Smt. Sonalben P.Dave, Anand v. The Income tax Officer, Ward-4,, Anand

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL VICE-PRESIDENT AND MUKUL KUMAR SHRAWAT JUDICIAL MEMBER) ITA.NO.235 AND 236/AHD/2006 [ASSTT.YEAR : 1999-2000 AND 2000-2001] AND ITA.NO.1412 TO 1415/AHD/2008 [ASSTT.YEAR : 2001-2002 TO 2004-2005] PARESHKUMAR M. DAVE SHAISHA BUNGLOW NR.H.M.PATEL STATUE VILLABH VIDYANAGAR ROAD ANAND. VS. ITO WARD-4 ANAND. ITA NO.985 TO 990/AHD/2010 [ASSTT.YEAR : 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05] WITH CO.NO.136 TO 141/AHD/2010 [ASSTT.YEAR : 1999-2000 TO 2004-2005] SMT.SONALBEN P. DAVE SHAISHA BUNGLOW NR.H.M.PATEL STATUE V.V.NAGAR ROAD ANAND. VS. ITO WARD-1 ANAND. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.M. MAHESH ASSESSEE BY : SHRI S.N.DIVETIA O R D E R PER BENCH: THESE ARE TWELVE APPEALS SIX EACH BY TWO ASSESSEE S AND SIX CROSS OBJECTIONS BY THE REVENUE AGAINST THE RESPECT IVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS). ASSESSES ARE SPOUSE AND THE ISSUES INVOLVED IN THESE APPEALS AND IN THE CO ARE INTER-R ELATED. THEREFORE FOR THE SAKE OF CONVENIENCE AND BREVITY WE DISPOSE OF ALL THESE APPEALS AND THE CO BY THIS CONSOLIDATED ORDER. SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -2- 2. THE APPEALS FILED BY SMT.SONALBEN P. DAVE (SMT.DAVE FOR SHORT) ARE LATE BY 734 DAYS. THE ASSESSEE HAS FILED THE CONDO NATION PETITION SUPPORTED BY THE AFFIDAVIT OF SHRI KANCHANLAL M. PARIKH CHARTER ED ACCOUNTANT. AT THE TIME OF HEARING BEFORE US IT WAS SUBMITTED BY THE LEARN ED COUNSEL THAT THE ASSESSEE IS WIFE OF SHRI PARESHKUMAR M. DAVE (SHRI DAVE FO R SHORT). THAT THE ASSESSEE IS RUNNING COACHING CLASSES IN WHICH HER H USBAND WHO IS PROFESSOR IN A GOVERNMENT COLLEGE IS ACTIVELY HELPING HER. THAT THE INCOME FROM COACHING CLASS DISCLOSED BY HER IN THE RETURN OF INCOME WAS ASSESSED ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI DAVE AND THE SAME INCOME WAS PROTECTIVELY ASSESSED IN THE HANDS OF THE ASSESSEE VIZ. SMT.DAVE. THAT T HE CIT(A) SUSTAINED THE FINDING OF THE AO THAT THE INCOME FROM COACHING CLA SS IS TO BE ASSESSED ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI DAVE. ACCO RDINGLY HE CANCELLED THE ASSESSMENT OF SUCH INCOME FROM THE HANDS OF THE ASS ESSEE. THAT AT THE RELEVANT TIME THE ASSESSEES COUNSEL WAS M/S.KIRAN PATEL & COMPANY CHARTERED ACCOUNTANT AND THEY REPRESENTED BEFORE THE CIT(A) O N BEHALF OF THE ASSESSEE. THAT AFTER THE ORDER OF THE CIT(A) ASSESSEE APPROAC HED HIS COUNSEL M/S.KIRAN PATEL & COMPANY AND IT WAS ADVISED BY THEM THAT THE APPEALS NEED TO BE FILED BY SHRI DAVE WHERE THE ADDITION IS MADE. THEREFORE AS PER THEIR ADVICE THE APPEAL IN THE CASE OF SHRI DAVE WAS FILED IN TIME. THAT FOR THE PURPOSE OF ARGUING THE APPEALS BEFORE THE ITAT THE ASSESSEE E NGAGED ANOTHER COUNSEL VIZ. SHRI S.N.DEVITA AND HE ADVISED THEM THAT THE APPEAL S OUGHT TO HAVE BEEN FILED BY THE ASSESSEE I.E. SMT.DAVE ALSO. IT WAS SUBMITT ED BY THE LEARNED COUNSEL THAT NEITHER ANY INTENTIONAL DELAY BY THE ASSESSEE NOR A NY NEGLIGENCE. THE ASSESSEE ACTED AS PER THE ADVICE OF THEIR COUNSEL SHRI KIRAN PATEL PARTNER OF M/S.KIRAN PATEL & COMPANY WHO HAS GIVEN AFFIDAVIT AFFIRMING T HAT THEY HAD ADVISED FOR FILING OF THE APPEAL IN THE CASE OF SHRI DAVE ONLY AND NOT SMT. DAVE. IN SUPPORT OF THIS CONTENTION THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE FOLLOWING DECISIONS: SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -3- I) CONCORD OF INDIA INSURANCE CO. LTD. VS NIRMALA D EVI (SMT.) 118 ITR 507 (SC) ; II) AREVA T AND D INDIA LTD. VS. JCIT 287 ITR 555 (MAD) 3. THE LEARNED DR STRONGLY OBJECTED TO THE CONDONAT ION OF DELAY AND THE ADMISSION OF THE APPEALS IN THE CASE OF SMT.DAVE. HE ALSO STATED THAT THE REVENUE HAS FILED THE CO OPPOSING THE CONDONATION O F THE DELAY AND THE ADMISSION OF THE APPEALS IN HER CASE. HE HAS STATE D THAT THERE IS AN INORDINATE DELAY OF 730 DAYS IN FILING OF APPEALS. THE APPEAL S HAVE BEEN FILED AS AN AFTER- THOUGHT ONLY WHEN THE HEARING OF THE APPEALS OF HER HUSBAND VIZ. SHRI DAVE WAS SCHEDULED BEFORE THE ITAT. IN SUPPORT OF THE C ONTENTION FOR NOT TO CONDONE THE DELAY THE LEARNED DR RELIED UPON THE D ECISION OF THE HONBLE HIGH COURT DELHI IN THE CASE OF HARO SINGH VS. AJAY KUMAR CHAWLA & ORS. IN CR NO.810 OF 2001 DATED 14-1-2004. THE LEARNED DR FAIRLY POINTED OUT THAT THE CO FILED BY THEM IS ALSO LATE BY 36 DAYS FOR WH ICH THE CONDONATION PETITION IS FILED BY THE REVENUE. HE HAS STATED THAT THE DE LAY IN THE COS. BY THE REVENUE IS ONLY 36 DAYS WHILE DELAY IN FILING OF TH E APPEALS BY THE SMT.DAVE IS 734 DAYS. HE THEREFORE SUBMITTED THAT THE DELAY IN FILING OF THE CO BY THE REVENUE SHOULD BE CONDONED WHILE THE DELAY IN FILIN G OF THE APPEALS BY THE SMT.DAVE SHOULD NOT BE CONDONED. 4. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH THE SID ES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE HONBL E APEX COURT HAS CONSIDERED THE ISSUE OF CONDONATION OF DELAY IN THE CASE OF CO NCORD OF INDIA INSURANCE CO. LTD.(SUPRA) AND HELD AS UNDER: ... I AM OF THE VIEW THAT LEGAL ADVICE GIVEN BY T HE MEMBERS OF THE LEGAL PROFESSION MAY SOMETIMES BE WRONG EVEN AS PRO NOUNCEMENT ON QUESTIONS OF LAW BY COURTS ARE SOMETIMES WRONG. AN AMOUNT OF LATITUDE IS EXPECTED IN SUCH CASES FOR TO ERR IS HUMAN AND LAYMEN AS LITIGANTS ARE MAY LEGITIMATELY LEAN ON EXPERT COUNSEL IN LEG AL AS IN OTHER DEPARTMENTS WITH-OUT PROBING THE PROFESSIONAL COMP ETENCE OF THE ADVICE. THE COURT MUST OF COURSE SEE WHETHER IN SUCH CASES THERE IS ANY TAINT OF MALA FIDES OR ELEMENT OF RECKLESSNESS OR RUSE. IF NEITHER IS SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -4- PRESENT LEGAL ADVICE HONESTLY SOUGHT AND ACTUALLY GIVEN MUST BE TREATED AS SUFFICIENT CAUSE WHEN AN APPLICATION UNDER SECTI ON 5 OF THE LIMITATION ACT IS BEING CONSIDERED. THE STATE HAS NOT ACTED IM PROPERLY IN RELYING ON ITS LEGAL ADVISERS. ' IN THE CASE OF AREVA T AND D INDIA LTD. (SUPRA) TH E APPEAL FILED BY THE ASSESSEE WAS LATE BY 231 DAYS. THE ASSESSEE EXPLAINED THAT IT COULD NOT PREFER THE APPEAL WITHIN TIME ON ACCOUNT OF THE ADVICE GIVEN BY THE S ENIOR COUNSEL. THE TRIBUNAL FOUND THAT THE REASONING ITSELF WAS BASED ON TOO MA NY SURMISES TO BE COGENT ENOUGH AND ASKED THE ASSESSEE TO SUBMIT AN AFFIDAVI T FROM THE CONCERNED COUNSEL IN THIS REGARD. THE CONCERNED COUNSEL DECL INED TO GIVE ANY SUCH AFFIDAVIT BUT THE DIRECTOR OF THE ASSESSEE FILED AN AFFIDAVIT AS INSISTED UPON BY THE TRIBUNAL. HOWEVER THE TRIBUNAL DISMISSED THE APPEAL ON THE GROUND OF LIMITATION. THE HONBLE MADRAS HIGH COURT HOWEVER CONDONED THE DELAY AND SET ASIDE THE ORDER OF THE TRIBUNAL BY HOLDING AS U NDER: THE TRIBUNAL OUGHT TO HAVE GIVEN A FINDING WHETHER THE ASSESSEE HAD GIVEN SUFFICIENT CAUSE IN THE AFFIDAVIT SWORN TO BY THE DIRECTOR OF THE ASSESSEE INSTEAD OF REFUSING TO ACCEPT THE AFFIDAVI T ITSELF. IN THE ABSENCE OF ANY FINDING BY THE TRIBUNAL AS TO THE SUFFICIENT CAUSE FOR THE ALLEGED DELAY THE TRIBUNAL HAD ERRED IN REFUSING TO EXERCI SE THE DISCRETION UNDER SECTION 5 OF THE LIMITATION ACT. THE TRIBUNAL WAS NOT CORRECT IN DISMISSING THE APPEAL ON ACCOUNT OF LIMITATION WITH OUT GIVING A FINDING THAT THERE WAS NO SUFFICIENT CAUSE FOR THE DELAY. T HE MATTER WAS REMITTED TO THE TRIBUNAL FOR DISPOSAL OF THE SAME ON THE MER ITS AND IN ACCORDANCE WITH LAW. IN THE CASE OF HARO SINGH (SUPRA) RELIED UPON BY TH E LEARNED DR THE HONBLE DELHI HIGH COURT HELD AS UNDER: 6. IT IS A UNIFORM PRACTICE THAT IN THE EVENT THAT A PARTICULAR BENCH DOES NOT AGREE WITH THE VIEW OF A COORDINATE BENCH THE MATTER SHOULD BE REFERRED TO A DIVISION BENCH. THIS HAS NOT BEEN DONE IN KRISHAN LALS CASE (SUPRA). I WOULD PREFER TO FOLLOW THE V IEW OF THE HONBLE MR.JUSTICE YOGESHWAR DAYAL IN BABU RAM VS. DEVINDER MOHAN KAURA AND OTHERS AIR 1981 DELHI 124 AND OF THE OTHER HIG H COURTS WHICH IS TO THE EFFECT THAT THE COUNSEL MUST DISCLOSE THE CI RCUMSTANCES IN WHICH INCORRECT ADVICE WAS GIVEN AND IT IS NOT SUFFICIENT TO MAKE A PERFUNCTORY SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -5- AND GENERAL STATEMENT THAT THAT WRONG ADVICE WAS GI VEN BONA FIDE. NO SUFFICIENT CAUSE HAS BEEN SHOWN FOR CONDONING THE D ELAY. NO COMPLAINT HAS BEEN FILED AGAINST THE ADVOCATE WHO PURPORTEDLY GAVE THE WRONG ADVICE. SECTION 6 ITSELF EXPECTS EXPEDITIOUS AND S PEEDY RELIEF WHICH CANNOT BE FRUSTRATED BY ADOPTING A LIBERAL APPROACH . IN ANY EVENT NO JURISDICTIONAL ERROR HAS BEEN DISCLOSED. 5. LET US EXAMINE THE FACTS OF THE ASSESSEES CASE IN THE LIGHT OF THE LAW LAID DOWN BY THE APEX COURT AS ABOVE. THAT M/S.KIRAN PA TEL & COMPANY ARE THE ASSESSEES COUNSEL IS NOT IN DISPUTE BECAUSE IN THE ASSESSMENT ORDER OF THE ASSESSEE IT IS MENTIONED THAT SHRI KIRAN PATEL CHA RTERED ACCOUNTANT APPEARED. BEFORE THE CIT(A) ALSO SHRI KIRAN PATEL APPEARED. SHRI K.M.PARIKH CHARTERED ACCOUNTANT PARTNER OF THE M/S.KIRAN PATEL & CO. GA VE AFFIDAVIT. THE RELEVANT PORTION OF WHICH READS AS UNDER: (4) THAT WHEN SHRI P.M.DAVE CAME TO OUR OFFICE TO SHOW THE APPELLANT ORDERS DATED 25 TH JAN 2008 PASSED BY CIT(A) BARODA FOR A.Y.1999-2000 TO 2004-2005 IN CASE OF SMT. SONALBEN P. DAVE SO AS TO AS CERTAIN THE RESULT OF THE SAID APPEALS. I HAD A DVISED HIM THAT AS THE APPEALS WERE ALLOWED SO FAR AS ADDITIONS MADE IN R ESPECT OF INCOME FROM TUITION CLASSES WAS DELETED FOR ALL THIS YEARS AND IN VIEW OF THE DELETION OF THE ENTIRE ADDITION THERE WAS NO NEED T O PREFER ANY FURTHER APPEAL TO HONBLE TRIBUNAL. I WAS UNDER GENUINE & BONAFIDE IMPRESSION THAT WHEN EVERY ANY ADDITION/DISALLOWANC E IS DELETED THERE WOULD BE NO GRIEVANCE TO THE ASSESSEE SO AS TO FILE ANY FURTHER APPEALS. ONLY IN A CASE WHERE THE ASSESSEE IS AGGRIEVED BY T HE APPELLATE ORDER PASSED BY THE CIT(A) THAT HE HAD TO PREFER SECOND A PPEAL TO HONBLE TRIBUNAL. ACCORDINGLY NO SECOND APPEAL WAS PREFER RED BY SMT. SONALBEN P. DAVE AGAINST THE AFORESAID APPELLATE OR DERS. THEREFORE THE FILING OF THE APPEAL IS DELAYED. SHRI S.N.DIVETIA WHO APPEARED AT THE TIME OF HEARIN G BEFORE US CONFIRMED THAT WHEN THE ASSESSEE APPROACHED HIM FOR ARGUING THE AP PEALS IN THE CASE OF SHRI DAVE HE ADVISED HIM FOR FILING APPEALS IN THE CASE OF SMT.DAVE ALSO. THEREAFTER THE APPEALS HAVE BEEN FILED. IN OUR OP INION THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CONCORD OF INDIA INSURANCE CO. LTD. WOULD BE SQUARELY APPLICABLE BECAUSE THE DELAY WAS ON ACC OUNT OF BONA FIDE MISTAKE OF THE ASSESSEES COUNSEL AND THERE WAS NEITHER ANY MALA FIDE OR RECKLESSNESS. SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -6- THE HONBLE APEX COURT HAS HELD THAT IF THE LEGAL A DVICE IS ACTUALLY SOUGHT AND ACTUALLY GIVEN AND THE SAME IS NOT A DEVISE TO COVE R AN ULTERIOR PURPOSE SUGGESTING LATCHES ON THE PART OF THE LITIGANTS OR AN ATTEMPT TO SAVE LIMITATION THEN THE COUNSELS ADVICE SHOULD BE TREATED AS SUFF ICIENT CAUSE FOR CONDONATION OF DELAY. IN OUR OPINION ON THE FACTS OF THE ASSE SSEES CASE THE ABOVE DECISION OF THE HONBLE APEX COURT WOULD BE SQUARELY APPLICA BLE. SIMILARLY ON THE FACTS OF THE ASSESSEES CASE THE DECISION OF THE H ONBLE MADRAS HIGH COURT WOULD ALSO BE SQUARELY APPLICABLE. THOUGH THE DECI SION OF THE HONBLE DELHI HIGH COURT IS TAKING A CONTRARY VIEW. HOWEVER TH ERE IS A DECISION OF HONBLE APEX COURT AS WELL AS MADRAS HIGH COURT (SUPRA) IN FAVOUR OF THE ASSESSEE. THEREFORE RELYING UPON THESE DECISIONS FACTS OF T HE CASE AND THE AFFIDAVIT OF THE ASSESSEES CHARTERED ACCOUNTANT SHRI K.M.PARIK H AS WELL AS SUBMISSION MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE WE DE EM IT PROPER TO CONDONE THE DELAY IN FILING OF THE APPEALS BY SMT. SONALBEN DAV E. WE ALSO CONDONE THE DELAY IN FILING OF THE CO BY THE REVENUE WHICH IS L ATE BY 36 DAYS FOR WHICH THE CONDONATION PETITION IS FILED BY THE AO. 6. NOW WE PROCEED ON DECIDING THE APPEALS OF THE AS SESSEES AND THE COS. OF THE REVENUE ON MERITS. 7. IN ALL THESE APPEALS BY BOTH THE ASSESSEES AS WE LL AS COS. BY THE REVENUE ONLY TWO MAJOR ISSUES ARE ARISING. THEY A RE - I) WHETHER THE INCOME FROM COACHING CLASSES IS ASSESSA BLE IN THE HANDS OF SHRI PARESHKUMAR M. DAVE OR SMT.SONALBEN P ARESH DAVE; II) DETERMINATION OF INCOME FROM COACHING CLASSES AS WE LL AS INCOME FROM UNDISCLOSED SOURCES DUE TO UNEXPLAINED INVESTMENT OR UNEXPLAINED EXPENDITURE. WHETHER INCOME FROM COACHING CLASSES IS TO BE ASSES SED IN THE HANDS OF SHRI PARESHKUMAR M. DAVE (SHRI DAVE) OR SMT. SONA LBEN P. DAVE (SMT. DAVE) SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -7- 8. IT IS SUBMITTED BY THE LEARNED COUNSEL THAT SMT. DAVE STARTED COACHING CLASS DURING THE ACCOUNTING YEAR RELEVANT TO THE AS SESSMENT YEAR 1998-99. THAT HER HUSBAND SHRI DAVE WAS HELPING HER IN RUNNING CO ACHING CLASS BY TEACHING THE STUDENTS ON PHYSICS SUBJECT. THAT SMT.DAVE FIL ED HER RETURN OF INCOME FROM THE ASSESSMENT YEAR 1998-99 DISCLOSING INCOME FROM COACHING CLASS. THAT THE INCOME FROM COACHING CLASS WAS ACCEPTED IN HER HAND YEAR AFTER YEAR BEGINNING FROM THE ASSESSMENT YEAR 1998-99. THAT T HERE WAS SURVEY AT THE PREMISES WHERE THE COACHING CLASS WAS BEING RUN AND DURING THE SURVEY STATEMENT OF SHRI DAVE AS WELL AS SMT.DAVE WAS RECO RDED. THAT THE AO RELYING ON THE ANSWER TO SOME OF THE QUESTIONS HELD THAT SH RI DAVE WAS RUNNING THE COACHING CLASSES. THAT THE AO HAS NOT CONSIDERED T HE STATEMENT OF SMT.DAVE IN ENTIRETY. THE AO ALSO NOT CONSIDERED THE STATEM ENT OF SHRI DAVE RECORDED ON 5-9-2003 WHEREIN HE CLEARLY STATED THAT HIS WIFE WAS RUNNING THE COACHING CLASS. THAT THE AO IGNORED THE DOCUMENTARY EVIDENC ES FOUND AT THE TIME OF SURVEY I.E. DAY BOOK IN WHICH TUITION INCOME FROM C OACHING CLASS IS RECORDED. THIS FACT IS EVIDENT FROM THE QUESTION 16 AND ANSWE R THERETO BY SMT.DAVE. THAT TILL THE DATE OF SURVEY THE INCOME OF THE COA CHING CLASS WAS REGULARLY ASSESSED IN THE HANDS OF SMT.DAVE. AFTER THE SURVE Y AUTHORITIES HAVE REOPENED THE CASES OF SHRI DAVE AND SMT.DAVE FOR ASSESSMENT YEAR 1999-2000 ONWARDS. HOWEVER FACTS REMAIN THAT THE INCOME FROM COACHING CLASSES FOR A.Y.1998-99 WHICH WAS THE FIRST YEAR WAS DISCLOSED AS WELL AS A SSESSED IN THE HANDS OF SMT. DAVE. HE ALSO SUBMITTED THAT EVEN AFTER THE SURVEY THE INCOME FROM COACHING CLASS DISCLOSED IN THE HANDS OF SMT.DAVE FOR ASSESS MENT YEAR 2005-2006 AND 2006-2007 IS ACCEPTED BY THE REVENUE. IN SUPPORT O F THIS CONTENTION HE FURNISHED BEFORE US THE COPY OF THE COMPUTATION OF INCOME GIVEN IN ASSESSMENT ORDER FOR A.Y.2005-2006 2006-2007 AND 2007-2008. IT IS FURTHER SUBMITTED BY THE LEARNED COUNSEL THAT SHRI DAVE IS A LECTURER IN GOVERNMENT COLLEGE AND HE IS PROHIBITED FROM RUNNING THE COACHING CLASS. THERE CANNOT BE ANY PRESUMPTION THAT ANY PERSON ACTED AGAINST THE LAW. THAT NO ACT ION IS TAKEN AGAINST SHRI DAVE SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -8- BY THE COLLEGE AUTHORITIES WHERE HE IS SERVING. TH IS ALSO PROVES THAT HE HAS NOT VIOLATED THE SERVICE CONDITION RULE. IN VIEW OF TH E ABOVE IT IS SUBMITTED BY THE LEARNED COUNSEL THAT THE INCOME FROM COACHING CLASS SHOULD BE ACCEPTED IN THE HANDS OF SMT.DAVE. 9. THE LEARNED DR ON THE OTHER HAND RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. HE HAS STATED THAT DURING THE C OURSE OF SURVEY IT WAS PROVED BEYOND DOUBT THAT THE COACHING CLASS WAS BEING RUN BY SHRI DAVE. HE HAS STATED THAT THE ASSESSEE I.E. SMT. DAVE IS ONLY B.C OM AND SHE IS NOT COMPETENT TO CONDUCT THE CLASS. SHE CANNOT NOT TEACH PHYSICS SUBJECT TO THE STUDENTS. EVEN IN THE STATEMENT RECORDED SHRI DAVE ADMITTED THAT HE WAS GIVING TUITION TO THE STUDENTS AND SMT.DAVE ADMITTED THAT SHE IS O NLY HOUSE WIFE. IN VIEW OF THE ABOVE IT IS SUBMITTED BY THE LEARNED DR THAT T HE INCOME FROM COACHING CLASS SHOULD BE ASSESSED IN THE HANDS OF SHRI DAVE 10. IN THE REJOINDER IT IS SUBMITTED BY THE LEARNE D COUNSEL THAT FOR RUNNING THE COACHING CLASSES IT IS NOT NECESSARY THAT THE OWNER OF THE COACHING CLASS HIMSELF SHOULD TEACH THE SUBJECTS. IT IS NOW A COM MON PRACTICE THAT VARIOUS CORPORATE ENTITIES ARE RUNNING THE COACHING CLASSES . DIRECTORS OR THE SHARE HOLDERS OF SUCH ENTITIES DO NOT TEACH TO STUDENTS BUT TEACHERS ARE HIRED TO TEACH THE STUDENTS. SIMILARLY IN THIS CASE ALSO SMT.DAV E WAS THE OWNER OF THE COACHING CLASS AND SHRI DAVE WAS TEACHING THE STUDE NTS. SINCE SHRI DAVE IS HUSBAND OF SMT.DAVE HE DID NOT CHARGE FOR THE SERV ICES BEING RENDERED BY HIM TO HIS WIFE. 11. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS NOT D ISPUTED THAT SHRI DAVE IS A LECTURER IN PHYSICS IN M.B.PATEL SCIENCE COLLEGE A NAND. HE IS POST-GRADUATE IN PHYSICS SUBJECT. SURVEY UNDER SECTION 133A WAS CARRIED OUT ON 27-8-2003 AT THE RESIDENCE OF BOTH THE ABOVE ASSESSEES FROM WHER E THE COACHING CLASSES WERE BEING RUN. DURING THE COURSE OF SURVEY THE STATEM ENT OF SHRI DAVE AS WELL AS SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -9- SMT.DAVE WAS RECORDED. THE ENGLISH TRANSLATION OF THE RELEVANT PORTION OF THE STATEMENT IS REPRODUCED BY THE AO IN THE ASSESSMENT ORDER. THE ENGLISH TRANSLATION OF THE STATEMENT OF SMT.DAVE IS GIVEN AT PAGE NOS.1 2 3 4 AND 5 OF THE ASSESSEES PAPER-BOOK. THE RELEVANT PORTION OF WHICH READS AS UNDER: QUESTION 1 : PLEASE GIVE YOUR INTRODUCTION ANSWER : MY NAME IS SONALBEN PARESHBHAI DAVE. MY A GE IS 35 YEARS QUESTION 2 : WHAT IS YOUR QUALIFICATION ? ANSWER : I HAVE PASSED B.COM. QUESTION 3 : WHAT ARE YOU DOING AT PRESENT ? ANSWER AT PRESENT I AM DOING HOUSE WORK QUESTION 4 : WHETHER THERE IS ANY BANK ACCOUNT OF Y OUR NAME ? ANSWER YES I HAVE ACCOUNT IN SARDARGANJ MERCANTIL E BANK ANAND PEOPLES CO-OP. BANK AND LAXMI VILAS BANK IN ANAND. QUESTION 5 : PLEASE GIVE YOUR ACCOUNT NO. OF THE AB OVE MENTION BANK. ANSWER SARDARGANJ MERCANTILE CO.OP. BANK A/C. 7157 ANAND PEOPLES CO-OP. BANK A/C. - 5871 LAXMI VILAS BANK A/C. - 13597 QUESTION 6 : IF YOU HAVE ANY FIXED DEPOSIT PLEASE GIVE DETAIL. ANSWER IN BANK OF BARODA I HAVE FIX DEPOSIT OF RS .50 000/- IN MY NAME AND OTHER TEN THIS I HAVE FIX DEPOSIT OF RS. 2650/- IN MY SONS NAME SHARDUL. IN PEOPLES BANK ANAND. QUESTION 7 : WHICH SUBJECTS ARE TAUGHT IN YOUR TUIT ION CLASSES BY YOU ? ANSWER : IN THIS TUITION CLASSES I AM NOT TEACHING ANY SUBJECTS. QUESTION 8 : WHO ARE RUNNING CLASSES AT YOUR HOME ? ANSWER CLASS WHICH IS RUNNING AT MY HOME IS RUN BY MY HUSBAND NAMED PARESHBHAI M. DAVE. QUESTION 9 : WHO IS RUNNING TUITION CLASS OTHER THA N YOUR HUSBAND. ANSWER : OTHER THAN MY HUSBAND PARESHBHAI DAVE N O ONE RUN TUITION CLASS. QUESTION 10 : DO YOU FILE YOUR INCOME TAX RETURN YO URSELF ? ANSWER : YES I FILE INCOME TAX RETURN MYSELF. QUESTION 11 : GIVE YOUR INCOME TAX PAN. ANSWER : MY INCOME TAX PAN IS ACXPD8936 B SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -10- QUESTION 12 : IN WHICH YEAR YOU HAVE FILE INCOME RE TURN LAST ? ANSWER : I HAVE FILED THE INCOME TAX RETURN OF A.Y. 2002-2003 DETAILS OF WHICH HAS WITH MY LAWYER MR.TAMBOLI. QUESTION 13 : DO YOU HAVE FILED THE INCOME TAX RETU RN FOR CURRENT YEAR ? ANSWER : NO FILING INCOME TAX RETURN OF CURRENT YE AR IS REMAINING. QUESTION 14 : IS ANY GOVERNMENT SAVING ACCOUNT OR F IX DEPOSIT I.E. NSC NSS PPF IN YOUR NAME ? ANSWER : IN MY NAME THERE IS PPF ACCOUNT FROM LAST FOUR YEARS. THERE IS NO ANY NSC NSS IN MY NAME. QUESTION 15 : IS THERE ANY SAVING ACCOUNT IN YOUR N AME ? ANSWER : YES IN MY NAME THERE IS SAVING ACCOUNT IN STATE BANK OF SAURASHTRA SARDARGANJ BRANCH AND ACCOUNT NO.8227 QUESTION 16 : ANNEXURE A SR.NO.1 TO 6 DAY BOOK LE DGER FINANCIAL YEAR 2001-2002 2000-01 1999- 00 ON WHICH YOUR NAME IS PRINTED. SO SEE ON BOOKS AND TELL THAT WHO THE OWNER OF THES E BOOKS ARE. ANSWER : THESE BOOKS ARE OF MY TUITION INCOME OF TH EIR RESPECTIVE YEARS WHOSE RETURN HAVE BEEN FILED IN INCOME TAX DEPARTME NT WARD-1 QUESTION 17 : IN QUESTION NO.3 YOU HAVE ANSWERED T HAT YOU ARE DOING HOUSE WORK AND NOW YOU TELL THAT YOU HAD TUITION INCOME WHEN FINANCIAL BOOKS HAS BEEN SHOWN SO DESCRIBE TRUE FA CTS. ANSWER : REAL FACT IS THAT I MANAGE TUITION CLASS. 12. ON 5-9-2003 THE STATEMENT OF SHRI DAVE WAS RECO RDED THE QUESTION NO.6 AND THE REPLY THERETO READS AS UNDER: Q.6 : YOU HAVE STATED IN REPLY NO.A.16 WHILE GIVING STATEMENT ON 27.9.03 DURING SURVEY THAT THERE WAS TUITION INCOME RS.10 90 000/- FOR F.Y.2002-03 AND TILL TODAY RS.21 21 000/- IN FINANCIAL YEAR 2002-03. RECEIVED IN CASH WHICH IS GROSS INCOME AND I HAVE NOT SHOWN IN MY RETURN WHAT YOU HAVE TO SAY ? ANS : MY WIFE SONALBEN P. DAVE CONDUCTS CLASSES AND SHE CAN TELL REGARDING TUITION INCOME OF THE F.Y.2002-03 WILL BE KNOWN FROM BLACK DAIRY WHICH IMPOUNDED BY YOU AND CURRE NT YEAR INCOME CAN BE KNOWN COMPLETION OF SAME BECAUSE FEES IS TO BE REFUNDED TO STUDENTS WHO ARE LEAVING THE TUITION CL ASSES. 13. FROM THE STATEMENT OF SMT.DAVE IT IS EVIDENT T HAT IN REPLY TO QUESTION NO.3 SHE ADMITTED THAT SHE IS HOUSE-WIFE. IN REPL Y TO QUESTION NO.8 SHE HAS SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -11- STATED THAT THE CLASS IS RUNNING FROM HER RESIDENCE BY HER HUSBAND. HOWEVER IN REPLY TO QUESTION NO.16 AND 17 SHE ACCEPTED THAT T HE INCOME FROM COACHING CLASS BELONGING TO HER AND SHE IS MANAGING THE COAC HING CLASS. SHE HAS ALSO STATED THAT SHE HAS DISCLOSED THE INCOME FROM COACH ING CLASS IN HER RETURN OF INCOME. IN REPLY TO QUESTION NO.10 SHE ADMITTED A BOUT THE FILING OF THE INCOME TAX RETURN AND SHE HAS ALSO GIVEN HER PERMANENT ACC OUNT NUMBER. SHE IS AWARE UPTO WHICH ASSESSMENT YEAR HER RETURNS OF INCOME WE RE FILED. HERE IT WOULD BE PERTINENT TO REFER TO QUESTION NO.16 PUT TO SMT.DAV E WHERE THE OFFICER ASKED HER THAT ANNEXURE-A SR.1 TO 6 DAY BOOK LEDGER FINANC IAL YEAR 2001-02 2000-01 1999-2000 ON WHICH YOUR NAME IS PRINTED. THUS DUR ING THE SURVEY CERTAIN BOOKS RELATING TO RUNNING OF COACHING CLASS WERE FO UND AND ON THOSE BOOKS NAMES OF SMT.DAVE WAS PRINTED. THAT THE COACHING W AS STARTED IN THE YEAR 1998-99. SHE FILED HER INCOME TAX RETURN DISCLOSE D INCOME FROM COACHING CLASS YEAR AFTER YEAR. TILL DATE OF SURVEY INCOME FROM COACHING CLASS IS ACCEPTED IN HER HANDS. SURVEY TOOK PLACE ON 27-8-2 0003 I.E. RELEVANT TO THE ASSESSMENT YEAR 2004-2005. AFTER THE SURVEY ASSES SMENT FOR A.Y.1999-2000 TO 2004-2005 WERE REOPENED IN WHICH INCOME FROM COA CHING CLASSES WAS ASSESSED IN THE HANDS OF SHRI DAVE ON SUBSTANTIVE B ASIS AND THE SAME WAS ASSESSED ON PROTECTIVE BASIS IN THE HANDS OF THE AS SESSEE I.E. SMT. DAVE. HOWEVER IN THE YEARS AFTER SURVEY AGAIN INCOME FRO M COACHING CLASSES WAS ASSESSED IN THE HANDS OF SMT.DAVE ON SUBSTANTIVE BA SIS. LD. COUNSEL FOR THE ASSESSEE FILED BEFORE US COPY OF THE COMPUTATION FO R A.Y.2005-2006 2006-07 AND 2007-08 WHEREIN INCOME FROM COACHING CLASSES WA S DISCLOSED IN THE HANDS OF SMT. DAVE. THE SAME WAS ACCEPTED BY REVENUE U/S .143(1). SHRI DAVE IS AN EMPLOYEE WITH GOVERNMENT COLLEGE AND AS PER SERVICE CONDITION RULES HE IS PROHIBITED FROM RUNNING THE COACHING CLASS. A STAT EMENT WAS MADE BY THE LEARNED COUNSEL AT THE TIME OF HEARING THAT NO DISC IPLINARY ACTION IS TAKEN AGAINST SHRI DAVE BY THE COLLEGE AUTHORITIES FOR VI OLATION OF SERVICE CONDITION RULES. CONSIDERING TOTALITY OF THE ABOVE FACTS IN OUR OPINION THERE IS NO JUSTIFICATION FOR ASSESSING THE INCOME FROM COACHIN G CLASS IN THE HANDS OF SHRI SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -12- DAVE. WE THEREFORE HOLD THAT THE INCOME FROM COACH ING CLASS BE ASSESSED IN THE HANDS OF SMT.SONALBEN P. DAVE (SMT.DAVE) ON S UBSTANTIVE BASIS AND ADDITION MADE IN THIS REGARDS IN THE HANDS OF PARES HBHAI M. DAVE (SHRI DAVE) IS DELETED. DETERMINATION OF INCOME FROM COACHING CLASS/INCOME FROM UNDISCLOSED SOURCES: ASSESSMENT YEAR : 1999-2000 14. THAT THE AO DETERMINED THE INCOME FROM COACHING CLASSES FOR VARIOUS YEARS AS UNDER: ASST. YEAR ADOPTION OF TUITION INCOME LESS : 30% TOWARDS EXPS. NET TUITION INCOME TO BE ADOPTED 2004-05 21 21 000/- 6 36 300/- 14 84 700/- 2003-04 15 00 000/- 4 50 000/- 10 50 000/- 2002-03 10 00 000/- 3 00 000/- 7 00 000/- 2001-02 7 50 000/- 2 25 000/- 5 25 000/- 2000-01 5 00 000/- 1 50 000/- 3 50 000/- 1999-00 3 00 000/- 90 000/- 2 10 000/- TOTAL 43 19 700/- ACCORDINGLY FOR A.Y. UNDER CONSIDERATION INCOME FRO M COACHING CLASSES WAS DETERMINED AT RS.2 10 000/-. THE AO ALSO NOTICED TH AT THERE WAS UNEXPLAINED INVESTMENT IN THE NAMES OF SMT.DAVE AS WELL AS THEI R MINOR CHILDREN AMOUNTING TO RS.78 000/-. HOWEVER SINCE THE ADDITION MADE F OR INCOME FROM COACHING CLASSES WAS MORE THAN THE UNEXPLAINED INVESTMENT T HE AO DID NOT MAKE ANY SEPARATE ADDITION FOR UNEXPLAINED INVESTMENT IN FDR AS WELL AS KVP AND MADE THE ADDITION OF RS.2 10 000/- AS INCOME FROM COACHI NG CLASS. ON APPEAL THE CIT(A) AFTER THE DETAILED DISCUSSION HELD THAT UNEX PLAINED INVESTMENT IS RS.73 853/-. THE RELEVANT FINDINGS OF THE CIT(A) I N THIS REGARD READS AS UNDER: IT WAS NOTED IN THE ABOVE PARAS THAT GROSS SALARY OF THE ASSESSEE DURING THE YEAR WAS RS.1 05 147/-. PRESUMI NG ON A VERY REASONABLE BASIS THAT THE APPELLANT HAD SPENT RS.5 000/- PER MONTH ON HOUSEHOLD EXPENSES THEN HE WAS LEFT WI TH ONLY SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -13- RS.45 147/-. AS AGAINST THIS THE APPELLANT HAD MADE INVESTMENTS TOTALLING RS.1 29 000/- DURING THE YEAR I.E. RS.1 19 000/- IN THE FDRS AND RS.10 000/- IN KVPS WHICH SHOW THAT THE APPELLANT HAD UTILIZED FUNDS TO THE E XTENT OF RS.83 853/- OVER AND ABOVE THE AMOUNT HE WAS LEFT W ITH FROM HIS GROSS SALARY AFTER ADJUSTING NORMAL HOUSEHOLD WITHDRAWALS. HENCE EVEN IF IT WAS TAKEN INTO CONSI DERATION THAT THE APPELLANT HAS ADMITTED IN RESPONSE TO QUES TION NO.16 RECORDED AT THE TIME OF SURVEY THAT HE HAD RECEIVED TUITION INCOME FROM 1.4.2002 ONLY AND ALSO THAT THE SOURCE OF INVESTMENT OF RS.10 000/- WAS OUT OF THE AGRICULTUR AL INCOME OF HIS FATHER IS ACCEPTED FOR BEING A SMALL AMOUNT TH EN ALSO THE AMOUNT OF RS.73 853/- IS BEYOND THE EXPLAINED SOURC ES OF INCOME OF THE APPELLANT. THE CIT(A) REDUCED THE ADDITION FROM RUNNING OF THE COACHING CLASS MADE BY THE AO AT RS.2 10 000/- TO RS.73 853/- BEING EQUIVA LENT TO UNEXPLAINED INVESTMENT IN FDR/KVP. THE REVENUE IS NOT IN APPEA L AGAINST THE ORDER OF THE CIT(A). 15. AT THE TIME OF HEARING BEFORE US THE LEARNED C OUNSEL FOR THE ASSESSEE DID NOT DISPUTE THE CORRECTNESS OF THE ABOVE WORKING OF THE UNEXPLAINED INVESTMENT BY THE CIT(A). IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE CIT(A) THAT THE ADDITION FOR INCOME FROM COACHING CLASSES/UNDIS CLOSED INVESTMENT BE SUSTAINED AT RS.73 853/-. WE HAVE ALREADY HELD EA RLIER IN THIS ORDER THAT INCOME FROM COACHING CLASSES BELONGS TO SMT.DAVE. THEREFORE WE SUSTAIN THE ADDITION OF RS.73 853/- IN THE HANDS OF SMT.DAVE AN D ADDITIONS MADE IN THIS REGARD IN THE CASE OF SHRI DAVE IS DELETED. ASSESSMENT YEAR : 2000-2001 16. THE AO ESTIMATED THE INCOME FROM COACHING CLASS ES AT RS.3 50 000/-. HOWEVER UNEXPLAINED INVESTMENT/EXPENDITURE WAS WOR KED AT RS.7 64 178/- AS UNDER: I) UNEXPLAINED DEPOSIT IN BANK RS.23 165/- II) UNDISCLOSED INTEREST ON FDR RS.14 363/- III) UNEXPLAINED INVESTMENT IN LAND RS.6 04 000/- SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -14- IV) UNEXPLAINED EXPENDITURE ON HOUSE RS.37 650/- V) UNEXPLAINED INVESTMENT IN CAR RS.85 000/- TOTAL 7 64 178/- 17. ON APPEAL THE CIT(A) SUSTAINED THE ADDITION FO R UNEXPLAINED INVESTMENT AS UNDER: I) DEPOSIT IN BANK RS.23 165/- II) INVESTMENT IN LAND (RS.2 04 000 + RS.51 000/- RS.2 55 100/- III) UNEXPLAINED INVESTMENT IN SANITARY WORK RS.37 650/- IV) UNEXPLAINED INVESTMENT IN MOTOR CAR RS.85 000/- 18. AT THE TIME OF HEARING BEFORE US WITH REGARD T O UNEXPLAINED INVESTMENT IN SANITARY WORK IT WAS STATED BY THE LEARNED COUNS EL THAT WHEN THE DVO HAS VALUED THE ENTIRE CONSTRUCTION AND THE ADDITION FOR UNEXPLAINED INVESTMENT IN THE COST OF CONSTRUCTION IS BEING SEPARATELY MADE THERE IS NO JUSTIFICATION FOR MAKING ANY ADDITION FOR UNEXPLAINED INVESTMENT IN S ANITARY WORK. SANITARY WORK IS PART OF THE BUILDING AND THE ASSESSEE HAS S HOWN THE SAME AS INVESTMENT IN THE BUILDING. 19. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AUTHORITIES BELOW ON THIS POINT. 20. WITH REGARD TO ADDITION FOR UNEXPLAINED INVESTM ENT IN LAND THE LEARNED COUNSEL FOR THE ASSESSEE ALSO CONTENDED THAT THERE WAS NO UNEXPLAINED INVESTMENT IN THE LAND. HE HAS SUBMITTED THAT THE LAND WAS PURCHASED FOR RS.3 30 000/- AS PER THE REGISTERED SALE DEED. THA T DURING THE COURSE OF SURVEY UNDER SOME MISUNDERSTANDING SHRI DAVE STATED TO HA VE INVESTED RS.4 00 000/- IN CASH FOR PURCHASE OF LAND. THEREFORE THE AO MAD E THE ADDITION OF RS.4 00 000/- FOR UNEXPLAINED INVESTMENT IN LAND. HOWEVER THE CIT(A) DID NOT ACCEPT THE FINDINGS OF THE AO WITH REGARD TO TH E ADDITION MADE ON THE BASIS OF STATEMENT AT THE TIME OF SURVEY. HE REDUCED THE ADDITION TO RS.51 000/- BASED UPON THE VALUATION OF THE DVO. SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -15- 21. THE REVENUE IS NOT IN APPEAL AGAINST THE ORDER OF THE CIT(A). THEREFORE THE LIMITED QUESTION BEFORE THE ITAT IS WHETHER THE ADDITION CAN BE MADE FOR PURCHASE OF LAND MERELY BECAUSE IN THE OPI NION OF THE DVO FAIR MARKET VALUE OF THE LAND WAS MORE THAN THE ACTUAL P URCHASE CONSIDERATION. HE HAS STATED THAT THERE IS NO EVIDENCE THAT THE ASSES SEE MADE PAYMENT ANYTHING OVER AND ABOVE THE REGISTERED SALE PRICE. HE THERE FORE SUBMITTED THAT THE ADDITION SUSTAINED BY THE CIT(A) MAY BE DELETED. 22. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE CIT(A) AND HE HAS STATED THAT THOUGH THE REVENUE HAS NOT F ILED THE APPEAL IN VIEW OF SMALLNESS OF TAX EFFECT INVOLVED BUT FACTS REMAINS THAT THE ASSESSEE ADMITTED TO HAVE MADE THE PAYMENT OF RS.4 00 000/- IN CASH FOR PURCHASE OF LAND. THAT OUT OF THE ADDITION OF RS.4 00 000/- THE CIT(A) HAD SU STAINED ONLY RS.51 000/- THEREFORE THE SAME SHOULD BE SUSTAINED. 23. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF B OTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T THE AO MADE THE ADDITION OF RS.37 650/- BEING THE PAYMENT MADE FOR SANITARY WORK. WE AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL THAT THE SANITARY WORK IS PART OF THE HOUSE CONSTRUCTION AND WHEN THE ENTIRE INVESTMENT FOR HOU SE CONSTRUCTION IS BEING CONSIDERED THERE IS NO JUSTIFICATION FOR SEPARATE ADDITION OF EXPENSES ON SANITARY WORK. WE THEREFORE DELETE THE ADDITION OF RS.37 650/- MADE FOR INVESTMENT IN SANITARY WORK. 24. WITH REGARD TO ADDITION FOR UNEXPLAINED INVESTM ENT IN LAND WE FIND THAT THE AO HAD MADE THE ADDITION OF RS.4 00 000/- ON TH E BASIS OF STATEMENT OF SHRI DAVE. HOWEVER THE CIT(A) DID NOT ACCEPT THE ADDIT ION MADE BY THE AO AND HE SUSTAINED THE ADDITION OF RS.51 000/- WHICH WAS ON THE BASIS OF DIFFERENCE BETWEEN THE PURCHASE CONSIDERATION OF THE LAND AND FAIR MARKET SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -16- VALUE DETERMINED BY THE DVO. THE REVENUE IS NOT IN APPEAL BEFORE US AGAINST THE ORDER OF THE CIT(A). THEREFORE THE LIMITED QU ESTION IN THE ASSESSEES APPEAL BEFORE US IS WHETHER THE ADDITION OF RS.51 0 00/- MADE ON THE BASIS OF DIFFERENCE BETWEEN THE ACTUAL PURCHASE CONSIDERATIO N AND FAIR MARKET VALUE CAN BE SUSTAINED. THE REVENUE HAS NOT BROUGHT ON RECOR D ANY EVIDENCE OF ANY PAYMENT OUTSIDE THE BOOKS FOR PURCHASE OF LAND. I N OUR OPINION MERELY BECAUSE THE FAIR MARKET VALUE ON THE DATE OF SALE I S ESTIMATED HIGHER THAN THE ACTUAL CONSIDERATION NO ADDITION CAN BE MADE. IN VIEW OF THE ABOVE WE DELETE THE ADDITION OF RS.51 000/- AS ABOVE. 25. ANOTHER ADDITION MADE BY THE AO AND CONFIRMED B Y THE CIT(A) WAS FOR UNEXPLAINED INVESTMENT IN THE PURCHASE OF THE LAND AMOUNTING TO RS.2 04 000/-. THE ASSESSEE CLAIMED TO HAVE PURCHASED THE LAND FOR RS.3 30 000/-. WHILE EXPLAINING THE SOURCE OF SUCH PURCHASE IT WAS EXPL AINED THAT RS.2 04 000/- WAS OUT OF THE PREMATURE PAYMENT OF FDR. HOWEVER NO E VIDENCE WITH REGARD TO PREMATURE ENCASHMENT OF FDR WAS PRODUCED BEFORE THE AO. HE THEREFORE MADE THE ADDITION OF RS.2 04 000/-. SINCE THERE IS NO FURTHER EVIDENCE PRODUCED BEFORE THE CIT(A) HE ALSO SUSTAINED THE A DDITION OF RS.2 04 000/-. BEFORE US ALSO NO EVIDENCE WAS PRODUCED BY THE ASSE SSEES COUNSEL FOR PREMATURE ENCASHMENT OF FDR. THEREFORE WE DO NOT FIND ANY JUSTIFICATION IN INTERFERING WITH THE ORDER OF THE LOWER AUTHORITIES ON THIS POINT. 26. WITH REGARD TO THE INVESTMENT IN BANK DEPOSIT O F RS.23 165/- AS WELL AS INVESTMENT IN PURCHASE OF MOTOR CAR FOR RS.85 000/- NO SATISFACTORY EXPLANATION WAS GIVEN BEFORE US. ACCORDINGLY THE ADDITION FOR THE SAME IS ALSO SUSTAINED. 27. NOW THE TOTAL UNEXPLAINED INVESTMENT DURING THE YEAR UNDER CONSIDERATION IS AS UNDER: SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -17- I) DEPOSIT IN BANK RS.23 165/- II) UNEXPLAINED INVESTMENT IN PURCHASE OF LAND RS.2 04 000/- III) UNEXPLAINED INVESTMENT IN MARUTI CAR RS.81 000/- TOTAL RS.3 12 165/- THAT THE AO HAS ESTIMATED THE TOTAL INCOME FROM COA CHING CLASS AT RS.3 50 000/-. HE ESTIMATED THE GROSS RECEIPTS FRO M COACHING CLASS AT RS.5 00 000/- ALLOWING DEDUCTION OF 30% TOWARDS EX PENSES I.E. RS.1 50 000/-. HE ESTIMATED NET TUITION INCOME OF RS.3 50 000/-. CONSIDERING THE FACTS OF THE CASE IN OUR OPINION THE ESTIMATION OF INCOME FROM COACHING CLASS BY THE AO IS FAIR AND REASONABLE AND ACCORDINGLY THE SAME IS AC CEPTED. WE HAVE ALREADY HELD EARLIER THAT INCOME FROM COACHING CLASSES BELO NGS TO SMT.DAVE. WE FIND THAT SMT.DAVE HAS ALREADY DISCLOSED THE INCOME FROM COACHING CLASSES IN HER RETURN OF INCOME AND THE AO HAD MADE THE ADDITION O F RS.3 50 000/- OVER AND ABOVE THE INCOME DISCLOSED BY HER. IN OUR OPINION THE INCOME FROM COACHING CLASS WORKED OUT BY THE AO WAS THE TOTAL INCOME FRO M COACHING CLASS WHICH IS EVIDENT FROM THE FACT THAT HE FIRST DETERMINED THE GROSS RECEIPT FROM COACHING CLASS ALLOWED DEDUCTION OF EXPENDITURE BY 30% AND THEN DETERMINED THE NET INCOME FROM COACHING CLASS. THE ADDITION TO BE MAD E IN THE CASE OF SMT.DAVE SHOULD BE THE DIFFERENCE BETWEEN THE INCOME FROM CO ACHING CLASS DETERMINED BY THE AO MINUS INCOME ALREADY DISCLOSED BY SMT.DAV E FOR THE RELEVANT YEAR. INCOME FROM COACHING CLASS DETERMINED BY THE AO IS RS.3 50 000/- WHILE THE INCOME DISCLOSED BY SMT.DAVE IS RS.65 700/-. THERE FORE IN OUR OPINION THE ADDITION TO THE INCOME FROM COACHING CLASS REQUIRED TO BE MADE IS RS.2 84 300/-. HOWEVER UNEXPLAINED INVESTMENTS IN THE BANK MARUTI CAR AND LAND AMOUNTED TO RS.3 12 165/-. IT IS ACCEPTED POS ITION IN THIS CASE FROM THE REVENUES SIDE AS WELL AS THE ASSESSEES SIDE THAT THE ADDITION IS TO BE MADE BETWEEN THE HIGHER OF (I) UNEXPLAINED INVESTMENT AN D (II) UNDISCLOSED INCOME FROM COACHING CLASS. IN THIS CASE UNEXPLAINED INV ESTMENT AMOUNTING TO RS.3 12 165/- IS HIGHER THAN UNDISCLOSED INCOME FRO M COACHING CLASS. SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -18- ACCORDINGLY WE DIRECT THAT THE ADDITION OF RS.3 12 165/- IS TO BE MADE IN THE CASE OF SMT.DAVE FOR INCOME FROM COACHING CLASSES/U NEXPLAINED INVESTMENT. THE ADDITIONS SUSTAINED IN THE CASE OF SHRI DAVE I N THIS REGARD ARE DELETED. ASSESSMENT YEAR 2001-2002: 28. THAT THE AO MADE THE ADDITION FOR RS.5 25 000/- IN THE CASE OF SHRI DAVE FOR INCOME FROM COACHING CLASS. HE ALSO WORKE D OUT THE FOLLOWING UNEXPLAINED INVESTMENT. I) UNEXPLAINED INVESTMENT IN FDR RS.1 40 000/- II) UNEXPLAINED INVESTMENT IN KVP RS.1 15 000/- III) UNEXPLAINED INVESTMENT IN HOUSE CONSTRUCTION RS.2 09 1275/- 29. ON APPEAL THE CIT(A) SUSTAINED THE ADDITION FO R UNEXPLAINED INVESTMENT IN THE HOUSE CONSTRUCTION AT RS.43 350/- ONLY AGAINST RS.2 09 127/- MADE BY THE AO. REVENUE IS NOT IN APPEAL AGAINST T HE RELIEF ALLOWED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO COULD NOT GIV E ANY SATISFACTORY EXPLANATION AS TO WHY THE ABOVE ADDITION SUSTAINED BY THE CIT(A) SHOULD NOT BE MADE. SIMILARLY THE ADDITION FOR UNEXPLAINED I NVESTMENT IN FDR AND KVP WAS SUSTAINED BY THE CIT(A) AND NO SATISFACTORY EXP LANATION IS GIVEN BEFORE US ALSO. THEREFORE THE UNEXPLAINED INVESTMENT IN THE ASSETS IS WORKED AS UNDER: I) UNEXPLAINED INVESTMENT IN FDR RS.1 40 000/- II) UNEXPLAINED INVESTMENT IN KVP RS.1 15 000/- III) UNEXPLAINED INVESTMENT IN HOUSE CONSTRUCTION RS.43 050/- TOTAL RS.2 98 035/- FOR THE YEAR UNDER CONSIDERATION THE AO HAS DETERM INED THE GROSS RECEIPT FROM COACHING CLASS AT RS.7 50 000/-. AFTER ALLOWING TH E DEDUCTION OF 30% TOWARDS EXPENSES HE WORKED OUT NET INCOME FROM COACHING CL ASS AT RS.5 25 000/-. WE FIND THAT FOR A.Y.2001-2002 SMT.DAVE HAS DISCLOSED THE NET INCOME FROM COACHING CLASS AT RS.85 684/-. THEREFORE DIFFEREN CE BETWEEN INCOME FROM SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -19- COACHING CLASSES ESTIMATED BY THE AO AND INCOME DIS CLOSED BY SMT. DAVE WORKS OUT TO RS.4 39 316 (RS.5 25 000/- MINUS RS.85 684/-). SINCE THE ADDITION SUSTAINED TO THE INCOME FROM COACHING CLAS SES IS MORE THAN UNEXPLAINED INVESTMENT IN FDR KVP AND THE HOUSE CO NSTRUCTION ETC. WE DIRECT THE AO TO MAKE ADDITION OF RS.4 39 316/- IN THE CASE OF SMT. DAVE TOWARDS INCOME FROM COACHING CLASS. THE ADDITIONS IN THE CASE OF SHRI DAVE IN THIS REGARD ARE DELETED. ASSESSMENT YEAR 2002-2003: 30. THE AO MADE ADDITION OF RS.7 00 000/- FOR UNDIS CLOSED INCOME FROM COACHING CLASS IN THE CASE OF SHRI DAVE. SINCE UNE XPLAINED INVESTMENT IN THE ASSETS WAS LESS THAN RS.7 00 000/- NO SEPARATE ADDI TION WAS MADE. AFTER THE ORDER OF THE CIT(A) THE UNEXPLAINED INVESTMENT SUS TAINED BY THE CIT(A) IS AS UNDER: I) UNEXPLAINED INVESTMENT IN THE HOUSE CONSTRUCTION RS.2 47 085 II) DEPOSIT IN BANK RS.1 64 403 III) UNEXPLAINED FDRS. KVPS ET. RS.1 07 000 TOTAL RS.5 18 488 THAT FOR A.Y.2002-2003 INCOME FROM COACHING CLASS D ISCLOSED IN THE HANDS OF SMT.DAVE WAS RS.1 08 077/-. THUS THE ADDITION TO INCOME FROM COACHING CLASS WORKS OUT TO RS.5 91 923/- (RS.7 00 000/- MINUS RS. 1 08 077). THE UNEXPLAINED INVESTMENT IN VARIOUS ASSETS WAS RS.5 1 8 488/-. IN VIEW OF THE ABOVE WE DIRECT THAT THE ADDITION OF RS.5 91 923/- TO BE MADE IN THE CASE OF SMT.DAVE. THE ADDITIONS MADE IN THIS REGARD IN THE CASE OF SHRI DAVE ARE DELETED. ASSESSMENT YEAR 2003-2004: SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -20- 31. THAT FOR ASSESSMENT YEAR 2003-2004 THE AO MADE THE ADDITION OF RS.10 90 000/- IN THE CASE OF SHRI DAVE FOR UNDISCL OSED INCOME FROM COACHING CLASS. HOWEVER IN THE YEAR UNDER CONSIDERATION HE ALSO MADE SEPARATE ADDITIONS FOR UNEXPLAINED INVESTMENT AS UNDER: I) UNEXPLAINED INVESTMENT FOR THE COST CONSTRUCTION RS.16 007 II) UNEXPLAINED INVESTMENT IN FURNITURE RS.1 54 611 III) UNEXPLAINED INVESTMENT IN FURNITURE AS ADMITTED BY THE ASSESSEE RS.1 59 300 IV) UNEXPLAINED INVESTMENT IN CASH WITHDRAWAL FROM THE BANK RS.2 4 105 V) UNEXPLAINED INVESTMENT FOR PURCHASE OF MARUTI CAR RS.1 50 000 TOTAL RS.7 02 023 32. THE CIT(A) SUSTAINED THE ADDITION IN RESPECT OF INCOME FROM COACHING CLASS AT RS.10 90 000/- AND HELD THAT SINCE THE UND ISCLOSED INCOME FROM COACHING CLASS IS MORE THAN UNEXPLAINED INVESTMENT HE DELETED THE ADDITION OF RS.7 20 023/- MADE FOR UNEXPLAINED INVESTMENT. 33. WE HAVE ALREADY HELD IN THE EARLIER YEAR THAT T HE INCOME FROM COACHING CLASS IS TO BE ASSESSED IN THE HANDS OF SMT.DAVE AN D ADDITION IS TO BE SUSTAINED FOR DIFFERENCE BETWEEN THE INCOME FROM COACHING CLA SS DETERMINED BY THE AO AND THE INCOME DISCLOSED BY SMT.DAVE. FOR THE YE AR UNDER CONSIDERATION THE AO MADE THE ADDITION OF RS.10 90 000/- AS INCOME F ROM COACHING CLASS IN THE NAME OF SHRI DAVE ON THE BASIS OF STATEMENT OF SH RI DAVE DURING THE COURSE OF SURVEY. THE RELEVANT WORKING OF THE AO IN THIS REG ARD IS AS UNDER: 1 11 SCIENCE (ENGLISH) 1 BATCH TOTAL 70 STUDENTS RS.3 000/- PER STUDENT RS.2 10 000 2 12 SCIENCE (GUJARATI) 3 BATCHES TOTAL 200 STUDENTS RS.2 800/- PER STUDENT RS.5 60 000/- 3 12 SCIENCE (ENGLISH) 1 BATCH TOTAL 80 STUDENTS RS.4 000/- RS.3 20 000/- TOTAL RS.10 90 000/- SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -21- THE TOTAL INCOME EARNED FROM TUITION CLASSES AMOUN TING TO R.10 90 000/- FOR THE YEAR UNDER CONSIDERATION IS BROUGHT TO TAX ON SUBSTANTIAL BASIS IN THE HAND OF THE ASSESSEE. THE ABOVE INCOME IS NET OF ALL THE EXPENSES WHICH MAY HAVE BEEN INCURRED. THEREFORE ADDITION OF RS.10 90 000/- IS MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED INCOME. HOWEVER THE ABOVE AMOUNT WOULD BE IN FACT GROSS RE CEIPT AND NOT NET INCOME. WHILE COMPUTING THE INCOME FROM COACHING CLASS FOR ASSESSMENT YEAR 1999- 2000 THE AO HAS ESTIMATED INCOME FROM COACHING CLA SS FOR ALL THE YEARS I.E. FROM 1999-2000 TO 2004-2005 AND AFTER DEDUCTING THE 30% TOWARDS EXPENSES WORKED OUT NET INCOME FROM COACHING CLASS. AS PER THE ABOVE ESTIMATE THE GROSS RECEIPT FROM COACHING CLASS FOR THE YEAR UNDE R CONSIDERATION WAS RS.15 LAKHS AFTER ALLOWING DEDUCTION OF EXPENSES AT RS.4 50 000/-. NET INCOME FROM COACHING CLASS WAS WORKED OUT AT RS.10 50 000/-. I N OUR OPINION THERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION OF RS.10 90 0 00/- WHICH WAS THE RECEIPTS FROM STUDENTS WHICH WOULD FORM PART OF THE GROSS R ECEIPT. IN EARLIER YEARS WE HAVE ALREADY DISCUSSED THAT THE ESTIMATION OF INCOM E FROM COACHING CLASS BY THE AO IS FAIR AND REASONABLE. IN VIEW OF THE ABOVE IN OUR OPINION NET INCOME FROM COACHING CLASS FOR THE ASSESSMENT YEAR 2003-20 04 SHOULD BE TAKEN AT RS.10.50 LAKHS. FROM THE RETURN OF SMT.DAVE WE FI ND THAT SHE DISCLOSED RECEIPT OF COACHING CLASS AT RS.5 50 250/- AND NET INCOME FROM COACHING CLASS AT RS.3 46 810/-. FROM THE INCOME FROM THE COACHIN G CLASS DETERMINED AT RS.10 50 000/- NET INCOME DISCLOSED BY SMT.DAVE IS RS.3 46 810/- IS TO BE REDUCED. THUS NET ADDITION REQUIRED TO BE MADE IN HER HANDS IN RESPECT OF INCOME FROM COACHING CLASS WOULD WORK OUT TO RS.7 0 3 190 (RS.10 50 000/- MINUS RS.3 46 810). 34. THE ADDITION FOR THE UNEXPLAINED INVESTMENT SUS TAINED BY THE CIT(A) WAS RS.7 20 023/-. AT THE TIME OF HEARING BEFORE U S THE LEARNED COUNSEL DID NOT SERIOUSLY CONTEST THE ADDITION FOR UNDISCLOSED SOURCES IN RESPECT OF OTHER ITEMS EXCEPT UNEXPLAINED INVESTMENT IN FURNITURE. HE SUBMITTED THAT THIS SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -22- ADDITION IS MADE TWICE ONCE AS PER THE DVOS REPOR T AND AGAIN AS PER THE STATEMENT OF THE ASSESSEE. HE HAS STATED THAT THE ADDITION CAN BE MADE ONLY ONCE FOR THE SAME EXPENDITURE. 35. AFTER CONSIDERING ARGUMENTS OF BOTH THE SIDES A ND THE FACTS OF THE CASE WE FIND THAT THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE TO BE JUSTIFIED. THE AO MADE THE FOLLOWING TWO ADDITIONS : I) UNEXPLAINED INVESTMENT IN FURNITURE AS PER THE DVOS REPORT RS.1 54 611/- II) UNEXPLAINED INVESTMENT IN FURNITURE AS ADMITTED BY THE ASSESSEE RS.1 59 300/- FROM THE ABOVE IT IS EVIDENT THAT THE AO MADE TWO ADDITIONS FOR FURNITURE. FIRST ADDITION WAS AS PER DVOS REPORT WHILE SECON D ADDITION AGAIN FOR FURNITURE WAS AS PER ASSESSEES STATEMENT. WE THERE FORE DELETE THE ADDITION OF RS.1 54 611/-. ACCORDINGLY THE UNEXPLAINED INVEST MENT IS WORKED OUT AT RS.5 65 412/- (RS.7 20 023/- MINUS RS.1 54 611/-). SINCE THE ADDITION TO INCOME FROM COACHING CLASS IS MORE THAN UNEXPLAINED INVESTMENT THE ADDITION REQUIRED TO BE MADE ONLY FOR INCOME FROM COACHING C LASSES WHICH WILL TAKE CARE OF UNEXPLAINED INVESTMENT. ACCORDINGLY WE DI RECT THAT THE ADDITION OF RS.7 03 190/- BE MADE IN THE CASE OF SMT. DAVE FOR INCOME FROM COACHING CLASS. THE ADDITIONS MADE IN THE CASE OF SHRI DAVE IN THIS REGARD ARE DELETED. ASSESSMENT YEAR 2004-2005 36. FOR THE YEAR UNDER CONSIDERATION THE AO WORKED OUT THE INCOME FROM COACHING CLASS AT RS.28 74 000/-. THERE WAS SURVEY AT THE ASSESSEES RESIDENTIAL PREMISES FROM WHERE THE COACHING CLASSES WERE BEING RUN. AT THE TIME OF SURVEY IT WAS FOUND THAT 958 STUDENTS ARE REGISTER ED IN THE COACHING CLASS. ON THE ABOVE BASIS THE AO ADOPTED RS.3000/- RECEIVED FROM EACH STUDENT WHICH SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -23- WORKED OUT INCOME FROM COACHING CLASS AT RS.28 74 0 00/-. SMT.DAVE HAD DISCLOSED RECEIPT OF INCOME FROM COACHING CLASS AT RS.23 24 100/-. THE DIFFERENCE OF RS.5 49 900/- WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME FROM COACHING CLASS. THE AO ALS O ASSESSED THE ABOVE INCOME IN THE HANDS OF SHRI DAVE ON SUBSTANTIVE BAS IS. 37. ON APPEAL THE CIT(A) UPHELD THE FINDING OF THE AO WITH THE FOLLOWING OBSERVATIONS: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. THE APPELLANT HAS ADMITTED TO AN INCOME OF RS.23 24 100/- AS PER THE STATEMENT RECORDED DURING THE TIME OF SURVEY. AS IN THE EARLIER YEARS THE AO SHOULD HAVE ALLOWED 30% DEDUCTION FOR EXPENSES INCURRED. IF THIS WOULD HAVE DONE NET INCOME SAID TO HAVE BEEN EARNED FROM TUITION FEES WOULD HAVE BEEN RS.16 26 870/-. THE AO HAS BROUGHT TO TAX RS.14 62 619/- (9 122 719 + 5 49 900/-) WHIC H IS WELL BELOW THE 30% NET INCOME BROUGHT TO TAX IN THE EARLIER YEARS. I THEREFORE SEE NO REASON TO INTERFERE WITH THE ADDITION MADE BY THE A O AND ACCORDINGLY CONFIRM THE SAME. 38. AT THE TIME OF HEARING BEFORE US IT IS SUBMITT ED BY THE LEARNED COUNSEL THAT WORKING MADE BY THE AO FROM A.Y.1998-99 TO 200 3-2004 WHEREIN FROM GROSS RECEIPT 30% EXPENDITURE WAS DEDUCTED WAS NO T APPLICABLE TO THE YEAR UNDER CONSIDERATION. THAT IN THE EARLIER YEARS NO BOOKS OF ACCOUNTS AND THE DETAILS OF ANY EXPENDITURE INCURRED FOR RUNNING OF THE COACHING CLASS WAS MAINTAINED AND THEREFORE A ROUGH AND READY FORMULA WAS ADOPTED. THAT FOR A.Y.2004-2005 I.E. YEAR UNDER APPEAL SMT.DAVE HAS M AINTAINED REGULAR BOOKS AND COMPLETE DETAILS OF EXPENDITURE WAS ALSO MAINTA INED. THEREFORE THE AO HAS ALSO ACCEPTED THE EXPENDITURE CLAIMED BY SMT.DA VE. HE HAS STATED THAT THE ONLY CONTENTION OF THE ASSESSEE IN THIS REGARD IS T HAT THE AO HAS NOT CONSIDERED TUITION FEE REFUND TO THE STUDENTS WHO LEFT THE COA CHING CLASS. THE AO WHILE CONSIDERING THE RECEIPT DISCLOSED BY SMT.DAVE HAS C ONSIDERED THE RECEIPT AFTER REFUND. BUT FROM THE GROSS RECEIPT HE DID NOT RED UCE THE REFUND. THEREFORE HIS LIMITED CLAIM WAS THAT FROM THE ADDITION THE DEDUC TION FOR RS.1 99 600/- BE SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -24- ALLOWED. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 39. WE HAVE CONSIDERED ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN THE ASSESSMENT ORDE R THE AO HAS WORKED OUT THE RECEIPT FROM THE COACHING CLASS AT RS.28 74 9000/- WITH THE FOLLOWING OBSERVATIONS: THE ASSESSEE HAS MAINTAINED THE COMPUTER LEDGER A CCOUNT OF THE FEES RECEIVED BEFORE THE DATE OF SURVEY AND AFTER T HE DATE OF SURVEY. IN ABSENCE OF A COMPLETE COMPILED RECORD OF THE FEES A ND EXPLANATION BY THE ASSESSEE IT IS VERY DIFFICULT TO ARRIVE AT THE CORRECT FIGURE OF FEES RECEIPTS. IN VIEW OF THE ABOVE TOTAL FEES RECEIPTS HAS BEE N CONSIDERED ON AVERAGE RATE AT RS.3000/- PER STUDENTS. CONSIDERING THE ABOVE FACTS THE TOTAL TUITION FEES INCOME WILL BE RS.28 74 000 (958 X 3000) INSTEAD OF RS.23 24 100/- . THE DIFFERENCE OF RS.5 49 900/- IS ADDED TO THE TOTAL INCOME. HE ALSO MENTIONED THAT THE GROSS-RECEIPT DISCLOSED IN THE BOOKS OF ACCOUNTS WAS RS.25 23 700/- FROM WHICH FEES RETURNED TO THE STUD ENTS AT RS.1 95 600/- WAS DEDUCTED. THIS FINDING OF THE AO READS AS UNDER: THE TUITION FEES DECLARED BY THE ASSESSEE AT THE T IME OF SURVEY U/S.133A IS RS.212 21 000/- RECEIVED UPTO 27/08/200 3 AND THEREAFTER TOTAL FEES OF RS.23 24 100/- AFTER DEDUCTING RS.1 9 9 600/- WHICH WAS RETURNED BACK TO THE STUDENTS WHO WERE LEFT THE COA CHING CLASSES I.E. TOTAL FEES RECEIVED DURING THE YEAR IS RS.2 5 23 70 0/- (RS.23 24 100 + RS.1 99 600/-) 40. FROM THE ABOVE IT WOULD BE EVIDENT THAT THE AO COMPUTED THE GROSS FEE RECEIVABLE FROM 958 STUDENTS AT RS.28 74 000/-. TH AT THE GROSS FEE RECEIVED ACTUALLY SHOWN IN THE BOOKS OF ACCOUNTS WAS RS.25 2 3 700/-. THEREFORE THE SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -25- DIFFERENCE IN THE FEES WAS ONLY RS.3 50 300/-. HOW EVER WHILE CONSIDERING RECEIPT SHOWN IN THE BOOKS OF ACCOUNTS THE AO HAS CONSIDERED NET RECEIPT I.E. GROSS FEE RECEIVED LESS FEE REFUND TO THE STUDENTS AMOUNTING TO RS.1 99 600/- WHO LEFT THE COACHING CLASS. THAT THE AO COMPARED THE NET RECEIPT WITH GROSS FEE RECEIVABLE FROM 958 STUDENTS AND WORKED OUT THE DIFFERENCE OAT RS.5 49 900/-. IN THE ASSESSMENT ORDER THE AO HAS NOT DOUBTED THAT THE FEE WAS REFUNDED TO THE STUDENTS WHO LEFT THE COACHING CLAS S IN BETWEEN. IT IS THE COMMON KNOWLEDGE THAT MANY STUDENTS LEAVE THE COACH ING CLASS IN BETWEEN. IN VIEW OF THE ABOVE IN OUR OPINION IT WOULD BE F AIR AND REASONABLE IF THE DIFFERENCE IN FEES IS WORKED OUT BETWEEN THE GROSS FEE ESTIMATED BY AO AND THE GROSS RECEIPT SHOWN IN THE BOOKS OF ACCOUNTS OF SMT .DAVE. ACCORDINGLY THE ADDITION IS WORKED OUT AS UNDER: I) GROSS RECEIPT OF FEES ESTIMATED BY THE AO RS.28 74 000/- LESS: GROSS RECEIPT DISCLOSED IN THE BOOKS RS.25 23 700/- DIFFERENCE RS.3 50 300/- WE ARE THEREFORE OF THE OPINION THAT ADDITION REQUI RED TO BE MADE FOR INCOME FROM COACHING CLASS IS RS.3 50 300/-. WE HAVE ALRE ADY HELD IN THE EARLIER YEAR THAT THE INCOME FROM THE COACHING CLASS IS TO BE AS SESSED IN THE HANDS OF SMT.DAVE. WE THEREFORE DIRECT THE ADDITION OF RS.3 50 300- TO BE MADE IN THE HANDS OF SMT.DAVE. THE ADDITIONS IN THE HANDS OF SHRI DAVE ARE DELETED. 41. IN RESULT ALL THE APPEALS OF SMT.DAVE AND SHRI DAVE ARE PARTLY ALLOWED AND THE COS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 31-08-2010 SMT.SONALBEN P. DAVE AND PARESHKUMAR M. DAVE VS. ITO ANAND -26- VK* COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD