ 65.00 lakhs respectively against the name of Dr. Khoiram Sunderjit, Dr. Taseer Basha and Dr. Premlatha respectively. However, the amounts accounted for were found to be ₹ 40.00 lakhs, ₹ 4.50 lakhs and ₹ 40.00 lakhs respectively. The AO noticed that only a part of fees is being accounted for. The same worked out at 54% in the case of Dr. N.S. Rajitha and 49% in the case of Dr. Mary Sowmya. Accordingly, the AO took the view that the assessee should be accounting only part of fees in respect of all P.G seats. Accordingly the AO iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the year relevant to AY 2009-10. The suppressed fees in respect of these three candidates, cited above, worked out to ₹ 68.50 lakhs. With regard to remaining four seats, the AO estimated the suppression of fees at ₹ 107.45 lakhs by back working the fees that would have collected by the assessee. Accordingly, the assessing officer made an addition of ₹ 1,75,95,081/- towards suppression of fees in respect of PG seats allotted under management quota. 34. The Ld CIT(A) confirmed this addition on identical reasoning given by him while confirming the addition relating to suppression of fee for MBBS seats. 35. We heard the parties on this issue. We notice that the AO has made this addition on the basis of certain documents pertaining to the AY 2009-10 and 2014-15. In respect of documents relating to the assessment year 2009-10, some amount has been noted in the said document and the same has been considered as correct or true amount by the assessing officer. 36. The assessee has offered following explanations before Ld CIT(A) on this issue, which is extracted by the Ld CIT(A) in his order:- "The Appellant admitted 7 candidates to various PG Courses, 5 of which had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein subject to payment of the balance fees. Beyond this the endorsements do not state anything. The AO relied on certain hand written notings on the said endorsements to conclude in case of the three students whose endorsements had been seized, the amount received vis-à-vis the accounted amounts was under: Sl.No. Name of the Candidate Course Received Amount Accounted Amount Unaccounted Amount 1. Dr. Khoiram Sunderjit MS OBG 63,00,000 40,00,000 23,00,000 2. Dr. Taseer Basha S DCH 25,00,000 4,50,000 20,50,000 3. Dr. Premalatha MD Peadiatrics 65,00,000 40,00,000 25,00,000 TOTAL 1,53,00,000 84,50,000 68,50,000 The Appellant submits that the notings in seized material DBRAMCH/A/1 cannot be relied upon since some of them are signed or even if signed, do not bear the seal of the Appellant. Consequently there is no conclusive evidence that the amounts mentioned therein were in fact received by the Appellant. Without prejudice and in any event, Mr P L Nanjundaswamy, in his letter dated 29-01-2016 addressed to the Appellant stated as under:- III) Question No.3, Page No.2 For the same reason of derecognition of our college by MCI, some candidates wanted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso, the assessee has given explanations as to why the originally negotiated amounts could not be collected. It is pertinent to note that the assessing officer did not conduct any independent enquiry either with the students or their parents or with any other person related to those students in order to find out the truth. He also not brought any material on record to show that the explanations given by the assessee were not correct. Hence, we are of the view that the assessing officer should not have drawn presumptions without conducting proper enquiry. The assessee has stated that the fee is not fixed uniformly for management quota seats and the same is finalized by the chairman on case to case basis. It is also undisputed fact that the revenue did not unearth any material with regard to the remaining four seats. Under these set of facts, it may not be correct on the part of the AO to presume that the assessee would have collected more fees in respect of remaining four seats. Though the AO has taken support of the diary relating to AY 2014-15 to entertain presumption that the assessee has been suppressing the fees, in our considered view, it may not be right to presume that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO rejected the explanations of the assessee. He referred to certain documents pertaining to AY 2014-15, which are in the form of letter issued by the college to prospective candidates, wherein it was stated that the request for seats will be considered when the cancellation seats are available in the college. It was further stated that the rates will be as applicable for management quota seats. The AO noticed that such kinds of letters were issued to three candidates viz., Kum. Shivani Sudesh, Kum. Riya Mukherjee and Mr. Ankush Agarwal. These letters also contained noting of fees like 25 lakhs, 35 lakhs. The AO noticed that two candidates have taken admission. However, the assessee has accounted only fees applicable for COMED-K seats for these two candidates, viz., Shivani and Ankush. 41. The AO also observed that the assessee has not given proper explanations as to why the candidates selected under COMED-K exam did not take admission. He also took the view that the copies of letters issued to the prospective candidates support his view that the COMED-K seats are also allotted at the rates applicable to management quota seats. Accordingly, the AO estimated the fees that would h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut may instead secure seats in a different category. The letters do not indicate that the seats will be provided to these candidates as per management fees on cancellation of COMED-K seats. The letters do not state anything to the effect that the cancelled COMED-K seats would be provided to the candidates at management fees. The AO seems to have proceeded on the predetermined basis that the expression 'cancellation seats' would in all events referred to the unfilled COMED-K seats which is not correct. In any event, all the documents pertain to the financial year 2013-14 and cannot be used to estimate the income for any past year when there is no incriminating material for that past year. Without prejudice, the notings on the letters to the effect '25 + fee' or '35 + fee' do not indicate that the Appellant has, in fact, received any of those amounts, assuming that 25 indicates ₹ 25,00,000/-. As submitted above, the letters were issued prior to the CET and COMED-K counselling and thus were only at enquiry stages, if at all. Further, the very fact that only 2 students out of the 4 students whose letters were seized were admitted into the college stands testimony to the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmation letters obtained from the candidates. 45. The Ld CIT(A) has discussed about the contentions of the assessee as under:- "…..Even when such a detailed reply was available, it is surprising that the Assessing Officer has made the addition on purely conjectures and surmises. As far as A-1/PLN/15 is concerned, the learned A.R pointed out that the letters are addressed to candidates by Sri P L Nanjundaswamy and they do not indicate that the COMED-K seats were filled up applying the management quota fee. The candidates, approach the management before the results of CET and COMED-K at which point of time, the fee may have been quoted. Ultimately, the candidates may not turn up or the candidate would have been admitted under CET quota. It is not possible on the basis of stray letters found in the residential premises, to draw general conclusion that the drop out seats is charged as is charged for Management seats. Significantly, he pointed out that the letters bear the date on second week of June, 2013 and the admission process has not started. The letters pertain to the assessment year 2014-15 and on the basis of those letters, it cannot be retrospectively concluded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so his oral arguments. It is no doubt true that the COMED-K seats remain unfilled after two rounds of counselling. Some of the candidates who became eligible for COMED-K admission would have been absorbed under CET quota and, therefore, would not turn up. Those who appear for COMED-K also would have appeared for various other Examinations like GRE, JEE, GATE etc., depending upon the avenues open to them. The candidates who intended to choose medical course may change their mind and choose Engineering Course. There are lot of alternatives to the candidates. Therefore, nothing much can be read in respect of cancellation sears under COMED-K. It is not possible to draw adverse inference against the Medical Colleges in general and the appellant in particular about the vacancies arising in the COMED-K category. The assessing officer's mention about dummy meritorious candidates appearing for examination and the Management encashing the surrendered seat etc., are far fetched. The learned AR pointed out that the Assessing Officer has been given the COMED-K rank cards and confirmation letters of the candidates. When such rank cards have not been disputed, there can be no dummy candidates adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionate or inadequacy - has not been doubted by the Assessing Officer. In short there is no material to fall back upon for the year under consideration. 49. Regarding the case laws quoted by the Assessing Officer, they have all been distinguished with valid reasons in the earlier paragraphs. The case laws in support of the appellant quoted above have relevance to the facts and circumstances of the case. The observations are not repeated for the sake of brevity. 50. I, therefore, hold that there was no justification for the Assessing Officer to make any addition under the head "COMED-K" drop out seats for the year under consideration. Hence the addition of ₹ 5,22,04,425/- is deleted." 48. We notice that the Ld CIT(A) has analysed the facts surrounding this issue properly. There is no dispute that the assessee has to admit the students under the COMED-K category out of the rank list published for the entrance exam conducted for this category. It is not the case of the AO that any students outside the rank list has been admitted under this category. There is no dispute that the fee structure under this category is lower than the fees applicable for management quota. In this ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inguished before the Ld CIT(A). On the contrary, the decision rendered by Hon'ble Madras High Court in the case of Balaji Educational and Charitable Public Trust (supra) would support the contentions of the assessee, since the AO has drawn certain adverse inferences on the basis of certain materials pertaining to other years disregarding the explanations and materials furnished by the assessee. Hence we do not find any infirmity in the decision taken by Ld CIT(A) on this issue and accordingly confirm the deletion. ASSESSMENT YEARS 2008-09, 2010-11 TO 2013-14:- 51. We shall now take up the appeals filed by both the parties for AY 2008-09, 2010-11 to 2013-14. The AO had made additions on identical reasoning in all these years and the Ld CIT(A) has disposed of the appeals of the above said years by a common order dated 13-09-2017. 52. The first addition contested by the assessee relates to the suppression of fees collected in admission under management quota MBBS seats. We have noticed earlier that the revenue has carried out search and seizure operations in the hands of the assessee and the revenue has seized certain incriminating documents from the residence of Chairman Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord." 54. The AO was, however, not convinced with the explanations of the assessee. The AO placed reliance on the order passed by him for AY 2009-10 and held that hefty amounts have been charged for the admission to MBBS course under the Management/NRI category and all of it has not been brought to books of account. Accordingly, applying the ratio of "unaccounted amount" to the "accounted amount" determined in AY 2009- 10, the AO computed unaccounted amount of all these years. For example, the assessee had accounted ₹ 4,92,35,217/- in the year relevant to AY 2008-09. The assessing officer computed the unaccounted income for assessment year 2008-09 as under:- 4,92,35,217 x (1,85,28,850/3,88,58,650) = ₹ 2,34,76,676/-. Accordingly, the AO added the amounts so computed in each of assessment years, viz., 2008-09, 2010-11 to 2013-14. 55. The Ld CIT(A) also confirmed the additions in all these years by following his decision rendered for AY 2009-10. 56. We heard the parties on this issue and perused the record. In the earlier paragraphs, we have dealt with the addition made under this head in AY 2009-10. We have deleted the addition in AY 2009-10 for detailed reasoni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. 58. The next addition contested by the assessee in AY 2008-09, 2010-11 to 2013-14 relates to suppression of fees of PG seats. We have noticed earlier that the search officials unearthed certain documents in the form of letters titled as Agreement, endorsement, no-due certificates pertaining to AY 2014-15 given for admission into PG seats. Based on the amounts noted down in those documents and the actual amount accounted for by the assessee, the AO had estimated the fees that would have been collected for PG seats of other students and accordingly made addition in AY 2009-10. Following the same methodology, the assessing officer estimated the fees that would have been collected by the assessee in the years relevant to AY 2008-09, 2010-11 to 2013-14. The AO added the difference between the amount so estimated and the amount accounted for by the assessee in all these years. The Ld CIT(A) also confirmed the same. 59. While dealing with identical addition made in AY 2009-10, we have held that the said addition made on estimated basis is not sustainable for the detailed reasons discussed in the earlier paragraphs. It is an admitted fact that the revenue did not unearth any incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were pertaining to AY 2014-15, was not correct on the facts and circumstances of the case. Further the assessee has also disproved the presumption by submitting confirmation letters obtained from students admitted under COMED-K category along with rank sheets of the Entrance examination conducted. We also noticed that the assessing officer did not make any enquiry from any of the students or parents or others to prove that the explanations and evidences furnished by the assessee were wrong. The facts and circumstances relating to this addition are identical in all these years also. Accordingly, we do not find any reason to take a different view in this matter and accordingly confirm the order passed by Ld CIT(A) on this issue in all the above said years. ASSESSMENT YEAR 2014-15:- 63. We shall now take up the appeals filed by both the parties for AY 2014-15. In this year also, the assessing officer has made three types of additions made in other years. The Ld CIT(A) deleted the addition relating of Suppression of fees collected for COMED-K seats and confirmed other two types of addition. 64. The first addition contested by the assessee relates to the suppression of fees co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book are false on the following grounds:- 1. …….. 2. In respect of MBBS, details appearing in the alleged note book Annexured as "A-1/BRAMC/2" is showing details of 18 students admitted. The balance 12 students are not even applied for admission. Hence, the notings in the said note book shall not be relied. Those 6 students who's names are appearing have paid fee much more than what has been noted in the said note book. The actual amounts received from the candidates have been accounted. During the year we have accounted ₹ 9,00,88,658/- towards fees from 20 students admitted under management category. In view of the inconsistencies pointed out above, we request your honour not to rely on the notings appearing in the alleged note book. (In case you are drawing any adverse inference from the above seized material, which will be against the principle of natural justice, we request your honour to provide an opportunity to cross examine Mr. Manjunath)". 66. The assessing officer did not accept the contentions of the assessee. Since the diary was seized from the premises of the trust, he held that the same is reliable u/s 132(4A) as well as u/s 292C of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e confirmed the addition by making same observations which were made in other years in respect of this issue. 69. We heard the parties on this issue and perused the record. Identical addition made in earlier years has been deleted by us for detailed reasons discussed in the relevant paragraphs dealing with the identical issue. As in earlier years, the Assessing officer has drawn adverse inferences in this year also without bringing any other corroborating material on record in order to disprove the explanations furnished by the assessee. The assessing officer has not made any enquiry with any of the students or parents or others. We notice that the assessing officer has placed reliance on the diary maintained by the P.A to Chairman named Manjunatha and also certain documents seized from the residence of Shri P L Nanjundaswamy. Even though the noting made in the diary related to the admission to MBBS management quota seats for the year relevant to AY 2014-15, yet it is an admitted fact that the entries made are not complete in all respects in the sense, there was no mention of the name of the candidates in two items and the fee amount agreed upon was not mentioned against all the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noting relating to P.G admissions for 10 candidates. The AO referred to the name of three candidates viz., Dr. N.S.Rajitha; Dr. Mary Sowmya and Dr. Sunil Patil. The fees mentioned in the diary against the above said three candidates was ₹ 1.10 crores; ₹ 1.20 crores and ₹ 1.35 crores respectively, whereas the fees accounted in the books was ₹ 60.04 lakhs; ₹ 58.91 lakhs and ₹ 65.00 lakhs respectively. The AO also referred to visitors slips, wherein also certain amounts were found noted. 72. Before the AO, the assessee contended that the diary maintained by Mr. Manjunatha is not reliable and, in this regard, it pointed out the inconsistencies therein. It was submitted that the diary contains details of 10 candidates out of which, nine candidates have taken admission. The total fees mentioned against the nine candidates is ₹ 5.25 crores, whereas the aggregate amount of fees accounted for in the books of accounts was higher at ₹ 5.58 crores. The assessee also furnished confirmation letters obtained from the students to prove that the fees actually accounted for in the books of accounts only have been collected. The AO was not convinced wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resumption of suppression of fees on the basis of noting made in the diary/documents seized from the residence of Shri P L Nanjundaswamy. We notice that the assessee has disproved the said presumption by furnishing confirmation letters obtained from the students. On the contrary, the AO did not conduct any enquiry from any of the students or their parents or others to disprove the confirmation letter filed by the assessee. We have also noticed earlier that the cash unearthed during the course of search were found to have been accounted for in the books of accounts. The assessee also shown that the aggregate amount of fees accounted for in respect of nine students is higher than that noted in the diary. The assessee has also given explanations as to why fees were collected at a lesser amount. We notice that none of those explanations were disproved by the AO. Under these set of facts, we are of the view that the assessing officer has made the addition under this head under surmises and conjectures and hence Ld CIT(A) was not justified in confirming the addition relating to suppression of fees under Management quota PG seats. Accordingly, we set aside the order passed by Ld CIT(A) on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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