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2012 (11) TMI 537 - ITAT CHENNAIAddition u/s 68 Capitation fees AO argued that any parent of the students was not traceable Held that:- Out of 54 students, parents of 33 students have replied in affirmative confirming that they had given interest free refundable deposits to the assessee society. The majority of the parents have given testimony in support of the statements given by the assessee society. The reason that the remaining 11 parents have not given any confirmation, does not dilute the probative value of the material evidence available on record. Minority of the parents might not be available at that point of time at the addresses available on record and it might not be possible for them to give confirmation letters within the time frame given by the authorities. The Revenue fails in its appeal filed for the assessment year 2003-04. In favour of assessee Addition on account of receipt of capitation fee AO argued that purported admissions made by the functionaries of the assessee society in the statements furnished Held that:- As the statements have been subsequently, retracted. The retractions of those statements made by the functionaries of the society are well supported by the books of account maintained by the assessee with supporting documents and evidences. All the basic details are very much available before the assessing authority, himself. Issue decides in favour of assessee Addition on account of paper found in course of search - A sum of Rs. 23,52,000/- was stated to have been paid to the assessee Held that:- The assessee explained that a sum of Rs.17,52,000/- had been received by cheque from Shri Amul John Jacob and it was not aware of any money received in cash. As already found in the appeal filed by the Revenue for the same assessment year 2006-07, the CIT(A) has deleted the addition of the said amount of Rs.17,52,000/- made by cheque. When the assessee had accounted for the amount received by cheque, there is no reason to go beyond, only for the reason that in the sheet of paper found in the course of search, the amount recorded was Rs.23,52,000/-. There is no direct nexus with the proposition made by the AO and the paper seized in the course of search. Therefore addition deleted. Issue in favour of assessee Addition on account of undisclosed income AO on the ground that those receipts were not recorded by the assessee in the books of account Held that:- As there are no materials available on record to show that the assessee society had received such amounts over and above what was recorded in its books of account. The AO has made a presumption that the assessee society might have received that much amount on the strength of students admitted for medical course. This is only an intelligent presumption. When there is no material available on record, it is not possible to presume that the assessee might have collected capitation fee for admitting students for medical course. In favour of assessee Whether in case of trust addition u/s 68, was taxable at Maximum Marginal Rate or consider as applied u/s 11 Held that:- Assessee has applied its entire funds in running the Hospital, Medical College and other Educational Institutions. Therefore, the additional amounts covered by sec.68 are treated as part of assessees income, still the amounts cannot be brought to tax, as those amounts have been applied for charitable purposes. Issue in favour of assessee
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