COMMISSIONER OF INCOME TAX Vs. DINESH KUMAR GOEL

JUDGEMENT

(1.) In all these appeals, similar questions of law are raised. At the same time, wewould like to discuss them separately after stating the legal principles, whichwould govern the fate of these appeals. For this purpose, the appeals can be putinto two categories. In the first category, the appeals are, viz., ITA Nos. 514/2006, 439/2007, 980/2007, 14/2008, 409/2009, 193/2010, 1112/2008 and598/2010 which would be taken together as they belong to the same Assessee. Remaining appeals would be taken together in the other category, in which theAssessees belong to the same group. We first take up the discussion in respect ofITA No. 514 of 2006 and other connected matters wherein the legal proposition wouldalso be explained.

(2.) The Assessee in these cases running an institute under the name M/s FIITJEE andis the sole proprietor of these concerns. M/s FIITJEE is a coaching institutewhere students are admitted for getting coaching and preparing them for appearingin entrance examination conducted by engineering institutes. The Assessee isfollowing mercantile method of accounting. From these students, total fee of theentire course, which may be of two years duration, is initially taken at the timeof admission of the students.

(3.) For the assessment year in question, i.e., 1997-98, the Assessee filed hisreturn on 29.10.1997 declaring the total income of '3,42,620. This return wasprocessed under Section 143 (1) (a) of the Income Tax Act (hereinafter referred toas 'the Act') on 01.01.1998 at the aforesaid income. Thereafter, notice underSection 143(2) of the Act was issued to the Assessee on 26.10.1998. It so happenedthat a couple of months before, i.e., on 18.08.1998, a search operation was carriedout at the business and residential premises of the Assessee by the Income TaxAuthorities. Thereafter, the Assessee filed a revised return of income on31.03.1999 declaring a loss of '58,39,070.