M/S. GURU KRIPA CAREER INSTITUTE PVT. LTD., SIKAR V. PR.CIT-3, JAIPUR

ITA 283/JPR/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6532 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 30-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RS.. CRORE TAXATION
• Keywords: Unexplained cash credit; Related party transaction; Revision of order; Depreciation; Charitable institution; Deemed to accrue or arise in india; Assessment record; Prejudicial to interest; Unabsorbed depreciation; TDS; Set aside
• Section: 68; 263; 40A(3); 143(3); 142(1); 133A; 143(2); 44AB; 43; 2(A); 13; 22; 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH LANHI XLKA ] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI SANDEEP GOSAIN, JM VK;DJ VIHY LA -@ ITA NO. 283/JP/2020 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 M/S GURU KRIPA CAREER INSTITUTE PVT. LTD., SAMRATPURA PIPRALI ROAD, JYOTI NAGAR, SIKAR. CUKE VS. PR.CIT-3, JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AAECG 6662 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI S.R. SHARMA & SHRI RAJNIKANT BHATRA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI B.K. GUPTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/08/2020 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 03/09/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. PR.CIT-3 JAIPUR DATED 19/03/2020 PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT) FOR THE A.Y. 2015-16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX-3 JAIPUR HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT HOLDING THE ASSESSMENT ORDER DATED 29.12.2017 TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WHICH IS ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 2 CONTRARY TO THE PROVISIONS OF LAW AND FACTS THEREFORE, THE IMPUGNED ORDER U/S 263 OF THE ACT DATED 19.03.2020 KINDLY BE QUASHED. 2. THAT THE LEARNED PR. CIT-3 JAIPUR ERRED IN LAW AS WELL AS ON THE FACT OF THE CASE IN ASSUMING JURISDICTION U/S 263 OF THE ACT BY WRONGLY AND INCORRECTLY HOLDING THAT THE SUBJECTED ASSESSMENT ORDER PASSED ON DATED 29.12.2017 WAS WITHOUT MAKING PROPER ENQUIRIES. SUCH FINDING AND THE ASSUMPTION OF JURISDICTION, BOTH ARE CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON RECORD. HENCE THE PROCEEDINGS INITIATED U/S 263 OF THE ACT AND THE IMPUGNED ORDER DATED 19.03.2020 KINDLY BE QUASHED. 3. THAT THE LEARNED PR. CIT-3 JAIPUR ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SETTING ASIDE THE ASSESSMENT ORDER DATED 29.12.2017 WITH REFERENCE TO ALL THE FOLLOWING ISSUES, MERELY ON SUSPICION, SURMISES & CONJECTURES, AND IN WRONGLY ALLEGING LACK OF PROPER ENQUIRY AND NON- APPLICATION OF MIND BY THE AO WHICH IS NOTHING BUT A PRETENSE. THE SUBJECTED ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE NOR IT HAS BEEN SHOWN SO: I) ALLEGED SHORT OFFER OF COACHING FEE REVENUE BY RS.2.20 CRORE FOR TAXATION OUT OF TOTAL SURRENDER OF RS.3.00 CRORE DURING THE COURSE OF SURVEY. II) ALLEGED ABNORMAL INCREASE IN SALARY, CELEBRATION, LEGAL AND RENT EXPENSES III) ALLEGED VARIOUS EXPENSES OF RS.3,34,500/-IN VIOLATION OF SECTION 40A(3). IV) ALLEGED NON-VERIFICATION OF CLAIM OF DEPRECIATION ON COMPUTER AND FURNITURE AND VEHICLE RUNNING EXPENSES, ADVERTISEMENT EXPENSES V) ABNORMAL INCREASE IN CASH IN HAND POST SURVEY VI) OUTSTANDING LIABILITIES IN SUNDRY CREDITORS FOR ADVERTISEMENT AND RENT EXPENSES AND STAFF PAYABLE VII) ALLEGED NON-VERIFICATION OF CONSTRUCTION IN BUILDING AND NON- RECONCILIATION OF TRIAL BALANCE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 3 VIII) ALLEGED NON-APPLICATION OF PROVISIONS OF SECTION 68 TO 69D READ WITH SECTION 115BBE THE IMPUGNED ORDER THEREFORE, LACKS VALID JURISDICTION U/S 263 OF THE ACT AND HENCE, THE IMPUGNED ORDER KINDLY BE QUASHED. 4. THAT THE LEARNED PR.CIT-3 JAIPUR ERRED BOTH IN LAW AND ON FACTS IN FAILING TO APPRECIATE THE MATERIAL PLACED ON RECORD, WRITTEN SUBMISSIONS FURNISHED AND EVIDENCE TENDERED BY THE APPELLANT COMPANY DURING THE CASE OF ASSESSMENT PROCEEDINGS AS WELL IN REPLY TO SHOW CAUSE NOTICE ISSUED U/S 263 OF THE ACT AND OVERLOOKING THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT. IT IS THEREFORE, PRAYED THAT PROCEEDINGS INITIATED U/S 263 OF THE ACT AND THE IMPUGNED ORDER DATED 19.03.2020 KINDLY BE QUASHED, AND APPEAL OF THE APPELLANT COMPANY BE ALLOWED. 2. THE HEARING OF THE APPEAL WAS CONCLUDED THROUGH VIDEO CONFERENCE IN VIEW OF THE PREVAILING SITUATION OF COVID-19 PANDEMIC. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN RUNNING COACHING CENTER FOR PROVIDING COACHING TO STUDENTS FOR PRE-MEDICAL (NEET) AND PRE-ENGINEERING ENTRANCE EXAMINATIONS (IIT JEE) FOR ADMISSION IN VARIOUS MEDICAL AND ENGINEERING COLLEGES OF INDIA. DURING THE YEAR UNDER CONSIDERATION, A SURVEY U/S 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY ON 19.02.2015, WHEREIN THE ASSESSEE COMPANY SURRENDERED AN AMOUNT OF RS.3,00,00,000/. SUBSEQUENTLY ASSESSEE COMPANY FILED RETURN OF INCOME DECLARING AN INCOME OF RS.4,01,29,300/-. THE SAID RETURN WAS SELECTED FOR COMPLETED SCRUTINY AND ASSESSMENT WAS ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 4 COMPLETED U/S 143(3) OF THE ACT. THE ASSESSMENT WAS COMPLETED AT TOTAL INCOME AT RS.4,09,98,505/- AFTER MAKING AN ADDITION OF RS.2,69,205/- U/S 40A (3) OF THE ACT AND LUMP SUM ADDITION OF RS.6,00,000/- FOR PERSONAL ELEMENT OF USE IN VARIOUS EXPENSES CLAIMED IN P&L ACCOUNT. THEREAFTER THE LD. PR.CIT-3, JAIPUR EXAMINED THE ASSESSMENT RECORD OF ASSESSEE COMPANY AND OPINED THAT ASSESSING OFFICER FAILED TO VERIFY VARIOUS ISSUES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE SHOW CAUSE NOTICE ISSUED BY PR. CIT -3 IS ALSO REPRODUCED HEREIN BELOW: - 2. PERUSAL OF THE ASSESSMENT RECORD REVEALS THE FOLLOWING ISSUES WHICH THE AO HAS NOT VERIFIED: 1. A SURVEY ACTION VIDE U/S 133A OF THE ACT WAS CARRIED OUT IN THIS CASE ON 19.02.2015 WHEREIN THE ASSESSEE COMPANY OFFERED A SUM OF RS.3.00 CRS., FOR TAXATION OUT OF THE SURRENDERED AMOUNT THE ASSESSEE RECORDED RS.2,20,00,000/- AS COACHING FEE ADVANCE UNDER THE HEAD REVENUE FROM OPERATION. 2. ACCORDINGLY, THE ASSESSEE HAS OFFERED ONLY RS.20,09,434/- OUT OF SURRENDERED RS.3.00 CRS., IN THE COMPUTATION OF TOTAL INCOME AND RS.59,90,566/- AS COACHING FEES (JEE-SURRENDERED) UNDER THE HEAD REVENUE FROM OPERATION. 3. THERE IS AN ABNORMAL INCREASE IN SALARY & WAGES, CELEBRATION & FESTIVAL EXPENSES, LEGAL & PROFESSIONAL CHARGES AND RENT FOR WHICH THE CASE WAS CONVERTED INTO COMPLETE SCRUTINY. NO DETERMINED ADDITION WAS MADE UNDER THESE HEADS EXCEPT A LUMP SUM ADDITION OF RS.6,00,000/- 4. SALARY EXPENSES HAVE BEEN ALLOWED WITHOUT OBTAINING ANY DETAILS OF QUALIFICATION, NATURE OF DUTY PERFORMED ETC. SIMILARLY STUDENT ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 5 HEALTHCARE AND WELFARE EXPENSES OF RS.5,00,000/- HAVE BEEN ALLOWED WITHOUT VERIFICATION. 5. EXPENSES IN VIOLATION OF SECTION 40A(3) ON ACCOUNT OF PRIZE DISTRIBUTION EXPENSES ON 04.10.2014 AMOUNTING TO RS.1,10,000/- AND RS.1,53,000/- AND CELEBRATION & FESTIVAL EXPENSES ON 21.10.2014 AMOUNTING TO RS.37,500/- AND 34,000/- HAVE BEEN ALLOWED. 6. DEPRECIATION ON FURNITURE AND COMPUTERS WAS ALLOWED AS CLAIMED IN THE RETURN OF INCOME WITHOUT VERIFICATION. 7. VEHICLE RUNNING EXPENSES ALLOWED AS CLAIMED IN THE RETURN OF INCOME WITHOUT VERIFICATION. 8. ABNORMAL INCREASE IN CASH-IN-HAND FROM RS.81,43,641/- ON THE DATE OF SURVEY TO RS.2.17 CRORES AS ON 31.03.2015 HAS NOT BEEN VERIFIED. 9. ADVERTISEMENT EXPENSES OF RS.1.93 CRORES NOT VERIFIED. SIMILARLY, ADVERTISEMENT EXPENSES PAYABLE AS ON 31.3.2015 TO M/S MAHESH ADVERTISING AGENCY AMOUNTING TO RS.66,55,161, TO M/S SAI ADVERTISING AGENCY AMOUNTING TO RS.38,89,918/- AND TO M/S SALASAR ADVERTISING AGENCY AMOUNTING TO RS.1,11,078/- HAVE NOT BEEN VERIFIED. 10. SOME OF THE TRADE EXPENSES PAYABLE LIKE RENT TO GURUKRIPA CAREER INSTITUTE AMOUNTING TO RS.12,39,978/-, TO M/S JAIPAL SINGH HUF AMOUNTING TO RS.13,60,000/- TO M/S MAHAVEER ENTERPRISES AMOUNTING TO RS.9,47,334/- TO SAKSHI PRINTERS AMOUNTING TO RS.5,60,924/- AND TO SMT. MAMKAUR AMOUNTING TO RS.14,60,000/- HAVE NOT BEEN VERIFIED. FURTHER, KEEPING IN VIEW THE ABNORMAL INCREASE IN ALL THE EXPENSES FOR THE PURPOSE OF VERIFICATION THE AO DID NOT OBTAIN THE DETAILS OF ADVERTISEMENT EXPENSES INCURRED BEFORE AND AFTER THE DATE OF SURVEY. 11. THE AO HAS NOT EXAMINED CASH IN HAND SHOWN AT JAIPUR AMOUNTING TO RS.2.16 CR. IN THE BALANCE SHEET. 12. AS PER THE STATEMENTS OF SHRI RAJESH KULHAR, DIRECTOR OF M/S GURU KRIPA INSTITUTE PVT. LIMITED RECORDED ON 19.02.2015, THE DIRECTOR IN HIS REPLY TO QUESTION NO. FROM 18 HAS ACCEPTED INVESTMENT IN HANUMAN ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 6 NAGAR, SIKAR SITUATED BUILDING UNDER CONSTRUCTION AND SOME OTHER HEADS. THIS ISSUE HAS NOT BEEN EXAMINED BY THE AO. SIMILARLY, IN REPLY TO QUESTION NOS. 21 TO 23 THE DIRECTOR HAD NOT BEEN ABLE TO VERIFY THE DIFFERENCE IN TRIAL BALANCE WHICH WAS NOT EXAMINED AT THE TIME OF ASSESSMENT PROCEEDINGS. 13. WHILE FRAMING THE ASSESSMENT ORDER THE AO FAILED TO TAX THE HEAD-WISE UNDISCLOSED SURRENDERED INCOME AS PER THE APPLICABLE PROVISIONS OF SEC. 68 TO 69D READ WITH SECTION 115BBE OF THE INCOME TAX ACT, 1961. ACCORDINGLY, THE AO HAS NOT BROUGHT TO TAX THE SURRENDERED INCOME AS PER APPLICABLE PROVISIONS OF THE ACT. 14. THE AO HAS NOT VERIFIED THE AMOUNT OF RS.45,85,897/- UNDER THE HEAD STAFF PAYABLE. 15. THE AO HAS NOT AT ALL VERIFIED ALL THE ISSUES ENUMERATED FROM (1) TO (14) AND HAS NOT ASKED FOR THE REASONS FOR SUBSTANTIALLY HIGH EXPENDITURE DEBITED IN THE PROFIT & LOSS ACCOUNT. 3. NECESSARY POWERS HAVE BEEN CONFERRED UPON THE UNDERSIGNED BY THE INCOME TAX ACT, 1961 ACT TO REVIEW THE ASSESSMENT MADE BY THE ASSESSING OFFICER IF THE ORDER PASSED BY THE ASSESSING OFFICER IS FOUND TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER THE EXPLANATION (2) TO SECTION 263, WHICH WAS INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015, PROVIDES AND READS AS FOLLOWS:- FOR THE PURPOSE OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE AO SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IF IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER,- 1. THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; 2. THE ORDER IS PASSED ALLOWED ANY RELIEF WITHOUT INQUIRING INTO CLAIM. ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 7 4. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT THE ASSESSMENT ORDER DATED 29.12.2017 PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. HENCE, YOU ARE DIRECTED TO SHOW- CAUSE WHY PROVISIONS OF SECTION 263(1) READ WITH (EXPNANTION-2) MAY NOT BE INVOKED AND ASSESSMENT ORDER PASSED ON 29.12.2017 MAY NOT BE SET ASIDE/ENHANCED ACCORDINGLY. YOUR REPLY IN THIS MATTER MAY BE FILED INT THIS OFFICE BY 13.03.2020 FALLING WHICH IT WILL BE PRESUMED THAT YOU HAVE NOTHING TO SAY IN THIS MATTER AND REVISION ORDER WILL BE PASSED ACCORDINGLY. IN CASE YOU WISH TO APPEAR PERSONALLY OR THOROUGH AUTHORIZED REPRESENTATIVE, YOU MAY APPEAR ON 13.03.2020 AT 01.00 P.M. IN THE OFFICE OF THE UNDERSIGNED WITH NECESSARY DETAILS AND SUPPORTING DOCUMENTS THAT YOU WANT TO RELY UPON. - THE LD. PR. CIT ON THESE OBSERVATIONS IN SHOW CAUSE NOTICE OPINED THAT ASSESSMENT ORDER PASSED IN THE CASE OF ASSESSEE IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND THEREFORE PR.CIT PROPOSED TO SET ASIDE/ENHANCE THE SAID ASSESSMENT ORDER IN RESPECT OF ABOVE POINT IN EXERCISE OF POWER VESTED U/S 263 OF THE ACT. 4. IN REPLY TO THE SHOW CAUSE NOTICE, THE ASSESSEE FILED DETAILED REPLY ALONGWITH RELEVANT DETAILS AND DOCUMENTS AS DESIRED BY THE LD. PR.CIT. HOWEVER, THE LD. PR.CIT BEING NOT CONVINCED WITH THE ASSESSEES REPLY HELD THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY, SET ASIDE THE ASSESSMENT AND DIRECTED THE A.O. TO PASS FRESH ASSESSMENT ORDER ON THOSE ISSUES. AGAINST THE ORDER OF THE LD. PR.CIT, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 8 5. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT FOR INVOKING PROVISIONS OF SECTION 263 THE CONDITION PRECEDENT IS THAT ASSESSMENT ORDER PASSED BY A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE I.E. BOTH CONDITIONS MUST CO-EXIST. IN THE CASE OF ASSESSEE COMPANY THE ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. IT WAS EXPLAINED BY THE LD AR THAT A SURVEY HAS BEEN CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE WHEREIN THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS MAINTAINED BY THE ASSESSEE WERE EXAMINED BY THE SURVEY TEAM DEPUTED BY THE REVENUE, STATEMENTS WERE RECORDED AND THE ASSESSEE SURRENDERED AN AMOUNT OF RS 3.00 CRORE WHICH WAS SUBSEQUENTLY OFFERED TO TAX IN THE RETURN OF INCOME. THEREAFTER, THE RETURN OF INCOME FILED BY THE ASSESSEE HAS BEEN SUBJECTED TO THE SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE AO IN HIS ORDER PASSED UNDER SECTION 143(3) OF THE ACT HAS STATED THAT SURVEY HAS BEEN CONDUCTED WHEREIN THE ASSESSEE HAS SURRENDERED AN AMOUNT OF RS 3.00 CRORE WHICH HAS BEEN OFFERED TO TAX IN THE RETURN OF INCOME. OUR ATTENTION WAS INVITED TO THE NOTICE ISSUED BY THE A.O. UNDER SECTION 143(2) ON 13.04.2016, AND CONSEQUENTLY NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED ON 5.06.2017. ANOTHER NOTICE U/S 142(1) OF THE ACT ALONGWITH DETAILED QUESTIONNAIRE WAS ISSUED ON 20.12.2017 UPON CONVERSION OF CASE FROM LIMITED SCRUTINY TO COMPLETE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 9 SCRUTINY IN ADDITION TO QUERIES/CLARIFICATION/DOCUMENTS SOUGHT DURING PERSONAL HEARING(S) AND ASSESSEE COMPANY'S SUBMISSIONS WERE EXAMINED. 6. THE LD AR HAS FURTHER CONTENDED THAT THE A.O. HAD MADE SUFFICIENT INQUIRES AND ALSO CONSIDERED THE MATERIAL PLACED DURING THE COURSE OF SURVEY AND THE SURRENDER MADE BY THE ASSESSEE AND AFTER CONSIDERING ALL THESE THINGS, FRAMED ASSESSMENT U/S 143(3) OF THE ACT. AS PER THE LD AR THE PROCEEDING U/S 263 IS A STEP TO START AGAIN A SECOND SCRUTINY/INVESTIGATION OF FACTS WITHOUT THERE BEING ANY MATERIAL TO HOLD EVEN PRIMA-FACIE THAT THE ASSESSMENT ORDER PASSED BY A.O. IS ERRONEOUS WHICH IS NOT VALID IN THE EYES OF LAW. FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE VARIOUS JUDICIAL PRONOUNCEMENTS I.E. (CIT VS. TRUSTEES ANUPAM CHARITABLE TRUST (1987) 167 ITR (129) (RAJASTHAN), CIT VS. GODAWARI SUGAR MILLS LTD. (1993) 203 ITR 108 (BOM.) AND CIT VS. SHAKTI CHARITIES (2000) 160 CTR 107 (MAD.). THE FACTS AND SUBMISSIONS ARE VERIFIABLE FROM THE ASSESSMENT RECORD. THE SUPREME COURT IN CASE OF CIT VS. GREEN WORLD CORPORATION (2009) 314 ITR 81 (SUPREME COURT) HELD THAT THE JURISDICTION UNDER SECTION 263 CAN BE EXERCISED ONLY WHEN BOTH THE FOLLOWING CONDITIONS ARE SATISFIED (I) THE ORDER OF THE ASSESSING OFFICER SHOULD BE ERRONEOUS AND (II) IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THESE CONDITIONS ARE CONJUNCTIVE. AN ORDER OF ASSESSMENT PASSED BY THE ASSESSING OFFICER SHOULD NOT BE INTERFERED WITH ONLY BECAUSE ANOTHER VIEW ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 10 IS POSSIBLE. THE RAJASTHAN HIGH COURT IN A RECENT JUDGEMENT IN CASE OF CIT VS. CHAMBAL FERTILIZERS AND CHEMICALS LTD. (2013) 258 CTR (RAJ.) 540 HAS HELD THE LAW IS THAT THE CIT CANNOT INVOKE THE POWERS TO CORRECT EACH AND EVERY MISTAKE OR ERROR COMMITTED BY THE A.O. EVERY LOSS TO THE REVENUE CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND IF THE AO HAS ADOPTED ONE OF THE COURSE PERMISSIBLE UNDER THE LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE AO EXERCISES QUASI-JUDICIAL POWER VESTED IN HIM AND IF HE EXERCISES SUCH POWERS IN ACCORDANCE WITH LAW, ARRIVES AT A JUST CONCLUSION SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS ONLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH THE CONCLUSION. THE DELHI HIGH COURT IN CASE OF CIT VS. KELVINATOR OF INDIA LTD. (2011) 332 ITR 231 (DELHI) IT HAS HELD THAT ASSESSING OFFICER TAKING ONE OF TWO POSSIBLE VIEWS WITH WHICH COMMISSIONER NOT AGREEING THE ASSESSMENT ORDER CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVENUE. THE KARNATAKA HIGH COURT AFTER CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENT IN THE CASE OF CIT VS. GOKUL DAS EXPORTS (2011) 333 ITR 214 (KAR) HAS HELD THAT ASSESSING OFFICER TAKING ONE OUT OF TWO VIEWS THE ASSESSMENT ORDER IS NOT PREJUDICIAL TO INTEREST OF REVENUE. IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENTS AND VARIOUS OTHER JUDGEMENTS ON THE ISSUE THE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 11 ASSESSMENT ORDER PASSED BY A.O. CANNOT BE TREATED AS AN ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE CASE OF CIT VS. VODAFONE ESSAR SOUTH LTD. (2013) 2012 TAXMAN 184 HON'BLE DELHI HIGH COURT HELD THAT ASSESSING OFFICER BEFORE PASSING ASSESSMENT ORDER MADE AN ENQUIRY AND DIRECTED HIS MIND ON ALL ASPECTS. VIEW ADOPTED BY HIM WAS CLEARLY ONE AMONG TWO PLAUSIBLE VIEWS THAT COULD HAVE BEEN TAKEN. COMMISSIONER DID NOT SPECIFICALLY FURNISH ANY REASONS TO SAY WHY ORIGINAL ORDER WAS UNSUPPORTABLE IN LAW. COMMISSIONER COULD NOT HAVE VALIDITY EXERCISED HIS REVISIONARY POWER U/S 263 IN INSTANT CASE. 7. RELIANCE WAS PLACED BY THE LD AR ON THE DECISION OF JURISDICTIONAL JAIPUR BENCH OF ITAT IN THE CASE OF VINAY KUMAR SOGANI ITA NO. 444/JP/2018 DATE OF PRONOUNCEMENT: 26/07/2018 (HELD : ..ONCE THE ASSESSEE HAS PRODUCED EVIDENCE WHICH ESTABLISHED THE GENUINENESS OF THE TRANSACTION BEING HOLDING OF SHARES BY THE ASSESSEE IN THE DEMAT ACCOUNT AND PURCHASE OF THE SHARES AGAINST THE CONSIDERATION PAID THROUGH BANKING CHANNEL THEN IN THE ABSENCE OF BRINGING ANY CONTRARY FACT OR DISAPPROVING THE EVIDENCE PRODUCED BY THE ASSESSEE, THE MERE SETTING ASIDE ISSUE 42 BY THE PR. CIT FOR DENOVO CONSIDERATION IS NOT SUSTAINABLE. THOUGH EXPLANATION-2 TO SECTION 263 MANDATES A PROPER ENQUIRY AS THE AO SHOULD HAVE CONDUCTED HOWEVER, EVEN IN THE OPINION OF THE PR. CIT, THE AO HAS NOT CONDUCED A PROPER ENQUIRY AS IT OUGHT TO HAVE BEEN ONCE THE AO HAS ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 12 EXAMINED THE RELEVANT RECORD IN SUPPORT OF THE CLAIM OF THE ASSESSEE THEN THE COMMISSIONER IN THE PROCEEDING U/S 263 OF THE ACT IT ALSO REQUIRED TO HAVE CONDUCTED AN ENQUIRY TO CONTRADICT EVIDENCE. IN THE ABSENCE OF ANY EFFORTS ON THE PART OF THE COMMISSIONER TO CAUSE A ROUTINE INQUIRY ON THE ISSUE THAT HAS ALREADY BEEN CONDUCTED BY THE AO, THE ORDER PASSED BY THE PR. CIT MERELY SETTING ASIDE THE ISSUE TO THE AO FOR CONDUCTING THE DENOVO ASSESSMENT IS NOT PERMISSIBLE. THUS, WHEN THE ENTIRE EVIDENCE IN SUPPORT OF THE CLAIM WAS AVAILABLE ON THE ASSESSMENT RECORD AND THE ASSESSING OFFICER HAS ALREADY EXAMINED THE SAME, THEN THE PR. CIT DIRECTING A RE- ENQUIRY ON THE ISSUE IS NOT PERMISSIBLE U/S 263 OF THE ACT). IN THE INSTANT CASE ALSO THE PR. CIT-3, JAIPUR WHILE PASSING THE ORDER U/S 263 OF THE ACT HAS SIMPLY REPRODUCED THE ISSUE RAISED IN THE SHOW CAUSE NOTICE ISSUED AND HAVE NOT CONSIDERED THE WRITTEN SUBMISSION AND DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE COMPANY BEFORE HIM. AS SUCH THE ORDER PASSED. BY THE LD. PR.CIT IS A MECHANICAL ONE WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. AS PER THE LD AR, THE ITAT, JAIPUR BENCH, JAIPUR IN THE RECENT CASE OF M/S DANGAYACH HOTELS PVT. LTD. VS PR. CIT, CENTRAL, JAIPUR (ITA NO. 290/JP/2017) DATED 04-09-2017 HAS HELD THAT THERE IS DOUBT AS TO WHETHER THE NEWLY INSERTED EXPLANATION 2(A) TO SECTION 263 OF THE ACT WAS INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01-06-2015 WOULD BE APPLICABLE TO ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 13 ASSESSMENT ORDER PASSED PRIOR TO THE EFFECTIVE NESS OF THE AMENDMENT YET WE ARE OF THE VIEW THAT EXPLANATION CANNOT BE SAID TO HAVE OVERRIDE THE LAW INTERPRETED BY THE HONBLE DELHI HIGH COURT IN CASE OF NAGESH KNITWEARS PVT. LTD. (2012) 345 ITR 135 WHERE IN THE HONBLE DELHI HIGH COURT HAS ELUCIDATED AND EXPLAINED THE SCOPE OF PROVISION OF 263 OF THE ACT AND THE SAME HAS BEEN EXTRACTED BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GOETZE (INDIA) LTD 361 ITR 505 WHICH READ AS UNDER:- THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE COMMISSIONER OF INCOME TAX HAS TO COME TO CONCLUSION AND HIMSELF DECIDED THAT THE ORDER IS ERRONEOUS BY CONDUCTING NECESSARY ENQUIRY IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER SECTION 263 IS PASSED. IN SUCH CASES THE ORDER OF THE AO WILL BE ERRONEOUS BECAUSE THE ORDER IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. THE COMMISSIONER OF INCOME- TAX CANNOT REMAND THE MATTER TO THE AO TO DECIDE WHETHER THE FINDINGS RECORDED DARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENTRY AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/ENQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE AO MAKING THE ORDER UNSUSTAINABLE IN LAW/ IN SOME CASES POSSIBLY THOUGH PURELY THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCE DRAWN FROM FACTS ON RECORD AS PER AS JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE AO HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME/ HOWEVER THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE AO TO CONDUCT FURTHER ENQUIRIES WHETHER A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 14 ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION U/S 263 OF THE ACT. IN SUCH MATTERS TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE COMMISSION OF INCOME TAX HAS NOT EXAMINED AND DECLARED WHETHER OR NOT THE ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER IN DECIDE THE ASPECT/QUESTION. THEN LD. AR FURTHER CONTENDED THAT THIS THIS EXPLANATION CANNOT OVERRIDE THE INTERPRETATION PROVIDED BY THE HONBLE DELHI HIGH COURT AND IF THAT BE THE CASE THEN THE LD. PR. CIT CAN FIND FAULT WITH EACH AND EVERY ASSESSMENT WITHOUT CONDUCTING ANY ENQUIRIES OR VERIFICATION IN ORDER TO ESTABLISH THAT THE ASSESSMENT ORDER IS NOT SUSTAINABLE IN LAW AND ORDER FOR REVISION. WE WOULD ALSO LIKE TO STATE THAT LD. PR. CIT CAN FORCE THE ASSESSING OFFICER TO CONDUCT THE ENQUIRIES IN THE MANNER PREFERRED BY HIM THEN IT WILL BE PREJUDICED TO THE INDEPENDENT APPLICATION OF MIND BY THE AO AND DEFINITELY THAT COULD NOT BE INTENTION OF THE LEGISLATURE IN INSERTING EXPLANATION 2 TO SECTION 263 OF THE ACT. SUCH INTERPRETATION WOULD LEAD TO UNENDING LITIGATIONS AND THERE WOULD NOT BE ANY POINT OF FINALITY IN THE LEGAL PROCEEDINGS. THE HONBLE SUPREME COURT IN THE CASE OF PARSHURAM POTTERY WORKS CO. LTD. VS ITO (1977) 106 ITR 1 HELD THERE MUST BE POINT OF FINALITY IN ALL LEGAL PROCEEDINGS. IN OUR CONSIDERED VIEW, THIS PROVISION SHALL APPLY IF THE ORDER HAS BEEN PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATION WHICH A REASONABLE AND PRUDENT OFFICER SHOULD HAVE CARRIED OUT IN SUCH ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 15 CASES. UNDER THESE FACTS AND RATIO DECIDED BY THE HONBLE SUPREME COURTS IN CASE OF CIT VS GREEN WORLD CORPORATION 314 ITR 81 (SC), CIT VS KELVINATOR OF INDIA LTD. 332 ITR 231 (DELHI), CIT-8 BOMBAY VS FINE JEWELLERY (INDIA) LTD. 372 ITR 217, WE ARE OF THE CONSIDERED VIEW THAT IT IS NOT A FIT CASE OF INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. THEREFORE, WE SET ASIDE THE ORDER OF LD. PR CIT AND RESTORE THE ASSESSMENT ORDER ON THIS ISSUE IN THE LIGHT OF ABOVE DELIBERATIONS. IT IS THUS SUBMITTED THAT IMPUGNED ORDER U/S 263 PASSED LD. PR. CIT 3 JAIPUR IS WRONG, BAD IN LAW AND WITHOUT JURISDICTION AND THEREFORE, DESERVES TO BE CANCELLED/SET ASIDE. 9. ON THE OTHER HAND, IT WAS CONTENDED BY THE LD CIT-DR THAT THE ASSESSEE HAS OFFERED RS. 3.00 CRORES AS NET INCOME IN ADDITION TO THE REGULAR INCOME DURING THE COURSE OF SURVEY AND ALSO PAID TAXES THEREON. HOWEVER, WHILE FRAMING THE ASSESSMENT, THE A.O. HAS NOT CONSIDERED THE NET INCOME OFFERED BY THE ASSESSEE NOR THE AMOUNT OF TAX WHICH HAVE ALREADY BEEN PAID BY THE ASSESSEE DURING THE COURSE OF SURVEY. 10. THE LD CIT-DR HAS FURTHER CONTENDED THAT THE INVESTMENT MADE IN THE CONSTRUCTION WAS NOT EXAMINED BY THE A.O. WHILE FRAMING THE ASSESSMENT IN SO FACT AS NO ENQUIRY WAS RAISED WITH REGARD TO HUGE CONSTRUCTION EXPENDITURE SO INCURRED BY THE ASSESSEE NOR THE CAPITAL WORK ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 16 IN PROGRESS WAS EXAMINED. OUR ATTENTION WAS INVITED TO THE OPENING BALANCE UNDER THE HEAD BUILDING, WORK IN PROGRESS AND THE CLOSING BALANCE WHICH WAS NOT MATCHING WITH THE FIGURE GIVEN IN THE BALANCE SHEET. AS PER THE LD.DR INCREASE IN CASH IN HAND AS COMPARED TO THE CASH FOUND DURING THE COURSE OF SURVEY WAS NOT LOOKED INTO. AS PER THE LD DR, EXPLANATION 2 IS CLEARLY APPLICABLE. 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE ASSESSEE WAS SUBJECT TO SURVEY U/S 133A OF THE ACT ON 19/02/2015 WHEREIN THE ASSESSEE COMPANY HAS SURRENDERED AMOUNT OF RS. 3.00 CRORES. SUBSEQUENTLY, THE ASSESSEE COMPANY FILED RETURN OF INCOME DECLARING INCOME OF RS. 4,01,29,300/- WHICH INCLUDED SURRENDERED AMOUNT OF RS. 3.00 CRORES. THE ASSESSEES RETURN WAS SUBJECT TO COMPLETE SCRUTINY AND AFTER MAKING DETAILED ENQUIRY AND VERIFICATION OF THE IMPOUNDED DOCUMENTS/RECORDS SEIZED DURING THE COURSE OF SURVEY U/S 133A OF THE ACT, THE A.O. DETERMINED TOTAL INCOME OF RS. 4,09,98,500/- AFTER MAKING ADDITION OF RS. 2,69,205/- U/S 40A(3) OF THE ACT AND LUMP SUM ADDITION OF RS. 6.00 LACS FOR PERSONAL ELEMENT OF USE IN VARIOUS EXPENSES CLAIMED IN P&L ACCOUNT. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNTS, CASH BOOK, BILLS/VOUCHERS ETC. GIVEN THESE UNDISPUTED FACTS AS APPARENT FROM THE ASSESSMENT ORDER, IT IS CLEARLY APPARENT THAT THE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 17 ASSESSEE HAS UNDERGONE THROUGH TWO DETAILED PROCEEDINGS - SURVEY PROCEEDINGS UNDER SECTION 133A AND THEREAFTER ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT WHERE ITS BOOKS OF ACCOUNTS WERE EXAMINED NOT JUST ONCE BUT TWICE BY THE DEPARTMENTAL AUTHORITIES AND ACCEPTED AFTER CONSIDERING THE SURRENDERED AMOUNT EXCEPT FOR CERTAIN ADDITIONS AS MADE UNDER SECTION 143(3) OF THE ACT. 12. FROM THE RECORD WE FOUND THAT THE AO HAS MADE SUFFICIENT ENQUIRIES, CONSIDERED THE SURVEY RECORDS AND THE SURRENDER MADE BY THE ASSESSEE AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND DUE APPLICATION OF MIND COMPLETED THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. IT IS THUS EVIDENT THAT A.O. MADE ENQUIRIES ON THE ISSUE AND ASSESSEE COMPLIED TO THE ENQUIRIES AND FILED ALL THE REQUIRED DETAILS. THUS, IT IS NOT A CASE WHERE THAT A.O. MADE NO ENQUIRY OR VERIFICATION WHICH SHOULD HAVE BEEN MADE. IT IS CLEAR FROM READING OF NOTICE U/S 263 OF THE ACT, THAT THE PROCEEDINGS U/S 263 HAS BEEN STARTED ON THE SAME ISSUE WHICH HAVE ALREADY BEEN CONSIDERED AND EXAMINED BY THE THEN A.O. THE ALLEGATION OF THE LD. PR.CIT WAS AS UNDER: I) ALLEGED SHORT OFFER OF COACHING FEE REVENUE BY RS.2.20 CRORE FOR TAXATION OUT OF TOTAL SURRENDER OF RS.3.00 CRORE DURING THE COURSE OF SURVEY. II) ALLEGED ABNORMAL INCREASE IN SALARY, CELEBRATION, LEGAL AND RENT EXPENSES III) ALLEGED VARIOUS EXPENSES OF RS.3,34,500/-IN VIOLATION OF SECTION 40A(3). ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 18 IV) ALLEGED NON-VERIFICATION OF CLAIM OF DEPRECIATION ON COMPUTER AND FURNITURE AND VEHICLE RUNNING EXPENSES, ADVERTISEMENT EXPENSES V) ABNORMAL INCREASE IN CASH IN HAND POST SURVEY VI) OUTSTANDING LIABILITIES IN SUNDRY CREDITORS FOR ADVERTISEMENT AND RENT EXPENSES AND STAFF PAYABLE VII) ALLEGED NON-VERIFICATION OF CONSTRUCTION IN BUILDING AND NON-RECONCILIATION OF TRIAL BALANCE VIII) ALLEGED NON-APPLICATION OF PROVISIONS OF SECTION 68 TO 69D READ WITH SECTION 115BBE IN REPLY TO THESE QUERIES OF THE LD. PR.CIT, THE ASSESSEE HAS FILED DETAILED SUBMISSION. FROM THE RECORD WE FOUND THAT DURING THE COURSE OF THE SURVEY ACTION U/S 133A OF THE ACT ON 19.02.2015, WHILE RECORDING STATEMENT U/S 133A, MR. RAJESH KULARIA DIRECTOR OF THE COMPANY OFFERED A SUM OF RS.3.00 CRORE. THE SAID OFFERED AMOUNT WAS DULY DECLARED AND TAX WAS PAID THEREON AS PER DETAIL HEREUNDER PARTICULARS AMOUNT HEAD/GROUP OF INCLUSION COACHING FEE ADVANCE 2,20,00,000/- RECEIPTS FROM STUDENTS- FORMING PART OF REVENUE FROM OPERATION COACHING FEE JEE 59,90,566/- -DO- ADDITIONAL INCOME OVER AND ABOVE INCORPORATED IN BOOKS OF ACCOUNT. 9,27,519/- PLUS RS.10,81,615/- I.E. RS.20,09,434/- COMPUTATION OF TOTAL INCOME TOTA L 3,00,00,000/ - THUS, WE FOUND THAT THE AFORESAID AMOUNT OF RS.3.00 CRORE HAVE ALREADY BEEN ACKNOWLEDGED AS DECLARED BY THE ASSESSEE COMPANY, IN THE PARA 1 OF THE QUERY LETTER DATED 20-12-2017 U/S 142(1) OF THE ACT, ISSUED BY THE AO CONSEQUENT UPON CONVERSION OF THE ASSESSMENT PROCEEDINGS UNDER ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 19 COMPLETE SCRUTINY AFTER OBTAINING NECESSARY APPROVAL OF THE LD. PCIT-3 JAIPUR AS WELL AS IN PARA 2 OF THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. 13. IT WAS ALLEGATION OF THE LD. PR.CIT THAT ASSESSEE COMPANY HAS OFFERED ONLY RS.20,09,434/- IN THE COMPUTATION OF TOTAL INCOME AND RS.59,90,566/- UNDER THE HEAD REVENUE FROM OPERATION. THE SAID OBSERVATION IS FAR AWAY FROM FACTS AS AMOUNT OF RS.2,20,00,000/- HAVING ACCOUNTING HEAD COACHING FEE ADVANCE ALONG WITH AMOUNT OF RS.59,90,566/- HAVING ACCOUNTING HEAD COACHING FEE (JEE), WAS ALSO OFFERED IN THE ACCOUNTING GROUP HEAD-RECEIPTS FROM STUDENTS FORMING PART OF REVENUE FROM OPERATION. ALL THESE FACTS AND FIGURES ARE VERIFIABLE FROM THE AUDITED FINANCIAL STATEMENTS AS WELL AS FROM PARA 2.1 OF THE SAID SHOW CAUSE NOTICE, WHERE IN IT IS MENTIONED THAT FOR TAXATION OUT OF THE SURRENDERED AMOUNT THE ASSESSEE RECORDED RS.2.20 CRORE AS COACHING FEE ADVANCE UNDER THE HEAD REVENUE FROM OPERATION. 14. WE OBSERVE FROM THE ORDER OF THE LD. PR.CIT THAT MERELY ON ACCOUNT OF NOMENCLATURE OF ACCOUNT HEAD AS COACHING FEE ADVANCE, THE LD PR.CIT ASSUMED THAT SAID AMOUNT WAS NOT OFFERED TO INCOME. THE SAID AMOUNT OF RS.2.20 CRORE IS PART AND PARTIAL OF THE OFFERED AMOUNT OF RS.3.00 CRORE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 20 DURING THE COURSE OF SURVEY PROCEEDINGS AND VERIFIED WITH THE UNDERLYING BOOKS OF ACCOUNTS AND ASSESSMENT RECORD. 15. WE HAD ALSO CAREFULLY GONE THROUGH THE ACCOUNTING POLICIES FORMING PART OF THE AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE COMPANY. IN THE SCHEDULE OF ACCOUNTING POLICIES ACCOUNTING POLICY PERTAINING TO REVENUE RECOGNITION IS DISCLOSED AS PER POLICY NO.1 (K). 1 (K) REVENUE RECOGNITION REVENUE IS RECOGNIZED ONLY WHEN IT CAN BE REASONABLE MEASURED AND THERE EXISTS REASONABLE CERTAINTY OF ITS RECOVERY. FEE/INCOME COLLECTED IN ADVANCE FOR THE PERIOD SUBSEQUENT TO THE ACCOUNTING PERIOD IS SHOWN AS CURRENT LIABILITY 16. IT IS ALSO EVIDENT FROM THE AUDITED FINANCIAL STATEMENTS READ WITH AFORESAID ACCOUNTING POLICY THAT THE RS.2.20 CRORE FORMING PART OF OFFER OF INCOME DURING THE COURSE OF SURVEY ACTION WAS DECLARED UNDER THE HEAD REVENUE FROM OPERATION AND OFFERED TO TAX. HAD THE SAID RECEIPT HAVE BEEN TREATED AS ADVANCE THE SAME WOULD NOT HAVE BEEN INCLUDED IN THE REVENUE FROM OPERATION AND WOULD HAVE BEEN SHOWN IN THE ACCOUNTING HEAD OF CURRENT LIABILITY AS PER ACCOUNTING POLICY ADOPTED BY THE ASSESSEE COMPANY. THUS, THE AMOUNT OF RS.2.20 CRORE BEING PART OF OFFERED INCOME DURING THE COURSE OF SURVEY ACTION, HAS BEEN DULY OFFERED BY ASSESSEE TO TAX IN THE RETURN OF INCOME FILED FOR THE YEAR. 17. WE ALSO GONE THROUGH THE REPLY OF THE ASSESSEE TO THE QUESTIONNAIRE DATED 20-12-2017, DETAILING NATURE AND IMPLICATION OF IMPOUNDED ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 21 DOCUMENTS DURING SURVEY PROCEEDINGS. AS PER SUB PARA A) TO D) OF PARA 6 OF THE SAID REPLY LETTER, NATURE AND IMPLICATION OF THE IMPOUNDED PAPERS VIDE ANNEXURE A-1 TO A-6 WERE EXPLAINED. ON PERUSAL OF THE SAID REPLY AS WELL AS IN REPLY TO QUESTION NO. 21 OF THE STATEMENT RECORDED U/S 133A , IT IS VERIFIABLE THAT OUT OF THE OFFERED INCOME OF RS.20,09,434/- IN THE COMPUTATION OF TOTAL INCOME RS.9,27,519/- WAS OFFERED ON ACCOUNT OF RECONCILIATION DIFFERENCE OF SERVICE TAX COMPONENT BETWEEN BOOKS OF ACCOUNTS AND FEE COLLECTION DETAILS AND REMAINING AMOUNT OF RS.10,81,915/- I.E. RS.20,09,434 MINUS RS.9,27,519/- WAS OFFERED TO MEET THE REMAINING AMOUNT OF OFFER OF RS. 3.00 CRORE IN THE STATEMENT RECORDED OF MR. RAJESH KULARIA DIRECTOR OF THE ASSESSEE COMPANY DURING THE COURSE OF SURVEY PROCEEDINGS. 18. THE LD. PR.CIT HAS ALSO ALLEGED IN THE SHOW CAUSE NOTICE THAT THERE IS ABNORMAL INCREASE IN FOLLOWING EXPENSES FOR WHICH ASSESSMENT OF THE ASSESSEE COMPANY WAS CONVERTED IN COMPLETE SCRUTINY CASE AND NO DETERMINED ADDITION WAS MADE UNDER THESE HEADS EXCEPT A LUMP SUM ADDITION OF RS.6,00,000/- NAME OF EXPENSES HEAD AMOUNT F.Y. 2014 - 15 F.Y. 2013 - 14 SALARY & WAGES 5,47,60,400/ - 3,96,75,047/ - CELEBRATION & FESTIVAL EXPENSES 20,84,356/- 16,25,322/- ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 22 LEGAL & PRO FESSIONAL EXPENSES 81,92,200/ - + (PROFESSIONAL FEE TO TUTORS RS. NIL) 3, 8 5,100/ - + (PROFESSIONAL FEE TO TUTORS RS.85,51,000/- RENT 66,96,000/ - 49,20,000/ - 19. IN REGARD TO ABOVE QUERY OF THE LD. PR.CIT, WE OBSERVE THAT IN RESPONSE AND REPLY TO QUERY LETTER DATED 20-12-2017, ASSESSEE COMPANY HAS DULY FILED STATEMENT CONTAINING DETAILS OF SALARY & WAGES WITH EACH NAME OF EMPLOYEE AS WELL AS ITS BIFURCATION AS TEACHING AND NON-TEACHING STAFF. THE SAID DETAIL ALSO CONTAINED THE TOTAL AMOUNT OF SALARY PAID AND TDS DEDUCTED THEREON AS APPLICABLE 20. FROM THE RECORD WE ALSO FOUND THAT DURING THE YEAR UNDER ASSESSMENT, ALWAR BRACH OF THE ASSESSEE COMPANY WAS ALSO STARTED AND SALARY EXPENSES OF RS.17,21,996/- WAS INCURRED ON STAFF EMPLOYED WITH ALWAR BRANCH. COPY OF LEDGER ACCOUNT OF SALARY HEAD SHOWING MONTHLY SUMMARY FOR EACH OF THE MONTH FROM APRIL TO MARCH OF THE FINANCIAL YEAR WAS PLACED IN THE PAPER BOOK WHICH WAS ALSO FILED BEFORE LD. PR.CIT-3. IT IS APPARENT FROM THE PERUSAL OF THE SAID LEDGER ACCOUNT THAT FOR EVERY MONTH SALARY EXPENSES AT SIKAR BRANCH IS BETWEEN RS. 40 LACS TO 43 LACS I.E. BEFORE SURVEY TOOK PLACE IN FEBRUARY 2015 AS WELL AFTER MONTH OF SURVEY. DURING THE COURSE OF SURVEY PROCEEDINGS, NO ADVERSE ISSUE WAS NOTED REGARDING SALARY EXPENSES. SINCE ASSESSEE COMPANY HAS ALREADY BIFURCATED THE EMPLOYEES BETWEEN TEACHING AND NON TEACHING STAFF AND AS SUCH NOT ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 23 FURTHER PRESSED BY THE AO, SPECIFICALLY ABOUT QUALIFICATION OF EMPLOYEES AND NATURE OF DUTY. 21. IT IS CLEAR FROM THE RECORD THAT THE ASSESSEE COMPANY IS RUNNING PMT AND IIT ENTRANCE EXAMINATION COACHING DIVISION IN THE MEDICAL AND ENGINEERING STREAM AND TEACHING STAFF WAS EMPLOYED WITH A MINIMUM QUALIFICATION OF POST GRADUATE IN SCIENCE/ GRADUATE OR POST GRADUATE IN ENGINEERING B.TECH. A STATEMENT CONTAINING NAME OF EMPLOYEE, ITS COMPLETE ADDRESS, QUALIFICATION, PERMANENT ACCOUNT NUMBER, GROSS SALARY PAID/CREDITED DURING THE YEAR, MODE OF PAYMENT AND OUTSTANDING SALARY AT THE END OF YEAR WAS ALSO FILED BEFORE THE LD. PR.CIT IN SUPPORT OF THE SALARY EXPENSES. THE DETAILS ARE VERIFIABLE WITH CORRESPONDING DETAIL FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CONTAINING NAME OF EMPLOYEE AND RESPECTIVE ANNUAL SALARY THEREOF. AS SUCH NO ADVERSE INFERENCE NEEDS TO BE DRAWN MERELY ON THE BASIS OF NON-AVAILABILITY OF DETAIL OF QUALIFICATION AND NATURE OF DUTY SINCE THE SALARY EXPENSES DETAILS WERE EXAMINED BY THE AO WITH RELATED DETAILS AS PER BOOKS OF ACCOUNTS PRODUCED DURING ASSESSMENT PROCEEDINGS. 22. WITH REGARD TO LD. PR.CITS OBSERVATION REGARDING CELEBRATION AND FESTIVAL EXPENSES, WHICH WAS FOUND BY THE LD. PR.CIT THAT THERE IS ABNORMAL INCREASE IN CELEBRATION AND FESTIVAL EXPENSES AND NO DETERMINED ADDITION ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 24 WAS MADE CONSEQUENT UPON CONVERSION OF LIMITED SCRUTINY TO COMPLETE SCRUTINY. IN THIS REGARD WE OBSERVE THAT DURING THE YEAR UNDER CONSIDERATION THE SAID EXPENSES INCURRED OF RS.20,84,356/- IN COMPARISON TO CORRESPONDING EXPENSES RS.16,25,322/- IN THE PRECEDING ASSESSMENT YEAR. IN TERMS OF AMOUNT, INCREASE IN EXPENSES OF RS.4,59,034/- AND IN PERCENTAGE TERMS 28.24%, WHICH CANT BE TREATED ABNORMAL IN TERMS OF INCREASE IN REVENUE OF COACHING FEES BY 13.25% ON YEAR TO YEAR BASIS. VIDE PARA 2 OF THE REPLY LETTER TO THE QUESTIONNAIRE DATED 20-12-2017, ASSESSEE COMPANY HAS IN DETAIL NARRATED THE NATURE OF CELEBRATION AND FESTIVAL EXPENSES AND RELATED BILLS/VOUCHERS WERE PRODUCED AND LEDGER ACCOUNT HAVING TRANSACTION WISE ENTRY WAS FILED AND AS SUCH IT IS WRONG TO ALLEGE THAT THE SAID DETAILS WERE NOT VERIFIED AND NO DETERMINED ADDITION WAS MADE. 23. WITH REGARD TO LEGAL PROFESSIONAL CHARGES DEBITED IN THE P&L ACCOUNT AND THE INCREASE IN THE EXPENDITURE THEREON, WE FOUND THAT EXPENDITURE IN TWO YEARS ARE AS UNDER: LEGAL & PROFESSIONAL EXPENSES F.Y. 2014-15 F.Y. 2013-14 81,92,200/- + (PROFESSIONAL FEE TO TUTORS RS. NIL) 3,85,100/- + (PROFESSIONAL FEE TO TUTORS RS.85,51,000/- ON PERUSAL OF ABOVE DETAIL WHICH ARE VERIFIABLE FROM THE OTHER EXPENSES HEAD IN THE AUDITED PROFIT AND LOSS ACCOUNT DURING THE F.Y. 2014-15 ENTIRE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 25 EXPENSES RELATING TO LEGAL AND PROFESSIONAL EXPENSES INCLUDING PROFESSIONAL FEE TO TUTORS WAS DEBITED AND ACCOUNTED FOR IN SINGLE LEDGER ACCOUNT HEAD I.E. LEGAL AND PROFESSIONAL CHARGES, WHERE AS IN THE PRECEDING YEAR 2013- 14 LEGAL AND PROFESSIONAL EXPENSES OF RS.3,85,100/- AND PROFESSIONAL FEE TO TUTORS RS. 85,51,000/- WERE SEPARATELY DEBITED/ACCOUNTED FOR IN TWO LEDGER ACCOUNT AS APPEARING IN THE AUDITED PROFIT & LOSS ACCOUNT. AS SUCH IN FACT THERE IS DECREASE IN LEGAL AND PROFESSIONAL EXPENSES BY RS. 7,43,900/- RATHER THAN INCREASE AS POINTED IN THE SHOW CAUSE NOTICE ISSUED U/S 263 OF THE ACT. 24. WITH REGARD TO RENT EXPENDITURE AS ALLEGED BY THE LD. PR.CIT , WE OBSERVE THAT VIDE PARA 2 OF THE REPLY LETTER TO THE QUESTIONNAIRE DATED 20- 12-2017, FILED BEFORE LD. PR.CIT-3, ASSESSEE COMPANY HAS FURNISHED DETAILED REPLY AND REASONING OF THE RENT EXPENSES OF RS.66.96 LACS IN THE YEAR UNDER ASSESSMENT IN COMPARISON TO RS. 49.20 LAC IN THE PRECEDING ASSESSMENT YEAR. IT WAS SPECIFICALLY SUBMITTED IN THE SAID REPLY LETTER THAT INCREASE IN RENT BY RS.16.50 LAC WAS ON ACCOUNT OF RENT EXPENSES OF ALWAR BRACH, WHICH WAS OPENED AND OPERATIONALIZED DURING THE YEAR FROM MAY 2014 AT A RENT OF RS.1.50 LACS PER MONTH. TDS AS APPLICABLE WAS DULY DEDUCTED AND DEPOSITED ON THE SAID RENT EXPENSES. REMAINING AMOUNT OF INCREASE IN RENT I.E. RS.17.76 LACS MINUS 16.50 LACS I.E. RS.1.26 LACS WAS ON ACCOUNT OF ANNUAL 5 PERCENT INCREASE OF LEASE RENT OF INSTITUTE BUILDING. A ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 26 TABLE SHOWING NAME OF LANDLORD, ADDRESS OF RENTED PREMISES, RENT AMOUNT FOR THE WHOLE YEAR AND TDS DEDUCTED THEREON WAS PLACED ON RECORD. WE ALSO OBSERVE THAT THE SAID DETAILS ALONG WITH CONFIRMATION OF THE RESPECTIVE LAND LORD OF PREMISES RUNNING ON RENT AT SIKAR WERE ALSO FILED ALONG WITH REPLY LETTER TO THE QUESTIONNAIRE DATED 20-12-2017 NAME OF LANDLORD ADDRESS OF RENTED PREMISES PURPOSE OF USE AMOUNT OF RENT TDS AMOUNT JAGPAL SINGH HUF JYOTI NAGAR PIPRALI ROAD SIKAR CLASS ROOM COACHING BUILDING PORTION 12,00,000/- 1,20,000/- SMT. MAMKAUR JYOTI NAGAR PIPRALI ROAD SIKAR CLASS ROOM COACHING BUILDING PORTION 12,00,000/- 1,20,000/- GURUKRIPA CAREER INSTITUTE JYOTI NAGAR PIPRALI ROAD SIKAR OFFICE AND CLASS ROOM COACHING BUILDING 26,46,000/- 2,64,600/- OM PRAKASH NARULA, PLOT NO. 1 NEAR AMBEDKAR CIRCLE SCHEME NO.3 ALWAR CLASS ROOM COACHING AND OFFICE 1/3 PORTION 5,50,000/ - 55,000/ - RAJKUMAR NARULA -DO- -DO- 5,50,000/- 55,000/- RAMESH CHANDRA NARULA - DO - - DO - 5,50,000/ - 55,0 00/ - TOTAL 66,96,000/ - 6,69,600/ - 25. WE ALSO FOUND THAT ADDITIONALLY COPY OF RENT DEED W.R.T. TO PREMISES TAKEN ON RENT WAS ALSO BEING FILED BEFORE LD. PR.CIT-3. RENT EXPENSES WAS VERIFIED BY AO FROM THE DETAILS AND DOCUMENTARY EVIDENCE FILED. ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 27 26. WITH RESPECT TO OBSERVATION OF THE PR.CIT REGARDING STUDENT AND WELFARE EXPENSES OF RS.5.00 LACS ALLOWED WITHOUT VERIFICATION, WE OBSERVE THAT THE SAID EXPENSES WAS PAID TO M/S GURU KRIPA HOSPITAL RESEARCH CENTRE PRIVATE LIMITED AND WAS DULY DECLARED IN RELATED PARTY TRANSACTION DETAILS IN THE AUDITED FINANCIAL STATEMENTS AS WELL AS IN RELEVANT COLUMN IN FORM 3CD FILED U/S 44AB OF THE ACT. THE SAID EXPENSES OF RS.5.00 LACS DULY EXPLAINED AND VERIFIED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDING. THE SAID EXPENSES INCURRED WAS OF RS.5.00 LACS IN THE YEAR UNDER ASSESSMENT AS COMPARED TO EXPENSES AMOUNT OF RS.54.57 LACS IN THE PRECEDING YEAR. ASSESSEE COMPANY HAS ENTERED INTO TIE-UP WITH M/S GURU KRIPA HOSPITAL RESEARCH CENTRE PRIVATE LIMITED FOR OFFERING CONCESSIONAL HEALTH/MEDICAL CONSULTATION TO THE STUDENTS OF ITS INSTITUTE AND THEREBY IN FACT MINIMIZED DRASTICALLY ITS EXPENSES ON SAID HEAD. 27. THE LD. PR.CIT IN THE PARA 2.5 OF THE SHOW CAUSE NOTICE ALLEGED THAT EXPENSES ARE IN VIOLATION OF SECTION 40A(3) ON ACCOUNT OF PRIZE DISTRIBUTION AND CELEBRATION & FESTIVAL EXPENSES HAVE BEEN ALLOWED AS UNDER:- NAME OF EXPENSES HEAD DATE AMOUNT PRIZE DISTRIBUTION EXPENSES 04.10.2014 1,10,000/- 04.10.2014 1,53,000/- CELEBRATION & FESTIVAL EXPENSES 21.10.2014 37,500/- 21.10.2014 34,000/- 28. IN THIS CONNECTION, WE OBSERVE FROM THE DETAILS PLACED ON RECORD THAT NO PAYMENT EXCEEDING RS.20,000/- IN CASH WAS MADE TO ANY PERSON IN ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 28 VIOLATION OF THE PROVISIONS OF THE SECTION 40A (3) OF THE ACT. PRIZE DISTRIBUTION EXPENSES OF RS.1,10,000/- AND RS.1,53,000/- WERE ON ACCOUNT OF CASH PRIZE DISTRIBUTED TO STUDENTS WHO WERE DECLARED DIAMOND AND STAR STUDENT OF GURU KRIPA CAREER INSTITUTE PVT LTD. CASH PRIZES OF RS.11,000/- EACH WAS PAID TO 11 STUDENTS, WHO WERE DECLARED AS DIAMOND AND RS.5100/- EACH WAS PAID TO 30 STUDENTS WHO WERE DECLARED AS STARS. DOCUMENTARY EVIDENCE IN SUPPORT OF THESE PAYMENTS IN THE FORM OF SHEET CONTAINING NAME OF STUDENT AND THEIR RESPECTIVE SIGNATURE IN ACKNOWLEDGMENT WAS PRODUCED AS BILLS/VOUCHER WITH BOOKS OF ACCOUNT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 29. FROM THE RECORD, WE FOUND THAT THE FESTIVAL EXPENSES OF RS.37,500/- AND 34,000/-WAS INCURRED ON THE FESTIVAL OF DEEPAWALI TO NON-TEACHING STAFF AND CASUAL WORKERS LIKE, SWEEPER, POSTMAN, ELECTRICIAN FROM JVVNL ETC. THE DETAILS OF SAID PAYMENT WITH NAME AND AMOUNT WAS FORMING PART OF THE VOUCHER OF PAYMENT AND WAS DULY EXAMINED BY THE TAX AUDITOR AS WELL AS BY THE AO DURING SCRUTINY ASSESSMENT. INDIVIDUAL PAYMENT TO SAID PAYEES IS NOT EXCEEDING RS.1000/- PER PAYEE AND THE SAME IS EVIDENT FROM THE COPY OF VOUCHER PRODUCED WITH SUPPORTING DETAIL. WE ALSO FOUND THAT EACH CASH PAYMENT EXCEEDING IN VIOLATION OF THE PROVISIONS OF SECTION 40A (3) WAS DULY VERIFIED BY THE AO AND THATS WHY ADDITION U/S 40A (3) OF THE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 29 ACT WAS MADE IN THE ASSESSMENT ORDER ON ACCOUNT OF THE PAYMENT OF ELECTRICITY BILL OF RS.2,69,205/- MADE IN CASH TO JVVNL. 30. IN THE SHOW CAUSE NOTICE, THE LD. PR.CIT ALSO ALLEGED THAT DEPRECATION ON FURNITURE AND COMPUTERS WAS ALLOWED AS CLAIMED IN THE RETURN OF INCOME WITHOUT ANY VERIFICATION. THE SAID OBSERVATION IS FAR AWAY FROM THE DETAILS FILED AND AVAILABLE ON ASSESSMENT RECORD OF THE ASSESSEE COMPANY. VIDE ITS 3 RD REPLY LETTER TO THE QUESTIONNAIRE DATED 20-12-2017, ASSESSEE COMPANY HAD FILED DETAIL OF ADDITION MADE TO VARIOUS FIXED ASSETS ALONG WITH COPY OF BILLS/VOUCHERS WHERE THE AMOUNT OF SUCH ADDITION WAS MORE THAN RS.50,000/- IN CASE OF BUILDING CONSTRUCTION AND IN OTHER CASE OF OTHER FIXED ASSET ADDITION, WHERE THE AMOUNT EXCEED RS.10,000/-. 31. WE ALSO FOUND THAT OVER AND ABOVE ADDITION TO SAID ASSETS WERE DULY VERIFIED BY THE TAX AUDITOR AND CERTIFIED IN THE DEPRECATION CHART WITH RESPECTIVE DATE OF ADDITION IN FORM 3CD. DURING THE YEAR UNDER ASSESSMENT ADDITION TO THE COMPUTERS WERE MADE FOR RS.19,06,350/-. ON 14-05-2014 VIDE BILL NO. 2025 DATED 14-05-2014 85 DESKTOP COMPUTERS WERE PURCHASED FOR RS.17,55,250/- (EACH COSTING RS.20650/-). (COPY OF THE LEDGER ACCOUNT AND COPY OF INVOICES FOR ADDITIONS IN THE COMPUTER HEAD ARE AGAIN PLACED ON RECORD, WERE FILED BEFORE LD. PR.CIT. THE SAID DESKTOP COMPUTERS WERE PURCHASED FOR THE INSTALLATION IN COMPUTER LAB FOR CONDUCTING TRAINING OF ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 30 STUDENTS FOR ON-LINE PRE-MEDICAL AND PRE-ENGINEERING ENTRANCE EXAMINATION. THE SAID COMPUTERS WERE PURCHASED ON ACCOUNT OF CHANGE OF OFFLINE MODE TO ONLINE MODE OF CONDUCT OF SAID ENTRANCE EXAMINATION BY THE AIIMS AND IIT. THE SAME FACTS WERE ALSO CONVEYED TO THE AO DURING HEARING OF THE SCRUTINY ASSESSMENT. 32. FROM THE RECORD, WE ALSO FOUND THAT THE ADDITION TO FURNITURE FOR RS.10,50,263/- WERE MADE DURING THE YEAR AND THE BILLS/VOUCHERS OF EACH ADDITION TO FURNITURE WERE FILED ALONGWITH COPY OF ITS LEDGER ACCOUNT BEFORE THE A.O. 33. THE LD. PR.CIT HAS ALSO ALLEGED THAT VEHICLE RUNNING EXPENSES HAVE BEEN ALLOWED AS CLAIMED IN THE RETURN OF INCOME WITHOUT ANY VERIFICATION. IN THIS REGARD WE OBSERVE THAT THE ASSESSEE COMPANY HAD FILED COPY OF LEDGER ACCOUNT OF VEHICLE RUNNING EXPENSES WHILE FILING COPIES OF VARIOUS EXPENSES LEDGER ACCOUNTS WITH 2 ND REPLY LETTER TO THE NOTICE/QUESTIONNAIRE DATED 20-12-2017. DURING THE INSTANT ASSESSMENT YEAR VEHICLE RUNNING EXPENSES WERE INCURRED FOR RS.12,21,778/- IN COMPARISON TO RS.4,39,248/- IN THE PRECEDING ASSESSMENT YEAR. IN THE YEAR UNDER ASSESSMENT TATA BUS FOR TRANSPORTATION OF THE STUDENTS WAS PURCHASED AND INCREASE IN VEHICLE RUNNING EXPENSES WAS ALSO ON ACCOUNT OF SAID BUS RUNNING EXPENSES. VEHICLE RUNNING EXPENSES WERE DULY EXAMINED BY THE AO DURING THE ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 31 ASSESSMENT PROCEEDINGS AS VERIFIABLE FROM THE PARA 4 OF THE ASSESSMENT ORDER, WHEREIN AO HAS MADE A LUMP SUM ADDITION OF RS.6.00 LACS ON ACCOUNT OF POSSIBLE PERSONAL USE OF MOTOR VEHICLE (BMW CAR) AND TELEPHONE/MOBILE EXPENSES. 34. THE LD. PR.CIT HAS ALSO ALLEGED THAT THAT THERE IS ABNORMAL INCREASE IN CASH IN HAND FROM RS.81,43,641/- ON THE DATE OF SURVEY TO RS.2.17 CRORE AS ON 31.03.2015 HAS NOT BEEN VERIFIED. IN THIS RESPECT WE OBSERVE FROM THE RECORD THAT THE ASSESSEE COMPANY HAD SUBMITTED THAT SAID INCREASE IN CASH WAS ON ACCOUNT OF AMOUNT OFFERED AND ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF RS.2.20 CRORE UNDER THE HEAD COACHING FEE(ADVANCE). THE SAID OFFERED INCOME WAS RECORDED IN THE BOOKS OF ACCOUNTS POST SURVEY PROCEEDINGS AND OFFERED TO TAX. FURTHER CASH BOOK FOR THE ENTIRE PERIOD OF THE ASSESSMENT YEAR WAS PRODUCED AND ALSO EXAMINED BY THE AO. THEREFORE, WE DO NOT FIND ANY MERIT IN THE OBSERVATION OF THE LD. PR.CIT THAT THERE IS ABNORMAL INCREASE IN CASH AND NO JUSTIFICATION WAS OFFERED BY ASSESSEE COMPANY. FURTHER MONTHLY SUMMARY OF CASH BOOKS HAVING MONTH-WISE OPENING BALANCE, RECEIPTS, PAYMENTS AND CLOSING BALANCE FOR THE YEAR UNDER CONSIDERATION WAS ALSO FILED BEFORE THE LD. PR.CIT-3. 35. FROM THE RECORD, WE ALSO FOUND THAT DURING THE YEAR UNDER ASSESSMENT ADVERTISEMENT EXPENSES OF RS.1.93 CRORE WERE INCURRED IN ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 32 COMPARISON TO RS.2.12 CRORE IN THE PRECEDING ASSESSMENT YEAR. DURING THE YEAR UNDER ASSESSMENT THE ADVERTISEMENT EXPENSES HAVE REDUCED FROM 2.12 CRORE TO RS.1.93 CRORE DUE TO BETTER RATE NEGOTIATIONS WITH ADVERTISING AGENCY. ASSESSEE COMPANY HAS FILED ADVERTISING AGENCY WISE DETAIL OF ADVERTISEMENT EXPENSES AND COPY OF CONFIRMATIONS OF MAHESH ADVERTISING AGENCY AND SAI ADVERTISING AGENCY ALONG WITH 1 ST REPLY LETTER TO THE QUESTIONNAIRE DATED 20-12-2017. THUS, THERE IS NO MERIT IN THE LD. PR.CITS ALLEGATION THAT AT THIS STAGE, EXPENSES WERE NOT VERIFIED BY THE A.O. 36. IN THE PARA 2.10 OF THE SHOW CAUSE NOTICE LD. PR.CIT HAS OBSERVED THAT AMOUNT PAYABLE AGAINST TRADE EXPENSES TO FOLLOWING PARTIES HAVE NOT BEEN VERIFIED. S.NO. NAME OF CREDITOR FOR EXPENSES AMOUNT NATURE OF EXPENSES 1 GURUKRIPA CAREER INSTITUTE 12,39,978/ - RENT 2 JAGPAL SINGH HUF 13,60 ,000/ - RENT 3 MAHAVEER ENTERPRISES 9,47,334/- OPENING BALANCE 4 SAKSHI PRINTERS 5,60,924/- BOOKS AND STUDY MATERIAL 5 SMT.MAMKAUR 14,60,000/ - RENT 37. IN THIS REGARD, WE OBSERVE THAT VIDE NOTICE U/S 142(1) ISSUED ON 05- 06-2017, THE AO VIDE PARA NO.3 OF THE QUERY LETTER CALLED FOR COPY OF FINANCIAL STATEMENTS ALONG WITH GROUPING THERETO, I.E. DETAIL WITH NAMES OF ALL CREDITORS AND DEBTORS. THE SAID DETAILS WERE FILED BY THE ASSESSEE COMPANY VIDE ITS REPLY LETTER DATED 28-06-2017 FILED BEFORE LD. PR.CIT-3. ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 33 WE FIND THAT M/S GURU KRIPA CAREER INSTITUTE, MR. JAGPAL SINGH HUF AND SMT. MAMKARU WERE REGULAR SERVICE PROVIDER AS LANDLORD OF PREMISES TAKEN ON RENT, THE DETAIL OF WHICH WERE DULY SUBMITTED AND VERIFIED BY THE LD. AO. M/S SAKSHI PRINTERS WAS REGULAR SUPPLIER OF STUDY PRINTED MATERIAL FOR STUDENTS AND THEIR BILLS/VOUCHERS WERE PRODUCED FOR VERIFICATION ALONG WITH BOOKS OF ACCOUNTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 38. IT HAS ALSO BEEN OBSERVED BY LD. PR.CIT THAT THERE IS ABNORMAL INCREASE IN OTHER EXPENSES, WHEREAS IN FACT IN THE ASSESSMENT YEAR UNDER CONSIDERATION OTHER EXPENSES, REFERRING NOTE NO.22 OF THE AUDITED FINANCIAL STATEMENTS HAVE COME DOWN TO RS.605.98 LACS FROM RS.676.54 LACS IN THE PRECEDING YEAR. DETAIL OF ADVERTISEMENT EXPENSES PRE AND POST SURVEY WERE DULY FILED BEFORE THE A.O.. FROM THE PERUSAL OF THE SAID LEDGER ACCOUNT IT IS APPARENT THAT THERE IS NO ABNORMALITY OF THE ADVERTISEMENT EXPENSES POST SURVEY 39. WITH REGARD TO OBSERVATION OF THE LD. PR.CIT THAT THERE IS INCREASE IN CASH BALANCE, IN THIS REGARD WE FOUND THAT CASH BALANCE OF RS.2.16 CRORE AS ON 31-03-2015 WAS ARISING OUT OF THE OFFERED AMOUNT OF RS.2.20 CRORE AND RS.59.91 LACS DURING SURVEY PROCEEDINGS. THE SAID CASH BALANCE DULY REFLECTED IN THE CASH BOOK PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CASH BALANCE AT THE END OF THE YEAR OF RS.2,16,59,171/- ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 34 WAS LYING AT SIKAR (INADVERTENTLY IN GROUPING TO THE AUDITED FINANCIAL STATEMENTS, WRITTEN AS JAIPUR) AND AT ALWAR RS.50,012/- THE ASSESSEE COMPANY IS NOT HAVING ANY BUSINESS ACTIVITIES AT JAIPUR. 40. THE LD. PR.CIT HAS ALSO ALLEGED THAT INVESTMENT IN BUILDING CONSTRUCTION AT HANUMAN NAGAR SIKAR (JEE COACHING BUILDING) AS ACCEPTED IN THE STATEMENT OF MR. RAJESH KULARIA DIRECTOR OF THE COMPANY IN REPLY TO QUESTION NO. 18 HAS NOT BEEN EXAMINED BY THE AO. THE SAID ALLEGATION IS FAR AWAY FROM FACTS OF THE CASE. FROM THE REPLY OF THE SAID QUESTION IT IS VERY MUCH APPARENT THAT THE CONSTRUCTION EXPENSES OF RS.2,71,04,786/- INCURRED UP TO 19-02-2015 WAS FROM TRIAL BALANCE FORMING PART OF THE ACCOUNTS. THE SAID EXPENDITURE WAS ALREADY DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DETAIL OF CONSTRUCTION EXPENSES AND BILLS/VOUCHERS OF INDIVIDUAL EXPENSES EXCEEDING RS.50,000/- OR MORE WERE FILED WITH 3 RD REPLY LETTER TO THE QUESTIONNAIRE DATED 20-12-2017. 41. FURTHER QUESTION NO. 21 WAS PERTAINING TO TOTAL COACHING RECEIPT OF RS.14,05,39,498/- AS PER BOOKS OF ACCOUNTS AND RS. 15,88,37,699/- AS PER ANNEXURE-A-1 (DETAIL OF FEE RECEIVED FROM STUDENTS.) THE SAID DIFFERENCE OF RS.1,82,98,201/- WAS ON ACCOUNT OF SERVICE TAX AMOUNT OF RS.1,73,70,682/- AND REMAINING DIFFERENCE OF RS.9,27,519/- WAS OFFERED TO INCOME AS RECONCILIATION DIFFERENCE IN THE COMPUTATION OF TOTAL INCOME. AS ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 35 SUCH THE QUESTION NO. 21 AND ITS REPLY WAS DULY CONSIDERED AND EXAMINED BY THE AO. QUESTION NO. 22 WAS PERTAINING TO ANOTHER FIRM M/S GURU KRIPA CAREER SCHOLAR HOSTEL. THE SAID FIRM WAS ALSO SURVEYED AND SCRUTINY ASSESSMENT U/S 143(3) WAS COMPLETED BY THE AO. QUESTION NO. 23 WAS RELATED TO IMPOUNDED ANNEXURE A-3 AND A-6. THE DETAILED REPLY OF NATURE OF UNDERLAYING DOCUMENTS AND CONTENTS THEREIN WERE EXPLAINED BY THE ASSESSEE COMPANY VIDE ITS 2 ND REPLY LETTER TO THE QUESTIONNAIRE DATED 20-12-2017. KINDLY REFER TO PARA 6(D) OF THE SAID REPLY LETTER WHERE IN IT IS SUBMITTED THAT THE TRANSACTIONS RECORDED IN THESE ANNEXURES ARE RELATED TO GURU KRIPA CAREER INSTITUTE PVT LTD., GURU KRIPA CAREER SCHOLARS HOSTEL AND ASTHA ACADEMY (UNIT OF NAVPRERNA SHIKSHAN SANSTHAN) WERE DULY RECORDED IN THEIR REGULAR BOOKS OF ACCOUNTS AND THIS FACT HAS ALSO BEEN MENTIONED IN THE REPLY LETTER DURING THE ASSESSMENT PROCEEDINGS OF GURU KRIPA CAREER SCHOLARS HOSTEL. WHILE THE RECEIPTS RELATED TO GURU KRIPA CAREER INSTITUTE PVT LTD. WERE NOT FULLY RECORDED AND THE SAME UNRECORDED FEE AMOUNT WAS OFFERED FOR TAXATION BY THE ASSESSEE COMPANY AND WERE DULY INCORPORATED IN THE TOTAL INCOME IN ITS RETURN OF INCOME. ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 36 42. THE LD. PR.CIT HAS ALSO ALLEGED THAT WHILE FRAMING ASSESSMENT ORDER THE AO FAILED TO TAX THE HEAD-WISE UNDISCLOSED SURRENDERED INCOME AS PER APPLICABLE PROVISIONS OF SEC.68 TO 69D READ WITH SECTION 115BBE OF THE INCOME TAX ACT. IN THIS RESPECT WE OBSERVE THAT ASSESSABLE INCOME OF THE ASSESSEE COMPANY HAS BEEN TAXED @ 30 PERCENT PLUS APPLICABLE SURCHARGE AND CESS IN ACCORDANCE WITH EXTANT PROVISIONS APPLICABLE U/S 115BBE FOR THE YEAR UNDER ASSESSMENT. PROVISIONS FOR CHARGING HIGHER RATE OF TAX I.E. 60 PERCENT WAS INTRODUCED BY THE TAXATION LAWS (SECOND AMENDMENT) ACT, 2016 W.E.F. 1-4-2017 I.E. APPLICABLE FROM THE A.Y. 2017-18. AS SUCH THE ASSESSABLE INCOME OF THE ASSESSEE COMPANY HAS BEEN RIGHTLY TAXED AS PER APPLICABLE PROVISIONS OF SECTION 115BBE FOR INSTANT A.Y. 2015-16. FOR THIS PURPOSE WE PLACE RELIANCE ON RECENT DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF VIJAYA HOSPITALITY AND RESORTS LTD. V. COMMISSIONER OF INCOME-TAX, [2020]114 TAXMANN.COM 91 (KERALA), WHEREIN IT WAS HELD AS UNDER:- SECTION 115BBE , READ WITH SECTIONS 68 , 71 AND 263 , OF THE INCOME-TAX ACT, 1961 - TAX ON INCOME REFERRED TO IN SECTION 68 TO SECTION 69D (SET OF LOSS) - ASSESSMENT YEAR 2013-14 - DURING YEAR, ASSESSEE FILED ITS RETURN OF INCOME AND CLAIMED SET OFF OF CARRIED FORWARD LOSS (UNABSORBED PORTION OF DEPRECIATION) - SAME WAS ALLOWED - PRINCIPAL COMMISSIONER INVOKED REVISION UNDER SECTION 263 ON GROUND THAT ASSESSEE'S INCOME INCLUDED DEEMED INCOME BEING UNEXPLAINED CASH CREDIT UNDER SECTION 68 WHICH IS NOT CLASSIFIED UNDER ANY HEADS OF INCOME UNDER SECTION 14; THEREFORE, SET OFF OF ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 37 BROUGHT FORWARD LOSS AGAINST THIS DEEMED INCOME WAS NOT CORRECT- WHETHER AMENDMENT BROUGHT IN SECTION 115BBE(2) BY FINANCE ACT, 2016 WHEREBY SET OFF OF LOSSES AGAINST INCOME REFERRED TO IN SECTION 68 WAS DENIED, WOULD BE EFFECTIVE FROM 1-4-2017 - HELD, YES - WHETHER, THEREFORE, DURING RELEVANT ASSESSMENT YEAR, THERE WAS NO BAR EXISTED WITH RESPECT TO ALLOWING SET OFF OF CARRIED FORWARD UNABSORBED DEPRECIATION ON FIXED ASSETS AGAINST DEEMED INCOME UNDER SECTION 68 - HELD, YES [PARA 14] [IN FAVOUR OF ASSESSEE] 43. FURTHERMORE, IT HAS BEEN OBSERVED IN THE PARA 2.14 OF THE SHOW CAUSE NOTICE THAT AMOUNT OF RS.45,85,897/- UNDER THE STAFF PAYABLE HAS NOT BEEN VERIFIED BY THE AO. IN THIS REGARD, WE OBSERVE THAT LIST OF STAFF PAYABLE HAVING RESPECTIVE NAME OF EMPLOYEE AND AMOUNT DUE AS ON 31 ST MARCH 2015 WAS DULY FILED ALONG WITH AUDITED FINANCIAL STATEMENTS FORMING PART AS GROUPING THE SAID AMOUNT WAS PAYABLE AGAINST SALARY FOR THE MONTH OF MARCH 2015 AND WAS VERIFIABLE FROM THE BOOKS OF ACCOUNTS AND DETAIL OF SALARY AND WAGES EXPENSES OF RS.547.60 LACS FOR THE WHOLE YEAR, FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 44. IN VIEW OF THE ABOVE DISCUSSION AND DETAILS AND DOCUMENTARY EVIDENCES FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT IS GROSSLY WRONG AND BAD IN LAW AND FAR AWAY FROM THE FACTS EMANATING FROM THE QUESTIONNAIRE (S) ISSUED, NOTE SHEET OF ASSESSMENT PROCEEDINGS AND DETAILED REPLY AND DOCUMENTARY EVIDENCES FILED AS WELL AS BOOKS OF ACCOUNTS ALONG WITH BILLS/VOUCHERS PRODUCED DURING THE COURSE OF ITA 283/JP/2020_ M/S GURU KRIPA CAREER INSTITUTE P LTD. VS PCIT 38 ASSESSMENT PROCEEDINGS, THAT AO HAS NOT VERIFIED THE FOREGOING ISSUES WARRANTING INVOCATION OF PROCEEDINGS U/S 263 OF THE ACT. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD. PR.CIT. 45. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD SEPTEMBER, 2020. SD/- SD/- LANHI XLKA JES'K LH 'KEKZ (SANDEEP GOSAIN) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03/09/2020 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S GURU KRIPA CAREER INSTITUTE PVT. LTD., SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE PR.CIT-3, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 283/JP/2020) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR