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2016 (4) TMI 84 - ITAT HYDERABAD

2016 (4) TMI 84 - ITAT HYDERABAD - [2016] 49 ITR (Trib) 148 - Additional/capitation fees recipt - Registration granted u/s 12AA cancelled - Held that:- It is important to mention here that the department has chosen to bring to tax the same additional/capitation fees collected, both in the hands of society as well as in the hands of Mr. K.T. Mahi. The same amount cannot be brought to tax in the hands of two persons. From this, it is evident that the Assessing Officer is not able to come to any co .....

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stified as the principle that is applicable in tax statutes is that an income can be subjected to tax in the hands of one person only. Therefore, we hold that the income cannot be charged to tax in the hands of society as well as in the hands of trustee cum secretary of the society. - We are inclined to adjudicate that the additional fees collected should be assessed only in the hands of Mr. Mahi and the same should be deleted to be assessed in the hands of society. - With regard to quan .....

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fficer cannot estimate the unaccounted receipts for all the assessment years based on the material found in the search proceedings relating to a particular AY without any cogent material available for the other AYs and without any statement/deposition of any of the office bearers of the society that it has collected additional fees in the earlier years also. With regard to pending assessments which abated in view of the provisions of section 153A of the Act, the Assessing Officer had already mad .....

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Seva Mandir Vs. DDIT(E) (2012 (5) TMI 396 - ITAT MUMBAI ), section 40 is applicable only when deductions u/s 30-38 are being made in computing income chargeable under the head 'profits and gains of business or profession' u/s 28. Similarly, provisions of section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of section 11. - Decided in favour of assessee - ITA Nos. 111 to 117/Hyd/2014 - Dated:- 11-3-2016 - P. Madhavi Devi, J .....

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of the case are: A search and seizure operation was conducted on 10-9-2009 in the case of Sreenidhi Educational Society and also the residences of the main trustees, Shri K.T. Mahi and Smt. K.Sarita Mahi. Search was also conducted at the residence of Shri P.Narsimha Reddy, Principal, SNIST. 2.1 As mentioned in the assessment orders, the assessee society is a registered society and had been granted registration u/s 12A of the Act by the Commissioner of Income-tax-I, Hyderabad on 2-4-1998. Subseq .....

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fessional and vocational education etc. to the students. 2.2 In the course of search at the residence of Shri K.T. Mahi and Smt. Sarita Mahi, cash of ₹ 2,84,110/- and jewellery of ₹ 22,36,380/- were found, out of which ₹ 2,00,000/- and ₹ 8,59,680/- respectively, were seized. In addition to the same, documents relating to unaccounted Income generation and Investments thereof were also found and seized, which pointed to the fact that the assessee society was collecting amou .....

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nting admission into engineering courses. The excess amounts so collected were not recorded in the books of the society. The evidence relating to collection of donations/capitation fees was found and seized in the course of search from the office premises of the assessee society and seized as Annexure A/SNIST/OFF/35 to 41 and A/KTMGH/04 & 06. It was also found that the entries in respect of collection of capitation fee/donation, as recorded in those Incriminating documents, were not recorded .....

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donations received for management seats are used to clear the expenses in cash and are also deposited into the personal a/c of Shri K.T. Mahi with Andhra Bank and that from there, the cash deposited was transferred into the accounts of various schools, as per day's requirement. He stated that the cash donation for 2 years was close to about ₹ 21 crores. The Assessing Officer noted that as per the evidence found in the course of search, collections totalled to ₹ 23,05,24,200/-. 2 .....

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orded u/s.132(4) on 6-11-2009 admitted additional income of ₹ 16.50 crores in his Individual hands with a view to set right the lapses, omissions and commissions in his individual business affairs and all issues involved in the seized material. 2.6 However, the Assessing Officer, after going through the relevant material noticed that, the total unaccounted monies, received over and above the prescribed fee, came to ₹ 16,62,26,600/- (after reducing the amount of ₹ 6,42,97,600/- .....

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receipts (Rs.) 2005-06 18,62,000/- 2006-07 1,35,17,000/- 2009-10 9,00,44,700/- 2010-11 6,04,02,900/- 2.8 The Assessing Officer has also listed out year-wise investments as appearing in the seized material in the names of other entities from out of donations/capitation fees collected from students and not recorded in the books of the society, as under: AY Amount diverted (Rs.) Utilized by whom and purpose Whether recorded in the books of the entity Whether reflected in the books of the society 2 .....

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d in the Management Quota. He discussed one entry from each of the said note books in the assessment order. For example, page 69 of Annexure A/SNIST/36 showed that the student Shri Ramayanam Amitesh was admitted to the ECE course and the total amount finalized in his case was ₹ 13,75,000/-. Out of the same, ₹ 4 lakhs were received on 9-7-2008, ₹ 5 lakhs on 11-7-2008 and ₹ 4.75 lakhs on 14-7-2008. As against this, the prescribed fee was ₹ 91,700/- only. The Assessing .....

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rred in cash for running the engineering college, school as also the personal use of Shri Mahi. 2.11 During the course of post search enquiries, Shri KT Mahi submitted a detailed cash flow statement, crediting the undisclosed income of various years besides showing the unaccounted payments based on the seized material including the unaccounted credit card payments. 2.12 After analyzing the seized documents, the Assessing Officer concluded that part of the fees recorded therein was reflected in t .....

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books reflected the amounts of cash received from various persons as consideration for courses offered to them. He also explained how the said cash was being used by Shri KT Mahi for Investments in real estate, personal expenditure, etc. Shri Ramesh Babu also explained the mode of receipt of fees and donation/capitation fee, stating that for the Management Quota seats, only fee is collected through Bankers Cheque/DD, while capitation fee is collected in cash. He also explained that the fee in t .....

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mmunicating the bus timings and transportation fee to be collected from the parents from time to time. However, Shri Mahi did not agree with the statement of Shri Ramesh Babu. Despite this, in the statement recorded u/s.132(4) on 6-11-2009, Shri Mahi came out with the disclosure of additional income of ₹ 16.50 crores in his individual hands for various years. Such disclosure was made allegedly with a view to set right the lapses, omissions and commissions in his individual business affairs .....

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the DGIT(Inv), Hyderabad, recommending rescinding of the approval granted u/s 10(23C)(vi). The DGIT vide his proceedings in F.No.DGIT(Inv)/Hyd/APP &. Renewal u/s.10(23C)/SES/2011-12, dated 16-12-2011, withdrew/rescinded the recognition with effect from 2003-04. The Hon'ble DGIT held that in the Instant case, amounts were collected by way of capitation fees/ donations in cash which were not recorded in the books of accounts and consequently not utilized for the purpose of education. Cons .....

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also used the charitable activity/educational Institution as an apparatus for selling education and that the element of charity no longer remained the activity of the assessee. He concluded that since the society sells seats of professional courses and collects Capitation Fee and therefore, the activity of the assessee no more remains charitable activity within the meaning of sec. 2(15) of the Act. The Assessing Officer held that the material seized in the course of search clearly establishes th .....

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e's case, the seized documents showed that collection of such amounts was a regular phenomenon. He also took note of the fact that even in the state of Andhra Pradesh, a committee has fixed the fees that may be collected by the professional educational Institutions per semester/year but that the assessee society had collected fees for the entire course in advance, besides collecting amounts over and above such fees, which was to be treated as collection of capitation fees. He noticed that ev .....

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is collected by the trust per se or by some interested persons. He felt that in the assessee's case the collection of capitation fee could not even be termed as a 'business income' as envisaged u/s.11(4A). Besides, he observed that there had been violations of provisions of sec. 13(1)(c) as the amounts collected over and above the prescribed fee were being handed over to the Chairman and other interested persons of the society. Accordingly, he concluded that even on this account, th .....

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of Karnataka (2002) 8 SSC 481, holding that the society would not be eligible for exemption u/s 11 or 10(23C) where it fails to prove that the contributions are not in the nature of capitation fees. Accordingly, he held that the assessee is neither eligible for exemption u/s 10(23C)(vi), nor is it, eligible for exemption u/s 11. He accordingly, proceeded to assess the income of the assessee in the capacity of AOP. 2.16 With the above view, .the Assessing Officer issued a show cause notice to th .....

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ere not at all related to any of the transactions of the assessee society and were maintained purely by Shri Ramesh Babu in his personal capacity. Therefore, the assessee claimed that those could not be accepted as the books of account of the society. It also relied upon the Affidavit filed by Shri KT Mahi before the ADIT, emphasizing the fact that cross-examination of these persons would begin a long and protracted litigation, and therefore, to avoid litigation and have peace of mind, the incom .....

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ri Mahi admitted the additional income in his individual hands, apparently the sources for the said additional income stemmed from the college fee receipts, collected over and above the prescribed fee as evidenced by the seized material. He noted that the seized material indicated that wherever capitation fee was collected in cash, it was not recorded in the books of account and only the regular fees were recorded. Besides, AO felt that after admitting part of the document in respect of regular .....

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ng Officer also noted that in view of the evidence seized, it could be concluded that the collection of amounts over and above the prescribed fees (capitation/donation) is not an isolated instance. He noted that Shri KT Mahi has been collecting amounts over and above the prescribed fee and the same are being deposited in the personal bank a/c or being invested in the personal business of KT Mahi. Accordingly, It could be concluded that the society was collecting capitation fees in the previous y .....

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ed 14-7-2006 have observed that when the assessee is in the habit of suppressing turnover consistently, the only issue to be examined is whether the AO's estimation of undisclosed turnover is fair, bona fide and reasonable. 2.19 Applying the above ratio, in view of the facts available in the assessee's case regarding charging of capitation fee, the Assessing Officer concluded that the assessee society was into the practice of collection of capitation fee for the earlier years also. Relyi .....

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the approval u/s 10(23C) had already been rescinded by the Hon'ble DGIT (Inv) by way of his order dated 16-12-2011, the claim of exemption under the said section was rejected. In view of the foregoing discussion, the AO concluded that the assessee is not eligible for exemption u/s 11 of the Act also and accordingly proceeded to assess the assessee in the status of an AOP and proceeded to compute the total Income for asst. years 2004-05 to 2010-11 as under: 2.21 Asst. Year 2004-05: The Asses .....

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ted to the Income and Expenditure a/c, he disallowed the claim of such contribution. Accordingly, the total income was worked out to ₹ 24,35,634/-. 2.22 Asst. Year 2005-06 The AO considered the surplus of ₹ 79,37,347/-. Besides, in view of the payment of TDS deducted from payments towards contracts, rent, professional and consultancy charges, after March of this year, the claim of expenditure under those heads of ₹ 6,33,100/-, ₹ 1,51,470/- and ₹ 3,25,580/- respectiv .....

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ely, were disallowed u/s.40(a)(ia), after including the surplus, disallowances and the unaccounted income, the total income was worked out at ₹ 2,51,58,145/-. 2.24 Asst. Year 2007-08: In the I & E, Statement, the assessee had shown a deficit of ₹ 53,20,801/-. Besides, in view of the payment of TDS deducted from payments towards contracts, rent and professional/consultancy charges, after March of the year, the claim of expenditure under those heads of ₹ 11,08,180/-, ₹ .....

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an effect on the Block of assets. Considering these and the unaccounted income, the total loss was worked out at Rs.(-) 1,98,64,736/-. 2.26 Asst. Year 2009-10: The Income and expenditure statement for this asst. year showed a surplus of ₹ 8,13,821/-. Considering the same and the unaccounted income, the total Income was worked out at ₹ 9,12,58,521/-. 2.27 Asst. Year 2010-11: The income and expenditure statement for this asst. year showed a surplus of ₹ 98,07,374/-. Besides, the .....

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ated before the Assessing Officer and submitted that the Hon'ble ITAT, 'Hyderabad 'A' Bench has decided assessee's appeal against the order of the CIT(Central), Hyderabad u/s.12AA(3) of I.T. Act cancelling the registration granted to the Society in assessee's favour and restored the registration granted. Since the registration was cancelled by the CIT(Central) on the basis of the findings given by the Assessing Officer which are also the basis for the assessment order und .....

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ould not be applicable retrospectively and its operation has to be effective from the date it was Introduced and onwards and therefore CIT was not justified in cancelling the registration granted to assessee u/s 12A, by invoking provisions of section 12AA(3) further, the trust being an educational institution end undisputedly imparting education, cancellation of registration was not in accordance with law. The same ratio has been followed by the Lucknow Bench of ITAT in the case of Kapoor Educat .....

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authority to collect the excess fees should have been given by the society and it is only, then, it can be said that the acts of the employees will bind the principal. Anything done by the employee beyond the scope of powers given to him will not bind the principal society. The cash deposited in the Head Office by itself cannot be treated as fund collected by the society. The said amount has been assessed in the personal hands of Sri K.T. Mahi as the collected amounts have not reached the socie .....

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T vs. Geethanjali University, 214 Taxman (Raj), it was held that what is required for purpose of seeking approval u/s 10(23)(c) is that university or education trust shall exist solely for educational purposes and not for purpose of profit. Furthermore though the admissions were not in accordance with prescribed rules still the said violation could not be to its losing character as an entity existing solely for educational purposes. Following the ratios of the decisions as mentioned above, In th .....

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ut any authority or consent of the society and the conclusion of the CIT was that ETF was collected by M.J. Balachander on his own and the society has nothing to do with ETF collection. The ITAT confirmed the findings of the CIT. In the present case, no material has been brought on record to show that the assessee solely exists for profit motive. The department has not been able to discharge its onus of showing as to how the conditions for grant of registration have been breached by the assessee .....

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been earned by the assessee. The DIT has failed to specify as to how profit earning is the predominant activity of the assessee and the society has been pursuing its object of imparting education to students. Therefore, the assessee-society cannot be deprived off of the benefit of registration granted by the DIT(E) u/s 11 of the Act. Being so, in our opinion, registration granted u/s.12AA of the Act cannot be cancelled. However, the aforesaid findings given by us are nothing to do with the allo .....

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to be decided on the facts of the case as observed by the Hon'ble ITAT. It may be noted that the Assessing Officer has categorically brought out the discrepancy/irregularity with regard to the allowability of exemption u/s 11 in the assessment order. 4.3 The CIT(A) after analysing the issue with relevant sections and following the decision of the Jurisdictional High Court in the case of M/s Ahura Holdings Ltd. Vs. DCIT reported in - 2012-TIOL-357-HC-AP-IT & Gopal Lal Badruka Vs. DCIT 34 .....

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e hands of the society in view of the violation of provisions of section 13(1)(c) of the Act by the society and that the society loses the cover of exemption u/s.11 of the I.T. Act. There has been incriminating material for AYs 2009-10 and 2010-11 and Sri K.T. Mahi has admitted to have received capitation fee for admission in to the colleges run by the society not only in those years but also in the past years and offered some amount as Income on account of undisclosed capitation fee received by .....

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ssessing Officer's estimation of undisclosed turnover is fair, bonafide and reasonable. In the present case, the Assessing Officer has tried to make the estimation as fair, bonafide and reasonable as possible on the basis of material available. Therefore, It is held that the assessee society received capitation fee even in those years also and the Assessing Officer is justified by taking reference to the number of management seats offered and the fee collected over and above the prescribed f .....

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1,00,000/- is confirmed." 5. Aggrieved by the order of the CIT(A), the assessee is in appeals before us for the AYs 2004-05 to 2010-11 and has raised the following grounds of appeal, which are common in all the appeals, except for the quantum of the additions made: Grounds of Appeal: 1. The Commissioner (Appeals) has erred on facts and in law and the order is bad in law. 2. The Commissioner (Appeals) ought to have held that the search on the Society was without proper jurisdiction. The Comm .....

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assumption of extrapolation irrespective of any evidence from the seized material. b. The Commissioner {Appeals} has erred in upholding the inference of the assessing officer that the assessee earned undisclosed income. c. The Commissioner (Appeals) has erred in upholding the inference of the assessing officer that KT Mahi, the Trustee, collected the capitation fee on behalf of the Society. d. The Commissioner (Appeals) has erred in upholding the inference of the assessing officer that the asse .....

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nference of the assessing officer that the assessee had violated the provisions of s 13(1)(c). h. The Commissioner (Appeals) has erred in upholding the denial of exemption u/s 11. 5. The Commissioner (Appeals) has erred in sustaining denial, made by the assessing officer, of exemption u/s 10(23C). 6. The Commissioner (Appeals) has erred in overlooking the written submissions and evidences with respect to donation of corpus fund of ₹ 1,00,000 and directing the assessing officer to verify th .....

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s in cash. The argument of the learned DR that the acts of the servant will bind the master cannot be applied to the facts of the present case for the reason that Shri K.T. Mahi was never authorized to collect the excess capitation fees. The authority to collect the excess fees should have been given by the society and it is only, then, it can be said that the acts of the employees will bind the principal. Anything done by the employee beyond the scope of powers given to him will not bind the pr .....

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that it was Shri K.T. Mahi, who has collected excess money without the knowledge or the authority of the society. In other words, none of the monies were collected by Shri K.T. Mahi on the authority of the society. 6.1 Referring to the above observations, the ld. AR submitted that in the present case no material has been brought on record to show that the assessee solely exists for profit motive and that the department has not been able to discharge its onus of showing as to how the conditions .....

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cation and not to earn profit. In fact no profit has been established to have been earned by the assessee. According to him, the DIT has failed to specify as to how profit earning is the predominant activity of the assessee as the society has been pursuing its object of imparting education to students. Therefore, according to him, the assessee society cannot be deprived of the benefit of registration granted by the DIT(E) u/s 11 of the Act. Being so, in his opinion, registration granted u/s 12AA .....

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AR submitted that the order of the Commissioner to rescind the registration u/s 12AA was passed after the Assessment Order was passed and refers to the Assessment Order, relevant seized material and assessment records extensively. He submitted that the findings in the assessment order were considered and the assessment orders (of the Society and Shri K T Mahi) were part of the Paper books submitted before the Hon'ble Tribunal during hearing of the appeals in the 12AA matter and were consider .....

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could not be assessed in the hands of the assessee. He pointed out that the order of the Hon'ble Tribunal in ITA No. 564/H/12 is binding on the Hon'ble Tribunal in this matter because the earlier order is based on the very same facts and records and the Tribunal has given categorical findings which are required to be considered in the present case. For this proposition, he relied on the following case laws: 1. Marubeni Corporation (liaison Office) vs JCIT 83 ITD 577 Precedent-Binding nat .....

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7) 110 ITR 453 (Mad), Union of India VS. Kaumudini Narayan Dalal (2001)168 CTR (SC) 3: (2001) 249 ITR 219 (SC), CIT VS. AL. Ramanathan (2000) 159 CTR (Mad) 255: (2000) 245 ITR 494 (Mad) and Union of India & Ors. VS. Kamalakshay Finance Corpn. Ltd. AIR 1992 SC 711 followed 2. CIT vs Travancore Titanium Products Ltd 265 ITR 526 (Kerala) 3. S Shanmugavel Nadar vs State of Tamil Nadu 263 ITR 658 (SC) 4. CIT vs Sterling Foods 237 ITR 579 (SC) 5. CIT vs B R Constructions 202 ITR 222 (FB) 6. AP Bid .....

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ITD 577 (Delhi) 15. MTNL vs Adl. CIT 8 SOT 376 (Delhi) 16. Venkateshwara Farms P Ltd vs DCIT 84 ITD 212 (Pune) 17. Deccan Cements Ltd vs DCIT 76 TIJ 691 (Hyderabad) ITA 1983/HYD/1996 6.4 The ld. AR submitted that the Commissioner (Appeals) ought to have followed the findings of the Hon'ble Tribunal. According to him, having ignored the findings without any new material or facts, she has exceeded her powers, vitiating her order. It was therefore prayed that the order of the ClT(A) confirming .....

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judicial system and the decision of the higher judicial authority deserves not only respect but also unequivocal compliance and adherence by lower judicial authorities- Order of the Tribunal is binding on the AO and the first appellate authority-Action of CIT(A) in not following the Tribunal's order given in assessee's own case in earlier years, and that too without distinguishing the facts and terming it as running counter to the law, was an outrageous and contemptuous act which deserve .....

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that all the authorities below Tribunal must accept as binding Judgment of the Tribunal. The CIT (A), therefore, should not have committed any judicial impropriety in refusing to follow the order of the Tribunal. Even if she had some reservations about the correctness of the decision of the Tribunal, she should have followed that order. - Bank of Baroda vs. H.C. Srivastava (2002) 175 CTR (Bam) 663: (2002) 256 ITR 385 (BOM) and Aggarwal Warehousing & Leasing Ltd. vs. CIT (2002) 177 CTR (MP) .....

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hus, decision of a Bench of the Tribunal, even in the case of the same assessee in a particular assessment year does not constitute a binding precedent on subsequent co- ordinate Bench of the Tribunal in relation to another assessee or another assessment year of the same assessee - However, a subsequent Bench can draw different conclusion if there is adequate justification to depart from the earlier view, e.g., where subsequently new or more facts or material or evidence come to light-However/if .....

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foresaid findings given by us are nothing to do with the allowability of exemption u/s 11 of the Act. In case any discrepancy or irregularity with regard to the allowability of exemption u/s 11 is noticed by the AO, he can make an independent enquiry/examination at the time of assessment for each assessment year and decide in accordance with law." He submitted that the CIT(A) took cover under these observations to completely ignore the categorical findings of the Hon'ble Tribunal given .....

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hout any new evidence or material. 6.6 Ld. AR submitted that even for the years where no incriminating evidence was discovered during the search, the AO has made additions by estimations, extrapolating figures from other years. It is submitted that if the original amounts are not assessable in the hands of the assessee, the question of extrapolations would not arise. No estimation would, therefore, be permissible. 6.7 Ld. AR submitted that in the case of the Society, by the date of search, asses .....

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ruka and Ahura Holdings etc.) He submitted that in view of this, for assessment year up to 2008-09, no assessment can be made based on estimation without any incriminating evidence being found. 6.8 Ld. AR further submitted that abated cases which are open for assessment are required to be assessed like any other normal assessment. As per settled law, these assessments should be based on relevant material which is justifiable. Whereas in the present case, the AO has made additions based on materi .....

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that "Held that in the absence of evidence or material indicating any suppression about collection of fees towards management quota seats for the academic years 2003-04 to 2007-08 having been found during search, and there being no admission from the assessee, the Assessing Officer was not justified in estimating the same on the materials seized relating to academic years 2008-09 and 2009-10 indicating suppression about collection of fees for management seats, in assuming suppressed/unaccou .....

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the case of CIT v Anil Kumar Bhatyia, 211 Taxman 453 Delhi and approved the order of the Special Bench in All Cargo. 6.9 The ld. AR submitted that even in the eventuality it is held that estimation of income was permissible, the assessment order cannot be sustained for the following reasons: • The AO has not done any investigation into why there is no evidence in some years and ignored the possibility that there was no capitation fee collected for those years. • Basis of computation by .....

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Society, ITAT Hyderabad, ITA No. which relied upon Mahatma Gandhi Seva Mandai, ITAT Mumbai, 21 Taxman.com 321 ITA No. 4138/Mum/2011. Mahatma Gandhi Seva Mandai, ITAT Mumbai, 21 Taxman.com 321 ITA No. 4138/Mum/2011 7. The Learned Departmental Representative besides relying on the orders of the revenue authorities, relied upon the following decisions in support of contention supporting the orders of the authorities below: 1. ITA No. 430/Hyd/08 in case of M/s Vodithala Educational Society, order d .....

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nt to survey and based on the records found by the revenue, no doubt that the evidence found, establishes that additional fees was collected by the people involved in the management of the education in the college. Now, the question that arises is, who actually collected the additional/capitation fees. On perusal of the decision of the coordinate bench of this Tribunal on the very same set of facts, it clearly spelt out that the additional fees was collected by Mr. K.T. Mahi without clear author .....

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e same amount cannot be brought to tax in the hands of two persons. From this, it is evident that the Assessing Officer is not able to come to any conclusion as the person to whom, this income belongs. The substantive additions in the hands of both the assessees are not sustainable. Shri K.T. Mahi has offered the income in his hands and therefore the revenue had no option but to accept the returned income by Shri K.T. Mahi. Since, the revenue has accepted the income offered by Shri K.T. Mahi in .....

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d should be assessed only in the hands of Mr. Mahi and the same should be deleted to be assessed in the hands of society. 9. With regard to quantification of unaccounted receipts by the Assessing Officer, the Assessing Officer had quantified the same at ₹ 16.62 crores instead of ₹ 16.50 crores as accepted by Mr. Mahi. The calculation is based on the investment made by Mr. Mahi in his individual name as well as in his own companies and the material seized during search. As the Assessi .....

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st year. Assessing Officer had estimated for other earlier years by giving discount of ₹ 50,000 per year as below: AY Estimate No. of students Amount 1. 2004-05 1,00,000 78 78,00,000 2. 2005-06 1,50,000 77 115,50,000 3. 2006-07 2,00,000 - 4. 2007-08 250,000 45 287,50,000 5. 2008-09 3,00,000 130 390,00,000 From the above calculation, it is clearly established that Assessing Officer had presumed that the society or Mr. Mahi had collected the above said amount but could not provide any cogent .....

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e had accepted in the sworn deposition anything more than ₹ 16.50 crores. On the other hand, the decision of M/s Bawarchi can be applied when the situation arises for estimation. Not in the present case. Moreover, as per the records submitted by assessee, the assessments of the society were completed up to AY 2008-09, no proceedings were pending on the date of assessment. Based on the decision of the Tribunal in the case of Pratap Jadeja Vs. ACIT (supra), Assessing Officer cannot disturb t .....

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than what was available during the search and seizure operation for making an assessment of the undisclosed income of the assessee. As pointed out by the Ld. Counsel for the assessee in this regard, the said decision of Hon'ble jurisdictional High Court in the case of Gopallal Bhadruka (supra) has already been considered by the Coordinate Bench of this Tribunal in the case of ACIT vs. Srinivasa Rao (ITA.No.1767 & 1768/Hyd/2011 dated 08.11.2013) and the same has been found to be distingui .....

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hapatra 320 ITR 403 (All) and Hon'ble Supreme Court decision in the case of Commissioner of Sales Tax vs. H.M. Esufali H.M. Abdulali 90 ITR 271 (SC) that undisclosed income cannot be estimated for the assessment year in question on the basis of seized material relating to some other assessment years. 10. The Coordinate Bench of this Tribunal in the case of Mr. B. Srinivas (supra) thus followed the proposition laid down by the Special Bench of this ITAT in the case of All Cargo Global Logisti .....

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f the Act will get free hand through abatement and will frame the assessment afresh. It was held that where proceedings have reached finality, the assessment under section 153A read with 143(3) however has to be made as was originally made/assessed and further addition should be restricted only to the extent they are supported/justified by any material found during the course of search." 11. In view of the above judicial precedents, we are of the view that the Assessing Officer cannot estim .....

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