Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (7) TMI 1018 - AT - Income TaxAddition towards Capitation fees - Relevence of statement made u/s 131 and 132(4) - The addition towards capitation fee by AO, was solely based on the sworn statement recorded under section 132(4) - CIT(A) deleted such addition HELD THAT:- We have gone through the facts, there is a whisper of collection of capitation fees by SO, but nowhere else there is such an admission made by him. Statement of president was recorded u/s 131, he has stated that whatever was received from the students was reflected in the books of account. Such statement was also made a basis for this addition. He was not examined u/s 132(4) A statement made u/s 131 cannot be equated with a statement recorded under section 132(4). A statement recorded u/s 132(4) is a valid and relevant piece of evidence but a statement recorded under section 131 is not so relevant. Nevertheless, even a statement recorded under section 132(4) cannot be made a sole basis for any such addition unless corroborated by seized material. If any admission is made in a statement recorded under section 132(4), this can be used with reference to any piece of evidence found during the course of search. In this case, no such piece of evidence or to say any incriminating evidence was either found or seized. In our well considered view, this addition could not have been made at all in the hands of the assessee-trust on the basis of such evidence. With regard to involuntary statement, extracted from the deponent, the Central Board of Direct Taxes has issued instructions, wherein it has been directed that search party shall not obtain confessions. So, the admission made u/s 132(4) by the concerned officer cannot be treated even as a valid piece of evidence. There being no incriminating document having been found or seized during search and the statement also being abstruse, the addition in question has no legs to stand on. Had there been a valid statement, even then, solely on the basis thereof, addition could not have been made. The decisions of the hon'ble Supreme Court in the case of COMMISSIONER OF INCOME-TAX, WEST BENGAL II VERSUS DURGA PRASAD MORE [1971 (8) TMI 17 - SUPREME COURT and SUMATI DAYAL VERSUS COMMISSIONER OF INCOME-TAX [1995 (3) TMI 3 - SUPREME COURT], which speak about human probabilities and realities which have to be taken into consideration while dealing with income-tax matters. In fact, this is not such a case. The ratio decidendi of these decisions would not apply in the absence of any direct piece of evidence available on record. We, therefore, confirm the order of the learned Commissioner of Income-tax (Appeals) in deleting the addition. Excess Income under the Income and Expenditure Account u/s 164(1) - Donations receipts of the trust have been diverted to the personal investment of the president. AO made addition regarding excess income under the income and expenditure account as per the proviso to section 164(1) HELD THAT:- When we have already held that there is no proof that the assessee had collected capitation fees in the guise of donation as has been alleged, there is no violation of the Tamil Nadu Educational Institutions (Prohibition of Collection of Capitation Fee) Act, 1992. The donation received/voluntarily given by anybody to charitable institutions towards its corpus is a permissible and legal activity and not an illegal activity terminating into denial of exemption under section 11. There is no evidence on record to show a link between the investments made with the trust's activities as per the provisions of section 164(1) read with section 13(1)(c) and 13(1)(d). Therefore, this addition cannot be sustained in the eye of law in view of our above observation. Accordingly, we confirm this impugned deletion Addition of cash found and seized by dept - Case of revenue is that this cash seized during search does not stand properly explained by the assessee - HELD THAT:- We have found that the list of students and the details of fees collected were found in the computer at the time of survey itself. The assessee had also explained the cash balance through letter before the Assistant Director of Income-tax, which is recorded in the assessment order also. The Assessing Officer issued summons under section 131 to the students and their sworn statements were recorded in which the students have admitted payment of such fees. The cumulative effect of these observations is that this amount cannot be so easily added in the hands of the assessee as it stands explained on record. In our considered opinion, the entire cash stands fully and satisfactorily explained and cannot be sustained in the hands of the assessee.
|