TMI Blog2020 (9) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ive clauses provided u/s 132(4A) cannot be invoked in the instant case. As considered the fact of seizure of cash and its relation to the collection of capitation fees. The cash balance as per the books of account as on 18.09.2014 was ₹ 8.5 crores. The cash seized was ₹ 6.6 crores. Hence, the revenue s endeavor to relate the presence of cash to collection of capitation fee false flat. The issue of cash seizure is dealt further in this order about its source, accountability, reconciliation and taxation thereof. There has been a sequence of admission of Shobhit Pal and Anuj Agarwal to the medical courses which has been narrated above. No examination of the students from whom the amounts purportedly have been received has been undertaken by the revenue to prove receipt of donation. The writings on the empty envelops have not been examined. Other than the loose papers, there has been no evidence corroborating receipt of the amounts from these two persons to the tune of ₹ 73 lacs. We also find that no primary evidence has been available with the Revenue authorities extrapolating the amount and work out the donation purportedly received. The addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her rather than in isolation and it should reflect the true state of affairs of the assessee. The taxation has to be done as per law in the correct hands. Since we have already adjudicated on the issue of cash seizure in the case of the trust, we hereby delete the addition made in the hands of the trustee. Valuation of properties/Unexplained investment in the building - CIT(A) deleted the addition as the difference between the actual investment, shown by the assessee and the estimated by the D.V.O., is only 9.86%, which is less than 15% - HELD THAT:- During the arguments before us, the Revenue could not controvert the factual findings. Hence, the addition made on account of the difference of the investment and as estimated by the D.V.O., being less than 15%, the same is hereby ordered to be deleted. - I.T.(SS)A. Nos.293 to 299/Lkw/2019, I.T.(SS)A. Nos.437 & 438/Lkw/2019, I.T.A. No.300/Lkw/2019 - - - Dated:- 25-6-2020 - Shri A. D. Jain, Vice President And Shri Dr. B. R. R. Kumar, Accountant Member For the Assessee : Shri Ved Jain, Advocate, Shri Ravindra Kumar Agarwal, C.A. For the Revenue : Shri S. K. Madhuk, CIT (D.R.) ORDER PER BENCH: The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rustee and Chairman of the Trust while his spouse Smt. Asha Murti is also a trustee. Shri Aditya Murti is son of the main trustee Shri Dev Murti and looks after the management of the hospital and medical college of the trust. 5. During the search operation, many loose papers, registers and diaries of incriminating nature and cash were seized from the residence of Shri Dev Murti at 4, La-Place , Shahnajaf Road, Lucknow (which is also used as head office of the trust), residence of Shri Dev Murti at N-3,4, Murti Bhawan, Rampur garden, Bareilly which is also registered office of the trust and from the premises of M/s SRMS Institute of Medical Science, M/s SRMS Institution of Paramedical Science and SRMS College of Engineering Technology, 13 Kms on Bareilly -Nainital Road, Bhojipura, Bareilly. Issue of Capitation Fees : 6. During the course of search of bedroom of Shri Aditya Murti in residential premises, situated at Rampur Garden Bareilly incriminating documents inventoried as annexure LP-1 was found and seized. Similarly incriminating documents found and impounded as annexure LP-6 from the medical college, incriminating documents found and impounded as annexure LP-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s confronted that these papers indicated towards the capitation fee in cash, over and above the normal fee of ₹ 8.5 lakh per annum, taken by the trust from these students for the admission, he again denied of having any knowledge about the noting on the page 27 and stated that no capitation fee was charged for admitting any student. 11. Shri Dev Murti was also confronted on this issue during operation of restrained order at his residence at Lucknow on 15/10/2014. He also denied having any idea about these two names and the nature of transaction inscribed on the page no. 27. 12. The AO held that in Page No. 27 of LP-1 is clear cut evidence of the system of acceptance of capitation fee/donation in cash for admission to the medical College. It was held that the finding gets substantiated by the Annexure LP-6 LP-7. 13. The AO came to the conclusion based on the seized material that ₹ 23,00,000/- represents cash donation being taken by the SRMS Trust for admission in the undergraduate (MBBS) medical course while it is ₹ 50,00,000/- for the Postgraduate course (MD/MS). 14. Further, the paper recovered from the Sri Ram Murti Smarak College of Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 .. Records of Shobhit Pal and Anuj Agrawal found and impounded as Annexure- LP- 6 and LP-7 respectively from SRMS Medical College, Bareilly (Party-MM-5) shows that in Shobhit pal's case only ₹ 9,08,500/- was paid as fee and other charges during admission. Similarly a piece of paper was received from Shri Ram Murti Smarak College of Engineering Technology , Bareilly by Party ME-10 where on page No. 26 of Annexure -A, LP-2 it is written in hand writing the name Ms Ambika Mittal D/o Anil Kumar Mittal, Udhamsingh Nagar, in which an amount of ₹ 40 lacs is written where as from the records of Ms Ambika Mittal found and impounded by party MM-5 as Annexure-LP-8 shows that she had been admitted for the MS in Ophthalmology course for the academic session 2014-15 in the SRMS institute of Medical Science Bareilly. It also reveals that only ₹ 11,25,000/- was paid by her during the time of admission for course. Further there was seizure of two envelops marked as Annexure A-ll, on first envelop cash denomination 1000*2500 dated 18.4.14 was mentioned while on the second envelop cash denomination 1000*2000 was written. Shri Aditya Murti and Dev Mur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under section 153A . The details are as under: TABLE-A Batch Range(Rs.) Average 2008 5,00,000 to 7,00,000 6,00,000 2009 7,50,000 to 8,50,000 8,00,000 2010 8,50,000 to 10,00,000 9,25,000 2011 10,00,000 to 12,00,000 11,00,000 2012 11,00,000 to 14,00,000 12,50,000 2013 12,00,000 to 17,50,000 14,75,000 2014 23,00,000 to 25,00,000 24,00,000 MD/MS Post graduate Course Table B Course /Course Name Year 2014 Year 2013 Year 2012 Year 2011 MD/ Dermo Skin/VD 1,10,00,000 90,0,000 30,00,000 MD (TB Chest) 51,00,000 45,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lifying for any exemption under the provisions of section 11 and 12 of f the IT Act. 20. The AO while making the addition relied on the judgement in the case of Rohilkhand Educational and Charitable Trust, who is also in the similar line of activity of imparting medical education through its various institutions. 21. Aggrieved with the addition, the assessee filed appeal before the Learned CIT(A)-3, Lucknow. The observation of learned CIT(A), while confirming the addition, is reproduced as Under: . I have examined the facts circumstances of the case. I have considered the finding of the AO in the assessment order and the submissions of the appellant made during the appellate proceedings. The AO has noted that during the course of search at the premises situated at Rampur Garden, Bareilly, incriminating documents Annexure LP1- page 1 to 27, was found and seized from the room of Shri Aditya Murti on which name of two persons Shobhit Pal, Anuj Agarwal and amounts was found to be written, details of which are given as under: 1) ShobhitPal 23,00,000 2) AnujAgrawal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is solely and purely based on conjectures and surmises since no incriminating documents were found for A.Y.2013-14, on the basis of which AO can claim that capitation fees was received by the appellant. .. The appellant has contended that the pillar of assessment on the basis of which assessment proceedings has been framed and completed are the 3 dumb documents only. There were no other documents found during the search proceedings from which some adverse inference could have been drawn. These dumb documents in itself can not in any circumstances become a conclusive evidence to prove that cash has been actually received. Assessee in its submission clearly explained all these three loose slips. Assessee has submitted that, out of these slips, Annexure A-11 is just an empty envelope which in itself does not prove anything, Annexure LP-2, Page no. 26 is just an visitor's slips which assessee has substantiated during assessment proceedings as well and explained above and Annexure LP-1, Page no. 27 is some rough calculations only, incidentally name of 2 students are mentioned in front of them. Ld. Assessing Officer has grossly erred in concluding that assessee is receiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd different dates. Shri Dev Murti could not satisfactorily explain the cash of ₹ 1,00,00,000/-found in the Locker. . Considering the fact that the cash found during the course of search of ₹ 6,30,53,000/- found (un)recorded in the books of account, on the date of search the reconciliation of cash submitted by the appellant during assessment proceedings is considered as an afterthought and not found acceptable. The source of cash of ₹ 6,30,53,000/- ₹ 1,00,00,000/- found during the course of search have been found to be not satisfactorily explained by Shri Dev Murti, trustee of the Trust. The documents found during the course of search i.e. LP-1, pg. 1 to 27, LP-6,LP-7,LP-2,LP-8 and the cash found during the course of search of ₹ 6,30,53,000/- and ₹ 1,00,00,000/- have to examined together rather than in isolation and it reflects the true state of affairs of the appellant trust. It substantiates the fact that the appellant has charged capitation fees over and above the admission fees charged for under graduate and post graduate courses for the year under consideration. Hence appellant's contention that documents found and seized during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reliance on the case of Rohilkhand Educational and Charitable Trust is totally unwarranted as the facts of that case are totally different to the operations of the assessee trust. Regarding the extrapolation, the learned A.R. argued that the order of the Revenue extrapolating the amounts for the period of seven years based on three loose slips is totally unwarranted as no evidences of collection of donation has been found during the search. 24. On the other hand, the learned D.R. argued that the provisions of section 132(4A) allows the Revenue to presume that the contents of the books of accounts or other documents are true and in cases wherein it is reasonably assumed to have been signed, stamped, executed or attested. Coupled with the fact that there has been seizure of ₹ 6.30 crores of cash during the search only reflects that the assessee is in the course of collection of capitation fees on a regular basis. 25. Heard the arguments of both the parties and perused the records available before us. 26. We have gone through the seized materials mainly page No. 27 of Annexure LP1, page No. 26 of LP2 and Annexure A-11, the same are as under: (The scanned copies) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to be in the handwriting of, any particular person, are in that person s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. Presumption as to assets, books of account, etc. 292C. [(1)] Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 [or survey under section 133A] it may, in any proceeding under this Act, be presumed (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person s handwriting, and in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol of another person during the course of the search then such presumption can be raised only against such another person in whose control and possession the valuable assets/documents are found, even though no warrant for search has been issued against him. Carrying out search against the person i.e issuance of warrant of authorization against the person for raising presumption is not necessary. There should be a search and the person is whose control and possession assets/books/ documents are found may be some person or may be other. If these items are found in control and possession of the person searched then presumption would be raised against the person searched in respect of these items. But if these items are found in control and possession of some other person during the course of search then presumption would be raised against that other person. 32. In the absence of working out of the basic parameters regarding the ownership of transactions as to how they culminate into the determination of concealed income, the presumptive clauses provided u/s 132(4A) cannot be invoked in the instant case. 33. We have also considered the fact of seizure of cash and its relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee trust. The Revenue made substantive addition on account of unexplained cash in the hands of Shri Dev Murti for the assessment year 2015-16 and on protective basis in the hands of the assessee trust. The learned CIT(A) upheld the addition of ₹ 7,30,53,000/- in the case of Shri Dev Murti holding that the cash belonging to Shri Dev Murti and confirmed the addition and deleted in the hands of the assessee. 37. During the course of arguments before us, Learned AR. argued that the reconciliation chart pertaining to cash seizure has been submitted to the Revenue authorities, which proves that the cash balance as per the books of account is ₹ 7,30,77,143/-. He also brought to our notice the letters dated 27/10/2014 and 09/01/2015 filed by the assessee before the Revenue authorities for release of this seized cash. He also brought to our notice various statements recorded by the Revenue authorities on the date of search as well as during the post search enquiries. 38. Learned DR. argued that the fact the cash has been found at the premises of Shri Dev Murti cannot be disputed and hence, the same needs to be assessed in the hands of Shri Dev Murti as unexplained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust SRMST, Bareilly. The reconciliation statement has been rejected en-bloc by the revenue. The facts or the explanation given by the assessee has not been examined by the Revenue in a right perspective so as to determine the accountability of these amounts in the regular books or not. Hence, keeping in view the cash deposited in the bank, expenses, cash balance as per the books and cash found at the premises, the reconciliation filed by the assessee, we here by remand the matter to the file of the assessing officer for the limited purpose of verifying the cash balances with the regular books of accounts filed by the assessee as well as with the balance sheets and income and expenditure accounts available with the revenue along with the returns and the books of accounts available in the seized material. In order to arrive at a coherent decision, this exercise of verification shall be carried out under the effective supervision of the officer who authorizes the officers to file appeals before the tribunal so as to avoid duplication. ITA 300/Lkw/2019 (AY 2015-16) 44. The only issue involved in this case is the addition of cash seized during the search conducted in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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