TMI Blog2020 (5) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of accounts. As noticed that the Ld CIT(A) has agreed with the inferences drawn by the AO. The discussions made in the preceding paragraph would also show that the assessing officer has only drawn certain inferences on surmises and conjectures. Hence we are unable to sustain the view taken by Ld CIT(A) on this issue. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition made in AY 2009-10 towards suppression of fee on MBBS Management Quota. - Decided in favour of assessee. Addition towards suppression of fees under P.G admission - suppression of fee receipts of Post graduate seats - AO has made this addition on the basis of certain documents pertaining to the AY 2009-10 and 2014-15 - HELD THAT:- AO did not conduct any independent enquiry either with the students or their parents or with any other person related to those students in order to find out the truth. He also not brought any material on record to show that the explanations given by the assessee were not correct. Hence, we are of the view that the assessing officer should not have drawn presumptions without conducting proper enquiry. The assessee has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich were seized by the revenue, pertained to management quota seats. The revenue has seized letters issued to four students, out of which only two students have joined under COMED-K category. The assessee has furnished confirmation letters obtained from those two students confirming that they have paid only prescribed fees. We notice that the AO did not disprove the contents of the confirmation letters. In any case, those letters pertained to AY 2014-15 and not to the assessment year 2009-10, which is under consideration. AO has not conducted any enquiry with any of the students or their parents or any other person to support the inference drawn by him that the fees applicable to management quota seats were collected from the students admitted under cancelled seats of COMED-K category. The detailed discussions made by the Ld CIT(A) would show that the assessee has answered all the queries raised by the AO in this regard and none of the said explanations have been proved to be wrong by the assessing officer. No infirmity in the decision taken by Ld CIT(A) on this issue and accordingly confirm the deletion. - Decided against revenue. - (ITA Nos.2542-2548(B)/2017) (Assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the assessment years 2008-09 to 2013-14 were re-opened u/s 153A of the Act. The assessee filed returns of income for the above said years and also for AY 2014-15 claiming exemption u/s 11 of the Act. The assessing officer, however, completed the assessments rejecting the claim of exemption u/s 11 of the Act and also making additions towards suppression of fees. The claim of exemption u/s 11 was rejected, since the application filed by the assessee seeking registration u/s 12A of the Act had been rejected and the matter was in appeal proceedings. The appeals filed by the assessee before ld CIT(A) were partly allowed and hence both the parties are in appeal before us challenging the decision taken by Ld CIT(A) against each of them. 7. In AY 2009-10, the assessing officer made following additions relating to suppression of fees:- (a) Addition of ₹ 1.85 crores relating to fee charged for MBBS seats under Management/NRI quota (b) Addition of ₹ 5.22 crores relating to fee charged for MBBS seats under COMED-K cancellation seats. (c) Addition of ₹ 1.75 crores relating to fee charged for PG Courses. 8. The back-ground of these additions are discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected from the students for admission into MBBS management quota seats and the latter documents disclosed the actual amount accounted for. The assessing officer has scanned pages 84 to 86 in the assessment order for AY 2009-10 at pages 6 and 7. These documents disclosed the details of amount agreed to be paid by the students, amount received through Bank and amount received by way of cash. These documents contained one more column Remarks , wherein it was mentioned either as Agreement or No dues . The AO also called for the details of students admitted in the year relevant to AY 2009-10 and fees collected from them. He noticed that the name of students matched with the names mentioned in the seized documents. In respect of some of the students, the manner of collection of fees, the amount collected also matched. Hence, the assessing officer came to the conclusion that the contents of seized documents are true and represent actual facts. He further noticed that, in some cases, the cash portion of fee has not been accounted for. The AO also noticed that the search officials have seized certain documents titled as Visitors slips pertaining to the FY 2013-14. In these slips a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll and final. 13. The AO also referred to a diary maintained by the P.A of the Chairman named Mr.Manjunatha, wherein fees pertaining to admissions pertaining to the financial year 2013-14 was found noted. The said diary is marked as A-1/BRAMC/2 . The amounts mentioned in the diary did not match with the amount accounted for in the books of accounts. Accordingly, the AO concluded that the assessee-trust is not accounting for the amounts collected by way of cash. When these aspects were confronted with the assessee, it disowned the documents seized from the residence of the Chairman Shri P L Nanjundaswamy and also the diary maintained by Mr. Manjunatha. It was submitted that the Chairman has the authority to determine the fees for management quota and the amount received from the candidates as determined by the Chairman have been fully accounted for. It also stated that the action shall be taken if the chairman has collected money outside the books. The AO, however, expressed as under:- . the siphoning of funds does not mean that income has not accrued to the trust. If the trust finds any breach of trust by the Trustees, then it is for the trust to deal with the trustees as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r themselves, Sri P L Nanjundaswamy should have disproved what the apparent is not real. (f) The documents seized, the statement recorded and huge cash seized combined together gives rise to a reasonable belief that the admission fee charged is not fully accounted in the books of account. There is no transparency in the admission process. The assessee has failed to rebut the presumption. (g) The corroborative evidences, wherever possible, have been gathered. There cannot be conclusive proof in respect of such cases, as all the actions will be covered up and the evidences will be destroyed after the event. The circumstantial evidences gathered by the Investigation wing and the facts marshalled by the Assessing Officer are enough to draw a reasonable conclusion that there is suppression of receipts. 16. The assessee is aggrieved by the decision rendered by Ld CIT(A) on this issue. The Ld A.R submitted that the assessing officer has placed his reliance on the documents seized from the residence of the then Chairman Shri P L Nanjundaswamy. Those documents do not bear signature of anyone and they are dumb documents, which could not have relied upon by the AO. She submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endered by Ld CIT(A) on this issue. The Ld D.R submitted that the documents recovered during the course of search reveal that the assessee has been collecting money over and above that recorded in the books of accounts. The documents recovered from the residence of Chairman disclosed the actual collections made by the assessee for giving seats under Management quota for MBBS seats. The fact that the assessee is collecting amount outside the books is further corroborated by the visitors slips and diary maintained by the P.A to the Chairman. Hence the Ld CIT(A), on noticing that the AO has reached logical conclusion, has confirmed the addition made by the AO. 19. We heard rival contentions and perused the record. We notice that the very foundation for making this addition in AY 2009-10 is the document seized from the residence of the Chairman Shri P L Nanjundaswamy. The contention of the assessee is that it is not aware of existence of any such document and accordingly it has disowned the same. It was also contended that the said document is a dumb document. We notice that the said document was not made available to the assessee by the assessing officer, but its contents were mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year 2008-09 which was collected by you. Thus not only have you collected capitation fee but also appropriated the same for personal benefit. Please state whether you have accounted for it and where. Ans.: Amounts have been partly remitted into the bank. The AO has interpreted from the answer given that the entire amount collected by way of cash has not been accounted for. The assessee, while disputing the interpretation given by the AO, has given following explanations before Ld CIT(A):- Further, at para 14.17 of the assessment order, the AO relies on the sworn statement of Mr. P L Nanjundaswamy recorded under Section 131 of the Act where, to a question posed as to whether the amounts reflected in seized material A1/PLN/3 were accounted for, he states that the amount were partly remitted to the bank. The AO in the very next sentence concludes that the entire money which was received at the time of admission was not accounted for in the books of account of the Appellant. The Appellant submits that such a conclusion is wholly misplaced. The appellant submits that the AO has not taken note of the fact that Mr. P L Nanjundaswamy states that some amount has in fact be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No.2 in page no. 2 3: The accounted amount in the books of account is the final amount received at the end of the negotiations with the candidates opting for admission under our institution. Normally, the payments towards admission of the candidates are received in installments over a period of time. The agreed amount was finally brought down for various reasons. In the year 2008-09, our college was derecognized by the Medical Council of India (MCI), when the students became aware of it, they were apprehensive and some wanted to cancel the admission or reduction in the agreed amount. They were assured of getting the recognition issue solved, but unfortunately, we failed to get the recognition. Subsequently, they declined to make the balance of the agreed amount in view of the college de-recognition by MCI. There were also other reason like recommendations from important persons, inability on the part of the candidates to comply and to settle on the agreed amount decided in the initial part of the negotiation, and hence the amount of ₹ 3,53,08,650/- has been accounted. We notice that Shri P L Nanjundaswamy has clarified as to why there is difference in the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BBS courses is also without any basis since the cash seized had also been duly accounted for as stated in the paragraphs below. In any event, mere seizure of cash cannot lead to a conclusion that amounts over and above the accounted income was received by the Appellant. The assessee has clarified that the amounts mentioned in the visitors slips are only indicative figures and do not refer to actual amounts collected. During the course of arguments, the Ld A.R also pointed out that not all, but only some students whose name was found in the Visitors slips have taken admission. This fact would support the submission of the assessee that the Visitors slips are filled in at the time of enquiry and do not represent actual amount collected. 23. Another important point brought out by the assessee in the explanations submitted before Ld CIT(A) relate to the Cash seized during the course of search. In the assessment order, the AO has mentioned that substantial cash and jewellery was found and seized from the residence of trustees during the course of search. It is pertinent to note that the assessing officer has not made any addition towards unaccounted cash in any of the years. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een ₹ 5.47 crores and ₹ 3.88 crores. One of the observations of the AO was that the assessee has accounted for only those fee receipts, which have been received through banking channels. On the contrary, the assessee has shown that it has accounted for fees collected by way of cash also and the has not been proved to be incorrect. Hence, it supports the case of the assessee that it has received fees from students both by way of cash and also through banking channels. Further, fees received in cash have also been accounted for in the books of accounts. 25. The next important issue is the reliability of the documents seized from the residence of the Chairman, Shri P L Nanjundaswamy. The AO has fully relied upon those documents and accordingly concluded that the assessee has collected fees as mentioned in those documents. The AO has also taken support of certain Visitors slips and diary maintained by the P.A to the Chairman to vindicate that the assessee has been collecting fees over and above that accounted for in the books of accounts. The visitors slips and the diary maintained to P.A were related to the financial year relevant to AY 2014-15. It is not the case that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the back of the appellant have to be brought to its notice. The assessing officer has not used the confirmation letters to draw any adverse inference. Therefore, I do not see any force in the arguments of the appellant in this regard. As regards RTI application, providing of information or otherwise is a statutory act and the denial of information can be dealt with by the appellate authority under the Right to Information Act. The appellate authority under the Income tax Act, cannot deliberate or decide about the justification or otherwise of denial of information. I, therefor, decline to interfere in this respect. We notice that the assessee has contended that the presumption to be entertained in such kind of situation is that the students have only confirmed the payments which have been duly accounted for by the assessee, i.e., no adverse report was given by any of the students. We notice that the Ld CIT(A) has also accepted the above said contentions of the assessee. In the highlighted portion in the decision rendered by the Ld CIT(A), we notice that the first appellate authority has expressed the view that the question of parting with the information collected behind the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash seized, which have been held as irrelevant to the present issue, it cannot be held that for all the assessment years the assessee received capitation fee for admission of students in the management quota. This is a perverse inference. Without conducting any enquiry in this regard to make allegation is unsustainable. The information obtained from the Public Information Officer to a query raised under the Right to Information Act to the effect that There is no any complaint received from any student/parent regarding capitation fee charged by the above institutions so far also tilts the balance in favour of the assessee. It disproves the department's allegation of involuntary collection of amounts. That apart, the order passed under Section 264 of the Act for the assessment years 1998-1999 to 2001-2002 clearly states that the donation received from students or the parents is not compulsory in nature and, therefore, the same is not capitation fee. There is no material to controvert this fact which is to the knowledge of the department. No endeavour is made to sustain the allegation of involuntary donation. In any event, as rightly held by the Tribunal, it is not relevant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees under P.G admission. The facts relating to this issue are stated in brief. During the course of search, the revenue seized certain documents in the form of a Diary maintained by a person named Shri Manjunath, PA to Chairman of Trust. The said diary is numbered by the search officials as A-1/BRAMC/2 . In the diary, certain amounts were mentioned against PG seats. However, the actual amount accounted for did not match with the entries made in the diary. The entries made in the diary pertained to FY 2013-14 relevant to AY 2014-15. The AO noticed that the amounts mentioned against the candidates named Dr. N.S. Rajitha, Dr. Mary Sowmya and Dr. Sunil Patil were ₹ 1.10 crores, ₹ 1.20 crores and ₹ 1.35 crores respectively. However, amounts accounted for in the books of accounts were found to be ₹ 60.04 lakhs, ₹ 58.91 lakhs and ₹ 65.00 lakhs respectively. The search team also found certain documents titled as Agreement , Endorsement pertaining to FY 2008-09 relating to AY 2009-10. In those documents also, certain amounts were noted as agreed amounts. The AO has noticed that the amounts mentioned amounts of ₹ 63.00 lakhs, ₹ 25.00 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial available for AY 2009-10 and AY 2014-15, which disclosed that the assessee is suppressing fee receipts. The assessee has also been suppressing fee collections made for giving admission under Management Quota seats of MBBS. The AO referred to the documents in the form of agreement etc., pertaining to three candidates, viz., Dr. Khoram Sunderjit, Dr. Taseer Basha and Dr. Premalatha pertaining to AY 2009-10 and observed that these documents show that the assessee has not accounted for entire fee receipts. The assessee has allotted seven seats under management quota during the year relevant to AY 2009-10. The suppressed fees in respect of these three candidates, cited above, worked out to ₹ 68.50 lakhs. With regard to remaining four seats, the AO estimated the suppression of fees at ₹ 107.45 lakhs by back working the fees that would have collected by the assessee. Accordingly, the assessing officer made an addition of ₹ 1,75,95,081/- towards suppression of fees in respect of PG seats allotted under management quota. 34. The Ld CIT(A) confirmed this addition on identical reasoning given by him while confirming the addition relating to suppression of fee for MBB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in the academic year 2013-14 and therefore in the absence of any evidence for the assessment year in question no addition can be made to the income of the Appellant. In any event, the AO ought to have examined the said Mr Manjunatha, to whom the diary belonged and ought to have given an opportunity to the Appellant to cross examine him. The other set of documents relied upon by the AO is the seized material annexed as DBRAMCH/A/1. The said documents are endorsements where the Medical College had stated that seats had been reserved in the names of the candidates mentioned therein subject to payment of the balance fees. Beyond this the endorsements do not state anything. The AO relied on certain hand written notings on the said endorsements to conclude in case of the three students whose endorsements had been seized, the amount received vis- -vis the accounted amounts was under: Sl.No. Name of the Candidate Course Received Amount Accounted Amount Unaccounted Amount 1. Dr. Khoiram Sunderjit MS OBG 63,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of extrapolation, estimation and imaginary events are unsustainable. . Moreover, the AO, without rejecting the books of accounts of the Appellant, ought not to have made additions to the income of the Appellant on the basis of extrapolations. He ought to have appreciated that the Chairman of the Appellant changes year on year and the seized material pertained to only those years during which Mr. P L Nanjundaswamy was the Chairman. Consequently, the assumption that there is undisclosed income for all six assessment years is unsustainable. 37. We notice that the ld CIT(A) has upheld the addition made by the AO by confirming the inferences drawn by the assessing officer from the seized materials. The question that arises is whether the said documents could be relied upon by the assessing officer? The assessee has admitted 7 students under management quota of P G seats. The above said documents were related to 3 students only. The AO has estimated the suppression of fees in respect of remaining four students. With regard to the three students also, the assessee has given explanations as to why the originally negotiated amounts could not be collected. It is pertinent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem, subject to the condition that the fee charged for these seats should be the same as determined as per the agreement entered between the State Government and the Association. 39. During the year relevant to AY 2009-10, 40 seats fell under the category of COMED-K. The AO noticed that the assessee has filled up one seat through the exam and the remaining 39 seats were filled up by the management, since they fell vacant. The AO took the view that the assessee would have charged the same fees as applicable to the Management quota seats. We noticed earlier, the AO has worked out average fee per seat at ₹ 28,69,375/-. Accordingly, he proposed to apply the above said rate to all the 39 seats and make addition for the difference. 40. Before the AO, the assessee submitted that it has collected fees as per the agreement entered by the association with the State Government for COMED-K seats. It further submitted that the college was denied recognition by the Medical Council of India during this year and hence the students did not prefer this college. However, the AO rejected the explanations of the assessee. He referred to certain documents pertaining to AY 2014-15, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment quota before the results of CET and COMED-K are announced as at that point of time, they may not be confident of securing seats on merit basis. As stated above, the admissions under the management category is as per the discretion of the management and the only requirement is that they should have obtained 50% of marks in the qualifying exam and an NRI sponsorship. In all other category seats, admissions are governed by the CET and COMED-K rules. The above four letters have been issued to the students as early as in June 2013 much before the admissions under the COMED-K quota had even begun. When they approached the management for seats, some of the seats had already been committed to other candidates. What above letters indicate is that on cancellation of seats reserved under the management category, seats would become available for the college to admit these candidates by charging management fees. This is because once the results in the CET and COMED-K are announced, some candidates who may have secured good ranking would not opt for the management seats but may instead secure seats in a different category. The letters do not indicate that the seats will be provided to these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any evidence that COMED-K seats were filled as per management quota fee during the assessment year 2009-10, is wholly arbitrary and therefore the application of ₹ 28,69,375/- as the fee for 39 unfilled seats and making addition of ₹ 5,22,04,425/- is without any basis. The AO also observes that the Appellant has not given any reason for candidates not reporting to the college for admission under COMED-K. The AO has clearly lost sight of the fact that seats did not filled under COMED-K category because the MCI had withdrawn the recognition granted to the college. 44. The Ld A.R also submitted before Ld CIT(A) that there is a monitoring agency/committee constituted by the Government to ensure implementation of fee structure consensually agreed between the Association and the Government. If the college indulge in over charging of fees, it may lead to complaints by candidates. It was also submitted that the assessee has submitted the list of candidates admitted under this category along with rank cards. The assessee also submitted that it has submitted confirmation letters obtained from the candidates. 45. The Ld CIT(A) has discussed about the contentions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les bills were not issued on all sales. Further, the revenue officials purchased certain gold ornaments in the pre-search enquiry and no bill was issued. Accordingly it was submitted that there were overwhelming evidences in the above said case. Accordingly, it was submitted that the above said case laws are not applicable to the facts of the present case. It was submitted that the AO did not gather any evidence to prove the receipt of unaccounted money. Further, no trustee has accepted that there was suppression of fees. On the contrary, the assessee placed its reliance on the following case laws:- (a) CIT vs. Balaji Educational and charitable public Trust (374 ITR 274) (b) CIT vs. B.Nagendra Baliga (363 ITR 410) (c) CIT vs. Standard Tea Processing Co Ltd (215 Taxman 659)(Guj). 47. The Ld CIT(A) was convinced with the contentions of the assessee and accordingly deleted the addition with the following observations:- 46. I have carefully considered the findings of the Assessing Officer and also carefully perused the submissions made by the appellant in writing and also his oral arguments. It is no doubt true that the COMED-K seats remain unfilled after two rounds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der. The consensual agreement cannot be wished away, as it is an agreement regulated by the Government of Karnataka, Medical Council of India and Rajiv Gandhi University of Health Sciences. The AO admitted that the appellant submitted rank cards in support of admission under COMED-K category, but failed to understand the binding nature of the Consensual Agreement on the management. If the management admitted the students under management category, submitting the rank cards does not arise. The assessing officer has not chosen to examine any of the candidates though the appellant had filed confirmation letters. Sri P L Nanjundaswamy is answerable to the papers seized from his residence. As far as appellant is concerned, it has made an attempt by corresponding with Sri P L Nanjundaswamy, who only stated that all the collections have been deposited into the Bank. My observation in the earlier part of this order about auditing of books by a qualified Chartered Accountant and non-rejection of book results, all go to support the case of the appellant. The claim of expenditure the disproportionate or inadequacy has not been doubted by the Assessing Officer. In short there is no materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. 50. We also notice that the AO has not conducted any enquiry with any of the students or their parents or any other person to support the inference drawn by him that the fees applicable to management quota seats were collected from the students admitted under cancelled seats of COMED-K category. The assessing officer has observed that the management of the college is creating vacancy under COMED-K seats through dubious ways and the ld CIT(A) has observed that the said observation is far fetched and is not supported by any material. The Ld CIT(A) has also observed that the lapse, if any, in the said procedure has to be dealt with by the concerned authorities. What the revenue should be concerned is whether the fees collected from the students have been duly accounted for or not. The detailed discussions made by the Ld CIT(A) would show that the assessee has answered all the queries raised by the AO in this regard and none of the said explanations have been proved to be wrong by the assessing officer. We also notice that the various case laws relied upon by the AO has been rightly distinguished before the Ld CIT(A). On the contrary, the decision rendered by Hon'ble Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of presumptions. You have not pointed out any incriminating material seized by you alluding about the unaccounted receipt. In the absence of any other incriminating material seized, there is no reason why the accounted receipts should not be accepted. We vehemently object to your proposal to make any addition on this count. This proposal is against the principle of natural justice. It is also pertinent to note that Sri P L Nanjundaswamy was not the Chairman of the Medical College for the assessment year 2008-09. Therefore, any material seized in the premises of Sri P L Nanjundaswamy, cannot be applied for this year. We also make it clear that Sri H S Mahadev Prasad was the Chairman of the Medical College at the relevant point of time, and he has not been interrogated at the time of search. No person has vouchsafed the receipt of monies over and above the amount accounted for. We have already filed confirmation letter obtained from the students regarding total amounts paid by them. Any proposal to make addition over and above the accounted receipts shall be illegal and contrary to the facts available on record. 54. The AO was, however, not convinced with the explanations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the post of Chairman in the years relevant to AY 2009-10 and 2014-15. 57. The above discussions would show that the revenue did not unearth any incriminating material pertaining to the years relevant to AY 2008-09, 2010-11 to 2013-14. We have noticed that the fees for management quota seats are determined on case to case basis. Hence, unless there is any concrete material to show that the assessee has collected any amount outside the books of accounts, in our view, it is not justified to presume that the assessee would have collected fees outside the books of accounts. In fact, the assessee has disproved the said presumption by furnishing confirmation letters obtained from the students. Under these set of facts, we are of the view that the assessing officer has made the addition in all these year under surmises and conjectures and hence Ld CIT(A) was not justified in confirming the addition relating to suppression of fees under Management quota MBBS seats. Accordingly, we set aside the order passed by Ld CIT(A) on this issue in all the above said years and direct the AO to delete the addition in all the above said years. 58. The next addition contested by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealt with an identical issue in AY 2009-10 in the earlier paragraphs. We have noticed that the assessing officer has placed reliance on certain letters issued by the assessee to some students stating that their request shall be considered on availability of cancellation seats. In those letters, it was also mentioned that the fee shall be charged as applicable to management quota seats. The AO presumed that the assessee has collected fees applicable to Management quota seats from the students admitted under COMED-K cancelled seats. Accordingly he made the addition, computing the suppression of fees by adopting fee applicable to management quota seats. The Ld CIT(A) has deleted this addition in AY 2009-10. Following the same, he deleted identical additions made in these years also. 62. We have heard the parties on this issue and perused the record. For detailed reasons discussed in AY 2009-10, we have upheld the order of Ld CIT(A) on this issue in deleting the addition made by the assessing officer. We have noticed that the assessee has given proper explanation to show that presumption drawn by the AO in respect of those letters, which were pertaining to AY 2014-15, was not correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, only 4 of them took admission and 12 did not take admission. We are surprised to know how the above seized material become basis to arrive average per seat ₹ 7432322/-. In the absence of clear findings from the show cause notice, we are unable to submit our reply. The AO noticed that there was some confusion about the number of students who have taken admission out of the list collated from the diary. Sometimes, it is mentioned as 4, sometimes 5 and sometimes 6. The assessee had also replied as under in its reply dated 17.2.2016:- In respect of the note book annexed as A-1/BRAMC/2 alleged to have maintained by Sri Manjunath, PA to Sri P L Nanundaswamy and its contents are denied as false as the PA is not authorized to keep/maintain any book, as the same was done by the accounts department. As stated by Mr P L Nanjundaswamy that he had not inform his PA about the admissions or amounts collected or collectible from the students. Why Mr. Manjunath maintained the above book is not known. The alleged note book doesn t belong to the Trust. Without prejudice to the above, we submit that the notings in the alleged note book are false on the following grounds:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that only four candidates have taken admission from the list of 18 candidates mentioned in the diary and the fee collected from the said four persons was more than the amount mentioned in the diary. Hence the figures mentioned therein Might have been noted at enquiry stage. It was contended that the diary did not indicate anything to show that the amounts mentioned in the diary was received by the assessee at all. It was also submitted that the AO did not supply copy of statement taken from Manjunatha and also did not afford opportunity to cross examine him, even though it was specifically sought for. With regard to the documents seized from the residence of P L Nanjundaswamy and also visitors slip, the assessee reiterated that they were at enquiry stage before the Chairman and hence the figures mentioned therein are not final. Accordingly it was submitted that the fees accounted for by the assessee are actual fees received. Accordingly it was contended that the AO was not justified in estimating the fee collections by entertaining certain presumptions. 68. The Ld CIT(A) was not convinced with the contentions of the assessee. He confirmed the addition by making same obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve noticed in other years that the fees for management quota seats are determined on case to case basis. Hence, unless there is any concrete material to show that the assessee has collected any amount outside the books of accounts, in our view, it is not justified to presume that the assessee would have collected fees outside the books. In the instant year, the assessee has explained that the fees collected from four students was higher than that mentioned in the diary. Under these set of facts, we are of the view that the assessing officer has made the addition in all this year also under surmises and conjectures and hence Ld CIT(A) was not justified in confirming the addition relating to suppression of fees under Management quota MBBS seats. Accordingly, we set aside the order passed by Ld CIT(A) on this issue in this year and direct the AO to delete the addition. 71. The next addition contested by the assessee in AY 2014-15 relates to suppression of fees of PG seats. We have noticed earlier that the search officials unearthed a diary maintained by Mr. Manjunatha, P.A. to the Chairman Shri P L Nanjundaswamy. The said diary also contained noting relating to P.G admissions for 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has collected fees mentioned therein. The assessee also submitted that some of the PG courses were not recognized by Medical Council of India in this year and hence the students were admitted under Permitted category, in which case, the fees could not be fixed at higher level. The assessee also placed reliance on the explanation given by Shri P L Nanjundaswamy explaining that the actual fees collected were lesser than the negotiated amount due to absence of recognition. However, the Ld CIT(A) was not convinced with the contentions of the assessee and accordingly confirmed the addition. 74. While dealing with identical addition made in AY 2009-10, we have held that the said addition made on estimated basis is not sustainable for the detailed reasons discussed in the earlier paragraphs. We have noticed that the fees for management quota seats are determined on case to case basis. Hence, unless there is any concrete material to show that the assessee has collected any amount outside the books of accounts, in our view, it is not justified to presume that the assessee would have collected fees outside the books. The AO has entertained the presumption of suppression of fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For detailed reasons discussed in AY 2009-10, we have upheld the order of Ld CIT(A) on this issue in deleting the addition made by the assessing officer. We have noticed that the assessee has given proper explanation to show that the presumption drawn by the AO in respect of those letters, which were pertaining to AY 2014-15, was not correct on the facts and circumstances of the case. Further the assessee has also disproved the presumption by submitting confirmation letters obtained from students admitted under COMED-K category along with rank sheets of the Entrance examination conducted. We also noticed that the assessing officer did not make any enquiry from any of the students or parents or others to prove that the explanations and evidences furnished by the assessee were wrong. The facts and circumstances relating to this addition is identical in this year also. Accordingly, we do not find any reason to take a different view in this matter and accordingly confirm the order passed by Ld CIT(A) on this issue in this year also. 78. In the result, all the appeals of the assessee are allowed and all the appeals of the revenue are dismissed. Order pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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