JAGDISH KUMAR ARORA,DELHI V. ACIT, CIRCLE-58(1), DELHI

ITA 99/DEL/2024

AI Insights

The case revolves around the additions made by the AO to the income of Jagdish Kumar Arora, alleging unexplained cash payments for his son's medical education. The AO added Rs. 20,25,000 as unexplained course fees and Rs. 13,25,000 as a capitation fee based on documents seized during a search operation at Santosh Group of Institutions. The assessee contested these additions, claiming that the course fees were paid by his mother from the sale of her property. The CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal. The Tribunal found merit in the assessee's arguments, particularly the substantiation of the source of the course fee payment, and thus allowed the appeal, deleting both additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298867 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Assessee Lawyers: SHANTANU KANUNGO
• Keywords: Set aside; Documents seized; Search and seizure
• Section: 132

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.99/िदʟी/2024 (िन.व. 2010-11) ITA No.99/DEL/2024 (A.Y.2010-11) Jagdish Kumar Arora, House No. 257, Mohala Ram Nagar, Gandhi Nagar, Delhi 110031 PAN: AAEPK-6012-G ...... अपीलाथᱮ/Appellant बनाम Vs. Assistant Commissioner of Income Tax, Circle Ward 58(1), Delhi ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Shantanu Kanungo, Advocate ŮितवादीȪारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 09/12/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 27/02/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-23, New Delhi (hereinafter referred to as 'the CIT(A)') dated 22.01.2020, for assessment year 2010-11. 2. Shri Shantanu Kanungo appearing on behalf of the assessee submits that the Assessing Officer (AO) has made addition in the hands of assessee on account of payment of course fee and alleged payment of capitation/donation, in respect of medical studies of his son Akant Arora. Narrating facts of the case the ld. Counsel for the assessee submits, that the assessee is running a shop under the name 2 ITA No. 99/Del/2024 (AY 2010-11) Lakshmi Hosiery Corner. A search and seizure action u/s. 132 of the Income Tax Act, 1961(hereinafter referred to as 'the Act') was carried out on 27.06.2013 on Santosh Group of Institutions and Dr. P. Mahalingam. On the basis of documents seized during the course of search, the AO held that the assessee has paid capitation fee in cash of Rs.13,25,000/- for admission in medical course for Akant Arora son of the assessee/appellant. The AO further made addition of Rs.20,25,000/- on account of course fee paid in cash from unexplained sources. The ld. Counsel for the assessee submitted that during assessment proceedings, the assessee had categorically stated that neither capitation fee nor regular course fee for study of his son was paid by him. It was contended before the AO that regular course fee of Rs.20,25,000/- was paid by Smt. Usha Rani, grandmother of Akant Arora i.e. mother of the assessee. To substantiate his contention, the assessee filed affidavit. The regular course fee of Rs.20,25,000/- was paid by Smt. Usha Rani from sale proceeds of property owned by her. To substantiate sale of property, the assessee furnished copy of sale deed dated 06.10.2008. An affidavit from Smt. Usha Rani was also furnished before the AO, wherein, she has admitted to have paid regular course fee of Rs.20,25,000/- from the funds available with her from the sale of property. The AO at the outset rejected affidavits filed by the assessee and made addition of entire amount i.e. regular course fee of Rs.20,25,000/- and alleged payment of capitation fee Rs.13,25,000/- in the hands of assessee. The assessee carried issue in appeal before the CIT(A). The assessee reiterated submissions before the CIT(A), but the CIT(A) upheld addition and dismissed appeal of the assessee. 3. Per contra, Shri Rajesh Tiwari representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. 3 ITA No. 99/Del/2024 (AY 2010-11) 4. Both sides heard, orders of the authorities below examined. The short issue in appeal is against addition of Rs.33,50,000/- comprising of Rs.20,25,000/- towards regular course fee and Rs. 13,25,000/- towards alleged capitation fee paid in cash by the assessee for study of his son. The AO on the basis of statement of Dr. P Mahalingam Chairman of Trust which runs Santosh Group of Institutions made additions in the hands of assessee on account of alleged payment of capitation fee. Whereas, the assessee has categorically denied payment of capitation fee and even the regular fee. The contention of the assessee is that regular course fee was paid by Smt. Usha Rani, his mother and source of payment of regular course fee of Rs.20,25,000/- is sale proceeds of property owned by Smt. Usha Rani. A perusal of sale deed dated 06.10.2008 placed on record by the assessee reveals that Smt. Usha Rani had sold her property i.e. build up property no. X/3550 situated at Shanti Mohalla, Gandhi Nagar, Delhi for a total consideration of Rs.22,75,000/-. Smt. Usha Rani has filed an affidavit dated 13.11.2017 before the AO admitting that she has paid Rs.20,25,000/- for admission of Akant Arora in MBBS course to Maharaji Educational Trust on 10.07.2009. The assessee has also filed an affidavit to the effect that the regular course fee was paid by Smt. Usha Rani, his mother. The AO disbelieved affidavits filed by the assessee and Smt. Usha Rani. The AO rejected assessee's contention for the reason that the assessee has not been able to produce bank statements of Smt. Usha Rani. I find merit in the contention of assessee. Once the assessee has been able to substantiate source of payment of regular course fee. No addition was called for specially when Smt. Usha Rani by way of affidavit has confirmed that she had paid regular course fee Rs.20,25,000/- for the study of her grandson Akant Arora. Hence, addition of Rs.20,25,000/- is deleted. 4 ITA No. 99/Del/2024 (AY 2010-11) 5. As regards addition on account of capitation fee Rs.13,25,000/- is concerned, contention of the assessee is that no such capitation fee was ever paid by the assessee. The addition has been made merely on the basis of statement of Dr. P. Mahalingam Chairman of Santosh Group of Institutions. The ld. Counsel for the assessee has submitted that neither statement of Dr. P. Mahalingam was provided to the assessee, nor search material was ever confronted to the assessee. In the absence of any material being available to the assessee on the basis on which the AO has made addition, such addition is unsustainable. 6. Hence, addition of Rs.13,25,000/- allegedly paid by the assessee towards capitation fee in cash is deleted. 7. In the result, impugned order is set aside and appeal of the assessee is allowed. Order pronounced in the open court on Thursday the 27th day February, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 27.02.2025 NV/- 5 ITA No. 99/Del/2024 (AY 2010-11) ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "