TaxTMI 
TaxTMI 
2020 (5) TMI 690
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....ee receipts of Management/NRI quota. (b) Addition relating to suppression of fee receipts of Post graduate seats. 3. The revenue is aggrieved by the decision of Ld CIT(A) in granting relief in respect of addition relating to COMED-K seats. 4. The facts relating to the case are set out in brief. The assessee is a charitable trust established for educational purposes in the year 1980. It has set up a medical college by name Dr B.R. Ambedkar Medical College and Hospital offering both under graduate and post graduate courses. It also runs a Dental college and nursing college. The issues under consideration are related to Medical college only. The assessee trust is being managed by a body of trustees. The chairman of the trust keeps changing and during the year relevant to AY 2009-10 and 2014-15, Sri. P L Nanjundaswamy was the Chairman. 5. The revenue carried out search and seizure operations on 18-07-2013 in the hands of the assessee. At that point of time Shri P L Nanjundaswamy was the Chairman. The search operations also covered the residential premises of its Chairman and some of the trustees, certain other connected institutions also. The documents seized from the trust....
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....on of Professional colleges on the basis of an agreement entered between the Government and the Association. The admission is based on the rank scored by the students in this entrance test and the fees under this category shall be higher than the Government quota seats and the said fees is also determined under the agreement entered between the Government and Association. Further, in terms of the agreement, if any of the seats falling under COMED-K quota remain unfilled after completion two rounds of COMED-K counselling process, those seats shall be handed over to the respective colleges and the management may fill them at their discretion, but the fees to be charged for these seats should not exceed the fees agreed upon through the Agreement entered between the Government and Association. 10. The management/NRI quota seats are filled by the respective colleges and they exercise their own discretion in allotment and charging of fees. The fee charged under this quota shall be higher. 11. The first addition made by the assessing officer related to Management/NRI quota for MBBS seats. During the course of search operations conducted at the residence of the Chairman Shri P L Nanj....
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....hether you have accounted for it and where. Ans.: Amounts have been partly remitted into the bank." Since, the chairman stated that the amounts have been partly remitted into the bank, the AO concluded that entire money collected by way of cash at the time of admission is not being account for in the books of account of the trust. The AO also referred to question no.9 and 12 and answers given thereto in the statement taken on 18-07-2013 u/s 132(4) of the Act, which read as under:- "Q.9 What is the amount that you are taking for medical seats under management quota and NRI quota? Ans.: The amount in NRI quota is $ 1,50,000 which includes the admission fee, tuition fee, additional college fee and the development fee. The amount under management quota is not fixed. It varies from 30 - 55 lacs. The discretionary power to decide the amount vests with the Chairman." "Q.12 The loose sheets marked 33 to 38 found during the course of search today at the bedroom of Sri P L Nanjundaswamy and placed at folder marked A-ALN/3 dated 18-07-2013 are the visitors slips of Dr. B.R.Ambedkar Medical College, Kadugondanahalli, Bangalore. Please explain the contents of these loose sheets. ....
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.... amount per student under the management/NRI quota worked out to Rs. 28,69,375/- (Rs. 5,73,87,500/- divided by 20). The amount accounted in the books of account was seen at Rs. 3,53,08,650/-, which was later revised to Rs. 3,88,58,650/-. The difference between the amount agreed and the amount accounted for in the books of accounts worked out to Rs. 1,85,28,850/-. The assessing officer added the same to the total income of the assessee in AY 2009-10. 15. The Ld CIT(A) confirmed this addition and the reasoning given by him in this regard are summarized below:- (a) It is evident from document No.A/PLN/3 that the appellant has not accounted for entire agreed amount. In case, it was intended to take into account the entire amount, there was no need to collect any amount in cash. (b) The appellant cannot disown the document as it was recovered from the Chairman of the relevant period. The presumption u/s 132(4A)/292C can be taken even when the documents are in control or possession of the person searched. (c) The names found in the list are the names of students, who sought admission to the Medical college. (d) The visitors' slips A/PLN/2 also give indication of the amount....
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.... assessee cannot be presumed to be the owner of those documents, when they have not been taken from the control of the assessee. In any case, the AO could not have made impugned additions without bringing corroborative evidences. In support of this proposition, she relied upon the decision rendered by Mumbai bench of ITAT in the case of ACIT vs. Ms. Katrina Rosemary Turcotte (87 taxmann.com 116)(Mum). 17. The Ld A.R further submitted that the AO has not conducted any enquiry from any of the students or their parents to support his inferences or to prove that the amounts mentioned in the seized documents were received by the assessee. The Chairman has categorically stated in his statement that the assessee has not collected any capitation fee. No complaint has been received from any of the student to the effect that the assessee was collecting fee over and above that accounted in the books of accounts. Hence the AO could not have drawn adverse inferences and the Ld CIT(A) was not justified in confirming the addition. In support of these contentions, the Ld A.R placed her reliance on the decision rendered by Hon'ble Madras High Court in the case of CIT vs. Balaji Educational &....
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....cture for management quota seats is fixed at the discretion of the management and differs each year and from candidate to candidate, depending on the availability and demand for the seats. There are various other factors also that are taken into account in admitting a candidate under the management quota like affordability, recommendations from VIPs etc. The appellant submits that during the year under question, the medical college was de-recognised by the Medical Council of India, which had a huge impact on the admission process and the demand for seats in the college. Consequently, even assuming that the document at A1/PLN/3 indicated the fee payable to the Appellant the same cannot be taken as final since many candidates would not have paid the amounts reflected therein due to the above circumstances." Thus, it is the contention of the assessee that the contents of the above said document cannot be considered to be true and correct. 20. We notice that the AO has placed his reliance on the statement given by Shri P L Nanjundaswamy on different occasions. The AO has first referred to the answer given by him to question no.7 posed to him in the statement taken on 17-10-2013 u....
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....estion no.12, he has stated that the amount mentioned in the loose sheets is towards package for medical seats and is not full and final. Since there was difference between the amount mentioned in the seized document and that accounted for in the books of accounts, the AO has presumed that the difference might have been siphoned of by the Chairman. Hence the AO has observed that the income has accrued to the assessee-trust and hence the siphoning of the funds would not affect the accrual. It is pertinent to note that it is nobody's case that the difference amount, if any, has been defalcated by anyone. On the contrary, it is the explanation of the assessee that the amount actually collected has been accounted for in the books of accounts. At this stage, it is pertinent to refer to question no.11 and answer given thereto in the statement taken u/s 132(4) of the Act. "Q.No.11:- Please state whether you are collecting capitation fees for admission to medical seats in your college? Ans.:- We are not collecting any capitation fee for admission to medical seats in the college. We notice that the assessing officer did not consider the above said question and answer. Before the Ld....
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....f at all, only on the basis of enquiries and are not final. Therefore, the AO could not have relied upon these visitors slips to make any additions since they do not show that any income, over and above the amounts accounted for in the books of account, was in fact, received by the Appellant. In answer to question 12 in the sworn statement of Mr. P L Nanjundaswamy (extracted at page 21 of the Assessment order), he has stated that "this amount mentioned in loose sheets is towards package for medical seats under NRI quota and are recorded for enquiry purposes. The amounts mentioned in the slips are discussed with prospective students and are not full and final." This shows that even assuming that the figures mentioned in the visitors slips indicate the fee payable, the same were only at the negotiation stage and not final. In the absence of any corroborative evidence to show that the alleged fee referred to in the slips were, in fact, received by the Appellant, the addition made by the AO is without any legs to stand and thus ought to be set aside. What is more, the said visitors slips pertain to FY 2013-14 and the reliance placed by the AO on such material is only on the basis of as....
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....ates) and it is incorrect to state that cash portion has not been accounted for. He further stated that there are only cash receipts in respect of following candidates, but the entire amount has been accounted for: a. Ramya B Sriram - Rs. 21,78,550 b. U K Pooja - Rs. 20,00,000 c. T. Gautham - Rs. 20,50,000 d. P. Matangi - Rs. 28,00,000 e. Sebkhatija - Rs. 15,41,050 f. Avinash R - Rs. 25,41,050 g. Bhavya S - Rs. 15,41,050 h. Sajjad Masoominezhad - Rs. 29,00,000 i. Mithija D Kadulngattil - Rs. 15,41,050 -------------------- Total - Rs. 1,90,92,750 =============" As per the assessing officer, the aggregate amount of collections for MBBS management quota seats was Rs. 5.47 crores. Though the AO as initially stated that the assessee has accounted for only Rs. 3.53 crores, later he accepted that the assessee has accounted for Rs. 3.88 crores. Accordingly he has made the addition of difference between Rs. 5.47 crores and Rs. 3.88 crores. One of the observations of the AO was that the assessee has accounted for only those fee receipts, which have been received through banking channels. On the contrary,....
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....er RTI Act, but it was denied. Accordingly, it was submitted that there is violation of Principles of Natural justice in not providing information about results of the notices issued and accordingly it was contended that the whole assessment order is liable to be quashed. It was also submitted that the presumption should be that the information obtained by the AO was in favour of the assessee only. The Ld CIT(A) has rejected the above said contentions with the following observations: - "68. I am not in agreement with the proposition of the appellant. I have discussed in detail about the reliefs that the appellant is entitled to under each head. Just because the information obtained was not shared with the appellant does not mean that the whole order is bad in law, on the principles of natural justice. The assessing office can part with the information collected only if there is something adverse to the interests of the appellant. The adverse materials collected behind the back of the appellant have to be brought to its notice. The assessing officer has not used the confirmation letters to draw any adverse inference. Therefore, I do not see any force in the arguments of the....
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.... on hypothetical facts or conjectures or surmises. The inference drawn by the Original Authority is based on probability. 7.6 With regard to the seizure of cash of over Rs. 44 lakhs from the residence of Chairman of Assessee Trust, it is not in dispute that the said sum has been assessed in the hands of the Chairman for the assessment year 2008-2009 and the same was received from the petrol pump business, the turnover of which is more than Rs. 30 crores. Moreover, the Assessing Officer has accepted the disclosure of the seized cash as the income of the individual and, therefore, in our considered opinion, it cannot be said that assessee trust had accepted contributions by way of capitation fee. The said issue cannot be used both ways. The assessment of the undisclosed income at the hand of the individual ends the issue there. It has no relevance to the affairs of the Trust and there is no material to hold so. 7.7 In our considered opinion, based on the loose sheets and cash seized, which have been held as irrelevant to the present issue, it cannot be held that for all the assessment years the assessee received capitation fee for admission of students in the manage....
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....scuss the result of enquiry conducted by him by issuing notices u/s 133(6) of the Act. Hence the assessee has contended that the assessing officer did not receive any adverse reply from the students. Even though the AO has observed that huge cash was seized during the course of search, yet it was shown by the assessee that all those cash are accounted for in the books of accounts. 30. We have noticed that the Ld CIT(A) has agreed with the inferences drawn by the AO. The discussions made in the preceding paragraph would also show that the assessing officer has only drawn certain inferences on surmises and conjectures. Hence we are unable to sustain the view taken by Ld CIT(A) on this issue. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition of Rs. 1,85,28,850/- made in AY 2009-10 towards suppression of fee on MBBS Management Quota. 31. The next issue urged by the assessee relates to the addition towards suppression of fees under P.G admission. The facts relating to this issue are stated in brief. During the course of search, the revenue seized certain documents in the form of a "Diary" maintained by a person named Shr....
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.... subject to recognition by Medical Council of India. The assessee also submitted that the admission fee would differ from Course to Course. Accordingly it was contended that the AO was not justified in estimating the suppression of fees. The assessee also moved a petition u/s 144A of the Act before the JCIT, but the same was rejected. 33. The AO did not accept the contentions of the assessee. He observed that three candidates noted in the Diary have, in fact, taken admission in FY 2013-14. He also took the view that the extrapolation is permitted in the Income tax proceedings on the basis of available materials. In this regard, he placed reliance on the decision rendered in the following cases:- (a) CST vs. H.M. Eusufali, H.M. Abdulali (1973)(90 ITR 271)(SC) (b) Gopal lal Bhadruka vs. DCIT (346 ITR 106)(AP) (c) Sunny Jacob Jewellers and Wedding Centres (48 Taxmann.com 347)(Kerala) The AO also observed that there was material available for AY 2009-10 and AY 2014-15, which disclosed that the assessee is suppressing fee receipts. The assessee has also been suppressing fee collections made for giving admission under Management Quota seats of MBBS. The AO referred to the ....
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....ant to the Chairman of the trust Mr P L Nanjundaswamy (A1/BRAMC/2). The AO relied on the notings of amounts against certain names in the diary to conclude that the Appellant had received amounts over and above what was accounted for in its books of accounts. The Appellant submits that firstly, the diary does not belong to the Appellant but belongs to the PA of Mr P.L. Nanjundaswamy and therefore the entries made therein are not relatable to the Appellant. Secondly, even going by the notings in the said diary, there is no indication that figures mentioned were with respect to fees payable by the candidates. Neither is there any indication that such amounts were in fact received by the Appellant. Therefore, no addition can be made in the absence of any other evidence to show that amounts over and above what was accounted for by the Appellant was received by it. Thirdly, the candidates mentioned in the said diary took admission only in the academic year 2013-14 and therefore in the absence of any evidence for the assessment year in question no addition can be made to the income of the Appellant. In any event, the AO ought to have examined the said Mr Manjunatha, to whom the diary b....
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.... year 2013-14 and has applied it proportionately to each post graduate seat for financial year 2008-09 (at para 16.19 of the assessment order) which is wholly misconceived. The Appellant submits that the said figures have no relevance as regards actual receipts during financial year 2008-09 and in the absence of any seized material for financial year 2008-09 to support the conclusion that there was in fact unaccounted income, the addition made by the AO cannot be sustained. The Appellant submits that the addition on the basis of extrapolation, estimation and imaginary events are unsustainable. ....... Moreover, the AO, without rejecting the books of accounts of the Appellant, ought not to have made additions to the income of the Appellant on the basis of extrapolations. He ought to have appreciated that the Chairman of the Appellant changes year on year and the seized material pertained to only those years during which Mr. P L Nanjundaswamy was the Chairman. Consequently, the assumption that there is undisclosed income for all six assessment years is unsustainable." 37. We notice that the ld CIT(A) has upheld the addition made by the AO by confirming the inferences drawn by t....
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....OMED-K candidates. We have noticed earlier that 40% of the MBBS seats are filled up on the basis of common entrance test conducted by the association or body of professional colleges. The fee to be charged for the candidates admitted under this process is determined as per the agreement entered between the State Government and the Association. However, if the seats under this category lies vacant after two rounds of counselling process, those vacant seats will be handed over to the management, which can fill up them, subject to the condition that the fee charged for these seats should be the same as determined as per the agreement entered between the State Government and the Association. 39. During the year relevant to AY 2009-10, 40 seats fell under the category of COMED-K. The AO noticed that the assessee has filled up one seat through the exam and the remaining 39 seats were filled up by the management, since they fell vacant. The AO took the view that the assessee would have charged the same fees as applicable to the Management quota seats. We noticed earlier, the AO has worked out average fee per seat at Rs. 28,69,375/-. Accordingly, he proposed to apply the above said r....
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....ffered following explanations with regard to the seized documents in the form of letters issued to the prospective candidates:- "......The said letters extracted in the assessment order have been allegedly issued to 1) Kum. Shivani Sudesh; 2) Kum. Riya Mukerjee; 3) Mr. Ankush Agarwal; 4) Mr. Bolla Kamal Chaitanya. Of the said four candidates, only two i.e. Kum. Shivani Sudesh and Mr. Ankush Agarwal took admission. The Appellant submits that the practice is that the candidates booked seats under the management quota before the results of CET and COMED-K are announced as at that point of time, they may not be confident of securing seats on merit basis. As stated above, the admissions under the management category is as per the discretion of the management and the only requirement is that they should have obtained 50% of marks in the qualifying exam and an NRI sponsorship. In all other category seats, admissions are governed by the CET and COMED-K rules. The above four letters have been issued to the students as early as in June 2013 much before the admissions under the COMED-K quota had even begun. When they approached the management for seats, some of the seats had already ....
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.... students securing admission to the 40 seats under this category during the academic year 2008-09 have given letters indicating that the fee paid by them is Rs. 3.25 lakhs only, which has been completely ignored by the AO. A true copy of Appellant's letter dated 08-02-2016 filled with the AO together the confirmation letters is annexed herewith as ANNEXURE-C. In any event the extrapolation of figures adopted for a given assessment year to a past assessment year without any basis and without there being any evidence that COMED-K seats were filled as per management quota fee during the assessment year 2009-10, is wholly arbitrary and therefore the application of Rs. 28,69,375/- as the fee for 39 unfilled seats and making addition of Rs. 5,22,04,425/- is without any basis. The AO also observes that the Appellant has not given any reason for candidates not reporting to the college for admission under COMED-K. The AO has clearly lost sight of the fact that seats did not filled under COMED-K category because the MCI had withdrawn the recognition granted to the college." 44. The Ld A.R also submitted before Ld CIT(A) that there is a monitoring agency/committee constituted by the ....
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....ubmitted that the assessee therein had admitted sales outside the books of accounts. Accordingly it was submitted that the said case law is not applicable to the assessee. In the case of Gopal das Bhaddruka (346 ITR 106), one of the assessees had admitted receipt of on-money, which is not the case here. In the case of Sunny Jaccob Jewellers (48 taxmann.com 347), the suppression of sales was evident from the Sales summary sheet when compared with actual sales recorded. The employees admitted that the sales bills were not issued on all sales. Further, the revenue officials purchased certain gold ornaments in the pre-search enquiry and no bill was issued. Accordingly it was submitted that there were overwhelming evidences in the above said case. Accordingly, it was submitted that the above said case laws are not applicable to the facts of the present case. It was submitted that the AO did not gather any evidence to prove the receipt of unaccounted money. Further, no trustee has accepted that there was suppression of fees. On the contrary, the assessee placed its reliance on the following case laws:- (a) CIT vs. Balaji Educational and charitable public Trust (374 ITR 274) (b) CIT....
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.... for which no evidences are available, no purpose will serve in adopting the fees for the year under consideration. In other words, extrapolation of figures has to be downplayed. Suffice to mention that the Assessing Officer was not justified in estimating the figures on the basis of seized material which did not pertain to any of the year under consideration. The Assessing Officer appears to have not examined carefully the reply filed by the appellant on 1.2.2016, though it is extracted in the assessment order. The consensual agreement cannot be wished away, as it is an agreement regulated by the Government of Karnataka, Medical Council of India and Rajiv Gandhi University of Health Sciences. The AO admitted that the appellant submitted rank cards in support of admission under COMED-K category, but failed to understand the binding nature of the Consensual Agreement on the management. If the management admitted the students under management category, submitting the rank cards does not arise. The assessing officer has not chosen to examine any of the candidates though the appellant had filed confirmation letters. Sri P L Nanjundaswamy is answerable to the papers seized from his resi....
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....eized by the revenue, pertained to management quota seats. The revenue has seized letters issued to four students, out of which only two students have joined under COMED-K category. The assessee has furnished confirmation letters obtained from those two students confirming that they have paid only prescribed fees. We notice that the AO did not disprove the contents of the confirmation letters. In any case, those letters pertained to AY 2014-15 and not to the assessment year 2009-10, which is under consideration. 50. We also notice that the AO has not conducted any enquiry with any of the students or their parents or any other person to support the inference drawn by him that the fees applicable to management quota seats were collected from the students admitted under cancelled seats of COMED-K category. The assessing officer has observed that the management of the college is creating vacancy under COMED-K seats through dubious ways and the ld CIT(A) has observed that the said observation is far fetched and is not supported by any material. The Ld CIT(A) has also observed that the lapse, if any, in the said procedure has to be dealt with by the concerned authorities. What the rev....
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....roposal was communicated to the assessee, following explanations were offered by the assessee in AY 2008-09:- "We categorically state that during the assessment year 2008-09, an amount of Rs. 4,89,85,217/- has been received from students of undergraduate (MBBS) course, under Management Quota, which has been duly accounted for. There is no amount which has been received over and above this amount accounted for. Therefore, there is no cause for making any addition, on the basis of presumptions. You have not pointed out any incriminating material seized by you alluding about the unaccounted receipt. In the absence of any other incriminating material seized, there is no reason why the accounted receipts should not be accepted. We vehemently object to your proposal to make any addition on this count. This proposal is against the principle of natural justice. It is also pertinent to note that Sri P L Nanjundaswamy was not the Chairman of the Medical College for the assessment year 2008-09. Therefore, any material seized in the premises of Sri P L Nanjundaswamy, cannot be applied for this year. We also make it clear that Sri H S Mahadev Prasad was the Chairman of the Med....
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....y, Shri P L Nanjudaswamy was not the Chairman in all these years. We have noticed that the Chairman post is held by different person on rotation basis and fee for management quota seats are determined by the Chairman of the year. We notice that the revenue has not seized any such document either from the college or from the residences of the concerned Chairman pertaining to these years. The incriminating documents have been seized only from the residence of Shri P L Nanjundaswamy, who was holding the post of Chairman in the years relevant to AY 2009-10 and 2014-15. 57. The above discussions would show that the revenue did not unearth any incriminating material pertaining to the years relevant to AY 2008-09, 2010-11 to 2013-14. We have noticed that the fees for management quota seats are determined on case to case basis. Hence, unless there is any concrete material to show that the assessee has collected any amount outside the books of accounts, in our view, it is not justified to presume that the assessee would have collected fees outside the books of accounts. In fact, the assessee has disproved the said presumption by furnishing confirmation letters obtained from the students.....
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....der Management quota PG seats. Accordingly, we set aside the order passed by Ld CIT(A) on this issue in all the above said years and direct the AO to delete the addition in all the above said years. 60. We shall now take up the appeals filed by the revenue for AY 2008-09, 2010-11 to 2013-14. The only issue urged by the revenue in all these years relate to the addition made by the AO towards suppression of fees under COMED-K category, which has been deleted by the Ld CIT(A). 61. We have dealt with an identical issue in AY 2009-10 in the earlier paragraphs. We have noticed that the assessing officer has placed reliance on certain letters issued by the assessee to some students stating that their request shall be considered on availability of cancellation seats. In those letters, it was also mentioned that the fee shall be charged as applicable to management quota seats. The AO presumed that the assessee has collected fees applicable to Management quota seats from the students admitted under COMED-K cancelled seats. Accordingly he made the addition, computing the suppression of fees by adopting fee applicable to management quota seats. The Ld CIT(A) has deleted this addition in ....
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.... The AO computed aggregate amount of fees collected for 20 seats at Rs. 14.86 crores and deducted the amount of Rs. 8.95 crores accounted for by the assessee and accordingly held that the difference of Rs. 5.91 crores represent suppressed amount of fees. Accordingly the AO proposed to make the addition of above said amount. 65. The assessee, inter alia, replied as under:- ".....Whereas, out of 16 names and 2 unknown names appearing in the table given in the show cause notice, only 4 of them took admission and 12 did not take admission. We are surprised to know how the above seized material become basis to arrive average per seat Rs. 7432322/-. In the absence of clear findings from the show cause notice, we are unable to submit our reply." The AO noticed that there was some confusion about the number of students who have taken admission out of the list collated from the diary. Sometimes, it is mentioned as 4, sometimes 5 and sometimes 6. The assessee had also replied as under in its reply dated 17.2.2016:- "In respect of the note book annexed as "A-1/BRAMC/2" alleged to have maintained by Sri Manjunath, PA to Sri P L Nanundaswamy and its contents are denied a....
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.... over and above that was recorded in the books of accounts. The AO had computed average fee collected at Rs. 74,32,327/-. Accordingly, he computed aggregate amount of fees collected for 20 students at Rs. 14.86 crores. After deducting the amount of Rs. 9.00 crores accounted for by the assessee, the AO made addition of Rs. 5.86 crores. 67. Before Ld CIT(A), the assessee disowned the diary maintained by Shri Manjunatha, P.A to Shri P L Nanjundaswamy. It further submitted that only four candidates have taken admission from the list of 18 candidates mentioned in the diary and the fee collected from the said four persons was more than the amount mentioned in the diary. Hence the figures mentioned therein Might have been noted at enquiry stage. It was contended that the diary did not indicate anything to show that the amounts mentioned in the diary was received by the assessee at all. It was also submitted that the AO did not supply copy of statement taken from Manjunatha and also did not afford opportunity to cross examine him, even though it was specifically sought for. With regard to the documents seized from the residence of P L Nanjundaswamy and also visitors slip, the assessee r....
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....could not be proved to be wrong by the AO. Thus, we notice that the assessee has effectively rebutted the presumption entertained by the AO in respect of diary maintained by Shri Manjunatha and the documents seized from the residence of Shri P L Nanjundaswamy. The AO has also referred to certain visitors' slips, wherein also certain figures were found mentioned. We have noticed earlier that the visitors' slips are also at enquiry stage and is not final. 70. We have noticed in other years that the fees for management quota seats are determined on case to case basis. Hence, unless there is any concrete material to show that the assessee has collected any amount outside the books of accounts, in our view, it is not justified to presume that the assessee would have collected fees outside the books. In the instant year, the assessee has explained that the fees collected from four students was higher than that mentioned in the diary. Under these set of facts, we are of the view that the assessing officer has made the addition in all this year also under surmises and conjectures and hence Ld CIT(A) was not justified in confirming the addition relating to suppression of fees under Manag....
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....re the AO. It also submitted that the assessee is not aware of the diary maintained by Mr. Manjunatha and the documents seized from the residence of P L Nanjundaswamy. It submitted that the confirmation letters obtained from the students were rejected by the AO without examining them. It submitted that the entries made in the above said documents as well as visitors' slips were at enquiry stage and hence, it does not mean that the assessee has collected fees mentioned therein. The assessee also submitted that some of the PG courses were not recognized by Medical Council of India in this year and hence the students were admitted under Permitted category, in which case, the fees could not be fixed at higher level. The assessee also placed reliance on the explanation given by Shri P L Nanjundaswamy explaining that the actual fees collected were lesser than the negotiated amount due to absence of recognition. However, the Ld CIT(A) was not convinced with the contentions of the assessee and accordingly confirmed the addition. 74. While dealing with identical addition made in AY 2009-10, we have held that the said addition made on estimated basis is not sustainable for the detailed....