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2021 (6) TMI 903 - ITAT PUNEAddition based on statements recorded u/s. 132(4) - Effect of retraction of statements recorded u/s. 132(4) of the Act - Taxation of capitation fee alleged to have been received in cash by the assessee for admission of students in L N Welingkar Institute of Management under management quota - statement of Samir kharkanis recorded u/s.132(4) of the Act in respect of seized document from his residence, Shri Samir Karkhanis explained his role with the prospective students and their parents regarding negotiations for cash donations, modus operandi, receipt of capitation fee not only for this A.Y. and also for passed 6 years - HELD THAT:- We note that the basing on the statements of employees together with the seized torn piece document the DCIT, Central Circle lodged a complaint to AICTE stating that the assessee was involved in accepting the capitation fee In pursuance of such complaint the AICTE issued show caused notice to the assessee and in response to which the assessee submitted reply along with supporting documents. The AICTE put up the said case before the standing complaint committee consisting of Justice P.S. Patankar, Professor Manik Rao Solunke and Professor K. Tirumaran. After detailed discussion, the three members committee by referring to a letter dated 07-02-2013 issued by the western regional office of AICTE held that “there was anything wrong in the admissions and absolutely no evidence or any document suggesting that the assessee was charging capitation fees or donations”. The AICTE again put up the said report of three members committee before the One Man Justice P.C. Jain, committee for vetting/final opinion. The One Man Justice committee fully agreed with the report of three members committee. On perusal of the finding of the Hon‟ble One Man Justice committee clearly establishes that there was no evidence suggesting that the assessee charged capitation fee and consequent thereto the AICTE dropped the complaint against the assessee. Therefore, the arguments made by the ld. DR are rejected. AO does not have jurisdiction to make the addition in the hands of the assessee without any incriminating material found as a result of search - We find that there is no incriminating evidence found as a result of search action indicating undisclosed income. Therefore, we are of the considered opinion that the AO had failed to bring on record any material suggesting the receipt of capitation fee and there is no basis to infer that the assessee had been receiving capitation fee during any previous year relevant to the assessment years under consideration. In the absence of any incriminating material suggesting the undisclosed income, the question of extrapolation of addition in the previous year or subsequent year does not arise. Therefore, We do not find any reason to interfere with the orders of CIT(A) accordingly, it is justified. Thus, grounds raised by the revenue fails, hence, are dismissed. Application under Rule 27 of the ITAT Rules questioning the validity of assessment order - No ground questioning the validity of proceedings u/s. 153C of the Act raised for any of the assessments and no decision rendered by the CIT(A) on such validity of assessment. It is an established principle that Rule 27 would not extend to permit respondent-assessee scope of an appeal to question the decision on such issues which are not subject matter of the appeal. It is also decided that the assessee who has not appealed cannot be permitted to raise a ground which will adversely work against the appellant-revenue.
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