TMI Blog2013 (2) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... assets’ extinction has not been proved, nor any effort has been made by the AO to find out whether those stock, cash and the amount of sundry debtors have been sold or utilized and increase of stock, cash and the amount of sundry debtors because of increase in the stock, cash and the amount of sundry debtors due to voluntary disclosure of the appellant under the Scheme of 1997, was not continuing in the hands of the assessee. Therefore, stock, cash and the amount of sundry debtors, on account of disclosure of the appellant on 26th December, 1997, pertaining to the closing date of 31st March, 1996 and pertaining to previous year 1995-96 and assessment year 1996-97 be the opening balance as on 1st April, 1996 and effect of increase in the stock, cash and the amount of sundry debtors due to increase of the previous years’ increase in stock, cash and the amount of sundry debtors is required to be given. AO even after rejecting the books of accounts of the assessee for the purpose of declaring opening stock of the assessee, relied upon the same statement of accounts and books of accounts produced by the assessee and without enquiry, declared that the assessee sold out undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also of the year 1996-97.The appellant claims that it has disclosed undisclosed stock, cash and amount of sundry debtors for previous years, which is pertaining not only to the assessment year in which survey was conducted, but also of three previous years to the date of survey, meaning thereby that, survey was conducted on 16th October, 1996, previous year for this survey is the year 1996-97 and assessment year pertaining to the survey year is 1997-98.The appellant's contention is that since disclosure was made on 26th December, 1997, whatever has been disclosed by the assessee on 26th December, 1997 was also including the stock, cash and amount of sundry debtors as on 31st March, 1996. The said stock, cash and amount of sundry debtors, which increased because of disclosure, which were available on 31st March, 1996 as closing balance, became the opening balance for 1st April, 1996, and therefore, stock, cash and amount of sundry debtors as on 31st March, 1996, is for the previous year 1995-96 and is the opening balance of the assessment year 1996-97. Learned counsel for the appellant, Ms. A.R. Choudhary, submitted that as per clause 64(2)(ii), the appellant was not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been accepted and it has been accepted by the Revenue that on a particular year, the appellant had a specific amount of stock, cash and sundry debtors in hand. The benefit under VDIS is a specific liability and benefit but what is the consequence, it cannot be denied in fact situation which will depend upon the facts which stand conclusively determined by acceptance of the appellant's disclosure. The appellant is, therefore, claiming enhancement in stock, cash and amount of sundry debtors due to its disclosure of stock, cash and amount of sundry debtors of previous years, which stand increased due to assessee's voluntary disclosure and this income will continue to be in accordance with stock, cash and amount of sundry debtors of the appellant for subsequent years. 2. Learned counsel for the appellant, Ms. A.R.Choudhary, relied upon a Division Bench judgment of this Court delivered in the case of Sri Gyan Chand Jain Vs. Commissioner of Wealth Tax, Bihar (II), Ranchi (Tax Case No.23/1994 and connected matters) decided on 12th December, 2012 (by us) and submitted that the Division Bench, in the said judgment, after considering the judgment of Supreme Court delivered in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ak Roshan, drew our attention to the reasons given by the Assessing Officer in the assessment order, wherein the Assessing Officer, after considering facts of disclosure of the appellant's stock, cash and amount of sundry debtors under VDIS, held that the assessee did not disclose any undisclosed stock, cash and amount of sundry debtors for the year under consideration, i.e. assessment year 1997-98 and the value of the opening balance of stock declared in the statement of accounts filed with the returns of income shown in the assessment year 1997-98 is not the subject matter of dispute and this unaccounted stock of the previous year was shown in the concerned year only and the opening balance as on 1st April, 1996 was Rs.19,98,468/only and accounts of the appellant in this regard has been accepted by the Assessing Officer after going through its statement of accounts and books of accounts produced during the assessment proceeding.However, at this juncture, it will be relevant to mention here that according to the learned counsel for the Revenue, books of account were rejected but we found that books of accounts had been accepted for this issue only. The Assessing Officer thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the previous year in which a search under section 132 of the Income-tax Act was initiated or requisition under section 132A of the Income-tax Act was made, or survey under section 133A of the Income-tax Act was carried out or in respect of any earlier previous year. (Emphasis supplied) 8. The CBDT, to clarify the purport of sub-clause (2) above, answered the question in its Circular No.754. The question and answer are as follows:" Q.23. The scope of the scheme should be expanded so as to include cases where:- ( a) action under section 132, 133A has been taken. (b) appeal is withdrawn, as this will reduce litigation. Ans. This is not possible. In respect of survey under section 133A, the declarants are debarred for that previous year only. 9. The issue of survey and its effect in VDIS has been answered in CBDT Circular No.755 and the relevant questions are question nos.27 and 36, which are as follows:" Q.27. Whether survey under section 133A(5) of the Income-tax Act, will also bar a person from making a disclosure? Ans. Yes, for the previous year in which the survey was carried out. Q.36. Survey operations were carried out u/s. 133A of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the years 1994-95 and 1995-96 as well as cash and amount of sundry debtors, they shall continue to be good for the year 1997-98? We are again making it clear that it is not a disclosure of the years pertaining to the year 1997-98 or the previous year to the year 199798 but it is claim of essential consequence of increase of stock, cash and the amount of sundry debtors in the hands of the appellant, which admittedly was not reflected in the books of accounts of years 1994-95 and 199596, 1996-97 and 1997-98. Therefore, rejection of stock, cash and the amount of sundry debtors for the years 199798 would tantamount to rejection of accepted fact of the Revenue of increase of stock etc. in the years 1994-95, 1995-96, which has been accepted by the Revenue under VDIS and accordingly the appellant has been taxed. Once that stock, cash and the amount of sundry debtors was accepted to be in existence in the years 1994-95 and 199596 (though it is not mentioned in the books of accounts but in fact, it was in existence) cannot be declared to have extinguished in such a short period of time, i.e. from 1994 to 1997 only. The reverse case was under consideration before the Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of declaring opening stock of the assessee, relied upon the same statement of accounts and books of accounts produced by the assessee and without enquiry, declared that the assessee sold out undisclosed stock of the earlier years in those years itself. The Tribunal in impugned order even went to the extent of declaring that disclosure made was not voluntary but it was a compulsion on the part of the applicant to opt for VDIS as it was caught by the Department with unaccounted income at the time of survey under section 133A on 26th December, 1997. The Tribunal failed to understand the VDIS, which nowhere says and nowhere prohibits any person from disclosing his income, who is under fear of being caught. The Scheme gives benefit upon disclosure of income provided that his disclosure is in accordance with the Scheme of disclosure and once a disclosure is accepted by the Revenue, then it cannot be questioned in subsequent proceedings by holding that the disclosure was not voluntary. Such person, who has disclosed the income under the VDIS of 1997, is not entitled to any benefit, which is also given in the Scheme itself and no more denial can be made to the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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