TMI Blog2022 (4) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Hon'ble Supreme Court in the case of Pullangode Rubber Produce Company Ltd. vs. State of Kerala Another [ 1971 (9) TMI 64 - SUPREME COURT] An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclusive, shifts the onus on the maker on the principle that what a party himself admits to be true may reasonably be presumed to be so and until the presumption was rebutted the fact admitted must be taken to be established [Thiru John v. Returning Officer [ 1977 (4) TMI 173 - SUPREME COURT] ]. In the light of this above legal position, the statement voluntarily made by the assessee could form the basis of assessment. As retraction statements can be said to be self-serving and no credence can be given and the retraction statements looses significance and an afterthought. Therefore, the statement recorded u/s. 132(4) cannot be discarded merely because the retractment statements were filed. The statements u/s. 132(4) are true and correct and brings out the correct picture as at that time the maker of the statement is uninfluenced by external agencies and it is the statements are recorded in the presence of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no credence can be given. It is settled position of law that the amount of capitation fees received over and above the prescribed under the provisions of the Maharashtra Educational Institution (Prohibition of Capitation Fees) Act, 1987 is not eligible for exemption u/s. 11 as the practice of collection of capitation fees is contrary to the law laid down by the Hon'ble Apex Court in the case of Islamic Academy Of Education And Another vs. State Of Karnataka And Others,[ 2003 (8) TMI 469 - SUPREME COURT] and also against public policy and the contrary to the provisions Maharashtra Educational Institution (Prohibition of Capitation Fees) Act, 1987. Thus, the appellant is not eligible for exemption of income of capitation fees received outside books of accounts u/s. 11 and the Assessing Officer had rightly brought to tax. Accordingly, the ground appeal no. 1 to 7 stands dismissed. Denying the exemption u/s. 11 of the entire income for violation of provisions of section 13(1)(c) on receipt of the capitation fees - Hon'ble Supreme Court in the case of Director of Income-tax vs. Bharat Diamond Bourse [ 2002 (12) TMI 8 - SUPREME COURT] wherein, the Hon'ble Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Member (A) And S.S. Viswanethra Ravi, Member (J) For the Appellant : Chetan A. Karia and Suhas P. Bora For the Respondents : Abhinay Kumbhar ORDER Per Bench These are the cross appeals filed by the assessee society as well as by the Revenue directed against the common orders of ld. Commissioner of Income Tax (Appeals)- 12, Pune ['CIT(A)' for short] dated 26.04.2017 for the assessment years 2008-09 to 2014-15 respectively. 2. Since the identical facts and issues are involved in all above captioned cross appeals, therefore, we proceed to dispose of the same by this common order. 3. The brief factual background of the case is that the appellant society is a Trust, namely, M/s. Sinhagad Technical Education Society established under the Bombay Public Trust Act, 1950. It was founded in the year 1993 with the objects of imparting the education. The appellant society is also registered u/s. 12A of the Income Tax Act, 1961 ('the Act'). It is running several Colleges i.e. it has got 12 Campuses and 97 Institutions in the State of Maharashtra. 4. A search and seizure operations were conducted under the provisions of section 132 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 0 0 0 6 Office of Sinhgad Technical Education Society (STES) at Erandwane Plot no 15, Survey no 19, Erandwane, Smt Khilare Marg, Off Karve Road, Erandwane, Pune 0 0 0 0 4+1=5 (2) (2) 7 Premises at NDA Road, Plot No.101/15, NDA Road, Warje, Pune 0 0 526362 0 0 8 Academic Section of Administrative office of Sinhgad Dental College and Hospital SDCH, STE Society Campus, S.No.44/1, Vadgaon (Bk), Off Sinhgad Road, Pune 0 0 0 0 70 5. For the sake of clarity and convenience, the facts relevant to the appeal in IT(SS)A No. 50/PUN/2017 for the assessment year 2014-15 are stated herein. 6. Based on the impugned documents, the AO had come to the conclusion that the appellant society had undisclosed income. Accordingly, a notice u/s. 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings made by Shri. Sharad D. Bhosale ii. Notings made on Chits of paper/letters a. Notings made by Shri. Arvind V. Deshpande b. Notings made by Shri. Maruti N Navale iii. Envelopes found in cabin of Shri. Sharad Bhosale containing cash and corresponding notings on reverse of forms/enclosures iv. Refund of Donations/Capitation Fees upon cancellation of admission under Management Quota a. Letters/communications/notings regarding refund of Capitation fees/donations to students against cancellation of admission under Management Quota b. Cash Receipt Vouchers from students acknowledging refund of capitation fees in cash v. Rate-lists about Donation rates a. Rate- list for admissions to PG Seats found at the residence of Shri. Arvind Deshpande b. Rate- list for admissions to PG Dental Seats found at the Main Office of STES at Erandvane vi. Collection-Utilization details: Pages seized from the residence of Shri. Sharad Bhosale vii. Recommendation letters urging waiver/concessions in donations for seats under Management Quota viii. Instances of Fees paid for one course ADJUSTED against capitation fees/donation for another cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fees was that after the finalization of the capitation fees and discussion with the students or their parents of the students by Shri Arvind Deshpande, the students were directed to meet one Shri Sharad Bhosale for the purpose of depositing the capitation fees and on receipt of the capitation fees, Shri Sharad Bhosale noted down the date of receipt, amount of receipt, capitation fees/donations etc. The sum and substance of the case set up by the Assessing Officer is that the notings made in the application forms, when confronted with makers of the statement, namely, Shri Arvind Deshpande, Shri Sharda Bhosale and Dr. Janardan Garde u/s. 132(4). According to the Assessing Officer, the above said three persons had decoded the figures and data found in the notings/chits and also confirmed that Shri Arvind Deshpande and Dr. Janardan Garde were approached by the students and their parents for admission under the management quota in various course of the institutions run by the appellant society. Both Shri Arvind Deshpande and Dr. Janardan Garde also finalized with the students and their parents regarding the amount of capitation fees after negotiations. On finalization of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es so received arrived at ₹ 5223.85 lakhs as set out by the Assessing Officer at page no. 16 of the assessment order. Out of which, an amount of ₹ 2266,25,000/- was received during the previous year relevant to the assessment year 2014-15. It is pertinent to note that the amount of capitation fees so arrived at is not based on the extrapolation of evidence. 11. According to the Assessing Officer, the notings on the chits also revealed that the above said three persons were acting on the instructions of the President of appellant society i.e. Shri Maruti N. Navale. The scanned images of relevant notings were reproduced at page no. 21, 23 and 24 of the assessment order. 12. During the course of search and seizure operations, the Investigation Wing of the Department found in the cabin of the Principal of SKN College of Engineering, Vadgaon, Pune certain loose papers containing recommendation letters from the eminent persons or very important person requesting Shri Maruti N. Navale, President of the appellant society to grant the admission to the recommended student under the management quota by either reducing the donation amount or by waiving off the donation amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons are extracted by the Assessing Officer at page no. 45 and 46 of the assessment order. During the course of assessment proceedings, the AO had confronted to the appellant society with the above evidences, the appellant society vide its letter dated 06.10.2015 had stated that names of the authorized persons for admission process had been published advertisement in newspapers and all the above three persons were not among the authorized persons for admission process. The appellant society also submitted that the statements recorded u/s. 132(4) from Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde were retracted by filing the affidavits on 16.04.2014 after gap of 7 months. However, the Assessing Officer said that the retraction statements cannot be given credence by holding that the retractions statements are afterthought and retractions statements were given after gap of 7 months. The Assessing Officer also issued letters to the students/parents of the students, who were allegedly to have been paid the capitation fees for admission under the management quota in the colleges of the appellant society. One of them, Ms. Mrinalini Patankar, ex-student of Sinhagad C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Navale for personal enrichment on the ground that the findings/conclusions reached by the Assessing Officer in the form of statement recorded u/s. 131 of the Act from the students and their parents was neither placed on the record of the assessment nor furnished to the appellant society. (ii) The statement recorded from one of the student, namely. Ms. Mrinalini Patankar and her father Shri Sudhir Patankar, who had confirmed the payment of capitation fees, was not allowed to cross-examine of them. (iii) The Assessing Officer had reached the conclusion that the appellant society had been indulging in collection of capitation fees without examining the Principals, Directors, Dean, who are authorized to grant the admission. It is further contended that the Assessing Officer ought not to have returned the findings that the entire amount, which was found during the course of search and seizure operations, was collected as capitation fees or donations for admission of the students under the management quota and the same was siphoned off by the President of the appellant society, namely, Shri Maruti N. Navale for personal enrichment. (iv) The appellant society challenged th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 13(1)(c) be taxed at the normal rate of tax, the Revenue is in appeal in ITA No. 1654/PUN/2017 for the assessment year 2014-15. IT(SS)A No. 50/PUN/2017, A.Y. 2014-15 - By Assessee: 19. Now, we shall take up the assessee's appeal in IT(SS)A No. 50/PUN/2017 for the assessment year 2014-15. 20. It is contended before us that the ld. CIT(A) ought not to have sustained the findings of the Assessing Officer that the appellant had been indulging in collection of the capitation fees in the absence of cogent material, concrete evidence, much less of corroborative evidence, especially in the light of fact that there was no complaint of acceptance of capitation fees under the provisions of the Maharashtra Educational Institution (Prohibition of Capitation Fees) Act, 1987. It is further contended that the statements recorded u/s. 132(4) by the Investigation Wing of the Department from Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde have no evidentiary value in the light of the fact that the said statements were retracted by an affidavit filed on 21.04.2014 before the Assessing Officer. It was also mentioned that the statements u/s. 132(4) were given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant society is that the Assessing Officer had gathered evidence from the students/parents of the students by recording the statements u/s. 131 of the Act and notices u/s. 133(6) of the Act. These statements were never produced to the appellant society whereas only in respect of one ex-students, namely, Ms. Mrinalini Patankar, the statement which is adverse to the assessee were furnished to the assessee which is against the appellant society, it shows that the Assessing Officer has indulged in cherry picky of the evidence, which is not permissible in law. Finally, it is submitted that during the course of search proceedings, the President of the appellant society, Shri Maruti N. Navale had categorically denied that the appellant society had been collecting the capitation fees or donations for admission of the students under the management quota. It is also contended that the Assessing Officer had chosen to make the addition on account of capitation fees without granting any opportunity to the appellant society to rebut the evidence gathered by the Assessing Officer. The ld. Counsel assailed the finding of the Assessing Officer as well as the ld. CIT(A) that the capitation fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectors to ensure that education is imparted in the most effective manner. His direct supervision over all these Principals/Directors results into vouching their working and desired result, c. Working diligently in obtaining approvals from the educational and government authorities for conducting the various courses, d. Representing for fixing the reasonable tuition fees by the Fee Fixation Committee appointed by the government, e. Entering into agreements wherever needed, f. Pursuing the legal matters before the education tribunals including High Court, Supreme Court etc. as and when needed. g. To invite tenders for construction of the various buildings making estimation of cost to be laid out, h. Negotiating and arranging the bank loans and signing the documents including documents for mortgaging the immovable properties as security for the loans obtained or to be obtained, and signing the loan documents, ensuring to the adherence of repayment of loans as scheduled etc, i. Deciding purchases of lands, properties etc needed for the appellant and many other incidental jobs, j. Visiting other educational institutions, social bodies, etc and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he evidence brought on record by the Assessing Officer is the form of the loose sheets found as result of search and seizure action, which are confronted to the persons from whose custody such documents/papers were found. II. During the course of search operations, when the loos sheets were confronted with the concerned persons, they confirmed on oath u/s. 132(4) of the Act and also decoded the contents found on the loose sheets/chits. They have also admitted to have made the notings. The statements recorded u/s. 132(4) from these people like, Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde clearly establishes the factum of the collection of the capitation fees by the appellant society. III. The Assessing Officer also brought corroborative evidence in the form of recommendation letters urging concession of donations/capitation fees, statement recorded from the admission agent, statement recorded from the parents of the students and SMS messages exchange between the admission agent and Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde. IV. The statement recorded from the students and the parents of the students u/s. 131 and u/s. 133(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses. The ld. CIT-DR contends that when no credence was given to the retraction statement then the evidentiary value of the statement recorded u/s. 132(4) remain intact. VIII. Placing reliance on the provisions of section 132(4) of the Act submits that the loose documents/sheets found in the premises of the appellant society belongs to the appellant society and the statements recorded from the persons in whose custody the documents are found clearly confirmed that the notings were made in the loose sheets in the handwriting of the said three persons placing reliance on the decision of the Hon'ble Madras High Court M. Vivek vs. DCIT, 121 taxmann.com 366 (Madras) wherein, the Hon'ble High Court held that loose sheets picked up during search and seizure operations u/s. 132 also falls within the definition of documents and it has got evidentiary value. IX. Rebutting the argument of the ld. AR that the loose sheets are simple dumb, ld. CIT-DR submits that the notings on the loose sheets were clearly in handwriting and with signature of persons involved in admission process, namely, Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde. During the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms/notepad etc. Page 10 of bundle no. 1 found from the society office clearly speaks of offering the concession of 10% on the donation of ₹ 12 lakhs for the BDS seat. Another page from the same bundle speaks of 50% concession in capitation fee. There are numerous instances wherein Sh. M.N. Navale has instructed Sh. Bhosale with remark such as collect fees only and ''fees only . The very remark is self explanatory suggesting that Sh. Bhosale is supposed to collect something other than fees unless instructed otherwise. It is nobody's guess as to what that 'something' must be except for capitation fee/donation. v) Dr. Janardan Garde in his statement u/s. 132(4) of the IT act in response to question no. 6 has categorically stated that the criteria for accepting capitation fee for MQ/IQ seats is by and large set by our President founder secretary, Sh. M.N. Navale from year to year and he in his capacity as professor and Head, merely communicates the said criteria i.e. the quantum of donation/capitation fees to be submitted by the students for MQ seats. Interestingly, in his response to question no. 7, Sh. Garade gives name-wise list of students and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maruti N. Navale, it cannot be said that the object of the appellant society is charitable and, therefore, the Assessing Officer rightly denied the exemption u/s. 11 of the Act. XV. As regards to the rent free accommodation u/s. 13(2)(b) of the act, the ld. CIT-DR submitted that once there is a violation u/s. 13(1)(c) r.w.s. 13(2)(b), the benefit of section 11 should be taken away. XVI. As regard to the salary paid to Shri U.Y. Pawar, ld. CIT-DR submitted that the action of recovery was initiated only after search action and the ld. CIT(A) rightly confirmed the addition. XVII. As regards to the prior period expenses, ld. CIT-DR submitted that ld. CIT(A) rightly confirmed the disallowed as the appellant society had not furnished anything before the Assessing Officer as well as the ld. CIT(A) to justify the claim. 22. We heard the rival submissions and perused the material on record. The ground no. 1 to 7 challenges the correctness of findings of the lower authorities in holding that the appellant society had been indulged in collecting the capitation fees from the students for their admission in various courses under the management quota in the institutions run by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees received from students at the time of admission into the courses under the management quota. He also decoded the figures appearing in the loose sheets to mean that the figure of 3 is ₹ 3,00,000/- to be collected from the students. Likewise, the said persons explained the contents of all the balance 10 chits and the scanned images of loose sheets also reproduced at page no. 8 of the assessment order. Similarly, in the statement recorded from Shri Sharad Bhosale u/s. 132(4), he confirmed in answer to query no. 46 that he had received the amounts as per instruction of Shri Arvind Deshpande from the students. He also confirmed that the figures finding place in the notings represents in Rupees 'Lacs', no receipts were issued as per direction of Shri Arvind Deshpande. The statement recorded are extracted by the Assessing Officer in the assessment order and the scanned images of the loose sheets are also reproduced in the assessment order vide page no. 8 and 9. The statement was recorded from Dr. Janardan Garde u/s. 132(4) on 06.08.2013, he had confirmed in reply to question no. 10 that the students approached him for admission under the management quota for admission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... people like Shri Arvind Deshpande, Shri Sharad Bhosale and Dr. Janardan Garde filed at page no. 139 to 288 of the Paper Book. The notings in loose papers are explained by said three people in the statements recorded u/s. 132(4), these three people have confirmed that they had collected the capitation fees from the students in cash at the time of admission in various courses under the management quota. The amount of capitation fees was decided either by Shri Arvind Deshpande or by Dr. Janardan Garde under over all framework given by the Founder and President of the appellant society, namely, Shri Maruti N. Navale. The said three persons have categorically stated in answers to question recorded at the time of statements recorded u/s. 132(4) that the students approaches them for admission into various courses under the management quota and they negotiate with the students or their parents of the capitation fees and the students were directed to meet Shri Sharad Bhosale to deposit the capitation fees against which no receipt was issued. Even that Shri Sharad Bhosale also categorically stated in the statement recorded u/s. 132(4) that as per instructions of Shri Arvind Deshpade, the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umb documents cannot be accepted in view of the provisions of section 292C of the Act and the legal position as enunciated by the Hon'ble Madras High Court in the case (supra). From reading of the above para of the judgement in the case of M. Vivek (supra), it would be clear that the decision of the Hon'ble Supreme Court in the case of V.C. Shukla reported in 1998 3 SCC 410 have no application in the case of proceedings under Income Tax Act. Thus, the reliance placed by the ld. Counsel on the decision of the Hon'ble Supreme Court in the V.C. Shukla (supra) does not come to the rescue of the appellant herein. 26. It is settled position of law that the admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect as held by the Hon'ble Supreme Court in the case of Pullangode Rubber Produce Company Ltd. vs. State of Kerala Another, 91 ITR 0018 (SC). In other words, an admission is the best evidence that an opposing party rely upon and though not conclusive, is a decisive of matter, unless successfully withdrawn of proved erroneous. An admission, if c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emendous pressure as well as torture at the time of the statement were recorded. These retraction statements were made after a gap of 7 months. No evidence of coercion, compulsion and pressure was led on record. Thus, it is nothing, but a bald statement. Further, the said three persons are employees of the appellant society working under direct supervision, control, direction of the Founder and President of the appellant society, namely, Shri Maruti N. Navale. In view of these facts, the retraction statements can be said to be self-serving and no credence can be given and the retraction statements looses significance and an afterthought. Therefore, the statement recorded u/s. 132(4) cannot be discarded merely because the retractment statements were filed. The statements u/s. 132(4) are true and correct and brings out the correct picture as at that time the maker of the statement is uninfluenced by external agencies and it is the statements are recorded in the presence of the independent witnesses. Therefore, in our considered opinion, the so-called retraction statements are simple a self-serving statements without any material and cannot override the statements recorded u/s. 132(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96. We may observe that retraction should be made as soon as possible and immediately after such a statement has been recorded, either by filing a complaint to the higher officials or otherwise brought to the notice of the higher officials, either by way of a duly sworn affidavit or statements supported by convincing evidence through which an assessee could demonstrate that the statements initially recorded were under pressure/coercion and factually incorrect. In our view, retraction after a sufficient long gap or point of time, as in the instant case, loses its significance and is an afterthought. Once statements have been recorded on oath, duly signed, it has a great evidentiary value and it is normally presumed that whatever stated at the time of recording of statements under Section 132(4), are true and correct and brings out the correct picture, as by that time the assessee is uninfluenced by external agencies. Thus, whenever an assessee pleads that the statements have been obtained forcefully/by coercion/undue influence without material/contrary to the material, then it should be supported by strong evidence which we have observed hereinbefore. Once a statement is recorded un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcion, had also to consider genuineness of documents produced before him. The Punjab and Haryana High Court in Commissioner of Income-Tax Vs. Lekh Raj Dhunna, taking note of the fact that the assessee had made a statement under Section 132(4) of the IT Act whereby a surrender of ₹ 2 lakh was made and further that the assessee had admitted that he had earned commission from a party, which was not disclosed in the return filed by him and certain documents were seized which bore the signature of the assessee, held in para 16 of the report as under:- 16. Thus, in view of sub-sections (4) and (4A) of Section 132 of the Act, the Assessing Officer was justified in drawing presumption against the assessee and had made addition of ₹ 9 lakhs in his income under Section 68 of the Act. The onus was upon the assessee to have produced cogent material to rebut the aforesaid presumption which he had failed to displace. The assessee retracted from the said statement, vide letters dated November 24, 1998, and March 11, 1999, during the course of assessment proceedings. However, no value could be attached thereto in the present case. In case the statement which was made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey persuaded the assessee to state details of undisclosed income, which the assessee disclosed in his sworn statement, on being confronted with the title deeds seized in search. 9. Section 132 of the Income tax Act deals with search and seizure and sub-Section (4) of Section 132 empowers the authorised officer during the course of the search and seizure to examine on oath any person who is found to be in possession or control of any books of account, documents, money or valuable articles or things etc. and record a statement made by such person which can be used in evidence in any proceedings under the Income Tax Act. The explanation appended to Clause (4) also makes it clear that such examination can be in respect of any matters relevant for the purpose of any investigation and need not be confined to matters pertaining to the material found as a result of the search. A plain reading of Section 132(4) would clearly show that what was intended by empowering an officer conducting the search to take a statement on oath was to record evidence as contemplated in any adjudication especially since Section 131 confers on all officers empowered therein with the same powers as vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) wherein also the assessee retracted from his statement initially given under Section 132(4) of the Act on 10.10.2014 followed by confirmation statement under Section 131 on 04.12.2014 and made the following observations: Reverting back to the present case, the ITAT, on the basis of such statement of Shri Bannalal Jat, concluded that he was managing his business affairs of both his proprietary concern as well as appellant-company from his residence and that in the absence of individual cash-book of respective concerns and other details maintained by him, it is not possible to identify whether the cash so found belongs to the proprietary concern or to the assessee company. Subsequently, when the statement under Section 132(4) of the IT Act was recorded on 10.10.2014, which was concluded at his residence, Shri Bannalal Jat categorically admitted that the cash amount of ₹ 1,21,43,210/- belonged to his company M/s. Bannalal Jat Construction Private Limited and the same was its undisclosed income. Thereafter another statement under Section 132(4) of the IT Act was recorded at his business premises on 11.10.2014. In reply to question No. 8, he was asked to explain the sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. DCIT, 441 ITR 495 after referring to the judgements of the Hon'ble Supreme Court in the case of Pullangode Rubber Produce Co. Ltd. Vs. State of Kerala, 91 ITR 18 and Bannalal Jat Constructions Pvt. Ltd. Vs. CIT, 413 ITR 322, the legal position in relation to the statement u/s. 132(4) of the Act was set out as under: a. An admission is an extremely important piece of evidence though it is not conclusive. b. A statement made voluntarily by the appellant could form the basis of assessment. c. The mere fact that the appellant retracted the statement could not make the statement unacceptable. d. The burden lay on the appellant to show that the admission made by him in the statement earlier at the time of survey was wrong. Such retraction, however, should be supported by a strong evidence stating that the earlier statement was recorded under duress and coercion, and this has to have certain definite evidence to come to the conclusion 11/15 that indicating that there was an element of compulsion for appellant to make such statement. e. However, a bald assertion to this effect at much belated stage cannot be accepted. Applying the aforesaid legal propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. It is settled position of law that the amount of capitation fees received over and above the prescribed under the provisions of the Maharashtra Educational Institution (Prohibition of Capitation Fees) Act, 1987 is not eligible for exemption u/s. 11 as the practice of collection of capitation fees is contrary to the law laid down by the Hon'ble Apex Court in the case of Islamic Academy Of Education And Another vs. State Of Karnataka And Others, 6 SCC 697 (2003) and also against public policy and the contrary to the provisions Maharashtra Educational Institution (Prohibition of Capitation Fees) Act, 1987. Thus, the appellant is not eligible for exemption of income of capitation fees received outside books of accounts u/s. 11 and the Assessing Officer had rightly brought to tax. Accordingly, the ground appeal no. 1 to 7 stands dismissed. 33. Now, we shall deal with the ground of appeal no. 9 challenging the findings of the lower authorities denying the exemption u/s. 11 of the entire income for violation of provisions of section 13(1)(c) on receipt of the capitation fees. In the foregoing paragraphs, we held that the appellant society had been indulging in the practice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 13(1)(c) of the Act. It is unnecessary to deal with this ground of appeal for the reasons that in the foregoing paragraphs, we held that the appellant's income is not eligible for exemption u/s. 11 of the Act for the breach of trust committed by the management by diverting the income of the appellant society to their personal enrichment. Thus, we uphold the denial of exemption u/s. 11 of the Act. This ground of appeal 8 becomes academic. 35. The ground of appeal no. 10 challenges the disallowance of prior period expenses. The Assessing Officer disallowed as sum of ₹ 2,27,35,426/- by holding that the expenditure is pertaining to the prior period. No evidence is filed before us demonstrating that the liability for this expenditure was crystallized for the previous year relevant to the assessment year under consideration when the income of the appellant society has been assessed to tax. The action of the Assessing Officer on this issue is totally justified. Hence, we do not find any merit in the ground of appeal no. 10 and the same stands dismissed. 36. In the result, the appeal of the assessee in IT(SS)A No. 50/PUN/2017 for the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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