Shri Ramchandra Dada Shinde, Pune V. Dy. CIT Cen Cir-2[2] Pune, Pune

ITA 246/PUN/2012

• Counselvise Citation: 24624514 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 06-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Documents seized
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S . 246, 247 & 248 / P N/ 20 12 ASSESSMENT YEAR S : 2004 - 05, 2005 - 06 & 2006 - 07 SHRI RAMCHANDRA DADA SHINDE, ASHIRWAD BHARATI NAGAR, PAUD ROAD, PUNE VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2(2), PUNE (APPELLANT) (RESPONDENT) PAN NO. ADFPS8569L APPELLANT BY: SHRI SUNIL PATHAK RESPONDENT BY: SHRI S.K. SINGH ORDER P ER R.S. PADVEKAR , JM : - THIS BATCH OF THREE APPEALS ARE FILED BY THE ASSESSEE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(A) - CENTRAL, PUNE DATED 31 - 10 - 2011 FOR THE A.YS. 2004 - 05, 2005 - 06 AND 2006 - 07. 2. WE FIRST TAKE THE ASSESE ES APPEAL FOR THE A.Y. 2004 - 05 BEING ITA NO. 246/PN/2012. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2 CRS. MADE ON PROTECTIVE BASIS WITHOUT APPRECIATING THAT THE SAID ADDITION WA S MADE ON PRESUMPTIONS AND SURMISES AND HENCE, THE SAME OUGHT TO HAVE BEEN DELETED. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ADDITION MADE WAS JUSTIFIED SINCE THE APPELLANT HIMSELF IN THE STATEMENT RECORDED IN THE COURSE OF SEARCH HAD ADMITTED THE RECE IPT OF THE AMOUNT AND HENCE, THE A.O. WAS JUSTIFIED IN MAKING THE ADDITION. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT A. THE ADDITION OF RS. 2 CRS. WAS MADE PURELY ON PRESUMPTIONS AND SURMISES AND HENCE, THE SAME OUGHT TO HAVE BEEN DELETED. B. THE ASSESSEE HAD NEVER ADMITTED RECEIPT OF RS. 2 CRS. IN THIS YEAR AND THEREFORE, THERE WAS NO REASON TO MAKE THE ADDITION. 2 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE C. THE ADDITION WAS MADE WITHOUT ANY CORROBORATIVE EVIDENCE THAT THE ASSESSEE HAD ACTUALLY RECEIVED RS. 2 CRS. IN THIS YEAR AND HENCE, SUCH AN ADDIT ION WAS NOT WARRANTED AT ALL. 4. THE LEARNED CIT(A) ERRED IN MISINTERPRETING THE STATEMENT OF THE ASSESSEE RECORDED U/S 132(4) WHILE CONFIRMING THE ADDITION OF RS. 2 CRS. AND ACCORDINGLY, THE SAID ADDITION MADE MAY KINDLY BE DELETED. 3 . IN SUM AND SUBSTANCE , THE ASSESSEE HAS CHALLENGED THE ADDITION MADE BY THE ASSESSING OFFICER TO EXTEND OF RS.2 CRORES ON THE P ROTECTIVE BASIS IN THE HAND S OF THE ASSESSEE. THE FACTS WHICH ARE REVEALED FROM THE RECORD ARE AS UNDER. THERE WAS A SEARCH AND SEIZURE OPERATION AG AINST THE ASSESSEE U/S. 132(1) OF THE INCOME - TAX ACT ON 20 - 07 - 2005. IN THE SEARCH AND SEIZURE OPERATION THE ASSESSEES CABIN IN THE BHARATI VIDYAPEETH , IN WHICH HE WAS WORKING AS ACCOUNTS OFFICER AND HIS RESIDENCE WAS COVERED. IN CONSEQUENCE OF THE SEARC H AND SEIZURE OPERATION , THE ASSESSEE WAS ISSUED NOTICES U/S. 153A OF THE ACT. THE ASSESSEE FILED THE RETURN OF INCOME FOR A.Y. 200 4 - 0 5 DECLARING TOTAL INCOME OF RS.1,98,420/ - . IN THE COURSE OF SEARCH AND SEIZURE OPERATION , CASH WAS FOUND IN THE ALMARI (C UPBORD) OF THE ASSESSEES CABIN IN BHARATI VIDYAPEETH WHICH WAS TO THE EXTENT OF RS.3,14,83,870/ - . M ANY INCRIMINATING DOCUMENTS /LOOSE PAPERS WERE ALSO SEIZED WHICH WERE IN RESPECT OF THE FORMS FILED BY THE CANDIDATES /STUDENT S SEEKING THE ADMISSION S IN THE DIFFERENT COURSES /INSTITUTIONS IN THE BHARATI VIDYAPEETH GROUP. 4 . SO FAR AS CASH SEIZED FROM THE ASSESSEES CABIN TO THE EXTENT OF RS.3,14,83,870/ - IS CONCERNED , THE ASSESSEE ADMITTED THAT THE SAID CASH IS BELONG ING TO HIM AND EARN ED FROM THE WORK OF CONSULTANCY FOR HELPING STUDENTS TO GET ADMISSIONS INTO DIFFERENT INSTITUTIONS / COURSES IN THE BHARATI VIDYAPEETH GROUP. IT WAS CLAIMED BY THE ASSESSEE THAT HE WAS DOING CONSULTANCY WORK OF ADMISSIONS AND HELPING THE STUDENTS TO GET THE ADMISSIONS IN THE B HARATI VIDYAPEETH GROUP OF THE COLLEGES AND INSTITUTIONS AND FOR THAT HE WAS CHARGING FEES . THE ASSESSEE ALSO AGREED 3 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE THAT HE WOULD DECLARE THE SAID MONEY AS HIS INCOME AND ALSO PA Y THE TAX. THE ASSESSEE , ACCORDINGLY , DECLARED THE SAID CASH IN THE TWO ASS ESSMENT YEARS I.E. A.YS. 2005 - 06 AND 2006 - 07 AS HIS UNDISCLOSED INCOME AND ALSO PAID TAX ON IT. 5 . SO FAR AS PRESENT ASSESSMENT IS CONCERNED THE ASSESSEE DID NOT DECLARE ANYTHING FROM HIS INCOME FROM ADMISSION CONSULT ANCY TO ASPIRANTS/ CANDIDATES TO GET THE ADMISSIONS IN THE BHARATI VIDYAPEETH GROUP. THE ASSESSING OFFICER HAS OBSERVED THAT SEVERAL INCRIMINATING DOCUMENTS WERE FOUND WITH THE ASSESSEE RELATING TO THE ADMISSIONS TO VARIOUS INSTITUTIONS/COLLE GES OF BHARATI VIDYAPEETH GROUP . ON THE BASIS OF THE NOTINGS FOUND ON THE SEIZED DOCUMENTS /LOOSE PAPERS TH E ASSESSING OFFICER WORKED OUT THE AMOUNT OF RS.9,37,21,850/ - AS UNDISCLOSED INCOME. THE ASSESSING OFFICER ALSO REFERRED TO THE ASSESSEES STATEMENT RECORDED U/S. 132(4) /131 OF THE INCOME - TAX ACT. AS NOTED BY THE ASSESSING OFFICER THE ASSESSEE WAS ASKED TO PRODUCE THE PAPERS/DOCUMENTS FOR THE EARLIER YEAR S . BUT THE ASSESSEE DENIED HAVING EARNED ANY INCOME IN A.Y. 2004 - 05 . THE ADDITION OF RS.2 CRORES HAS BEEN MADE IN THE HANDS OF THE ASSESSEE BY TH E ASSESSING OFFICER BY HOLDING THAT THE ASSESSEE HAS EARNED THE SAID AMOUNT IN A.Y. 2004 - 05 ON BASIS OF HIS STATEMENT THAT HE HAS DEPOSITED SAME AMOUNT IN THE ACCOUNT OF THE TRUST (BV) AND WHATEVER CASH WAS FOUND WITH HIM WAS EARNED IN 15 DAYS ONLY . THE ASSESSING OFFICER MADE THE ADDITION BY OBSERVING THAT SINCE THE TRUST ACCOUNTS ARE SUBJECT ED TO THE SPECIAL AUDIT AND THE ASSESSMENT OF THE TRUST I.E. BHARATI VIDYAPEETH ARE PENDING WITHOUT PREJUDICE TO THE ST AND TAKEN BY THE DEPARTMENT , T HE AMOUNT OF RS.2 CRORES IS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE ON THE PROTECTIVE BASIS AND THE SAID ADDITION HAS TO BE MADE ON SUBSTANTIVE BASIS IF THE SAME WOULD NOT HAVE BEEN MADE IN THE HANDS OF THE BHARATI VIDYAPEETH. THE ASSESSEE CHALLENGED THE ADDITION BEFO RE THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON 4 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE PROTECTIVE BASIS. THE OPERATIVE PART OF THE ORDER OF THE LD. CIT(A) IS AS UNDER: 3.4. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND GONE THROUGH THE FACTS O F THE CASE. IT MAY BE NOTED THAT SAME ADDITION WAS MADE BY THE LD. A.O. IN THE HANDS OF THE BHARATI VIDYAPEETH HOLDING THAT THE TRUST HAS COLLECTED THE CAPITATION FEES IN PAST. HE MADE THE SAME ADDITION SIMULTANEOUSLY IN THE HANDS OF THE APPELLANT, ON PR OTECTIVE BASIS. WHILE ADJUDICATING THE CASE OF BHARATI VIDYAPEETH, MY PREDECESSOR HAS GONE THROUGH THE FACTS OF THE CASE AND THE VARIOUS SUBMISSION MADE BY THE TRUST. AFTER TAKING INTO ACCOUNT THE SUBMISSION MADE IN THAT CASE, HE HAS HELD THAT THE BHARAT I VIDYAPEETH HAS BEEN COLLECTING THE CAPITATION FEES AND BASED ON THE STATEMENT OF SHRI SHINDE THAT HE WAS DOING THIS ACTIVITY SINCE 2 - 3 YEARS, THE A.O. HAS RIGHTLY MADE AN ADDITION OF RS.2 CRORES IN THE HANDS OF THE BHARATI VIDYAPEETH ( PARA 14.6 ON PAGE 113 OF THE APPELLATE ORDER IN CASE OF BHARATI VIDYAPEETH FOR AY 2004 - 05). MY PREDECESSOR HAS ACCORDINGLY SUSTAINED THE ADDITION ON THIS ACCOUNT IN THE HANDS OF BHARATI VIDYAPEETH ON SUBSTANTIVE BASIS. THEREFORE, FOR THE REASONS DISCUSSED IN THE ASSESSMENT ORDER AND IN VIEW OF THE STATEMENT OF THE APPELLANT ON 21/07/2005 TO THE EFFECT THAT HE HAD BEEN DOING THE BUSINESS OF CONSULTANCY FOR THE LAST TWO/THREE YEARS THE ADDITION MADE IN THE HANDS OF THE APPELLANT ON PROTECTIVE BASIS IS CONFIRMED. 3.5. THIS ADDI TION WILL AUTOMATICALLY STAND DELETED FROM THE INCOME OF THE APPELLANT WHEN SUBSTANTIVE ADDITION IN THE CASE OF M/S.BHARATI VIDYAPEETH BECOMES FINAL. IF, FOR SOME REASON, THIS ADDITION IN THE CASE OF BHARATI VIDYAPEETH IS DELETED AT ANY STAGE, IT WOULD, F OR THE REASONS DISCUSSED IN THE ASSESSMENT ORDER, BECOME INCOME OF THE APPELLANT. THIS IS BECAUSE OF THE FACT THAT THE APPELLANT'S MAIN CONTENTION IN THE APPELLATE PROCEEDINGS IS THAT HIS STATEMENT SHOULD HAVE BEEN CONSIDERED AS A WHOLE. A CAREFUL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD REVEALS THAT THE APPELLANT, HIMSELF, ACCEPTED RECEIPT OF THE AMOUNT ON ACCOUNT OF HIS CONSULTANCY FROM THE WORK OF THE ADMISSION FOR THE LAST 2/3 YEARS AS ON THE DATE OF THE STATEMENT I.E. 21/7/2005. HE ALSO GAVE THE AP PROXIMATE FIGURES OF THESE AMOUNTS FOR THESE YEARS WHICH WAS RS.2 CRORES. THE APPELLANT'S SUBSEQUENT STATEMENT TO THE EFFECT THAT HE WAS DOING THIS BUSINESS W.E.F. JANUARY, 2005 DOES NOT APPEAR TO BE CORRECT. IN FACT, THIS ISSUE WAS EXAMINED BY THE AO. THE AO CAME 5 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE TO THE CONCLUSION THAT THE SUBSEQUENT STATEMENT MIGHT NOT REPRESENT THE TRUE AFFAIRS. PART OF PARA 24 OF ASSESSMENT ORDER IN THE CASE OF THE APPELLANT FOR A.Y.2006 - 07 IS RELEVANT AND IS, THEREFORE, REPRODUCED BELOW : - 24. THERE ARE TWO SIGNIFICANT THINGS WHICH CAME OUT THE RE - EXAMINATION OF THE ASSESSEE. IN HIS STATEMENT RECORDED EN 14.10.2005, IN RESPONSE TO Q. NO. 76 SHRI SHINDE HAD CATEGORICALLY STATED THAT HE IS DOING CONSULTANCY BUSINESS FOR THE LAST TWO YEARS. NOW, ON RE - EXAMINATION IT HAS B EEN STATED THAT BY HIM IN RESPONSE TO Q. NO. 18 ON 29.10.2007 THAT THE WORK OF CONSULTANCY STARTED IN JANUARY 2005. A BARE LOOK AT THE RETURN OF INCOME FILED IN RESPONSE TO 153A SHOWS THAT WHAT IS STATED NOW IS WRONG. THE CONSULTANCY WORK CANNOT START IN T HE MONTH OF JANUARY BECAUSE AT THAT TIME THE PROCESS OF ADMISSION DOES NOT START. THE RETURN FOR A Y 05/06 INCLUDES CONSULTANCY RECEIPTS OF RS. 2,00,00,000/ - AND THAT FOR AY 06/07 RS. 7,25,00,000 / - . IF NO SUCH WOK WAS CARRIED OUT DURING FY 2004 - 05 HOW IS I T THAT THE ASSESSEE HAS DISCLOSED INCOME OF RS.2,00,00, 000/ - FOR AY 05 - 06. THIS SHOWS THAT THE ASSESSEE IS NOT SPEAKING TRUTH AND HE HAS OWNED UP THE CASH ONLY TO SERVE PURPOSE OF HIS MASTER FOR THE OBVIOUS REASONS. FROM THE ABOVE OBSERVATION OF THE A.O., IT IS OBVIOUS THAT THE SUBSEQUENT STATEMENTS REPRESENT AFTERTHOUGHT AND THEREFORE, CANNOT BE RELIED UPON. UNDER THE CIRCUMSTANCES, VARIOUS CONTENTIONS RAISED BY THE APPELLANT IN RESPECT OF NON - ACCEPTANCE OF THE AMOUNT OF RS.2 CRORES FOR THIS YEAR DESERVE TO BE REJECTED. THEREFORE, THESE GROUNDS OF APPEAL ARE DISMISSED. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY IN THE PRESENT CASE ADDITION IN THE HANDS OF THE ASSESSE E IS MADE ON PROTECTIVE BASIS WITH RIDER THAT IF THE SAID ADDITION IS MADE IN THE HANDS OF THE BHARATI VIDYAPEE TH (BV) THEN IN THE ASSESSEE S HANDS THE SAME W OULD BE DELETED. WE HAVE PASSED THE ORDER IN THE CASE OF BHARATI VIDYAPEE TH AND THE SAID ADDITION IS DELETED BY HOLDING THAT WHATEVER PAPERS OR DOCUMENTS FOUND WITH THIS ASSESSEE HAS NO RELEVANCE WITH BHARATI VIDYAPEETH TRUST . IN SAID CASE WE HAVE ALSO HELD 6 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE THAT SAID ADDITION WOULD BE DECIDED ON MERIT IN THE CASE OF PRESENT ASSESSEE. NOW THE QUESTION IS WHETHER ON MERIT THE SAID ADDITION CAN BE SUSTAINED IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS . ADMITTEDLY NO INCRIMINATING MATERIAL OR DOCUMENTARY EVIDENCE WAS FOUND AGAINST THE ASSESSEE SUGGESTING THAT THE ASSESSEE HAS EARNED RS.2 CRORES IN T HE F.Y. 2003 - 04 RELEVANT TO THE A.Y. 2004 - 05. THE ENTIRE CASE OF THE REVENUE IS BASED ON ONE OF THE ANSWER S GIVEN BY THE ASSESSEE DURING THE COURSE OF INTERROGATION MORE PARTICULARLY WHILE RECORDING HIS STATEMENT AFTER THE SEARCH IN WHICH THE ASSESSEE STA TED THAT HE HAS DEPOSITED THE S O ME MONEY IN THE BHARATI VIDYAPEE TH TRUST S ACCOUNT. WE FIND THAT THE SAID STATEMENT WAS ALSO SUBSEQUENTLY RETRACTED . W HATEVER DOCUMENTS/LOOSE PAPERS IN RESPECT OF THE CANDIDATES /ASPIRANTS COMING FOR THE ADMISSIONS WERE FOUN D AND SEIZED FROM THE ASSESSEES CABIN WERE NOT RELATING TO F.Y. 2003 - 04. 7 . IT IS THE CASE OF THE REVENUE THAT APART FROM CASH SEIZED NO OTHER ASSETS WERE FOUND OWNED BY THE ASSESSEE. IN OUR OPINION THERE IS NO BASIS FOR WORKING OUT RS.2 CRORES AS AN INCOME OF THE ASSESSEE FOR HIS INDULGENCE IN EARNING THE MONEY FROM THE CANDIDATES/STUDENTS WHO USED TO APPROACH HIM FOR ADMISSION S IN THE INSTITUTIONS RUN BY BHARATI VIDYAPEETH (B.V.) . LAW IS WELL SETTLED THAT NO ADDITION CAN BE MADE MERELY ON SURMISES O R PRESUMPTIONS. MOREOVER IN THE CASE OF BHARATI VIDYAPEETH TRUST EVEN THOUGH THERE WAS A SPECIAL AUDIT NOTHING COULD BE CO - RELATED WITH THE SAID STATEMENT OF THE ASSESSEE THAT ANY AMOUNT WAS DEPOSITED WHICH HAS BEEN BROUGHT TO TAX TO THE EXTENT OF RS.2 CRORES IN THE HANDS OF THE ASSESSEE IN THE A.Y. 2004 - 05. MOREOVER THE BHARATI VIDYAPEETH TRUST HAS ALSO DENIED ANY SUCH RECEIPT HAVING BEEN DEPOSITED BY SHRI SHINDE IN THEIR BANKS ACCOUNTS. WE FIND NO REASON TO SUSTAIN THE ADDITION OF RS.2 CRORES IN THE HANDS OF THE ASSESSEE WHICH IS MERELY BASED ON SOME CONFLICTING STATEMENT GIVEN BY THE ASSESSEE WITHOUT ANY CORROBORATIVE EVIDENCE AND ACCORDINGLY SAME IS DELETED. ACCORDINGLY, THE 7 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE GROUNDS TAKEN BY THE ASSESSEE ARE ALLOWED. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 8 . NOW WE TAKE UP THE ASSESSEES APPEAL FOR THE A.YS. 2005 - 06 AND 2006 - 07 BEING ITA NOS. 247 & 248/PN/2012 FOR ADJUDICATION AS THE ASSESSMENTS INVOLVED IN THESE APPEALS ARE INTER - LINKED. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE A.Y. 2005 - 06: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2 CRS. IN THE ASSESSEE'S HANDS WHEN THE LEARNED A.O. HAD TAXED THE ENTIRE CASH FOUND IN THE COURSE OF SEARCH OF RS.3,14,83,870/ - WITHOUT APPRECIATING THAT IT RESULTED IN DOUBLE AD DITION AND HENCE, THE ADDITION OF RS.2 CRS. OUGHT TO HAVE BEEN DELETED. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THERE WAS NO DOUBLE ADDITION ON ACCOUNT OF TAXING RS. 2 CRS. IN THIS YEAR AND TAXING THE CASH FOUND IN THE COURSE OF SEARCH OF RS.3,14,83,870/ - IN A.Y. 2006 - 07 ON THE GROUND THAT THE TWO ADDITIONS WERE SEPARATE AND HENCE, THE LEARNED A.O. WAS JUSTIFIED IN MAKING THOSE ADDITIONS. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE CASH FOUND IN THE COURSE OF SEARCH OF RS.3,14,83,870/ - WAS PART LY OUT OF THE INCOME OF RS.2 CRS. DECLARED BY THE ASSESSEE IN THIS YEAR AND HENCE, WHEN THE A.O. HAD ADDED THE ENTIRE CASH FOUND OF RS.3.14 CRS. AS INCOME FOR A.Y. 2006 - 07, IT RESULTED IN DOUBLE ADDITION AND HENCE, THE INCOME OF RS.2 CRS. WAS NOT REQUIRE D TO BE TAXED IN THIS YEAR. 9 . IN THE A.Y. 2006 - 07 THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS IN THE APPEAL: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION ON PROTECTIVE BASIS OF RS. 2,00,50,000 / - ON ACCOUNT OF THE SEIZED PAPERS FOUND IN THE COURSE OF SEARCH WITHOUT APPRECIATING THAT NO SUCH ADDITION WAS WARRANTED. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE SEIZED PAPERS FOUND IN THE COURSE OF SEARCH CLEARLY INDICATED RS. 2,00,50,000/ - RECEIVED BY THE APPELLANT ON ACCOUNT OF ADMISSION OF THE STUDENTS AND HENCE, THE ADDITION WAS RIGHTLY MADE BY THE LEARNED A.O. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAD DECLARED HIS UNACCOUNTED INCOME IN THE RETURNS FOR A.Y. 2005 - 06 AND 2006 - 07 AT A MUCH HIGHER AMOUNT THAN THE AMOUNT RECORDED ON THE SEIZED 8 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE PAPERS AND HENCE, THERE WAS NO REASON TO MAKE FURTHER ADDITION ON THE BASIS OF THE SEIZED PAPERS FOUND IN THE COURSE OF SEARCH. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 1.25 CRS. IN THE ASSESSEE'S HANDS WHEN THE LEARNED A.O. HA D TAXED THE ENTIRE CASH FOUND IN THE COURSE OF SEARCH OF RS. 3,14,83,870/ - WITHOUT APPRECIATING THAT IT RESULTED IN DOUBLE ADDITION AND HENCE, THE ADDITION OF RS. 1.25 CRS. OUGHT TO HAVE BEEN DELETED. 5. THE LEARNED CIT(A) ERRED IN HOLDING THAT THERE WAS NO D OUBLE ADDITION ON ACCOUNT OF TAXING RS. 1.25 CRS. IN THIS YEAR AND TAXING THE CASH FOUND IN THE COURSE OF SEARCH OF RS. 3,14,83,870/ - IN THIS YEAR ON THE GROUND THAT THE TWO ADDITIONS WERE SEPARATE AND HENCE, THE LEARNED A.O. WAS JUSTIFIED IN MAKING THOSE ADDITIONS. 6. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE CASH FOUND IN THE COURSE OF SEARCH OF RS. 3,14,83,870/ - WAS PARTLY OUT OF THE INCOME OF RS. 1.25 CRS. DECLARED BY THE ASSESSEE IN THIS YEAR AND HENCE, WHEN THE A.O. HAD ADDED THE ENTIRE CASH FOUND OF RS. 3,14,83,870/ - AS INCOME FOR A.Y. 2006 - 07, IT RESULTED IN DOUBLE ADDITION AND HENCE, THE INCOME OF RS. 1.25 CRS. WAS NOT REQUIRED TO BE TAXED IN THIS YEAR. 7. THE LEARNED ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS. 3,14,83,870/ - ON ACCOUNT OF CASH SEIZED AT THE TIME OF SEARCH WITHOUT APPRECIATING THAT THE ASSESSEE HIMSELF ADMITTED UNDISCLOSED INCOME OF RS. 2 CRS. IN AY 2005 - 06 AND RS. 1.25 CRS. IN AY 2006 - 07 AND HENCE, THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE WAS MUCH HIGHER THAN THE CASH SEIZED AND ACCORDINGLY, THERE WAS NO REASON TO MAKE FURTHER ADDITION OF RS. 3,14,83,870/ - WHICH RESULTED IN DOUBLE ADDITION. 10 . AS STATED HERE - IN - ABOVE DURING THE COURSE OF SEARCH ACTION AGAINST THE ASSESSEE THE CASH OF RS.3,14,83,870/ - WAS FOUND IN HIS CABIN WHICH OWNERSHIP WAS ADMITTED BY THE ASSESSEE AND AS PER HIS ADMISSION GIVEN IN THE STATEMENT RECORDED U/S. 132(4) /131(1) , A FTER THE SEARCH THE ASSESSEE ALSO DECLARED THE SAID CASH BY SPLITTING INTO TWO DIFFERENT ASSESSMENT YEARS I.E. A.YS. 20 05 - 06 AND 2006 - 07 WHICH IS AS UNDER: A.Y. CASH DECLARED AS INCOME 2005 - 06 RS.2 CRORES 2006 - 07 RS.1.25 CRORES 9 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE EVEN IF NO SEPARATE ADDITION IS MADE FOR THE A.Y. 2005 - 06 IN RESPECT OF THE CASH SEIZED FROM THE POSSESSION OF THE ASSESSEE WHICH WAS ALSO DEC LARED BY HIM IN THE TWO ASSESSMENT YEARS BUT THE ASSESSING OFFICER HAS OBSERVED THAT THE SAID INCOME/CASH ACTUALLY BELONG ED TO THE BV TRUST . THE SAID INFERENCE WAS DRAWN ON THE BASIS OF THE FACT THAT NO CORRESPONDING ASSETS MATCHING TO THE COMMISSION INCO ME OF SHRI SHINDE WERE FOUND OR DETECTED DURING THE SEARCH AND SEIZURE OPERATION. 11 . THE ASSESSING OFFICER HAS ALSO OBSERVED THAT THE BVP TRUST AND ITS MANAGEMENT IS WELL AWARE OF THE RECEIPTS OF SUMS OVER AND ABOVE THE REGULAR FEE S PAID BY THE STUDENT S/PARENTS. THE ASSESSING OFFICER HAS SUPPORTED HIS OWN PRESUMPTION BY DRAWING THE INFERENCE FROM THE FACT THAT FOR KEEPING SUCH HUGE CASH, THE EMPLOYER NAMELY M/S. BVP HAS PROVIDED SHRI SHINDE WITH LOCKER FITTED WITH STEEL A LMIRAHS (CUPBOARD) . AS NOTED B Y THE ASSESSING OFFICER THE EXPLANATION WAS ALSO SOUGHT FROM THE ASSESSEE IN RESPECT OF THE CASH SEIZED FROM HIS CABIN . T HE ASSESSEE EXPLAINED HIS MODUS OPERANDI HOW HE WAS MAKING THE MONEY BY EXPLOITING HIS OFFICIAL POSITION WHEN THE CANDIDATES/PARENTS U SED TO APPROACH HIM FOR GETTING THE ADMISSION S IN DIFFERENT INSTITUTIONS/COURSES IN THE BVP. THE ASSESSING OFFICER FINALLY HELD THAT THE INCOME OF RS.2 CRORES OFFERED BY THE ASSESSEE IS ASSESSED ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. 1 2 . IN T HE A.Y. 2006 - 07 AS STATED HERE - IN - ABOVE THE ASSESSEE DECLARED RS.1.25 CRORES OUT OF CASH SEIZED SHOWING THE SAID INCOME AS FROM HIS CONSULTANCY FOR HELPING THE STUDENTS TO GET ADMISSION S INTO DIFFERENT INSTITUTIONS OF THE BVP. IN ADDITION TO UNDISCLOSED I NCOME DECLARED BY THE ASSESEE THAT THE ASSESSING OFFICER ALSO MADE THE ADDITION OF RS.3,14,83,870/ - ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE WHICH WAS UNDISPUTEDLY IS IN RESPECT OF THE CASH FOUND WITH THE ASSESSEE IN HIS OFFICE CABIN. THE ASSESSIN G OFFICER HAS GIVEN THE REFERENCE OF RE - EXAMINATION MADE BY THE JT. CIT (CENTRAL), RANGE - 2 ON 29 - 10 - 2007. THE 10 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE ASSESSING OFFICER DECLINED TO ACCEPT THE ASSESSEE S DECLARATION OF RS.2 CRORES IN THE A.Y. 2005 - 06 IN RESPECT OF THE CASH SEIZED FROM HIS CABIN O N THE REASON THAT IN HIS STATEMENT RECORDED ON 14 - 10 - 2005, IN RESPONSE TO Q. NO. 76 THE ASSESSEE HAS STATED THAT HE IS DOING CONSULTANCY BUSINESS FOR THE LAST TWO YEARS. IN HIS RE - EXAMINATION BY THE DEPARTMENT ON 29 - 10 - 2007 , HE HAS STATED THAT THE WORK OF CONSULTANCY STARTED IN JANUARY 2005. THE ASSESSING OFFICER HAS OBSERVED THAT THE SAID STATEMENT CANNOT BE BELIEVED AS THE CONSULTANCY WORK CANNOT START IN THE MONTH OF JANUARY BECAUSE AT THAT TIME , THE PROCESS OF ADMISSION S DOES NOT START. IN THE OPINIO N OF THE ASSESSING OFFICER THE ASSESSEE IS NOT SPEAKING TRUTH AND HE HAS OWNED UP THE CASH ONLY TO PROTECT HIS MASTER FOR THE OBVIOUS REASONS. THE ASSESSING OFFICER HAS ALSO MENTIONED THAT THE ASSESSEE REMAINED UNDER THE EMPLOYMENT OF BHARATI VIDYAPEETH F OR A PERIOD OF 21 MONTHS EVEN AFTER THE MANAGEMENT CAME TO KNOW THAT HE WAS IN POSSESSION OF SUM OF RS. 3.14 CRORES AND HE IS DOING CONSULTANCY BUSINESS WITHOUT THE KNOWLEDGE OF THE BVP TRUST. 1 3 . HE ACCORDINGLY BROUGHT TO TAX THE ENTIRE AMOUNT OF RS.3,1 4,83,870/ - IN THE A.Y. 2006 - 07. THE MAIN PLANK OF THE ARGUMENT OF THE LD. COUNSEL IS THAT THE ASSESSEE HAS ADMITTED THAT THE AMOUNT OF RS.3,14,83,870/ - BELONGED TO HIM AND HE HAS EARNED THAT INCOME BY MISUSING HIS POSITION IN THE BVP TRUST AND HE HAS DECL ARED THAT AMOUNT SPLITTING THE SAME FOR THE TWO ASSESSMENT YEARS. THERE IS AGAIN NO REASON TO DISCARD THE DECLARATION OF RS.2 CRORES MADE BY THE ASSESSEE IN THE A.Y. 2005 - 06 AND RS.1.25 CRORES IN THE A.Y. 2006 - 07 AND AGAIN BRINGING TO TAX THE ENTIRE AMOUN T OF THE CASH SEIZED AGAIN IN THE A.Y. 2006 - 07. HE ARGUES THAT THERE IS A DOUBLE TAXATION TO THE EXTENT OF RS.3.14 CRORES. HE REFERRED TO THE PAPER BOOK MORE PARTICULARLY PAGE NO. 31 WHERE THE COPY OF COMPUTATION OF INCOME IS FILED FOR THE A.Y. 2005 - 06 A ND PAGE NO. 53 WHERE THE COPY OF COMPUTATION OF THE STATEMENT OF INCOME FOR THE A.Y. 2006 - 07 IS PLACED. HE SUBMITS THAT IN BOTH THE ASSESSMENT YEARS IN THE COMPUTATION ITSELF T HE INCOME WAS 11 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE DECLARED BY GIVING THE REFERENCE OF THE STATEMENT RECORDED U/S. 1 34(4) ON THE DATE OF SEARCH I.E. ON 20 - 07 - 2005. HE ARGUES THAT HOW THERE CAN BE DOUBLE TAXATION OF THE SAME INCOME ? H E PLEADED FOR DELETING THE ENTIRE ADDITION OF RS.3.14 CRORES MADE IN THE A.Y. 2006 - 07. WE HAVE ALSO HEARD THE LD. CIT (DR). 1 4 . WE FIND FORCE IN THE ARGUMENT OF THE LD. COUNSEL. WE HAVE PERUSED THE COMPUTATION STATEMENT S FOR THE A.YS. 2005 - 06 AND 2006 - 07 WHICH ARE PLACED AT PAGE NOS. 31 AND 53 OF THE PAPER BOOK. THE ASSESSEE HAS DECLARED THE ADDITIONAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES BY GIVING THE NARRATION I NCOME FROM CONSULTANCY AS DECLARED IN THE STATEMENT RECORDED U/S. 132(4) ON 20 - 07 - 2005 . THE ASSESSEE HAS DECLARED TOTAL AMOUNT OF RS. 3. 2 5 CRORES ALMOST 10 LAKHS MORE THAN THE CASH SEIZED , IF THE TOTAL OF INCOME D ECLARED IN BOTH THE ASSESSMENT YEARS IS MADE. WE HAVE PERUSED THE REASON S GIVEN BY BOTH THE AUTHORITIES BELOW . IN OUR OPINION EXCEPT THE WORDS IF AND BUT NOTHING IS IN THE REASONS GIVEN BY THE AUTHORITIES BELOW TO SUPPORT THE SAID ADDITION. THE LD. CIT(A) HAS OBSERVED THAT IF FOR SOME REASON , SAID ADDITION IN THE CASE OF BHARATI VIDYAPEETH IS DELETED IN ANY STAGE , THEN FOR THE REASON DISCUSSED IN THE ASSESSMENT ORDER , BECAME INCOME OF THE ASSESSEE. A DMITTEDLY IN THE CASE OF BHARATI VIDYAPEETH THE AD DITION IS DELETED TO THE EXTENT OF RS.3.14 CRORES AS THE ASSESSEE HAS DECLARED THE SAID AMOUNT IN THE RETURN IN A.YS. 2005 - 06 AND 2006 - 07 AND ALSO PAID THE TAX ON IT. W E HOLD THAT THE ASSESSING OFFICER HAS MADE THE DOUBLE ADDITION IN THE A.Y. 200 6 - 07 OF T HE SAME INCOME TO THE EXTENT OF RS.3,14,83,870/ - WHICH IS ALREADY DECLARED IN A.Y. 2005 - 06 & A.Y. 2006 - 07 BY THE ASSESSEE AND THE SAME CANNOT BE SUSTAINED. ACCORDINGLY THE SAID ADDITION IS DELETED AND RELEVANT GROUNDS TAKEN BY THE ASSESSEE I.E. GROUND NOS . 4 TO 7 ARE ALLOWED. 1 5 . THE NEXT ISSUE IS THE ADDITION OF RS.2,00,50,000/ - SUSTAINED BY THE LD. CIT(A). THE IDENTICAL ADDITION WAS MADE IN THE HANDS OF THE 12 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE BHARATI VIDYAPEETH IN A.Y. 2006 - 07 AND THE RELEVANT DISCUSSIONS AND OUR FINDING ARE AS UNDER: 40. PER CONTRA, THE LD. CIT (DR) ARGUES THAT SHRI SHINDE WAS TRUSTED EMPLOYEE OF THE TRUST AND WHATEVER HE HAS DONE THAT IS FOR THE ASSESSEE TRUST OR THE TRUSTEES. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL. IN THE ASSESSMENT ON THE BASIS OF T HE DOCUMENTS SEIZED FROM SHRI SHINDE, THE ASSESSING OFFICER MADE VERY HIGH PITCH ADDITIONS BY PRESUMING THAT WHATEVER THE FIGURES ARE APPEARING IN RESPECT OF 146 STUDENTS ALL HAVE GOT THE ADMISSIONS. HE FURTHER PROCEEDED BY ESTIMATING THE ALLEGED CAPITATI ON FEE AND WORKED OUT ON THE BASIS OF THE STATEMENT OF SHRI SHINDE THAT WHATEVER THE CASH WAS FOUND WITH HIM THAT WAS IN RESPECT OF 15 DAYS ADMISSIONS AND HE WAS INDULGED INTO THE SAID AFFAIR IN MUCH MORE EARLIER PERIOD ALSO. NOTHING HAS BEEN CONTROVERTED BEFORE US THAT IN FACT OUT OF THE 146 STUDENTS TO THE EXTENT OF 112 CANDIDATES NO ADMISSIONS WERE GIVEN AT ALL IN ANY OF THE INSTITUTIONS OF THE ASSESSEE TRUST. THIS SUGGESTS THAT WHATEVER THE EVIDENCE IN THE FORM OF LOOSE PAPERS IS COLLECTED DURING THE COURSE OF THE SEARCH HAS NO RELEVANCE WITH THE ASSESSEE AND CANNOT BE RELIED ON TO SUSTAIN THE ADDITION. MOREOVER, ANOTHER IMPORTANT ASPECT IS TO BE CONSIDERED THAT SHRI SHINDE HAS ADMITTED THAT HE WAS WORKING AS A CONSULTANT OR AGENT. WE HAVE ALSO PERUS ED THE STATEMENTS GIVEN BY HIM TO THE REVENUE DURING INVESTIGATION STATING THAT HE USED TO MAKE PROMISES TO MANY STUDENTS AND IF THE ADMISSION IS BY LUCK CONFIRM THEN HE USED TO COLLECT WHOLE MONEY OTHERWISE USED TO REFUND THE TOKEN AMOUNT TAKEN. IN OUR O PINION WHEN THIS FACTS ARE CLEAR AND SHRI SHINDE HAS ADMITTED DOCUMENTS ARE PERTAINING TO HIS OWN AFFAIRS , NO LIABILITY CAN BE FASTENING OF THE ASSESSEE TRUST ON THE BASIS OF EVIDENCE WHICH IS CONCERNING SOMEBODY ELSE. WE FIND NO JUSTIFICATION EVEN TO SUS TAIN THE ADDITION OF RS.200,50,000/ - IN THE HANDS OF THE ASSESSEE TRUST. THIS ISSUE WILL BE INDEPENDENTLY DECIDED IN THE CASE OF SHRI SHINDE IN HIS APPEAL. WE, ACCORDINGLY, DELETE THE SAME. 41. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2006 - 07 IS PA RTLY ALLOWED. 1 6 . THE ASSESSING OFFICER HAS MADE THE ADDITION TO THE EXTENT OF RS.9,37,21,850/ - ON THE BASIS OF THE DOCUMENTS SEIZED FROM SHRI SHINDE WHICH WAS IN THE FORM OF LOOSE PAPERS. THE LD. CIT(A) SUSTAINED THE 13 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE ADDITION TO THE EXTENT OF RS.2,00 ,50,000/ - BY HOLDING THAT OUT OF THE 146 STUDENTS THE LOOSE PAPERS DO NOT INDICATE ANY ADMISSION GIVEN TO 112 STUDENTS IN THE BHARATI VIDYAPEETH. THE SAID ADDITION WAS MADE ALSO IN THE HANDS OF THE BHARATI VIDYAPEETH IN THE A.Y. 2006 - 07. IN THE CASE OF B HARATI VIDYAPEETH THE ADDITION SUSTAINED OF RS.2,00,50,000/ - WAS MADE ON SUBSTANTIVE BASIS AND THE SAME ADDITION IS MADE IN THE HAND S OF THE PRESENT ASSESSEE ON PROTECTIVE BASIS. 1 7 . AS PER THE LOOSE PAPERS SEIZED FROM SHRI R.D. SHINDE , ON INITIAL APPRAIS AL IT WAS FOUND THAT THE SHRI SHINDE HAS COLLECTED THE MONEY FROM 146 STUDENTS AS PER THE NOTINGS ON LOOSE PAPERS. AFTER FURTHER VERIFICATION IT WAS FOUND THAT OUT OF 146 STUDENTS, NO ADMISSION WAS GIVEN TO ANY OF 112 STUDENTS /CANDIDATES IN ANY OF THE IN STITUTIONS OF THE BVP HENCE, THE WORKING OF UNDISCLOSED INCOME WAS NARROWED DOWN TO 34 STUDENTS WHO WERE GIVEN THE ADMISSIONS IN THE INSTITUTIONS/COURSES OF THE BVP. THE EXPLANATIONS OF THE ASSESSEE ARE GENERAL IN NATURE. THE ASSESSEE HIMSELF H AS ADMITTE D THAT HE WAS USING ( OR MISUSING ) HIS POSITION IN BVP FOR HELPING THE STUDENTS TO GET THE ADMISSIONS IN THE INSTITUTIONS/COURSES RUN BY BVP. HE HAS ALSO ADMITTED IN THE STATEMENT THAT ON MANY OCCASIONS THE STUDENTS USE TO GET THE ADMISSION ON MERIT ITSELF BUT HE USE D TO COLLECT THE MONEY FROM THOSE STUDENTS ALSO . HE FURTHER STATED IN HIS STATEMENT THAT IF ANY STUDENTS APPROACH S HIM FOR GETTING THE ADMISSION THEN HE USED TO COLLECT A TOKEN AMOUNT AND IF ANY STUDENT DID NOT GET THE ADMISSION TH AT HE IS USED TO REFUND THE SAID AMOUNT. WE ALSO FIND THAT THE ASSESSEE COULD NOT CO - RELATE THE AMOUNT OF THE CASH SEIZED WITH THE AMOUNT NOTED ON THE LOOSE PAPERS. MOREOVER, THE ASSESSEE HAS ALSO EXPLAINED HOW HE IS USING CODE FIGURES IN RESPECT OF HIS CONSULTANCY FE ES. ONCE HE ADMITS THE CONTENTS OF DOCUMENTS AND ALSO EXPLAINS SAME THEN IN SUCH CIRCUMSTANCES HE CAN NOT CRY THAT LD. CIT(A) HAS WRONGLY SUSTAINED ADDITION IN HIS HAND. IN OUR OPINION TO THE EXTENT OF RS.2,00,50,000/ - THE ADDITION HAS TO BE SUSTAINED IN THE HAND S OF THE ASSESSEE ON SUBSTANTIVE BASIS A S IN THE CASE OF BHARATI 14 ITA NOS. 246, 247 & 248/PN/2012, SHRI RAMCHANDRA DADA SHINDE, PUNE VIDYAPEETH THE SAID ADDITION HAS BEEN DELETED . ACCORDINGLY GROUNDS NOS. 1, 2 AND 3 ARE DISMISSED. 1 8 . IN THE RESULT, THE ASSESSEES APPEAL FOR THE A.YS. 2004 - 05 AND 2005 - 06 ARE AL LOWED AND THE ASSESSEES APPEAL FOR THE A.Y. 2006 - 07 IS PARTLY ALLOWED . PRONOUNCED IN THE OPEN COURT ON 29 - 11 - 20 1 3 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 29 TH NOVEMBER, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A), CENTRAL, PUNE 4 THE CIT, CENTRAL, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIB UNAL PUNE