TaxTMI 
TaxTMI 
2013 (11) TMI 826
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....al relief to the poor and general public (b) Advancement of medical education, para medical education, education of health sciences and research and development relating thereto. 4. The assessee is running a medical college at Karimnagar and has also established a 750 bedded hospital at Nanganur village of Karimnagar District. 5. The AO reported that the assessee-society has been collecting fees over and above the fees prescribed by Government from the students for granting admission under the management quota. He also referred to the various evidences relating to collection of donations/capitation fee that were found and seized during the course of search from the office premises of the assessee society. It was also reported that the fees collected over and above the prescribed fee has not been duly accounted in the regular books of account of the society and the same have been utilised for the benefit of the interested persons of the society. The AO also reported about unexplained expenditure incurred by the society. In this view of the matter, the AO was of the view that due to the violations of the provisions of S. 11 and 13 of the Act, the assessee-society is no....
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.... the CIT, assessee preferred the present appeal before us. 7. The learned counsel for the assessee, reiterating the contentions urged before the Commissioner of Income-tax submitted that the assessee has not collected any capitation fee or any other levy by whatever name called, and therefore, the CIT was not justified in cancelling the registration granted earlier under S. 12A of the Act. He further submitted that all the findings given in the impugned order were subject matter of appellate/writ proceedings, and therefore, much reliance cannot be placed on the same. He further submitted in this behalf that the order rescinding the exemption granted under S. 10(23C)(vi) of the IT Act was stayed by the Hon'ble Andhra Pradesh high Court in WP MP No. 1026 of 2012 in WP No. 811 of 2012 and, therefore, ought not have passed an order under S. 12AA (3) cancelling the registration earlier granted under S. 12A of the Act. 8. As for the first reason put forth for cancellation of registration, viz., collection of capitation fee, it is submitted that in the course of search, one Excel sheets were found containing the names of students, names of parents and the amount. In the course o....
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.... therefore, not relevant at all by itself. In such cases either authority who has fed the information must be identified or he must appear personally and testify before the Court about the source of information. Hence, in the absence of any such corroboration, the evidence remained a hearsay evidence, carrying no evidentiary value, in the absence of any corroboration. (g) At the time of seizure, the Excel sheets was not authenticated either by the assessee or by the witnesses or by an authorized officer. This is an unsigned document and as such it loses its evidentiary value for want of authentication. In support of this proposition reliance is placed on the decision of Ahmedabad Bench of the Tribunal in the case of Sanskruti Township Surat vs. Department of income-tax(ITA No. 1885/Ahd/2006 order dated 23.9.2011) and Hyderabad Bench of the Tribunal in the case of DCIT vs. Krishna Yadav (2011) 12 Taxman.com.4 (Hyd). (h) There is evidence in the seized record that the Department has typed some information by making use of assessee's computer and made part of the Panchnama. This fact was pointed out by the Chairman of the assessee, Sri B. Srinivas Rao in the cour....
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....gs in the loose sheet remained uncorroborated till end as the same was not a speaking document and no supporting evidence by way of money receipt and other evidences were found. It was pointed out that the same was a dumb document and therefore not to form the basis of cancellation of registration under section 12AA. With regard to evidentiary value of notings the loose sheet, the appellant relies on the following decisions: a) DCIT Central V C Krishna Yadav 2011,12 Taxman.com 4 Hyd b) Asst. CIT v. Satyapal Wassan [2007] 295 ITR (AT) 352 (Jabalpur), c) ACIT V Dr Kamla Prasad Singh 3 ITR Trib 533 Patna, d) CIT Vs. Khazan Singh & Brothers 2007,304 ITR 243 (P & H,) e) CIT v. Girish Chaudhary [2007] 163 Taxman 608, Delhi f) Bansal Strips (P.) Ltd. v. Asstt. CIT [2006],99 ITD 177 Delhi g) CIT v Mauli Kumar K. Shah [2008] 307 ITR 137 (Guj.) (l) As regards the presumption under section 132( 4A), it was submitted that a loose sheet is not a book/document so as to raise the presumption. For this proposition, reliance was placed in the decision of apex Court in the case of CBI vs. V.C. Shukla [1998] 3 SCC 410. Further th....
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....e assessee earned a fortune by collection of capitation fees of such huge amount as alleged, the same would have been found in course of search either in the case of the society or its trustees. No such evidence was found regarding application. The cash found from the premises of the society is Rs. 8,09,526. This is as per books. This would show that the assessee society has not collected any capitation fees as alleged for the purpose cancellation of registration. Assessee society relies on the following decisions: i) DCIT V Pramukh Builders 2008 112 ITD 179 Ahd TM. ii) ACIT v Jorawar Singh M Rathod 2005 94 TTJ 867 iii) Sri Ganesh Trading Company vs. CIT(241 Taxman 264)- Jharkhand iv) Jyotichand Bhaichand Saraf & Co. P.Ltd. vs.DCIT(139 ITD 10)Pune 12. With reference to the seized document from the premises of hospital at Karimnagar, being Annex AA/PES/01,03,06,08,13, it is submitted that they are loose slips containing irregular notings about a number of small expenditure incurred by the society in the course of running the hospital at Karimnagar. With regard to these notings, it is submitted that there are two types of such expenditure- one r....
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....It is accordingly submitted that in the absence of cross-examination, the statement of the said witness cannot be utilized against the assessee. In support of this contention, reliance is placed on the decision of the Supreme Court in the case of Kishan Chand Chellaram vs. CIT(125 ITR 713)-SC; and of the Calcutta High Court in the case of CIT vs. Eastern Commercial Enterprises(210 ITR 103). As for the letter addressed by Sri Madhav Reddy, it is submitted that the said person has denied to have paid any fee over and above the prescribed fees. Although with regard to this witness, examination in chief, cross-examination and re- examination were complete and the evidence was closed in favour of the assessee, this was utilized against the assessee society, which according to the learned counsel was not justified. As for payment by Nikhila, an MBBS student, it is pleaded that the assessee has made a request of the assessee to provide corroborative evidence by way of testimony of her father, who was also examined by the DDIT, but the same was not provided to the assessee. With reference to the admission of the assessee under S. 132(4) of the Act, it is stated that the CIT has made use of....
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....he Tribunal in the case of Joginpalli BR Educational Society 17. The learned Departmental Representative, strongly relying on the order of the CIT cancelling registration under S. 12AA of the Act, submitted that the activities of the assessee-trust are not being carried out in accordance with their objects. It was only after considering all the material /records available before him, including a proposal received from the AO before issue of show-cause notice to the assessee, giving opportunity to explain why the registration should not be cancelled, and after satisfying himself about the nature of the activities of the assessee, the CIT cancelled the registration by passing a speaking order. As is evident from the show cause notice dated 22.3.2012 issued to the assessee, the CIT mainly relied on the material seized during the course of search, which showed that the assessee-society has been collecting amounts over and above the prescribed fee, in cash from the students admitted under management quota and the amounts so collected are not being accounted for in the books of the assessee-society. 18. Referring to the argument of the assessee that the impugned order of the CIT is....
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....sessee is entitled to copies of such documents, that point of time, it was premature to give copies of the seized material, as that would have interfere in the course of investigation. In a further statement recorded on 17.12.2009 also, the assessee did not explain the contents of the material, but only stated that they have not collected any capitation fee. He also evaded all along to explain the contents of the incriminating papers seized during the course of search. 22. The Learned Departmental Representative submitted that the contention of the learned Authorised Representative that the assessee has never accepted the receipt or collection of donations by is to be examined in the light of the sequence of events explained above. It is further submitted that contents of any paper are to be considered in the same manner as a prudent person would understand them in normal circumstances, and the incriminating material seized, being produced even before this Tribunal, clearly reflect that the assessee-society was collecting monies over and above the prescribed fee. In the face of such incriminating documents, the registration under S. 12 of the Act has been correctly cancelled by ....
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....Engineering & Educational Research vs. CIT (133 TTJ 706). 25. Further he submitted that evidence collected by the Department is not enough to cancel the registration granted u/s. 12AA of the Act. For this proposition, he relied on the judgement of Supreme Court in the case of Dhirajlal Giridharlal vs. CIT (26 ITR 736) (SC), Shalini Soni vs. UOI (AIR 1981) 431, 434 (SC). Finally he submitted that the registration was cancelled on the basis of irrelevant material collected during the course of the search and it should be vacated. Findings in respect of ITA No. 720/Hyd/2012: 26. We have heard both the parties and perused the material on record. In this case registration granted to the assessee w.e.f. 1.4.2000 u/s. 12AA of the Income-tax Act, 1961 was cancelled by the CIT vide order dated 22.3.2012. The reasons for cancellation of registration are that the assessee has violated the provisions of sections 11 and 12 of the Act and the assessee has not conducted itself in accordance with the object for which it was established and registered u/s. 12A of the Act. The basis for such conclusion are the materials collected by the Department in the course of search action conducted u/....
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....1. For example Sl. No. 8 in this page shows the details of student by name Satla Rajkumar s/o. S. Chinna Mallaiah. He was admitted under management quota for a consideration of Rs. 30 lakhs and paid Rs. 15 lakhs in cash at the time of admission and balance Rs. 15 lakhs paid in the year 2008. (3) Annexure A/PES/16: This annexure contains page Nos. 31 to 35, details of fee collected from 34 MBBS students under management quota for academic year 2009-10 and shows details of student name, total fee for management quota seat, total consideration (TC), dates on which these amounts paid, mobile phone numbers. As per this annexure, the lowest fees collected for MBBS course under management quota is Rs. 2,00,006 and the highest is Rs. 35 lakhs. (4) Annexure A/PES/15: It contains page Nos. 56 to 82. Having post dated cheques and small slips with the details of total fee, payment thereof by cash and cheque with cheque Nos. and date issued by the parents of the students who are admitted into MBBS course under management quota for academic year 2007-08. (5) Annexure A/PES/15 (page No. 49): This is a letter written in Telugu in the hand writing of Sri E. Tirupathi Redd....
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....t over and above the prescribed fees, as evidenced by his statement placed on record at page Nos. 147 to 149 of Paper Book Vol. I. Later he has changed his version, being so, little value can be attached to his statement and his conduct neutralised his value as a witness. A man indulging in double speaking cannot be said by any means a truthful man at any stage and we cannot decide on which occasion he was truthful. Further, the assessee was not given any opportunity to cross examine him. Therefore, the Department cannot consider his statement as an evidence against the assessee. Further the judgement of Supreme Court in the case of Kishan Chand Chellaram vs. CIT (125 ITR 713) also supports the assessee case, wherein held that evidence collected from witness cannot be considered without giving opportunity of cross-examination to the assessee. 28. Further, in the case of K. Madhav Reddy, he was examined on 5.12.2009. He was also cross-examined by the assessee. He had denied payment of excess fee more than what is prescribed fees and said that his son got admission in normal course. 29. Regarding payment by Ms. Nikita, the assessee asked corroborative evidence collected from th....
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....d uncorroborated because of their denial, non-production of one of them (Tirupathi Reddy) for cross examination and admission by the department before High Court that statement of Madhav Reddy is not incriminating. d) The society explained the rough notings in loose papers and the same were accounted for in the books. It also explained payments and recovery of the amounts from doctors through IOU payments. The department failed to demolish society's contention through cross examination of Sri Parahlada Rao, accountant, who made these payments, although he was examined, cross examined and re-examined. No enquiry has been made for corroboration. e) The admission of Rs. 5 cores supposed to have been made by Srinivas Rao, chairman never pertained to society. Further it was a non specific and bald declaration. f) There is nothing in the order that the society has deviated from the objects for which the registration was granted and not applied its funds towards its objects. g) No evidence was brought out to show that the amount of capitation fees alleged to have been collected were applied either by the society or by any interested persons. There i....
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....d to the assessee by the parents of Kum. Nikita were for the purpose of facilitating the financial assistance from bank. Being so, the activities of the trust cannot be held as non-genuine or it can be said that the activities of the assessee are not being carried out in accordance with the object of the trust or institution. There cannot be any other legally sustainable reasons for cancelling or withdrawing the registration granted to the assessee on 4.10.2000 w.e.f. 1.4.2000. 35. To come to the above conclusion, we place reliance on the order of the Tribunal in the case of Maharashtra Academy of Engineering & Educational Research vs. CIT (133 TTJ 706) wherein held the Tribunal held as under: "Held : In the recent past sub-s. (3) was inserted in s. 12AA w.e.f. 1st Nov., 2004 which gives power of cancellation of registration to the CIT, if he finds that the activities are not genuine or not being carried out in accordance with the object of the trust. These powers are conferred with a view to ensure that if once a registration has been granted under s. 12AA, a trust or institution may not take any such liberty of misuse of the registration or the provisions by ....
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....ng means of collection of fees. But whether at this preliminary stage he had the right to draw an adverse inference so as to refuse registration or alternatively confine himself to the enquiry about the objects and the activities of the trust as per the limits of the jurisdiction of s. 12AA. Rather this is also not the case of the CIT that the institution is doing some other activity of earning profit other than the activity of running educational institutions. The established factual position is that the institution is not doing in any other activity except running educational institutions. In such circumstances, the action of cancellation of registration cannot be upheld. As far as the objective of the appellant is concerned this is not the case of the Revenue that the assessee was not imparting education. Since the question about the imparting of education has not been doubted or challenged by the Revenue therefore, the impugned order passed by the respondent is unsustainable in law. Strange enough there is nothing on record to prove sightlessly that the purpose of imparting of education was not fulfilled by this institute thus the Revenue Department has hopelessly failed to est....
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....ies of the appellant were not genuine or activity of imparting of education, for which the trust was created, were not carried out. Even the CIT has failed to establish that any part of the income/receipt of the trust was in any manner mis-utilized by the trustees for their personal benefit i.e., not in fulfilment of the object of the trust. Otherwise also there are three ways to look at this problem. One is, that the donations are raised but not utilized for achieving the objects i.e., towards imparting education; then such an institution must bear the consequence of cancellation of registration since ipso facto infringed s. 12AA(3) condition. Second aspect is, that though the donations received are meant to fulfil the objects but together with fees have infringed Anti Capitation Prohibition Act; that comes within the clutches of that Act but definitely not under s. 12AA(3) provisions. The third aspect is, that the donation plus fees do not exceed the prescribed limit of Anti Capitation Fee Act i.e., five times the normal fees; further that no evidence of mis-utilization other than the prescribed activity then no action can be suggested under s. 12AA(3). The assessee's case fa....
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.... tuition fees on his own without any authority or consent of the society and conclusion of the CIT was that extra tuition fees was collected by M.J. Balachandran on his own and the society has nothing to do with the extra tuition fees collection. Being so, the assessee cannot be faulted and the registration granted to the assessee should not be withdrawn so as to deny the benefit of section 11 of the Act. 38. Similarly the co-ordinate Bench, consisting of the same members, in the case of Sree Educational Society in ITA No. 564 of 2012 for A.Y. 2011-12 vide order dated 31.7.2013 held as under: "16. In the present case no material has been brought on record to show that the assessee solely exists for profit motive. The department has not been able to discharge its onus of showing as to how the conditions for grant of registration have been breached by the assessee. The registration has been granted to the society for many years in the past under the same facts and there is no change in the facts or in the activities of the society in the present year. It has also not been demonstrated by the Department as to how the object of the assessee has turned into a commercial one.....
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.... April 1, 1984. 39.2 The order cancelling the registration granted to a trust or institution under section 12AA being a quasi-judicial order does not fall within the category of orders mentioned under section 21 of the General Clauses Act, 1897, which provides that the power conferred on an authority to issue orders includes the power to rescind such orders, and the CIT would not have power to rescind the order passed by the CIT earlier granting the registration to a trust or institution. Section 12AA(3) was incorporated with effect from October I, 2004, to empower the CIT to cancel the registration granted to a trust or institution. The object of this provision is not clarificatory or explanatory. So prior to that date, the authorities granting registration had no inherent power to withdraw or revoke the registration already granted. 39.3 Once an institution came within the phrase "exists solely for educational purpose and not for profit" no other condition like application of income was required to be complied with. The mere existence of profit/surplus did not disqualify the institution. Breach of the conditions of the trust deed would not disentitle the institution from ge....
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.... ground that the assessee did not deserve exemption under section 11 (1)(a). The Tribunal found that the order of the CIT was not justified as the power to cancel could be only traced to section 12AA(3) and in the absence of any activity carried on by the assessee contrary to the objects, the registration could not be revoked. 41.1. On appeal: Held, that under section 12AA, the CIT is empowered to grant or refuse the registration and after granting registration, would be empowered to cancel it, but only on the two conditions laid down under section 12AA(3). Whether the income derived from such transaction would be assessed to tax and whether the trust would be entitled to exemption under section 11 are entirely the matters left to the AO to decide. The Tribunal had allowed the case of the assessee with the finding that none of the conditions under section 12AA(3) were violated and, therefore, the satisfaction which was arrived at by the CIT was not justified. Therefore, there was no reason to interfere with the order of the Tribunal. 42. In the case of Director of Income-tax (Exemptions) v. Mool Chand Khairati Ram Trust (339 ITR 622) (Delhi). In sub-section (1) clause (b) and....
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.... the case of Smt. K.V. Lakshmi Savitri Devi vs. ACIT (148 TTJ 517) (Hyd.) and in the case of CIT vs. Krishna Yadav (2011) 12 taxmann.com 4 (Hyd). Further, various judgements relied on by the assessee's counsel also support the assessee's case to hold that Excel sheets are dumb documents and therefore, do not form the reason to cancel registration granted to the assessee u/s. 12AA of the IT Act. 44. Further, in the case of Sri Chaitanya Educational Committee vs. CIT (106 ITD 256) (Hyd) it was held that amendment sub-section (3) in section 12AA by the Finance (No. 2) Act, 2004, w.e.f. 1st October, 2004, the CIT had no power to cancel registration u/s. 12A earlier granted and the order of the CIT dated 26th July, 2004 cancelling registration granted u/s. 12A on 14th August, 1992 was, therefore, invalid. 45. The learned DR placed much reliance on the order of the co-ordinate Bench in the case of Joginpally BR Educational Society in ITA No. 585/Hyd/2012 and Ors. dated 31.8.2012 which is not applicable to the facts of the case on the following reasons: (1) In the case decided by the Tribunal, the employees have deposed that capitation fees were collected and handed....
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.... in rejecting the assessee's plea as opposed to the normal course of human conduct. The circumstances surrounding the case also not strong enough to reject the assessee's plea. We have considered all the material available on record and also statements of the parties concerned as discussed in earlier paras and we are of the opinion that the Department cannot rely on those statements, more so, when it was not confronted to the assessee for cross examination, the same cannot be relied upon. Being so, considering the above precedents, in our opinion, the assessee society cannot be deprived of the registration granted to the assessee us. 12AA of the Act. Accordingly, we vacate the order of the CIT dated 22.3.2012. However, the aforesaid findings given by us are nothing to do with the allowability of exemption u/s. 11 of the Act. In case of discrepancy or irregularity with regard to allowability of exemption u/s. 11 is noticed by the AO, he can make independent enquiry or examination at the time of assessment for each assessment year in accordance with law. Accordingly, the registration granted to the assessee u/s. 12AA of Income-tax Act, 1961 is hereby restored back. In the res....
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....o the amounts collected over and above prescribed fee, from students especially for academic years 2006-07, 2007-08 and partly for 2009-10, based on such evidence, the AO extrapolated the same to the assessment year 2003-04 also, applying the ratio of the decision of the A.P. High Court in the case of Rajnik & Co. vs. ACIT(251 ITR 561). The AO further observed that in the case of an educational society collecting capitation fee, Society would not be eligible for exemption under S. 11 and/or u/s. 10(23C)(vi) of the Act. Accordingly, the AO treated the excess of income over expenditure admitted in the return as income of the assessee, and also quantified the unaccounted receipts for the financial year 2002-03, based on the extrapolation of the evidence found during the academic years 2006-07, 2007-08 and 2009-10 at Rs. 38,28,000. He accordingly, determined the total income of the assessee at Rs. 7,51,10,275, raising a tax demand of Rs. 5,36,87,886, vide order of assessment dated 30.11.2010 passed under S. 14(3) read with S. 147 of the Act. 50. Aggrieved by the order of re-assessment, assessee preferred appeal before the CIT(A), contesting not only the merits of the addition of Rs.....
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.... in view of his decision in favour of the assessee on the merits of the addition and denial of assessee's claim for exemption by the AO, the decision on the legality of reopening has become academic, decided the issue also in favour of the assessee observing in para 06.0 of his impugned order as follows- "06. ....However, I may add that even on the ground of legality of reopening the case there is force in the contention raised by the appellant. Especially the appellant's contention that any information for reopening must be concrete not speculative and it must relate to the assessment year in question for which assessment is sought to be reopened is not without basis. Admittedly there was no specific material for the year under consideration relating to collection of capitation fee or any amount over and above the prescribed fee. The AO has simply extrapolated the evidence available for academic years 2006-07, 2007-08 and 2009-10 that too to arrive at the estimated capitation fee for A.Y. 2003-04. The same cannot be considered as cogent evidence or information warranting reopening of the assessment." 53. Aggrieved by the order of the CIT(A), the Revenue is in a....
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....and validity of the reopening, but also on the merits of re- assessment made, and consequently, the same is liable to dismissed. 56. We have considered the rival submissions and perused the impugned orders of the lower authorities and other material available on record. Let us first consider the issue relating to legality and validity of the reopening of assessment by the AO. It is pertinent to note at this stage, the relevant provisions of S. 147, which read as follows- "147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this ....
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....w a rate ; or (iii) such income has been made the subject of excessive relief under this Act ; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.--For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. Explanation 4.--For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012." 57. It is, no doubt, evident from a close reading of the above provisions of S. 147 that it is only satisfaction of the AO with regard to escapement of income from asses....
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....ed during the year under appeal, based on the material found at the time of search, which relate to other years, clearly establishes the absence of any concrete material to indicate the actual collection of capitation fee by the assessee. In these facts and circumstances of the case, the decision of the jurisdictional High Court in the case of Rajnik and Company (supra) relied upon by the learned counsel for the AO, cannot come to the rescue of the Department, in the absence of any clinching evidence to suggest collection of capitation fee in the year under appeal. In this view of the matter, the CIT(A), in our considered opinion is justified in holding the issue relating to the legality and validity of the reopening of assessment under S. 147 in favour of the assessee. We accordingly uphold the order of the CIT(A) on this issue and reject the grounds of the Revenue in this behalf. 58. The Revenue raised the ground with regard to merit that the CIT(A) failed to appreciate the fact that extrapolation can be made for other years on the basis of material found during the course of search relating to some other year as it is supported by the judgement of Hon'ble A.P. High Court ....
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....thority." 61. As seen from the above judgement, there was unreported sales detected for a period of 19 days in a year. The AO estimated the turnover for the entire period of one year on the basis of unreported sales for the period of 19 days in a year. The question that arose before the Apex Court is as to whether the AO was right in doing so. It was held by the Apex Court that in a matter involving unreported sales, the AO has to proceed on the basis of estimation which involves some amount of guess work. The Apex Court, accordingly, upheld the order of the AO in estimating the turnover on the basis of the unreported sales for a short period. However, in the present case, we are concerned with the estimation of income for assesment year 2003-04, where there is no seized material for this assessment year and material is available only for subsequent assessment years other than the year under consideration. Ultimately, the said judgement of Supreme Court must be seen in the context of the facts of each case. In the present case, the assessee is a medical college. It is highly improbable to estimate collection of fees for management quota seats in the assessment year under conside....
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....he Act the Assessing Officer can take into consideration material other than what was available during the search and seizure operation for making an assessment of the undisclosed income of the assessee." 64. In the above case, there was collection of on-money with reference to the real estate dealt by the assessee firm. The partners had admitted the on-money in their hands in the return of income. The AO rejected their plea and assessed the on- money receipts for all the plots in the firm hand i.e., M/s. Ahura Holdings. On the basis of evidence collected during the course of search it shows 3 persons admitted payment of on-money, 5 persons denied the payment of on-money and no evidence with regard to payments of on-money for remaining 24 plots. However, the partners Gopal Lal Bhadruka and Avadesh Bhadruka confirmed the receipt of on-money. However, in the present case, there is no admission by the assessee for collection of excess fees for management quota seats for the assessment year 2003-04. Further, unless there is evidence or material indicating any suppression of collection of fees towards management quota seats for the assessment year 2003-2004 having been found during s....
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....ained and kept. Though such a record could have been destroyed also from time to time, but in such a situation also, if the assessees had actually made a fortune of similar receipts in respect of the remaining part of the year, they must be reflected by certain assets, movable or immovable ought to have been found during the course of search. No such assets, despite the extreme step of search which amounts to a serious invasion on the rights of subjects and which is perhaps the last weapon in the arsenal of the Department, were found, which could be attributed to any such patently hypothetical receipts. In view of this the multiplication formula adopted by the A.O. was not valid. 65. Being so, extrapolation of income cannot be made for the assessment year in question on the basis of seized material relating to some other assessment years. 66. Relating to exemption u/s. 11, this issue stands decided in favour of the assessee in view of our findings in ITA No. 720/Hyd/2012 in this order. Regarding exemption u/s. 10(23C), the withdrawal of the approval granted u/s. 10(23C)(vi) of the IT Act in the case of the assessee was with effect from AY 2007-08 only vide cancellation order ....