DY. COMMISSIONER OF INCOME TAX, KOTA vs. MOTION EDUCATION PVT. LTD., KOTA

fu/kZkfjrh dh vksj ls@ Assessee by : Mrs. Raksha Birla CA (V.C) jktLo dh vksj ls@ Revenue by : Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 15/09/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 31/10/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The present bunch of two appeals were filed by the revenue and there upon two cross objections to those appeals were preferred by the assessee. Since the issue raised by the revenue and that of the assessee 2017-18 & 2018-19 and were heard together with the consent of parties are disposed off with this common order.

2. First we take up the appeal of the revenue in for Assessment Year 2017-18 and the connected cross objection of assessee on numbered as CO no. 21/JP/2025. was filed by the Revenue feeling dissatisfied with the finding so recorded in the order of Commissioner of Income Tax, Appeal-02, Udaipur [ for short CIT(A) ] dated 31.01.2025 preferred the present appeal and thereby the assessee preferred the cross objection on it. The issues relate to the assessment year 2017-18. That order of the ld. CIT(A) arises because the assessee has challenged the order of assessment passed on 27.07.2021 as per provision of section 153A of the Income Tax Act, 1961 [ for short Act ] by ACIT, Central Circle, Kota [ for short AO]. that the revenue has assailed the appeal for assessment year 2017-18 in on the following grounds;

1. Whether on facts and in circumstances of the case, the CTT(A) is justified in deleting the addition of Rs. 1,55,51,600/- made on account of unexplained cash deposits in SBNs during the demonetization period and accepting the claim of the assessee for Rs. 1,55,51,600/- that same was fee received from students from 01.11.2016 to 08.11.2016 without appreciating the facts that assessee has failed to justify receipt of fees of Rs. 1,55,51,600/-in 08 days wherein during the immediate last FY 2015-16 Company's average cash balance was only Rs. 35.0 lacs and therefore, there is abnormal rise in cash deposits during demonetization period? 2. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/-made on account of unexplained cash deposits in SBNs during the demonetization period, considering the claim of the assessee that the fees of Rs. 1,55,51,600/- received during 01.11.2016 to 08.11.2016 was the bulk receipts from the students due to allowing them privilege of depositing fees after Deepawali, without appreciating the facts that the assessee did not provide any evidences of such privilege provided to the students in written which proves that privilege was given, nor provided any specific reasons for allowing such privilege specially in FY 2016-17 as Deepawali comes every year and also this privilege is never reflected from the fees deposit pattern for last FYs while the reply of the assesse is very closest to the intent of arranging and accommoding its unexplained transactions of receiving SBNs in demonetization period? 3. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/- made on account of unexplained cash deposits in SBNs during the demonetization period, considering the claim of the assessee that most of these students are those students who took early registration and who joined coaching just after the Deepawali holidays were given benefit/relaxation to deposit their second installment upto Deepawali without appreciating the facts that the assesse failed to produce identity proof of students, detail of early registered students, detail of students who joined coaching after Deepawali, detail of fees of first installments given by the same students, mode of deposit of fees of first installments and its comparision with last FYs and the assessee also failed to provide reason for relaxation in fees in this year only and also failed to provide any evidence in support of claim that relaxation was provided?

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd.

4. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/- made on account of unexplained cash deposits SBNs during the demonetization period, considering the claim of the assessee that students were pre-informed by management for deposition of due fees after vacation without appreciating the facts that assessee failed to submit any evidences of official pre information to student for fees relaxation in recorded mode and mere claim of pre information without evidence cannot be accepted as the existing intent of arrangement of unexplained receipts of fees in SBNs during the demonetization having the weightage on the mere reply of the assessee.

5. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/- made on account of unexplained cash deposits SBNs during the demonetization period, without considering the facts and position that assesse itself to prove the genuineness of the claim that the fees received in cash in SBNs in bulk after Deepawali and deposited in the bank during demonetization period as the assesse itself taking it and presenting it as "co- incidence" for FY 2016-17 and accepting the truth that such event had not been seen in last FYs which clearly proves that it was only the fabricated arrangement of the assessee to colour its unexplained cash?

6. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/-made on account of unexplained cash deposits SBNs during the demonetization period, without considering the facts and position that assessee has not provided any documents related to fee collection like challan form and any other forms which were filled, signed, and submitted by the students at the time of fee deposition and it is not possible that the students paid their fees without any challan and other relevant forms and therefore, in the absence of these documents, claim of the assessee that the fee was collected during the period 01.11.2016 to 08.11.2016 remains unverified?

7. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/-made on account of unexplained cash deposits SBNs during the demonetization period, holding that AO has not pointed out discrepancy in the detail of student who paid the fees without appreciating the facts that the assessee did not provide other necessary detail of these students in respect of admission record of early registered students and new registered students, challan form for bank deposits, detail of fees installments to be submitted by the students, record of pre-information, demand letter issued, similar practice record in last FYs, reasons for privilege given and in absence of such corroborative and complete information with evidences, the mere detail is not complete and having self-discrepancies?

8. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,55,51,600/- made on account of unexplained cash deposits SBNs during the demonetization holding that book of accounts was not rejected without appreciating the facts that the amount of fees of Rs. 1,55,51,600/- & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. shown as collected during 01.11.2016 to 8 08.11.2016 was objected and denied with all sufficient reasoning and evidences which itself amounts to the rejection of relevant entries and therefore, rejection of all books off accounts in not required? Remarks-The system is not allowing ground exceed 8 grounds therefore Ground no. 9 to 14 is not uploaded as approved by the PCIT, although the approval letter mentioning ground no. 1 to 14 is being uploaded in annexure module.

Notice u/s 153A of the Act was issued to the assessee on 28.12.2018, which was duly served. In response to the notice issued u/s 153A, the assessee company had furnished its return of income on 16.01.2019, declaring total income of Rs. 5,45,460/-. Earlier the assessee company had filed its return of income u/s 139 of the Act on 09.10.2017 at the total filed under section 153A and 139 of the Act. Statutory notices as required under the provision of section 143(2) and 142(1) of the Act were issued from time to time and the assessee in response filed the details / information as called for.

Record reveals that the case of the assessee was also selected for scrutiny through CASS. The reasons for selection of scrutiny were also examined during that assessment proceedings by the ld. AO. The CASS scrutiny proceeding was abated vide order dated 20.11.2019 on account of search action. Upon examination of the books of accounts, it was found that the assessee has deposited Rs. 2,85,00,000/- in old currency during demonetization period. Statement of Shri Surendra Kumar Gupta (one of the Director of Motion Education Pvt. Ltd.) was recorded u/s 132(4) of the Act on 18.04.2018, and he was asked to explain the source of such cash deposited during the demonetization period in old denomination of Rs.

1,000 & Rs. 500 currency notes. He stated in reply to question no. 49 that during demonetization cash amounting of Rs. 2,85,00,000/- was deposited by Motion Education Pvt. Ltd. Further, he had also explained the source of cash deposited as under:-

Cash balance available in company's a/c Rs. 2,60,00,000 While search proceedings, Shri Surendra Kumar Gupta stated in reply to Q.No.50 that cash balance of Rs. 1.25 Cr always remained in the company's cash book. The assessee has also submitted the cash book for the period of 01.10.2015 to 31.12.2015. On perusal of cash book, it was noticed that during the period 01.10.2015 to 31.12.2015 Company's average cash balance only was at Rs. 35.0 lacs. Further search party asked for explanation of opening cash balance of Rs. 2,60,00,000/- оn 07.11.2016. He gave a simple explanation that cash balance of Rs.

2,60,00,000/- was available in the company's account at that time. While post-search investigation proceedings, the statement of Shri Nitin Vijay was recorded on 24.07.2018, and he stated in reply to Q.No. 17 that there was an opening cash balance of Rs. 1,31,46,295/- as on 01.11.2016 and fees of Rs. 1,55,51,600/- was received within the period of 01.11.2016 to 08.11.2016. Further, the assessee was asked vide Q.No. 18 that "as you have stated in the reply of Q.No. 17 that if the total fees receipt for the period of 01.11.2016 to 08.11.2016 (8 days) comes to Rs. 1,55,51,600/- For which the assessee filed written submission on 27.07.2018 regarding cash deposited during demonetization, which reads as follows:-

“During the demonetization period, i.e., between 09.11.2016 to 30.12.2016, total amount of Rs. 2.85 Crore was deposited in account No.39384000000102 with Yes Bank Ltd of Motion Education Pvt.Ltd. This is a current a/c in the name of the Company and is used for business purposes only. Out of the total cash deposit of Rs. 2,85,00,000/- in the Yes Bank, Rs. 1,31,46,295/- was the opening balance of cash as on 01.11.2016, and the remaining amount was the fee received from students. This opening balance of cash incudes cash with school integration programme centres/branches and temporary imprest to different marketing staff who move frequently to other cities for marketing purpose. We are also enclosing herewith the list of the student who deposited fees in the period 01.11.2016 to 08.11.2016.We would also like to inform you that most of these students are those students who took early registration with theinstitute,i.e.before March2016, and were given benefit/relaxation to deposit their second installment upto Deepawali.”

The submission of the assessee was not considered as acceptable by the ld. AO. During the search proceedings, the question was raised regarding the availability of monthly cash balance in the company's cash books. The summary of the cashbook was produced before the search party and found that during the FY 2016-17, the monthly average cash balance was only at 35.0 Lacs. During post search, the question regarding availability of huge cash balance of Rs. 1,31,46,295/- on 01.11.2016 and huge cash receipt of Rs. 1,55,51,600/- within period 01.11.2016 to 08.11.2016 (8 days) was also asked to Shri Nitin Vijay. He had failed to produce identity proof of students, vouchers of fee receipt from students, and other supporting documents of 08.11.2016. While assessment proceedings also, the same issue was confronted to the assessee vide notice u/s. 142(1) of Act dated 27.01.2021 to submit its explanation in this regard. The assessee company submitted its response on 24.02.2021, which was considered and placed on record. In its reply, the assessee stated that during the demonetization period i.e. between 09.11.2016 to 30.12.2016 total amount of Rs. 2.85 crore was deposited in account No. 39384000000102 with Yes Bank Ltd of Motion Education Pvt Ltd. This is a current account in the name of the Company and is used for business purposes only. Out of the total cash deposit of Rs. 2,85,00,000/- in the Yes Bank, Rs. 1,31,46,295/- was the opening balance of cash as on 01.11.2016, and the remaining amount was the fees received from the students. This opening balance of cash includes cash with school integration program centers / branches and temporary imprest to different marketing staff who move frequently to other cities for marketing purposes.

List of the students who deposited fees in the period 01.11.2016 to 08.11.2016 was submitted. The assessee also submitted that most of these students were those students who took early registration with the institute, i.e., before March 2016, and were given benefit/relaxation to deposit their second instalment upto Deepawali. The receipt book for this period were support of the contention the assessee submitted the copy of the cashbook from the regular books of accounts for the period 01.11.2016 to 30.12.2016 along with, copy of Yes bank statement, fees received account ledger copy from the books of accounts, and the return of Service Tax for the cross verification of the same was also filed. The assessee also submitted its reply on 26.02.2021 on the same issue and stated that it was a coincidence that students joined coaching just after the Deepawali holidays (Deepawali was on 27th October 2016), and those students who took early registration in the Motion were given a special privilege at the time of joining in depositing remaining fees after Deepawali. When students returned from their homes after Deepawali vacation, they started depositing fees in bulk, and that's why in FY 2016-17 fees collected in the month of November were more than in other years. As all the students whose fees were due and they returned from home after Deepawali vacation, and they were pre-informed by management that after vacation they have to deposit their due fees, so it is not an abnormal factor that so much fees was received in 8-9 days. The assessee stated that those students who joined coaching just after the Deepawali holidays and those students who took early registration in the Motion were given a special privilege at the time of joining in depositing after the Deepawali vacation, they started depositing fees in bulk, and that's why in FY 2016-17 fees collected in the month of November were more than in other years. The assessee's claim was not found acceptable by the ld. AO because the same trends of fees collection in the month of November in earlier years did not happen. As per the monthly fee collection chart submitted by the assessee, the assessee has shown fee collection of Rs. 1,58,60,918/-(including other misc receipts) during the month of November 2016. While the collection of fee in the month of November 2014 and November 2015 were shown of Rs.20,30,553/- & 14,21,300/- only. The fee collection figure in the month of November 2016 is abnormally higher than in the earlier years in the same month. Further, the assessee has not provided the details of the students who took early registration in the Motion and the balance fees to be collected from those students as on 31.10.2016.

The assessee company has received fees in cash from students amounting to Rs. 1,55,51,600/- only in 8 days from 01.11.2016 to 08.11.2016. The assessee company has not received such huge fees in this short period from its beginning till demonetization. The assessee has shown an opening cash balance of Rs. 1,31,46,295/- as on 01.11.2016. Further, the assessee has shown fee collections of Rs. 1,55,51,600/- and other receipts of Rs. provided by the assessee, the total cash balance of Rs. 2,87,11,895/- was available with the assessee as on 08.11.2016. The assessee company has deposited total cash in old currency of Rs. 2,85,00,000/-on 18.11.2016 out of total cash available as per cash book, but the assessee has not provided any satisfactory reason for holding this huge cash for ten days. The documents provided by the assessee in support of its claim, i.e. copy of cash book, ledger accounts, fee receipts etc, during the assessment proceedings, were prepared by the assessee itself. But the assessee has not provided any documents related to fee collection like challan form and any other forms which were filled, signed, and submitted by the students at the time of fee deposition. It was not possible that the students paid their fees without any challan and other relevant forms. In the absence of these documents, the fee collected during the period 01.11.2016 to 08.11.2016 remains unverified. Considering the above fact, the claim of the assessee was not considered justified. The assessee has failed to explain the source of cash deposited in old currency during the demonetization period of Rs. 1,55,51,600/-out of total cash deposit; therefore, the same amount was added to the total income of the assessee company treated as unexplained money as per provision of section 69A of the Act.

6. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:

Ground No. 1

5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

The ground no. 1 is general in nature without any specific argument or evidence. This general ground of appeal is found to be without any basis and treated as dismissed.

Ground No. 2

I have carefully gone through the assessment order, the written submission and relevant case laws relied by the appellant.

5.2.1 The approval u/s 153D is not appealbale before CIT(A)

Prima facie, the issue raised by the appellant is not subject matter of appeal. This appeal is against the order passed by the AO u/s 153A and not against the approval granted by the Addl. CIT u/s 153D. The approval granted u/s 153D is not an appealable order. Hence, the issue raised is prima facie not maintainable. The approval u/s 153D is administrative requirement which is not appealable before the CIT(A).

5.2.2 There is no prescribed time limit for granting approval u/s 153D The section 153D reads as under:- "Prior approval necessary for assessment in cases of search or requisition.

1530. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A or the assessment year referred to in clause

Provided that nothing contained in this section shall apply where the assessment or reassessment order, as the case may be, is required to be passed by the Assessing Officer with the prior approval of the Principal Commissioner or Commissioner under sub- section (12) of section 1448A."

There is no time limit prescribed in this section for granting approval by Joint Commissioner Hence, the arguments of the appellant with regard to the time taken in giving approval by the AddI. CIT is not found to be relevant.

5.2.3 The application of Mind by the Addl. CIT is evident

The appellant had argued that there was no application of mind by the Addl. CIT The appellant has advanced this argument without any evidence of non application of mind by the Addl. CIT. The allegation of non application of mind by the Addl. CIT while granting the approval is not established. The appellant in this case has alleged non application of mind on the basis of wordings used in granting approval. Only the wording in graniting approval do not establish non- application of mind. Further, there are no prescribed words to establish application of mind. The granting of approval of draft order in itself is an evidence of application of mind. It is observed that while SLP is granted Hon'ble Supreme Court of India in the case of Oriental Insurance Co. Ltd. vs. Chief Commissioner of Income-tax (TDS) [2023] 154 taxmann.com 465 (SC) passed order as under- ORDER

1. Delay condoned.

2. Leave granted.

This two sentence order establishes the application of mind of Hon'ble Supreme Court of India. The application of mind is the whole process through which the all the facts and questions of law has been considered by Hon'ble Supreme Court and the order is just conclusion of the whole process of application of mind. Therefore, the argument of the appellant that there was no application of mind by the Addl. CIT is not found to be acceptable.

The appellant may argue that approval granted in small period of time. This argument is not found to be justified as non application of mind by the Additional CIT has to be proved by bringing positive evidences on record. In this regard judgment of Hon'ble High Court of Bombay in the case of Chhagan Chandrakant Bhujbal Vs Income-tax Officer (2022) 136 taxmann.com 24 (Bombay) [2022] 440(TR 359 (Bombay) is relevant. In that case Hon'ble High Court held as under:

"In the case at hand, there is nothing to indicate that there was non-application of mind. Merely because information was received at 5.47 p.m. and the notice was issued by 10:49 p.m. would not mean that there has been non-application of mind. If we hold that it would be merely speculative and based on conjecture."

This judgment was rendered with reference to approval granted by the CIT for issuing notice u/s 148. However, the ratio of this judgment is applicable on the facts of this case. The appellant has not established non application of mind by the Addl. CIT in this case also. Only because approval was granted by the Addl. CIT on the small period would not mean that there has been non application of mind by the Addi. CIT. Further, there is no time limit prescribed under the Act for granting approval under section 153D of the Act. Therefore, contention of the appellant are found to be without any basis. The facts of case laws relied upon the appellant are different from the present case hence not found applicable on the facts of the case.

Hon'ble High Court Of Gujarat in the case of Lalita Ashwin Jain v, Income Tax Officer [2014/ 45 taxmann.com 404 (Gujarat)/[2015] 228 Taxman 107 (Gujarat) (Mag.)/[2014] 363 (TR 343 (Gujarat)(25-03-2014] held as under-

"17.4 However, so as to aver such allegations of non-application of mind all that is desirable is that the Joint Commissioner should briefly state his reasons. However, only because he has nodded in favour of Assessing Officer by writing 'yes' to the reasons recorded and accorded permission for reopening of the assessment, the notice of reopening on that count alone cannot fail holding that the assumption of jurisdiction under Section 147 is invalid, if application of mind is demonstrable from the material on record. From the record, it emerges that the reasons recorded were placed before the Assistant Commissioner along with other details in prescribed format. It was only after perusing such details that the Assistant Commissioner agreed that it was a fit case for issuing notice under Section 148 of the Act. Thus, this is not a case where such permission can be stated to have been granted without application of mind. We are satisfied from the overall facts and circumstances that the provisions of the Act are duly complied with in the action of the Joint Commissioner."

In this case also application of mind is demonstrable from the material on record. From the record, it emerges that the letter seeking approval of the Addl. CIT was sent by the Assistant/Deputy Commissioner along with Assessment Records on 23-07-2021 It was only after going through the draft assessment orders and perusing the Assessment Records that the Additional Commissioner granted approval on 26-07-2021. Thus, this is not a case where such permission can be stated to have been granted without application of mind.

The allegation that it was impossible to go through these orders in small period is without any scientific basis. It depends on the complications of a case. In the present case, the orders of the assessee for different assessment years are interlinked and some issues are common. Therefore, it would not have been a difficult task to go through these orders in this period. Hence, only because time available with the Additional CIT was short, it cannot be presumed that there was non application of mind by the Additional CIT

5.2.4 There is application of mind by the Addl. CIT

Without prejudice to the above, there is no time limit prescribed in the statute for granting approval, Hence, the granting of approval cannot be said to be mechanical when there is clear noting about going through the draft assessment order (DFA) by the Additional Commissioner in the letter granting the approval. The assessment folder is being returned along with the letter of approval. Therefore, the Addl. CIT has gone through entire records before granting approval.

5.2.5 The approval u/s 153D is merely an administrative action

The Income Tax Appellate Tribunal Mumbai Bench "C", Mumbai in the case of Pratibha Pipes & Structurals Ltd Vs DCIT, Cent. Cir. 17 & 28, Mumbai ITA No.3876/Mum/2015-AY 2009-10 ITA No.7120/Mum/2016 - AY 2011-12. held as under- "Further, the approval u/s 1530 is an administrative procedure which requires to be complied with by the officers, who is discharging the assessment functions. The administration action of the department is not very much relevant for the assessee to justify its case, on merits. Therefore, when assessee goes to question the administrative procedure, rather contending its case on merits, that too, after a lapse of 4 to 5 years, then obviously, a doubt arises about intend of the assessee in taking this ground and such an attempt is derail the issue on merits and to escape on technical ground. Therefore, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed by the AO u/s 143(3) r.w.s. 153A of the Income-lax Act, 1961

The approval u/s 153D is an administrative procedure which requires to be complied with by the officers, who is discharging the assessment functions. In this case, the same has been complied with by the officers. Therefore, the administration action of the department is not very much relevant for the assessee to justify its case, on merits.

5.2.6 The Practice of discussion before finalisaztion

It is also to be mentioned that it is a general practice that the AO discusses the cases with the Additional CIT even while making enquiries and drafting the order. The Additional CIT is involved in the case even at the stage of enquiry and drafting. The discussions with AQ are held by the Additional CIT on regular intervals. Therefore, the Additional CIT grants approval considering the fact that the case was already in his knowledge on the basis of previous discussions. Hence, the approval granted by the Additional CIT should be seen in these circumstances. Considering the general practice adopted by the officers of the department, the argument of non application of mind by the Additional CIT while granting approval u/s 153D is not found to be acceptable.

5.2.7 No Prejudice is Caused to the Assessee

Without prejudice to the above, there is no prejudice is caused by the assessee in granting approval by the Additional CIT in small period of time. The appellant has not discussed what prejudice is caused to the assessee if the approval is granted in small period of time. There would not have been any material difference for the assessee if the approval was granted in longer period. Nevertheless the approval in the present case is granted 3 days. The appellant has not proved any prejudice caused by this administrative action of the Additional CIT

In view of the above discussion, the arguments of the appellant with regard to approval granted u/s 1530 are not found to be acceptable.

In view of the above, this ground no. 2 of appeal is treated as dismissed.

Ground Nos. 3, 4 and 5

6.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

The AO noted that the assessee has deposited Rs. 2,85,00,000/- in old currency during demonetization period. Shri Surendra Kumar Gupta (Director of Motion Education Pvt. Ltd.) stated that during demonetization cash amounting of Rs. 2,85,00,000/- was deposited by Motion Education Pvt. Ltd. Further, he had also explained the source of cash deposited as under:-

Cash balance available in company's Rs. 2,60,00,000 a/c as 7.11.2016 Cash receipt on 08.11.2016 Rs. 25,97,490 Total cash deposited on 18.11.2016 Rs. 2,85,00,000

The AO noted that on perusal of cash book, it was noticed that during the period 01.10.2015 to 31.12.2015 Company's average cash balance only was at Rs. 35.0 lacs. Further search party asked for explanation of opening cash balance of Rs. 2,60,00,000/- on 07.11.2016. He gave a simple explanation that cash balance of Rs. 2,60,00,000/- was available in the company's account at that time.

During post-search investigation proceedings, it was explained that there was an opening cash balance of Rs. 1,31.46.295/- as on 01.11.2016 and fees of Rs. 1,55,51,600/- was received within the period of 01.11.2016 to 08.11.2016. The assessee stated that those students who joined coaching just after the Deepawali holidays and those students who took early registration in the Motion were given a special privilege at the time of joining in depositing remaining fees after Deepawali. When students returned from their homes after the Deepawali vacation, they started depositing fees in bulk, and that's why in FY 2016-17 fees collected in the month of November was more than in other years.

It is noted by the AO that the assessee's claim is not found acceptable because the same trends of fees collection in the month of November in earlier years did not happen. As per the monthly fee collection chart submitted by the assessee, the assessee has shown fee collection of Rs. 1,58,60,918/- (including other misc receipts) during the month of November 2016. While the collection of fee in the month of November 2014 and November 2015 were shown of Rs.20,30,553/- & 14,21,300/- only. The fee collection figure in the month of November 2016 is abnormally higher than the earlier years in the same month. Further, the assessee has not provided the details of the students who took early registration in the Motion and the balance fees to be collected from those students as on 31.10.2016. As per the cash book provided by the assessee, the total cash balance of Rs. 2,87,11,895/-was available with the assessee as on 08.11.2016. The assessee company has deposited total cash in old currency of Rs. 2,85,00,000/-on 18.11.2016 out of total cash available as per cash book, but the assessee has not provided any satisfactory reason for holding this huge cash for ten days. The documents provided by the assessee in support of its claim, le, copy of cash book, ledger accounts, fee receipts etc, during the assessment proceedings, were prepared by the assessee itself. But the assessee has not provided any documents related to fee collection like challan form and any other forms which were filled, signed, and submitted by the students at the time of fee deposition. In the absence of these documents, the fee collected during the period 01.11.2016 to 08.11.2016 remains unverified.

The AO concluded that the assessee has failed to explain the source of cash deposited in old currency during the demonetization period of Rs. 1,55,51,600/- out of total cash deposit; therefore, the same amount is added to the total income of the assessee company treated as unexplained money as per provision of section 69A, and tax is charged as per provision of section 115BBE of the IT ACL

The appellant stated that there remains a substantial cash on hand with the assessee-company. The complete details of students viz; name of students, father's name, roll number, complete address with PIN, fees receipt amount, etc. from whom fees received during the first week of November, 2016 were uploaded online on the Income Tax portal on 13.02.2017 The same details were also furnished to the Id. ITO Intelligence as well as Id. ADIT, to which no adverse inference was drawn. When factual position of cash already emanates from the records, there is no point in considering the average cash balance or that of earlier period.

The reason for fluctuation was also explained to the Id. AO. In the month of November 2016, the students who joined coaching after Deepawali holidays and also those students who took early bird registration were given a special privilege at the time of joining to deposit remaining fee after Deepawali vacations. It was also illustrated to the id. AO that in the year under consideration the percentage of cash fee is lesser than earlier two years which shows that there remains difference in pattem of fee received because of business strategy and marketing plan adopted in the beginning of the session.

It is respectfully submitted that the fee receipts issued to the students in this period were on record and were also seized during search as Exhibit No. 102

(Party No. B-2), which contain receipt books. Such receipts are duly reconciled with the service tax returns. Service tax was also duly paid therson. The fees received ware due to be deposited by students after Deepawali vacations, which was pre-informed when the students were leaving for Deepawali break. To collect foo ofter Deepawali vacations when the students retum from their home is a normal trend and practice among coaching institutions.

It is stated that the Id. AO in order to test the veracity of the same, issued notices u/s 133(6) to some of the randomly selected students and many of them replied and accepted that they have deposited fees in this period.

It is stated that the appellant had declared fee recoipla from students, which is duly supported by receipts issued to them. The appellant is having complete details of such students, which were duly produced before the id. AQ. The student fees received is also backed by the service tax return. The appellant has duly paid service tax on such recelpis at the applicable rate out of such receipts and also, the income out of the same is already offered. The Id. AO has not pointed out any discrepancies in books of account maintained by the appellant. He has not pointed out any suspicious back dating of foe receipt or fictitious fee receipt where thore is an increase during the month of November, 2015 as compared to earlier years.

It is stated that there is no finding of booking of fee of the student, which is non- existent to show pumping of unaccounted money in old currency notes. The appellant had fumished explanation with regard to the nature and source of the cash deposited in bank in demonetized currency which was not found to be false by the Department

In absence of any observations with regard to incorrectness in books of account maintained by the assessee, genuine of the same, which is duly supported by necessary documentary evidences cannot be rejected as source for cash deposits into bank account during demonetization period.

The Id. AO has not brought on record any material to draw an inference that the explanation offered by the assessee was incorect or that the impugned sum represented income of the assessee from undisclosed from the explained source appearing in the books of account could not be treated as unexplained money us sources as against the entries recorded in the audited books of the assessee The cash deposited in the banks 69A of the Act without bringing on record any credible evidence/material in support of such allegation. It is submitted that the entire sales of the assessee are supported by the service tax invoices, fee receipts, service tax retums, which are duly accepted by the service tax authorities and verifiable from books of account & records, duly audited under the Companies Act, 2013 as well as Income Tax Act, 1961

It is stated that the Id. AD did not reject the books of account and accepted such deposits of lee as business receipts it is respectfully submitted that when the audited books are not rejected and business receipts are not disturbed, no addition is warranted in respect of cash deposits during demonetization period. Making a separate addition would lead to double taxation,

It is stated that if the AD alleged that the appellant has brought the unaccounted money generated into the books on that day, then the onus was on the id. AD to bring on record evidence to demonstrate that such receipts were made by the appellant out of books of that the appellant had other source of income which is not disclosed in the absence of any evidence, allegation cannot be accepted under the law. The contention of the Id. AO is not supported by any reliable evidence but merely suspicion,

It is further stated that the AC can resort to making an addition under section 63A of the Act only an respect of such monies/lassets/articles or things which are not recorded in the assessee's books of account. In the present case on hand, the cash deposits are duly recorded in the books of account and are made on the recept of coaching fee from students in these circumstances, it is not a case where such money was not u/s 69A of the Act

The appellant has placed reliance in the case of DCIT vs. Karthik Construction Co, in dated 23.02.2018, wherein the Bench at para 6 thereof has held that addition under section fi9A of the Act cannot be made in respect of those assets/monies/entries which are recorded in the assessee's books of account. The cash sales as part of the trading result offered for taxation by the assessee is not disputed, the addition made on account of cash deposit during demonetization without rejection of books of account uls 145(3) is not warranted. In case of the present appellant-assessee, who is running a coaching institution, it cannot be a case that higher tumover is shown to cover up cash deposits to bank account. It is also stated that there was no prohibition for dealing with specified bank notes during those period during demonetization and the appellant-assessee has already filed necessary evidences to prove the availability of source for cash deposits & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. It is further stated that provision of Section 6A of Act cannot be applied to cash deposits duly recorded in books of account as held in Income Tax Officer vs. M/s Zee Bangles Pvt. Ltd 2023 TAXSCAN (ITAT) 1886.

In case of Arun Garg vs. ITO 2022 TAXSCAN (ITAT) 1257, it is held that for cash deposits during demonetization period, no addition can be made if AO accepted documents and books of account containing cash credits. Cash generated from sales and duly recorded in books of account can't be treated as unexplained cash credit u's 68 or investment 69A of Act as held by ITAT in Abhishek Prakashchand Chhajed vs. Income Tax Officer 2023 TAXSCAN (ITAT) 2449

Reliance is placed on DCIT vs. M's Bhanulnfrabuild Pvt. Ltd. 2023 TAXSCAN (ITAT) 2159, wherein it is held that the assessee has successfully demonstrated source of cash deposit to its bank account during demonetization period thus, no addition can be made.

Reliance is placed on DCIT vs. Bawa.Jewellers Pvt. Ltd. 2023 TAXSCAN (ITAT) 1586, Mis Hirapanna Jewellers, Visakhapatnam, in and CO No. 02/Viz/202tand ITO vs. Sahana Jewellery Exports Pvt. Ltd. Is Reliance is also placed on the decision of the Hon'ble Delhi High Court in the case of PCIT vs. Agson Global (P) Ltd., reported in [2022] 441 ITR 550 (Delhi) (19-01-2022), where under identical set of facts, has deleted the additions made by the AD towards cash deposits during demonetization.

The contention of the assessee that these were prepared by the assessee itself holds no water in view of the fact that the Id. AO himself issued notices u/s 133(6) to students to which many of them mplied confirming the facts Otherwise also, without prejudice, it is stated that various Courts have held that the Assessing Officer cannot make additions towards cash deposits, more particularly, when law is very clear in respect of KYC details of customers as per Rule 114B of LT. Rules, 1962, where the assessee is not required to take KУС details of customers in case the sale or service value is less than Rs 2 lakh. However, in the present case complete details of students with name of student, roll number, father's name, address, course nome, amount of fee received, etc. during the period 01.11.2010 to 08.11.2015 from the permanent data record of students maintained in the computer system of the assessee were provided and confirmations were received from the students in compliance of section 133(6) noces AX DEPAR

Moreover, simply business receipts cannot be rejected on the ground that it for the particular month or period is higher when compared to corresponding previous period. It is a factual position that there connot be any reason for uniform sales/receipts in all days or month or year. There may be various reasons for increase or decrease in the same, which depends upon various factors, including number of students undergoing coaching, terms of fee payment, discount benefit offered, etc. The assessee has duly explained the reason for such variation during the course of assessment. The Delhi High Court in the case of Agson Global Pvt. Ltd. vs. ACIT (2022) 325 CTR 001 held that additions made on the sole ground of deviation in the ratio of cash sales and cash deposits during the demonetization period with that of earlier period, is improper and unlawful

The ITAT, Indore Bench in the case of Dewas Soya Ltd, Ujjain vs. ITO Appeal No. 336/Ind/2012 hos held that the claim of the appellant that such addition resulted into double texation of the same income in the same year is also acceptable because on one hand cost of the sales has been fazed (afier deducting gross profit from same price ultimately credited to profit & loss account) and on the other hand amounts received from above parties has also been added uls 68 of the Act. This view has been held by the Hon'ble Supreme Court in the case of CIT vs. Devi Prasad Vishwnath Prasad (1969) 72 ITR 194(SC) Ihat "t is for the assessee to prove that even the cash credit represents comencome from as source, which has already been loved the assessee has already offered the soles for taxation and hence, the onus has been discharged by it and the same income cannot be fared again is stated that neither book of account nor the audited financials submitted before the Id AD have been controverted and as such, they stood accepted by the At AQ When entries in books stood accepted, the availability of cash could not have been disputed Reliance is placed on Laichand Bhagat Ambica Ram vs. CIT (1959) 37 ITR 288 (SC) (1)ACIT vs. Hirapanna Jewellers (2021) 189 170 608 (Vishakha pabram) ACIT vs. Nitin Sankhla in vide order cit 08.06.2023 (v) ITO vs. Parmanand Gupta in dated 04.08.2022

It is stated that cash deposits are accounted in regular books as business receipts. Such business tumover is accepted by the id. AD Books are not rejected by him Profit arising out of business lumover in retumed and assessed by the id. AO. Therefore, credits for cash accruals could not have been denied. Profit from sales already laxed by AD. Adding cash deposits amounts to double addition, Reliance placed on (i) CIT vs. Kallash Jewellery House in order dtd. 09.04.2010 of Delhi High court, PN 112 of PB.

(ii) Anantpur Kalpana vs. ITO in dtd., 13.12.2021

(iii) ACIT vs. Vishal Exports Overseas Ltd. in ITA no. 790/Ahd. 2005 order did. 07.08.2009, "C" Bench, affinmed in of 2009 vide order dated 03.07.2012.

It is submitted that the cash deposits by the assessee is towards the students fee being proceeds from the business of the assessee, duly supported with lee receipts issued to them and all such cash receipts are duly recorded in the cash book of the assessee in the case of Lalchand Bhagat Ambica Ram vs. CIT [1959] 27 ITR 288 (SC), the Hon’ble Apex Court decided the matter in favour of assessee of the ground that it was clear on the record that the assessee maintained the books of account according to the mercantile system and there was sufficient cash balance in its cash book and the books of account of the assessee wore not challenged by the Assessing officer. If the entries in the books of account are genuine and the balance in cash is matching with the books, it can be said that the assessee has explained the nature and source of such deposit

It is also submitted that since the assessee has already demonstrated the cash deposes as revenue recogit, mere is no case for making the addition or lar the same uls 115BBE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case of CIT vs. Kailash Jewellery House in order dtd. 09.04.2010 of Hon'ble Delhi High Court and the Hon'ble Gujarat High Court in the case of ACIT vs. Vishal Exports Overseas Ltd. in ITA no. 790/Ahd.//2005 order dt. 07.08.2009, "C" Bench, affirmed in of 2009 vide order dated 03.07.2012. Since the source of cash deposits is business receipts as submitted here-in-above, section 11588E is not applicable

Facts of the case are considered. The assessee has deposited Rs. 2,85,00,000/- in old currency during demonetization period. Out of this amount opening cash balance of Rs. 1,31,46,295/- as on 01.11.2016 was treated as genuine by the AO and fees of Rs. 1,55,51,600/- which was received within the period of 01.11.2016 to 08.11.2016 was treated as unexplained.

The claim of the assessee was rejected by the AO because the same trends of fees collection in the month of November in earlier years did not happen. The fee collection figure in the month of November 2016 is abnormally higher than the earlier years in the same month. The appellant has give explanation that students who joined coaching just after the Deepawali holidays and those students who took early registration were given a special privilege at the time of joining in depositing remaining fees after Deepawali. That's why in FY 2016-17 fees collected in the month of November was more than in other years. This claim of the assessee cannot be rejected without establishing that the claim is not correct. The AO has not brought material on record to reject the claim of the assessee.

The AO also stated that the assessee has not provided any satisfactory reason for holding this huge cash for ten days from 08.11.2016 to 18.11.2016. The cash deposited by the assessee was within the period so allowed by the government hence; no adverse view can be taken only because of this reason that cash was not deposited immediately.

The AO also stated that the assessee has not provided challan form and any other forms which were filled, signed, and submitted by the students hence the fee remains unverified. In this respect the appellant stated that the fee is duly supported by receipts issued to students which were found during search. The appellant claimed that complete details of such students were provided. Details of students viz; name of students, father's name, roll number, complete address with PIN, fees receipt amount, etc. from whom fees received during the first week of November, 2016 were uploaded online on the Income Tax portal on 13.02.2017 The student fees received is also backed by the service tax return. The AO has not pointed out any discrepancies in books of account maintained by the appellant. The claim of the appellant is that the AO has made verification in some cases and no discrepancy has been pointed out. In these facts the allegation of the AO that fee remains unverified is not found to be sustainable.

The AO stated that the assessee has failed to explain the source of cash deposited in old currency during the demonetization period of Rs. 1,55,51,600/- out of total cash deposit. As against this the appellant stated that the cash deposits are duly recorded in the books of account and are made on the receipt of coaching fee from students. In these circumstances, it is not a case where such money was not recorded in the books and as such, it is evident that addition u/s 69A of the Act. The claim of the assessee is found to be acceptable as the assessee has explained the source of deposit and also furnished detail of students from whom the fee was collected. The books of accounts are also not rejected by the AO. Therefore, the claim of the assessee with regard to source reflected in the books of accounts has not been rejected by the AO.

In view of these facts, it is held that in the reply uploaded on Income Tax Portal in January, 2017 the assessee had provided details of students from whom fee was collected. The AO has not pointed out any discrepancy in these details. The fee was duly recorded in the books of account which have not been rejected u/s 145(3) of the Act. The Appellant has explained nature and source of such business activity. The fee receipts are also reflected in service tax return. The AO has not brought any material on record to establish that the claim of the assessee is not correct. Without rejecting the claim of the assessee, the addition made by the AO cannot be sustained only because there is abnormality in the amount of fee deposited during the month of November 2016 in comparison to other years. The assessee has also explained that there was special privilege at the time of joining in depositing remaining fees after Deepawali. The reason provided for abnormal deposit is not found to be rejected by bringing any adverse findings on record. Hence, the claim of the appellant is to be accepted.

The appellant has relied upon decisions which support the arguments of the appellant. In view of the settled position of law and considering the facts of the case, the addition made by the AO is not found to be sustainable and deleted.

This ground of appeal is treated as allowed.

Ground Nos. 6,7,8,9 and 10

7.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

The AO noted that incriminating document found and seized by party No.B-2, as page No.37 of Exhibit 15 of Annexure AS-1. This document is a computerised excel sheet containing information in respect of fees received for FY.2016-17 & 2017-18.

On perusal of computerized excel sheet, it was found that there are huge differences in fees receipt shown in books of account of M/s Motion Education Pvt Ltd and actual fees receipt written in computerized excel sheet found and seized by the search party. As per the excel sheet, difference of fees receipt was detected as under-

F.Y Fee receipt difference as per excel sheet and Company’s books of account (in Rs.) 2016-17 1 ,52,89,500/- 2017-18 1,46,12,184/-

During the search the assessee has stated that he will produce reconciliation statements in later departmental proceedings.

The assessee submitted reconciliation statement through his reply submitted on 24.07.2018,

The AO noted that the assessee merely claimed that books of accounts are maintained considering service tax paid, GST paid, fees refund paid etc. However, the assessee did not furnish any documentary evidence during the search or post-search inquiries to substantiate the claims. The assessee has failed to reconcile each and every entry in the excel sheet. It has failed to produce any evidence such as receipts issued to students for refund etc. Therefore, the general claim cannot be accepted without specific and corroborative evidence.

The AO noted that GST and Service Tax Returns have been filed based on the turnover recorded in books of accounts. However, all the entries in excel sheets are not even récorded in regular books of accounts.

The AO held that mere production of ledger copies of fees refund, cheque returns etc. does not tantamount to furnishing reconciliation with documentary evidence. The assessee did not fumish the list of students from whom fees/cheques have been received and entered in these excel sheets and subsequent return of fees to those students. The assessee's claim that while receiving fees, all entries were recorded in excel while the entries of refund are not made in the excel sheets is too general to accept. Complete names, addresses of all students to whom fees have been refunded were not furnished, and therefore no cross-verification was made possible.

The AO noted that the manual registers were not produced during the search and post search proceedings to substantiate its claim. Therefore, such registers are an after-thought. Further names, addresses, PANs of third parties mentioned in these registers have not been furnished. No counter evidence such as acknowledgement of fees return/cheque return by students has been furnished,

The AO concluded that the total unaccounted fees/receipts of Rs.1,52,89,500/- detected on the basis of incriminating documents seized during search related to FY 2016-17 is added to the total income of the assessee.

The appellant argued that the fee is received from students by the front desk stalt, who prepares a manual sheet containing date and student-wise details of fee received through cash/ cheque. Then, he pass on the same to the back office staff, who enters student-wise detail in the computer for various classes/courses every day and surmmation of all fees received from different students on that particular day comes on these impugned excel sheets. The person who receives fees from students is front desk staff and this reconciliation of daily fee received is done by back office staff, Thus, total fee received by the front office staff relating to Motion Education Pvt. Ltd., Motion E-learning Solution Pvt. Ltd. and on behalf of schools are duly entered on these excel sheets on daily basis from the details received from the front office.

It is stated that the excel sheets found & seized comprise of gross fees receipts from students at Kota centre and total of the excel sheets duly matches with the fees received ledger summary from the audited books of account maintained by the assessee-company

It is stated that the fee entered in the excel sheets is gross fée received from the students and on such fee received, service tax is pald by the assessee company. It is claimed that on every fees receipt and also on brochure that the fee is inclusive of Service Tax. Thus, the said excel sheets contain the gross fees received from students, while in the books if the summary of fees ledger is viewed: it is net of service tax component. Therefore, on this count alone, out of alleged difference of Rs. 1,57,89,800/-, a sum of Rs. 1,29,30,043 relates to Service Tax. The service tax is duly verifiable from service tax retums available on record and also visible on every fees receipt issued to students and found & seized from the searched party,

The appellant explained that the remaining difference of Rs. 23,59,757% relates to Rs. 10,50,801/- foe refund in respect of which complete lediger was fumished which shows that all refunds were made through banking channels except Rs.41,350. Similarly, school fee of Rs. 6.15.730/- was collected on behalf of afflillated school namely: Maa Bharti Senior Secondary School for which no book entry is required in the assessee's books of account, Like-wise, as stated above, Rs.9,54,615 belong to Motion E-leaming Solutions (P) Ltd., an affiliated company has duly been accounted in its books of account

It is claimed that complete reconciliation statement was submitted before the id. AO. All reconciliation tems are duly verifiable as under-

Copy of audited Profit & Loss a/c which shows that total fees received during FY 16-17 is Rs. 14,23,95, 103/-, which is also duly ventiable with the service tax return.

(ii) Monthly summary of fees received and advance fees received ledger accounts, in which dobit side entries are relating to service tax transfer to service tax account, fees refund and cheque retum. Fees Ruceived Rs.7,53,33,274/- and Fees Received in Advance Rs. 1,08,54,249/- have been taken in reconciliation sheet

() Ledger copies incorporating service tax detail on fees received, advance fees received account, fees refund account and cheque rotum account.

(iv) Copy of school fees receipt of Rs. 6,15,730/- issued by MaaBharti School

(v) Copy of audited Profit & Loss Alc of Motion E leaming Solutions Pvt. Ltd., which makes it clear that during the year Rs.9.51,615/- (Le, net of received Rs 9,54,615/- & refunded Rs 3000) was the foes miceipt of Motion E leaming Solutions (P) Ltd.

(vi) There is fees details of Rs. 1,83,629/- which was entered into books of account but left from entering into excel shoot where student's name or roll number were not available in the details prepared by the front desk and such entrios were not made by computer operator into excel sheets.

(vii) Cheques retum were of Rs. 1,06,800- during the year and they were re- lodged, which were cleared by the bank so were entered in book of account later, added back in the reconciliation statement.

(vii) Fees received from old students Rs.57,500/- was entered in books in the ledger of advance fees and another advance fees of Rs.49000/- received via bank NEFT and entered in books was not taken in excel sheets

It is stated that after all above addition/subtraction in the reconciliation statement, the gross fees received of Rs. 10,14,77,024/- as per fotal of excel sheet found and seized by the search team, remains tallied with the books of account, which is higher by Rs. 29,059 due to cumulative effect of minute human error in preparing excel sheet.

It is argued that the assesses has explained the nature and source of such transactions and reconciled the same from audited books of account regularly maintained, no addition is warranted and there is no application of section 1158BE of the Act TAX DEPAN

The facts of the case are considered. Total unaccounted fees/receipts of Rs.1,52,89,500/- was detected on the basis of incriminating documents seized during search related to FY 2016-17.

As per AO, the assessee failed to reconcile each and every entry in the excel sheet. It failed to produce any evidence such as receipts issued to students for refund etc. The general claim cannot be accepted without specific and corroborative evidence.

As against this the appellant stated that out of alleged difference of Rs.1,52,89,800/-, a sum of Rs.1,29,30,043/- relates to Service Tax. The service tax is duly verifiable from service tax returns. The service tax is claimed to be visible on every fees receipt issued to students and found & seized from the searched party Hence, the claim of appellant in this regard has to be accepted as it is supported by verifiable evidences.

The remaining difference of Rs. 23,59,757/- is also explained as Rs. 10,50,801/- fee refund in respect of which complete ledger was furnished which shows that all refunds were made through banking channels except Rs.41,350/-Since the refunds are made through banking channel, these are verifiable. The school fee of Rs. 6,15,730/- collected on behalf of affiliated school namely; Maa Bharti Senior Secondary School is also verifiable. Rs. 9,54,615/- belonging to Motion E- learning Solutions (P) Ltd. is also verifiable. In the reconciliation statement, the appellant has also added some amounts which were entered in the books of accounts but not recorded in the excel sheet. In view of these verifiable evidences furnished by the assessee, the claim of the appellant is found to be acceptable.

It is explained that the gross fees received of Rs. 10,14,77,024/- as per total of excel sheet found and seized by the search team, remains tallied with the books of account, which is higher by Rs. 29,059/- due to cumulative effect of minute human error in preparing excel sheet.

The appellant has accordingly furnished reconcillation statement entries of which are verifiable. The fee received has been shown more in the books of accounts after reconciling the figures as per seized excel sheet, hence, no adverse inference needs to be drawn against the assessee.

After reconciling these figures from the books of accounts, the claim of the AO is not found to be sustainable that all the entries in excel sheets are not recorded in regular books of accounts. In fact, the fee received has been shown more in the books of accounts after reconciling the figures as per seized excel sheet.

The AO stated that the assessee did not furnish the list of students from whom fees/cheques have been received and entered in these excel sheets and subsequent return of fees to those students. Complete names, addresses of all students to whom fees have been refunded were not furnished, and therefore no cross-verification was made possible. As against this the appellant argued that Rs. 10,50,801/- fee refund were made through banking channels except Rs. 41,350/-. The refunds made are through banking channel and the details have been provided in the form of ledger. Hence, the evidences furnished by the assessee were verifiable evidences. Therefore, the allegation of the AO that the evidences are not verifiable is not found to be sustainable.

Considering the verifiable evidences along with reconciliation statement the reply of the appellant cannot be brushed aside without verifying or disproving these evidences. The AO has not brought evidences on record which could establish that the evidences are incorrect. Therefore, the claim of the appellant is found to be acceptable. The addition made by the AO is not found to be sustainable and deleted.

This ground of appeal is treated as allowed.

Ground Nos. 11 and 12

8.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

The AO noted that incriminating documents in the form of cash vouchers were found and seized vide various exhibits of Annexure AS by party No. B-1. During the search Shri Nitin Vijay stated vide reply to question No.12 that cash vouchers were related to various expenses incurred by M/s Motion Education Pvt. Ltd.

The AO noted that on going through the various seized cash vouchers, it is found that on some cash vouchers, dates are not mentioned. In the absence of a date, it could not be considered that cash vouchers have been entered in the regular books of accounts maintained by the assessee company M/s Motion Education Pvt. Ltd.

The assessee company has not entered such cash vouchers in its regular books of accounts, and the assessee has incurred expenses aggregating to Rs. 78,95,973, which are not reported in his regular books of accounts.

The year-wise bifurcations of unexplained cash vouchers are as under:-

F.Y A.Y Undisclosed/unaccounted investment/expenses 2014-15 2015-16 1,84,900 2015-16 2016-17 1,21,350 2016-17 2017-18 27,36,409 2017-18 2018-19 48,53,314 Total 78,95,973/-

In its reply, the assessee claimed that the vouchers which were not entered in the books of accounts were mainly related to FY 2017-18. The financial year 2017-18 was just ended, so the accounting was not completed for FY 2017-18, and most of the vouchers were dump.

The assessee has stated that some of the vouchers were related to FY 2014-15. 2015-16 & 2016-17 which are mentioned exhibit-wise in the above letter and amounting to Rs. 184900/-, Rs. 121350/- and Rs. 2736409/- respectively. These are a bunch of documents containing miscellaneous small expenses vouchers/bills, vouchers relating to advance and temp imprest to staff, rough jottings, etc. Generally, these are accounted for in the books of accounts in the concerning financial year if it is in the nature of expense.

The reply of the assessee is not found acceptable by AO because the assessee has incurred various expenses of Rs. 27,36,409/- in cash during the year. and the same were not recorded in the books of accounts of the assessee company.

Further, the assessee has itself included undisclosed income of Rs. 1,84,900/-& Rs. 1,21,350/-in its total income in ITR filed in compliance to notice u/s 153A for AY 2015-16 & 2016-17 respectively on the basis of these seized vouchers.

Therefore, the assessee's claim that the vouchers related to the F.Y. 2016-17 are dump is not acceptable. These seized vouchers are the evidence that the assessee had incurred various expenses where payments were made in cash, and the same was not recorded in the regular books of account of the assessee company.

Considering these facts, the reply submitted by the assessee is not found satisfactory, and therefore, the total amount of unaccounted vouchers related to FY 2016-17 of Rs. 27,36,409/- is added to the total income of the assessee as per provision of section 69C, and tax is charged as per provision of section 115BBE of the IT Act.

The appellant claimed that these are duly accounted for in the books of account as expenditure if the same are in the nature of expenditure. The reply of the appellant is vague and not found to be specific with regard to cash expenditure of Rs. 27,36,409/-. The appellant has not furnished any evidence to show that these are accounted for in the books of accounts. The claim of the appellant is not found to be acceptable in this regard.

It is argued that it was specifically requested to the Id. AO to provide the details of vouchers being treated by him as not recorded in the books so that the same may be specifically got verified. However, the same were not provided till the end and as such, in absence of the requisite details it is not humanly feasible to get it verified from the books of account.

The claim of the appellant is not found to be acceptable as no evidence is furnished for request made to the AO about details of vouchers and denied by the AO. The claim of the appellant is therefore rejected.

It is stated that temporary imprest/ advance paid to staff cannot be labeled as expenditure.

The claim is not found to be acceptable. The appellant has not explained with supporting evidences that these vouchers relates to temporary imprest/ advance paid to staff. In the absence of corroboration with books of accounts the claim is found to be not verifiable. The appellant has not explained that the cash vouchers were not expenditure. The source of making such expenditure is also not explained because these vouchers are not found to be recorded in the regular books of accounts. Even if the claim of the appellant is accepted that the voucher was with regard to advance given to the staff, the source of such expenditure needs to be explained. The claim made by the appellant is therefore not found to be acceptable.

The appellant claimed that these are rough document on which some small amount is written, which even does not have any date could not be treated as actual voucher and could not be assigned to any particular financial year. Such documents have no significance and are deaf and dumb documents and do not fit in the character of a voucher relating to any expense.

The arguments of the appellant are considered but not found to be acceptable. There might be some vouchers which are not dated properly. The AO has considered them for the current year on the basis of year. The appellant is claiming that small amount is mentioned on some vouchers. However, the total of such vouchers is a huge sum which is not explained from the books of accounts.

It is stated that inclusion of income on the basis of seized vouchers in the ITR of earlier assessment years cannot be the ground to treat the same in current year also. Every assessment year is separate and independent. In Radhasoami Satsang Vyas Radhasoami Satsang Vyas vs. CIT, 1991 Indlaw SC 948, the Hon'ble Supreme Court observed that each assessment year is a separate unit. Decision in one year may not carry forward and hold for a subsequent year

Hon'ble Supreme Court Of India in the case of Radhasoami Satsang v Commissioner of Income-tax [1992] 60 Taxman 248 (SC)/[1992] 193 ITR 321 (SC)/[1991] 100 CTR 267 (SC)[15-11-1991] relied upon by the appellant held as under-

"13. We are aware of the fact that strictly speaking res judicata does not apply to income- tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.

Hon'ble supreme court held that where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. The appellant has included income on the basis of seized vouchers in the ITR of earlier assessment years. The appellant should have included income on the basis of similar seized vouchers in the ITR of current assessment year. Following the order of Hon'ble Supreme Court, it would not be at all appropriate to allow the position to be changed in current year The decision relied upon by the appellant is therefore supporting the addition made by the AO.

It is argued that the Id. AO has described cash vouchers as bogus. It is argued that once the cash voucher is said as bogus, the same is not required to be accounted for and as such, no addition can be made u/s 69C of the Act.

The argument of the appellant are considered. The AO made addition with regard to these vouchers because the source of the expenditure was not explained. The voucher was bogus because it was not allowable if claimed in the regular books as expenditure because the voucher was not verifiable. Even if the claim of the appellant is accepted that the voucher was with regard to advance given to the staff, the same is not an allowable expenditure as per Income Tax Act. However, since the source of such expenditure is not explained the expenditure is to be treated as unexplained expenditure as per provisions of section 69C of the Income Tax act. The addition made by the AO is found to be justified and upheld.

This ground of appeal is treated as dismissed.

Ground No. 13

9.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AD in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

This ground of appeal has not been argued by the appellant. On perusal of assessment order, it is evident that the appellant has been provided enough opportunity of being heard. The reply of the appellant has also been considered by the AO. Therefore, the issue of opportunity of hearing raised by the appellant is not found to be acceptable.

This ground of appeal is treated as dismissed.

Ground No. 14

10. The last Ground of Appeal is that the assessee reserves the right to amend delete, add, substitute, modify or alter any one or more of the grounds of appeal at the time of hearing.

10.1 The appellant has not added, altered, modified or amended any of the above mentioned grounds of appeal on or before the date of hearing. Accordingly such mention any specific adjudication and is accordingly treated as disposed of.

11. In the result, the appeal of the appellant is treated as partly allowed.

7. Feeling dissatisfied with the above findings so recorded in the order of the ld. CIT(A), the revenue preferred the present appeal before this tribunal on the grounds as stated herein above. Apropos to the grounds of appeal ld. DR relied upon the finding recorded in the order of the ld. AO. Ld. DR vehemently submitted that the ld. CIT(A) was not justified in deleting the addition of Rs. 1,55,51,600/- made on account of unexplained cash deposited in Specified Bank Notes (SBN) during the demonetization period accepting the claim of the assessee for Rs. 1,55,51,600/- considering it as fees received from the assessee but the assessee failed to justify the receipt of fees of that amount in just 8 days wherein the during the same period in immediate period the cash balance was only for Rs. 35 lacs therefore, the appeal cannot be accepted. It was recorded during the search unable to explain the source of cash deposited into the bank account and that too in the demonetization period. The assessee company also could not submit any evidence for bulk receipt of fees from the student on Deepavali and the same was kept as cash in hand and were deposited after the Deepavali upon demonetization. The explanation so furnished cannot be believed. The assessee so failed provide proof for providing relaxation in fees to student as claimed. The assessee has produced any evidence such as challan, receipt or other form filed in connection with the fees so received in cash, thus in the absence of corroborative evidence or the complete information the relied granted by the ld. CIT(A) is not correct and thereby the order passed by the ld. CIT(A) be quashed and that of the ld. AO be restored.

8. Per contra, ld. AR of the assessee relied upon the detailed finding recorded in the order of the ld. CIT(A) and thereby he stood by the finding so recorded in the order of the ld. CIT(A). In support of that order so made by the ld. CIT(A) he relied upon the following written submission advanced before the ld. CIT(A);

With reference to the captioned subject and on behalf of the appellant- assessee, we crave leave to submit herewith as under for favour of your kind and sympathetic consideration please:

01 That the assessee-company is engaged in providing coaching to the students aspiring for entrance examinations. The return of income for the AY 2017-18 was filed u/s 139(1) on 09.10.2017 within the due date.

2. Later on, a search and seizure action under section 132(1) of the Act was carried out on 18.04.2018 at the various premises of Motion Education Pvt. Ltd.

3. Consequent to the search action, notice under section 153A of the Act was issued on 28.12.2018. In response thereof, the assessee filed return of income u/s 153A on 16.01.2019 declaring the total income of Rs.5,45,460/-. There is no difference in income between ITR filed u/s 139 and 153A of the Act.

4. Thereafter, statutory notices were issued and complied with by the appellant- assessee and rejecting the contention of the assessee, the assessment was completed on 27.07.2021 under section 153A of the Act with approval of the ld. Addl. CIT, Central Range, Udaipur u/s 153D and the following additions were made and tax was charged by applying the provisions of section 115BBE of the Act: (i) Alleged unexplained cash deposit Rs.1,55,51,600/- in bank account during demonetization (ii) Alleged difference in fees receipts Rs.1,52,89,500/- (iii) Alleged unexplained/bogus cash vouchers Rs.27,36,409/-

5. That being aggrieved by the impugned assessment order, the appellant- assessee has filed the present appeal petition.

(B) OUR SUBMISSIONS:

The grounds of defence are as follows:

1. Alleged unexplained cash deposit in bank account during demonetization: Rs.1,55,51,600/-

Succinctly, the facts as culled out from the records, is that the assessee- company is engaged in the business of providing coaching to the students. During search proceedings u/s 132 of the Act, on going through books of & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. account of the appellant-assessee, it is found that the assessee has deposited Rs.2,85,00,000/- in account No. 39384000000102 with Yes Bank Ltd. in old currency during demonetization period. Statement of Shri Surendra Kumar Gupta, director of the appellant-company was recorded u/s 132(4) of the Act on 18.04.2018 and he was asked to explain the source of such cash deposited during the demonetization period. He stated in his reply to question no. 49 that during demonetization cash amounting of Rs.2,85,00,000/- was deposited by the company and also explained the source of cash deposited. Further, during post-search investigation proceedings, the statement of Shri Nitin Vijay, the director of the company was recorded on 24.07.2018 and he stated in reply to Q. No. 17 that there was an opening cash balance of Rs.1,31,46,295/- as on 01.11.2016 and fees of Rs.1,55,51,600/- were received within the period of 01.11.2016 to 08.11.2016. During the course of assessment proceedings, it was duly explained that the opening balance of cash includes cash with school integration programme centres/ branches and temporary imprest to different staffs, who move frequently to other cities for marketing purpose. The detailed list of the students who deposited fees in the period 01.11.2016 to 08.11.2016 was also furnished earlier on the online portal of the Department on 13.02.2017 when query was raised as to cash transactions and also before the ld. AO. Many of these students are those who took early registration, i.e. before March, 2016 and were given relaxation to deposit their second installment upto Deepawali i.e. 27.10.2016.

During the course of assessment proceedings, the copy of the cash book from the regular books of account for the period 01.11.2016 to 30.12.2016 along with copy of Yes bank statement, ledger copy of fees received account from the books of account and the return of Service Tax for the cross verification were submitted. The receipt book for this period was already seized during the search proceedings, which were already on record. However, the ld. AO accepted the opening cash of Rs.1,31,46,295/- as on 01.11.2016 but doubted such huge receipt within a short span of time and added a sum of Rs.1,55,51,600/- as unexplained money u/s 69A of the Act.

In this connection, it is humbly & respectfully submitted as under:

1. It is stated that as on 31.10.2016, there was a cash balance of Rs.1,31,46,295/- in the books of account. As per ITR filed for AY 2015-16 also, as on 01.04.2016 there was a cash balance of Rs.1,35,50,709/-. This itself shows that there remains a substantial cash on hand with the assessee- company. Copy of the cash book for the year was duly produced before the ld.

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. AO. Earlier also, the Department had enquired such information of cash deposits during demonetization period. In compliance thereof, the complete details of students viz; name of students, father’s name, roll number, complete address with PIN, fees receipt amount, etc. from whom fees received during the first week of November, 2016 were uploaded online on the Income Tax portal on 13.02.2017. The same details were also furnished to the ld. ITO Intelligence as well as ld. ADIT, to which no adverse inference was drawn. When factual position of cash already emanates from the records, there is no point in considering the average cash balance or that of earlier period. Vide reply dated 24.02.2021, it was duly explained to the ld. AO that in post search investigation only a specific sample from 01.10.2015 to 31.12.2015 of the cash book was taken showing average cash balance of around Rs.35 lakh but the cash summary of other months were also provided. Before the ld. AO, the monthly cash summary of five years viz., FY 2014-15 to 2018-19 was also submitted where in sixteen months cash on hand was around Rs.100 lakh as per books of the assessee. The reason for fluctuation was also explained to the ld. AO. In the month of November 2016, the students who joined coaching after Deepawali holidays and also those students who took early bird registration were given a special privilege at the time of joining to deposit remaining fee after Deepawali vacations. It was also illustrated to the ld. AO that in the year under consideration the percentage of cash fee is lesser than earlier two years which shows that there remains difference in pattern of fee received because of business strategy and marketing plan adopted in the beginning of the session. After demonetization, the assessee received online notices for verification of cash deposit from ITO, Intelligence on 06.01.2017 and also from ADIT (Investigation) on 17.03.2017. At that time also, the assessee furnished complete details and no adverse findings were made by them.

2. It is respectfully submitted that the fee receipts issued to the students in this period were on record and were also seized during search as Exhibit No. 102 (Party No. B-2), which contain receipt books. Such receipts are duly reconciled with the service tax returns. Service tax was also duly paid thereon. The fees received were due to be deposited by students after Deepawali vacations, which was pre-informed when the students were leaving for Deepawali break. To collect fee after Deepawali vacations when the students return from their home is a normal trend and practice among coaching institutions. It is generally happens.

3. The ld. AO in order to test the veracity of the same, issued notices u/s 133(6) to some of the randomly selected students and many of them replied & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. and accepted that they have deposited fees in this period. Not only this but it was also brought to the knowledge of the ld. AO that during the course of earlier enquiry by the Department just after demonetization period also, complete details of students viz; name of students, father’s name, roll number, complete address with PIN, fees receipt amount, etc. from whom fees received during the first week of November, 2016 were uploaded online on the Income Tax portal on 13.02.2017. Fee receipts issued were seized by the Department. Therefore, there is no ground to doubt the identity of students and voucher of fee receipt.

4. It is respectfully submitted that the deposits by the assessee in bank account during demonetization period are not unexplained. There are proper entries in the books of account for cash fee receipts, cash balance and cash deposits. Fee receipts were duly issued against fee received. The ld. AO did not point out any defect in the books of account. To collect fee after Deepawali vacations when the students return from their home is a normal trend and practice among coaching institutions. There is not even a single evidence of suggesting unexplained money. Thus, no adverse inference could be drawn regarding cash deposits made during demonetization.

5. It is respectfully submitted that the ld. AO has made additions towards cash deposits into bank account during demonetization period, by rejecting explanation furnished by the assessee with regard to source for cash deposits, which is backed by necessary evidences. The appellant had declared fee receipts from students, which is duly supported by receipts issued to them. The appellant is having complete details of such students, which were duly produced before the ld. AO. The student fees received is also backed by the service tax return. The appellant has duly paid service tax on such receipts at the applicable rate out of such receipts and also, the income out of the same is already offered. The ld. AO has not pointed out any discrepancies in books of account maintained by the appellant. He has not pointed out any suspicious back dating of fee receipt or fictitious fee receipt where there is an increase during the month of November, 2016 as compared to earlier years.

9. It is, therefore, submitted that if the AO alleged that the appellant has brought the unaccounted money generated into the books on that day, then the onus was on the ld. AO to bring on record evidence to demonstrate that such receipts were made by the appellant out of books or that the appellant had other source of income which is not disclosed. In the absence of any evidence, allegation cannot be accepted under the law. The contention of the ld. AO is not supported by any reliable evidence but merely suspicion.

10. Reliance is also placed on the decision of Hon'ble Supreme Court in the case of CIT vs. Devi Prasad Vishwnath Prasad (1969) 72 ITR 194 (SC), wherein it is held that "It is for the assessee to prove that even if the cash credit represents income, it is income from a source, which has already been taxed". In the present case, the assessee has already offered the receipts for taxation and hence, the onus has been discharged by it and the same income cannot be taxed again.

and the appellant-assessee has already filed necessary evidences to prove the availability of source for cash deposits.

Reliance is placed on:- (i) Laichand Bhagat Ambica Ram vs. CIT (1959) 37 ITR 288 (SC) (ii) ACIT vs. Hirapanna Jewellers (2021) 189 1TD 608 (Vishakhapatnam) (iii) ACIT vs. Nitin Sankhla in vide order cit 08.06.2023 (iv) ITO vs. Parmanand Gupta in dated 04.08.2022

(i) CIT vs. Kailash Jewellery House in order dtd. 09.04.2010 of Delhi High court, PN 112 of PB. (ii) Anantpur Kalpana vs. ITO in dtd. 13.12.2021 (iii) ACIT vs. Vishal Exports Overseas Ltd. in ITA no. 790/Ahd.//2005 order dtd. 07.08.2009, "C" Bench, affirmed in ITA no. 2471 of 2009 vide order dated 03.07.2012.

2. Alleged difference in fees receipts: Rs.1,52,89,500/-

During the search proceeding u/s 132 at business premises of the appellant- assessee, computerized excel sheets containing information in respect of fees received from students for the FY 2016-17 & 2017-18 were found and seized. On the basis of these sheets, it is alleged that there is a difference in the student’s fees as per excel sheets and the books of account maintained. During the course of post search investigation proceedings, the assessee-company submitted a complete reconciliation statement as to the difference in fees entered as per excel sheets and the books of account. Vide point no. 6 of the reply dated 24.07.2018, the reason for difference appearing in excel sheets and books of account was duly explained in detail.

During the assessment proceedings also, such reconciliation details along with supporting evidences were furnished, which make it crystal clear that there is no difference in the fees recorded in the books and as appearing in the excel sheets. However, the ld. AO while passing the assessment order, treated such difference of Rs.1,52,89,500/- as undisclosed fees.

In this connection, it is humbly & respectfully stated as under:

1. It is submitted that the fee is received from students by the front desk staff, who prepares a manual sheet containing date and student-wise details of fee received through cash/ cheque. Then, he pass on the same to the back office staff, who enters student-wise detail in the computer for various classes/courses every day and summation of all fees received from different students on that particular day comes on these impugned excel sheets. The person who receives fees from students is front desk staff and this reconciliation of daily fee received is done by back office staff. Thus, total fee received by the front office staff relating to Motion Education Pvt. Ltd., Motion E-learning Solution Pvt. Ltd.

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. and on behalf of schools are duly entered on these excel sheets on daily basis from the details received from the front office. This was duly clarified by Mr. Pawan Vijay, computer operator during the course of search. For the fees received on behalf of school separate receipt is issued by the concerning school and such fees is handed over to school. Thus, the excel sheets are prepared for daily collections made. The excel sheets also serve the purpose of getting information readily available about due fees of any student as the computer operator has that data in his hand on the basis of such excel sheets. Based on such data, the accountant enters such transactions in the tally software for preparation of books of account.

2. It is humbly stated that the excel sheets found & seized comprise of gross fees receipts from students at Kota centre and total of the excel sheets duly matches with the fees received ledger summary from the audited books of account maintained by the assessee-company.

3. It is submitted that, the fee entered in the excel sheets is gross fee received from the students and on such fee received, service tax is paid by the assessee-company. There is a clear-cut mention on every fees receipt and also on brochure that the fee is inclusive of Service Tax. Thus, the said excel sheets contain the gross fees received from students, while in the books if the summary of fees ledger is viewed, it is net of service tax component. Therefore, on this count alone, out of alleged difference of Rs.1,52,89,800/-, a sum of Rs.1,29,30,043/- relates to Service Tax because in the excel-sheet gross fee inclusive of service tax received from students is entered whereas in the books of account the net fee, exclusive the service tax is entered. The service tax is calculated by reverse calculation by the accountant and after that he enters the same in tally where service tax is transferred in the relevant account head i.e. service tax payable and net amount after deduction of indirect tax is taken to fees received account. The service tax is duly verifiable from service tax returns available on record and also visible on every fees receipt issued to students and found & seized from the searched party.

4. For the remaining difference of Rs.23,59,757/- also, a detailed reconciliation with supporting evidences were furnished to the ld. AO. We produce herewith the reconciliation statement between fee as appearing in the excel sheets and as per books of account. From the same, it may kindly be observed that out of Rs.23,59,757/-, a sum of Rs.10,50,801/- relates to fee refund in respect of which complete ledger was furnished which shows that all refunds were made through banking channels except Rs.41,350/-. Similarly, school fee of Rs.6,15,730/- was collected on behalf of affiliated school namely; Maa Bharti Senior Secondary School for which no book entry is required in the assessee’s books of account. Like-wise, as stated above, Rs.9,54,615/- belong to Motion E- learning Solutions (P) Ltd., an affiliated company has duly been accounted in its books of account. A complete reconciliation statement submitted before the ld. AO is produced. All reconciliation items are duly verifiable.

5. To substantiate the entries of the reconciliation sheet, the assessee had duly submitted the following documents before the ld. AO along with the reconciliation statement:

(i) Copy of audited Profit & Loss a/c which shows that total fees received during FY 16-17 is Rs.14,23,95,103/-, which is also duly verifiable with the service tax return.

(ii) Monthly summary of fees received and advance fees received ledger accounts, in which debit side entries are relating to service tax transfer to service tax account, fees refund and cheque return. Fees Received Rs.7,53,33,274/- and Fees Received in Advance Rs.1,08,54,249/- have been taken in reconciliation sheet.

(iii) Ledger copies incorporating service tax detail on fees received, advance fees received account, fees refund account and cheque return account. (iv) Copy of school fees receipt of Rs.6,15,730/- issued by Maa Bharti School. (v) Copy of audited Profit & Loss A/c of Motion E learning Solutions Pvt. Ltd., which makes it clear that during the year Rs.9,51,615/- (i.e. net of received Rs.9,54,615/- & refunded Rs.3000/-) was the fees receipt of Motion E learning Solutions (P) Ltd. (vi) There is fees details of Rs.1,83,629/- which was entered into books of account but left from entering into excel sheet where student’s name or roll number were not available in the details prepared by the front desk and such entries were not made by computer operator into excel sheets. (vii) Cheques return were of Rs.1,06,800/- during the year and they were re- lodged, which were cleared by the bank so were entered in book of account later, added back in the reconciliation statement.

(viii) Fees received from old students Rs.57,500/- was entered in books in the ledger of advance fees and another advance fees of Rs.49000/- received via bank NEFT and entered in books was not taken in excel sheets. After all above addition/subtraction in the reconciliation statement, the gross fees received of Rs.10,14,77,024/- as per total of excel sheet found and seized by the search team, remains tallied with the books of account, which is higher by Rs.29,059/- due to cumulative effect of minute human error in preparing excel sheet.

7. Since the assessee has already explained the nature and source of such transactions and reconciled the same from audited books of account regularly maintained, no addition is warranted and there is no application of section 115BBE of the Act. Under the aforesaid facts and circumstances, the addition of Rs.1,52,89,500/- made as unaccounted fee receipts may kindly be deleted.

3. Alleged unexplained/bogus cash vouchers: Rs.27,36,409/-

During the course of search proceedings at business premises of the assessee, certain documents, cash vouchers were found and seized vide various exhibits of Annexure-AS by Party No. B- 1.

1. During the search proceedings, the statement of director of the assessee-company Mr. Nitin Vijay was recorded and asked to explain the cash vouchers, to which he replied that cash vouchers are related to various expenses incurred by the company and some vouchers were found to be doubtful in nature. In this regard, it is respectfully submitted that: 01. It is stated that these are bunch of documents containing misc. small expenses vouchers/bills, vouchers relating to advance and temporary imprest to staff, rough jottings, etc. and these are duly accounted for in the books of account as expenditure if the same are in the nature of a expense.

02. During post search proceedings also, it was duly explained that out of these many of the vouchers are relating to either temporary imprest/advance paid to staff, rough jottings, and in absence of date on some vouchers, it was not clear that how the vouchers of Rs.27,36,409/- were considered as unexplained expenditures. Since all the actual expenses voucher/bills were already entered in the books of account, it was specifically requested to the ld. AO to provide the details of vouchers being treated by him as not recorded in the books so that the same may be specifically got verified. However, the same were not provided & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. till the end and as such, in absence of the requisite details it is not humanly feasible to get it verified from the books of account. Thus, the appellant- assessee submitted the details of all expenses accounted for in its books of account from which the unaccounted expenditures could have been separated out. It is also stated that temporary imprest/ advance paid to staff cannot be labeled as expenditure.

4. It is further stated that inclusion of income on the basis of seized vouchers in the ITR of earlier assessment years cannot be the ground to treat the same in current year also. Every assessment year is separate and independent. In Radhasoami Satsang Vyas Radhasoami Satsang Vyas vs. CIT, 1991 Indlaw SC 948, the Hon’ble Supreme Court observed that each assessment year is a separate unit. Decision in one year may not carry forward and hold for a subsequent year. For this particular year, the assessee had requested to provide details of such alleged bogus/unexplained cash expenditures of Rs.27,36,409/-, which were not provided to the appellant and thus, the assessee submitted details of all expenses appearing in the books of account and thus, without providing the details, it cannot be said that the same were not recorded in the regular books of account.

5. It is further submitted that on one hand the ld. AO has described the same as also bogus cash vouchers and on other hand, the addition is made u/s 69C. It is respectfully submitted that the assessee right from the beginning contended that many vouchers have dumb/rough jottings. Once the cash voucher is said as bogus, the same is not required to be accounted for and as such, no addition can be made u/s 69C of the Act. Under the aforesaid facts and circumstances, the addition of Rs.27,36,409/- made on this score may kindly be deleted. 04. Approval order u/s 153D is bad in law:

Apart from our submissions, on the merits of the case as above, the humble appellant has also raised the legal ground that the impugned assessment order u/s 153A deserves to be quashed since the statutory and mandatory approval as granted u/s 153D is totally mechanical and ritualistic without any independent application of mind and without any reference of year-wise material as required by law. In this connection, it is humbly & respectfully submitted as under:

2. Moreover, it is stated that the provisions contained in section 153D as enacted by the parliament cannot be treated as an empty formality. The provision has certain purpose that the approval of the senior authority will ensure that the & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. assessee is not prejudiced by the undue or irrelevant addition or assessment and would also ensure that proper enquiry or investigation are carried out by the assessing authority. In the approval order, even the bare minimum requirement of the approving authority having to indicate what the thought process involved is missing. While elaborate reasons need not be given, there has to be some indication that it meets the requirement of the law.

3. Such approval is generic and accorded in a blanket manner without any reference to any issue in respect of any of the seven assessment years. Impugned approval is apparently issued in a mechanical and hurried manner without mentioning the reasons and cannot sustain in law. Consequently, the impugned assessment order u/s 153A is non est and nullity and hence, the same may kindly be quashed.

Reliance is placed on the following supporting case laws:

(i) In the case of ACIT vs. Serajuddin & Co. (2023) 333 CTR (Ori) 228, it was held that such an approval of a superior officer cannot be a mechanical exercise has been emphasized in several decisions. (ii) Where the approval is granted mechanically, it would vitiate the assessment order itself. Sahara India (Firm) vs. CIT (2008) 216 CTR (SC) 303: (2008) 7 DTR (SC) 27: (2008) 14 SCC 151 and Rajesh Kumar vs. Dy. CIT (2006) 206 CTR (SC) 175 : (2007) 2 SCC 181 applied. (iii) Reliance is also placed on Veena Singh vs. ACIT (2024) 38 NYPTTJ 519 (Del) Therefore, the impugned assessment order may kindly be quashed. Other grounds are already covered in our submissions and not being elaborated separately.

9. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions:

S.No. Particulars Page No. 01 Copy of written submission before the Ld CIT(A). - 10 1 02 11 Copy of letter of approval granted u/s 153D by Addl. CIT, Central Range, Udaipur. 03 Copy of reconciliation statement as per books and excel sheet - 15 12 found during the search. 04 Copy of ledger account of fee and other income during the year - 129 16 under consideration. Copy of service tax return. 05 - 135 130 06 Copy of GST return. - 153 136

S. No. Particulars Page No. 1 Copy of decision of Hon’ble ITAT Jaipur Bench in the case of Resonance 1-32 Eduventures Ltd., to 672/JP/2024, dated 10.03.2025 2 Copy of decision of Hon’ble ITAT Delhi Bench in the case of Sohan Lal 33-48 Singla dated 08.05.2025

Record reveals that the assessee has deposited Rs. 2,85,00,000/- in old currency during demonetization period. When the premises search statement of Shri Surendra Kumar Gupta (Director of Motion Education Pvt.

Ltd.) was recorded wherein he stated that during demonetization cash amounting of Rs. 2,85,00,000/- was deposited by Motion Education Pvt. Ltd. The details as source submitted reads as under:-

Cash balance available in company's a/c as Rs. 2,60,00,000 7.11.2016 Cash receipt on 08.11.2016 Rs. 25,97,490 Total cash deposited on 18.11.2016 Rs. 2,85,00,000 While assessment proceeding ld. AO noted that cash book so filed, it was noticed that during the period 01.10.2015 to 31.12.2015 Company's average cash balance only was at Rs. 35.0 lacs. Further search party asked for explanation of opening cash balance of Rs. 2,60,00,000/- on 07.11.2016. He gave a simple explanation that cash balance of Rs.

2,60,00,000/- was available in the company's account at that time. Whereas in the post -search investigation proceedings, it was explained that there was an opening cash balance of Rs. 1,31.46.295/- as on 01.11.2016 and fees of Rs. 1,55,51,600/- was received within the period of 01.11.2016 to just after the Deepawali holidays and those students who took early registration in the Motion were given a special privilege at the time of joining in depositing remaining fees after Deepawali. When students returned from their homes after the Deepawali vacation, they started depositing fees in bulk, and that's why in FY 2016-17 fees collected in the month of November was more than in other years. It was noted by the AO that the assessee's claim was not found acceptable because the same trends of fees collection in the month of November in earlier years did not happen. As per the monthly fee collection chart submitted by the assessee, the assessee has shown fee collection of Rs. 1,58,60,918/- (including other misc receipts) during the month of November 2016. While the collection of fee in the month of November 2014 and November 2015 were shown of Rs.20,30,553/- & 14,21,300/- only. The fee collection figure in the month of November 2016 is abnormally higher than in the earlier years in the same month. Further, the assessee has not provided the details of the students who took early registration in the Motion and the balance fees to be collected from those students as on 31.10.2016. As per the cash book provided by the assessee, the total cash balance of Rs. 2,87,11,895/-was available with the assessee as on 08.11.2016. The assessee company has of total cash available as per cash book, but the assessee has not provided any satisfactory reason for holding this huge cash for ten days. The documents provided by the assessee in support of its claim, i.e copy of cash book, ledger accounts, fee receipts etc, during the assessment proceedings, were prepared by the assessee itself. But the assessee has not provided any documents related to fee collection like challan form and any other forms which were filled, signed, and submitted by the students at the time of fee deposition. In the absence of these documents, the fee collected during the period 01.11.2016 to 08.11.2016 remains unverified.

Based on that observation ld. AO concluded that the assessee has failed to explain the source of cash deposited in old currency during the demonetization period of Rs. 1,55,51,600/- out of total cash deposit; therefore, the same amount is added to the total income of the assessee company treated as unexplained money as per provision of section 69A, and tax is charged as per provision of section 115BBE of the Act. The assessee submitted that there remains a substantial cash on hand with the assessee-company. The complete details of students viz; name of students, father's name, roll number, complete address with PIN, fees receipt amount, etc. from whom fees received during the first week of November, same details were also furnished to the Id. ITO Intelligence as well as Id.

ADIT, to which no adverse inference was drawn by them, after submitting those details. When factual position of cash already emanates from the records, there is no point in considering the average cash balance or that of earlier period as each year is different assessment year. The reason for fluctuation was also explained to the Id. AO. In the month of November 2016, the students who joined coaching after Deepawali holidays and also those students who took early bird registration were given a special privilege at the time of joining to deposit remaining fee after Deepawali vacations. It was also illustrated to the id. AO that in the year under consideration the percentage of cash fee is lesser than earlier two years which shows that there remains difference in pattern of fee received because of business strategy and marketing plan adopted in the beginning of the session. It was also submitted that the fee receipts issued to the students in this period were on record and were also seized during search as Exhibit No. 102 (Party No. B-2), which contain receipt books. Such receipts are duly reconciled with the service tax returns. Service tax was also duly paid. The fees received were due to be deposited by students after Deepawali vacations, which was pre-informed when the students were when the students return from their home is a normal trend and practice among coaching institutions. It was also submitted that the Id. AO in order to test the veracity of the same, issue notices u/s 133(6) to some of the randomly selected students and many of them replied and accepted that they have deposited fees in this period. It is stated that the appellant had declared fee receipt from students, which is duly supported by receipts issued to them. The appellant has complete details of such students, which were duly produced before the id. AO. The student fees received is also backed by the service tax return. The appellant has duly paid service tax on such receipts at the applicable rate out of such receipts and also, the income out of the same is already offered. The Id. AO has not pointed out any discrepancies in books of account maintained by the appellant. He has not pointed out any suspicious back dating of foe receipt or fictitious fee receipt where there is an increase during the month of November, 2015 as compared to earlier years. It is stated that there is no finding of booking of fee of the student, which is non-existent to show pumping of unaccounted money in old currency notes. The appellant had furnished explanation with regard to the nature and source of the cash deposited in bank in demonetized currency which was not found to be false by the Department. account maintained by the assessee, genuine of the same, which is duly supported by necessary documentary evidences cannot be rejected as source for cash deposits into bank account during demonetization period.

The Id. AO has not brought on record any material to draw an inference that the explanation offered by the assessee was incorrect or that the impugned sum represented income of the assessee from undisclosed from the explained source appearing in the books of account could not be treated as unexplained money us sources as against the entries recorded in the audited books of the assessee. The cash deposited in the banks 69A of the Act without bringing on record any credible evidence/material in support of such allegation. It is submitted that the entire sales of the assessee are supported by the service tax invoices, fee receipts, service tax returns, which are duly accepted by the service tax authorities and verifiable from books of account & records, duly audited under the Companies Act, 2013 as well as Income Tax Act.It is stated that the Id. AO did not reject the books of account and accepted such deposits of lee as business receipts it is respectfully submitted that when the audited books are not rejected and business receipts are not disturbed, no addition is warranted in respect of cash deposits during demonetization period. Making a separate addition brought the unaccounted money generated into the books on that day, then the onus was on the ld. AO to bring on record evidence to demonstrate that such receipts were made by the appellant out of books of that the appellant had other source of income which is not disclosed in the absence of any evidence, allegation cannot be accepted under the law. The contention of the Id. AO is not supported by any reliable evidence but merely suspicion.

As per provision of section 69A of the Act addition can be made of such monies/assets/articles or things which are not recorded in the assessee's books of account. In the present case on hand, the cash deposits are duly recorded in the books of account and are made on the receipt of coaching fee from students in these circumstances, it is not a case where such money was not u/s 69A of the Act. In the light of the facts and circumstances of the case we do not see any infirmity in the finding so recorded in the order of the ld. CIT(A) and thereby the we see no reason to consider the various grounds of appeal of the revenue and the same are dismissed.

In the result, the appeals of the revenue in stands dismissed in terms of the above observations.

455/JP/2025. In this appeal the revenue has taken following grounds of appeal;

“1. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,46,12,184/-without considering the facts and position that the assessee did not 1 produce any specific evidences in respect of amount of Rs. 10,86,475/- refunded to the students and reasons for refund with documentary evidences and in absence of reason and documentary evidences, same is not acceptable? 2. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 70,96,310/- on account of unexplained expenses without appreciating the facts that the assesse has been failed to explain and to make verified the unaccounted expenses with supportive documents and evidences? 3. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 70,96,310/-on account of unexplained expenses without appreciating the facts that the assessee has claimed that some vouchers were not entered but in the reconciliation, the not-entered voucher detail were found for whole the year and also company could not prove any nexus to show that the shortage of cash due to these vouchers only? 4. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 70,96,310/- on account of unexplained expenses without appreciating the facts that the reply of the assessee is only an afterthought arrangement by tallying the cash shortage with the unaccounted cash vouchers which belongs to whole year and in general business practice, it is not possible that vouchers of whole years were not entered in books of account? 5. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 70,96,310/-on account of unexplained expenses by holding that Assessing Officer has not mentioned source of expenditure other than shortage of cash without appreciating the facts that Assessing Officer has made addition of Rs. 1,46,12,184/- as unaccounted and unexplained income and expenses recorded in various vouchers might be incurred from above undisclosed and unexplained income? 6. The appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appellant proceeding.

7. Whether on facts and in circumstances of the case, the CIT(A) is filed in deleting the addition of Rs. 1,46,12,184/- on account of unaccounted fee receipts without & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. appreciating the facts that addition was fact made on the basis of incriminating document found and seized during the search proceedings by party No. B-2, as page No. 37 of Exhibit 15 of Annexure AS-1, and this document is a computerized excel sheet containing information in respect of fees received for F.Y. 2016-17 & 2017-18 and there is difference of Rs. 1,46,12,184/- in fees receipt shown in books of account of M/s Motion Education Pvt. Ltd and actual fees receipt written in computerized excel sheet and the assessee failed to furnish satisfactory explanation, to make it verified and reconciled each and every entry? 8. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,46,12,184/-accepting the claim of the assessee for Rs. 28,22,140/- as explained and verifiable as refund of Rs. 10,86,475/- to students, Rs. 13,46,301/-belonging to Motion E-learning Solutions Pvt. Ltd collection and remaining as taken in other head, without appreciating the fact that assessee failed to submit documentary evidences in support of its claim and CIT(A) has accepted reply of the assessee without remarking specific evidences supporting and justifying the variation from excel sheet? 9. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,46,12,184/-by accepting the claim of the assessee for Rs. 1,17,90,044/- as verified from service tax return without appreciating the facts that service tax is also part of fees receipts of the assessee and on 9 the basis of payment of service tax to Government, assessee cannot claimed that same was not included in fees receipts in books of the account and assessee failed to provide reason for non-inclusion of service tax in books of accounts and also failed to reconcile it from books of accounts at the time of assessment proceedings? 10. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 1,46,12,184/- considering the reply of the assessee claiming the fees receipts are more than the amount in excel sheet without appreciating the facts and 10 position that the these were the specific unexplained entries in excel sheet which are remained unverified and unexplained and when, these are not recorded in books of accounts, facts that fees receipts shown in books is higher than excel sheet has no relevance?”

12. Apropos to these grounds the relevant finding of the ld. CIT(A) reads as under :

“5.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. The AO noted that incriminating document found and seized by party No.B-2, as page No.37 of Exhibit 15 of Annexure AS-1. This is a computerized excel sheet containing information in respect of fees received for F.Y.2016-17 & 2017-18. On perusal of computerized excel sheet, it was found that there are huge differences in fees receipt shown in books of account of M/s Motion Education Pvt. Ltd and actual fees receipt written in computerized excel sheet. As per the excel sheet, difference of fees receipt was detected as under:- F.Y. Fee receipt difference as per excel sheet and company’s books of account (in Rs.) 2016-17 1,52,89,500/- 2017-18 1,46,12,184/-

The assessee submitted reconciliation statement through his reply submitted on 24.07.2018, The assessee merely claimed that books of accounts are maintained considering service tax paid, GST paid, fees refund paid etc. However, the assessee did not furnish any documentary evidence during the search or post-search inquiries to substantiate the claims. The assessee has failed to reconcile each and every entry in the excel sheet. It has failed to produce any evidence such as receipts issued to students for refund etc. Therefore, the general claim cannot be accepted without specific and corroborative evidence. The AO noted that GST and Service Tax Returns have been filed based on the turnover recorded in books of accounts. However, all the entries in excel sheets are not even recorded in regular books of accounts. Mere production of ledger copies of fees refund, cheque retums etc. does not tantamount to furnishing reconciliation with documentary evidence. The assessee did not furnish the list of students from whom fees/cheques have been received and entered in these excel sheets and subsequent return of fees to those students. The assessee's claim that while receiving fees, all entries were recorded in excel while the entries of refund are not made in the excel sheets is too general to accept. Complete names, addresses of all students to whom fees have been refunded were not furnished, and therefore no cross-verification was made possible. It is claimed that entries in excel sheets were verified with manual registers. Further, the assessee claimed that the front desk maintained manual registers, and thereafter entries in the back office computer were recorded based on such & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. manual registers prepared by the front line desk. However, the same manual registers were not produced during the search and post search proceedings to substantiate its claim. Therefore, such registers might have been prepared as an after-thought to mislead the department. Further names, addresses, PANs of third parties mentioned in these registers have not been furnished. No counterevidence such as acknowledgement of fees return/cheque return by students has been furnished. Considering these facts, the reply filed by the assessee is not found satisfactory, therefore, the total unaccounted fees/receipts of Rs. 1,46,12.184/-detected on the basis of incriminating documents seized during search related to FY 2017-18 is added to the total income of the assessee. Per contra the appellant argued that the fee received from students by the front desk staff who prepares a manual sheet containing date and student-wise details of fee received through cash cheque. Then, he pass on the same to the back office staff, who enters student-wise detail in the computer for various classes/courses every day and summation of all fees received from different students on that particular day comes on these impugned excel sheets. The person who receives fees from students is front desk staff and this reconciliation of daily fee recerved is done by back office staff. Thus, total fee received by the front office staff relating to Motion Education Pvt. Ltd.. Motion E-learning Solution Pvt. Ltd. and on behalf of schools are duly entered on these excel sheets on daily basis from the details received from the front office. For the foes received on behalf of school separate receipt is issued by the concerning school and such fees is handed over to school. Thus, the excel sheets are prepared for daily collections made. It is stated that the excel sheets found & seized comprise of gross fees receipts from students at Kota centre and total of the excel sheets duly matches with the fees received ledger summary from the audited books of account maintained by the assessee-company. It is stated that, the fee entered in the excel sheets is gross the received from the students and on such lee received, Service Tax/GST is paid by the assessee- company There is a clear-cut mention on ovary fees receipt and also on brochure that the fee is inclusive of Service Tax. Thus, the said excel sheets contain the gross fees received from students, while in the books if the summary of fees lodger is viewed, it is net of Service Tax/GST component. Therefore, on this count alone, out of alleged difference of Rs. 1,46,12,184, a sum of Rs. 1,17,90.044/- relates to Service Tax/GST because in the excel-sheet grass fee inclusive of Service Tax/GST received from students is entered whereas in the books of account the not fee. The Service Tax/GST is duly verifiable from Service Tax/GST returns available on record and also visible on every fees receipt issued to students and found & seized from the searched party. It is stated that for the remaining difference of Rs. 28,22.140/- a sum of Rs. 10,86,475/- relates to fee refund in respect of which complete ledger was furnished which shows that mostly refunds were made through banking channels Rs. 13,46.301/- belong to Motion E-learning Solutions (P) Ltd., an affiliated company has duly been accounted in its books of account. A complete reconciliation statement submitted before the id. AG is produced. It is claimed that all reconciliation items are duly verifiable. To substantiate the entries of the reconciliation sheet, the assessee had duly submitted the following documents before the id. AO along with the reconciliation statement. (i) Copy of audited Profit & Loss a/c which shows that total fees received during FY 17-18 is Rs. 15,06,68,418/, which is also duly vonfiable with the Service Tax/GST returns (ii) Monthly summary of fees received and advance fees received ledger accounts, in which debit side entries are relating to Service Tax transfer to Service Tax account, fees refund and cheque returns Fees Received Rs. 6.22.68,447% and Fees Received in Advance Rs. 97.09 836 have been taken in reconciliation sheet. (iii) Ledger copies incorporating Service Tax/GST detail on fees received, advance fees received account, fees refund account and cheque return account. (iv) Copy of audited Profit & Loss A/c of Motion E learning Solutions Pvt. Ltd. alongwith copy of relevant ledger account (v) Cheques return were of Rs. 3,13,070/- during the year, deducted in the reconciliation statement. (vii) Advance fees of Rs. 1,73,916/- received and entered in books was not taken in excel sheets. After all above addition/subtraction in the reconciliation statement, the gross fees received of Rs. 8,66,51,687/- as per total of excel sheet found and seized by the search team, remains tallied with the books of account, which is higher by Rs. 9,495/- due to cumulative effect of minute human error in preparing excel sheet. It is argued that since the assessee has already explained the nature and source of such transactions and reconciled the same from audited books of account regularly maintained, no addition is warranted and there is no application of section 115BBE of the Act. The facts of the case are considered. Total unaccounted fees/receipts of Rs. 1,46,12,184/- was detected on the basis of incriminating documents seized during search related to FY 2017-18. As per AO, the assessee failed to reconcile each and every entry in the excel sheet. It failed to produce any evidence such as receipts issued to students for refund etc. The general claim cannot be accepted without specific and corroborative evidence. As against this the appellant stated that out of alleged difference of Rs. 1,46,12,184/-, a sum of Rs. 1,17.90,044/- relates to Service Tax/GST. The service tax and GST is duly verifiable from respective tax returns. The service tax/GST is claimed to be visible on every fees receipt issued to students and found & seized from the searched party. Hence, the claim of appellant in this regard has to be accepted as it is supported by verifiable evidences. The remaining difference of Rs. 28,22,140/- is also explained as Rs. 10,86,475/- is fee refund in respect of which complete ledger was furnished which shows that most of refunds were made through banking channels, Since, most of the refunds are made through banking channel these are verifiable. Rs. 13,46,301/-belonging to Motion E-learning Solutions (P) Ltd, is verifiable. As per reconciliation statement the remaining difference is because of cheque returned, franchisee shivay associate which is offered in other head and study material which is taken in other head of income. These are also verifiable. In view of these verifiable evidences furnished by the assessee, the claim of the appellant is found to be acceptable It is explained that the gross fees received of Rs. 8.66,51,687/- as per total of excel sheet found and seized by the search team, remains tallied with the books of account after reconciliation, which is higher by Rs. 9,495/- due to cumulative effect of minute human error in preparing excel sheet The appellant has accordingly furnished reconciliation statement entries of which are verifiable. The fee received has been shown more in the books of accounts after reconciling the figures as per seized excel sheet, hence, no adverse inference needs to be drawn against the assessee. After reconciling these figures from the books of accounts, the claim of the AD is not found to be sustainable that all the entries in excel sheets are not recorded in regular books of accounts, in fact, the fee received has been shown more in the books of accounts after reconciling the figures as per seized excel sheet.

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. The AO stated that the assessee did not furnish the list of students from whom fees/cheques have been received and entered in these excel sheets and subsequent retum of fees to those students. Complete names, addresses of all students to whom fees have been refunded were not furnished, and therefore no cross-verification was made possible. As against this the appellant argued that Rs. 10,86,475/- fee refund were made mostly through banking channels. The refunds made are through banking channel and the details have been provided in the form of ledger. Hence, the evidences furnished by the assessee were verifiable evidences. Therefore, the allegation of the AO that the evidences are not verifiable is not found to be sustainable. Considering the verifiable evidences along with reconciliation statement the reply of the appellant cannot be brushed aside without verifying or disproving these evidences. The AO has not brought evidences on record which could establish that the evidences are incorrect. Therefore, the claim of the appellant is found to be acceptable. The addition made by the AO is not found to be sustainable and deleted. This ground of appeal is treated as allowed. 7.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The AO noted that during the course of search proceedings, cash amounting to Rs. 32,95,000/- was found from his residential premises. Shri Nitin Vijay stated in his statement that this cash amounting to Rs. 32,95,000/- pertains to the coaching Institute namely Motion Education Pvt. Ltd. On going through the respective books of accounts of his business concerns, the following cash-in-hand are appearing:- S. No. Name of Business concerns Cash balance as on 18.04.2018 (in Rs.)

1. Motion Education Pvt. Ltd, 93,81,635 1. Motion Educational & 8,51,826 Development Society 1. Motion E-Learning Solution Pvt. 1,07,435

Total cash as per books 1,03,40,896 & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. On the basis of the above table, it has been noticed that the total cash balance in the books of all the entities of the assessee group is Rs. 1,03,40,896/- and cash found at the residential premises during the search proceeding is Rs. 32.95,000/-. Thus there is a cash shortage in cash found and cash-in-hand as per books of accounts, and it comes to Rs. 70,45,896/-. The assessee has not stated any satisfactory reply regarding the shortage of cash found during the search proceedings. The assessee submitted his reply vide his letter dated 24.07.2018 that the shortage in cash balance is due to the expenditure of F.Y. 2017-18 & 2018-19 done in cash and recorded in the books of accounts. The vouchers related to these expenditures are seized during the search party B-1 & B-2 at their premises. Further, the assessee has submitted a reconciliation statement regarding unaccounted expenditure for the F.Y. 2017-18 & F.Y.2018-19, which comes to Rs. 74,05,967/-. The AO held that submission of the assessee was not acceptable. The year-wise bifurcations of undisclosed/unaccounted investment/expenses are as under: F.Y. A.Y. Undisclosed/ unaccounted investment/expenses ( in Rs.) 2017-18 2018-19 67,35,703 2018-19 2019-20 6,70,264 Total 74,05,967 The assessee company has claimed that the search action was carried out on 18.04.2018, and the company could not complete the books of accounts, and certain bill/vouchers remain to be entered in regular books of accounts, and the cash shortage was due to these vouchers only. The assessee's claim was not accepted as the unaccounted vouchers found and seized by the search party pertain to the whole year, not only for the last one or two months. The assessee had not recorded these vouchers in its regular books of accounts because these vouchers were related to various cash payments and source the same was also unexplained. Further, the assessee company also could not prove any nexus to show that the shortage of cash due to these vouchers only. Therefore, the reply of the assessee is simply an afterthought to evade tax liability. Therefore unaccounted expenses of Rs. 70,96,310/- (4853314+2242996) detected on the basis of incriminating documents seized by party No. B-1 & B-2 during the search related to FY 2017-18 is added to total income of the assessee as per the provision of section 69C and tax is charged as per provision of section 115BBE of the IT Act.

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. As against this the appellant stated that the actual cash shortages were Rs.73,86,840/- and not Rs.70,45,896/- because book balances of cash appearing in the hands of Mr. Nitin Vijay amounting to Rs.1,81,906/-. Mrs. Swati Vijay Rs.1,28,743/- and Mr. Surendra Kumar Gupta Rs.30,295/- were not considered at that time. The search was conducted just after the close of the financial year 2017- 18 on 18.04.2018. It is stated that when the search team asked Mr. Nitin Vijay to explain the reason of this cash shortage vide question no. 23 and 24, he replied that accountant of the company has not yet accounted for some cash expenditures for which bills/vouchers must have found from the premises. This depicts the factual position that at the time of search whatever shortage of cash was found was for the reason that some bills and vouchers in respect of which payments have been made but could not be accounted for in the books. The payments in respect of such bills/vouchers have been done from the cash available in the books of account, resulting into physical cash shortage. It is stated that the year-wise bifurcation of unaccounted vouchers for expenses seized is as under: Financial Assessment Undisclosed/ unaccounted year year investment/expenses ( in Rs.) 2017-18 2018-19 67,35,703 2018-19 2019-20 6,70,264 Total 74,05,967

The facts of the case are considered. There are two discrepancies noticed by the AO. There was shortage of physical cash when compared to the books of accounts. Another discrepancy was that there were cash vouchers which were not found to be entered in the books of accounts. The appellant is claiming that the cash shortage found is Rs. 73,86,840/- and the total expenditures for FY 2017-18 and 2018-19 is Rs. 74,05,967/-. Thus, there is difference of Rs. 19,127/-only which is possible considering huge vouchers. It is, therefore, submitted that there remains no major shortage of cash when all such expenses are accounted for. The claim of the appellant is found to be based on facts. The AO rejected the claim of the assessee considering the same as an afterthought. The appellant stated that the source of such payments remains proved and no other source of income was found during the course of search except business income, which cannot be said as an after-thought. During investigation also, it was duly explained being the factual position so it cannot be said as an after-thought exercise. In this regard it is observed that the AO has noted in the assessment order that the assessee submitted his reply vide his letter dated 24.07.2018 that the shortage in cash balance is due to the expenditure of F.Y.2017-18 & 2018-19 done in cash and recorded in the books of accounts. The vouchers related to these expenditures are seized during the search party B-1 & B-2 at their premises. Further, the assessee has submitted a reconciliation statement regarding unaccounted expenditure for the F.Y.2017-18 & F.Y.2018-19, which comes to Rs. 74,05,967/-. The appellant claimed that once source is proved, the same need not be treated as unexplained income so as to attract section 69C of the Act. It is stated that the Id. AO has also relied upon the books of account and did not reject the same u/s 145 of the Act. It is stated that the only source of appellant-assessee is business income. The AO has not disproved the claim made by the assessee by bringing some contrary evidence on record. The claim made by the assessee cannot be brushed aside only by mentioning the same as an afterthought. Without bringing evidences on record which establishes that the claim made by the appellant assessee is not correct the claim made by the assessee cannot be rejected. The claim was rejected by the AO because the vouchers pertain to the whole year and not only for the last one or two months. The assessee company claimed that the search action was carried out on 18.04.2018, and the company could not complete the books of accounts, and certain bill/vouchers remain to be entered in regular books of accounts, and the cash shortage was due to these vouchers only. Only because the vouchers were pertaining to the whole year the claim of the assessee cannot be rejected as long as the books of accounts were not finalized. The audit of the year was not completed. Not making entry in the books of accounts is not a good practice, however, only on this basis addition cannot be sustainaed when the appellant is able to explain availability of source from the books of accounts. Therefore, the claim of the assessee is found to be acceptable. The AO also stated that the assessee had not recorded these vouchers in its regular books of accounts because these vouchers were related to various cash payments and source the same was also unexplained. The source of the payment made is claimed from the cash as per books of accounts. This is proved from the fact that the cash was found short during the search proceedings. Therefore, the observation of the AO that the source cash expenditure was also unexplained is not found to be sustainable. The AO also noted that the assessee company could not prove any nexus to show that the shortage of cash due to these vouchers only. The claim of the assessee could have been rejected if any other source of these expenses was detected or evidences were brought on record. However, in the absence of any evidence brought on record to establish that the shortage of cash was not due to these vouchers the claim of the assessee cannot be rejected. The appellant argued that in the assessment year under consideration, the unaccounted vouchers as mentioned on page no. 13 of the impugned order has been determined by the Id. AO as Rs. 67,35,703/- (48,53,314 18,82,389) but while making the addition, he has taken the same as Rs.7096310/- (48,53,314 + 22,42,996) for no good reason. The addition made by the AO is not found sustainable and hence, the issue is not found to be relevant. However, the AO may verify the correctness of the claim made by the appellant. In view of above discussion, the addition made by the AO with regard to unaccounted expenses of Rs. 70,96,310/- (4853314+2242996) as per the provision of section 69C of the Income Tax Act is not found to be sustainable and deleted. This ground of appeal is treated as allowed. 8.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The AO noted that assessee had paid interest of Rs. 16,33,406/- to certain entities i.e Bajaj Finserv, Capital First Ltd. Tata Capital Finanicial & ERFL on which provisions of TDS were applicable, however no TDS had been deducted by the assessee as per provision of section 194A of the IT Act, During the assessment proceeding, the assessee was asked to submit its explanation on this issue. In response to this, assessee has submitted its reply in which assessee accepted the discrepancy regarding non deduction of TDS on interest payment made during the year. However, assessee claimed that these mentioned entities are companies which are filling its return regularly and must have been taken this interest income in its account for calculating its income.

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. The reply of the assessee has been considered but not found acceptable. The assessee has not deducted TDS on these interest payments and also not provided any documentary evidences i.e CA certificate regarding these payments included by the companies in its total income for the relevant year. Therefore, these interest expenses are not allowable as per provision of section 40(a)(ia) of the IT Act. Hence, the amount of Rs. 4.90,020/-(30% of 1633406) is disallowed and added to the total income of the assessee. The appellant argued that disallowance of Rs 4,90,020/- ux 40(a)(ia) has been made without doubling genuineness of such business expenditure paid to NBFCs, which were made through banking channels and without verifying that the subject receipts have been duly shown by payees in their respective income tax returns The facts of the case are considered. In this case the Assessing Officer observed that the assessee had failed in complying with its statutory obligation of deducting tax at source on the aforesaid amount of interest paid to the NBFC's, thus triggered the provisions of section 40(a)(ia) and worked out a disallowance of Rs. 4,90,020/- (30% of 1633406). The appellant claimed that the expenditure is genuine. The claim is not found to be relevant. There is no precondition that for making disallowance u/s 40(a)(ia) of the Income Tax Act, only the expenses of which genuineness is doubtful can be disallowed. Therefore, the genuineness is not a relevant criterion for making disallowance u/s 40(a)(ia). The non genuine expenses are not allowable to the extent of 100 per cent as per provisions of Income Tax Act. The disallowance u/s 40(a)(ia) is to the extent of 30 per cent of the expenditure claimed. The appellant claimed that the receipts have been duly shown by payees in their respective income tax returns. However, no such evidence is furnished by the appellant. Similar issue was considered by Hon'ble ITAT Raipur Bench in the case of Sanjay Bajpai Builders (P.) Ltd. v. Assistant Commissioner of Income-tax [2023] 156 taxmann.com 692 (Raipur - Trib.). Hon'ble ITAT held as under- "Admittedly, it is a matter of fact become from record that the assessee-company had failed to deduct tax at source under section 194A on the amount of interest of Rs. 52.97 lacs that was paid to the aforementioned NBFCs. Although it was the claim of the assessee that the respective payee companies had included the aforementioned amounts of interest in their respective returns of income for the year under consideration and paid taxes on the same, but it had failed to substantiate its said claim by placing on record any evidence in support thereof. Accordingly, the Assessing Officer observing that the assessee had failed in & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. complying with its statutory obligation of deducting tax at source on the aforesaid amount of interest paid to the NBFC's, thus triggered the provisions of section 40(a)(ia) and worked out a disallowance of Rs. 15.89 lacs. [Para 7] Although it was principally concurred with the assessee that in case the interest paid by the assessee company to the aforementioned NBFCs was included by them in their respective returns of income for the year under consideration and subjected to tax in their hands, then the assessee-company could not be deemed as an assessee-in-default, but at the same time in absence of any supporting material cannot summarily accept the said unsubstantiated claim on the very face of it. At this stage, it is observed that though the '2nd proviso' to section 40(a)(ia) read with the '1st Proviso' to section 201 carves out an exception that where the payee has included the disputed amount in its income and paid taxes on the same then the assessee is not to be treated as being in default and would stand exonerated from the consequential disallowance under section 40(a)(ia), but as observed by the lower authorities nothing has been placed on record by the assessee company which would bring its case within the realm of the aforesaid exception. On a conjoint perusal of the aforesaid statutory provisions, it transpires that the concession carved out in the '2nd proviso' to section 40(a)(ia), re. for not treating the assessee as being in default pre-supposes a cumulative satisfaction of the aforementioned set of three conditions laid down in the '1st proviso' to section 201, viz. (i) that the payee has furnished his return of income under section 139; (ii) that the payee has taken into account such sum for computing income in such return of income; and (iii) that the payee has paid the tax due on the income declared by him in such return of income. Also, the legislature in all its wisdom has further cast an obligation upon the assessee-deductor to furnish a certificate from an accountant in 'Form 26A' read with rule 31ACB, wherein it is certified by the accountant that the payee had fulfilled all the conditions mentioned in the '1st proviso' to sub-section (1) to section 201. [Para 8] Considering the aforesaid clear mandate of law, as the assessee company except for harping on its claim that the respective payees had included the interest incomes in their respective returns of income for the year under consideration and paid taxes an the same, had however failed to substantiate the same in the manner required under law, therefore, there was no infirmity in the view taken by the lower authorities who had rightly made/sustained the disallowance under section 40(a)(ia). Before parting, it is herein observed that the assessee company had not only failed to file both before the Assessing Officer and the Commissioner (Appeals) the certificates of the accountants in the prescribed form ie. in 'Form

26A' read with 31ACB, certifying that the respective payees had fulfilled all the conditions mentioned in the "Ist proviso" to sub-section (1) to section 201, but the assessee on being queried during the course of hearing of the appeal had candidly admitted that the said certificates had till date have not been obtained by the assessee from the said payees. A perusal of the record in the present case, reveals that both the lower authorities had categorically observed that the assessee had failed to produce the certificates/evidence in support of its claim that the respective payees companies i.e. NBFC's had included the amount of interests in their respective returns of income and paid tax on the same. Considering the fact that the assessee-company despite lapse of substantial time period had till date failed to cumulatively satisfy the mandatory conditions contemplated in the '2nd proviso' to section 40(a)(ia) along with '1st proviso' to section 201, which were indispensably required to be done on its part as a pre-condition for it not being held as an assessee-in-default, therefore, there was no infirmity in the view taken by the Commissioner (Appeals) who had rightly sustained the disallowance made by the Assessing Officer under section 40(a)(ia) and, thus, uphold the same. [Para 9] As held by Hon'ble ITAT, the legislature in all its wisdom has casted an obligation upon the assessee-deductor to furnish a certificate from an accountant in 'Form 26A' read with rule 31ACB, wherein it is certified by the accountant that the payee had fulfilled all the conditions mentioned in the '1st proviso' to sub-section (1) to section 201. The appellant has failed to furnish the required certificate of accountant in this case. The onus was on the appellant to furnish such certificate and not on the AO to make verification. Considering the aforesaid clear mandate of law, as the assessee company except for harping on its claim that the respective payees had included the interest incomes in their respective returns of income for the year under consideration and paid taxes on the same, had however failed to substantiate the same in the manner required under law, therefore, there was no infirmity in the view taken by the AO who had rightly made the disallowance under section 40(a)(ia). In view of above discussion, the disallowance made by the AO of Rs. 4,90,020/- (30% of 1633406) is found to be as per provisions of Income Tax Act and upheld. This ground of appeal is treated as dismissed. the revenue preferred the present appeal. The ld. DR so far as the grounds so raised by the revenue relied upon the finding so recorded in the order of the ld. AO, wherein all the addition were made after recording detailed finding and after providing opportunity to the assessee. Ld. DR also submitted that addition was in fact made on the basis of incriminating document found and seized during the search proceedings by party No. B- 2, as page No. 37 of Exhibit 15 of annexure AS-1, and this document is a computerized excel sheet containing information in respect of fees received for F.Y. 2016-17 & 2017-18 and there is difference of Rs. 1,46,12,184/- in fees receipt shown in books of account of M/s Motion Education Pvt. Ltd. and actual fees receipt written in computerized excel sheet and the assessee failed to furnish satisfactory explanation, to make it verified and reconciled each and every entry. The ld. CIT(A) was not justified in deleting the addition of Rs. 1,46,12,184/- accepting the claim of the assessee for Rs. 28,22,140/-as explained and verifiable as refund of Rs.

10,86,475/- to students, Rs. 13,46,301/- belonging to Motion E-learning Solutions Pvt. Ltd. collection and remaining as taken in other head, without appreciating the facts that assessee failed to submit documentary evidences in support of its claim and ld. CIT(A) has accepted reply of the the variation from excel sheet. She also submitted that ld. CIT(A) was not justified in deleting the addition of Rs. 1,46,12,184/- by accepting the claim of the assessee for Rs. 1,17,90,044/-as verified from service tax return without appreciating the facts that service tax is also part of fees receipts of the assessee and on the basis of payment of service tax to Government, assessee cannot claimed that same was not included in fees receipts in books of the account and assessee failed to provide reason for non- inclusion of service tax in books of accounts and also failed to reconcile it from books of accounts at the time of assessment proceedings. The ld. CIT(A) was also not justified in deleting the addition of Rs. 70,96,310/- on account of unexplained expenses without appreciating the facts that the, assessee has claimed that some vouchers were not entered but in the reconciliation, the not-entered voucher detail were found for whole the year and also company could not prove any nexus to show that the shortage of cash due to these vouchers only and the reply of the assessee is only an afterthought arrangement by tallying the cash shortage with the unaccounted cash vouchers which belongs to whole year and in general business practice, it is not possible that vouchers of whole years were not entered in books of account. recorded in the order of the ld. CIT(A) and also filed the following paper book in support of the contention raised in that order; S. No. Particulars Page No.

1. Copy of written submission before the ld. CIT(a) 1-10 2. Copy of letter of approval granted u/s 153D by Addl. CIT, 11 Central Range, Udaipur.

3. Copy of reconciliation statement as per books and excel 12-15 sheet found during the search.

4. Copy of ledger account of fee and other income during the 16-29 year under consideration 5. Copy of service tax return 130-135 6. Copy of GST 136-153

15. We have carefully considered the rival submissions, and perused the material placed on record. The bench noted that the revenue has taken as much as 10 grounds of appeal. The ground no. 1, 7 8, 9 and 10 are interrelated and therefore we deal with them together in that ground revenue challenges the finding of the ld. CIT(A) in deleting the addition of Rs. 1,46,12,184/-without considering the facts and position that the assessee did not produce any specific evidences in respect of amount of Rs. 10,86,475/- refunded to the students and reasons for refund with documentary evidence and in absence of reason and documentary evidences, same is not acceptable to the revenue. On this aspect of the matter the ld. AO noted that incriminating document found and seized by computerized excel sheet containing information in respect of fees received for F.Y.2016-17 & 2017-18. On perusal of computerized excel sheet, it was found that there are huge differences in fees receipt shown in books of account of M/s Motion Education Pvt. Ltd and actual fees receipt written in computerized excel sheet. As per the excel sheet, difference of fees receipt was detected as under:-

F.Y. Fee receipt difference as per excel sheet and company’s books of account (in Rs.) 2016-17 1,52,89,500/- 2017-18 1,46,12,184/- The assessee submitted reconciliation statement through his reply submitted on 24.07.2018 wherein the assessee claimed that books of accounts are maintained considering service tax paid, GST paid, fees refund paid etc. However, the assessee did not furnish any documentary evidence during the search or post-search inquiries to substantiate the claims. The assessee has failed to reconcile each and every entry in the excel sheet. It has failed to produce any evidence such as receipts issued to students for refund etc. Therefore, the general claim cannot be accepted without specific and corroborative evidence. Thus, ld. AO noted that GST and Service Tax Returns have been filed based on the turnover recorded in recorded in regular books of accounts. Mere production of ledger copies of fees refund, cheque returns etc. does not tantamount to furnishing reconciliation with documentary evidence. The assessee did not furnish the list of students from whom fees/cheques have been received and entered in these excel sheets and subsequent return of fees to those students. The assessee's claim that while receiving fees, all entries were recorded in excel while the entries of refund are not made in the excel sheets is too general to accept. Complete names, addresses of all students to whom fees have been refunded were not furnished, and therefore no cross- verification was made possible. It was claimed that entries in excel sheets were verified with manual registers. Further, the assessee claimed that the front desk maintained manual registers, and thereafter entries in the back office computer were recorded based on such manual registers prepared by the front line desk. However, the same manual registers were not produced during the search and post search proceedings to substantiate its claim by the assessee. Therefore, such registers might is not but after thought to mislead the department. Further names, addresses, PANs of third parties mentioned in these registers have not been furnished. No counterevidence such as acknowledgement of fees return/cheque return by assessee is not found satisfactory, therefore, the total unaccounted fees/receipts of Rs. 1,46,12.184/-detected on the basis of incriminating documents seized during search related to FY 2017-18 is added to the total income of the assessee.

Against that finding of the ld. AO the assessee submitted that the fee received from students by the front desk staff who prepares a manual sheet containing date and student-wise details of fee received through cash cheque. Then, he pass on the same to the back office staff, who enters student-wise detail in the computer for various classes/courses every day and summation of all fees received from different students on that particular day comes on these impugned excel sheets. The person who receives fees from students is front desk staff and this reconciliation of daily fee received is done by back office staff. Thus, total fee received by the front office staff relating to Motion Education Pvt. Ltd. Motion E-learning Solution Pvt. Ltd. and on behalf of schools are duly entered on these excel sheets on daily basis from the details received from the front office. For the fees received on behalf of school separate receipt is issued by the concerning school and such fees is handed over to school. Thus, the excel sheets are prepared for daily collections made. It was submitted that the excel sheets found & total of the excel sheets duly matches with the fees received ledger summary from the audited books of account maintained by the assessee- company. It is stated that, the fee entered in the excel sheets is gross the received from the students and on such lee received, Service Tax/GST is paid by the assessee-company There is a clear-cut mention on ovary fees receipt and also on brochure that the fee is inclusive of Service Tax. Thus, the said excel sheets contain the gross fees received from students, while in the books if the summary of fees lodger is viewed, it is net of Service Tax/GST component. Therefore, on this count alone, out of alleged difference of Rs. 1,46,12,184, a sum of Rs. 1,17,90.044/-relates to Service Tax/GST because in the excel-sheet grass fee inclusive of Service Tax/GST received from students is entered whereas in the books of account the not fee. The Service Tax/GST is duly verifiable from Service Tax/GST returns available on record and visible on every fees receipt issued to students and found & seized from the searched party. The assessee also submitted that remaining difference of Rs. 28,22,140/- a sum of Rs. 10,86,475/- relates to fee refund in respect of which complete ledger was furnished which shows that mostly refunds were made through banking channels Rs. 13,46.301/- belong to Motion E-learning Solutions (P) account. A complete reconciliation statement submitted before the id. AG is produced. It is claimed that all reconciliation items are duly verifiable. The assessee to substantiate the entries of the reconciliation sheet, the assessee had duly submitted the following documents before the id. AO along with the reconciliation statement wherein (i) Copy of audited Profit & Loss a/c which shows that total fees received during FY 17-18 is Rs.

15,06,68,418/, which is also duly vonfiable with the Service Tax/GST returns, (ii) Monthly summary of fees received and advance fees received ledger accounts, in which debit side entries are relating to Service Tax transfer to Service Tax account, fees refund and cheque returns Fees Received Rs. 6.22.68,447% and Fees Received in Advance Rs. 97.09 836 have been taken in reconciliation sheet. (iii) Ledger copies incorporating Service Tax/GST detail on fees received, advance fees received account, fees refund account and cheque return account. (iv) Copy of audited Profit & Loss A/c of Motion E learning Solutions Pvt. Ltd. alongwith copy of relevant ledger account. (v) Cheques return were of Rs. 3,13,070/- during the year, deducted in the reconciliation statement. (vii) Advance fees of Rs. 1,73,916/- received and entered in books was not taken in excel sheets.

After all above addition/subtraction in the reconciliation statement, the and seized by the search team, remains tallied with the books of account, which is higher by Rs. 9,495/- due to cumulative effect of minute human error in preparing excel sheet. The remaining difference of Rs. 28,22,140/- is also explained as Rs. 10,86,475/- is fee refund in respect of which complete ledger was furnished which shows that most of refunds were made through banking channels, Since, most of the refunds are made through banking channel these are verifiable. Rs. 13,46,301/-belonging to Motion E-learning Solutions (P) Ltd, is verifiable. As per reconciliation statement the remaining difference is because of cheque returned, franchisee shivay associate which is offered in other head and study material which is taken in other head of income and therefore, we see no merit in the ground no. 1, 7 8, 9 and 10 raised by the revenue and thereby the same are dismissed. Ground no. 6 being general does not require our finding.

15.1 So far as the ground no. 2, 3, 4 & 5 are concerned the main grievance of the revenue is that CIT(A) was not justified in deleting the addition of Rs. 70,96,310/-on account of unexplained expenses without appreciating the facts that the assessee has claimed that some vouchers detail for whole the year and also company could not prove any nexus to show that the shortage of cash due to these vouchers only. In the assessment proceeding on this issue ld. AO noted that while search proceedings, cash amounting to Rs. 32,95,000/- was found from his residential premises. Shri Nitin Vijay stated in his statement that this cash amounting to Rs. 32,95,000/- pertains to the coaching Institute namely Motion Education Pvt. Ltd. On going through the respective books of accounts of his business concerns, the following cash-in-hand are appearing: -

S. No. Name of Business concerns Cash balance as on 18.04.2018 (in Rs.) 1. Motion Education Pvt. Ltd, 93,81,635 2. Motion Educational & Development 8,51,826 Society 3. Motion E-Learning Solution Pvt. 1,07,435 Total cash as per books 1,03,40,896 As is evident from the above tabulation that the total cash balance in the books of all the entities of the assessee group is Rs. 1,03,40,896/- and cash found at the residential premises during the search proceeding is Rs.

32,95,000/-. Thus, there is a cash shortage in cash found and cash-in-hand as per books of accounts, and it comes to Rs. 70,45,896/-. The assessee has not stated any satisfactory reply regarding the shortage of cash found reply vide his letter dated 24.07.2018 that the shortage in cash balance is due to the expenditure of F.Y. 2017-18 & 2018-19 done in cash and recorded in the books of accounts. The vouchers related to these expenditures are seized during the search party B-1 & B-2 at their premises. Further, the assessee has submitted a reconciliation statement regarding unaccounted expenditure for the F.Y. 2017-18 & F.Y.2018-19, which also comes to Rs. 74,05,967/-. These explanation furnished by the assessee was not considered by the ld. AO and thereby he determined the undisclosed investment / expense as tabulated below :

F.Y. A.Y. Undisclosed/ unaccounted investment/expenses ( in Rs.) 2017-18 2018-19 67,35,703 2018-19 2019-20 6,70,264 Total 74,05,967

Before the ld. CIT(A) the assessee - appellant claimed that the search action was carried out on 18.04.2018, and the company could not complete the books of accounts, and certain bill/vouchers remain to be entered in regular books of accounts, and the cash shortage was due to these vouchers only. The assessee's claim was not considered as the unaccounted vouchers found and seized by the search party pertain to the whole year, not only for the last one or two months. The assessee had not vouchers were related to various cash payments and source the same also remained unexplained. Further, the assessee company could not prove any nexus to show that the shortage of cash due to these vouchers only. Therefore, the reply of the assessee was considered as an afterthought to evade tax liability and thereby the ld. AO considered that amount as unaccounted expenses of Rs. 70,96,310/- (4853314+2242996) detected on the basis of incriminating documents seized by party No. B-1

& B-2 during the search related to FY 2017-18 and was added to total income of the assessee as per the provision of section 69C of the Act and tax was charged as per provision of section 115BBE of the IT Act.

When the matter carried before the ld. CIT(A) the assessee – appellant submitted that the actual cash shortages were Rs.73,86,840/- and not Rs.70,45,896/- because book balances of cash appearing in the hands of Mr. Nitin Vijay amounting to Rs.1,81,906/-. Mrs. Swati Vijay

Rs.1,28,743/- and Mr. Surendra Kumar Gupta Rs.30,295/- were not considered at that time. The search was conducted just after the close of the financial year 2017-18 on 18.04.2018. The assessee also placed on record the fact that when the search team asked Mr. Nitin Vijay to explain the reason of this cash shortage vide question no. 23 and 24, he replied expenditures for which bills/vouchers must have found from the premises.

This depicts the factual position that at the time of search, whatever shortage of cash was found was for the reason that some bills and vouchers in respect of which payments have been made but could not be accounted for in the books. The payments in respect of such bills/vouchers have been done from the cash available in the books of account, resulting into physical cash shortage. The year-wise bifurcation of unaccounted vouchers for expenses seized were summarized for the assessment year wise as under:

Financial year Assessment Undisclosed/ unaccounted year investment/expenses ( in Rs.) 2017-18 2018-19 67,35,703 2018-19 2019-20 6,70,264 Total 74,05,967 From the record we note that there were two discrepancies noticed by the AO, 1st shortage of physical cash when compared to the books of accounts.

Another discrepancy was that there were cash vouchers which were not found to be entered in the books of accounts. On that the assessee – appellant claimed that the cash shortage found was for Rs. 73,86,840/- and the total expenditures for FY 2017-18 and 2018-19 was for Rs. 74,05,967/-. considering huge vouchers left to be incorporated in books. Both this facts were available before the search team and therefore, claimed that there remains no major shortage of cash when all such expenses are accounted for. The claim of the appellant is found to be based on facts and ld. CIT(A) has considered it based on the set of facts available before him and the same cannot be considered as after thought when all these two aspect are inter related. While investigation also, it was duly explained being the factual position so it cannot be said as an after-thought exercise. We also note that from the finding recorded in the assessment order that the assessee submitted his reply vide his letter dated 24.07.2018 that the shortage in cash balance is due to the expenditure of F.Y.2017-18 & 2018- 19 done in cash and recorded in the books of accounts. The vouchers related to these expenditures are seized during the search party B-1 & B-2 at their premises. Further, the assessee has submitted a reconciliation statement regarding unaccounted expenditure for the F.Y.2017-18 & F.Y.2018-19, which comes to Rs. 74,05,967/-. The appellant claimed that once source is proved, the same need not be treated as unexplained income so as to attract section 69C of the Act. It is stated that the Id. AO has also relied upon the books of account and did not reject the same u/s business income when these explanation was not disproved the with contrary evidence the claim with evidence cannot be ignored. In view of these set of fact, the addition made by the AO with regard to unaccounted expenses of Rs. 70,96,310/- (4853314+2242996) as per the provision of section 69C of the Act rightly deleted by the ld. CIT(A) and we see no infirmity in that finding.

16. Now we take up the cross objection filed by the assessee bearing no. CO/20/JP/2025 for assessment year 2018-19 and cross objection in CO No. 21/JP/2025 of the assessee for assessment year 2017-18. The ground of the cross objection reads as under :

CO No. 21/JP/2025 AY 2017-18:

“1. That on the facts & in the circumstances of the case, the Id. CIT (A) erred in upholding the validity of order passed by the Id. AO particularly, addition in respect of unexplained expenditure u/s. 69C of the Act.

2. That on the facts & in the circumstances of the case, the Id. CIT (A) erred in upholding the validity of notice u/s 153A of the Act.

3. That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred is sustaining the assessment order passed by the Id. AO, which is non-est and bad in law in as much as approval has been granted u/s 153D by the Id. Addl. CIT in a mechanical manner without application of mind and also, the proceedings have not been conducted in the manner prescribed by the departmental instructions from time to time, particularly with respect to mentioning of Document Identification Number (DIN).

4. That on the facts and in the circumstances of the case, the Id. CIT(A) grossly erred in upholding that the respondent-company had made the unexplained & 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd. expenditure in cash on the basis of seized documents & vouchers found during the course of search without any corroborative evidences or material on record to prove the same.

5. That on the facts and in the circumstances of the case, the Id. CIT(A) grossly erred in sustaining the addition of Rs.27,36,409/- in respect of unexplained expenditure u/s 69C of the Act made by the Id. AO.

6. That on the facts and in the circumstances of the case, the Id. CIT(A) grossly erred in upholding the findings of the Id. AO while sustaining the addition without appreciating the nature of transaction mentioned on seized vouchers and written submission of respondent in right perspective and judicious manner.

7. That on the facts and in the circumstances of the case, the Id. CIT(A) has grossly erred in upholding the invocation of the provisions of section 115BBE of the Act, despite the Id. AO himself having accepted that the nature of the expenditure found from the seized material is business expenditure.

8. That on the facts and in the circumstances of the case the Id. CIT(A) grossly erred in sustaining addition on assumption and presumption, without sufficient material evidence corroborating said additions.

10. The petitioner prays for appropriate relief and justice in the interest of fairness and equity.

CO No. 20/JP/2025 AY 2018-19:

1. That on the facts & in the circumstances of the case, the ld. CIT (A) erred in upholding the validity of order passed by the Id. AO particularly, in respect of disallowance u/s 40(a)(ia) of the Act.

2. That on the facts & in the circumstances of the case, the Id. CIT (A) erred in upholding the validity of notice u/s 153A of the Act.

3. That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred is sustaining the assessment order passed by the Id. AO, which is non-est and bad in law in as much as approval has been granted u/s 153D by the ld. Addl. CIT in a mechanical manner without application of mind and also, the proceedings have not been conducted in the manner prescribed by the departmental instructions from time to time, particularly with respect to mentioning of Document Identification Number (DIN).

& 455/JP/2025 DCIT vs. Motion Education Pvt. Ltd.

4. That on the facts & in the circumstances of the case, the Id. CIT (A) erred in sustaining the addition of Rs.4,90,020/- made by the Id. AO in respect of disallowance u/s 40(a)(ia) of the Act.

5. That on the facts & in the circumstances of the case, the Id. CIT(A) grossly erred in upholding the findings of the ld. AO while confirming the disallowance of expenses u/s 40(a)(ia) without appreciating facts and legal position in right perspective and judicious manner.

6. That on the facts & in the circumstances of the case, the Id. CIT (A) grossly erred in confirming the addition u/s 40(a)(ia) of the Act without considering facts that NBFCs had disclosed such interest income in their respective ITRs.

7. That the respondent may kindly be permitted to raise any additional and/or alternative ground at or before the hearing of appeal.

8. The respondent prays for appropriate relief and justice in the interest of fairness and equity.

17. As is evident from the Ground no. 3 raised by the assessee in both the year is to challenge the impugned proceeding as invalid as the sanction u/s. 153D of the Act were not correct as held by the various court and in particular he relied upon the following two case laws;

S. No. 1 Copy of decision of Hon’ble ITAT Jaipur Bench in the case of 1-32 Resonance Eduventures Ltd., to 672/JPR/2024, dated 10.03.2025 2 Copy of decision of Hon’ble ITAT Delhi Bench in the case of 33-48 Sohan Lal Singla dated 08.05.2025

18. On this ground ld. DR vehemently argued that Apex court has decided so many case in the Rajeev Bansal and group having similar set of facts and thereby the common approval does not vitiate the proceedings.

The approving authority has merely granted approval by common order it does not prove that there was no application of mind. The approving thereby at the end the approval is given by a common order. Based on that ld. DR submitted that issue of approval u/s. 153D of the Act is pending with the Supreme Court and thereby he submitted that this ground has no merit and thereby the same should be dismissed. Ld. DR also submitted the report of the ld. AO which reads as follows:

Kindly refer to your office mail dated 18/09/2025 alongwith trailing mail dated 17/09/2025 received to your good office from JCIT, SR. DR-I, ITAT, Jaipur on the above mentioned subject vide which it has been directed to provide method of approval u/s 153D highlighting the involvement of Range Head starting from allotment of case u/s 127 and till the completion of Assessment Proceedings alongwith connected office note.

3. After examination of the reply as well as documents seized during the search proceedings, the draft assessment order u/s 143(3) r.w.s 153A of the Act for the AY 2017-18 alongwith assessment folders was sent to the Addl. Commissioner of Income Tax, Central Range, Udaipur vide this office letter no. 103 dated 23/07/2021. In this draft assessment order, the addition of Rs. 3,69,64,500/- was proposed on account of various head /disallowances made on account of seized documents.

As is evident from ground no. 3 raised by the assessee in these two cross objections challenging the proceeding. This ground since taking into the root of the dispute we are taking up it first to decide. The assessee in this legal ground so raised submitted that the ld. AO has erred in passing the Assessment Order u/s 153A without obtaining proper approval of the cases for the year under consideration, as mandated u/s 153D of the Act. The action of the ld. AO is illegal, unjustified, arbitrary and against the facts of the case and thereby the entire assessment order deserves to be quashed on grounds of this infirmity of law.

Apropos to this ground our attention was drawn to the approval of the assessment proceeding granted as per the letter issued by the Addl.

Commissioner of Income Tax, Central Range, Udaipur who being the approving authority of the impugned order under challenge and that approval letter reads as under; granted as per section 153D of the Act in the present case was granted by a consolidated letter covering multiple assessment years.

The approval does not disclose any reference to the seized material, the appraisal report and does it contain any reasoning to demonstrate application of mind by the approving authority. This view was confirmed the Hon’ble Supreme Court in ACIT vs. Serajuddin & Co. [2024] 163 taxmann.com 118 (SC) wherein the Apex Court held that approval u/s 153D is a mandatory safeguard and cannot be granted mechanically.

Further, in PCIT vs. Anuj Bansal [2024] 165 taxmann.com 3 (SC), Hon’ble Supreme Court upheld the finding that absence of application of mind by the approving authority renders the approval invalid. It has also been held by the Hon’ble Allahabad High Court in PCIT vs. Sapna Gupta [2023] 147 taxmann.com 288 (All HC), that approval must be granted separately for each assessment year. Hon’ble Delhi High Court in PCIT vs. MDLR Hotels (P) Ltd [2024] 166 taxmann.com 327 (Del HC) and in PCIT vs. Shiv Kumar Nayyar [2024] 163 taxmann.com 9 (Del HC) quashed approvals granted in bulk for multiple assessments without application of mind. These judgments reinforce the principle that approval under Section 153D is not a mere administrative ritual but a substantive safeguard, which That view was also consistently followed by the various benches of the ITAT for which reference was made to the decision of ITAT Delhi Benches in Harish Bajaj vs. DCIT, to 2223/Del/2023 and Wave Industries Pvt. Ltd. vs. DCIT ITA 5241/Del/2015, ITAT Pune in Santosh Subhashappa Mukta vs. DCIT, ITA 18,19 & 20/PUN/2021, where assessments framed on the basis of mechanical approvals u/s 153D were held to be invalid and quashed.

Since the facts of the case on hand and the facts of the case laws as cited herein above on being consistent with the legal precedent of the case laws of the Hon’ble Supreme Court, the Hon’ble High Courts, and consistently applied by the coordinate benches of the Tribunal, we hold that the approval granted u/s 153D in the present case was accorded in a mechanical and consolidated manner, without due application of mind and without separate consideration of each assessment year. Such approval being invalid, the consequential assessment orders framed u/s 153A read with Section 153D for Assessment Years 2017-18 & 2018-19 cannot be sustained in law and are therefore quashed. allowed for these years. Since we have while holding the ground no. 3 quashed the impugned order the other grounds of cross objection raised by the assessee become academic.

In the result, the appeals of the revenue stands dismissed, and the cross objection of the assessee are allowed.

Order pronounced in the open court on 31/10/2025.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 31/10/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- DCIT, Central Circle, Kota 2. izR;FkhZ@ The Respondent- Motion Education Pvt. Ltd., Kota 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA Nos. 472 & 455/JP/2025 CO Nos. 20 & 21/JP/2025) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत