Arya Bhatt Vidhya Sansthan, V. DCIT, CC-13,

ITSSA 35/DEL/2005

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9296 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 22-04-2013
• Assessment Year: misc
• Appeal Filed On: 19-01-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S GILL
• Assessee Lawyers: P C PANWAL
• Keywords: Depreciation; Search and seizure; Loose papers; Document seized; Charitable institution; Opportunity of being heard; Additional evidence; Block assessment; Benefit of exemption; Documents seized
• Section: 143(3); 11A; 142(1); 234B; 12A; 131; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C: NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.S.S(A) NOS. 35/DEL/2005 (A.Y 1989-90 TO 99-2000 ) 3746/ D EL/2005(A.Y 1998-99) 3885/DEL/2005(A.Y 1999-200 M/S ARYABHATT VIDYA SANSTHAN, VS. DCI T, D-3, SOUTH EXTN,-11 CENTRAL CIRCLE-13, NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) A ND ITA NOS 82/DEL/2005 (A.Y 1989 -90 TO 99-2000) 3957/ DEL/200 5(A.Y 1998-99) 3958/DEL/2005 (A.Y 1999-2000) ACIT, VS. M/S ARYABHATT VIDYA SANSTHAN CENTRAL CIRCLE-13, D -3, SOUTH EXTN,-11 NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. C. PANWAL, C.A REVENUE BY: SHRI R. S. GILL, CIT, D.R ORDER PER I. C. SUDHIR, JUDICIAL MEMBER: I.T.S.S(A) NO. 35/DEL/2005 (A.Y 1989-90 TO 99-2000) 82/DEL/2005 (A.Y 1989-90 TO 99-2000) I.T.S.S(A) NO. 35/DEL/2005 (A.Y 1989-90 TO 99-2000) THE ASSESSEE SOCIETY HAS QUESTIONED THE FIRST APPEL LATE ORDER ON THE FOLLOWING GROUNDS:- 2 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN FACTS AND IN LAW IN DENYING EXEMPTION U/S 10 (22) A ND THEREBY CONSIDERING THE SURPLUS AS PER INCOME AND EXPENDITU RE AMOUNTING TOO RS.71,59,770/- (77,04,129-5,44,356) F OR DIFFERENT YEARS FALLING IN THE BLOCK PERIOD AS UNDISCLOSED IN COME. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR IN FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF DEPREC IATION ON VIRENDRA GRAM BUILDING AMOUNTING TO RS.33,81,425/-. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW CONFIRMING THE ADDITION TO THE EXTENT OF RS.4,08,557/- ON ACCOUNT OF FOLLOWING LOOSE PAPERS FOUND DURING T HE COURSE OF SEARCH: ANNEXURE/PA GE PARTICULARS AMOUNT (RS.) -2/4 TO 67 2,07,488/- A-3/38 3,684/- PAYMENT OF DECOFUR PALACE 10,000/- BOGUS PARTIES 38,000/- BOGUS PARTIES 99,385/- PAYMENT TO LALCHAND 50,000/- TOTAL 4,08,557/- 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE TO THE EXTENT OF RS.15,21,770/- MADE OUT OF TRANSPORT AND REFRESHMEN T EXPENSES. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN NOT GIVING SETOFF OF UNDISCLOSE D INCOME OF RS.5 LACS OFFERED BY THE ASSESSEE AGAINST THE ADDIT ION SUSTAINED BY HIM RESULTING INTO DOUBLE ADDITION TO THAT EXTEN T. I.T.S.S(A) NO. 82/DEL/2005 (A.Y 1989-90 TO 99-2000) (REVENUE) 3 THE REVENUE ON THE OTHER HAND HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN REDUCING THE SURPLUS AS PER INC OME & EXPENDITURE A/C FROM RS.77,04,129/- TO RS.17,59,770 /- THEREBY ALLOWING RELIEF OF RS.5,44,359/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,0 5,000/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE FROM THE EXPENSES CLA IMED UNDER THE HEAD FURNITURE & FIXTURES ETC. BEING BOGUS EXPENSES . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN REDUCING THE ADDITION FROM RS.1 7,76,491/- TO RS.3,76,681/- MADE ON ACCOUNT OF SEIZED DOCUMENTS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.13, 96,963/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCES FROM INCOME & EX PENDITURE A/C ON ACCOUNT OF NON-PRODUCTION OF VOUCHERS AND DETAIL S ETC. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF UNEXPLAINED SEIZED CASH OF RS.50,000/- 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN REDUCING THE ADDITION FROM RS.3 0,00,000/- TO RS.15,21,770/- MADE ON ACCOUNT OF BOGUS EXPENSES CL AIMED UNDER THE HEAD TRANSPORT ETC. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.15, 99,610/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF BOGUS EXPENSES FROM I & E A/C UNDER THE HEAD LEGAL, PROFESSIONAL, STUDENT WELFARE , REPAIR, DIESEL, TOUR ETC. 2. AT THE OUTSET OF HEARING THE LD. A.R POINTED OUT THAT THE ISSUES RAISED IN THE GROUP APPEALS ARE COVERED BY THE ORDER OF TH E TRIBUNAL IN THE GROUP 4 CASES ONLY. WE HAVE HEARD AND CONSIDERED THE ARGUM ENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. GROUND NO-1 1. THE RELEVANT FACTS ARE THAT SEARCH AND SEIZURE A CTION U/S 132(1) OF THE ACT WAS CONDUCTED ON 15/1/1999 AT THE SCHOOL PREMIS ES RUN BY THE SOCIETY. DURING THE COURSE OF SEARCH CASH AND VARIOUS INCRIM INATING DOCUMENTS WERE FOUND AND SEIZED. NOTICE U/S 158 B C OF THE ACT WA S ISSUED ON 17/11/1999 AND SERVED UPON THE ASSESSEE ON 29/11/1999. IN RES PONSE, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE BLOCK PERIOD. THE ASS ESSMENT U/S 158 B C HAS BEEN FRAMED. 2. THE SOCIETY WAS REGISTERED ON 12/5/1967 WITH THE REGISTRAR OF SOCIETY WITH THE OBJECT TO RUN EDUCATIONAL INSTITUTIONS. I T WAS NOT REGISTERED U/S 12A OF THE ACT AND RETURNS WERE NEVER FILED BEFORE. TH E SOCIETY WAS RUNNING TWO SCHOOLS NAMELY MANAVASTHALI SCHOOL AND SOUTH TOWN S CHOOL. 3. IN ITS RETURN OF INCOME FOR THE BLOCK PERIOD, TH E ASSESSEE DISCLOSED A SUM OF RS.5 LACS AS UNDISCLOSED INCOME. THE INCOME WAS DECLARED ON ESTIMATE BASIS. THE A.O OBSERVED THAT NO SPECIFIC DOCUMENTS /ITEMS WERE IDENTIFIED WITH THE INCOME ALONG WITH THE RETURN OF INCOME. NO INCOME AND EXPENSES ACCOUNT, PROFIT AND LOSS ACCOUNT, BALANCE SHEET OR ANY OTHER DETAILS OF INCOME WERE ENCLOSED ALONG WITH THE RETURN OF INCOME A NOT E ON COMPUTATION OF UNDISCLOSED INCOME WAS ATTACHED. IT WAS MENTIONED IN THIS NOTE THAT THE INCOME OF SOCIETY REMAINED EXEMPT U/S 10 (22) OF TH E IT ACT AND HENCE NO 5 RETURN OF INCOME WERE FILED. IT WAS ALSO SUBMITTED THAT THE SURPLUS FROM THE EDUCATIONAL ACTIVITY HAS BEEN CLAIMED AS EXEMPT FRO M INCOME TAX ON AN INCOME OF RS. 5 LACS WAS DECLARED AS UNDISCLOSED IN COME RELATING TO BLOCK PERIOD ON ESTIMATE BASIS. IT WAS ALSO REQUESTED TH AT SEIZED AMOUNT OF RS.50, 000/- SHOULD BE ADJUSTED AGAINST TAX DUE ON SURREND ERED INCOME OF RS.5 LACKS. THE A.O OBSERVED THAT THE ASSESSEE NEITHER MAINTAIN ED BOOKS OF ACCOUNT NOR GOT ITS BOOKS OF ACCOUNT AUDITED U/S 44 AB IN FORM NO-3 CD. THE A.O FRAMED ASSESSMENT AT RS.1, 92, 13,618/- INCLUDING TH E UNDISCLOSED INCOME OFFERED BY THE ASSESSEE AT RS.5 LACS. THE A.O TREAT ED SURPLUS IN THE INCOME EXPENDITURE ACCOUNT OF THE ASSESSEE SOCIETY FOR THE ASSESSMENT YEARS FALLING WITHIN THE BLOCK PERIOD, AS UNDISCLOSED INCOME. TH E ASSESSEE COULD NOT SUCCEED BEFORE THE LD. CIT (A). THE CONTENTION OF THE ASSESSEE REMAINED THAT IT IS RUNNING EDUCATIONAL SCHOOLS SOLELY FOR EDUCA TIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT AS SUCH THE EXCESS OF RECEIPT S OVER EXPENDITURE OF THE SCHOOLS CANNOT BE REGARDED AS UNDISCLOSED INCOME WI THIN THE MEANING OF CHAPTER XIV B OF THE I.T ACT. IT WAS ALSO CONTENDE D THAT THE ASSESSEES INCOME FROM RUNNING OF EDUCATIONAL SCHOOL, IS EXAMINED U/S 10 (22) OF THE ACT AND AS SUCH THE QUESTION OF HAVING ANY UNDISCLOSED INCOME WITHIN THE MEANING OF CHAPTER XIV B DOES NOT ARISE. IT WAS SUBMITTED THA T SINCE THIS INCOME WAS EXEMPT U/S 10 (22) OF THE ACT IT WAS NOT OBLIGED TO FILE RETURN OF ITS INCOME FROM RUNNING OF SCHOOLS WITHOUT ANY MOTIVE OF EARNI NG PROFIT. IT WAS CONTENDED THAT NO PERSON OR INDIVIDUAL WAS ENTITLED TO ANY PORTION OF SUCH INCOME AND IF SOMEBODY IS SEEN TO HAVE SIPHONED OFF CERTAIN FUNDS OF THE ASSESSEE FROM ITS BOOKS OF ACCOUNTS, THE SOCIETY CA NNOT BE DENIED THE BENEFIT OF EXEMPTION U/S 10 (22) OF THE ACT SINCE IT IS THE IN DIVIDUAL WHO IS LIABLE TO BE 6 HAULED UP FOR MAKING USE OF THE FUNDS UNAUTHORIZED LY OF THE SOCIETY FOR HIS PERSONAL USE. THE LD. CIT(A) DID NOT AGREE WITH TH ESE CONTENTIONS OF THE ASSESSEE AND HAS UPHELD THE ACTION OF THE A.O. THI S SECTION OF THE LD. CIT(A) HAS BEEN QUESTIONED BY THE ASSESSEE IN THE PRESENT APPEAL. 4. THE SUBMISSION OF THE ASSESSEE REMAINED THAT THE ISSUE AS TO WHETHER THE ASSESSEE IS ENTITLED FOR THE CLAIMED EXEMPTION U/S 10 (22) OF THE ACT OR NOT, IS FULLY COVERED BY THE DECISION OF THE TRIBUNAL IN TH E CASE OF GROUP SOCIETIES. IN THIS REGARD HE REFERRED PAGE NOS. 2 TO 38, PARA NO- 2 TO 11 OF THE DECISION OF THE TRIBUNAL IN THE CASE OF LAXMIBI FOUNDATION IT(SS)A NO- 33/DEL/2005, ST. VASWANI EDUCATION SOCIETY, IT(SS)A NO-30/DEL/2007, PAGE NOS. 6 TO 38 , PARA NOS. 4 TO 12, VIRENDRA BHATNAGAR SANSTHAN, IT(SS)A NOS- 29 & 89/DEL/2005, PAGE NOS. 9 TO 24 , PARA NOS 9 TO 22 & PAGE NOS 64, PARA NO-63; NAV MANAV SANSTHAN IT(SS)A NOS- 77 & 32/DEL/2005, PAGE NOS. 9 TO 24, PARA NOS. 9 TO 21 & PAGE NO 69, PARA NO- 80; & RAJENDRA NAGAR EDUCATIO N SOCIETY, IT(SS)A NO- 34/DEL/2005, PAGE NOS 13 TO 38 & PARA NOS. 13 TO 30 . HE SUBMITTED THAT IN ALL THESE CASES IT HAS BEEN HELD THAT EXEMPTION U/S 10 (22) IN RESPECT OF INCOME FROM EARNING OF THE SCHOOL IS LIABLE TO BE CONSIDER ED ON MERIT IN BLOCK ASSESSMENT PROCEEDINGS TAKING INTO CONSIDERATION TH E FACTS OF THE CASE OF THE ASSSESSE AS TO WHETHER IN A PARTICULAR YEAR/YEARS, IT EXISTED SOLELY FOR EDUCATION PURPOSE AND NOT FOR THE PURPOSE OF PROFIT . THE A.O HAS BEEN DIRECTED TO DISALLOW THE CLAIM FOR EXEMPTION U/S 10 (22) OF THE ACT IN YEAR/YEARS FORMING PART OF THE BLOCK PERIOD IN WHIC H DONATION RECEIVED BY IT OUTSIDE THE BOOKS OF ACCOUNT WERE NOT USED IN FURTH ERANCE OF ITS OBJECT OF RUNNING THE EDUCATIONAL INSTITUTION OR INFRASTRUCTU RE DEVELOPMENT. FOR 7 REMAINING YEARS, CLAIM FOR EXEMPTION U/S 10 (22) HA S BEEN DIRECTED TO BE ALLOWED. 5. THE LD. D.R DID NOT DISPUTE THE ABOVE SUBMISSION THAT THE ISSUE RAISED IN GROUND NO-1 REGARDING ELIGIBILITY OF THE ASSESSE E FOR CLAIMING EXEMPTION U/S 10 (22) OF THE ACT IS COVERED BY THE DECISION O F THE TRIBUNAL IN GROUP MATTERS. HE HOWEVER TRIED TO JUSTIFY THE ASSESSMEN T ORDER AND ACTION OF THE LD. CIT(A) IN DENYING THE CLAIMED BENEFITS TO THE A SSESSEE. 6. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT AN IDENTICAL ISSUE HAS BEEN DECIDED IN THE ABOVE CITED GROUP MATTERS UNDER SIMILAR SET OF FACTS BY THE TRIBUNAL. ON PERUSAL OF ORDER DATED 29/02/2008 OF THE TRIBUNAL IN THE GROUP CASE RAJENDERA NAGAR EDUCATION SOCIETY VS. DCIT, I T(SS)A NO- 34/DEL/2005 & ORS WE FIND THAT THE ISSUE HAS BEEN DISCUSSED IN DETAIL IN PARA NOS. 13 TO 30 AT PAGE NOS 13 TO 38 OF THE ORDER. AFTER DISCUSSIN G THE ISSUE IN DETAIL THE TRIBUNAL HAS COME TO THE CONCLUSION VIDE PARA NO-30 OF THE ORDER, WHICH IS BEING REPRODUCED HEREUNDER FOR A READY REFERENCE:- 30. THE A.O WHILE REJECTING THE EXEMPTION OF THE A SSESSEE U/S 10 (22) OF THE ACT, IN THE IMPUGNED ASSESSMENT ORDER, COMPLETELY OVERLOOKED THE FACT THAT THE ASSESSEE IS RUNNING AN EDUCATIONAL IN STITUTION EXISTING SOLELY FOR THE EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSES O F PROFIT AND THE SAID EXEMPTION HAS BEEN DULY GRANTED TO IT IN THE ASSESS MENT ORDER PASSED IN THE CASE OF THE APPELLANT SOCIETY U/S 143(3) FOR THE A. Y 1996-97 ON 8/3/1999. A NOTICE U/S 142(1) DT. 5/7/1994 WAS ISSUED TO THE AS SESSE FOR THE A.Y 1993-94 FOR REQUIRING THE ASSESSEE TO FILE ITS RETURN OF IN COME FOR THT A.Y AND THEN, THE PROCEEDINGS WERE DROPPED BY THE DEPARTMENT ON R ECEIPT OF REPLY FROM THE ASSESSEE DATED 12/7/1994 THAT IT IS RUNNING AN EDUC ATIONAL INSTITUTION AND IS EXEMPT U/S 10 922) OF THE ACT. IN VIEW OF THE ABOV E THE EXEMPTION U/2 10 (22) OF THE ACT. IN VIEW OF THE ABOVE THE EXEMPTIO N U/S 10 (22) OF THE ACT IN THE CASE OF THE ASSESSEE SOCIETY IS JUSTIFIED. THE RE IS NO REASON WHY THE 8 ASSESSEE SHOULD BE DENIED SUCH EXEMPTION. WE, THER EFORE, HOLD THT THE ASSESSE WOULD BE ENTITLED TO BENEFITS OF S. 10 (22) OF THE ACT FOR ALL THE A.Y COMPRISED IN THE BLOCK PERIOD. WE HOWEVER HASTEN T O ADD THAT IF SOME INSTANCES ARE FOUND WHILE DEALING WITH THE OTHER GR OUNDS OF THE REVENUE OR GROUNDS OF APPEAL BY THE ASSESSEE, WHICH SHOW THAT THE ASSESSEE DID NOT EXISTENT SOLELY FOR THE PURPOSE OF EDUCATION, THEN THE ASSESSEE WOULD NOT BE ENTITLED TO CLAIM EXEMPTION U/S 10 (22) OF THE ACT. WE WILL REVERT BACK TO THE ISSUE OF EXEMPTION U/S 10 (22) OF THE ACT LATER. 7. RESPECTFULLY, FOLLOWING THE ABOVE DECISION ON THE ISSUE WE HOLD IN THE PRESENT CASE THAT EXEMPTION U/S 10 (22) IN RESP ECT OF INCOME FROM EARNING OF THE SCHOOL IS LIABLE TO BE CONSIDERED ON MERITS IN BLOCK ASSESSMENT PROCEEDINGS TAKING INTO CONSIDERATION, T HE FACTS OF THE CASE OF THE ASSESSEE AS TO WHETHER IN A PARTICULAR YEAR/YEA RS IT EXISTED SOLELY FOR EDUCATION PURPOSE AND NOT FOR THE PURPOSE OF PROFIT . THE A.O IS DIRECTED TO DISALLOW THE CLAIM FOR EXEMPTION U/S 10 (22) IN THE YEAR/YEARS FORMING PART OF THE BLOCK PERIOD IN WHIC H DONATION RECEIVED BY IT OUTSIDE THE BOOKS OF ACCOUNTS WERE NOT USED I N FURTHERANCE OF ITS OBJECTS OF RUNNING THE EDUCATIONAL INSTITUTION OR F OR INFRASTRUCTURE DEVELOPMENT. FOR REMAINING YEARS, CLAIM FOR EXEMPT ION U/S 10 (22) IS DIRECTED TO BE ALLOWED. GROUND NO-1 IS THUS ALLOWE D FOR STATISTICAL PURPOSES. GROUND NO-2 1. THE GRIEVANCES OF THE ASSESSEE IS AGAINST CONFI RMATION OF DISALLOWANCE OF DEPRECIATION ON VIRENDRA GRAM BUILD ING AMOUNTING TO RS.33,81,425/-. THE LD. AR POINTED OUT THAT THE ISSU E IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF GROUP SOCIE TIES. HE REFERRED THE 9 CONTENTS OF PARA NOS. 11A TO 17 AT PAGE NOS. 38 TO 52 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF LAXMIBI FOUNDATION, IT(SS)A NO-33/DEL/2005; PAGE NOS. 38 TO 47, PARA NOS.13 & 14 IN THE CASE OF ST. VASHWANI EDUCATIONAL SOCIETY, IT(SS)A NO- 30/DEL/2007; PAGE NOS. 28 TO 35 , PARA NOS. 29 TO 36 IN THE CASE OF VIRENDRA BHATNAGER SANSTHAN IT(SS)A NOS-29 & 89/DEL /2005 & PAGE NOS. 24 TO 31 , PARA NOS. 23 TO 30 IN THE CASE OF NAV MANAV SANSTHAN IT(SS)A NOS- 77 & 32/DEL/2005. THE LD. D.R DID NOT DISPUTE THAT THE I SSUE RAISED IN THE GROUND IS COVERED BY THE DECISION OF THE DELHI BENCH OF TH E TRIBUNAL IN THE GROUP CASES. HE, HOWEVER, PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD. 2. HAVING GONE THROUGH THE ABOVE CITED DECISION O F THE TRIBUNAL ON THE ISSUE WE FULLY AGREE WITH THE SUBMISSION OF THE LD. A.R THAT ON IDENTICAL ISSUE, UNDER SIMILAR FACTS HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE IN THE GROUP CASES. THE FACTS IN BRIEF ARE THAT DURING TH E BLOCK PERIOD, THE ASSESSEE SOCIETY HAD SHOWN TO HAVE MADE INVESTMENT IN THE MU LTI PURPOSE PROJECT CALLED AS VIRENDRA GRAM PROJECT SITUATED ON AN AR EA OF ABOUT 55 ACRES AT GURGAON AT BYPASS ROAD. ORIGINALLY, THE LAND OF TH IS PROJECT WAS OWNED BY VARIOUS SOCIETIES INCLUDING THE ASSESSEE SOCIETY RU NNING DIFFERENT SCHOOLS. THE SAID SOCIETIES HAD MADE AN INVESTMENT OF ABOUT RS.1 0 CRORES IN THE SAID PROJECT AND THE SHARE OF THE ASSESSEE SOCIETY IN THE SAID I NVESTMENT WAS TO THE EXTENT OF RS.1.5 CRORES. THE SAID PROJECT INCLUDING THE IN FRASTRUCTURE CREATED THEREON WHICH WAS MAINLY COMPRISING OF DIFFERENT BUILDINGS THUS WAS CLAIMED TO BE JOINTLY BY THE DIFFERENT SOCIETIES INCLUDING THE A SSESSEE AND DIMENSION THEREON WAS CLAIMED IN THE RATIO OF RESPECTIVE INVESTMENT M ADE BY THE SOCIETIES ON THE 10 GROUND THAT THE SAID ASSETS WERE OWNED BY THEM TO T HE EXTENT OF INVESTMENT MADE AND THE SAME WERE USED FOR THE PURPOSE OF THEI R EDUCATIONAL ACTIVITIES. THIS CLAIM OF THE ASSESSEE FOR DEPRECIATION ON INVE STMENT MADE IN THE FIXED ASSETS IN VIRENDRA GRAM PROJECT WAS EXAMINED BY T HE A.O. ON EXAMINATION, HE FOUND THAT THE LAND OF VIRENDRA GR AM PROJECT ORIGINALLY OWNED BY VARIOUS SOCIETIES LATER ON TRANSFERRED TO SHRI V. K. BHATNAGAR AND HIS FAMILY MEMBERS BY WAY OF DECLAMATORY AND COMPROMISE SUITS AND THE OWNERSHIP OF THE LAND ON WHICH THE VIRENDRA GRAM PR OJECT WAS SET, THUS WAS FINALLY TRANSFERRED TO AND VISITED WITH SHRI V. K. BHATNAGAR AND HIS FAMILY MEMBERS. IN THIS REGARD, IT WAS CLAIMED BY THE ASS ESSEE SOCIETY THAT EVEN THOUGH THE LAND BELONGS TO SHRI V. K. BHATNAGAR AND HIS FAMILY MEMBERS, THE INFRASTRUCTURE CREATED THEREON BY MAKING INVESTMENT S BY DIFFERENT SOCIETIES CONTINUED TO BELONG TO THE SAME SOCIETIES. THIS CL AIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE A.O ON THE BASIS THAT THERE WAS NO DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME. THE A.O ALSO NO TED THAT THERE WAS NO AGREEMENT BETWEEN THE CONCERNED SOCIETIES ABOUT SHA RING OF ASSETS IN THE VIRENDRA GRAM PROJECT, SHARING OF OTHER BENEFITS RE LATING TO THE SAID PROJECT AS WELL AS SHARING OF ACTIVITIES UNDERTAKEN IN THE SAI D PROJECT. ACCORDING TO THE A.O, THERE WAS NO COGENT EVIDENCE TO ESTABLISH THE USE OF THE VIRENDRA GRAM PROJECT BY THE ASSESSEE SOCIETY FOR THE PURPOSE OF ITS EDUCATIONAL ACTIVITY. THE A.O, THEREFORE, HELD THAT BOTH THE CONDITIONS OF OW NERSHIP OF ASSETS AND USE THEREOF WERE NOT SATISFIED IN ABSENCE OF EVIDENCE B Y THE ASSESSEE AND IT WAS THEREFORE, NOT ENTITLED TO CLAIM DEPRECIATION IN RE SPECT OF ASSETS OF VIRENDRA GRAM PROJECT. THE LD. CIT (A) HAS UPHELD THE ACTIO N OF THE A.O ON THE ISSUE. AFTER DISCUSSING THE ISSUE IN DETAIL IN PARA NOS. 2 3 TO 29 OF THE ORDER IN THE 11 GROUP CASE OF MANAV SANSTHAN (SUPRA) THE TRIBUNAL V IDE PARA NO-30, REPRODUCED HEREUNDER HAS COME TO THE FOLLOWING FIND ING :- 30. AS REGARDS THE OWNERSHIP OF THE ASSETS OF VIRENDRA GRAM PROJECT, IT IS OBSERVED THAT THE LAND ON WHICH THE SAID PROJECT WAS DEVELOPED HAD BEEN INITIALLY PURCHASED AND OWNED BY THE ASSESSEE- SOCIETY JOINTLY WITH OTHER SOCIETIES. THIS BEING T HE UNDISPUTED POSITION AND KEEPING IN VIEW THT THE FACTUM AND QUA NTUM OF INVESTMENT MADE BY THE ASSESSEE-SOCIETY IN CREATION OF INFRASTRUCTURE ON THE SAID LAND WAS ACCEPTED EVEN BY THE AO AFTER HAVING GOT THE SAID INVESTMENT VALUED FROM THE DVO, WE ARE OF THE VIEW THAT THE OWNERSHIP OF THE ASSETS FORMING PART OF THE SAID IN FRASTRUCTURE TO THE EXTENT OF ITS SHARE AS DETERMINED ON THE BASIS OF C ONTRIBUTION OF FUNDS MADE HAS TO BE TAKEN AS DULY ESTABLISHED. THE AO A S WELL AS THE LD. CIT(A), HOWEVER, HAS DISPUTED THE SAME MAINLY ON TH E GROUND THAT THE LAND BELONGING TO THE ASSESSEE SOCIETY ON WHICH VIRENDRA GRAM PROJECT HAD BEEN DEVELOPED WAS SUBSEQUENTLY TRANSFE RRED TO SHRI V. K. BHATNAGAR AND HIS FAMILY MEMBERS IN EXCHANGE OF SOM E OTHER LAND AND IT HAD THUS NO MORE REMAINED THE OWNER OF THE L AND OR EVEN THE INFRASTRUCTURE CREATED THEREON. AFTER HAVING NOTED THAT THE SAID EXCHANGE OF LAND WAS EFFECTED BY WAY OF A DECLARATO RY SUIT, THE LD. COUNSEL OF THE ASSESSEE WAS DIRECTED BY US TO FILE THE COPIES OF RELEVANT PLAINT AND COMPROMISE DECREES THROUGH WHICH THE LAN D OF THE SOCIETY WAS EXCHANGED WITH LAND OF SHRI V. K. BHATNAGAR AND HIS FAMILY MEMBERS. A PERUSAL OF THE SAID DOCUMENTS PLACED BY HIM ON RECORD SHOWS THAT THE LAND BELONGING TO THE SOCIETY WAS AC TUALLY EXCHANGED ONLY IN THE MONTH OF JANUARY1998 AND THE ASSESSEE S OCIETY THUS HAD CEASED TO BE THE OWNER OF THE SAID LAND ON WHICH V IRENDRA GRAM PROJECT WAS DEVELOPED THEREAFTER. IT FOLLOWS THAT THE ASSESSEE SOCIETY CONTINUED TO REMAIN THE OWNER OF THE SAID LAND UPTO THE END OF THE PREVIOUS YEAR RELEVANT TO A.Y 1997-98 AND THIS BEIN G SO, THE OWNERSHIP OF THE ASSETS COMPRISING THE INFRASTRUCTU RE CREATED ON THE SAID LAND BELONGING TO IT COULD NOT BE QUESTIONED O N THE BASIS OF EXCHANGE OF LAND WHICH HAD TAKEN PLACE ONLY IN HE P REVIOUS YEAR RELEVANT TO A.Y 1998-99. AS REGARDS THE CLAIM OF T HE ASSESSEE SOCIETY FOR DEPRECIATION ON THE SAID ASSETS FOR AND FROM AY 1998-99. AS REGARDS THE CLAIM OF THE ASSESSEE SOCIETY FOR DEPR ECIATION ON THE SAID 12 ASSETS FOR AND FROM AY 1998-99, THE PLEA TAKEN BY T HE LD. COUNSEL FOR THE ASSESSEE BEFORE THE AUTHORITIES BELOW AS WELL A S BEFORE S HAS BEEN THAT EVEN THOUGH THE LAND OF THE VIRENDRA GRAM PROJ ECT WAS TRANSFERRED TO SHRI V. BHATNAGAR AND HIS FAMILY MEM BERS IN JANUARY, 1998 IN EXCHANGE OF SOME OTHER LAND, THE OWNERSHIP OF THE ASSETS COMPRISING INFRASTRUCTURE CREATED ON THE SAID LAND CONTINUED TO REMAIN WITH THE VARIOUS SOCIETIES INCLUDING THE ASS ESSEE SOCIETY IN THE RATIO OF INVESTMENT MADE THEREIN. IT IS NO DOUBT T RUE THT THE CONCEPT OF DUAL OWNERSHIP IS RECOGNIZED BY LAW IN INDIA AND AS HELD BY THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. PR ATASTH TRUST-249 ITR 120 CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE LAND PROPERTY MAY BELONG TO THE PERSON AND THE STRUCTURE THEREON MAY BELONG TO ANOTHER PERSONS. HOWEVER, THE ONUS TO ESTABLISH TH AT THERE WAS SUCH A DUAL OWNERSHIP IN EXISTENCE HAS TO BE ESTABLISHED B Y THE ASSESSEE CLAIMING THE SAME ON THE FACTS OF EACH CASE AS WELL AS THE EVIDENCE IN SUPPORT THEREOF. IN THE PRESENT CASE, THE ORDERS O F THE AUTHORITIES BELOW SHOW THAT THIS EXERCISE WAS NOT SPECIFICALLY DONE IN AS MUCH AS THE ASSESSEE WAS NOT CALLED UPON TO ESTABLISH HIS C ASE. WE, THEREFORE, FIND IT FAIR AND PROPER AND IN THE INTEREST OF JUST ICE TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTI ON TO ALLOW ON OPPORTUNITY TO THE ASSESSEE TO ESTABLISH ITS CLAIM THAT EVEN AFTER TRANSFER OF ITS LAND IN JANUARY, 1998, THE OWNERSHI P OF THE ASSETS COMPRISING INFRASTRUCTURE CREATED ON THE SAID LAND CONTINUED TO BE WITH IT. ACCORDINGLY, THE CLAIM OF THE ASSESSEE FO R DEPRECIATION ON ASSETS OF VIRENDRA GRAM PROJECT IS ALLOWED UPTO A.Y 1997-98 WHEREAS THE ISSUE RELATING TO ITS CLAIM FOR THE SAID DEPREC IATION OF AY 1998-99 AND ONWARDS IS RESTORED TO THE FILE OF THE AO FOR D ECIDING THE SAME FRESH AS PER THE DIRECTION GIVEN ABOVE. 3. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF TH E TRIBUNAL IN GROUP CASES ON THE ISSUE, WE SET ASIDE THE MATTER TO THE FILE O F THE A.O T O DECIDE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD T O THE ASSESSEE ON ITS CLAIM FOR THE DEPRECIATION FOR A.Y 1998-99 AND ONWARDS, A ND ALLOW THE CLAIM UP TO A.Y 1997-98. 4. THE GROUND NO-2 IS THUS ALLOWED FOR STATISTICAL PURPOSES. 13 GROUND NO-3. 1. IN THIS GROUND THE ASSESSEE HAS QUE STIONED THE SUSTAINING OF THE ADDITION TO THE EXTENT OF RS.4,08,557/- ON ACCOUNT O F SOME LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. THESE LOOSE PAPERS HA VE BEEN MARKED AS ANNEXURE A-2/4 TO 67 & A-3/38. THESE ARE PAYMENTS TO SOME PARTIES. THE LD. AR SUBMITTED THT THE LD. CIT (A) AFTER DISCUSSIN G INDIVIDUAL PAPER HAS DECIDED THE ISSUE BY PARTLY CONFIRMING THE ADDITION . THUS PARTIES ARE IN APPEAL ON THE ISSUE. HE POINTED OUT THAT IN THE GR OUP CASES ON IDENTICAL ISSUE THE TRIBUNAL HAS DECIDED IT IN THE CASE OF NAVMANAV SIKSHA SANSTHAN (SUPRA), RAJENDRA NAGAR EDUCATION SOCIETY (SUPRA) AND SHRI VI RENDRA. BHATNAGAR SANSTHAN (SUPRA) GIVING FINDING ON THE INDIVIDUAL P APER ON ITS MERITS. THE LD. A.R HAS TRIED TO JUSTIFY THE ACTION OF THE LD. C IT(A) IN DELETING THE ADDITIONS WHICH WAS MADE BY THE A.O ON THE BASIS OF VARIOUS LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. HE REFERRED THE CONTENTS OF PARA NOS 37 TO 39 AT PAGES 35 TO 40 OF THE DECISION OF THE TRIBUNA L ON THE ISSUE IN THE CASE OF VIRENDRA BHATNAGAR SANSTHAN (SUPRA); PAGE NOS 47 TO 52, PARA NOS 15 TO 30 IN THE CASE OF ST. VASHWANI EDUCATIONAL SOCIETY (SUPRA ); PARA NOS 59 TO 79 AT PAGE NOS 49 TO 69 IN THE CASE OF NAV MANAV SANSTHAN (SUP RA) AND PARA NOS. 27 TO 37 AT PAGE NOS. 57 TO 67 IN THE CASE OF LAXMIBI FOUNDA TION (SUPRA). 2. THE LD. D.R ON THE OTHER HAND TIRE D TO JUSTIFY THE ASSESSMENT ORDER. 3. HAVING GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW, WE FIND THAT THE ADDITION IN QUESTION WAS MADE BY THE A.O O N THE BASIS OF VARIOUS LOOSE PAPERS FOUND AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS. THESE 14 PAPERS WERE MARKED AS ANNEXURE A-2 PAGE NOS. 4 TO 6 7 AND ANNEXURE A3 PAGE NO 38. BASED ON THESE SEIZED PAPERS, THE A.O MADE ADDITION OF RS.17,76,491/- WHICH HAS BEEN REDUCED BY THE LD. CIT (A) AT RS.3,76,681/-. THE ASSESSEE HAS QUESTIONED THE SUSTAINING OF ADDITION OF RS.3,76,681/- BY THE LD. CIT(A) WHEREAS THE REVENUE HAS IMPUGNED THE RELIEF GIVEN TO THE ASSESSEE ON THIS ACCOUNT. THE A.O HAS DEALT WITH THE ISSUE AT PAGE NOS. 35 TO 40 OF THE ASSESSMENT ORDER, WHEREAS LD. CIT (A) HAS DISCUSSED IT AND HAS GIVEN HIS FINDING AT PAGE NOS. 16 TO 26 OF THE FIRST APPELLAT E ORDER. THE A.O MADE ADDITION ON THE GROUND THAT EITHER THESE PAYMENTS A RE NOT RECORDED OR THE PAYMENTS ARE MADE TO THE BOGUS PARTIES. IN PARA NO S. 13, 15, 17, 18, 23 & 25 LD. CIT(A) HAS OBSERVED THAT IN RESPECT OF AMOUNT O F RS.2,07,488/- AND RS.3,684/-, THE ASSESSEE COULD NOT GET THE PAYMENT V ERIFIED FROM ITS BOOKS OF ACCOUNTS AND THE REMAINING PAYMENTS ARE TO THE BOGU S PARTIES AND, THEREFORE, HE HAS CONFIRMED THE ADDITION OF THE AMOUNT IN QUES TION. REGARDING THE ADDITION OF RS.2,07,488/- MADE IN RESPECT OF ANNEXUR E A-2 THE OBSERVATION OF THE A.O REMAINED THAT THE AMOUNTS WERE FOR EXPENDIT URE INCURRED ON PAYMENT TO BOGUS PARTIES. IT WAS CONTENDED BY THE ASSESSEE THAT IF THE ASSESSEE HAS NOT RECORDED THESE ACCOUNTS IN THE BOO KS OF ACCOUNT, HOW THIS COULD BE ADDED TO THE INCOME OF THE ASSESSEE AS ASS ESSEE HAS NOT CLAIMED ANY EXPENDITURE ON THIS ACCOUNT. IT WAS CONTENDED THAT SIMILAR THE POSITION FOR THE AMOUNT OF RS.3,684/-. IT WAS SUBMITTED THAT THE AMOUNT WAS NOT CLAIMED AS EXPENDITURE HENCE THE SAME CANNOT BE ADDED TO TH E INCOME. REGARDING THE OTHER AMOUNTS IT WAS CONTENDED THAT THE SAME WERE D ULY RECORDED IN THE BOOKS OF ACCOUNT BUT THE ADDITION HAS BEEN CONFIRME D ON THE BASIS THAT THESE ARE PAYMENT MADE TO THE BOGUS PARTIES. IN HOLDING THESE PARTIES TO BE BOGUS, 15 THE A.O HAS OBSERVED THAT SUMMONS ISSUED U/S 131 HA S RETURNED WITH REMARKS, NO SUCH PERSON ON THIS ADDRESS. AND THE INSPECTORS ENQUIRY REVEALS THAT THEY ARE NON-EXISTANT AND THE ASSESSEE HAS FAILED TO FILE THEIR CONFIRMATIONS AND PRESENT ADDRESSES. THE CONTENTIO N OF THE ASSESSEE REMAINED THAT THE A.O HAS NOT GIVEN ANY OPPORTUNITY TO CROSS -EXAMINE THESE PERSONS. IT WAS POINTED OUT THAT INSPECTOR HAS REPORTED DIFFERE NTLY THAT THESE PERSONS HAVE DENIED TO HAVE RECEIVED THE PAYMENT AND HAS IG NORED THE FACT THAT THESE PAYMENTS WERE MADE IN EARLIER YEARS AND IN BETWEEN THESE PARTIES MIGHT HAVE CLOSED THEIR BUSINESS OR SHIFTED THEIR ADDRESSES. IT WAS CONTENDED THAT THERE HAS BEEN NO EVIDENCE IN THE SEIZED RECORD THAT PAYM ENT MADE TO THESE PARTIES HAVE COME BACK TO THE ASSESSEE. 4. ON GOING THROUGH THE ORDERS OF THE AUTH ORITIES BELOW, WE FIND THAT THE A.O MADE ADDITION OF THE AMOUNT OF RS.4,08,557/- QUE STIONED BY THE ASSESSEE ON THE BASIS THAT EITHER THESE PAYMENTS ARE NOT REC ORDED OR THE PAYMENTS ARE MADE TO THE BOGUS PARTIES. THE LD. CIT (A) HAS DEA LT WITH THE ISSUE IN PARA NOS. 13, 15, 17, 18, 23 & 25 WITH THIS OBSERVATION THAT IN RESPECT OF AMOUNT OF RS.2,07,488/- & 3,684/-, THE ASSESSEE COULD NOT GOT THE PAYMENT VERIFIED FROM HIS BOOKS OF ACCOUNT AND THE REMAINING PAYMENTS ARE TO THE BOGUS PARTIES AND THEREFORE, HE HAS CONFIRMED THE ADDITIONS FOR THE A BOVE AMOUNTS. 5. THE ADDITION OF RS. 2,07,488/- IS MADE I N RESPECT OF ANNEXURE A2, WHICH ACCORDING TO THE AO ARE FOR EXPENDITURE INCURRED ON PAYMENT TO BOGUS PARTIES. THE CONTENTION OF THE ASSESSEE REMAINED THAT IF THE ASSESSEE HAS NOT RECORDED THESE AMOUNTS IN THE BOOKS OF ACCOUNT, HOW THIS COU LD BE ADDED TO THE INCOME OF THE ASSESSEE AS ASSESSEE HAS NOT CLAIMED ANY EXP ENDITURE ON THIS ACCOUNT. 16 SIMILAR CONTENTION HAS BEEN RAISED AGAINST THE ADDI TION OF RS.3,684/-. WE FIND SUBSTANCE IN THIS CONTENTION OF THE ASSESSEE AND AC CORDINGLY SET ASIDE THE MATTER TO THE FILE OF THE A.O TO EXAMINE THIS ASPECT OF TH E MATTER AS TO WHETHER THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE ON THE ABO VE AMOUNTS AND IF IT IS SO, THEN DELETE THE ADDITIONS OF RS.2,07,488/- AND RS.3, 684/-. 6. REGARDING THE REMAINING ADDITIONS TH E CONTENTION OF THE LD. AR REMAINED THAT THESE ARE DULY RECORDED IN THE BOOKS OF ACCOUNT BUT THE ADDITION HAS BEEN CONFIRMED ON THE BASIS THAT THESE ARE PAYM ENTS MADE TO THE BOGUS PARTIES. WE FIND THAT THE A.O HELD THESE PARTIES AS BOGUS SINCE SUMMONS ISSUED U/S 131 TO THEM WERE RETURNED WITH REMARK N O SUCH PERSON ON THIS ADDRESS AND THE INSPECTORS ENQUIRIES REPORTED THE M AS NON-EXISTENT AND THE ASSESSEE HAS FAIL TO FILE THEIR CONFIRMATIONS AND P RESENT ADDRESSES. THE CONTENTION OF LD. AR REMAINED THAT THE A.O HAS NOT G IVEN ANY OPPORTUNITY TO CROSS-EXAMINE THESE PERSONS WHO HAVE DENIED TO HAVE RECEIVED THE PAYMENT AND ALSO IGNORED THE FACT THAT THESE PAYMENTS WERE MADE IN EARLIER YEARS AND IN BETWEEN THE PARTIES MIGHT HAVE CLOSED THEIR BUSINES S OR SHIFTED THEIR ADDRESS. IT WAS ALSO CONTENDED BY THE LD. AR THAT THERE IS NO EV IDENCE THAT PAYMENT MADE TO THESE PERSONS HAVE COME BACK TO THE ASSESSEE. 7. HAVING GONE THROUGH THE ORDERS OF THE A UTHORITIES BELOW, WE FIND THAT THE LD. CIT(A) AFTER DISCUSSING THE CASE OF THE PAR TIES HAS GIVEN HIS FINDING ON THESE ADDITIONS IN PARA NOS. 17,18,23 & 24 OF THE F IRST APPELLATE ORDER. RS.10,000/- WAS ADDED IN THE INCOME OF THE ASSESSEE BY THE A.O ON THE BASIS OF A RECEIPT OR THE LETTER HEAD OF M/S DIECO FUR PALA CE HOWING A PAYMENT OF RS.10,000/- THROUGH CHEQUE. THE A.O HELD THAT ON IN VESTIGATION THE AFORESAID 17 PARTY WAS FOUND TO BE BOGUS AND ASSESSEE HAD NOT FI LED ANY CONFIRMATION FROM THIS PARTY. THE CONTENTION OF THE ASSESSEE REMAINE D THAT THE PAYMENT MADE STOOD DULY ACCOUNTED FOR IN THE BOOKS OF ASSESSEE AND ALSO THE PAYMENT WAS MADE THROUGH CHEQUE AND THERE WAS NO EVIDENCE TO SH OW THAT THE PAYMENT HAD BEEN RECEIVED BACK THAT BY THE ASSESSE AT ANY STAGE . IT WAS ARGUED BY THE LD. AR THAT THE PAYMENT HAD BEEN MADE IN REGULAR COURSE OF BUSINESS. THE LD. CIT(A) HAS SUSTAINED THE ADDITION ON THE BASIS THAT THE ASSESSSEE HAS NOT BEEN ABLE TO REBUT THE ALLEGATION OF THE AO THAT THE PAR TY WAS NOT AVAILABLE AND HAD ALSO NOT FILED ANY CONFIRMATION FROM THIS PARTY. 8. WE ARE OF THE VIEW THAT WHEN IT IS AN UNDISPUTED FACT THAT THE PAYMENT TO THE PARTY WAS MADE THROUGH CHEQUE AND THE AMOUNT WAS DULY ACCOUNTED FOR IN THE BOOKS OF ASSESSEE REGULARLY MAINTAINED THEN ONLY BECAUSE THE PARTY WAS NOT FOUND ON THE GIVEN ADDRESS AFTER A LAPSE OF SUF FICIENT TIME IN BETWEEN AND CONFIRMATION OF THE SAID PARTY WAS NOT FILED BY THE ASSESSEE, THE AMOUNT OF RS.10,000/- IN QUESTION CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE SPECIALLY WHEN ASSESSEE WAS NOT GIVEN OPPORTUNITY TO CROSS-EX AMINE THE PERSON WHO REPORTED THAT THE PARTY WAS NON-EXISTENT. THE ADDI TION OF RS.10,000/- IS ACCORDINGLY DELETED. 9. THE NEXT ADDITION OF RS.38,000/- WAS MADE BY THE AO ON THE BASIS THAT PARTIES TO WHOM THE PAYMENTS ARE CLAIMED TO HA VE BEEN MADE ARE BOGUS PARTIES. THE LD. CIT(A) HAS UPHELD THE ADDITION ON THE BASIS THAT THE ALLEGATION OF ASSESSING OFFICER THAT PARTIES ARE BOGUS COULD N OT BE REBUTTED BY THE ASSESSEE IN ANY MANNER. NO SUCH SUBMISSION HAS BEEN MADE BY THE LD. AR AGAINST THIS ADDITION THAT THE AMOUNT WAS PAID THROUGH CHEQUE OR THE AMOUNT WAS DULY 18 RECORDED IN THE BOOKS MAINTAINED DURING THE COURSE OF REGULAR COURSE OF THE BUSINESS. WE THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. 10. THE NEXT ADDITION OF RS.99,3 85/- WAS MADE BY THE A.O ON THE BASIS THAT THE AMOUNT PAID TO SHRI RAMAWATAR SHARMA WAS FOUND TO A BOGUS PERSON. THE CONTENTION OF THE ASSESSEE REMAINED TH AT THE AMOUNT WAS RECORDED IN THE BOOKS OF ACCOUNT AND HAD BEEN MADE FOR THE P URPOSE OF SCHOOLS. THE LD. CIT(A) HAS UPHELD THE ADDITION AGAIN ON THE BASIS T HAT THE ASSESSEE HAS NOT BEEN ABLE TO REBUTT THE OBSERVATION OF THE ASSESSIN G OFFICER THAT MR. RAMAWATER SHARMA WAS FOUND TO BE A BOGUS PERSON. SINCE THE A SSESSEE COULD NOT IMPROVE ITS CASE AGAINST THIS ADDITION BEFORE THE TRIBUNAL, WE DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER. THE SAME IS UPHELD. 11. THE NEXT ADDITION OF RS.50,000/- HAS BEEN MADE B Y THE A.O ON THE BASIS THAT ON ENQUIRIES IT WAS FOUND THAT SHRI LAL CHND H AD DENIED TO HAVE RENDERED ANY SERVICE FOR THE SCHOOL. THE CONTENTION OF THE ASSESSEE REMAINED THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS-EXAM INE THE AFORESAID LAL CHAND. IT WAS CONTENDED THAT THE MOUNT WAS FOUND R ECORDED IN THE BOOKS OF ACCOUNTS AND THE COMPLETE NAME AND ADDRESS OF THE R ECIPIENT WAS FOUND THEREIN AND THE PURPOSE OF THE PAYMENT MADE WAS ALSO FOUND WRITTEN ON THE SEIZED DOCUMENT. THE LD. CIT(A) HAS UPHELD THE ADDITION S OLELY ON THE BASIS THAT SHRI LAL CHAND HAD DENIED TO HAVE RENDERED ANY SERVICE F OR THE SCHOOL AND DENIED THE RECEIPT. WE FOUND SUBSTANCE IN THE CONTENTION OF THE LD. AR THAT WITHOUT AFFORDING OPPORTUNITY TO CROSS-EXAMINE THE PERSON, HIS DENIAL OF RECEIPT OF THE PAYMENT CANNOT BE USED ADVERSELY AGAINST THE ASSESS EE. WE THUS SET ASIDE THE 19 MATTER TO THE FILE OF THE A.O WITH THIS DIRECTION T HAT THE ISSUE BE DECIDED AFRESH AFTER AFFORDING OPPORTUNITY TO THE ASSESSEE TO CROS S-EXAMINE SHRI LAL CHAND AND HEARING THE ASSESSEE ON THE SAME. THE GROUND OBJEC TING THE ADDITION OF RS.50,000/- IS THUS ALLOWED FOR STATISTICAL PURPOSES . GROUND NO-3 OF THE APPEAL PREFERRED BY THE ASSESSEE IS THUS PARTLY ALLOWED. 12. IN THE CORRESPONDING GROUND NO-3 OF TH E APPEAL PREFERRED BY THE REVENUE THE ACTION OF THE LD. CIT(A) REDUCING THE A DDITION FROM RS.17,76,491 TO RS.3,76,681/- MADE ON ACCOUNT OF SEIZED DOCUMENTS HA S BEEN QUESTIONED. SIMILAR ARGUMENT HAS BEEN ADVANCED BY THE PARTIES A S IN RELATION TO GROUND NO-3 OF THE APPEAL PREFERRED BY THE ASSESSSEE. THE AO MADE ADDITION OF RS.17,76,491/- ON ACCOUNT OF SEIZED DOCUMENTS BY ALL EGING THAT EITHER NO REPLY OF THESE SEIZED DOCUMENTS HAVE BEEN FILED BY THE AS SESSEE OR THE REPLY HAVE NOT BEEN FOUND SATISFACTORY. THE CONTENTION OF THE ASS ESSEE BEFORE THE LD. CIT(A) REMAINED THAT THE REPLIES OF SOME OF THE DOCUMENTS THOUGH RELATED TO THE ASSESSEE COULD NOT BE FILED DURING THE COURSE OF AS SESSMENT AND THE AO HAS MADE THE ADDITIONS ON THE BASIS OF THESE SEIZED DOC UMENTS WITHOUT APPRECIATING THE ACTUAL FACTS. BEFORE THE LD. CIT(A ) REPLIES TO THESE SEIZED DOCUMENTS WERE FILED WITH REQUEST TO ACCEPT THE SAM E AS AN ADDITIONAL EVIDENCE. WITHOUT PREJUDICE TO THESE SUBMISSIONS F OR THE ACCEPTANCE OF THE ADDITIONAL EVIDENCE, IT WAS ALSO ARGUED THAT OUT O F THE ADDITION AN AMOUNT OF RS.6,38,166/-, RS.28 LAC CALLING FOR 50+RS.78,500+RS.6 0,000/-+RS.1,30,328/- +18,605/-+RS.43,268/-+RS.12,836/-+RS.7,080/-+RS.11,0 75/-+RS.39,010/- +RS.85,968/-+RS.97,610/-+RS.25,436/-) REPRESENTS TRANS PORT AND MISCELLANEOUS EXPENSES ON ACCOUNT OF WHICH A SEPARATE ADDITION OF RS. 30 LAC HAS ALREADY BEEN 20 MADE BY THE A.O ON ESTIMATED BASIS. AS SUCH EVEN O THERWISE THE SAID ADDITION OF RS.6,38,166/- THOUGH ALLEGEDLY MADE ON THE BASIS OF THE SEIZED DOCUMENTS BUT THE SAME REPRESENTS ADDITION ON ACCOUNT OF TRAN SPORT AND MISCELLANEOUS EXPENSES, CLEARLY AMOUNTS TO DOUBLE TAXATION AND TH E SAME MAY BE DELETED. 13. IN SUPPORT OF THE GROUND THE LD. DR HAS BASICALL Y PLACED RELIANCE ON THE ASSESSMENT ORDER. THE LD. AR ON THE OTHER HAND TRIE D TO JUSTIFY THE RELIEF GIVEN BY THE LD. CIT(A). 14. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BEL OW, WE FIND THAT THE LD. CIT (A) HAS DISCUSSED THE CASE OF THE PARTIES WHILE DEALING WITH THE ADDITIONS IN QUESTION. THE A.O HAD MADE ADDITION OF RS.21,698/- ON THE BASIS OF THE DOCUMENT SEIZED AS PER WHICH THE AMOUNT STOOD PAID AS RENT FOR PREMISES NO- H-79,C-EXTENSION, NEW DELHI. THE AO TOOK THE VIEW THAT THE PREMISES IN QUESTION WERE NOT USED BY THE SOCIETY BUT BY MR. BH ATNAGAR. THE SAME WAS OBJECTED BY THE ASSESSEE WITH THIS CONTENTION THAT THERE IS NO EVIDENCE TO SUPPORT THE ALLEGATION OF THE AO THAT THE PREMISES WERE NOT USED BY THE SOCIETY WHEREAS THE PREMISES WERE USED FOR ADMINISTRATIVE P URPOSE BY THE ASSESSSEE. THE LD. CIT(A) HAS DELETED THE ADDITION ACCEPTING T HE ABOVE CONTENTION OF THE ASSESSEE THAT THERE WAS NO EVIDENCE TO SUPPORT THE ALLEGATION OF THE AO THAT THE PREMISES WAS USED BY ONE SHRI BHATNAGAR. THE AMOUN T WAS DULY PAID BY CHEQUE AND WAS DULY RECORDED IN THE BOOKS OF ACCOUN TS OF THE SOCIETY. WE DO NOT FIND REASON TO INTERFERE WITH THE FIRST APPELLA TE ORDER IN THIS REGARD. THE SAME IS UPHELD. 21 15. THE ADDITION OF RS.2,230/- MADE ON ACCOUNT OF W ATER CHARGES IN RESPECT OF THE AFORESAID PREMISES HAS ALSO BEEN DELETED IN CONSEQUENCE TO THE ABOVE FINDING ON THE ADDITION OF RS.21,691/- BY THE LD. CI T(A). THE SAME IS UPHELD. 16. THE AO MADE ADDITION OF RS.13,351/- ON THE BASIS THAT THE AMOUNT STOOD WITHDRAWN BY BEARER CHEQUE AND ASSESSEE DID NOT FIL E REPLY AGAINST THE DOCUMENT MENTIONING THE DETAILS OF PAYMENTS OF WITH DRAWAL OF RS.13,351/- TO BEARER CHEQUES. THE CONTENTION OF THE ASSESSEE REM AINED THAT THE DOCUMENT IN QUESTION INDICATED PAYMENT MADE TO VARIOUS PARTIES FOR GARDENING AND PLANTATION EXPENSES AS ALSO STOOD DULY RECORDED IN BOOKS AND THERE WAS NO MATERIAL WITH THE ASSESSING OFFICER TO CONCLUDE THA T IT WAS UNDISCLOSESD INCOME. BEING CONVINCED WITH THESE CONTENTIONS THE LD. CIT(A) HAS DELETED THE ADDITION IN ABSENCE OF ANY EVIDENCE FOUND DURING TH E COURSE OF SEARCH TO SUPPORT THE ALLEGATION OF THE AO. THE FIRST APPELL ATE ORDER IS REASONED ONE. HENCE, WE ARE NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHELD. 17. THE AO MADE ADDITION OF RS.41,132/- WITH THIS O BSERVATION THAT THE DOCUMENT IN QUESTION INDICATED EXPENSES BY WITHDRAW ALS BY THE ASSESSEE WHO WAS HAVING NO EXPLANATION ON THIS POINT. THE ASSES SEE CONTENDED THAT THE DOCUMENT CONTAINED DETAILS OF EXPENSES INCURRED FOR WHICH THE AMOUNT HAD ALREADY BEEN WITHDRAWN AND THE EXPENDITURE SO CLAIM ED IS PROPERLY RECORDED IN THE BOOKS OF ACCOUNT. THE LD. CIT(A) HAS DELETE D THE ADDITION ON THE BASIS THAT THE EXPENDITURE IN QUESTION RELATES TO VARIOUS ITEMS NOTED IN THE SEIZED DOCUMENT AND THE SAME IS RECORDED IN THE ACCOUNTS. WE CONCUR WITH THIS FINDING OF THE LD. CIT(A). UNDER THESE FACTS THE A MOUNT CANNOT BE HELD AS 22 UNDISCLOSED INCOME OF THE ASSESSEE IN ABSENCE OF AN Y ADVERSE EVIDENCE FOUND DURING THE COURSE OF SEARCH. THE SAME IS UPHELD. 18. THE ADDITIONS OF RS.13,824/- AND 20,000/- WERE M ADE BY THE ASSESSING OFFICER ON THE BASIS THAT THE SEIZED DOCUMENT INDIC ATED BOGUS EXPENDITURE BY WITHDRAWAL FROM ASSESSEES BANK ACCOUNT AND NO EXPL ANATION WAS FORTH COMING FROM THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE ADVERSE INFERENCE DRAWN BY THE A.O IS WHOLLY WRONG AND NOT BORNE OUT OF ANY MA TERIAL ON RECORD. IT WAS EXPLAINED THAT THE AMOUNT OF RS.13,824/- WAS WITHDR AWN FROM THE BANK FOR INCURRING VARIOUS EXPENSES IN DAY TO DAY RUNNING O F THE SCHOOL AND PAGE NO 32 WAS THE ACCOUNT OF SUCH EXPENSES. THERE WAS NO DIS PUTE REGARDING THE FACT THAT THESE EXPENSES WERE DULY RECORDED IN THE BOOKS OF A CCOUNTS. AS REGARDS RS.20,000/- ON PAGE NO-33, IT WAS SUBMITTED THAT IT IS A DUMB DOCUMENT SINCE IT NEITHER HAS ANY PAYMENT HAVING BEEN MADE NOR ANY EX PENDITURE HAVING BEEN ACTUALLY INCURRED. IT WAS EXPLAINED THAT IT WAS ON LY AN ESTIMATE IN ROUND FIGURE FOR EXPENSES PROPOSED TO BE INCURRED ON TABLE TENNI S PRIZES DISTRIBUTION TO STUDENTS. IT WAS ARGUED THAT THERE WAS NO MATERIAL TO SHOW THAT ANY EXPENDITURE HAS ACTUALLY BEEN INCURRED IN RESPECT O F THESE TABLE TENNIS PRIZES. BEING SATISFIED WITH THIS EXPLANATION OF THE ASSESS EE AND IN ABSENCE OF MATERIAL FOUND DURING THE COURSE OF SEARCH ENABLING THE ASSE SSING OFFICER TO MAKE THE IMPUGNED ADDITION AS UNDISCLOSED INCOME, WE ARE OF THE VIEW, THAT THE ADDITIONS IN QUESTION HAVE RIGHTLY BEEN DELETED BY THE LD. CIT(A). THE ADDITION OF RS.20,000/- WAS MADE BY THE AO INDICATING THE PAY MENT MADE FOR CALLS. IT WAS CONTENDED BY THE ASSESSEE THAT SUCH EXPENDITURE WAS NEVER INCURRED BY THE ASSESSEE SOCIETY AND THERE IS NO INDICATION THAT TH E SEIZED DOCUMENT SHOWED 23 THAT ANY EXPENDITURE HAS ACTUALLY BEEN INCURRED BY THE ASSESSEE. IN ABSENCE OF REBUTTAL OF THIS EXPLANATION OF THE ASSESSEE, WE AR E OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. 19. THE ASSESSEE CONTENDED THE ADDITION OF RS.28,450 /- MADE BY THE AO ON THE BASIS OF PAGE NO 39 OF THE SEIZED DOCUMENT. IT WAS CONTENDED BY THE ASSESSEE THAT THE DOCUMENT IN QUESTION IS A DUMB DO CUMENT AS THE SAME DOES NOT REPRESENT EITHER ANY INCOME OR ANY EXPENDITURE, RATHER IT IS A MERE PIECE OF PAPER SHOWING SOME ROUGH CALCULATION WHICH ARE NON- SPEAKING. ACCEPTING THE SAME THE LD. CIT (A) HAS DELETED THE ADDITION WITH THIS OBSERVATION THAT THERE IS NO INDICATION THAT IT IS THE ASSESSEE WHO HAS INCUR RED THIS AMOUNT AS TRANSPORT EXPENSES AS ALLEGED BY THE AO. SINCE THE REVENUE H AS FAILED TO IMPROVE ITS CASE ON THIS ADDITION, WE ARE NOT INCLINED TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. 20. ON THE BASIS OF PAGE NO- 48 OF THE SEIZED DOCUM ENT THE AO MADE ADDITION OF RS.28,204/-. THE ADDITION WAS OBJECTED BEFORE THE LD. CIT(A) BY THE ASSESSEE WITH THE CONTENTION THAT THE PAPER IN QUESTION INDICATED PAYMENTS MADE BY CHEQUES AND THERE WAS NO MENTION OF THE FIG URE OF RS.28,204/-. IT WAS CONTENDED THAT THE ADDITION HAS BEEN ERRONEOUSLY MA DE ON IMAGINATION WHEN THE ITEMS NOTED ON THE SEIZED DOCUMENT STOOD DULY R ECORDED IN THE BOOKS OF ACCOUNTS OF THE SCHOOL RUN BY THE ASSESSEE. IT WAS EXPLAINED BY THE ASSESSEE THAT THESE CHEQUES INFACT REFLECT THE REFUND OF CAU TION MONEY TO THE STUDENTS BY WAY OF CHEQUES. AGREEING WITH THESE SUBMISSIONS T HE LD. CIT(A) HAS DELETED THE ADDITION WITH THIS OBSERVATION THAT THERE IS NO MENTION OF THE AMOUNT OF RS.28,204/- ON THE SEIZED PAPER AND EVEN THE TOTAL O F THE FIGURE DOES NOT COME 24 TO RS.28,204/-. THE LD. CIT(A) HAS ALSO OBSERVED TH AT THE SEIZED PAPER CONTAINS REFERENCE OF NAMES, CHEQUE NOS AND AMOUNT WHICH PAR TLY APPEAR TO BE PAYMENTS BY CHEQUES TO THE PARTIES CONCERNED. THE FIRST APPELLATE ORDER ON THE ISSUE IS REASONED ONE. WE ARE THUS NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHELD. 21. ON THE BASIS OF PAGE NO-52 OF THE SEIZED DOCUME NT, THE AO MADE ADDITION OF RS.78,500/- WITH THIS OBSERVATION THAT T HE FIGURE AS PER SEIZED DOCUMENT DID NOT FIND MENTION IN THE ASSESSES BOOK S OF ACCOUNT. THE EXPLANATION OF THE ASSESSEE REMAINED THAT AS PER PA PER ITSELF IT APPEARS THAT IT IS RELATED TO MANAVASTHAL SCHOOL, PUSA ROAD, AND IS NO T RELATED TO THE ASSESSEE. IT WAS SUBMITTED THAT IT IS ONLY A NOTING FOR MANAGEME NT INFORMATION, AND THEREFORE THERE IS NO CONNECTION OF THE ASSESSEE WI TH THIS PAPER. BEING SATISFIED WITH THIS EXPLANATION THE LD. CIT(A) IN OUR VIEW HA S RIGHTLY DELETED THE ADDITION. THE SAME IS UPHELD. 22. THE ADDITION OF RS. 60,000/- HAS BEEN MADE BY TH E AO ON THE BASIS OF SEIZED PAPER. THE SAME WAS OPPOSED BY THE ASSESSEE WITH THIS CONTENTION THAT DOCUMENT IS NOT RELATED TO THE ASSESSEE WHICH RATHE R INDICATES THAT IT IS RELATED TO MANAVASTHAL SCHOOL, PUSA ROAD, AND IT IS ONLY A NOTING FOR MANAGEMENT INFORMATION. REITERATING THE SIMILAR REASON FOR DEL ETING RS. 78,500/-, THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.60,000/-. WE DO NOT FIND INFIRMITY IN THE ACTION OF THE LD. CIT(A) IN THIS REGARD.. THE SAME IS UPHELD. 23. THE AO MADE ADDITION OF RS. 42,201/- ON THE BASI S OF SEIZED DOCUMENT WITH THIS OBSERVATION THAT THE EXPENDITURE RECORDED ON THE SEIZED DOCUMENT DID 25 NOT FIND MENTION IN THE BOOKS OF ACCOUNT. THE SAME WAS OPPOSED BEFORE THE LD. CIT(A) WITH THIS CONTENTION THAT THE AMOUNT STOOD P AID FOR EXPENSES BY BEARER CHEQUES ISSUED IN THE NAME OF RESPECTIVE PARTIES AN D SUCH PAYMENT STOOD DULY RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED IN THE REGULAR COURSE OF RUNNING THE SCHOOL. HENCE THE SAME CANNOT BE TREATED AS UND ISCLOSED INCOME. THE LD. CIT(A) HAS DELETED THE ADDITION WITH THIS FINDING T HAT THE VARIOUS AMOUNTS STOOD PAID TO SPECIFIC PARTIES BY WAY OF CHEQUES A ND, THEREFORE, THE CONCLUSION ARARIVED AT BY THE AO THAT THE AMOUNT IN QUESTION D ID NOT FOUND MENTION IN THE BOOKS OF ACCOUNT IS NOT BORNE ITSELF FROM THE SEIZE D RECORD. WE DO NOT FIND INFIRMITY IN THIS REASONED ORDER OF THE FIRST APPEL LATE AUTHORITY. THE SAME IS UPHELD. 24. THE ADDITION OF RS. 36,480/- WAS ALSO MADE BY TH E AO ON THE BASIS OF SEIZED DOCUMENT INDICTING PAYMENTS MADE TO VARIOUS PARTIES NOT REFLECTED IN THE BOOKS OF ACCOUNTS. THE SAME WAS OPPOSED BY THE ASSESSEE WITH THIS CONTENTION THAT THE PAPER IS NOTHING BUT CONTINUATI ON OF EARLIER PAPER LEADING TO ADDITION OF RS. 42,201/- WHICH INDICATES PAYMENT BY BEARER CHEQUES TO VARIOUS PARTIES AT RS.36,480/-. THE LD. CIT(A) HAS DELETED THE SAME WITH THIS FINDING THAT THE DOCUMENT IN QUESTION MENTIONS SPECIFIC NAM ES OF VARIOUS PARTIES AS ALSO SPECIFIC NUMBER OF CHEQUES ISSUED TO THEM WITH SPECIFIED AMOUNT FOR PAYMENT. THE FIRST APPELLATE ORDER IN THIS REGARD IS REASONED ONE. WE ARE THUS NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS U PHELD. 25. ON THE BASIS OF SEIZED DOCUMENT MARKED PAGE NOS . 4 TO 67 OF ANNEXURE A-2, THE AO MADE ADDITION OF RS. 4,45,780/-. THE AO NOTED THAT THERE ARE BILLS IN THE NAME OF DIFFERENT PARTIES FOR TRANSPORT, MIS CELLANEOUS EXPENSES, 26 REFRESHMENT, BUILDING MATERIAL, BUILDING CONTRACT W ITH INCOMPLETE PERFORMA, SIGNED VOUCHERS ON REVENUES SUMMONS THAT CONTAINED BILLS AS ALSO CONSISTED OF BANK VOUCHERS SIGNED ON STAMPS WITH AMOUNT BUT THE NATURE OF WORK WAS NOT MENTIONED. THE AO HAS NOTED THAT INVESTIGATION CAR RIED OUT BY THE DIRECTORATE OF INVESTIGATION IN RESPECT OF CERTAIN PERSONS INDI CATED THAT THE PERSONS IN QUESTION WERE NOT GENUINE. THE AO ACCORDINGLY CALL ED THE ASSESSEE TO PROVE GENUINENESS AND IDENTITY OF THE PERSONS AS ALSO OF PAYMENTS AND ASKED TO FILE CONFIRMATIONS FROM THESE PERSONS. SINCE THE ASSESS EE FAILED TO FILE THE REQUIRED CONFIRMATIONS, THE AO CONCLUDED THAT THE PAYMENTS I N QUESTIONS HAVE BEEN SHOWN TO BOGUS PERSONS. THE AO NOTED FURTHER THAT THE ASSESSEE HAS NOT FILED EXPLANATION AS TO WHY BLANK PAPER SIGNED BY SOMEONE ON REVENUE STAMPS ARE KEPT BY THE ASSESSEE. THE A.O ISSUED SUMMONS TO VA RIOUS PARTIES BUT THE SAME WERE RETURNED WITH THE REMARK NO SUCH PERSON AT TH IS ADDRESS. THE AO NOTED FURTHER THAT ENQUIRY WAS ALSO CONDUCTED BY DD I (INV.) THROUGH INSPECTOR WITH SAME RESULTS. THE AO, THEREFORE, CALLED UPON THE ASSESSEE TO PROVE IDENTITY OF THE PERSONS AS ALSO TO PROVE GENUINENES S BY FILING CONFIRMATION FROM THE PARTIES CONCERN. 26. SINCE THERE WAS NO RESPONSE FROM THE ASSESSEE, THE AO CONCLUDED THAT THE AMOUNTS MENTIONED IN THESE PAPERS REPRESENTED B OGUS PAYMENTS, AND THEREFORE, DISALLOWED THE SAME. THE ASSESSEE OBJEC TED THE ADDITION WITH THIS CONTENTION THAT THERE WAS VOLUMINOUS SEIZED RECORD IN RESPECT OF LARGE EXPENSES FOR WHICH EXPLANATION WERE SOUGHT DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDING, EXPLANATION REGARDING SOME PAPERS WAS L EFT OUT TO BE GIVEN TO THE AO. IT WAS SUBMITTED THAT EVEN THE AO DID NOT RAIS E ANY FURTHER QUERY DURING 27 THE COURSE OF BLOCK PROCEEDINGS REGARDING THESE DOC UMENTS WHEN EXPLANATION REGARDING THE BALANCE DOCUMENTS WAS DULY FURNISHED BY THE ASSESSEE. IT WAS CONTENDED THAT EACH OF THE DOCUMENT WAS EXPLANATORY AND THERE WAS NO JUSTIFICATION FOR THE AO TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE WHEN DOCUMENT IN QUESTION INDICATED PAYMENTS MADE BY CHE QUES TO VARIOUS PARTIES. CONSIDERING THE EXPLANATION OF THE ASSESSEE THE LD . CIT(A) HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS.2,07,488/- AND HAS DELE TED THE ADDITION OF RS.2,38,292/- OUT OF THE TOTAL ADDITION OF RS.4,45,78 0/- WITH THIS FINDING THAT IN RESPECT OF THE AMOUNT OF RS.2,38,292/-, THE ASSESSEE HAS BEEN ABLE TO FURNISH EXPLANATION AND THE AMOUNT WAS ALSO FOUND RECORDED IN THE BOOKS OF ACCOUNTS, HENCE THE SAME CANNOT BE UPHELD AS UNDISCLOSED INCO ME. THIS FINDING OF THE LD. CIT (A) HAS NOT BEEN CONTROVERTED BY THE REVENUE BE FORE THE TRIBUNAL HENCE WE DO NOT FIND REASON TO INTERFERE WITH THE ACTION OF THE LD. CIT(A) IN THIS REGARD. THE SAME IS UPHELD. 27. THE AO MADE ADDITION OF RS.28,916/- ON THE BASIS OF SEIZED DOCUMENT MARKED AS PAGE NO 8 OF ANNEXURE A3. THE AO HELD THA T THE AMOUNT IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE ADDITION WA S OBJECTED BY THE ASSESSEE WITH THIS CONTENTION THAT NO DATES ARE MENTIONED ON THE DOCUMENT HENCE IT WAS A DUMB DOCUMENT. THE LD. CIT(A) HAS DELETED THE AD DITION WITH THIS OBSERVATION THAT THE AO HAS NOT GIVEN ANY BASIS TO HOLD THE AMOUNT SHOWN IN THE SEIZED DOCUMENT AS ACTUAL EXPENDITURE INCURRED, REPRESENTED THE UNDISCLOSED INCOME OF THE ASSESSEE. THE LD. CIT(A) HAS TREATED THE SEIZED DOCUMENT AS DUMB. IN ABSENCE OF REBUTTAL OF THESE FINDINGS OF THE LD. CIT(A) 28 BY THE REVENUE, WE DO NOT FIND REASON TO INTERFERE THEREWITH. THE SAME IS UPHELD. 28. THE AO MADE ADDITION OF RS.25,436/- ON THE BASIS OF SEIZED DOCUMENT WITH THIS OBSERVATION THAT THE ASSESSEE DID NOT EXP LAIN THE DOCUMENT AND THAT THE AMOUNT IS NOT ENTERED IN THE BOOKS OF ACCOUNTS. THE SAME WAS OPPOSED BY THE ASSESSEE WITH THIS CONTENTION THAT NO ADVERSE I NFERENCE ON THE BASIS OF THE SEIZED DOCUMENT CAN BE ARRIVED AT AS IT WAS AN ACCO UNT OF REFRESHMENT EXPENSES WHICH WERE DRAWN IN THE MONTH OF NOVEMBER AND DECEM BER 1996 AND WERE FOUND RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSE SSEE. IT WAS FURTHER EXPLAINED THAT THIS DOCUMENT MERELY SHOWED THAT WHA TEVER AMOUNT HAD BEEN WITHDRAWN IN THE REFRESHMENT ACCOUNT DURING THESE T WO MONTHS HAD ONLY BEEN EXPLAINED AND IT WAS REPORTED BY THE CONCERNED PERS ON TO MANAGEMENT STATING THAT THE REFRESHMENT ACCOUNT UP TO DECEMBER 1996 HA D BEEN CLEARED IN AS MUCH AS THE ENTIRE MONEY WITHDRAWN FOR REFRESHMENT EXPEN SES HAD ACTUALLY BEEN INCURRED. THE LD. CIT(A) DELETED THE ADDITION WITH THIS OBSERVATION THAT THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW T HAT THE AMOUNT WAS INCURRED OUT OF UNDISCLOSED INCOME. THE FIRST APPE LLATE ORDER ON THE ISSUE IS REASONED ONE. WE ARE THUS NOT INCLINED TO INTERFER E THEREWITH. THE SAME IS UPHELD. 29. ON THE BASIS OF SEIZED DOCUMENT MARKED ANNEXURE A-22 THE AO MADE ADDITION OF RS.1,00,424/-. HE MENTIONED THAT THIS AMOUNT OF RS.1,00,424/- COMPRISES OF AMOUNT OF RS.10,000/-+RS.2,871/-+RS.77,5 53/-+RS.10,000/- WHICH WAS PAID IN DIFFERENT NAMES AND WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS, BUT THE ASSESSEE COULD NOT FURNISH ANY CONFIRMATION OF THE RECIPIENTS NOR PROVE 29 THE GENUINENESS OF THE PAYMENTS. HE ACCORDINGLY AD DED THE AMOUNT OF RS. 1,00,424/- AS UNDISCLOSED INCOME OF THE ASSESSEE. THE SAME WAS OBJECTED BY THE ASSESSEE WITH THIS CONTENTION THAT THE SEIZED DOCUM ENT DOES NOT MENTION THE NAME OF EITHER MOOLCHAND OR BUDH PRAKASH. IT WAS A RGUED FURTHER THAT THE SEIZED DOCUMENT WERE INFACT STATEMENTS SHOWING TOTA L AMOUNT OF EXPENSES INCURRED BY MAKING WITHDRAWALS FROM THE BANKS. THE DOCUMENT WAS SHOWING THE DATE OF WITHDRAWAL, CHEQUE NOS. THE NAME IN WHI CH CHEQUE WAS ISSUED AND THE HEAD AGAINST WHICH THE EXPENSES WERE INCURRED. THE AMOUNTS WERE ALSO FOUND DULY RECORDED IN THE BOOKS OF ACCOUNTS BY THE AO. CONSIDERING THESE SUBMISSIONS IN TOTALITY THE LD. CIT (A) IN OUR VIEW HAS RIGHTLY DELETED THE ADDITION OF RS.1,00,424/- WITH THIS FURTHER OBSERVAT ION THAT EACH OF THE PAYMENT POINTED OUT BY THE ASSESSEE HAS BEEN WITHDRAWN FOR MAKING PAYMENT OF SALARY OR FOR INCURRING ANY OTHER EXPENDITURE RELATED TO T HE SOCIETY AS HAS BEEN FOUND WRITTEN ON THE SEIZED DOCUMENT REGISTER. THE ACTIO N OF THE LD. CIT(A) BEING REASONED ONE IS THUS UPHELD. 30. ON THE BASIS OF THE SEIZED DOCUMENT MARKED AS A NNEXURE A-22 SHOWING RS.5LAC RECORDED AGAINST THE NAME OF SHRI. Y. K. BHA TNAGAR , THE AO ADDED THIS AMOUNT ON THE BASIS THAT THE ASSESSEE HAD NOT FILED ANY EXPLANATION IN RELATION TO THESE PAYMENTS. THE ADDITION WAS OPPOSED BY THE ASSESSEE WITH THIS CONTENTION THAT THE AMOUNT OF RS. 5 LAC PAID TO SHRI . Y. K. BHATNAGAR WAS DEBITED TO THE ACCOUNT OF SHRI. Y. K. BHATNAGAR IN THE BOOKS OF THE SOCIETY AND WAS RETURNED BACK BY HIM ON 15/1/1999 AND THE RETUR N OF SUCH MONEY WAS ALSO FOUND RECORDED IN THE BOOKS OF ACCOUNTS. IT WAS AR GUED FURTHER THAT SINCE NEITHER ANY EXPENDITURE HAD BEEN CLAIMED BY THE SOC IETY NOR ANY CLAIM HAD 30 BEEN MADE IN RESPECT OF THESE PAYMENTS, THE ADDITIO N THEREOF TO THE UNDISCLOSED INCOME OF THE ASSESSEE WAS WHOLLY UNJUSTIFIED. IT WAS SUBMITTED THAT THE OBSERVATION OF THE AO THAT NO EXPLANATION HAD BEEN FIELD WAS ALSO WHOLLY WRONG AS THE AMOUNT PAID AND THE AMOUNT RETURNED WA S DULY REFLECTED IN THE BOOKS OF THE SOCIETY WHICH WERE EXAMINED BY HIM IN THE COURSES OF BLOCK ASSESSMENT PROCEEDINGS. IN ABSENCE OF REBUTTAL OF THESE MATERIAL EXPLANATION, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.5 LAC. THE SAME IS UPHELD. 31. THE AO MADE ADDITION OF RS.25,000/- ON THE BASI S THAT THE PAYMENT MADE TO NEHA NIRVAL KULKARNI IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE ASSESSEE DID NOT FILE ANY REPLY THERETO. THE SAME WAS OPPOSED BY THE ASSESSEE WITH THIS CONTENTION THAT THE SEIZED DOCUMENT WAS M ERELY A BILL OF FEE TO MR. KULKARNI WHO HAD DONE SOME CONSULTANCY WORK FOR THE SCHOOLS OPENED BY THE SOCIETY. IT WAS SUBMITTED THAT THE MANAGEMENT HAD NOT MADE ANY PAYMENT AGAINST SUCH BILL, AND THEREFORE, THERE WAS NO QUES TION OF SAME BEING ENTERED IN THE BOOKS OF ACCOUNT. CONSIDERING THESE SUBMISSION S OF THE ASSSESEE WE ARE OF THE VIEW, THAT THE LD. CIT(A) HAD RIGHTLY DELETED T HE ADDITION. THE SAME IS UPHELD. 32. ON THE BASIS OF SEIZED PAPERS RELATING TO PAYME NT TO MALHOTRA AND COMPANY FOR RENOVATION AND FURNITURE FIXTURES AT SO UTH EXTENSION OFFICER AND THE SAME BEING CONFIRMED BY MALHOTRA AND CO. ON INV ESTIGATION THAT EVEN THOUGH THE RENOVATION WORK WAS DONE AT A-1, SOUTH E XTENSION, THE PAYMENT WERE MADE BY THE SCHOOLS AND, THEREFORE, THE AO HEL D THE AMOUNT RS.91,419/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 31 33. BEFORE THE LD. CIT(A) IT WAS CONTENDED BY THE A SSESSEE THAT THE AO HAD ERRED IN DRAWING ADVERSE INFERENCE AGAINST THE ASSE SSEE IN RESPECT OF THESE PAYMENTS. IT WAS SUBMITTED THAT THE UNDISPUTED FAC T REMAINED THAT A-1 SOUTH EXTENSION IS THE PREMISES WHERE CENTRAL OFFICE IS B EING RUN IN RESPECT OF WHICH A DETAILED NOTE WAS FURNISHED BEFORE THE AO . IT W AS CONTENDED THAT THE CENTRAL OFFICER IS A NERVE CENTRE OF ALL THE 8 SOCIETIES AN D IT WAS FOR A BETTER CONTROL THAT ALL THE SOCIETIES HAD CONTRIBUTED BOTH FINANCIALLY AS WELL AS IN KIND TO RUN THE CENTRE FOR EFFICIENT AND BETTER RUNNING OF SCHOOLS. IT WAS ARGUED THAT THE EXPENDITURE HAD BEEN INCURRED FOR THE BETTERMENT OF THE ADMINISTRATION OF SCHOOLS RUN BY THE SOCIETY AND WAS DULY ACCOUNTED F OR IN THE BOOKS OF ACCOUNTS. THE LD. CIT(A) HAS DELETED THE ADDITION WITH THIS F INDING THAT THE PAYMENTS SO MADE ARE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT S OF THE SOCIETY, HENCE THE SAME ARE FULLY DISCLOSED. THE LD. CIT(A) HAS ALSO HELD THAT THE ADDITION MADE BY THE AO IS OUTSIDE THE SCOPE OF PROVISIONS OF CHA PTER XIVB OF THE ACT, AND THAT NO MATERIAL HAS BEEN FOUND DURING THE COURSE O F SEARCH, ON THE BASIS OF WHICH THE AMOUNT COULD BE ADDED AS UNDISCLOSED INCO ME OF THE ASSESSEE. THE FIRST APPELLATE ORDER IN THIS REGARD IS REASONED O NE. WE ARE THUS NOT INCLINED TO INTERFERE THEREWITH IN ABSENCE OF REBUTTAL THEREOF BY THE REVENUE. THE SAME IS UPHELD. 34. WE THUS FIND NO REASON TO INTERFERE WITH THE FI RST APPELLATE ORDER AS THE LD. CIT(A) HAS RIGHTLY DELETED THE ABOVE ADDITIONS AGGREGATING TO RS.14,67,319/-. THE SAME IS UPHELD. THE GROUND NO- 3 OF THE APPEAL PREFERRED BY THE REVENUE IS THUS REJECTED. GROUND NO-4 32 1. THE LD. CIT(A) HAS REDUCED THE ADDITION OF RS.30 LAC MADE BY THE AO ON ACCOUNT OF TRANSPORT EXPENSES TO RS.15,21,770/-. TH US BOTH THE PARTIES ARE IN APPEAL AGAINST THE ACTION OF THE LD. CIT (A) ADVERSE TO THEM. 2. IN SUPPORT OF THE GROUND RAISED IN THE APPEAL PREFE RRED BY THE ASSESSEE, THE LD. AR SUBMITTED THAT THE ISSUE IS COVERED BY TH E DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF OTHER SOCIETIE S OF THE GROUP. IN SUPPORT, HE REFERRED THE RELEVANT PARA NOS. 18 TO 2 5 OF THE ORDER IN THE CASE OF LAXMI FOUNDATION (ITSSA NO- 33/DEL/2005), P ARA NOS. 30 TO 43 IN CASE OF ST. VASWANI EDUCATIONAL SOCIETY (ITSSA N O- 30/DEL/2007), PARA NOS. 23 TO 28 IN THE CASE OF VIRENDRA BHATNAGA R SANSTHAN (ITSSA NOS. 29 & 89/DEL/2005), PARA NOS. 32 TO 36 IN THE C ASES OF NAV MANAV SANSTHAN (ITSSA NO. 77 & 32/DEL/2005) AND PARA NOS. 36 TO 43 IN THE CASE OF THE RAJENDRA NAGAR EDUCATION SOCIETY (IT(SS) A NO. 34/DEL/2005). THE LD. AR HOWEVER TRIED TO JUSTIFY T HE RELIEF GIVEN BY THE LD. CIT(A) WHILE OPPOSING THE GROUND NO 6 OF TH E DEPARTMENTAL APPEAL IN THIS REGARD. THE LD. DR ON THE OTHER HAND PLACED RELIANCE ON THE ASSESSMENT ORDER IN SUPPORT OF THE GROUND NO-6 RAISED IN THE APPEAL PREFERRED BY THE REVENUE AND TRIED TO JUSTIFY THE A CTION OF THE LD. CIT(A) IN SUSTAINING THE DISALLOWANCE TO THE EXTENT OF RS.1 5,21,000/-. 3. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES B ELOW, WE FIND THAT THE ADDITION OF RS.30 LAC WAS MADE BY THE AO ON ACCO UNT OF BOGUS EXPENDITURE UNDER THE HEAD TRANSPORT, REFRESHMENT E TC. HE HAS DISCUSSED THE ISSUE AT PAGE NOS. 18 TO 21 OF HIS OR DER. HE FOUND THAT THE EXPENSES AMOUNTING TO RS.15,21,770/- DEBITED UNDER THE HEADS TRANSPORT 33 EXPENSES AND REFRESHMENT EXPENSES WERE INCURRED AND PAID TO VARIOUS PERSONS WHO WERE FOUND TO BE NOT EXISTING AND, THER EFORE, WERE BOGUS. THE AO HAS NOTED THAT ON VERIFICATION OF VOUCHERS R ELATING TO THE TOTAL EXPENSES ON TRANSPORT AND REFRESHMENT AND ADDITION OF RS. 15,21,770/- WORKED OUT, HE OBSERVED THAT THE TOTAL EXPENSES TO RS.1,75,92,731/- HAD BEEN INCURRED BY THE ASSESSEE ON VARIOUS HEADS WHIC H ACCORDING TO HIM ARE NOT VERIFIABLE AND ARE PAYMENTS TO BOGUS PARTIE S. THE AO ACCORDINGLY INTIMATED A TOTAL AMOUNT OF RS.30 LAC ( INCLUDING RS.15,21,770/- ON TRANSPORT AND REFRESHMENT) OUT OF THE TOTAL AMOUNT OF RS.1,75,92,731/- HAVING BEEN PAID TO BOGUS PARTIES W HICH WAS HELD BY HIM AS UNVERIFIABLE AND THEREFORE REPRESENTED CONCE ALED INCOME. 4. THE ASSESSEE CONTENDED THAT EVEN THOUGH IT WAS FOUN D BY THE AO THAT ONLY AN AMOUNT OF RS.15,21,770/- WAS UNVERIFIABLE E XPENDITURE, STILL HE HAS MADE THE ADDITION OF AN AMOUNT OF RS.30 LAC WHIC H ITSELF SHOWS THAT THE ADDITION MADE IS WHOLLY WRONG AND ARBITRARY. IT WAS ARGUED THAT SUCH ADDITION COULD NOT HAVE BEEN MADE IN THE BLOCK PROCEEDINGS SINCE NO SPECIFIC ITEM HAS BEEN POINTED OUT BY THE AO EXC EPT FOR THE AMOUNT OF RS.15,21,770/-, HENCE THE BALANCE ADDITION DESERV ES TO BE DELETED. 5. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, T HE LD. CIT(A) HAS DELETED RS.14,78,230/- OUT OF THE TOTAL ADDITION OF RS.30LAC ON THE BASIS THAT AS PER WORKING ON SEIZED ANNEXURE A-17 & A-23 THE AMOUNTS COMES TO RS.15,21,770/- HENCE ANY ADDITION OVER AND ABOVE AN AMOUNT OF RS.15,21,770/- IS UNJUSTIFIED AND IS OUTSIDE THE SCOPE OF THE PROVISIONS OF CHAPTER XIV B OF THE ACT. THE ASSESSEE HAD QUES TIONED THE ACTION OF 34 THE LD. CIT (A) IN SUSTAINING THE ADDITION OF RS.15 ,21,770/- WHEREAS THE DEPARTMENT IS IN APPEAL OBJECTING THE RELIEF OF RS.1 4,78,230/- GRANTED BY THE LD. CIT(A) ON THIS ACCOUNT. 6. WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER AS THE SAME IS REASONED ONE AND SUPPORTED WITH THE PROVISIONS OF T HE ACT LAID DOWN IN CHAPTER XIV B. THE FIRST THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. THE GROUNDS ARE ACCORDINGLY REJECTED. GROUND NO-5 1. IN THIS GROUND THE ASSESSEE HAS QUESTIONED THE ACTION OF THE LD. CIT(A) IN INCLUDING THE SURRENDERED MADE BY THE ASSESSEE I N RETURN ON AD-HOC BASIS WHEN HE HAS COMPUTED THE INCOME BY MAKING SPECIFIC ADDITIONS. 2. IN SUPPORT OF THE GROUND THE LD. AR SUBMITTED TH AT THE AO WHILE COMPUTING UNDISCLOSED INCOME REDUCED THE AMOUNT OF INCOME OFFERED BY THE ASSESSEE. THE LD. CIT(A) GAVE RELIEF OUT OF THE AD DITIONS MADE BY THE AO BUT AT PAGE NO-32 OF THE ORDER MADE INDEPENDENT COMPUTATIO N OF UNDISCLOSED INCOME WHEREIN HE ADDED THE SURRENDERED AMOUNT OF RS.5 LAC . THIS HAS RESULTED INTO DOUBLE ADDITION. THE LD. AR SUBMITTED THAT THE LD. CIT(A) SHOULD NOT HAVE INCLUDED THE SURRENDER MADE BY THE ASSESSEE IN RETU RN ON AD-HOC BASIS WHEN HE HAS COMPUTED THE INCOME BY MAKING SPECIFIC ADDITION . 3. THE LD. DR OPPOSED THE GROUND AND TRIED TO JUSTIF Y THE ACTION OF THE LD. CIT (A). 35 4. CONSIDERING THE ABOVE SUBMISSIONS WE FIND SUBSTA NCE IN THE CONTENTION OF THE LD. AR THAT WHEN INDEPENDENT COMPUTATION OF U NDISCLOSED INCOME HAS BEEN WORKED OUT THEN THE SURRENDERED AMOUNT OF RS. 5 LAC ON ACCOUNT OF UNDISCLOSED INCOME SHOULD HAVE BEEN SET OFF AGAINST THE SUSTAINED ADDITION BY THE LD. CIT(A). OTHERWISE, IT WOULD AMOUNTING TO D OUBLE ADDITION WHICH IS NOT PERMISSIBLE IN THE LAW. THE AO IS ACCORDINGLY DIRE CTED TO GRANT SET OFF OF SURRENDERED AMOUNT OF RS. 5 LAC FROM THE SUSTAINED U NDISCLOSED INCOME. GROUND NO-5 IS THUS ALLOWED. GROUND NO-2 (DEPARTMENT) 1. THE REVENUE HAS QUESTIONED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.13,5,000/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCES OF CLAIMED EXPENSES ON SALARY, FURNITURE AND FIXTURE, REPAIRS, BUILDING AND REPAIRS ETC. THE AO MADE THIS ADDITION ON THE BASIS THAT T HE EXPENDITURE AGGREGATING TO RS.6,53,682/- WERE NOT SUPPORTED BY RELEVANT VOUC HERS AND BILLS. OUT OF THIS AMOUNT THE AO MADE DISALLOWANCE OF RS.3,52,000/- KEE PING IN VIEW THE FACT THAT SOME TIME THE PAYMENT OF SALARY IS ALSO MADE O N THE BASIS OF VOUCHERS. THE DISALLOWANCE OF RS.3,05,000/- WAS MADE ON ACCOUN T OF FURNITURE, REPAIRS BUILDING AND FURNITURE REPAIRS EXPENSES. 2. IN SUPPORT OF THE GROUND, THE LD. DR PLACED RELIANCE ON THE ASSESSMENT ORDER WHEREAS THE FIRST APPELLATE ORDER HAS BEEN JUSTIFIED BY THE LD. AR. HE CONTENDED FURTHER THAT THE ADDITION IN Q UESTION WAS MADE BY THE AO ONLY ON THE BASIS OF SUSPICION, SURMISES AND CON JECTURES AND THE AO HAS ALSO FAILED TO POINT OUT ANY SPECIFIC MATERIAL ON T HE BASIS OF WHICH THE 36 ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESS EE. HE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). HE POINTED OUT FURTHER THAT ALL THESE EXPENSES ARE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND DURING THE COURSE OF SEARCH NO SUCH EV IDENCE WAS FOUND WHICH COULD JUSTIFY THE ACTION OF THE AO FOR MAKING ANY A DDITION IN TERMS OF CHAPTER XIV B OF THE ACT. WE FIND THAT THE LD. CIT (A) HAS DELETED THE ADDITION ON THE BASIS THAT THE AO HAS NOT REFERRED TO ANY MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH WHICH COULD ENTI TLE HIM TO MAKE THE IMPUGNED ADDITION NOR ANY SPECIFIC ITEM CALLING FOR DISALLOWANCE HAS BEEN BROUGHT ON RECORD BY THE AO WHILE DISALLOWING THE E NTIRE AMOUNT. IN ABSENCE OF REBUTTAL OF THESE FINDINGS OF THE LD. CI T(A) WE DO NOT FIND REASON TO INTERFERE THEREWITH. THE SAME IS UPHELD. THE G ROUND NO-2 (DEPARTMENT) IS ACCORDINGLY REJECTED. GROUND NO-4 (DEPARTEMENT) 1. THE REVENUE HAS QUESTIONED ACTION OF THE LD. CIT (A) IN DELETING THE ADDITION OF RS.13,96,963/- MADE BY THE AO ON ACCOUN T OF DISALLOWANCE FROM INCOME AND EXPENDITURE ACCOUNT FOR NON-PRODUCTION O F VOUCHERS/DETAILS ETC. 2. THE LD. AR POINTED OUT THAT THE ISSUE IS FULLY CO VERED BY THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE GROUP CASE OF RA JENDRA NAGAR EDUCATION SOCIETY (ITSSA NO- 34/DEL/2005) IN PARA NOS. 31 TO 35 WHEREIN IT HAS BEEN HELD THAT EXPENSES RECORDED IN THE BOOKS CANNOT BE DISAL LOWED WITHOUT REFERENCE TO ANY EVIDENCE OR MATERIAL FOUND IN THE COURSE OF SEA RCH AND THUS SUCH 37 DISALLOWANCE IS NOT PERMISSIBLE IN THE BLOCK ASSESS MENT. THE LD. DR, HOWEVER PLACED RELIANCE ON THE ASSESSMENT ORDER IN SUPPORT OF THE GROUND. 3. WE FIND THAT THE AO HAS DEALT WITH THE IS SUE AT PAGE NOS. 21 & 22 OF THE ASSESSMENT ORDER AND LD. CIT (A) HAS DISCUSSED THE SAME AT PAGE NOS. 27 & 28 OF THE FIRST APPELLATE ORDER. THE AO NOTED THAT VA RIOUS EXPENSES HAVE BEEN DEBITED TO INCOME AND EXPENDITURE ACCOUNT OF THE SC HOOLS WHICH ACCORDING TO HIM ARE BOGUS AND DISALLOWED AS NO VOUCHER OF EXPEN SES HAVE BEEN PRODUCED. THE CONTENTION OF THE ASSESSEE BEFORE THE AO REMAIN ED THAT THE BOOKS OF ACCOUNT MAINTAINED IN EACH OF THE YEARS FALLING IN THE BLOCK PERIOD WERE PRODUCED AND THE SAME WERE EXAMINED BY THE A.O. EV EN DURING THE COURSE OF SEARCH SOME BOOKS OF ACCOUNTS WERE FOUND AND SEIZED WHICH WERE LYING WITH THE AO AND THE SAME WERE ALSO EXAMINED BY HIM AT TH E TIME OF BLOCK ASSESSMENT PROCEEDINGS. DESPITE THIS FACT, THE AO HAS NOT BEEN ABLE TO POINT OUT ANY SPECIFIC EXPENDITURE OUT OF THE AMOUNT OF RS .13,96,966/- AS MENTIONED BY HIM HAVING BEEN INCURRED FOR A. YS 1995-96, 1994 ,95, 1993-94 & 1991-92 WHICH WAS NOT ADMISSIBLE OR WAS VERIFIABLE OR BOGUS EXPENDITURE. BEFORE THE LD. CIT(A) IT WAS ARGUED FURTHER THAT ADDITION FOR ALLEGED BOGUS EXPENDITURE HAD ALREADY BEEN MADE SEPARATELY BY THE AO AND, THE REFORE ALSO THERE WAS NO JUSTIFICATION FOR HIM TO HAVE MADE ANY FURTHER ADDI TION ON THIS ACCOUNT. BEING SATISFIED WITH THESE CONTENTIONS THE LD. CIT(A) HAS DELETED THE ADDITION WITH THIS FINDING THAT SUCH ADDITION CANNOT BE MADE TO T HE UNDISCLOSED INCOME OF THE ASSESSEE AS THE SAME IS FOUND TO BE OUTSIDE THE SCO PE OF CHAPTER XIV B OF THE ACT. IN ABSENCE OF REBUTTAL OF ABOVE SUBMISSION OF THE ASSSESEE ON THE BASIS OF WHICH THE LD. CIT(A) HAS DELETED THE ADDITION, WE D O NOT FIND REASON TO 38 INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS RE GARD. THE SAME IS UPHELD. THE GROUND NO-4 (REVENUE) IS THUS REJECTED. GROUND NO-5 (DEPARTMENT) 1. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER DE LETING ADDITION ON ACCOUNT OF UNEXPLAINED SEIZED CASH OF RS.50,000/-. 2. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES B ELOW, WE FIND THAT THE LD. CIT(A) HAS DELETED THE ADDITION ON THE BASI S THAT THE CASH FOUND IS VERIFIABLE FROM THE CASH BALANCE AVAILABLE AS PER BOOKS OF ACCOUNTS AS EXPLAINED AT PAGE NO 19 OF THE WRITTEN SUBMISSION FILED ON 22/7/2011. IT WAS ALSO POINTED OUT BY THE LD. AR THA T SIMILAR ADDITION WAS MADE IN THE CASE OF NAVMANAV SANSTHAN WHICH WAS DELETED BY THE LD. CIT(A)HAS BEEN UPHELD BY THE TRIBUNAL. IN ABSE NCE OF REBUTTAL OF THE FINDING OF THE LD. CIT(A) IN THIS REGARD, WE AR E NOT INCLINED TO INTERFERE THEREWITH. THE FIRST APPELLATE ORDER ON THIS ISSUE IS THUS UPHELD. THE GROUND NO-5 IS ACCORDINGLY REJECTED. GROUND NO-7 1. THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 15,99 ,610/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF BOGUS EXPENSES FRO M INCOME AND EXPENDITURE ACCOUNT UNDER THE HEAD LEGAL/PROFESSION AL/STUDENT WELFARE, REPAIR, DIESEL, TOUR ETC. 2. IN SUPPORT OF THE GROUND THE LD. DR HAS BASICALLY PL ACED RELIANCE ON THE ASSESSMENT ORDER WHEREAS THE FIRST APPELLATE ORDER HAS BEEN RELIED UPON 39 BY THE LD. AR ON THE ISSUE. HE ALSO POINTED OUT THA T ISSUE IS COVERED BY THE DECISIONS OF THE TRIBUNAL IN GROUP CASES OF LAX MIBI FOUNDATION, ST. VASWANI EDUCATIONAL SOCIETY, VIRENDRA BHATNAGAR NAV MANAV SANSTHAN, RAJENDRA NAGAR EDUCATION SOCIETY (SUPRA) HOLDING THA T IN THE ABSENCE OF ANY SEIZED EVIDENCE THE DISALLOWANCE OF EXPENSES IN WRITTEN MANNER IS BEYOND THE SCOPE OF BLOCK ASSESSMENTS IN CHAPTER 14 B OF THE ACT. HE CONTENDED THAT THE ADDITION WAS MADE BY THE AO PURE LY ON AD-HOC BASIS AND WITHOUT BRINGING ANY MATERIAL ON RECORD. 3. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES B ELOW, WE FIND THAT THE AO HAS DEALT WITH THE ISSUE AT PAGE NO. 22 & 23 OF THE ASSESSMENT ORDER AND LD. CIT(A) ON THE BASIS OF RELEVANT RECOR D AND BLOCK ASSESSMENT ORDER HAS FOUND THAT THE AO HAS MADE THE ADDITION WITHOUT ANY MATERIAL IN SUPPORT FOUND DURING THE COURSE OF SEARCH TO ARRIVE AT A CONCLUSION THAT THE EXPENSES CLAIMED ARE BOGUS. HE HAS OBSERVED FURTHER THAT WHEREVER SPECIFIC EXPENSES HAVING BEEN FOUND PAID TO BOGUS PARTIES HAS BEEN SEPARATELY DISALLOWED, AND T HEREFORE, THERE CANNOT BE ANY PRESUMPTION THAT THESE EXPENSES ARE A LSO BOGUS EXPENSES. HE HAS THUS HELD THAT THE ADDITION MADE IS BEYOND T HE SCOPE OF BLOCK ASSESSMENT PROCEEDINGS UNDER CHAPTER VIB OF THE ACT . IN ABSENCE OF REBUTTAL OF THESE FINDINGS OF THE LD. CIT (A) BY TH E REVENUE WE ARE NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHEL D. GROUND NO-7 IS ACCORDINGLY REJECTED. 4. IN RESULT, THE APPEAL PREFERRED BY THE ASSESSEE IS PARTLY ALLOWED AND THAT PREFERRED BY THE REVENUE IS DISMISSED. 40 ITA NOS. 3746 & 3957/DEL/2005 (A.Y 98-99) ITA NO. 3746/DEL/2005( ASSESSEE). 1. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDE R ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DENYING EXEMPTION U/S 10 (22) TO THE ASSESSSEE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.6,92,014/- ON ACCOUNT OF DEPRECIATION ON BUILDI NG AT VIRENDRA GRAM THOUGH NOT MAKING SEPARATE DISALLOWAN CE AS COVERED BY BLOCK ASSESSMENT. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW CONFIRMING THE DISALLOWANCE OF RS. 6,486/- U/S 40 A (3) AND RS.2,427/- AS PRIOR PERIOD EXPENSES. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE CHARGING OF INTE REST U/S 234A AND 234B OF THE INCOME TAX ACT, 1961. 2. THE REVENUE ON THE OTHER HAND HAS QUESTIONED ON THE FIRST APPELLATE ORDER ON THE FOLLOWING GROUND:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.14,87,613/-MADE ON A CCOUNT OF RS.14,87,613/- MADE ON ACCOUNT OF BOGUS EXPENSES UN DER VARIOUS HEADS OF EXPENSES WHEN THE AO HAD SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE DISALLOWANCES ARE MADE ONLY AFTER CO NSIDERING DISALLOWANCES MADE IN THE BLOCK ASSESSMENT AND THE ASSESSEE WILL NOT BE ENTITLED TO ANY ADJUSTMENT FOR DISALLOWANCES MADE I N BLOCK ASSESSMENT ON ACCOUNT OF BOGUS EXPENSES. 41 GROUND NOS. 1 & 1.1 (ASSESSEE) 3. IN THIS GROUND, THE FIRST APPELLATE ORDER HAS BEEN QUESTIONED BY THE ASSESSSEE WHEREBY THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO IN DENYING EXEMPTION U/S 10 (22) TO THE ASSESSEE AN D HAS WENT FURTHER THAT SURPLUS OF RS.7,29,548/- AS PER INCOME AND EXPE NDITURE ACCOUNT OF THE ASSESSE SOCIETY IS LIABLE TO TAX. AT THE OUTSE T OF HEARING THE LD. AR POINTED OUT THAT THE ISSUE RAISED IN THE GROUNDS AR E FULLY COVERED BY THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y 2000-01 IN ITA NOS. 633/JP/2007 WHEREIN VID E ITS ORDER DATED 18/5/2007 THE TRIBUNAL HAS HELD THAT THE A.O HAD NO T BEEN ABLE TO PROVE AS TO HOW THE CASE OF THE ASSESSEE IS NOT COV ERED BY THE PROVISIONS OF SECTION 10 (23C) (IIIAD). IT WAS HEL D THAT THE ASSESSEE SOCIETY SOLELY EXIST FOR EDUCATIONAL PURPOSE AND NO T FOR THE PURPOSE OF PROFIT. FURTHER, THE ASSESSEE HAS BEEN GRANTED REGI STRATION U/S 12A IN THE SUBSEQUENT YEAR W.E.F 1/4/1999 WHICH ITSELF SHO WS THAT THE SOCIETY IS EXISTED FOR CHARITABLE PURPOSE AND NOT FOR THE PURPOSE OF PROFIT. IT WAS ALSO HELD THAT THE CLAIM OF EXEMPTION U/S 10 (2 2)10(23C) (IIIAD) NEEDS TO BE ANALYZED EACH YEAR AND ON THE BASIS OF GENERAL OBSERVATION SUCH BENEFIT CANNOT BE DENIED. 4. THE LD. D.R ON THE OTHER HAND TRIED TO JUSTIFY THE O RDERS OF THE AUTHORITIES BELOW ON THE ISSUES. 5. SIMILAR ISSUE REGARDING ELIGIBILITY OF EXEMPTION U/ S 10 (22) OF THE ACT IN RESPECT OF INCOME FROM RUNNING THE SCHOOL HAS BE EN RAISED IN THE 42 BLOCK ASSESSMENT FOR THE BLOCK PERIOD 1989-90 TO 19 99 2000 (UP TO 15/1/1999) HEREINABOVE IN ITA NO. 35/DEL/2005 WHERE IN FOLLOWING THE DECISION OF THE TRIBUNAL IN THE GROUP CASES OF ST. VASWANI EDUCATION SOCIETY (SUPRA), RAJENDRA NAGAR EDUCATION SOCIETY (SUPRA), NAVMANAV SANSTHAN (SUPRA) &LAXMIBI FOUNDATION (SUPR A), WHEREIN THE MATTER HAS BEEN SET ASIDE TO THE FILE OF THE A. O WITH DIRECTION TO GIVE EFFECT TO THE ABOVE DECISION OF THE TRIBUNAL, WHEREBY AO IS DIRECTED TO DISALLOW THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10 (22) IN YEAR OR YEARS FORMING PART OF THE BLOCK PERIOD I N WHICH DONATIONS RECEIVED BY OUTSIDE THE BOOKS OF ACCOUNTS WERE NOT USED IN FURTHERNESS OF ITS OBJECT OF RUNNING THE EDUCATION INSTITUTE OR FOR INFRASTRUCTURE DEVELOPMENT AND FOR REMAINING YEARS CLAIM OF THE AS SESSEE FOR EXEMPTION U/S 10 (22) IS TO BE ALLOWED. 6. FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL IN THE BLOCK PERIOD, WE SET ASIDE THE MATTER TO THE FILE OF THE AO TO DECID E THE ISSUE ACCORDINGLY SUBJECT TO THE OUT COME OF THE ABOVE DIRECTION OF T HE TRIBUNAL IN THE BLOCK PERIOD, WHICH ALSO COMPRISES THE ASSESSMENT Y EAR UNDER CONSIDERATION. THE ISSUE RAISED IN GROUND NO. 1.1 IS ALSO DEPENDENT UPON THE OUTCOME OF GROUND NO 1.1. HENCE, IT IS ALS O SET ASIDE TO THE FILE OF THE AO TO DECIDE ACCORDINGLY AS PER THE PROVISIO NS OF LAW. GROUND NO-2 (ASSESSEE) 1. IN THIS GROUND THE ASSESSEE HAS QUESTIONED FIRS T APPELLATE ORDER WHEREBY THE LD. CIT(A) HAS CONFIRMED THE DISALLOWAN CE OF RS.6,92,014/- ON 43 ACCOUNT OF DEPRECIATION ON BUILDING AT VIRENDRA GRA M THOUGH NOT MAKING SEPARATE DISALLOWANCE AS COVERED BY BLOCK ASSESSMEN T. 2. WE FIND THAT SIMILAR ISSUE HAS BEEN RAISED BY TH E ASSESSEE VIDE GROUND NO-2 IN IT (SS)A NO- 35/DEL/2005 BEFORE THE TRIBUNA L AGAINST THE BLOCK ASSESSMENT FOR THE PERIOD 1989-90 TO 1999-2000 (UP TO 15/1/1999). THE A.O IS ACCORDINGLY DIRECTED TO DECIDE THE ISSUE FOLLOWING THE DECISION TAKEN BY US IN THE APPEAL FOR THE BLOCK ASSESSMENT COMPRISING THE ASSESSMENT YEAR UNDER CONSIDERATION. THE GROUND IS THUS ALLOWED FOR STAT ISTICAL PURPOSES. GROUND NO-3 (ASSESSEE) 1. IN THIS GROUND THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER WHEREBY THE LD. CIT(A) HAS SUSTAINED THE DISALLOWANCE OF RS .6,486/- U/S 40A (3) AND RS.2,427/- AS PRIOR PERIOD EXPENSES. THE DISALLOWANC E IN QUESTION IS UNDISPUTEDLY SUBJECT TO THE OUTCOME OF GROUND NO-1 HEREINABOVE. WE THUS SET ASIDE THE MATTER TO THE FILE OF THE A.O TO DECI DE THE ISSUES AFRESH KEEP IN MIND HIS OUTCOME ON THE ISSUE RAISED HEREINABOVE IN GROUND NO-1. THE GROUND NO-3 IS THUS ALLOWED FOR STATISTICAL PURPOSE S. GROUND NO-4 1. IN THIS GROUND, THE ASSESSEE HAS QUESTIONED FIRS T APPELLATE ORDER WHEREBY THE LD. CIT(A) HAS UPHELD THE CHARGING OF I NTEREST UNDER SECTIONS 234 A & 234B OF THE ACT. THE ASSESSEE HAS ALSO QUE STIONED THE CHARGING OF INTEREST IN QUESTION ON THE BASIS THAT THERE WAS NO SPECIFIC MENTION IN THE BODY OF THE ASSESSMENT ORDER REGARDING CHARGING OF THE I NTEREST, HENCE IT IS NOT 44 SUSTAINABLE. THE MATTER IS SET ASIDE TO THE FILE O F THE AO TO DECIDE THE ISSUE AFRESH IN VIEW OF OUT COME OF GROUND NO-1 AND CONSI DERING THE SUBMISSION OF THE ASSESSEE ON THE ISSUE. THE GROUND NO-4 IS ACCO RDINGLY ALLOWED FOR STATISTICAL PURPOSES. 2. THE APPEAL IS THUS ALLOWED FOR STATISTICAL PURPO SES. 3. THE REVENUE HAS QUESTIONED THE FIRST APPELLATE O RDER WHEREBY THE LD. CIT (A) HAS DELETED THE ADDITION OF RS.14,87,613/- MADE ON ACCOUNT OF BOGUS EXPENSES UNDER VARIOUS HEADS OF EXPENSES. 4. IN SUPPORT OF THE GROUNDS THE LD. DR SUBMITTED TH AT THE LD. CIT(A) WHILE DELETING THE ADDITION IN QUESTION FAILED TO A PPRECIATE THAT THE AO HAD SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE DISALLOWANCE ARE MADE ONLY AFTER CONSIDERING DISALLOWANCE MADE IN THE BLO CK ASSESSMENT AND THE ASSESSEE WILL NOT BE ENTITLE TO ANY ADJUSTMENT FOR DISALLOWANCE MADE IN THE BLOCK ASSESSMENT ON ACCOUNT OF BOGUS EXPENSES. THE LD. AR ON THE OTHER HAND SUBMITTED THAT THE ISSUE RAISED IS FULLY COVER ED BY THE ORDER OF THE TRIBUNAL IN GROUP CASES FOR THE BLOCK PERIOD WHEREI N THE TRIBUNAL HAS DELETED THE DISALLOWANCE. 5. OF-COURSE, THE FATE OF THE ISSUE RAISED IN THE G ROUND UNDER CONSIDERATION IS SUBJECT TO THE OUT COME OF ADJUDICATION OF THE I SSUE RAISED IN GROUND NO-1 HEREINABOVE AFRESH BY THE AO. WE THUS, SET ASIDE T HE MATTER TO THE FILE OF THE A.O TO DECIDE THE ISSUE AFRESH IN VIEW OF HIS FINDI NG ON THE ISSUE RAISED IN GROUND NO- 1 HEREINABOVE AND AS PER THE ORDER OF TH E TRIBUNAL PASSED IN THE BLOCK PERIOD APPEAL REGARDING ADDITION MADE ON ACCO UNT OF BOGUS EXPENSES 45 UNDER VARIOUS HEAD. NEEDLESS TO MENTION OVER HERE THAT WHILE DECIDING THE ISSUE AFRESH OPPORTUNITY OF BEING HEARD WILL BE AFF ORDED TO THE ASSESSEE. THE GROUND IS THUS ALLOWED FOR STATISTICAL PURPOSES. 6. IN RESULT, APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. ITA NOS. 3885 & 3958/DEL/2005 ITA NOS. 3885/DEL/2005 (ASSESSEE) 1. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDE R ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN DENYING EX EMPTION U/S 10 (23C) (IIIAD) TO THE ASSESSEE. 1.1 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN FACTS AND IN LAW IN NOT ALLOWING THE BENEFIT OF EXEMPTION U/S 11 OF INCOME TAX ACT, 1961. 1.2 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN FACTS AND IN LAW IN HOLDING THAT SURPLUS OF RS.2,39,436/- AS PER INCOME AND EXPENDITURE A/C OF THE ASSESSEE SOCIETY IS LIABLE T O TAX. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.6,46,35 5/- ON ACCOUNT OF DEPRECIATION ON BUILDING AT VIRENDRA GRAM, THOUGH N OT MAKING SEPARATE DISALLOWANCE AS COVERED BY BLOCK ASSESSMEN T. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.60,000/ - OUT OF TRANSPORT AND REFRESHMENT EXPENSES. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.42,000/ - OUT OF VARIOUS EXPENSES AS MENTIONED AT PAGE NO. 11 & 12 OF APPELL ATE ORDER. 46 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN FACTS AND IN LAW IN CONFIRMING THE CHARGING OF INTEREST U/S 2 34A AND 234B OF THE INCOME TAX ACT, 1961. ITA NO. 3958/DEL/2005 (DEPTT) 1. THE REVENUE ON THE OTHER HAND HAS QUESTIONED THE FIRST APPELLATE ORDER WHEREBY THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.5,40,000/- OUT OF ADDITION OF RS.6 LAC MADE BY THE AO ON ACCOUNT OF BO GUS TRANSPORT AND REFRESHMENT EXPENSES AND RS.3,78,000/- UNDER VARIOUS HEADS AS MADE AGAINST RS.4,20,000/- UNDER VARIOUS HEADS OF EXPENSES. GROUND NOS. 1, 1.1 & 1.2 (ASSESSEE). 1. IN SUPPORT OF THE ISSUE RAISED IN GROUND NOS. 1 & 1.1 THE LD. AR POINTED OUT THAT THE SAME ARE COVERED BY THE DECISION OF TR IBUNAL IN THE CASE OF ASSESSEE ITSELF FOR THE A.Y 2000-01 IN ITA NO- 633/ JP/2007 VIDE ORDER DATED 18/5/2007. IN THIS GROUND, THE FIRST APPELLATE OR DER HAS BEEN QUESTIONED BY THE ASSESSSEE WHEREBY THE LD. CIT(A) HAS UPHELD THE ACTION OF THE AO IN DENYING EXEMPTION U/S 10 (22) TO THE ASSESSEE AND H AS WENT FURTHER THAT SURPLUS OF RS.7,29,548/- AS PER INCOME AND EXPENDIT URE ACCOUNT OF THE ASSESSE SOCIETY IS LIABLE TO TAX. AT THE OUTSET OF HEARING THE LD. AR POINTED OUT THAT THE ISSUES RAISED IN THE GROUNDS ARE FULLY COVERED BY T HE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A. Y 2000-01 IN ITA NOS. 633/JP/2007, WHEREIN VIDE ITS ORDER DATED 18/5/2007 THE TRIBUNAL HAS HELD THAT THE A.O HAD NOT BEEN ABLE TO PROVE AS TO HOW T HE CASE OF THE ASSESSEE IS NOT COVERED BY THE PROVISIONS OF SECTION 10 (23C) ( IIIAD). IT WAS HELD THAT THE ASSESSEE SOCIETY SOLELY EXIST FOR EDUCATIONAL PURPO SE AND NOT FOR THE PURPOSE 47 OF PROFIT. FURTHER, THE ASSESSEE HAS BEEN GRANTED REGISTRATION U/S 12A IN THE SUBSEQUENT YEAR W.E.F 1/4/1999 WHICH ITSELF SHOWS T HAT THE SOCIETY IS EXISTED FOR CHARITABLE PURPOSE AND NOT FOR THE PURPOSE OF PROFIT. IT WAS ALSO HELD THAT THE CLAIM OF EXEMPTION U/S 10 (22)10(23C) (IIIAD) N EEDS TO BE ANALYZED EACH YEAR AND ON THE BASIS OF GENERAL OBSERVATION SUCH B ENEFIT CANNOT BE DENIED. 2. THE LD. D.R ON THE OTHER HAND TRIED O JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUES. 3. THERE IS NO DISPUTE THAT THE AMENDE D PROVISIONS U/S 10 (23C) (IIIAD) OF THE ACT HAD COME INTO OPERATION DURING THE ASSES SMENT YEAR UNDER CONSIDERATION. IN THE APPEAL PREFERRED BY THE ASSE SSEE FOR THE BLOCK PERIOD 1989-90 TO 1999-2000 (UP TO 15/1/1999), WE HAVE SET ASIDE THE ISSUE FOR FRESH CONSIDERATION OF THE AO IN VIEW OF THE DIRECTION OF THE TRIBUNAL TO THE AO IN GROUP CASES. FOLLOWING THE SAME WE SET ASIDE THE M ATTER TO THE FILE OF THE AO TO DISALLOW THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10 (23C) OF THE ACT IN THE YEAR OR YEARS FORMING PART OF THE BLOCK PERIOD IN WHICH DONATIONS RECEIVED BY IT OUTSIDE THE BOOKS OF ACCOUNT WERE NO T USED IN FURTHERNESS OF ITS OBJECT OF RUNNING THE EDUCATION INSTITUTE OR FOR IN FRASTRUCTURE DEVELOPMENT AND FOR THE REMAINING YEARS CLAIM FOR THE ASSESSSEE FOR EXEMPTION IS DIRECTED TO BE ALLOWED. THE A.O IS ALSO DIRECTED TO KEEP IN MIND THE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF IN ITA NO. 633/JP/2007 ON AN IDENTICAL ISSUE RAISED IN THE A. YS. 2000-01 HOLDING THAT THE CLAIM OF EXEMPTION U/S 10 (23C) (IIIAD) NEEDS TO BE ANALYZED EACH YEAR INDEPE NDENTLY, IS ALSO TO BE TAKEN INTO ACCOUNT BY THE AO WHILE DECIDING THE ISSUE AFR ESH AFTER AFFORDING 48 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN VIEW OF ABOVE DECISIONS. THE GROUND NOS. 1 & 1.1 ARE THUS ALLOWED FOR STATISTICA L PURPOSES. 4. THE ISSUE RAISED IN GROUND NO- 1.2 AGAINST THE F INDING OF THE LD. CIT(A) THAT SURPLUS OF RS.2,39,436/- AS PER INCOME AND EXPE NDITURE ACCOUNT OF THE ASSESSEE SOCIETY IS LIABLE TO TAX IS DEPENDENT UPON THE OUT COME OF THE ISSUES RAISED IN GROUND NOS. 1 & 1.1 HEREINABOVE . WE SET ASIDE THE MATTER TO THE FILE OF THE A.O TO DECIDE THE ISSUE RAISED IN GROUND NO. 1. 2 IN VIEW OF THE OUT COME ON THE ISSUES RAISED IN GROUND NOS. 1 & 1.1 AFTER AFFO RDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND NO1.1 IS ACCORDI NGLY ALLOWED FOR STATISTICAL PURPOSES. GROUND NOS 2,3 & 4 (ASSESSEE) & SOLE GROUND (DEPTT) 1. THE REVENUE HAS ALSO QUESTIONED FIRST APPELLATE ORDER, WHEREBY THE LD. CIT(A) HAS DELETED SOME ADDITION MADE BY THE AO ON ACCOUNT OF BOGUS TRANSPORT AND REFRESHMENT EXPENSES AND ON ACCOUNT OF BOGUS EX PENSES UNDER VARIOUS HEADS OF EXPENSES. THE CONTENTION OF THE LD. DR IN SUPPORT OF THIS GROUND REMAINED THAT WHILE DELETING THE ADDITIONS OF RS.5,4 0,000/- AND RS.3,78,000/- THE LD. CIT(A)HAS FAILED TO APPRECIATE THAT THE AO HAD SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER THAT THE DISALLOWANCES ARE MADE ON LY AFTER CONSIDERING DISALLOWANCES MADE IN THE BLOCK ASSESSMENT AND THE ASSESSEE WILL BE ENTITLED TO ADJUSTMENT FOR DISALLOWANCES MADE IN BLOCK ASSESSME NT ON ACCOUNT OF BOGUS EXPENSES. IN THE ABOVE GROUNDS THE ASSESSEE HAS HO WEVER QUESTIONED FINDING OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCES OF RS .6,46,355/- ON ACCOUNT OF DEPRECIATION ON BUILDING AT VIRENDRA GRAM , RS. 60, 000/- OUT OF TRANSPORT AND 49 REFRESHMENT EXPENSES AND RS.42,000/- OUT OF VARIOUS EXPENSES AS MENTIONED AT PAGE NOS. 11 & 12 OF THE FIRST APPELLATE ORDER. 2. SO FAR AS DISALLOWANCE MADE ON ACCOUNT OF DEPREC IATION ON BUILDING AT VIRENDRA GRAM QUESTIONED BY THE ASSESSEE IN GROUND NO-2 IS CONCERNED AN IDENTICAL ISSUE HAS BEEN SET ASIDE BY US TO THE FIL E OF THE AO IN THE APPEAL FOR A.Y 1998-99 HEREINABOVE. IN THAT APPEAL OF THE ASSESSE E FOR THE A.Y 1998-99 THE ISSUE HAS BEEN RAISED IN GROUND NO-2 OF THE APPEAL. THE A.O IS DIRECTED TO DECIDE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING H EARD TO THE ASSESSEE AS DIRECTED IN THAT GROUND NO-2 OF THE APPEAL OF THE ASSESSEE F OR A.Y 1998-99. THE GROUND NO-2 IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE S. 3. SO FAR AS DISALLOWANCES QUESTIONED IN GROUND NOS . 3 & 4 ARE CONCERNED, THESE ARE DEPENDENT UPON THE OUTCOME OF THE DECISIO N OF THE AO ON THE ISSUE RAISED IN GROUND NOS. 1 & 1.1 HEREINABOVE. WE THUS SET ASIDE THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUE OF THESE DIS ALLOWANCES QUESTIONED IN GROUND NOS. 3 & 4 OF THE APPEAL AFRESH KEEPING IN V IEW THE OUTCOME OF THE ISSUE RAISED IN GROUND NOS. 1 & 1.1 HEREINABOVE AND THE ORDER OF THE TRIBUNAL PASSED ON SIMILAR EXPENSES IN THE APPEAL FOR THE BL OCK PERIOD I.E IN IT(SS)A NO- 35/DEL/2005 COMPRISING THE ASSESSMENT YEAR IN Q UESTION AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GR OUND NOS. 3 & 4 ARE THUS ALLOWED FOR STATISTICAL PURPOSES. IN RESULT GROUND RAISED BY THE REVENUE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. GROUND NO-5(ASSESSEE) 50 1. IN THIS GROUND THE ASSESSEE HAS QUES TIONED CHARGING OF INTEREST U/SS 234A & 234B OF THE ACT WITH SIMILAR SUBMISSION AS M ADE BY THE LD. AR IN THE APPEAL OF THE ASSESSEE FOR A.Y 1998-99. WE SET ASI DE THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH ACCORDINGLY AS DI RECTED HEREINABOVE BY THE TRIBUNAL IN THE APPEAL OF THE ASSESSEE ON AN IDENTI CAL ISSUE FOR THE A.Y 1998-99. 2. THE GROUND NO-5 IS ACCORDINGLY ALLOWED FOR STAT ISTICAL PURPOSES. 3. BOTH THE APPEALS ARE ACCORDINGLY ALLOWED FOR ST ATISTICAL PURPOSES. IN SUMMARY IT(SS)A NO. 35/DEL/2005 (ASSESSEE) IS PA RTLY ALLOWED. IT(SS)A NO. 82/DE/2005 (REVENUE) IS DISMISSED. ITA NOS. 3746 (ASSESSEE), 3957 (REVENUE), 3885 (ASS ESSEE & 3958 (REVENUE)/DEL/2005 ARE ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2013. SD/- SD/- (J.S. REDDY) (I. C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 22 ND DAY OF JULY, 2013 R. NAHEED COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT NEW DELHI . 51 52 53 54 55 56 57 58 59 60 61 62 63 64