Income Tax Appellate Tribunal - Ahmedabad
Dr. Radhakishan Ramjivan Bhotra, Surat vs Department Of Income Tax on 10 April, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD BENCH "A"
Before Shri D K TYAGI - JUDICIAL MEMBER
And Shri ANIL CHATURVEDI, ACCOUNTANT MEMBER
ITA no.3203/Ahd/2008
WITH
C O No.248/Ahd/2008
(Assessment Year:-2000-01)
The Income-tax Officer, V/s Dr. Radhakishan Ramjivan
Ward-1(1), Surat Bhootra, Athwa Arcade,
Opp. Sarvajanik School,
Athwaline, Nanpura, Surat
PAN: ABEPB 4750 H
[Appellant] [Respondent]
Revenue by :- Shri Rahul Kumar, Sr. DR
Assessee by:- Shri R N Vepari, AR
Date of Hearing:- 10-04-2012
Date of Pronouncement:- 27-04-2012
ORDER
PER D K TYAGI (JM):- This appeal by the Revenue and cross objection filed by the assessee are directed against an order dated 15-07-2008 passed by the Learned Commissioner of Income-tax (Appeals)-I, [hereinafter referred to as the 'learned CIT(A)'] Surat for Assessment Year (AY) 2000-01. The grounds raised by the Revenue in their appeal are as under:-
ITA no.3203/Ahd/2008 [Revenue's Appeal]:
[1] On the fact and circumstances of the case and in law, the learned CIT(A)-I, Surat has erred in holding that the A.O. had not afforded cross examination of the Clerk of Ramrao Adik Education Society from whose Diary the information regarding 2 payment of capitation fees paid by the assessee was elucidated, without appreciating the fact the A.O. of the Trust had issued summons to the Clerk of the Trust but he had never attended but the CIT(A) has not appreciated that Shri Mandavarkar, Clerk of the Trust had admitted the receipt of capitation fees from the assessee before the authorized Officer during the course of search in his statement on oath and Shri Mandvarkar or the Trust had not retracted therefrom.
[2] On the facts and circumstances of the case and in law, the learned CIT(A)-I, Surat has not appreciated the fact that the Ramrao Adik Education Society to whom the assessee had paid capitation fees has already filed a settlement petition before the Settlement Commission, Mumbai wherein they have surrendered the entire amount of capitation fees received by them from students for securing their admission [though no student-wise break up was given] including capitation fees received from the assessee.
[3] On the facts and circumstances of the case and in law, the learned CIT(A)-I, Surat has erred in deleting the addition made by the A.O. of Rs.18,27,500/- on account of unaccounted capitation fees paid by the assessee to Ramrao Adik Education, Society for securing admission of his son in M.B.B.S. course.
[4] It is, therefore, prayed that the order of the CIT (A) be set aside and that the Order of the Assessing Officer be restored.
2 All the above grounds relate to addition of Rs.18,27,500/- on account of unaccounted payment of donation / capitation fee by the assessee for securing admission of his son Shri Ashish Bhootra in M.B.B.S. Course of D.Y. Patil Medical College and Hospital run by Ram Rao Adik Education Society, Worli, Mumbai.
3 The brief facts of the case are that during the assessment proceedings, the AO observed that the assessee has filed his 2 3 return of income for AY 2000-01 on 31-08-2000 showing total income of Rs.6,82,772/-. This return was accepted u/s 143(1) of the Act. Subsequently, an information was received from Investigation Wing that the assessee has paid capitation fee amounting to Rs.18,27,500/- for securing admission in M.B.B.S. course at D.Y.Patil Medical College and Hospital run by M/s Ramrao Adhik Education Society, Worli, Mumbai for his son Shri Ashish Bhootra during FY 1999-2000. This specific information was collected by Investigation Wing, Pune during the course of search and seizure operation u/s 132 conducted at the premises of M/s Ramrao Adhik Education Society. Since this payment was not reflected in the return, the AO reopened the assessment u/s 147 of the Act and notice u/s 148 was issued. In response, the assessee filed his return of income showing total income of Rs.6,50,451/-. During the assessment proceedings, the assessee agreed that he had committed a mistake in not showing the capital gain of Rs.32,321/- which was shown in the original return. Therefore, the original returned income of Rs.6,82,772/- was adopted by the AO as returned income in this return filed in reply to notice u/s 148 of the Act. During the assessment proceedings, the AO asked as to why the amount of Rs.18,27,500/- paid as capitation fee should not be added to the total income of the assessee as representing unexplained income. It was pointed out by the AO in his letter addressed to the assessee that the payment of Rs.18,27,500/- was totally in cash and paid in two instalments of Rs.13,00,000/- on 07-07-99 and balance of Rs.5,27,500/- on 02-08-99. It was also pointed out that the assessee has made this payment for securing admission 3 4 of his son Shri Ashish Bhootra in MBBS course. The assessee's contention before the AO was that he had got admission of his son through his personal contact and had not paid any capitation fee of Rs.18,27,500/- and payment made by him was only Rs.4,72,500/- which is recorded in his regular books of account. The assessee also asked for the copy of evidence which the AO wanted to rely on and also wanted opportunity to cross examine the person who had made such statement for giving such evidence. The AO gave copy of pages 19 and 27 of Annexure-A seized during the search from the premises of M/s Ramrao Adhik Education Society as well as the copy of statement of Shri Shashiknt J Mandavkar who had explained the said cash book entry. As per seized item No.6 of Annexure-2 which is a diary, the name of Ashish Bhootra appearing at pages 19 and 27 mentioning entries as "1300" and "527.5". The amounts were written in code (000) were omitted. The inscription MBBS stood for Dr. D.Y. Patil Medical & Hospitals and RAES stood for M/s M/s Ramrao Adhik Education Society. During the course of search Shri Shashiknt J Mandavkar, Accounts clerk in his statement stated that these diaries were maintained by him and the amounts / figures represented the amounts disbursed out of cash collected from the students at the time of their admission. Copy of this statement of Shri Shashiknt J Mandavkar and copies of pages 19 and 27 of diary were given to the assessee for his comments. The assessee admitted that Shri Ashish Bhootra has got admission for MBBS course in Dr. D. Y. Patil Medical College and Hospital even when he had only 63% marks in XIIth Standard. The assessee objected before the AO that the reopening 4 5 was bad in law and also addition was not warranted because Shri Shashiknt J Mandavkar had nowhere mentioned the name of his son Shri Ashish Bhootra who is independently assessed since 1990 with PA No. AECPB 5717 M. The assessee also stated that the copies of 2 loose papers show that they were not singed either by cashier or by the Investigating Officer and therefore has no evidentiary value. This explanation of the assessee was not acceptable to the AO and he proceeded to make the addition for the following reasons:-
(i) The reopening of the assessment was well within the law as the information was received from the outside party during search and seizure in respect of the assessee paying capitation fee for the admission of his son in a Medical College for MBBS course, even though his son has secured only 63% marks in 12th standard.
(ii) Even though son of the assessee was an independent assessee but he did not have any income or source of income from which he could have been paid the capitation fee and, therefore, the capitation fee as evidenced by the Page No. 19 & 27 of the diary seized during the course of search & seizure in the case of Ramrao Adhik Education Society could have been paid only by Shri Ashish Bhootra's father i.e. the assessee.
4 Aggrieved, the assessee filed an appeal before the first appellate authority and objected to the addition on following grounds:-
(a) No cross examination of the person on whose statement and seized material the appellant's case was reopened has been allowed to the appellant.
(b) The appellant has desired the cross examination of Shashikant Jairam Mandavkar. The appellant has stated that 5 6 during the assessment proceedings his cross examination was requested but the AO has denied the cross examination.
(c) The loose papers i.e. the cash book and stray papers found cannot be taken as evidence.
(d) Since there was vacancy no donation was required to be given."
Before the learned CIT(A), the assessee also placed reliance on the decision of the Hon'ble Delhi High Court in the case of CIT vs. SMC Share Brokers Ltd. 288-ITR-345 and on the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Arjundas Surender Kumar & Co. 239-ITR-859. On these submissions of the assessee, the Remand Report from the AO was called for by the learned CIT(A). The AO was also asked by the learned CIT(A) to give cross examination opportunity to the assessee as desired by him. The AO submitted the following Remand Report:-
"2 With reference to the above captioned subject, it is submitted that immediately on receipt of the aforesaid letter from your Honour's office, the DCIT, CC-2, Mumbai, was requested to conduct cross examination of Shri Shashikant J. Mandavkar, by the assessee. The DCIT, CC-2, Mumbai vide letter dated 15/04/08 furnished the addresses of Shri Shashikant J. Mandavkar and stated that his statement was recorded in a difference context during the course of search. Copy of the said letter, along with its annexure, is enclosed herewith for your Honour's kind perusal.
3 In the circumstances, after taking over the charge of this office, the undersigned issued summons u/s.131 of the Act to Shri Shashikant J. Mandavkar and dispatched the same to his residential address as also to his office address. However, Shri Shashikant J. Mandavkar neither attended nor was the details called for furnished.6 7
4 In the above prevailing circumstances, it is submitted that the cross examination as directed by your Honour could not be arranged due to non co-operation from Shri Shashikant J. Mandavkar."
Along with this Remand Report, the AO also enclosed copy of letter dated 15-04-2008 written by the DCIT, CC-2, (AO of M/s Ramrao Adhik Education Society) to the AO stating as under:-
"3 It will not be out of place to mention here that the statement of Sh. Mandavkar was given in different context during the course of the search to explain the nature of entries in the seized diary and the same has not been challenged by the concerned assessee group including M/s. Ramrao Adhik Education Society, and no cross examination has been asked. Hence, it is suggested that the request of your assessee to cross examine him needs to be contested as misplaced and without locus standi, particularly in view of provisions of section 132(4A) of the Act. However, you may taken necessary directions from your superiors.
4 It will also be not out of place to mention that the assessee M/s. Ramrao Adhik Education Society had filed a Settlement application before the Settlement Commission Mumbai, wherein the donations received from the students have been surrendered. Order under section 245D.(4) of the Act has been passed in the case of Dr. D.Y. Pat/7 Group vide order dated 24.03.2008 and the application has been settled substantially. The assessee group has surrendered the donations received from the students as unaccounted receipts and the same may be brought to the knowledge of the CIT(A), as fait accompli. The relevant portion of the confidential annexure of the Settlement application herewith (Statement 1, 2 & 4) for your ready reference.
You may do the needful, as you deem fit."
The learned CIT(A) called for another Remand Report from the AO on the following lines:-
7 8"2 Your report vide letter dated 19.6.2008 has been received in this office along with enclosures. It has been stated that the donations received from the students have been surrendered before Settlement Commission by M/s Ram Rao Adhik Education Society which runs D.Y. Patil Medical College and Hospital at Nerul. It has also been stated that the Settlement Commission order u/s 245D(4) has been passed where the donations have been surrendered.
3 In view of the above, you are requested to obtain the information from M/s Ram Rao Adhik Education Society u/s 133(6) or whatever manner you think fit as to whether the donation in respect of the admission of Ashish Bhootra, son of Dr. Radhakishan Bhootra has also been surrendered before the Settlement Commission and if so, what was the amount of donation taken and how much donation has been surrendered. You may point out that as per the diary entry dated 7.7.99 the following entries are seen in the name of Ashish Bhootra:-
"7.7.99 1300. Ashish Bhootra 913699 VDP MBBS"
"2.8.99 527.5 Ashish Bhootra 913699 VDP MBBS"
4 If the donation in respect of Ashish Bhootra has been surrendered, then you may also obtain from them list of donation surrendered where the name of Ashish Bhootra appears along with copy of Settlement Commission order."
The AO submitted the following another Remand Report on 07- 07-2008 after obtaining information from M/s Ramrao Adhik Education Society as well as DCIT, CC-2, Bombay.
"2 With reference to the above captioned subject, it is submitted that, immediately on receipt of the above referred letter from your Honour's office, the undersigned had 8 9 written letters to the Managing Trustee, D.Y. Patill group as also to the DCIT, CC-2, Mumbai, seeking clarifications as to whether the donation received for giving admission to Shri Ashish Bhootra has been surrendered before the Hon'ble Settlement Commission.
3 Today, the undersigned has received replied from Ramrao Adhik Education Society as also from the DCIT, CC-2, Mumbai. Copy of both the replies is enclosed herewith for your kind perusal.
4 In the reply given by the Ramrao Adhik Education Society, It is stated that it is a charitable entity registered u/s 12A and that it has not, as such, surrendered any of the amounts that may have been received from students or others and that no list of students was furnished to the Hon'ble Settlement Commission.
5 The gist of the reply given by the DCIT, CC-2, Mumbai, is as follows:-
-That the Hon'ble Settlement Commission has passed the order u/s. 245D(4) dated 24/03/08 r.w. order u/s.154, dated 26/05/08, in the group of cases, settling the cases of the D.Y. Patil group fro A.Y. 2000-01 to 2006-07.
-That the department has submitted the computation of undisclosed income of the D.Y. Patil group trust, i.e. Ramrao Adhik Education Society, computing the undisclosed income at Rs.77,33,72,200/-.
-That in the application for settlement, the assessee trust had disclosed unaccounted donations from students at Rs.7448.62 lakhs.
-That the donations/capitation fees received from the students has been offered by the trust in lump sum and that there is no individual bifurcation. It is further stated by him that it can be presumed that offer of additional income by the assessee includes all donations made the students, including Shri Ashish Bhootra."9 10
Both the Remand Reports obtained from the AO were given to the assessee by the learned CIT(A) for his comments. The comments of the assessee can be summarized as under:-
(i) In the remand report dated 09.06.2008 the AO has categorically expressed his inability to grant the cross-
examination of Shri Shashikant J. Mandavkar on the basis of whose statement the addition was made. Therefore, the statement of Shri Mandavkar cannot be relied upon as an evidence as per the settled position of law.
(ii) Further, the AI has pointed out in his second remand report dated 07.07.2008 that the managing Trustee of D.Y. Patil Group, vide his letter dated 01.07.2008, has categorically stated that they have neither surrendered any of the amounts that may have been received from students or others, nor have they submitted any list of students before the Hon'ble Settlement Commission. In view of this reason the assessee has stated that no addition can be made.
(iii) The ITO has also pointed out in his second remand report that the DCIT, Central Circle-2 has accepted in his letter that there is no individual student-wise bifurcation of the income offered by D.Y. Patil Group.
The assessee also challenged the finding of the AO on following grounds before the learned CIT(A):-
"First of all, there is no objective satisfaction on the part of the AO for reopening the assessment and there is even no evidence in the name of the appellant as, even the loose paper mentions the name of the son of the appellant, who was independently assessed to tax in the year under consideration.
-Secondly, the Department has failed to grant cross- examination of the person on whose statement the impugned 10 11 addition has been made and hence, the said statement cannot be relied upon.
-Thirdly, the statement as relied upon by the Department is also a general statement not even naming the appellant and hence, is even otherwise without any evidential value.
-Fourthly, the loose papers stated to be a cash book are stray papers not even signed by the cashier or the Investigating Officials.
-Lastly, no donation was even otherwise required to be paid since the son of the appellant did not get admission in BDS Course (Dental) but got admission therein, even after commencement of the college."
After taking into consideration the submissions of the assessee, both the Remand Reports of the AO and comments thereon by the assessee, the learned CIT(A) deleted the addition made by the AO by observing as under:-
"6.2 With respect to the ground No.2 & 3, it is seen that the A.O. has failed to provide cross-examination of Shri Shashikant Mandavkar, who had given a statement that the diary containing the noting regarding donation of Rs.18,27,500/- was written by him and he had received the cash for the purpose of admission of Shri Ashish Bhootra. The cross-examination opportunity was not given by the AO during the assessment proceedings. Therefore, at the behest of the appellant, the AO was again asked to give the cross-examination opportunity as discussed above, but the AO expressed his inability to do so. In a further remand report, the AO has stated that even the AO of the trust, i.e. DCIT, CC-2, has stated that the surrender of donation did not give break-up of donation by the students individually and the trustees have also stated that they have not surrendered any amount Individually. In view of this reason, it is clear that the statement of Shri Mandavkar cannot be admitted as evidence following the settled position of law as enunciated in the decision of the Hon'ble Delhi High Court in the case of SMC Share Broker Vs. CIT (supra) and the decision of the Hon'ble Punjab & Haryana High Court in the case of Arjundas Surendar Kumar & Co. (supra). Since 11 12 the statement of Shri Mandavkar cannot be admitted as evidence, therefore, the diary entry cannot be relied upon for making the addition. The AO has also not brought any other evidence on record for making the addition. In view of these reasons, the addition made by the AO is deleted and these grounds of appeal are allowed."
5 Aggrieved by this order of the learned CIT(A) , now the Revenue is in appeal before us. At the time of hearing, the learned DR vehemently supported the order of the AO and further submitted that the search and seizure operation u/s 132 of the Act was carried out in the case of M/s Ramrao Adhik Education Society and the diary indicating collection of donation / capitation fee for admission of professional course of MBBS, BDS were seized in which the receipt of donation of Rs.18,27,500/- for giving admission to Shri Ashish Bhootra son of the assessee was recorded along with the date of receipt. During the course of this investigation the statement of Shri Shashiknt J Mandavkar, clerk of the Institute who had maintained the diary was recorded u/s 132(4) of the Act in which it was stated by him that the diary contained details of donation collected on behalf of the Institute for admission of students in various courses. It was further submitted by the learned DR that the AO made several serious attempts like issue of commission to the AO of the Institute at Mumbai, issue of summons of affording opportunity of cross examination of Shri Shashiknt J Mandavkar but due to non-compliance of Shri Shashiknt J Mandavkar this cross examination could not be done. The learned CIT(A) has not appreciated the important fact that the Institute from where the diary was seized accepted the fact given by Shri Shashiknt J Mandavkar in his statement by way of filing Settlement Petition 12 13 before the Settlement Commissioner wherein the donation received by the Institute including donation paid by the assessee has been surrendered as their unaccounted receipts. It was further submitted by the learned DR that the learned CIT(A) has not appreciated that as reported by the AO of the Trust, the donation / capitation fee paid by the assessee to the Trust were surrendered by it in lumpsum without any individual bifurcation. The same facts were reiterated by the Trust in its letter furnished in pursuance to the query raised in remand report proceedings. Concluding his arguments, the learned DR submitted that in the light of the admission made by the Trust as well as admission of Shri Shashiknt J Mandavkar in his statement on oath u/s 132(4) of the Act, it is absolutely clear that the assessee has made payment of capitation fee of Rs.18,27,500/- to the Trust for securing admission of his son in MBBS course and therefore the addition made by the AO may kindly be sustained and the order passed by the learned CIT(A) may kindly be set-aside.
6 The learned counsel for the assessee, on the other hand, placing reliance on the submissions made before the learned CIT(A), further submitted that the Revenue has failed to give cross examination of Shri Shashiknt J Mandavkar to assessee on whose statement addition has been made. This statement is also a general statement as nowhere in this statement, the name of the assessee has appeared and therefore, the same cannot be used by the Revenue for making this addition. It was further submitted that the seized documents on the basis of which this addition has been made are not signed either by Shri Shashiknt J Mandavkar 13 14 or by the search party, therefore, the same has no evidentiary value. The assessee's contention has been that no capitation fee has been paid by the assessee for getting admission of his son and this admission was given due to personal contact. The assessee's son is income-tax assessee himself since 1990 and if at all any addition was required to be made, it should have been considered in the hands of son Shri Ashish Bhootra. The learned counsel further submitted that the addition has been made by the AO on the presumption that unaccounted donation received from the students by D.Y.Patil Group Trust which was offered by them before the Settlement Commission included the amount of capitation fee of Shri Ashish Bhootra though there is no such evidence on record to show that any amount received by the Trust from Shri Ashish Bhootra has been offered for taxation before the Settlement Commission as is clear from the second Remand Report of the AO, according to which only lumpsum amount was offered before the Settlement Commission and no individual bifurcation was there. It was lastly contended on behalf of the assessee that on the basis of papers seized from the third party, addition cannot be made. For making this submission he placed reliance on the decision of the Hon'ble Bombay High Court in the case of Addl. CIT vs. Miss Lata Mangeshkar (1974) 97 ITR 69 (Bom).
7 We have heard both the parties, perused the records and find that in this case the assessee filed the return of income showing total income of Rs.6,82,772/- which was accepted by the Revenue u/s 143(1) of the Act. Subsequently, information was 14 15 received from Investigation Wing, Surat that the assessee had paid capitation fee amounting to Rs.18,27,500/- for securing admission of his son Shri Ashish Bhootra in MBBS Course at D.Y.Patil Medical College and Hospital run by M/s Ramrao Adhik Education Society, Worli, Mumbai. After receiving this information and recording the reasons for reopening the assessment, the AO initiated proceedings u/s 147 of the Act and finalized the assessment u/s 143(3) read with section 147 determining the total income at Rs.25,10,270/-. In the fresh assessment, the AO made the addition of Rs.18,27,500/- being the amount of capitation fee paid by the assessee to Ramrao Adhik Education Society, in cash for securing admission of his son Shri Ashish Bhootra in MBBS course in D.Y. Patil Medical College and Hospital, mainly on the basis of (i) statement of Shri Shashikant J Mandavkar, clerk of M/s Ramrao Adhik Education Society, Worli, Mumbai from whose diary the information regarding the payment of capitation fee paid by the assessee was elucidated; and (ii) surrender of donation by M/s Ramrao Adhik Education Society, Worli, Mumbai before the Settlement Commission. The assessee's consistent contention has however been that no capitation fee was paid to the Society for admission of Shri Ashish Bhootra and admission was given to him due to personal contacts of assessee. The assessee also wanted cross examination of Shri Shashikant J Mandavkar on the basis of whose statement, re-assessment proceedings were initiated and addition was made. The assessee has also questioned the another basis of making this addition in the hands of the assessee that the surrendered amount by D.Y.Patil Medical College and Hospital 15 16 before the Settlement Commission included the alleged donation of the assessee to get his son admitted in the MBBS Course.
8 There is no dispute about the fact that nowhere in the statement of Shri Shashikant J Mandavkar, name of the assessee or name of his son appears. No specific question was asked about Shri Ashish Bhottra's admission to MBBS course and whether any capitation fee by the assessee was paid for his admission in this course. It is also not in dispute that the assessee was not given opportunity to cross examine Mr. Shashikant J Mandavkar at any stage of the proceedings though the Revenue claimed that they tried hard to give such opportunity to the assessee. In the absence of Mr. Shashikant J Mandavkar being made available for cross examination by the assessee despite his repeated requests, his statement cannot be used for drawing an adverse inference against the assessee and, therefore, the diary entries loose their evidentiary value for making this addition. This view of ours get support from the decision of the Hon'ble Delhi High Court in the case of CIT vs. SMC Share Brokers Ltd. [288-ITR-345] wherein the Hon'ble High Court has held "that the Tribunal was right in its view that in the absence of the person being made available for cross- examination, despite repeated requests by the assessee, his statement could not be relied upon to its detriment," and the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Arjundas Surender Kumar & Co. [239-ITR-859] wherein the Hon'ble High Court has held that "on noticing that the assessee firm has not confronted with the statement, the Tribunal declined to use it against the firm for drawing an adverse inference therefrom". We further find that though 16 17 the Revenue has claimed that the amount of donation surrendered by M/s Ramrao Adhik Education Society, Worli, Mumbai offered before the Settlement Commission included the donation of Rs.18,27,500/- paid by the assessee to get admission of his son in the MBBS course, there is nothing on record to substantiate such claim as this is also not disputed that the amount of donation was surrendered by the Society in lumpsum and without giving any individual bifurcation of the donation received by it. During the course of hearing, the Revenue was given several opportunities to bring anything on record to show that the alleged donation was part of surrendered amount by the Society before the Settlement Commission but the same could not be done by the Revenue. In view of the above, the learned CIT(A) has rightly deleted the addition and the order passed by him is hereby upheld.
C O No.284/Ahd/2008 By Assessee:-
9 In the cross objection, the assessee has challenged the reopening of assessment u/s 147 of the Act by taking the following ground:-
[1] On the facts and circumstances of the case and as per law, the learned CIT(A) ought to have held that the reopening of the assessment was bad in law more particularly because the name of the appellant was not in the so called diary and related papers based on which reopening was done were not signed.
10 The learned CIT(A) has dealt with this issue as under:-
"6.1 I have considered the submission made by the appellant and the observation of the AO. As regards ground No.1 is concerned, the reopening of the assessment is valid. The only reason advanced by the appellant is that there is no objective satisfaction on the part of the AO 17 18 for reopening the assessment and no proper evidence was brought on record for opening the assessment. The appellant also argued that the reopening is wrong because the name mentioned in the diary was that of assessee's son and not that of the assessee. All these arguments are not acceptable for the simple reason that the AO has rightly reopened the assessment upon receiving a specific outside information along with prima facie evidence, in the form of a diary noting and statement of the person who wrote the diary pertaining to the trust which run the Medical College, that for the purpose of admission of son, the assessee has paid a donation/capitation fee which is not reflected in the return of the assessee. Even though the son may be an assessee but since he had no source of income to the extent of the amount mentioned in the diary, the reopening of the assessment of the assessee was right in law and hence the ground No.1 is dismissed."
11 At the time of hearing before us, the learned counsel for the assessee submitted that the reopening has been done by the AO on the basis of information received from the Investigation Wing of the Department without application of mind independently before arriving at a belief that income of the assessee has escaped assessment. For making this submission, he placed reliance on the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Aslam Ulla Khan (2010) 321 ITR 150 (Kar) and the decision of Hon'ble Delhi High Court in the case of CIT vs. SFIL Stock Broking Ltd. (2010) 325 ITR 285 (Delhi).
12 The learned DR, however, submitted that the ratio laid down in those two cases cannot be applied here as the facts in those care are entirely different from assessee's case.
13 After hearing both the parties and perusing the records, we find force in the contention of the learned DR that the facts of the case are different in the case of CIT vs. Aslam Ulla Khan 18 19 (2010) 321 ITR 150 (Kar) wherein the Hon'ble High Court has held as under:-
"Held, dismissing the appeals, that as the Tribunal had recorded a finding that there was no application of mind on the part of the assessing authority for reopening particularly in the actual reasoning as recorded in the proposal for reopening, the assessing authority could not act on the dictates of the Commissioner who had directed him to reopen the assessment."
14 Similarly in the case of SFIL Stock Broking Ltd. (supra), the AO acted on the direction given by the Deputy Director of Investigation and Additional CIT to initiate proceedings u/s 148 of the Act.
15 It is clear from the above that in these cases the reopening was found to be faulty as the AO acted on the directions of the superior authorities who had directed him to reopen the assessment and, therefore, it was held that there was no application of mind on the part of the assessing authority. The same is not the case before us as there was no such direction of a higher authority to the AO to reopen the assessment and he acted independently on the basis of specific information received from the Investigation Wing, Surat along with prima facie evidence in the form of a diary and statement of Shri Shashikant J Mandavkar who wrote the diary pertaining to the Trust which run the Medical Courses, that the sum of Rs.18,27,500/- has been paid by the assessee to get admission of his son in MBBS course.
19 2016 In view of the above, we have no hesitation in confirming the order of the learned CIT(A) on this issue also and the cross objection filed by the assessee is hereby dismissed.
17 In the result, the Revenue's appeal and cross objection filed by the assessee are dismissed.
Order pronounced in the court today on 27-04-2012 Sd/- Sd/-
(ANIL CHATURVEDI) (D K TYAGI)
ACCOUNTANT MEMBER JUDICI AL MEMBER
Date : 27-04-2012
Copy of the order forwarded to:
1. Dr. Radhakishan Ramjivan Bhootra, Athwa Arcade, Opp.
Sarvajanik School, Athwaline, Nanpura, Surat
2. The Income-tax Officer, Ward-1(1), Surat
3. CIT concerned
4. CIT(A)-I, Surat
5. DR, ITAT, Ahmedabad Bench-A, Ahmedabad
6. Guard File BY ORDER Deputy Registrar Assistant Registrar ITAT, AHMEDABAD 20