The ITO, Ward-1(1), Surat V. Dr. Radhakishan Ramjivan Bhotra, Surat

ITA 3203/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60300 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-04-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 12-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: R N VEPARI
• Keywords: Reopening of assessment; Search and seizure; Loose papers; Document seized; Opportunity of cross examination; Documents seized
• Section: 143(3); 133(6); 12A; 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI D K TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.3203/AHD/2008 WITH C O NO.248/AHD/2008 (ASSESSMENT YEAR:-2000-01) THE INCOME-TAX OFFICER, WARD-1(1), SURAT V/S DR. RADHAKISHAN RAMJIVAN BHOOTRA, ATHWA ARCADE, OPP. SARVAJANIK SCHOOL, ATHWALINE, NANPURA, SURAT PAN: ABEPB 4750 H [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI RAHUL KUMAR, SR. DR ASSESSEE BY:- SHRI R N VEPARI, AR DATE OF HEARING:- 10-04-2012 DATE OF PRONOUNCEMENT:- 27-04-2012 O R D E R PER D K TYAGI (JM) :- THIS APPEAL BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINS T AN ORDER DATED 15-07-2008 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-I, [HEREINAFTER REFERRED TO AS THE LEARN ED CIT(A)] SURAT FOR ASSESSMENT YEAR (AY) 2000-01. THE GROUNDS RAISED BY THE REVENUE IN THEIR APPEAL ARE AS UNDER:- ITA NO.3203/AHD/2008 [REVENUES APPEAL] : [1] ON THE FACT AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A)-I, SURAT HAS ERRED IN HOLDING THAT T HE A.O. HAD NOT AFFORDED CROSS EXAMINATION OF THE CLERK OF RAMR AO ADIK EDUCATION SOCIETY FROM WHOSE DIARY THE INFORMATION REGARDING 2 2 PAYMENT OF CAPITATION FEES PAID BY THE ASSESSEE WAS ELUCIDATED, WITHOUT APPRECIATING THE FACT THE A.O. OF THE TRUST HAD ISSUED SUMMONS TO THE CLERK OF THE TRUST BUT HE HAD NEVER ATTENDED BUT THE CIT(A) HAS NOT APPRECIATED THAT SHRI MANDAVARKA R, CLERK OF THE TRUST HAD ADMITTED THE RECEIPT OF CAPITATION FE ES FROM THE ASSESSEE BEFORE THE AUTHORIZED OFFICER DURING THE C OURSE OF SEARCH IN HIS STATEMENT ON OATH AND SHRI MANDVARKAR OR THE TRUST HAD NOT RETRACTED THEREFROM. [2] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)-I, SURAT HAS NOT APPRECIATED THE FAC T THAT THE RAMRAO ADIK EDUCATION SOCIETY TO WHOM THE ASSESSEE HAD PAID CAPITATION FEES HAS ALREADY FILED A SETTLEMENT PETI TION BEFORE THE SETTLEMENT COMMISSION, MUMBAI WHEREIN THEY HAVE SURRENDERED THE ENTIRE AMOUNT OF CAPITATION FEES RE CEIVED BY THEM FROM STUDENTS FOR SECURING THEIR ADMISSION [TH OUGH NO STUDENT-WISE BREAK UP WAS GIVEN] INCLUDING CAPITATI ON FEES RECEIVED FROM THE ASSESSEE. [3] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)-I, SURAT HAS ERRED IN DELETING THE A DDITION MADE BY THE A.O. OF RS.18,27,500/- ON ACCOUNT OF UNACCOU NTED CAPITATION FEES PAID BY THE ASSESSEE TO RAMRAO ADIK EDUCATION, SOCIETY FOR SECURING ADMISSION OF HIS SON IN M.B.B. S. COURSE. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE REST ORED. 2 ALL THE ABOVE GROUNDS RELATE TO ADDITION OF RS.18 ,27,500/- ON ACCOUNT OF UNACCOUNTED PAYMENT OF DONATION / CAP ITATION FEE BY THE ASSESSEE FOR SECURING ADMISSION OF HIS SON S HRI ASHISH BHOOTRA IN M.B.B.S. COURSE OF D.Y. PATIL MEDICAL CO LLEGE AND HOSPITAL RUN BY RAM RAO ADIK EDUCATION SOCIETY, WOR LI, MUMBAI. 3 THE BRIEF FACTS OF THE CASE ARE THAT DURING THE A SSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS FILED HIS 3 3 RETURN OF INCOME FOR AY 2000-01 ON 31-08-2000 SHOWI NG TOTAL INCOME OF RS.6,82,772/-. THIS RETURN WAS ACCEPTED U /S 143(1) OF THE ACT. SUBSEQUENTLY, AN INFORMATION WAS RECEIVED FROM INVESTIGATION WING THAT THE ASSESSEE HAS PAID CAPIT ATION FEE AMOUNTING TO RS.18,27,500/- FOR SECURING ADMISSION IN M.B.B.S. COURSE AT D.Y.PATIL MEDICAL COLLEGE AND HOSPITAL RU N BY M/S RAMRAO ADHIK EDUCATION SOCIETY, WORLI, MUMBAI FOR H IS SON SHRI ASHISH BHOOTRA DURING FY 1999-2000. THIS SPECI FIC INFORMATION WAS COLLECTED BY INVESTIGATION WING, PU NE DURING THE COURSE OF SEARCH AND SEIZURE OPERATION U/S 132 CONDUCTED AT THE PREMISES OF M/S RAMRAO ADHIK EDUCATION SOCIETY. SINCE THIS PAYMENT WAS NOT REFLECTED IN THE RETURN, THE AO REO PENED THE ASSESSMENT U/S 147 OF THE ACT AND NOTICE U/S 148 WA S ISSUED. IN RESPONSE, THE ASSESSEE FILED HIS RETURN OF INCOME S HOWING TOTAL INCOME OF RS.6,50,451/-. DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSEE AGREED THAT HE HAD COMMITTED A MISTAKE IN NOT SHOWING THE CAPITAL GAIN OF RS.32,321/- WHICH WAS SHOWN IN THE ORIGINAL RETURN. THEREFORE, THE ORIGINAL RETURNED INCOME OF RS.6,82,772/- WAS ADOPTED BY THE AO AS RETURNED INCOME IN THIS RE TURN FILED IN REPLY TO NOTICE U/S 148 OF THE ACT. DURING THE ASSE SSMENT PROCEEDINGS, THE AO ASKED AS TO WHY THE AMOUNT OF RS.18,27,500/- PAID AS CAPITATION FEE SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS REPRESENTING UNEXPL AINED INCOME. IT WAS POINTED OUT BY THE AO IN HIS LETTER ADDRESSE D TO THE ASSESSEE THAT THE PAYMENT OF RS.18,27,500/- WAS TOT ALLY IN CASH AND PAID IN TWO INSTALMENTS OF RS.13,00,000/- ON 07 -07-99 AND BALANCE OF RS.5,27,500/- ON 02-08-99. IT WAS ALSO P OINTED OUT THAT THE ASSESSEE HAS MADE THIS PAYMENT FOR SECURIN G ADMISSION 4 4 OF HIS SON SHRI ASHISH BHOOTRA IN MBBS COURSE. THE ASSESSEES CONTENTION BEFORE THE AO WAS THAT HE HAD GOT ADMISS ION OF HIS SON THROUGH HIS PERSONAL CONTACT AND HAD NOT PAID A NY CAPITATION FEE OF RS.18,27,500/- AND PAYMENT MADE BY HIM WAS O NLY RS.4,72,500/- WHICH IS RECORDED IN HIS REGULAR BOOK S OF ACCOUNT. THE ASSESSEE ALSO ASKED FOR THE COPY OF EVIDENCE WH ICH THE AO WANTED TO RELY ON AND ALSO WANTED OPPORTUNITY TO CR OSS EXAMINE THE PERSON WHO HAD MADE SUCH STATEMENT FOR GIVING S UCH EVIDENCE. THE AO GAVE COPY OF PAGES 19 AND 27 OF AN NEXURE-A SEIZED DURING THE SEARCH FROM THE PREMISES OF M/S R AMRAO ADHIK EDUCATION SOCIETY AS WELL AS THE COPY OF STATEMENT OF SHRI SHASHIKNT J MANDAVKAR WHO HAD EXPLAINED THE SAID CA SH BOOK ENTRY. AS PER SEIZED ITEM NO.6 OF ANNEXURE-2 WHICH IS A DIARY, THE NAME OF ASHISH BHOOTRA APPEARING AT PAGES 19 AN D 27 MENTIONING ENTRIES AS 1300 AND 527.5. THE AMOUN TS WERE WRITTEN IN CODE (000) WERE OMITTED. THE INSCRIPTION MBBS STOOD FOR DR. D.Y. PATIL MEDICAL & HOSPITALS AND RAES STO OD FOR M/S M/S RAMRAO ADHIK EDUCATION SOCIETY. DURING THE COUR SE OF SEARCH SHRI SHASHIKNT J MANDAVKAR, ACCOUNTS CLERK I N HIS STATEMENT STATED THAT THESE DIARIES WERE MAINTAINED BY HIM AND THE AMOUNTS / FIGURES REPRESENTED THE AMOUNTS DISBU RSED OUT OF CASH COLLECTED FROM THE STUDENTS AT THE TIME OF THE IR ADMISSION. COPY OF THIS STATEMENT OF SHRI SHASHIKNT J MANDAVKA R AND COPIES OF PAGES 19 AND 27 OF DIARY WERE GIVEN TO THE ASSES SEE FOR HIS COMMENTS. THE ASSESSEE ADMITTED THAT SHRI ASHISH BH OOTRA HAS GOT ADMISSION FOR MBBS COURSE IN DR. D. Y. PATIL ME DICAL COLLEGE AND HOSPITAL EVEN WHEN HE HAD ONLY 63% MARK S IN XIITH STANDARD. THE ASSESSEE OBJECTED BEFORE THE AO THAT THE REOPENING 5 5 WAS BAD IN LAW AND ALSO ADDITION WAS NOT WARRANTED BECAUSE SHRI SHASHIKNT J MANDAVKAR HAD NOWHERE MENTIONED THE NAM E OF HIS SON SHRI ASHISH BHOOTRA WHO IS INDEPENDENTLY ASSESS ED SINCE 1990 WITH PA NO. AECPB 5717 M. THE ASSESSEE ALSO S TATED THAT THE COPIES OF 2 LOOSE PAPERS SHOW THAT THEY WERE NO T SINGED EITHER BY CASHIER OR BY THE INVESTIGATING OFFICER A ND THEREFORE HAS NO EVIDENTIARY VALUE. THIS EXPLANATION OF THE ASSES SEE WAS NOT ACCEPTABLE TO THE AO AND HE PROCEEDED TO MAKE THE A DDITION FOR THE FOLLOWING REASONS:- (I) THE REOPENING OF THE ASSESSMENT WAS WELL WITHIN THE LAW AS THE INFORMATION WAS RECEIVED FROM THE OUTSID E PARTY DURING SEARCH AND SEIZURE IN RESPECT OF THE ASSESSE E PAYING CAPITATION FEE FOR THE ADMISSION OF HIS SON IN A ME DICAL COLLEGE FOR MBBS COURSE, EVEN THOUGH HIS SON HAS SE CURED ONLY 63% MARKS IN 12TH STANDARD. (II) EVEN THOUGH SON OF THE ASSESSEE WAS AN INDEPEN DENT ASSESSEE BUT HE DID NOT HAVE ANY INCOME OR SOURCE O F INCOME FROM WHICH HE COULD HAVE BEEN PAID THE CAPIT ATION FEE AND, THEREFORE, THE CAPITATION FEE AS EVIDENCED BY THE PAGE NO. 19 & 27 OF THE DIARY SEIZED DURING THE COU RSE OF SEARCH & SEIZURE IN THE CASE OF RAMRAO ADHIK EDUCAT ION SOCIETY COULD HAVE BEEN PAID ONLY BY SHRI ASHISH BH OOTRA'S FATHER I.E. THE ASSESSEE. 4 AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE TH E FIRST APPELLATE AUTHORITY AND OBJECTED TO THE ADDITION ON FOLLOWING GROUNDS:- (A) NO CROSS EXAMINATION OF THE PERSON ON WHOSE STATEMENT AND SEIZED MATERIAL THE APPELLANT'S CASE WAS REOPENED HAS BEEN ALLOWED TO THE APPELLANT. (B) THE APPELLANT HAS DESIRED THE CROSS EXAMINATION OF SHASHIKANT JAIRAM MANDAVKAR. THE APPELLANT HAS STAT ED THAT 6 6 DURING THE ASSESSMENT PROCEEDINGS HIS CROSS EXAMINA TION WAS REQUESTED BUT THE AO HAS DENIED THE CROSS EXAMI NATION. (C) THE LOOSE PAPERS I.E. THE CASH BOOK AND STRAY P APERS FOUND CANNOT BE TAKEN AS EVIDENCE. (D) SINCE THERE WAS VACANCY NO DONATION WAS REQUIRE D TO BE GIVEN.' BEFORE THE LEARNED CIT(A), THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD. 288-ITR-345 AND ON THE D ECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ARJUNDAS SURENDER KUMAR & CO. 239-ITR-859. ON THESE SUBMISSIONS OF THE ASSESSEE, THE REMAND REPORT FROM THE AO WAS CALLED FOR BY THE LEARNED CIT(A). THE AO WAS ALSO A SKED BY THE LEARNED CIT(A) TO GIVE CROSS EXAMINATION OPPORTUNIT Y TO THE ASSESSEE AS DESIRED BY HIM. THE AO SUBMITTED THE FO LLOWING REMAND REPORT:- '2 WITH REFERENCE TO THE ABOVE CAPTIONED SUBJECT, I T IS SUBMITTED THAT IMMEDIATELY ON RECEIPT OF THE AFORES AID LETTER FROM YOUR HONOUR'S OFFICE, THE DCIT, CC-2, MUMBAI, WAS REQUESTED TO CONDUCT CROSS EXAMINATION OF SHRI SHAS HIKANT J. MANDAVKAR, BY THE ASSESSEE. THE DCIT, CC-2, MUMB AI VIDE LETTER DATED 15/04/08 FURNISHED THE ADDRESSES OF SHRI SHASHIKANT J. MANDAVKAR AND STATED THAT HIS STATEME NT WAS RECORDED IN A DIFFERENCE CONTEXT DURING THE COURSE OF SEARCH. COPY OF THE SAID LETTER, ALONG WITH ITS ANN EXURE, IS ENCLOSED HEREWITH FOR YOUR HONOUR'S KIND PERUSAL. 3 IN THE CIRCUMSTANCES, AFTER TAKING OVER THE CHARG E OF THIS OFFICE, THE UNDERSIGNED ISSUED SUMMONS U/S.131 OF THE ACT TO SHRI SHASHIKANT J. MANDAVKAR AND DISPATCHED THE SAME TO HIS RESIDENTIAL ADDRESS AS ALSO TO HIS OFFI CE ADDRESS. HOWEVER, SHRI SHASHIKANT J. MANDAVKAR NEITHER ATTEN DED NOR WAS THE DETAILS CALLED FOR FURNISHED. 7 7 4 IN THE ABOVE PREVAILING CIRCUMSTANCES, IT IS SUBM ITTED THAT THE CROSS EXAMINATION AS DIRECTED BY YOUR HONO UR COULD NOT BE ARRANGED DUE TO NON CO-OPERATION FROM SHRI SHASHIKANT J. MANDAVKAR.' ALONG WITH THIS REMAND REPORT, THE AO ALSO ENCLOSED COPY OF LETTER DATED 15-04-2008 WRITTEN BY THE DCIT, CC-2, (AO OF M/S RAMRAO ADHIK EDUCATION SOCIETY) TO THE AO STATING A S UNDER:- '3 IT WILL NOT BE OUT OF PLACE TO MENTION HERE THAT THE STATEMENT OF SH. MANDAVKAR WAS GIVEN IN DIFFERENT C ONTEXT DURING THE COURSE OF THE SEARCH TO EXPLAIN THE NATU RE OF ENTRIES IN THE SEIZED DIARY AND THE SAME HAS NOT BE EN CHALLENGED BY THE CONCERNED ASSESSEE GROUP INCLUDIN G M/S. RAMRAO ADHIK EDUCATION SOCIETY, AND NO CROSS EXAMIN ATION HAS BEEN ASKED. HENCE, IT IS SUGGESTED THAT THE REQ UEST OF YOUR ASSESSEE TO CROSS EXAMINE HIM NEEDS TO BE CONT ESTED AS MISPLACED AND WITHOUT LOCUS STANDI, PARTICULARLY IN VIEW OF PROVISIONS OF SECTION 132(4A) OF THE ACT. HOWEVER, YOU MAY TAKEN NECESSARY DIRECTIONS FROM YOUR SUPERIORS. 4 IT WILL ALSO BE NOT OUT OF PLACE TO MENTION THAT THE ASSESSEE M/S. RAMRAO ADHIK EDUCATION SOCIETY HAD FI LED A SETTLEMENT APPLICATION BEFORE THE SETTLEMENT COMMIS SION MUMBAI, WHEREIN THE DONATIONS RECEIVED FROM THE STU DENTS HAVE BEEN SURRENDERED. ORDER UNDER SECTION 245D.(4) OF THE ACT HAS BEEN PASSED IN THE CASE OF DR. D.Y. PAT/7 G ROUP VIDE ORDER DATED 24.03.2008 AND THE APPLICATION HAS BEEN SETTLED SUBSTANTIALLY. THE ASSESSEE GROUP HAS SURRE NDERED THE DONATIONS RECEIVED FROM THE STUDENTS AS UNACCOU NTED RECEIPTS AND THE SAME MAY BE BROUGHT TO THE KNOWLED GE OF THE CIT(A), AS FAIT ACCOMPLI. THE RELEVANT PORTION OF THE CONFIDENTIAL ANNEXURE OF THE SETTLEMENT APPLICATION HEREWITH (STATEMENT 1, 2 & 4) FOR YOUR READY REFERE NCE. YOU MAY DO THE NEEDFUL, AS YOU DEEM FIT.' THE LEARNED CIT(A) CALLED FOR ANOTHER REMAND REPORT FROM THE AO ON THE FOLLOWING LINES:- 8 8 '2 YOUR REPORT VIDE LETTER DATED 19.6.2008 HAS BEEN RECEIVED IN THIS OFFICE ALONG WITH ENCLOSURES. IT H AS BEEN STATED THAT THE DONATIONS RECEIVED FROM THE STUDENT S HAVE BEEN SURRENDERED BEFORE SETTLEMENT COMMISSION BY M/ S RAM RAO ADHIK EDUCATION SOCIETY WHICH RUNS D.Y. PAT IL MEDICAL COLLEGE AND HOSPITAL AT NERUL. IT HAS ALSO BEEN STATED THAT THE SETTLEMENT COMMISSION ORDER U/S 245 D(4) HAS BEEN PASSED WHERE THE DONATIONS HAVE BEEN SURRE NDERED. 3 IN VIEW OF THE ABOVE, YOU ARE REQUESTED TO OBTAIN THE INFORMATION FROM M/S RAM RAO ADHIK EDUCATION SOCIET Y U/S 133(6) OR WHATEVER MANNER YOU THINK FIT AS TO W HETHER THE DONATION IN RESPECT OF THE ADMISSION OF ASHISH BHOOTRA, SON OF DR. RADHAKISHAN BHOOTRA HAS ALSO BEEN SURREN DERED BEFORE THE SETTLEMENT COMMISSION AND IF SO, WHAT WA S THE AMOUNT OF DONATION TAKEN AND HOW MUCH DONATION HAS BEEN SURRENDERED. YOU MAY POINT OUT THAT AS PER THE DIAR Y ENTRY DATED 7.7.99 THE FOLLOWING ENTRIES ARE SEEN IN THE NAME OF ASHISH BHOOTRA:- '7.7.99 1300. ASHISH BHOOTRA 913699 VDP MBBS' '2.8.99 527.5 ASHISH BHOOTRA 913699 VDP MBBS' 4 IF THE DONATION IN RESPECT OF ASHISH BHOOTRA HAS BEEN SURRENDERED, THEN YOU MAY ALSO OBTAIN FROM THEM LIS T OF DONATION SURRENDERED WHERE THE NAME OF ASHISH BHOOT RA APPEARS ALONG WITH COPY OF SETTLEMENT COMMISSION OR DER.' THE AO SUBMITTED THE FOLLOWING ANOTHER REMAND REPOR T ON 07- 07-2008 AFTER OBTAINING INFORMATION FROM M/S RAMRAO ADHIK EDUCATION SOCIETY AS WELL AS DCIT, CC-2, BOMBAY. '2 WITH REFERENCE TO THE ABOVE CAPTIONED SUBJECT, I T IS SUBMITTED THAT, IMMEDIATELY ON RECEIPT OF THE ABOVE REFERRED LETTER FROM YOUR HONOUR'S OFFICE, THE UNDERSIGNED H AD 9 9 WRITTEN LETTERS TO THE MANAGING TRUSTEE, D.Y. PATIL L GROUP AS ALSO TO THE DCIT, CC-2, MUMBAI, SEEKING CLARIFIC ATIONS AS TO WHETHER THE DONATION RECEIVED FOR GIVING ADMI SSION TO SHRI ASHISH BHOOTRA HAS BEEN SURRENDERED BEFORE THE HON'BLE SETTLEMENT COMMISSION. 3 TODAY, THE UNDERSIGNED HAS RECEIVED REPLIED FROM RAMRAO ADHIK EDUCATION SOCIETY AS ALSO FROM THE DCI T, CC-2, MUMBAI. COPY OF BOTH THE REPLIES IS ENCLOSED HEREWITH FOR YOUR KIND PERUSAL. 4 IN THE REPLY GIVEN BY THE RAMRAO ADHIK EDUCATION SOCIETY, IT IS STATED THAT IT IS A CHARITABLE ENTIT Y REGISTERED U/S 12A AND THAT IT HAS NOT, AS SUCH, SURRENDERED A NY OF THE AMOUNTS THAT MAY HAVE BEEN RECEIVED FROM STUDENTS O R OTHERS AND THAT NO LIST OF STUDENTS WAS FURNISHED T O THE HON'BLE SETTLEMENT COMMISSION. 5 THE GIST OF THE REPLY GIVEN BY THE DCIT, CC-2, MUMBAI, IS AS FOLLOWS:- -THAT THE HON'BLE SETTLEMENT COMMISSION HAS PASSED THE ORDER U/S. 245D(4) DATED 24/03/08 R.W. ORDER U/S.15 4, DATED 26/05/08, IN THE GROUP OF CASES, SETTLING THE CASES OF THE D.Y. PATIL GROUP FRO A.Y. 2000-01 TO 2006-07. -THAT THE DEPARTMENT HAS SUBMITTED THE COMPUTATION OF UNDISCLOSED INCOME OF THE D.Y. PATIL GROUP TRUST, I .E. RAMRAO ADHIK EDUCATION SOCIETY, COMPUTING THE UNDISCLOSED INCOME AT RS.77,33,72,200/-. -THAT IN THE APPLICATION FOR SETTLEMENT, THE ASSESS EE TRUST HAD DISCLOSED UNACCOUNTED DONATIONS FROM STUDENTS A T RS.7448.62 LAKHS. -THAT THE DONATIONS/CAPITATION FEES RECEIVED FROM T HE STUDENTS HAS BEEN OFFERED BY THE TRUST IN LUMP SUM AND THAT THERE IS NO INDIVIDUAL BIFURCATION. IT IS FURTHER S TATED BY HIM THAT IT CAN BE PRESUMED THAT OFFER OF ADDITIONAL IN COME BY THE ASSESSEE INCLUDES ALL DONATIONS MADE THE STUDEN TS, INCLUDING SHRI ASHISH BHOOTRA.' 10 10 BOTH THE REMAND REPORTS OBTAINED FROM THE AO WERE G IVEN TO THE ASSESSEE BY THE LEARNED CIT(A) FOR HIS COMMENTS . THE COMMENTS OF THE ASSESSEE CAN BE SUMMARIZED AS UNDER :- (I) IN THE REMAND REPORT DATED 09.06.2008 THE AO HA S CATEGORICALLY EXPRESSED HIS INABILITY TO GRANT THE CROSS- EXAMINATION OF SHRI SHASHIKANT J. MANDAVKAR ON THE BASIS OF WHOSE STATEMENT THE ADDITION WAS MADE. THEREFORE , THE STATEMENT OF SHRI MANDAVKAR CANNOT BE RELIED UPON A S AN EVIDENCE AS PER THE SETTLED POSITION OF LAW. (II) FURTHER, THE AI HAS POINTED OUT IN HIS SECOND REMAND REPORT DATED 07.07.2008 THAT THE MANAGING TRUSTEE O F D.Y. PATIL GROUP, VIDE HIS LETTER DATED 01.07.2008, HAS CATEGORICALLY STATED THAT THEY HAVE NEITHER SURREND ERED ANY OF THE AMOUNTS THAT MAY HAVE BEEN RECEIVED FROM STU DENTS OR OTHERS, NOR HAVE THEY SUBMITTED ANY LIST OF STUD ENTS BEFORE THE HON'BLE SETTLEMENT COMMISSION. IN VIEW O F THIS REASON THE ASSESSEE HAS STATED THAT NO ADDITION CAN BE MADE. (III) THE ITO HAS ALSO POINTED OUT IN HIS SECOND RE MAND REPORT THAT THE DCIT, CENTRAL CIRCLE-2 HAS ACCEPTED IN HIS LETTER THAT THERE IS NO INDIVIDUAL STUDENT-WISE BIF URCATION OF THE INCOME OFFERED BY D.Y. PATIL GROUP. THE ASSESSEE ALSO CHALLENGED THE FINDING OF THE AO ON FOLLOWING GROUNDS BEFORE THE LEARNED CIT(A):- 'FIRST OF ALL, THERE IS NO OBJECTIVE SATISFACTION O N THE PART OF THE AO FOR REOPENING THE ASSESSMENT AND THERE IS EV EN NO EVIDENCE IN THE NAME OF THE APPELLANT AS, EVEN THE LOOSE PAPER MENTIONS THE NAME OF THE SON OF THE APPELLANT , WHO WAS INDEPENDENTLY ASSESSED TO TAX IN THE YEAR UNDER CONSIDERATION. -SECONDLY, THE DEPARTMENT HAS FAILED TO GRANT CROSS - EXAMINATION OF THE PERSON ON WHOSE STATEMENT THE IM PUGNED 11 11 ADDITION HAS BEEN MADE AND HENCE, THE SAID STATEMEN T CANNOT BE RELIED UPON. -THIRDLY, THE STATEMENT AS RELIED UPON BY THE DEPAR TMENT IS ALSO A GENERAL STATEMENT NOT EVEN NAMING THE APPELL ANT AND HENCE, IS EVEN OTHERWISE WITHOUT ANY EVIDENTIAL VAL UE. -FOURTHLY, THE LOOSE PAPERS STATED TO BE A CASH BOO K ARE STRAY PAPERS NOT EVEN SIGNED BY THE CASHIER OR THE INVESTIGATING OFFICIALS. -LASTLY, NO DONATION WAS EVEN OTHERWISE REQUIRED TO BE PAID SINCE THE SON OF THE APPELLANT DID NOT GET ADMISSIO N IN BDS COURSE (DENTAL) BUT GOT ADMISSION THEREIN, EVEN AFT ER COMMENCEMENT OF THE COLLEGE.' AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE, BOTH THE REMAND REPORTS OF THE AO AND COMMENTS THER EON BY THE ASSESSEE, THE LEARNED CIT(A) DELETED THE ADDITION M ADE BY THE AO BY OBSERVING AS UNDER:- 6.2 WITH RESPECT TO THE GROUND NO.2 & 3, IT IS SEE N THAT THE A.O. HAS FAILED TO PROVIDE CROSS-EXAMINATION OF SHRI SHASHI KANT MANDAVKAR, WHO HAD GIVEN A STATEMENT THAT THE DIARY CONTAINING THE NOTING REGARDING DONATION OF RS.18,27,500/- WAS WRITTEN BY HIM AND HE HAD RECEIVED THE CASH FOR THE PURPOSE OF ADMISSION OF S HRI ASHISH BHOOTRA. THE CROSS-EXAMINATION OPPORTUNITY WAS NOT GIVEN B Y THE AO DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, AT THE BEHEST OF THE APPELLANT, THE AO WAS AGAIN ASKED TO GIVE THE CROSS -EXAMINATION OPPORTUNITY AS DISCUSSED ABOVE, BUT THE AO EXPRESSE D HIS INABILITY TO DO SO. IN A FURTHER REMAND REPORT, THE AO HAS STATE D THAT EVEN THE AO OF THE TRUST, I.E. DCIT, CC-2, HAS STATED THAT THE SURRENDER OF DONATION DID NOT GIVE BREAK-UP OF DONATION BY TH E STUDENTS INDIVIDUALLY AND THE TRUSTEES HAVE ALSO STATED THAT THEY HAVE NO T SURRENDERED ANY AMOUNT INDIVIDUALLY. IN VIEW OF THIS REASON, I T IS CLEAR THAT THE STATEMENT OF SHRI MANDAVKAR CANNOT BE ADMITTED AS EVIDENCE FOLLOWING THE SETTLED POSITION OF LAW AS ENUNCIATED IN THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SMC SHA RE BROKER VS. CIT (SUPRA) AND THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ARJUNDAS SURENDAR KUMAR & CO. (SUPRA). SINCE 12 12 THE STATEMENT OF SHRI MANDAVKAR CANNOT BE ADMITTED AS EVIDENCE, THEREFORE, THE DIARY ENTRY CANNOT BE RELIED UPON FO R MAKING THE ADDITION. THE AO HAS ALSO NOT BROUGHT ANY OTHER EVI DENCE ON RECORD FOR MAKING THE ADDITION. IN VIEW OF THESE REASONS, THE ADDITION MADE BY THE AO IS DELETED AND THESE GROUNDS OF APPEAL AR E ALLOWED. 5 AGGRIEVED BY THIS ORDER OF THE LEARNED CIT(A) , N OW THE REVENUE IS IN APPEAL BEFORE US. AT THE TIME OF HEAR ING, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF M/S RAMRAO ADHIK EDU CATION SOCIETY AND THE DIARY INDICATING COLLECTION OF DONA TION / CAPITATION FEE FOR ADMISSION OF PROFESSIONAL COURSE OF MBBS, BDS WERE SEIZED IN WHICH THE RECEIPT OF DONATION OF RS.18,27,500/- FOR GIVING ADMISSION TO SHRI ASHISH BHOOTRA SON OF THE ASSESSEE WAS RECORDED ALONG WITH THE DATE OF RECEIPT. DURING THE COURSE OF THIS INVESTIGATION THE STATEME NT OF SHRI SHASHIKNT J MANDAVKAR, CLERK OF THE INSTITUTE WHO H AD MAINTAINED THE DIARY WAS RECORDED U/S 132(4) OF THE ACT IN WHI CH IT WAS STATED BY HIM THAT THE DIARY CONTAINED DETAILS OF D ONATION COLLECTED ON BEHALF OF THE INSTITUTE FOR ADMISSION OF STUDENTS IN VARIOUS COURSES. IT WAS FURTHER SUBMITTED BY THE LE ARNED DR THAT THE AO MADE SEVERAL SERIOUS ATTEMPTS LIKE ISSUE OF COMMISSION TO THE AO OF THE INSTITUTE AT MUMBAI, ISSUE OF SUMMONS OF AFFORDING OPPORTUNITY OF CROSS EXAMINATION OF SHRI SHASHIKNT J MANDAVKAR BUT DUE TO NON-COMPLIANCE OF SHRI SHASHIKNT J MANDA VKAR THIS CROSS EXAMINATION COULD NOT BE DONE. THE LEARNED CI T(A) HAS NOT APPRECIATED THE IMPORTANT FACT THAT THE INSTITUTE F ROM WHERE THE DIARY WAS SEIZED ACCEPTED THE FACT GIVEN BY SHRI SH ASHIKNT J MANDAVKAR IN HIS STATEMENT BY WAY OF FILING SETTLEM ENT PETITION 13 13 BEFORE THE SETTLEMENT COMMISSIONER WHEREIN THE DONA TION RECEIVED BY THE INSTITUTE INCLUDING DONATION PAID B Y THE ASSESSEE HAS BEEN SURRENDERED AS THEIR UNACCOUNTED RECEIPTS. IT WAS FURTHER SUBMITTED BY THE LEARNED DR THAT THE LEARNED CIT(A) HAS NOT APPRECIATED THAT AS REPORTED BY THE AO OF THE TRUST , THE DONATION / CAPITATION FEE PAID BY THE ASSESSEE TO THE TRUST WERE SURRENDERED BY IT IN LUMPSUM WITHOUT ANY INDIVIDUAL BIFURCATION. THE SAME FACTS WERE REITERATED BY THE TRUST IN ITS LETTER FURNISHED IN PURSUANCE TO THE QUERY RAISED IN REMAND REPORT P ROCEEDINGS. CONCLUDING HIS ARGUMENTS, THE LEARNED DR SUBMITTED THAT IN THE LIGHT OF THE ADMISSION MADE BY THE TRUST AS WELL AS ADMISSION OF SHRI SHASHIKNT J MANDAVKAR IN HIS STATEMENT ON OATH U/S 132(4) OF THE ACT, IT IS ABSOLUTELY CLEAR THAT THE ASSESSE E HAS MADE PAYMENT OF CAPITATION FEE OF RS.18,27,500/- TO THE TRUST FOR SECURING ADMISSION OF HIS SON IN MBBS COURSE AND TH EREFORE THE ADDITION MADE BY THE AO MAY KINDLY BE SUSTAINED AND THE ORDER PASSED BY THE LEARNED CIT(A) MAY KINDLY BE SET-ASID E. 6 THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHE R HAND, PLACING RELIANCE ON THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A), FURTHER SUBMITTED THAT THE REVENUE HAS FAIL ED TO GIVE CROSS EXAMINATION OF SHRI SHASHIKNT J MANDAVKAR TO ASSESSEE ON WHOSE STATEMENT ADDITION HAS BEEN MADE. THIS STATEM ENT IS ALSO A GENERAL STATEMENT AS NOWHERE IN THIS STATEMENT, THE NAME OF THE ASSESSEE HAS APPEARED AND THEREFORE, THE SAME CANNO T BE USED BY THE REVENUE FOR MAKING THIS ADDITION. IT WAS FURTHE R SUBMITTED THAT THE SEIZED DOCUMENTS ON THE BASIS OF WHICH THI S ADDITION HAS BEEN MADE ARE NOT SIGNED EITHER BY SHRI SHASHIKNT J MANDAVKAR 14 14 OR BY THE SEARCH PARTY, THEREFORE, THE SAME HAS NO EVIDENTIARY VALUE. THE ASSESSEES CONTENTION HAS BEEN THAT NO C APITATION FEE HAS BEEN PAID BY THE ASSESSEE FOR GETTING ADMISSION OF HIS SON AND THIS ADMISSION WAS GIVEN DUE TO PERSONAL CONTAC T. THE ASSESSEES SON IS INCOME-TAX ASSESSEE HIMSELF SINCE 1990 AND IF AT ALL ANY ADDITION WAS REQUIRED TO BE MADE, IT SHO ULD HAVE BEEN CONSIDERED IN THE HANDS OF SON SHRI ASHISH BHOOTRA. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ADDITION HAS BEE N MADE BY THE AO ON THE PRESUMPTION THAT UNACCOUNTED DONATION REC EIVED FROM THE STUDENTS BY D.Y.PATIL GROUP TRUST WHICH WAS OFF ERED BY THEM BEFORE THE SETTLEMENT COMMISSION INCLUDED THE AMOUN T OF CAPITATION FEE OF SHRI ASHISH BHOOTRA THOUGH THERE IS NO SUCH EVIDENCE ON RECORD TO SHOW THAT ANY AMOUNT RECEIVED BY THE TRUST FROM SHRI ASHISH BHOOTRA HAS BEEN OFFERED FOR TAXATION BEFORE THE SETTLEMENT COMMISSION AS IS CLEAR FROM T HE SECOND REMAND REPORT OF THE AO, ACCORDING TO WHICH ONLY LU MPSUM AMOUNT WAS OFFERED BEFORE THE SETTLEMENT COMMISSION AND NO INDIVIDUAL BIFURCATION WAS THERE. IT WAS LASTLY CON TENDED ON BEHALF OF THE ASSESSEE THAT ON THE BASIS OF PAPERS SEIZED FROM THE THIRD PARTY, ADDITION CANNOT BE MADE. FOR MAKING TH IS SUBMISSION HE PLACED RELIANCE ON THE DECISION OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF ADDL. CIT VS. MISS LATA MANGES HKAR (1974) 97 ITR 69 (BOM). 7 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND FIND THAT IN THIS CASE THE ASSESSEE FILED THE RETUR N OF INCOME SHOWING TOTAL INCOME OF RS.6,82,772/- WHICH WAS ACC EPTED BY THE REVENUE U/S 143(1) OF THE ACT. SUBSEQUENTLY, INFORM ATION WAS 15 15 RECEIVED FROM INVESTIGATION WING, SURAT THAT THE AS SESSEE HAD PAID CAPITATION FEE AMOUNTING TO RS.18,27,500/- FOR SECURING ADMISSION OF HIS SON SHRI ASHISH BHOOTRA IN MBBS CO URSE AT D.Y.PATIL MEDICAL COLLEGE AND HOSPITAL RUN BY M/S R AMRAO ADHIK EDUCATION SOCIETY, WORLI, MUMBAI. AFTER RECEI VING THIS INFORMATION AND RECORDING THE REASONS FOR REOPENING THE ASSESSMENT, THE AO INITIATED PROCEEDINGS U/S 147 OF THE ACT AND FINALIZED THE ASSESSMENT U/S 143(3) READ WITH SECTI ON 147 DETERMINING THE TOTAL INCOME AT RS.25,10,270/-. IN THE FRESH ASSESSMENT, THE AO MADE THE ADDITION OF RS.18,27,50 0/- BEING THE AMOUNT OF CAPITATION FEE PAID BY THE ASSESSEE T O RAMRAO ADHIK EDUCATION SOCIETY, IN CASH FOR SECURING ADMIS SION OF HIS SON SHRI ASHISH BHOOTRA IN MBBS COURSE IN D.Y. PATI L MEDICAL COLLEGE AND HOSPITAL, MAINLY ON THE BASIS OF (I) ST ATEMENT OF SHRI SHASHIKANT J MANDAVKAR, CLERK OF M/S RAMRAO ADHIK E DUCATION SOCIETY, WORLI, MUMBAI FROM WHOSE DIARY THE INFORMA TION REGARDING THE PAYMENT OF CAPITATION FEE PAID BY THE ASSESSEE WAS ELUCIDATED; AND (II) SURRENDER OF DONATION BY M/S R AMRAO ADHIK EDUCATION SOCIETY, WORLI, MUMBAI BEFORE THE SETTLEM ENT COMMISSION. THE ASSESSEES CONSISTENT CONTENTION HA S HOWEVER BEEN THAT NO CAPITATION FEE WAS PAID TO THE SOCIETY FOR ADMISSION OF SHRI ASHISH BHOOTRA AND ADMISSION WAS GIVEN TO H IM DUE TO PERSONAL CONTACTS OF ASSESSEE. THE ASSESSEE ALSO WA NTED CROSS EXAMINATION OF SHRI SHASHIKANT J MANDAVKAR ON THE B ASIS OF WHOSE STATEMENT, RE-ASSESSMENT PROCEEDINGS WERE INI TIATED AND ADDITION WAS MADE. THE ASSESSEE HAS ALSO QUESTIONED THE ANOTHER BASIS OF MAKING THIS ADDITION IN THE HANDS OF THE A SSESSEE THAT THE SURRENDERED AMOUNT BY D.Y.PATIL MEDICAL COLLEGE AND HOSPITAL 16 16 BEFORE THE SETTLEMENT COMMISSION INCLUDED THE ALLEG ED DONATION OF THE ASSESSEE TO GET HIS SON ADMITTED IN THE MBBS COURSE. 8 THERE IS NO DISPUTE ABOUT THE FACT THAT NOWHERE I N THE STATEMENT OF SHRI SHASHIKANT J MANDAVKAR, NAME OF T HE ASSESSEE OR NAME OF HIS SON APPEARS. NO SPECIFIC QUESTION WA S ASKED ABOUT SHRI ASHISH BHOTTRAS ADMISSION TO MBBS COURSE AND WHETHER ANY CAPITATION FEE BY THE ASSESSEE WAS PAID FOR HIS ADMISSION IN THIS COURSE. IT IS ALSO NOT IN DISPUTE THAT THE ASS ESSEE WAS NOT GIVEN OPPORTUNITY TO CROSS EXAMINE MR. SHASHIKANT J MANDAVKAR AT ANY STAGE OF THE PROCEEDINGS THOUGH THE REVENUE CLAIMED THAT THEY TRIED HARD TO GIVE SUCH OPPORTUNITY TO THE ASS ESSEE. IN THE ABSENCE OF MR. SHASHIKANT J MANDAVKAR BEING MADE AV AILABLE FOR CROSS EXAMINATION BY THE ASSESSEE DESPITE HIS REPEA TED REQUESTS, HIS STATEMENT CANNOT BE USED FOR DRAWING AN ADVERSE INFERENCE AGAINST THE ASSESSEE AND, THEREFORE, THE DIARY ENTR IES LOOSE THEIR EVIDENTIARY VALUE FOR MAKING THIS ADDITION. THIS VI EW OF OURS GET SUPPORT FROM THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LTD. [288-ITR-345 ] WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THE TRIBUNAL WAS RIGHT IN ITS VIEW THAT IN THE ABSENCE OF THE PERSON BEING MADE A VAILABLE FOR CROSS- EXAMINATION, DESPITE REPEATED REQUESTS BY THE ASSES SEE, HIS STATEMENT COULD NOT BE RELIED UPON TO ITS DETRIMENT, AND THE DECIS ION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ARJUNDAS SURENDER KUMAR & CO. [239-ITR-859] WHEREIN THE HON BLE HIGH COURT HAS HELD THAT ON NOTICING THAT THE ASSESSEE FIRM HAS NOT CONFRONTED WITH THE STATEMENT, THE TRIBUNAL DECLINED TO USE IT AGAINST THE FIRM FOR DRAWING AN ADVERSE INFERENCE THEREFROM. WE FURTHER FIND THAT THOUGH 17 17 THE REVENUE HAS CLAIMED THAT THE AMOUNT OF DONATION SURRENDERED BY M/S RAMRAO ADHIK EDUCATION SOCIETY, WORLI, MUMBA I OFFERED BEFORE THE SETTLEMENT COMMISSION INCLUDED THE DONAT ION OF RS.18,27,500/- PAID BY THE ASSESSEE TO GET ADMISSIO N OF HIS SON IN THE MBBS COURSE, THERE IS NOTHING ON RECORD TO SUBS TANTIATE SUCH CLAIM AS THIS IS ALSO NOT DISPUTED THAT THE AMOUNT OF DONATION WAS SURRENDERED BY THE SOCIETY IN LUMPSUM AND WITHOUT G IVING ANY INDIVIDUAL BIFURCATION OF THE DONATION RECEIVED BY IT. DURING THE COURSE OF HEARING, THE REVENUE WAS GIVEN SEVERAL OP PORTUNITIES TO BRING ANYTHING ON RECORD TO SHOW THAT THE ALLEGE D DONATION WAS PART OF SURRENDERED AMOUNT BY THE SOCIETY BEFORE TH E SETTLEMENT COMMISSION BUT THE SAME COULD NOT BE DONE BY THE RE VENUE. IN VIEW OF THE ABOVE, THE LEARNED CIT(A) HAS RIGHTLY D ELETED THE ADDITION AND THE ORDER PASSED BY HIM IS HEREBY UPHE LD. C O NO.284/AHD/2008 BY ASSESSEE:- 9 IN THE CROSS OBJECTION, THE ASSESSEE HAS CHALLENG ED THE REOPENING OF ASSESSMENT U/S 147 OF THE ACT BY TAKIN G THE FOLLOWING GROUND:- [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE REOPENIN G OF THE ASSESSMENT WAS BAD IN LAW MORE PARTICULARLY BECAUSE THE NAME OF THE APPELLANT WAS NOT IN THE SO CALLED DIARY AND RELATE D PAPERS BASED ON WHICH REOPENING WAS DONE WERE NOT SIGNED. 10 THE LEARNED CIT(A) HAS DEALT WITH THIS ISSUE AS UNDER:- 6.1 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE AO. AS REGARDS GROUND NO.1 IS CO NCERNED, THE REOPENING OF THE ASSESSMENT IS VALID. THE ONLY REAS ON ADVANCED BY THE APPELLANT IS THAT THERE IS NO OBJECTIVE SATISFACTIO N ON THE PART OF THE AO 18 18 FOR REOPENING THE ASSESSMENT AND NO PROPER EVIDENCE WAS BROUGHT ON RECORD FOR OPENING THE ASSESSMENT. THE APPELLANT AL SO ARGUED THAT THE REOPENING IS WRONG BECAUSE THE NAME MENTIONED IN THE DIARY WAS THAT OF ASSESSEE'S SON AND NOT THAT OF TH E ASSESSEE. ALL THESE ARGUMENTS ARE NOT ACCEPTABLE FOR THE SIMPLE REASON THAT THE AO HAS RIGHTLY REOPENED THE ASSESSMENT UPON RECEIVING A SP ECIFIC OUTSIDE INFORMATION ALONG WITH PRIMA FACIE EVIDENCE, IN THE FORM OF A DIARY NOTING AND STATEMENT OF THE PERSON WHO WROTE THE DI ARY PERTAINING TO THE TRUST WHICH RUN THE MEDICAL COLLEGE, THAT FOR T HE PURPOSE OF ADMISSION OF SON, THE ASSESSEE HAS PAID A DONATION/ CAPITATION FEE WHICH IS NOT REFLECTED IN THE RETURN OF THE ASSESSE E. EVEN THOUGH THE SON MAY BE AN ASSESSEE BUT SINCE HE HAD NO SOURCE O F INCOME TO THE EXTENT OF THE AMOUNT MENTIONED IN THE DIARY, THE RE OPENING OF THE ASSESSMENT OF THE ASSESSEE WAS RIGHT IN LAW AND HEN CE THE GROUND NO.1 IS DISMISSED. 11 AT THE TIME OF HEARING BEFORE US, THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE REOPENING HAS BEEN DONE BY THE AO ON THE BASIS OF INFORMATION RECEIVED FROM THE INVES TIGATION WING OF THE DEPARTMENT WITHOUT APPLICATION OF MIND INDEP ENDENTLY BEFORE ARRIVING AT A BELIEF THAT INCOME OF THE ASSE SSEE HAS ESCAPED ASSESSMENT. FOR MAKING THIS SUBMISSION, HE PLACED RELIANCE ON THE DECISION OF THE HONBLE KARNATAKA H IGH COURT IN THE CASE OF CIT VS. ASLAM ULLA KHAN (2010) 321 ITR 150 (KAR) AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SFIL STOCK BROKING LTD. (2010) 325 ITR 285 (DEL HI). 12 THE LEARNED DR, HOWEVER, SUBMITTED THAT THE RATI O LAID DOWN IN THOSE TWO CASES CANNOT BE APPLIED HERE AS T HE FACTS IN THOSE CARE ARE ENTIRELY DIFFERENT FROM ASSESSEES C ASE. 13 AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, WE FIND FORCE IN THE CONTENTION OF THE LEARNED DR THAT THE FACTS OF THE CASE ARE DIFFERENT IN THE CASE OF CIT VS. ASLAM ULLA KHAN 19 19 (2010) 321 ITR 150 (KAR) WHEREIN THE HONBLE HIGH C OURT HAS HELD AS UNDER:- HELD, DISMISSING THE APPEALS, THAT AS THE TRIBUNA L HAD RECORDED A FINDING THAT THERE WAS NO APPLICATION OF MIND ON TH E PART OF THE ASSESSING AUTHORITY FOR REOPENING PARTICULARLY IN T HE ACTUAL REASONING AS RECORDED IN THE PROPOSAL FOR REOPENING, THE ASSE SSING AUTHORITY COULD NOT ACT ON THE DICTATES OF THE COMMISSIONER W HO HAD DIRECTED HIM TO REOPEN THE ASSESSMENT. 14 SIMILARLY IN THE CASE OF SFIL STOCK BROKING LTD. (SUPRA), THE AO ACTED ON THE DIRECTION GIVEN BY THE DEPUTY D IRECTOR OF INVESTIGATION AND ADDITIONAL CIT TO INITIATE PROCEE DINGS U/S 148 OF THE ACT. 15 IT IS CLEAR FROM THE ABOVE THAT IN THESE CASES T HE REOPENING WAS FOUND TO BE FAULTY AS THE AO ACTED ON THE DIREC TIONS OF THE SUPERIOR AUTHORITIES WHO HAD DIRECTED HIM TO REOPEN THE ASSESSMENT AND, THEREFORE, IT WAS HELD THAT THERE W AS NO APPLICATION OF MIND ON THE PART OF THE ASSESSING AU THORITY. THE SAME IS NOT THE CASE BEFORE US AS THERE WAS NO SUCH DIRECTION OF A HIGHER AUTHORITY TO THE AO TO REOPEN THE ASSESSMENT AND HE ACTED INDEPENDENTLY ON THE BASIS OF SPECIFIC INFORMATION RECEIVED FROM THE INVESTIGATION WING, SURAT ALONG WITH PRIMA FACI E EVIDENCE IN THE FORM OF A DIARY AND STATEMENT OF SHRI SHASHIKAN T J MANDAVKAR WHO WROTE THE DIARY PERTAINING TO THE TRUST WHICH R UN THE MEDICAL COURSES, THAT THE SUM OF RS.18,27,500/- HAS BEEN PAID BY THE ASSESSEE TO GET ADMISSION OF HIS SON IN MBBS CO URSE. 20 20 16 IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN C ONFIRMING THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE ALSO AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS HEREBY DISMISSED . 17 IN THE RESULT, THE REVENUES APPEAL AND CROSS OB JECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 27-04-2012 SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (D K TYAGI) JUDICIAL MEMBER DATE : 27-04-2012 COPY OF THE ORDER FORWARDED TO: 1. DR. RADHAKISHAN RAMJIVAN BHOOTRA, ATHWA ARCADE, OPP. SARVAJANIK SCHOOL, ATHWALINE, NANPURA, SURAT 2. THE INCOME-TAX OFFICER, WARD-1(1), SURAT 3. CIT CONCERNED 4. CIT(A)-I, SURAT 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD