M/s Fusion Coaching Redefined, Mohali V. ITO, Mohali

ITA 59/CHANDI/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8380 (ITAT-CHANDIGARH)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 02-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 59/CHD/2016 (ASSESSMENT YEAR : 2008-09) M/S FUSION COACHING REDEFINED, VS. THE INCOME TAX OFFICER, SCF: 23, PHASE: VII, WARD 6 (3), MOHALI. MOHALI. PAN: AABFF7680A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NEERAJ JAIN RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 29.02.2016 DATE OF PRONOUNCEMENT : 01.03.2016 O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH DATED 30.11.2015 FOR ASSESS MENT YEAR 2008-09. IN THIS APPEAL, THE ASSESSEE CHALLEN GED THE ADDITIONS OF RS.1,41,150/- AND RS.1,05,000/-. 2. THE BRIEF FACTS ARE THAT SURVEY OPERATION UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS TAKEN UP AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM. AS A RESULT OF SURVEY, A DOCUMENT ANNEXURE-2 WAS IMPOUNDED, WHICH GIVES DETAILS OF FE ES RECEIVED FROM STUDENTS. THE ASSESSING OFFICER CONF RONTED 2 THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DINGS THAT ON THIS DOCUMENT/RECEIPT BOOK THE MARK FUSION IS WRITTEN AND THESE RECEIPTS TOTALING RS.1,41,150/- H AVE NOT BEEN ACCOUNTED IN THE BOOKS OF ACCOUNT OF THE ASSES SEE FIRM. THE ASSESSEE SUBMITTED THAT THESE ARE THE RE CEIPTS IN THE HANDS OF THE PARTNER, SHRI RAJEEV KHURANA BU T COULD NOT EXPLAIN THAT THESE ARE ACCOUNTED FOR IN T HE HANDS OF THE PARTNER. THEREFORE, ADDITIONS OF THES E TUITION FEE RECEIPTS WERE MADE IN THE HANDS OF THE ASSESSEE FIRM. 2. THE ASSESSEE CHALLENGED THE ADDITIONS BEFORE TH E LEARNED CIT (APPEALS). IT WAS SUBMITTED THAT SHRI RAJEEV KHURANA WHO IS PARTNER OF FUSION COACHING REDEFINED IS ALSO PROPRIETOR OF M/S KHURANA INSTITUTE PROVIDING COACHING SEPARATELY IN HIS INDIVIDUAL CAPACITY TO T HE STUDENTS. SHRI RAJEEV KHURANAHAS ACCOUNTED FOR ALL THESE RECEIPTS IN HIS INDIVIDUAL BOOKS OF ACCOUNT. THERE FORE, NO ADDITION IS TO BE MADE IN THE HANDS OF THE FIRM. T HE LEARNED CIT (APPEALS) FOUND THAT THE ASSESSEE COULD NOT ESTABLISH BEFORE THE ASSESSING OFFICER THAT THESE F USION FEE RECEIPTS HAVE BEEN ACCOUNTED FOR IN THE BOOKS OF SH RI RAJEEV KHURANA IN HIS INDIVIDUAL CAPACITY. SINCE N O EVIDENCE HAVE BEEN FILED IN SUPPORT OF THE SAME, TH EREFORE, THE ADDITION WAS CONFIRMED. 3. SIMILARLY, DURING THE COURSE OF SURVEY, A DOCUMENT A-7 WAS IMPOUNDED, WHICH GIVES THE DETAILS OF FEES RECEIVED FROM STUDENTS. THE ASSESSEE SUBMITTE D THAT THESE RECEIPTS ARE OF THE INDIVIDUAL PARTNER. THE 3 ASSESSING OFFICER MADE THE ADDITION IN THE HANDS OF THE ASSESSEE AND THE ASSESSEE SIMILARLY SUBMITTED BEFOR E THE LEARNED CIT (APPEALS) THAT THE RECEIPTS MENTIONED I N THE DOCUMENT A-7 CONTAINED THE FEE RECEIVED BY SHRI RAJ EEV KHURANA AND MS.SARBJEET KAUR IN THEIR INDIVIDUAL CAPACITY. THE LEARNED CIT (APPEALS) ON THE SAME REASONING CONFIRMED THE ADDITION OF RS.1,05,000/-. 4. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSED THE MATERIAL ON RECORD. T HE IMPOUNDING OF DOCUMENTS AS MENTIONED ABOVE IN THE SURVEY PROCEEDINGS HAVE NOT BEEN DISPUTED BY THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE CON TENDED THAT THESE RECEIPTS HAVE BEEN SHOWN IN THE HANDS OF THE PARTNERS IN THEIR PERSONAL CAPACITY. HE HAS ALSO S TATED THAT THE PROPERTY WHERE THE ASSESSEE FIRM CARRIED ON COACHING BUSINESS IS TAKEN ON RENT BY THE PARTNER. THE LEARNED D.R., HOWEVER, SUBMITTED THAT NO SPECIFIC D ETAILS WERE FURNISHED BEFORE THE LOWER AUTHORITIES. THERE FORE, THE DETAILS SUBMITTED IN THE PAPER BOOK ARE ADDITIO NAL EVIDENCES IN NATURE AND MAY NOT BE CONSIDERED. THE ASSESSING OFFICER HAS MENTIONED THE DETAILS OF THE SEIZED PAPER FOUND DURING THE COURSE OF SURVEY FROM THE PR EMISES OF THE ASSESSEE. THE ADDRESS OF THE ASSESSEE IS SC F 23, PHASE-VII, MOHALI WHERE THE SURVEY WAS CONDUCTED AN D CERTAIN INCRIMINATING DOCUMENTS WERE IMPOUNDED. I T IS NOT IN DISPUTED THAT THE DETAILS MENTIONED IN SEIZE D PAPER WERE OF THE AMOUNT OF FEES RECEIVED FROM THE STUDEN TS, 4 WHICH HAVE NOT BEEN ACCOUNTED FOR IN THE BOOKS OF T HE ASSESSEE FIRM. THE ASSESSEE CLAIMED THAT THESE REC EIPTS PERTAINED TO INDIVIDUAL PARTNER. IT IS ALSO EXPLAI NED THAT THE INDIVIDUAL PARTNER ALSO GAVE COACHING IN THE SA ME PREMISES WHERE THE ASSESSEE FIRM IS CONDUCTING THE BUSINESS OF PROVIDING COMMERCIAL COACHING TO THE STUDENTS. THE ASSESSING OFFICER SPECIFICALLY NOTED THAT IT IS NOT EXPLAINED WHY THE RECEIPT BOOK OF PARTNERS W ERE LYING AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM . IT WAS ALSO FOUND THAT THE COMPLETE TOP FLOOR IS IN THE PO SSESSION OF THE ASSESSEE FIRM AND THERE WAS NO REASON FOR T HE PARTNER TO PRINT THE RECEIPT BOOK INDICATING THE SA ID ADDRESS. THE ASSESSING OFFICER ALSO NOTED THAT IT IS HIGHLY IMPROBABLE THAT THE STUDENTS WERE MAKING PAYMENT OF THEIR FEES TO SHRI RAJEEV KHURANA BY VISITING AT T HE SAID ADDRESS DURING THE RELEVANT DATES WHEN THE PREMISES WAS ACQUIRED BY THE ASSESSEE FIRM. THE RECEIPT BOOK AL SO HAS BEEN CO-RELATED WITH OTHER DOCUMENTS IMPOUNDED DURI NG THE SURVEY, WHICH IS THE ATTENDANCE REGISTER MARKED A-6. THE ATTENDANCE REGISTER INDICATES THE PRESENCE OF S TUDENTS DURING THE COACHING CLASSES WITH ASSESSEE FIRM. IT WAS, THEREFORE, FOUND THAT MOST OF THE STUDENTS WERE PRE SENT AT THE COACHING CLASSES CONDUCTED BY THE ASSESSEE FIRM . THE ASSESSING OFFICER, THEREFORE, HELD THAT THE INCOMES FROM FEES OF STUDENTS ASSESSABLE IN THE HANDS OF THE FIR M WERE DIVERTED TO THE PARTNERS. THE FINDING OF THE ASSES SING OFFICER WITH REGARD TO OTHER ADDITIONS WERE ALSO SA ME. THE FINDINGS OF FACT RECORDED BY THE ASSESSING OFFICER HAVE NOT 5 BEEN CONTROVERTED OR REBUTTED THROUGH ANY EVIDENCE ON RECORD. I MAY ALSO NOTE HERE THAT DURING THE SURVE Y PROCEEDINGS, A DIARY MARKED A-5 WAS ALSO IMPOUNDED, WHICH CONTAINS DETAILS OF RECEIPTS/EXPENSES AMOUNTI NG TO RS.3,39,906/-. THE ASSESSEE SIMILARLY EXPLAINED T HAT THESE EXPENSES WERE INCURRED BY THE PARTNER OF THE ASSESSEE FIRM IN PERSONAL CAPACITY, HOWEVER, THE AS SESSEE COULD NOT RE-CONCILE THE SAME. THEREFORE, LEARNED COUNSEL FOR THE ASSESSEE OFFERED RS.1 LAC FOR TAXATION AND NO FURTHER APPEAL HAVE BEEN FILED. THESE FINDINGS AND MATERIAL ON RECORD CLEARLY SUPPORT THE FINDINGS OF THE AUTHORITIES BELOW THAT THE IMPOUNDED DOCUMENTS CONTAINED THE AMOUNT OF FEES RECEIVED BY THE ASSESS EE FIRM FROM THE STUDENTS AND THE ASSESSEE MERELY TRIED TO DIVERT THESE RECEIPTS OF THE ASSESSEE FIRM TO THE PARTNER TO SUPPRESS ITS INCOME. THE REPLY OF ASSESSEE HAVE NO T BEEN PROVED BY ANY COGENT EVIDENCE ON RECORD. SECTION 1 6 OF THE PARTNERSHIP ACT, 1932 PROVIDES PERSONAL PROFITS EARNED BY THE PARTNER SUBJECT TO CONTRACT BETWEEN THE PA RTNERS, (A) ---------- (B) IF A PARTNER CARRIES ON ANY BUSINESS OF THE SA ME NATURE AS AND COMPETING WITH THAT OF THE FIRM, HE S HALL ACCOUNT FOR AND PAY TO THE FIRM ALL PROFITS MADE BY HIM IN THAT BUSINESS. ADMITTEDLY, FIRM AND PARTNERS ARE DOING SAME BUSINE SS IN SAME PREMISES BUT NO SPECIFIC CONTRACT IN BUSINESS IS EXPLAINED. 6 THE HON'BLE SUPREME COURT IN THE CASES OF CIT VS. D URGA PRASAD MORE, 82 ITR 540 AND SUMATI DAYAL VS. CIT, 2 14 ITR 801 HAVE HELD THAT THE COURTS AND THE TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEFORE THEM BY APPLYING THE T EST OF HUMAN PROBABILITIES AND SHALL ALSO CONSIDER SURROUN DING CIRCUMSTANCES. 5. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F FINDINGS OF FACT RECORDED BY THE AUTHORITIES BELOW, IT IS CLEAR THAT BOTH THE ADDITIONS WERE RIGHTLY MADE BY THE AUTHORITIES BELOW IN THE HANDS OF THE ASSESSEE FIRM BECAUSE THESE RECEIPTS PERTAINED TO THE ASSESSEE FI RM ONLY. THE FINDINGS OF FACT RECORDED BY THE ASSESSING OFFI CER HAVE NOT BEEN REBUTTED THROUGH ANY EVIDENCE. I AM, THER EFORE, NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AU THORITIES BELOW IN MAKING BOTH THE ADDITIONS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF MARCH, 2016. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 1 ST MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7