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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF DECEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE B M SHYAM PRASAD AND THE HON'BLE MR. JUSTICE T.M.NADAF INCOME TAX APPEAL NO. 2 OF 2025
BETWEEN:
THE PR. COMMISSIONER OF INCOME TAX CENTRAL, GROUND FLOOR, PUNDALIK NIWAS BUILDING, RUA-DE-AUREM, PANAJI, GOA-403 001
THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2, ALBUQUERQUE HOUSE, GROUND FLOOR, PANDESHWAR, MANGALURU-575 001.
…APPELLANTS (BY SRI. Y V RAVIRAJ., ADVOCATE A/W SRI. DILIP M., ADVOCATE) AND:
LAXMI MEMORIAL EDUCATION TRUST 15-3-93, A J TOWERS,
Digitally Signed by REKHA R Location : High Court of Karnataka
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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
BALMATTA, MANGALORE-575 002. RE BY ITS TRUSTEE.
…RESPONDENT (BY SRI. ANUPARNA BARDOLI., ADVOCATE)
THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 18.07.2024 PASSED IN ITA NO. 756/BANG/2024, FOR THE ASSESSMENT YEAR 2021- 2022 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.756/BANG/2024 DATED 18.07.2024 FOR ASSESSMENT YEAR 2021-2022 ANNEXURE-A AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, MANGALURU.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD and HON'BLE MR. JUSTICE T.M.NADAF
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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE B M SHYAM PRASAD)
The question that is put out for consideration with the Income-tax Appellate Tribunal, Bengaluru in ITA No.756/Bang/2024 by the respondent relevant to the assessment year 2021-22 is: whether the additions made based on certain unsigned loose sheets could form the basis of the addition. The Tribunal considering the afore, by its impugned order dated 18.07.2024, has answered against the Revenue.
The Assessing Officer has made an addition in a sum of Rs.6,61,00,000/- as unaccounted cash received from the students of the respondent - institution and the Tribunal which is the last fact finding authority has observed thus: "5.8 Hence, enquiry made by Id. AO with the above 43 students shows that there was no payment of unaccounted fees to the assessee in the assessment year under
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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
consideration as the students or parents of the students confirmed in their affidavit/sworn statements. With regard to other two students, there was no reply to the notice sent by the ld. AO and AO has not taken any effort to trace them and their whereabouts not known. Thus, evidence collected by the department not suggests that assessee has collected any unaccounted fees from the students in the assessment year under consideration. 5.9 It is to noted that the assessee was accorded an opportunity to cross summons Mr. Dilip Kumar and Mr. Vishwanath Shetty. During the cross examinations, both Mr. Dilip Kumar and Mr. Vishwanath Shetty claimed that cash was not collected for admission process to MBBS and MD seats and instead, concession was given to students due to covid and others reasons by the management of the trust. It was crystal clear that Mr. Mr. Vishwanath Shetty and Mr. Dilip Kumar had turned hostile by changing their stance and deposition on oath. In our opinion, these two persons are not
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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
reliable witness to take support of their acceptance or rejection of collection of unaccounted fees. Their statement to be rejected as it is and no credence could be given to consider a true statement. 5.36 It is also noted that on cross examination of the employees, they have denied the receipt of the unaccounted fees. Further, out of 43 students alleged to have been paid unaccounted fees, 35 students denied the same in affidavit, 5 denied in their sworn statement and whereabouts of 3 students were not known. No efforts has been done to find out their whereabouts."
The present appeal is filed proposing the following substantial questions that must be heard for disposal. 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the additions made based on loose slips/electronic documents seized during the course of search and seizure action under section 132 of the Act?
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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
Whether on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the additions made based on the statement recorded under section 132(4) and also cross verified with employees of the assessee and statement recorded during search?
When queried, Sri Y.V.Raviraj, the learned Senior Standing Counsel for the appellants, submits that he cannot dispute the proposition that unless the unsigned loose sheets are corroborated by evidence, such loose sheets cannot be the basis of addition, but the learned Senior Standing Counsel proposes to argue for an opinion on the questions proposed for consideration asserting there is corroboration. However, this Court, in the light of the Tribunal's finding on facts and on perusal of the records and upon hearing Ms. Anuparna Bordoloi, the learned counsel for the respondent, is of the view that the Tribunal's finding does not lead to any substantial questions of law for consideration. This Court opines
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HC-KAR NC: 2025:KHC:50381-DB ITA No. 2 of 2025
thus as no material is brought on record to show any perversity in such finding.
The appeal, therefore, stands dismissed.
Sd/- (B M SHYAM PRASAD) JUDGE
Sd/- (T.M.NADAF) JUDGE