, `'
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, MUMBAI
BEFORE S/SHRI D.MANMOHAN,VICE-PRESIDENT
AND N.K.BILLAIYA, ACCOUNTANT MEMBER
. , . . ,
./I.T.A.No.5882/Mum/2011
( / Assessment Year: 2000-01)
Aarti S Khetwani, / Income Tax Officer
C/o Skylite Electro Fix Pvt. Vs. 7(2)(3),
Ltd., Aayakar Bhavan,
John Robert Compound , M K Road,
Sewri Fort Road, Mumbai-400020
Sewri (E),
Mumbai-400015
. / . /PAN/GIR No. : AAGPK7433D
( /Appellant) .. ( / Respondent)
/ Assessee by : Shri D J Shukla
/Revenue by : Shri Ganesh Bare
/ Date of Hearing
: 22.4.2014
/Date of Pronouncement : 30.4.2014
/ O R D E R
Per N.K.BILLAIYA,AM
This appeal by the assessee is directed against the order of ld. CIT(A)-13,
Mumbai dated 15.4.2011 pertaining to assessment year 2000-01.
2. Grievance of the assessee is two fold. Firstly, the assessee has challenged the
addition of Rs.3,90,000/- made by AO and confirmed by ld. CIT(A) under section 69 of
the Income Tax Act, 1961 (the Act). Secondly, the assessee has challenged the very
jurisdiction of the Assessing Officer in reopening the assessment and passing re-
assessment order u/s 143(3) r.w.section 147 of the Act. In this case, the original
return was filed on 30.11.2000 declaring total income at Rs.1,68,220/-. The assessee is
a director in M/s Skylite Electro Fixtures Pvt Ltd. from which she has earned salary
income of Rs.1,34,400/-. The assessee has also declared business income of
I.T.A.No.5882/Mum/2011
2
Rs.55,000/-, income from other sources at Rs.3,254/- and agricultural income of
Rs.24,000/-.
3. On the basis of information received from Investigation Unit-III(3), Mumbai, the
case was reopened and notice u/s 148 of the Act was issued and served upon the
assessee. The assessee has stated that the return filed on 30.11.2000 may be treated
as return filed in response to the notice u/s 148 of the Act. It was brought to the notice
of the assessee that during the course of search in case of M/s Ramarao Adik Education
Society, Worli, the investigation wing came to know that the assessee has paid the
donation /capitation fees to the tune of Rs.3,90,000/- for the admission of her son Mr.
Vishal Khetwani. The assessee was asked to furnish details of education /capitation fees
of Rs.3,90,000/-, the assessee was also asked to explain the source of payment . The
assessee replied that during the financial year 1999-2000, the assessee has paid a sum
of Rs.1,60,000/- by two separate drafts to M/s Ramarao Adik Education Society for the
admission of her son Vishal Khetwani. It was further submitted that the assessee does
not remember about the payment of Rs.2,30,000/- to Ramarao Adik Education Society.
The AO strongly relied upon the finding of Investigation Unit and came to the
conclusion that the assessee has paid a sum of Rs.3,90,000/- for the admission of her
son to Dr.D.Y.Patil Medical College. The AO further drew support from the statement
of Shri Shashikant Mandavkar, Account Clerk recorded u/s 132(4) of the Act, wherein
the account clerk has confirmed of having received donation/capitation fees of
Rs.3,90,000/- from the assessee for the admission of her son. Without confronting with
this statement of the account clerk, the assessee strongly replied that such statement
is not binding on the assessee. It was further pointed out that primary onus u/s 69C of
the Act is on the revenue and the revenue has to prove that the assessee has given
donation of Rs.3,90,000/-. The AO did not accept the contention of the assessee and
proceeded to make addition of Rs.3,90,000/- as unexplained expenditure u/s 69C of the
Act.
I.T.A.No.5882/Mum/2011
3
4. Assessee carried the matter before the ld. CIT(A) but without success. The ld.
CIT(A) was convinced that the assessee has failed to contradict that the said amount
was not paid by her in cash. Aggrieved by this the assessee is before us.
5. The ld. Counsel for the assessee reiterated what has been submitted before the
lower authorities. It is the say of the counsel that the entire addition has been made
on the strength of the statement of account clerk except for that the AO could not
bring any material on record to establish that the assessee has actually paid the sum of
Rs.3,90,000/- as donation/capitation fees to M/s Ramarao Adik Educational Society.
The ld. DR strongly supported the findings of the lower authorities.
6. We have carefully perused the orders of lower authorities and the relevant
material evidences brought on record. It is not in dispute that the assessment was
reopened on the basis of information received from the Investigation Unit VIII(3),
Mumbai. The Investigation unit informed that Mrs. Aarti Khetwani has paid
donation/capitation fees of Rs.3,90,000/- for the admission of her son Mr. Vishal
Khetwani to Dr. D Y Patil Medical College. It is also not in dispute that the statement
made u/s 132(4) of the Act relied upon by the Revenue is of an employee who is
employed with M/s Ramarao Adik Institute of Technology, Nerul , Navi Mumbai. The
loose sheets referred to by the AO and which is placed before us as Ex-II and XII show
various names and one of the names is Mr. Vishal Khetwani. The Revenue could not
bring any cogent material evidence on record to show what happened in the case of
other named persons. Secondly, the presumption u/s 132(4A) is in respect of person
in whose possession the books of accounts and other documents etc are found. Since
diaries were found during the course of search in the case of Dr.D.Y.Patil Group
premises presumption may be valid against that group but cannot be stretched to the
assessee. The provisions of section 69C of the Act clearly show that the it was for the
revenue to first establish that the assessee has incurred certain expenditure and then
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the assessee does not offer any explanation about the source of such expenditure. In
the case in hand, the assessee has paid Rs.1,60,000/- to M/s Ramarao Adik Education
Society. The revenue has grossly failed to demonstrate that the assessee has paid
capital fees for the admission of her son to Dr.D Y Patila Medical College. In our
considered view the additions cannot be sustained on the strength of insufficient
evidence. The finding of the ld. CIT(A) are accordingly reversed and the AO is directed
to delete the addition of Rs.3,90,000/-.
7. Since, we have directed the AO to delete the additions on merits, we do not
find it necessary to decide the grievance of the assessee to so far as it relates to re-
opening of the assessment .
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30th day of April, 2014
30th day of April, 2014
Sd sd
(. / D.MANMOHAN) (. . /N.K.BILLAIYA)
/ VICE-PRESIDENT / ACCOUNTANT MEMBER
Mumbai : 30.4.2014
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , , / DR, ITAT,
Mumbai
6. / Guard file.
/ BY ORDER,
True copy
(Asstt. Registrar)
, /ITAT, Mumbai
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