TMI Blog2013 (5) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... h is duly supported by an affidavit stating reasons for this delay in filing of the appeal. We find the stated reasons to be genuine and sufficient enough to condone the delay. Therefore, we condone this delay and admit the appeal at its original number. This appeal arises out of the assessment order passed under section 143(3) read with section 153A and 153B of the IT Act, 1961 (hereinafter referred to as the Act, for short) for assessment year 2007-08 dt. 31-12-2010 passed by the Dy. CIT, Central Circle, Bikaner. 2.1 Briefly stated, the facts of the case are that Shri Anil Kumar Tantia is engaged in the business of purchase and sale of jewellery. A search and seizure operation under section 132 of the Act and simultaneous survey under section 133A of the Act, were conducted by the IT Department at many of the business premises of this group on 27-2-2009. During these operations, numerous incriminating evidence in the form of documents, loose papers, cash, etc. were found and inventorised and some of them were seized/impounded. The assessee resides in the town of Sriganganagar and falls under that jurisdiction. However, the jurisdiction over the cases of this entire group has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohit Tania (Son) Pankaj Tania (Son) Raaghav Tania (Son) The premises covered under search under section 132(1) of the Act are as under: (1) Tantia General Hospital/Sriganganagar CAT Scan Heart Centre (P) Ltd., Main Road, Sukhadia Nagar, Sriganganagar (2) Residence of Shri J.R. Tantia Dr. Shyam Sunder Tantia, Main Road, Sukhadia Nagar, Sriganganagar (3) Residence of Shri Anil Kumar Tantia, 3-D, Jawahar Nagar, Sriganganagar (4) Tantia Jewellers, 23B, Sadar Bazar, Sriganganagar. 2.3 A survey action under section 133A was carried out in the business premises of the Tantia Higher Education Institution Campus and J.R. Tantia Charitable Trust, Hanumangarh Road near RICCO Bus Stand, Sriganganagar. During these operations, cash and jewellery were found and seized. 2.4 It was found that Shri Anil Tantia has been doing jewellery business in the name and style of M/s. Tantia Jewellers, Sriganganagar but was not disclosing the actual income and has been suppressing purchases/sales and was booking bogus expenses and was even making payments/expenses out of books. As per the assessing officer, the above modus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seized from residential premises S. No. Income head Undisclosed income Seized documents Financial year Asst. yr 1 Unaccounted Purchases 4,64,137 Exhibit-1 pp. 1 to 3 2008-09 2009-10 2. Unaccounted Sales 4,59,878 Exhibit -1 pp. 4 to 8 26 2008-09 2009-10 3. Unaccounted Sales 3,96,355 Exhibit -2 pp. 42 43 2008-09 2009-10 4. Unaccounted expenses 50,000 Exhibit -3 pp. 27 to 30 2008-09 2009-10 5. Unaccounted Sales 19,837 Exhibit -4 pp. 53 54 2008-09 2009-10 2.5 From the return filed in response to notice under section 153A of the Act, the assessing officer noticed that the assessee has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required and the learned CIT (Departmental Representative) also agreed that this is purely a legal issue, we admit and allow this ground. 2.9 The first ground is general in nature in all the three years. The second and third ground are in respect of jurisdiction acquired by the, assessing officer. The assessee challenged the order of the CIT under section 127 of the IT Act and the notice issued under section 153A by the assessing officer. Reliance was placed by the assessee towards the following cases: (1) Appropriate Authority v. Jagdish Electrician India (P.) Ltd. (2003) 264 ITR 468 (SC); (2) CIT v. General Contracts Co. (2012) 254 CTR (SC) 223 : (2012) 79 DTR (SC) 97 : (2012) 210 Taxman 277 (SC); (3) Ajantha Industries Ors. v. CBDT Ors. (1976) 102 ITR 281 (SC); (4) Noorul Islam Educational Trust v. CIT: (2011) 241 CTR (Mad) 136; (5) Rajasthan Mining Engineering (P.) Ltd. Ors. v. CIT Ors. (1997) 142 CTR (Raj) 329 : (2000) 244 ITR 727 (Raj); (6) Sagarmal Spinning Weaving Mills Ltd. v. CBDT Ors. (1972) 83 ITR 130 (MP); (7) Anil Kumar Kothari v. Union of India Ors. (2010) 232 CTR (Gau) 104 : (2010) 39 DTR (Gau) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other assessing officer or AOs (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the assessing officer or AOs from whom the case is transferred. From the very plain reading of this section, it becomes amply clear that the learned CIT, apart from DG and Chief CIT has got power to transfer cases from one assessing officer to another assessing officer, with or without concurrent jurisdiction, who are subordinate to him. This section talks about giving the assessee a reasonable opportunity of being heard in the matter of transfer of jurisdiction. But this is not an absolute right of the assessee in all the cases. It is mentioned in the section that opportunity of being heard is subject to possibility of doing so in a given case. It is obvious that for transferring jurisdiction the CIT is required to record reasons which he has done in this case and the reasons recorded vide order dt. 7-7-2009 passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 153A for assessment year 2003-04 to 2008-09 and in the return submitted for the assessment year 2009-10 you have changed the valuation of closing stock of gold and silver at weighted average method and as a result you have claimed heavy business losses . The assessee submitted reply in respect of justification of change of method of valuation, part of the reply was also reproduced in the assessment order and the detailed reply submitted by the assessee is at pp. 90 to 107 of paper book. The arguments of the assessee are rather same as taken before the assessing officer. The assessee placed his reliance on the argument taken before the Commissioner (Appeals) as well as to assessing authority, which is on the ground that change of method of valuation is permissible in the Act itself, the claim can be made in the revised return, there was bona fide reason for change of valuation of closing stock. Besides, this also submitted the justification of method of valuation of closing stock as weighted average in place of market rate. The Authorised Representative also argued that real income has to be taxed and notional income cannot be taxed. It was argued that this change of meth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt) in Indo-Commercial Bank Ltd. v. CIT (1962) 44 ITR 22 (Mad). Therefore, we are of the considered view that the method of valuation of closing stock can be changed. What we find in case of the appellant is that the assessee is a dealer of precious metals like gold and silver, market rate of gold and silver fluctuates rather in hours. If the market rate is taken in that case it will tantamount to taxing of a notional income. Further, the benefit of closing stock has to be given in the next year as opening stock. Hence, we are of the considered opinion that the method of valuation can be changed if reasonable cause or ground exists there. Now the question, which has to be decided is that which method is to be adopted for the valuation of closing stock. There is amendment in the IT Act by introducing provisions of section 145A of the IT Act. The valuation as per the IT Act in the light of judicial pronouncements in force at the time has been dealt with. Therefore, any of the methods for valuation of stock can be as provided under AS-2. The Hon'ble Supreme Court in the case of Chainrup Sampatram v. CIT (1953) 24 ITR 481 (SC) and the Hon'ble Madras High Court in case of Indo- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied it will not be against the spirit of justice because if the wrong method of valuation of closing stock has been taken it can be corrected by replacing the correct method of valuation. The judgment of Hon'ble Supreme Court is a law of land as per Art. 141 of Constitution of India. Therefore, by respectfully following the judgment of Hon'ble of Supreme Court in the case of Chainrup Sampatram (supra) we are of the considered view that the method of valuation changed by the assessee is permissible in the eyes of the law and the same is in accordance with the law as has been the pronouncement by the Supreme Court of India. Therefore, the ground No. 4 and 5 taken by the assessee in the assessment year 2007-08, 2008-09 and 2009-10 are accepted and allowed. 3. The ground No. 6 is common in the assessment year 2007-08 and 2008-09, being the interest payment of ₹ 6,81,333 for the assessment year 2007-08 and ₹ 6,44,000 in the assessment year 2008-09. In course of search one document was seized by the Department a copy of which is enclosed at page No. 51 of the paper book. On this paper investment of ₹ 60 lakhs in total is revealed. The amount of ₹ 60 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs made by the assessing officer under section 68 is otherwise also not sustainable. This cannot be added under section 68 because the paper so found cannot be called as books of accounts. Therefore, the ground No. 6 taken by the assessee in the assessment year 2007-08 and 2008-09 is allowed. 4. The ground Nos. 7 and 8 taken in assessment year 2007-08 and 2008-09 and ground Nos. 6 and 7 in the assessment year 2009-10 are common and are in respect of the books of accounts prepared from the seized documents. A search was conducted at the business premises of the assessee and certain loose papers were impounded by the Department in course of search. On demand of the assessee the documents were supplied to the assessee. The evidence in respect of providing the copy is at page Nos. 156 and 157 of the paper book. The assessee after receiving the photostat copies compiled them in the shape of books of accounts by naming cash book, ledger. The copies of cash book and ledger so prepared were also produced before the Bench in course of hearing and is also in the paper book at page No. 502 for the assessment year 2007-08 and in the other years also the same type of books were prepared and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten submission how the defect were not correct. Therefore, requested to accept the cash book prepared from the seized document. 4.3 We have gone through the assessment records, order of the CIT(A) as well as the written submission. First of all, we have to look into the definition of books of accounts as per section 2(12A) of the Act introduced w.e.f. 1st June, 2001. It means ledger, day book, cash books and other books which are kept in the written form or as printout of data stored in floppy disc etc. In the common parlance the definition of books of accounts is the place where all the final information relating to a person or business are collected. The legal meaning as per Oxford Advanced Learner Dictionary, the books of accounts means the written records of final affairs of a firm. The loose paper seized and compiled by the assessee is definitely a books of accounts. Therefore, it cannot be said that the compilation of business affairs prepared from the seized documents is not books of accounts, although not maintained in regular course of business. 5. Now next issue is whether the books of accounts can be rejected or not? The assessing officer rejected the books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of books of accounts is illegal and against the law. The Department themselves have not accepted them as books whether then these can be rejected or not, we are of the view that the same cannot be rejected. The Authorised Representative relied upon the order of this Hon'ble Bench in case of Hari Prasad Dayma dt. 30-11-2012 Furthermore, the assessee has submitted an affidavit in support of maintenance of books from the seized papers. The Department failed to cross-examine the deponent. Therefore following the order of this Bench reported in case of Dr. Prakash Rathi v. ITO: (2006) 104 TTJ (Jp) 504 : 36 Tax World 1(Jp) the order was passed by this Bench following the judgment of Hon'ble Supreme Court in case of Mehta Pareekh Co. v. CIT (1956) 30 ITR 181 (SC). Therefore, we are of the opinion that books of accounts cannot be rejected which is prepared from the seized papers. 6. The next ground is No. 9 of 2007-08 and ground No. 10 of 2008-09 and 2009-10 regarding expenses of section 69C. The assessing officer while deciding the case of the assessee made addition under section 69C. The observation of the assessing officer is at p. 15 that why the provision of section 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the shape of judgment, which was not made known to him even their specific request. We therefore, feel that this is against the principle of natural justice. Therefore, the ground No. 10 taken in assessment year 2007-08, 2008-09 and 2009-10 are accepted. 8. Ground No. 12 in assessment year 2007-08 and ground No. 13 in assessment year 2008-09 and 2009-10 are regarding charging of interest under section 234A of the Act. The ground is in respect of charging of interest under section 234A. The provision of section 234A is in respect of charging of interest if there is a delay in furnishing the return of income. The section 139 provides for limitation in respect of furnishing the return of income. The burden is on the assessee so as to submit the return within stipulated time. If the circumstances are beyond the control in that case he can explain the reason for delay in submission of return of income and avail remedies as provided in the Act. In the present case the assessee is before the Hon'ble Bench and question is whether there was any reasonable cause which prevented the assessee from furnishing the return within stipulated time. In case of the assessee search has been co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash so found during the course of search totally remained unexplained. 9.2 Before us, both the parties have reiterated their stands. We have considered the submission and also paper book. The availability of cash of ₹ 54,61,207 is verifiable and rest of the amount of ₹ 8,07,952 being the cash available in the books of the account appearing from the seized material is also available. We have accepted the cash book therefore, the addition on account of the cash is restricted to the extent of ₹ 11,198. Therefore, this ground is partly allowed. 9.3 The assessing officer made addition of ₹ 1,03,500 in the assessment year 2009-10. The assessing officer made addition on the ground that the assessee offered for taxation in the statement recorded by the search authority. Therefore, only on this ground the additions were made. The learned Commissioner (Appeals) has sustained the addition as observed at p. 26 of the impugned order by stating that no specific separate explanation for the same has been filed by the appellant except the explanation that these entries are covered in the cash book. As the cash book has already been considered to be unreliable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 2,222 for-the assessment year 2008-09 and ₹ 4,004 for 2009-10. In this way he has sustained an addition of ₹ 35,21,128 and deleted addition of ₹ 70,61,979. 10.1 The learned Authorised Representative argued that the entire closing stock is verifiable. The assessee is having closing stock of ₹ 17260 gram at the time of search. The assessee purchased gold and silver on 1st April, 2006. Out of the amount surrendered in the assessment year 2007-08. The purchase of stock is reflected in the cash book prepared from seized documents. The position is as under: Total found at the time of search 17260.800 gms As per books of accounts regular and prepared from seized documents 17071.000 gms Difference 189 gms It was submitted by the learned Authorised Representative that the assessee submitted a copy of cash book ledger so prepared from the books of accounts from the page No. 153 of paper book of assessment year 2007-08, that the assessee has prepared one chart in respect of the closing stock as on 31-3-2009 and the difference co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o accepted deeply in respect of change of method. The depreciation is a statuary deduction and same is allowable. Therefore, the ground is disposed of accordingly. 12. In the result the appeals of the assessee in ITA Nos. 176, 177 and 178/Jd/2012 are allowed and those of the Revenue in ITA Nos. 166 and 167/Jd/2012 are dismissed. J.R. Tantia Charitable Trust 13. These are five appeals of the assessee trust for assessment year 2005-06 to 2009-10 and two appeals by Revenue for assessment year 2008-09 and 2009-10. 13.1 On 27-2-2009 a search and seizure action under section 132 of the Act was carried out at residential/business premises of Tantia Group. A survey under section 133A of the Act was also conducted at some of the business premises of this group. Family Pedigree: Shri Jagdish Rai Tania Smt. Shakuntla Devi (wife) Shri Shyam Sunder Tania (Son) Shri Anil Tania (son) Smt. Sunita Wife Smt. Sarita (wife) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s hence the income pertaining to other assessee is assessed in his hands on protective basis and the same is to be assessed in the hands of assessee to whom actually pertain on substantive basis. Thus following income is to be assessed in the hands of following assessees on substantive basis: Income as per Annex A-65 which actually pertain to Dr. Mahesh Maheshwari 27,01,697 Income on account of unaccounted receipts of salary which actually pertain to Tania Charitable Trust 2,63,499 Income on account of unaccounted receipts / income / expenses / a payments as per Annex, which actually pertain to Tania Charitable trust 7,2,88,820 (as per Annex A, Exhibit 28, 52, 72, 73 and Income on account of unaccounted receipts/income/expenses/payments As per Annexures which actually pertain to Sriganganagar EEG, Centre (as per Annex. A, Exhibit 4, 5, 34, 36, 38, 39, 45 and 69) 4,25,326 Total 3,67,9342 In view of the above the income of ₹ 36,79,342 which is included in the total undisclosed income of ₹ 67,25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessing officer fails to follow the direction of the Hon'ble jurisdictional High Court as well as the judgment of the Supreme Court referred before him. (3) That the Commissioner (Appeals) should have accepted the grounds that no search was conducted which is established from the entire record of the assessing authority. (4) That the initiation of proceedings under section 153A of the IT Act by the Asstt. CIT and confirmed by the Commissioner (Appeals) is illegal and against the law. Because no search whatsoever were conducted, as proved from the record, therefore, the action is illegal. (5) That the allegation of assessing officer in respect of (sic--non) fulfilment of provision of sections 11 and 12 of the IT Act is without any basis, factually not correct and based on irrelevant ground as well as without any specific notice. The Commissioner (Appeals) should have accepted that the trust is carrying on charitable activities. (6) That the observation made by the assessing officer and sustained by the Commissioner (Appeals) for making the irrelevant observation is not justified and against the fact in respect of activities of trust and should have been expun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carefully perused the entire record available before us. Ground Nos. 1 to 4 pertain to acquisition of jurisdiction by Asstt. CIT, Central Circle, Bikaner. The facts apropos this ground are that as per assessing officer the trusts old office was covered under the search operation and new office was only surveyed under section 133A. As per assessee the premises which is referred to as the new one, is the only business premise of the assessee-trust and it was only surveyed and, therefore, assumption of jurisdiction by assessing officer under section 153A of the Act is not valid and lis illegal. Hence, order passed by the assessing officer under section 153A/143(3) is ab initio void and cannot be sustained in the eyes of the law. The learned Authorised Representative has vehemently argued in this regard and with reference to various evidence available on record he has tried to prove that the premises of the trust were never searched and no incriminating evidence was found against the assessee. On the other hand learned CIT (Departmental Representative) has heavily relied on the orders of the authorities below to contend that the old office premises of the assessee-trust and the residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Ojha, advocate and Authorised Representative of the trust. (2) A certificate stating that all the photostat copies had been obtained was also placed on record. (3) The assessing officer has given a categorical finding in this letter, made part of the assessment order that on perusal of the various warrants of search issued under section 132(1) in respect of the various premises belonging to the persons/entities of the group and trustees of the group it was found that the name of the Trust was mentioned in all these search warrants. Therefore, the assessing officer proceeded to finalize the order in the proceedings initiated under section 153A. 14.3 The Authorised Representative of the appellant attended and filed the following submissions:. At the outset, it may be pointed out that assessee was never provided the photocopy of the search warrant. He was only provided the photocopies of four Panchnamas as mentioned on p. 6 of the assessment order. In none of these Panchnamas, the name of the assessee trust is mentioned against the row warrant in the case of. Only in the Panchnama prepared at the residence, the name of the assessee trust is mentioned after the addres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st was running twelve institutes. Given the fact that a proper address was never mentioned anywhere by the trust and the fact that the search warrant was issued in the name of the trust under section 132(1) along with the names of the trustees it cannot be said that there was no valid search warrant in the name of the Trust just because a specific address of all its premises was not mentioned in the search warrant and survey proceedings under section 133A were carried out at one of the premises of the trust. Survey proceedings under section 133A at one of the premises of the appellant would not vitiate or nullify the warrant under section 132(1) issued in the name of the appellant trust. Therefore, it is held that the warrant under section 132(1) was issued in the name of the trust and there is no infirmity in the proceedings initiated under section 153A and the first ground of appeal is rejected. 15. After cogitating the above rival stands, we are convinced that neither the Revenue could prove with certitude that the premises of this trust were searched and during that search any incriminating evidence were found to initiate action under section 153A of the Act. Nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of sections 11 and 12 of the Act. The assessing officer has discussed this issue, in detail, at pp. 23 to 28 of his order. The gist of assessing officers observations are as under: The assessing officer observed in his order that on perusal of the objects under clause 3(a) to (j) of the assessees trust deed dt. 24-10-1995 it was noticed that the assessee had several objectives in addition to educational purpose and the Trust did not exist solely for educational purpose. It was observed that there was scope and inbuilt mechanism for diversion of the funds of the Trust for non-educational and commercial purpose was observed that on verification of the documents found and seized during the course of search proceedings, it was seen that the assessee trust had taken capitation fees and donations for admissions. It had claimed bogus expenditure and payments outside the books of accounts, it had taken back in cash salary shown to have been paid to its employees by cheque; manipulated its income/expenditure transactions for the profit of the trustees. He therefore, gave the finding that the assessee-trust was engaged in commercial activities and did not exist solely for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also admitted to financial irregularities in the affairs of the trust during the course of his statements taken during the course of search and subsequent to search. The trust is not a vague entity, independent of its trustees but it is constituted by its trustees who act on its behalf. Moreover, the learned Commissioner (Appeals), vide his order dt. 29th March, 2012 for assessment year blocked period 2007-08, 2008-09 and 2009-10 in the case of Shri S.S. Tantia has held that the unaccounted income, receipts, expenditure pertaining to the trust as per the incriminating documents seized during search procedure are to be substantively added in the hands of the trust. Finally, registration under section 12AA is a necessary condition but a sufficient condition for determining the correct income of a trust. The registration granted by the learned CIT Administration to a trust under section 12AA does not prevent the assessing officer from examining the true activities and determining the correct income of a trust. Given the evidence found and seized in the documents and admitted to by Shri S.S. Tantia, the executive trustee in his statements pertaining to the trust, I do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97) 59 TTJ (Mumbai) 372 is relevant. In this case it has been held that the assessment of a trust has to be completed under Chapter III and its sections 11 to 13 and not under the provisions of sections 28 to 44 of the Act. It is not the case of the Revenue that the assessee is not registered as a trust. The assessee-trust has been maintaining its regular books of account, vouchers, necessary documents, etc. in respect of its income and expenses. As a result, we allow this issue in the favour of the appellant/assessee. 17. The next issue, taken vide ground Nos. 7, 8 and 9 is in respect of addition made on the merits on substantial basis. The facts of this issue are that during the above mentioned search operation carried out in this group of cases on 27-2-2009, especially, conducted at the residence of Dr. S.S. Tantia and business premises of the firm and company, certain incriminating documents were found and seized. Dr. S.S. Tantia is a psychiatrist and runs a drug de-addiction centre in the city of Sriganganagar, in the Rajasthan State. He also looks after a hospital namely, Sriganganagar EEG Centre (popularly known as the Tantia General Hospital) This hospital is run by a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Authorised Representative Shri Ojha is that no such addition can be made in Trusts hands. Apart from legality, his case is that when Dr. S.S. Tantia has been found in possession of all the incriminating documents, and at the office of the Trust no search was conducted, still the surrender made by Dr. S.S. Tantia and accepted by the Revenue would lead to no-addition in the hands of the trust. 17.3 The learned Authorised Representative has reiterated the submission made before the learned Commissioner (Appeals) and also placed reliance on his written submissions. 17.4 Per contra, learned CIT (Departmental Representative) has relied on the order of the authorities below and reiterated the reasons given by them in this regard. 17.5 After considering rival submissions, we are of the considered opinion that no such addition can be made in the hands of assessee-trust, either on substantive or protective basis. The search was conducted except at the business premises of the assessee-trust. Only survey under section 133A was conducted in trusts case at its office (new office). When the trust shifted to the new office, the old office cannot be tagged or related to the trust any l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no defect much less any material defect(s) in the books of accounts, they cannot be rejected. 18. Charging of interest under sections 234A, 234B and 234C is mandatory. But when no addition is sustained, no interest can be charged, under the law. The decision taken in Anil Tantias case at p. 32.33 in para 8, will also apply as far as interest under section 234A is concerned. 19. Accordingly, we have found that on merits also no such addition can be made in the hands of the assessee-trust either on substantive basis or on protective basis. Therefore we order to delete the additions made on merits in all three years under consideration. All the above reasonings will apply to other appeals as well. Accordingly, the grounds being same and similar in other appeals of this assessee, we order to delete the additions made on the merits of the case. Other grounds are also decided in the similar way and manner. Therefore, all the appeals in assessee-trust, M/s. J.R. Tantia Charitable Trust for assessment year 2005-06 to 2009-10 filed by the assessee stand partly allowed and the appeals of the Revenue are dismissed. 19.1 Before parting, we may mention that the income surrendered by D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed Representative cannot create jurisdiction by giving consent unless both the CITs--transferor and transferee-give consent to that effect. The condition precedent is that both the CITs should have given their consent. The assessee had been assessed to tax at Jaipur and his assessment records were transferred to the Central Circle, Bikaner. Therefore, consent of CIT, Jaipur and CIT, Central Circle is essential. 21.4 On the other hand learned CIT-Departmental Representative has relied on the decision of the learned Commissioner (Appeals). After considering rival submissions, we cannot allow this ground in view of similar reasoning, which we have given in other appeals of this ground where similar arguments were raised. 22. Ground Nos. 3, 4 and 5--are in respect of sustaining the addition of ₹ 24,36,597. The learned Authorised Representative argued that the addition sustained in the hands of the assessee is illegal and against the law because Dr. S.S. Tantia has declared this amount in his return of income. He only surrendered this amount in his statement recorded under section 132(4), a copy of which is placed on paper book at page Nos. 95, 96, 97 and 98. It was argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot considering and following the decision of this Bench. It is evident that these were referred but not considered. Therefore, the addition cannot be sustained. We have already expressed similar view while deciding other appeals of this group. We, therefore, delete the impugned addition made by the assessing officer and sustained by the Commissioner (Appeals) and allow the assessees ground Nos. 3, 4, and 5 raised by the assessee in this regard. 23.1 We have found that the assessee-trust stands and continues to be registered under section 12AA of the Act. This is not only an undeniable fact but also an admitted fact. However, the assessing officer made unwarranted comments regarding validity of this registration which was duly granted by the learned CIT(Admn.), as per law, when the objects of the trust were found charitable and no adverse activity which violated the requisite normal conditions laid down in sections 11, 12 and 13 of the Act were either noticed or found to exist. We are in agreement with the learned Authorised Representative Shri Ojha that the assessing officer is not invested with such ajjgjKer and therefore, he has correctly drawn support from the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed strictly. But once ambiguity about the applicability is visited, full play should be given to the exemption clause and it calls for a wider and liberal construction keeping in view the purpose underlying. Exemption from tax granted by the statute should be given full scope and amplitude, and should not be whittled down by importing limitation not inserted by the legislature. Viewed in the backdrop of the aforesaid legal position section 10(22) clearly confers exemption on the income of an educational institution which is run for educational purposes and not for purposes of profit. The language of section 10(22) is plain and clear and the availability of the exemption would essentially depend upon the objects of the institution being promotion of education and not personal benefit of the organizers. In the instant case of the assessee-trust, admitted facts are that the trust running the school is registered as a public charitable trust under the Bombay Public Trusts Act, 1850, and is also registered as a society under the Societies Registration Act. The running of the school by the trust is thus subject to close monitoring and supervision of the Charity Commr. under the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any part of the income of the assessee-society was misutilised. For so saying, the appellate authority referred to the balance sheet. The appellate authority further noticed that the assessee-society is a registered society under the Rajasthan Societies Act and that it is also recognized by the CBSE; if there was any misutilisation or mismanagement, action could be taken against the members of the society, but, from the records and facts, it is not possible to say that any amount of funds of the society was not utilised for educational purposes. The Tribunal concurred with this finding of fact. The authorities also referred to a decision of the apex Court in the case of Aditanar Educational Institution v. Addl. CIT: (1997) 224 ITR 310 (SC), in which, it is held that an overall view is to be taken and without being hyper-technical in granting exemption under section 10(22) of the Act, which include the objects of the society. 23.5 Furthermore, in case of Vishwa Jagriti Mission (supra), the Hon'ble High Court of Delhi also dealt with the same type of situation the reproduction given in the submission is reproduced hereunder: Individual activity of a trustee or a member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the director in the company but has no official capacity except for overlooking its work because his wife is a partner in the firm. Statements of the assessee were recorded during search investigations and during post search. In his statements the assessee has surrendered the income relating to the trust, the firm, the company and the hospital. The income declared has been assessed as protective in the hands of the assessee and as substantive in the hands of the firm, company, trust and Dr. Mahesh Maheshwari. We have decided this aspect of the issues elsewhere in the composite order. The AO has assessed the surrendered income in Dr. S.S. Tantias hands on protective basis. All the other relevant facts of the issue have been already discussed in the body of this order. 27. Ground No. 1 in all the appeals of the assessee is general in nature. 28. Ground Nos. 2 and 3 of all the years are common which is in respect of jurisdiction acquired by the AO. We have decided the appeal of Shri Anil Tantia in whose hand this issue has been decided as such is applicable in the appellants hand also. 29. Ground No. 4 is also common in all the years in respect of rejection of books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decided in favour of the assessee. 30. Ground No. 6 in all the years are in respect of the protective addition. 30.1 The AO has added the credit side as well as debit side of the seized documents, in the income of the assessee and has made a protective addition whereas the assessee had submitted return of income on the basis of books so prepared from the seized document and has declared this amount as his income (on substantive basis). The assessee has not retracted his statement recorded during search and the surrendered amount has been included after claiming the benefit of allowable deductions and/or admissible set off. The AO has denied claimed benefit and has made impugned additions ignoring even the peak theory. The learned Commissioner (Appeals), while deciding the appeal has scaled down the addition by adopting the peak theory but has sustained the addition by treating it as protective only. The learned Authorised Representative in support of his contention has relied upon the orders of this Bench reported in: (1) 26 Tax World 289; (2) 28 Tax World 454; (3) Sagarmal Spinning Weaving Mills Ltd. v. CBDT (supra); (4) 22 Tax World 399 (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks cannot be rejected as the entire entries are supported by the relevant papers/documents. Revenue cannot be permitted to use a part of the statement which is suitable to it and reject the other which is detrimental to its interest. The surrender made is verifiable from the statement of Dr. Shyam Sunder Tantia. The statement has to be considered in its entirety and not in piecemeal. 30.5 The decision in the case of Chandra Mohan Mehta v. Asstt. CIT (1999) 65 TTJ (Pune) 327 supports our above opinion. We extract its held portion which reads as under: For example, the sum of ₹ 50 would mean ₹ 50,000, ₹ 30 would mean ₹ 30,000 and so on. It is on the basis of this statement that AO inferred that assessee was engaged in money lending activity. Therefore, the evidentiary value attached to the loose papers is only because of this statement. In these circumstances, we are of the considered view that this statement has to be considered and accepted as a whole if the AO wants to use it in evidence. The AO cannot be allowed to blow hot and cold simultaneously. 30.6 In another case of ITO. v. Ghanshyambhai R. Thakkar (1996) 56 TTJ (Ahd) 460 Tribunal Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from that the doer of an act should be held responsible and not the supervisory authority. 30.9 This Bench has decided the case of Dinesh Tobacco Industries on 22-3-2013 in ITA No. 186/Jd/2011 (supra). Though, the matter is in respect of the company wherein the search was conducted and papers related to the company were found and the director surrendered the income in his own hands the Hon'ble Bench accepted the income as belonging to the director and not the company, therefore, the case of Dinesh Tobacco Industries (supra) is applicable. The addition made in the hands of the assessee as protective should be taxed on substantive basis. The statement recorded also cannot be interpreted in different manner and has to be read as a whole after reading the entire statement independently without interpreting or deriving any meaning reflecting that the income was surrendered by the assessee as his income. The trust company or director cannot be penalized for the illegal act of the other person, may be a trustee because the trust was not aware about the illegal work and, innocent cannot be a culprit. The AO failed to establish that the act was that of the respective institution. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O as well as Commissioner (Appeals). The position of the jewellery found during the search is as under: Jewellery found during the search The Commissioner (Appeals) has accepted a part of the jewellery and as per the observation made at p. 25, he has decided as under: Thus gold jewellery diamond silver of value of ₹ 52,53,415 is to be taken as unexplained as against ₹ 74,97,300 added by the AO. The claim of the appellant is allowing credit of income offered in respect of transaction with Dr. is rejected. Since such income is assessed in the hands of appellant oh protective basis. However, out of the income assessed on the basis of loose papers, there is an availability of funds of ₹ 17,27,678 As per the chart furnished herein above, not giving the credit of this amount will be unjustified and same is directed to be allowed. Hence addition on account of unexplained jewellery is directed to be restricted at ₹ 35,25,737. Thus this ground is partly allowed. 33.2 It was also argued that the contents of the affidavit were not accepted and out of the weight of precious metal mentioned in the affidavit was not accepted but the Commissioner (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the directions of the appellant received, the same is still liable to be assessed in his hands. The argument of set off was also discarded. The assessee submitted the same ground before the bench. In the written submission at page 16 also reproduced the question and answer given by Dr. S.S. Tantia in which bifurcation of the amount is given. It was argued that the addition is illegal, the amount have already been surrendered in the books prepared from seized material. 35.2 It was alternatively argued that only ₹ 80,000 is relevant to the assessment year 2009-10 and rest of the amount of ₹ 2,00,000 belongs to the financial year 2006-07 and ₹ 2,17,015 belongs to the financial year 2007-08. Therefore, addition to the extent of ₹ 80,000 can be made. 35.3 The learned Departmental Representative has relied on the order of the AO and that of the learned Commissioner (Appeals). 35.4 We have considered arguments of both the sides. We have decided the matter in respect of protective and substantive. We have considered the matter in respect of acceptance of books of accounts. The assessee declared the same in the books of accounts. Therefore accepted this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings under section 147 read with section 148 were initiated on 31st Dec, 1010 after recording the reasons for escapement of income chargeable to tax. The assessee filed return on 29-3-2011 in response to notice under section 148. Assessment was completed vide order dt. 16-12-2011 at a total income of ₹ 52,92,680 as the AO made various additions amounting to ₹ 4,15,132, ₹ 5,00,000, ₹ 2,20,787, ₹ 2,65,051 and ₹ 35,61,130 on different counts. The assessee went in the appeal and the learned Commissioner (Appeals) has deleted additions and has also declared the action taken under section 147/148 as illegal. However, he has sustained the addition of ₹ 2,45,374 being the amount related to the surrender made by Shri S.S. Tantia allegedly treating it to be related to the assessee firm. The amount has been sustained by adopting peak theory as against ₹ 4,15,132. The assessee is further aggrieved. 38. Ground Nos. 1 and 5 of this appeal are general in nature and don't require any specific adjudication. 39. We have heard the rival submissions and have carefully perused the entire material on record. Both the parties ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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