TaxTMI 
TaxTMI 
2016 (6) TMI 95
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....M'). Subsequently, in response to notices issued under section 153A of the Act, the assessee filed returns of income for assessment years 2005-06 to 2010-11 and for A.Y. 2011-12 in response to notice under section 142(1) of the Act. The assessments for assessment years 2005-06 to 2010-11 were completed under section 143(3) r.w.s. 153A of the Act vide orders dated 28.03.2013 and for A.Y. 2011-12 under section 143(3) of the Act vide order dated 28.03.2013 wherein the income of the assessee was determined year-wise as under, inter alia, making the following protective additions on account of capitation fees received for management quota seats for various years: - S. No. A.Y. Addn. On account of cash received for donation/ capitation fees (Rs. ) Assessed income (Rs. ) 1 2005-06 2,55,09,000 2,92,49,420 2 2006-07 3,54,29,000 3,90,49,780 3 2007-08 3,93,66,000 4,38,58,150 4 2008-09 4,37,40,000 5,54,28,500 5 2009-10 4,86,00,000 5,26,44,700 6 2010-11 5,40,00,000 5,84,80,030 7 2011-12 4,00,00,000 6,43,92,890 2.2 In coming to his decision in making the aforesaid additions in respect of alleged capitation fees received by the assessee on account of management qu....
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....n the arguments put forth by the assessee that the decision in respect of management seats is taken by a governing committee of SPM Trust, Pune, the AO concluded that the additions in respect of cash received in respect of management seats was to be made substantively in the case of SPM Trust and only on protective basis in the hands of the assessee. The assessment orders for assessment years 2005-06 to 2011-12 were accordingly completed vide orders dated 28.03.2013, inter alia, by making the aforesaid additions on account of cash received as donation/capitation fees for management quota seats for MMS/PGDM courses at 'Welingkar' as laid out in the table at para 2.1 of this order (supra) in the assessee's hands on protective basis. 3. Aggrieved by the orders of assessment dated 28.03.2013 for assessment years 2005-06 to 2011-12, the assessee preferred appeals before the CIT(A)-37, Mumbai. The learned CIT(A), vide the impugned order dated 31.07.2014 disposed off the assessee's appeal allowing the assessee partial relief. After considering the orders of assessment and the arguments put forward by the assessee, the learned CIT(A) observed that since the additions made by the A....
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....." 4.2 The learned D.R. for Revenue was heard in support of the grounds raised and placed strong reliance on the findings rendered in the order of assessment by the Assessing Officer. 4.3 Per contra, the learned A.R. for the assessee supported the decision of the learned CIT(A) in the impugned order. The learned A.R. for the assessee contended that the learned CIT(A) has rendered his decision that no addition on account of cash received on account of capitation fees/donation in respect of management quota/seats/ institutional level quota seats should be made in the assessee's hands even on protective basis decision only after elaborate discussion of the factual matrix of the case at paras 5.1 to 5.7 of the impugned order wherein all the contentions of the AO has been addressed. This findings is only subject to the caveat that in the event the concerned CIT(A) at Pune holds that these additions are not to be assessed in the hands of SPM, Pune but in the hands of the assessee in the case on hand, then the AO of the assessee should issue a show cause notice and make the protective assessments into substantive assessments for the concerned assessment years in the case on hand. The l....
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....Council nominates members to Local Management Committees who monitor the functioning of respective schools, colleges and institutes; whereas, Members of the Admissions Committee, who are also nominated by and out of the members of the Managing Council look after the admission under management quota seats for MMS/PGEM courses, headed by the Chairman of the Local Management Committee. 4.4.3 The learned CIT(A) has observed that in the statement of Shri Kanu Doshi, Dean - Finance of 'Welingkar', he has stated that the cash received by the assessee as capitation fees in respect of management quota seats, is sent to Shri Abhay Dhade and Shri Anant Mate, the trustees of SPM Trust, Pune. Similarly, Smt. Kalpana Hans, Faculty Computer (IT) Department, in her statement has deposed that the peons in the assessee's office are instrumental in collecting the cash received as capitation fees in respect of management quota seats and transporting the same to SPM, Trust at Pune. We find that apart from the assessee explaining the admission process in 'Welingkar' before the authorities below vide letter dated 20.03.2013, the learned CIT(A) has noted that SPM Trust, Pune has filed let....
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.... seen from the orders of assessment in the case on hand that in the course of assessment proceedings, SPM Trust, Pune has filed a letter dated 20.03.2013 before the AO stating that additions, if any, can be made only in the hands of SP Mandali, Pune being the parent body of 'Welingkar' and not in the hands of the Admission Committee members and the assessee either substantive or protective. In appellate proceedings before the CIT(A) also we find that this fact has been re-confirmed by a letter of SPM Trust, Pune dated 28.07.2014 and signed by Shri Abhay Dadhe, Chairman, Managing Council of SPM Trust. In this letter it is submitted that in the orders of assessment of SPM Trust, Pune dated 18.03.2014 for assessment years 2005-06 to 2011-12, the same additions as made in the hands of the assessee in the case on hand on a protective basis have been made on substantive basis in the case of SPM, Pune. It is further submitted in the said letter that while SPM has challenged the orders of assessment in appeal objecting to the substantive additions on merits, they have not taken and will not take the stand that the substantive additions made in SPM, Pune should have been made in the....
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.... be assessed as income in the hands of two different persons. In my view, since the additions have been merely made on protective basis, tax demands cannot be recovered from the appellant. Thus no real grievance has arisen at this stage. In case the Ld CIT(A) at Pune holds that the income should be assessed not in the hands of SPM, Pune and should be assessed in the hands of Uday Salunkhe; or SPM, Pune raises this ground in their appeal at any stage, then the assessing officer in the case of Uday Salunkhe could issue a show cause notice and can make the protective assessment a substantive assessment after meeting the appellant's arguments. Subject to the above caveat, l find merits in the grounds of appeal of the appellant that no addition should be made in his hands since the substantive addition made of the same income in SPM, Pune is not challenged on the technical issue of hand in which it should be assessed and the challenge is only on merits. In the result, for statistical purposes, the ground of appeal no.1 is allowed." On a careful appreciation of the facts and circumstances of the case as discussed at paras 4.1 to 4.4.6 of this order, we concur with and uphold the decisi....