The DCIT, Trivandrum V. M/s.South East Education Trust, Kollam

ITA 364/COCH/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7273 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 20-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-06-2015
• Court: TRIBUNAL
• Department Lawyers: SHANTHAM BOSE
• Section: 153A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI ABRAHAM P. GEORGE, AM & GEORGE GEORGE K., JM I .T.A. NO. 364 /COCH/201 5 ASSESSMENT YEAR : 2011 - 12 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, TRIVANDRUM. VS. M/S. SOUTH EAST EDUCATION TRUST, ARIPPA, CHOZHIYAKODE P.O., KULATHUPUZHA, KOLLAM-691 317. (REVENUE - APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY SHRI SHANTHAM BOSE, CIT(DR) ASSESSEE BY SMT. DIVYA RAVINDRAN, ADV. DATE OF HEARING 21 / 0 3 / 201 7 DATE OF PRONOUNCEMENT 23 / 0 3 /201 7 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: THIS APPEAL BY THE DEPARTMENT IS AGAINST THE ORDER OF LD. CIT(A)-IV, KOCHI DATED 26/03/2015 FOR THE ASSESSMENT YEAR 2011-12. 2. THOUGH FOUR GROUNDS HAVE BEEN TAKEN BY THE REVENUE, ALL RELATE TO THE DELETION OF AN ADDITION OF RS.36,20,079/-. 3. FACTS APROPOS ARE THAT ASSESSEE, AN EDUCATIONA L TRUST WAS RUNNING AN ENGINEERING COLLEGE CALLED HINDUSTAN COLLEGE OF ENGIN EERING. THE TRUST STARTED I.T.A. NO.364/COCH/2015 2 FUNCTIONING ON 02/08/2008. THE TRUST HAD NOT OBTAI NED REGISTRATION U/S. 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ENG INEERING COLLEGE WAS RUNNING FOUR STREAMS OF ENGINEERING, NAMELY, CIVIL, MECHANICAL, ELECTRONICS & COMMUNICATION AND COMPUTER SCIENCE. THERE WAS A S EARCH CARRIED OUT IN THE PREMISES OF ASSESSEE ON 01/12/2011. DURING THE SAID SEARCH, AUDITED BALANCE SHEET, INCOME AND EXPENDITURE STATEMENT WERE FOUND A ND SEIZED. A NOTICE U/S. 153A WAS ISSUED TO THE ASSESSEE ON 25/11/2013. RET URN WAS FILED PURSUANT TO SUCH NOTICE BY ASSESSEE ON 25/03/2014 WHEREIN INCOM E OF RS.79,99,040/- WAS DECLARED. BASED ON THE SEIZED MATERIALS, ASSESSING OFFICER FOUND THAT ASSESSEE HAD DURING THE RELEVANT YEAR, EFFECTED REFUNDS OF F EES RS.36,20,079/-. AS PER LD. AO, ASSESSEE COULD NOT PRODUCE ANY DETAILS OF SUCH FEES REFUNDED BY IT. DISALLOWANCE OF RS.36,20,079/- WAS MADE. APART FRO M THIS, THERE WERE DISALLOWANCE U/S.40(A)(IA) OF THE ACT, DISALLOWANCE S OF CERTAIN OTHER EXPENDITURE AND AN ADDITION FOR CAPITATION FEES. 4. AGGRIEVED, ASSESSEE MOVED AN APPLICATION BEFOR E LD. CIT(A). 5. WITH REGARD TO THE REFUND OF FEES WHICH WAS D ISALLOWED BY THE ASSESSING OFFICER, SUBMISSION OF ASSESSEE WAS THAT FEES COLLE CTED WERE REFUNDED TO THE STUDENTS WHO LEFT COLLEGE WHEN THEY OBTAINED ADMISS ION IN SOME OTHER COLLEGE. AS PER THE ASSESSEE, COLLECTIONS MADE FROM THE STUD ENTS WERE ACCOUNTED AS INCOME AND WHEN REFUND OF SUCH FEES WERE MADE TO TH E STUDENTS WHO LEFT THE I.T.A. NO.364/COCH/2015 3 COLLEGE, IT WAS SHOWN AS EXPENSES. ASSESSEE IT SEE MS FILED CERTAIN EVIDENCE IN SUPPORT OF THESE CONTENTIONS. ASSESSEE ALSO GAVE DE TAILS OF THE AMOUNTS OF FEES RECEIVED AND REFUNDED. AS PER THE ASSESSEE SUCH RE FUNDS WERE BASED ON GOVERNMENT REGULATION. ASSESSEE SUBMITTED BEFORE TH E LD. CIT(A) THAT DETAILS WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDI NGS BEFORE THE ASSESSING OFFICER ALSO. LD. CIT(A), AFTER GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE HELD THAT REFUND OF FEES OF RS.36,20,079/-WAS SUPPO RTED BY LEDGER ACCOUNT WHICH REFLECTED PAYMENT OF THE REFUNDS THROUGH CHEQUES I SSUED BY THE ASSESSEE FROM ITS ACCOUNT MAINTAINED WITH SBT, MADATHARA. ACCORD ING TO HIM, SUCH REFUNDS WERE PROVED BY THE ASSESSEE. HE DELETED SUCH ADDITI ON. WITH REGARD TO DISALLOWANCE OF EXPENDITURE, ASSESSEE GOT PARTIAL R ELIEF FROM CIT(A). 5. NOW REVENUE IS IN APPEAL AGAINST THE DELETION OF DISALLOWANCE OF RS.36,20,079/- FOR FEE REFUNDS. LD. DR SUBMITTED T HAT REFUND VOUCHERS WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICER BUT WER E ONLY PRODUCED BEFORE THE CIT(A). AS PER LD. DR, CIT(A) GAVE RELIEF TO THE AS SESSEE WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE DETAILS FILED BY THE ASSESSEE. 6. PER CONTRA, LD. AR SUPPORTED THE ORDER PASSED BY LD. CIT(A) AND ALSO STATED THAT ALL THE DETAILS WERE FURNISHED BEFORE THE ASSE SSING OFFICER. I.T.A. NO.364/COCH/2015 4 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS. IT IS SEEN THAT THE ASSESSMENT DONE ON THE ASSESSEE WAS CULMINATION OF A SEARCH DONE ON 01/12/2011. IT IS NOT DISPUTED THAT AUDITED BALANCE SHEET AND INCOME AND EXPENDITURE STATEMENT OF THE ASSESSEE WERE SEIZED D URING SUCH SEARCH. IT IS NOT DISPUTED BY THE REVENUE THAT REFUND OF FEES OF RS.3 6,20,079/- WAS A PART OF THE EXPENDITURE REFLECTED IN THE I&E ACCOUNT. AT THIS J UNCTURE, IT WOULD BE APPOSITE TO HAVE A LOOK AT SECTION 132(4A) OF THE ACT. 4A) WHERE ANY BOOKS OF ACCOUNTS, OTHER DOCUMENTS , MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE O R IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH, IT MAY BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT, MONEY, BULLION, JEWELLE RY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS T O SUCH PERSON; ( II ) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOO KS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY R EASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HAN DWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSONS HANDWRI TING, AND IN THE CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTESTED, T HAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY W HOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED. ONCE BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE SEIZE D DURING THE COURSE OF SEARCH, CONTENTS OF SUCH BOOKS AND DOCUMENTS HAVE T O BE PRESUMED TO BE TRUE. IT IS NOT DISPUTED THAT ENTRY FOR THE REFUND OF FEE S APPEARED IN THE AUDITED INCOME AND EXPENDITURE SEIZED DURING THE SEARCH. HE NCE, THERE IS A PRESUMPTION WHICH GOES IN FAVOUR OF THE ASSESSEE THAT THE CONTE NTS OF SUCH INCOME AND I.T.A. NO.364/COCH/2015 5 EXPENDITURE STATEMENT FILED WERE TRUE. NO DOUBT, I T IS A REBUTABLE PRESUMPTION, BUT THE REVENUE HAD NOT PROVED ANYTHING TO SHOW THA T THE CLAIM OF THE REFUND OF FEES WAS BOGUS. THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER. THERE IS NO CASE FOR THE REVENUE THAT REFU ND OF FEES TO THE STUDENTS WAS NOT REFLECTED IN THE LEDGER PRODUCED BY THE ASSESSE E. UNDER SUCH CIRCUMSTANCES, EVEN WITHOUT CONSIDERING THE DETAILS FILED BY THE A SSESSEE BEFORE THE LD. CIT(A), THE DISALLOWANCE COULD NOT HAVE BEEN DONE. SUCH DI SALLOWANCE, IN OUR OPINION WAS RIGHTLY DELETED BY LD. CIT(A). WE DO FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE STAND S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23-03-2017. SD/- SD/- (GEORGE GEORGE K.) ( ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 23 RD MARCH, 2017 GJ COPY TO: 1. M/S. SOUTH EAST EDUCATION TRUST, ARIPPA, CHOZHIYAK ODE P.O., KULATHUPUZHA, KOLLAM-691 317. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. I.T.A. NO.364/COCH/2015 6 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN