TMI Blog2013 (8) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... k Account and FDR only with respect to the cases where the declaration and deposit are in the same name and not in the fictitious name. Appraisal report is not a relevant and cogent material to be considered for assessment purposes. What is the material is the evidence and information as well as books of account detected during the course of the search and seizure proceeding and subsequent investigation. Deduction u/s 80P - Held that:- where the addition has been made u/s 68 with respect to the undisclosed deposits, therefore, the benefit of Section 80P is not available on such unexplained income. Matter remanded back with the direction to AO that, if the deposit and the declaration in the VDIS are in the same name and pertains to the same time/year then it can be considered as an explanation subject to verification of the correct name and identity of the depositor. The declaration of income under VDIS post search and seizure action but name of the declarant does not match with the name of the depositors in the account, the same would not be considered as relevant evidence. - IT(SS) No.342,343,379,390,/Mum/2002 - - - Dated:- 8-5-2013 - Vijay Pal Rao and N K Billaiya, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions before the High Court claiming the amount of deposit. After a series of notices and letters exchanged between the departmental and assessee, the assessee finally filed return u/s. 158BC on 19.03.1999 in which it furnished the details of Income returned for the Assessment Year 1987-88 to 1997 -1998 which included the income returned by the erstwhile Development Co-operative Bank Ltd. for the Assessment Years 1987-88 to part of Assessment Year 1996 -1997 up to 31st May, 1995 and the income returned by the assessee from remaining period up to the Assessment Year 1997-98. Thus, the assessee did not disclose any income in the returned filed u/s 158BC and mention that the assessee has no undisclosed income during the block period. The assessee has raised various objections including the validity of initiation of proceedings u/s 158BC and applicability of the provisions of section 68 in view of the presumption u/s 132 (4) (a). The AO has rejected the contention of the assessee and framed the block assessment u/s 158BC as well as 158 B(b), whereby, an addition u/s 68 of the Income Tax was made in respect of the deposits found during the search and seizure action and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Further, the Branch Managers of the assessee in the statement recorded u/s 132(4) admitted the fact that the Saving Bank Accounts and Fix Deposit exist in the record of the Assessee Bank are in the name of non-existing and fictitious parties. Thus, it is admitted case of unexplained Cash Credit and the AO has rightly added the same by invoking the provisions of the 68 of the Income Tax Act. He has heavily relied upon the order of the Assessing Officer. 3. On the other hand the Learned AR of the assessee has submitted that out of total addition of Rs. 17,09,00,881 made by the AO u/s68. the assessee produced the record in respect of about Rs. 14.50 crores the claims made by the depositors claiming the amount in the accounts and fixed deposits before the Hon ble High Court and further the depositors had declared the income under VDIS. After considering the relevant record the CIT (A) deleted the addition except Rs. 2.61 crores regarding which the assessee could not produced the record at that point of time. The Learned AR of assessee has contended that subsequently, the assessee has received the claim of Rs. 2.40 crores out of total of Rs. 2.61 crore addition sustained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Even if a declaration is made under VDIS there is nothing which prevents the AO, if he is not satisfied with the explanation of the assessee about the genuineness and source of shares of the amount found created in his book, from investigating the true nature and source of the credit, despite its having already made the subject of declaration by the creditor as held by the Hon ble Supreme Court in case of Jamuna Prasad Kanhaiya Lal Vs. CIT (Supra). Therefore, the Hon ble Supreme Court has dully taken into consideration a situation where if a person made a false declaration with respect to an amount which was not his income but was the income of some body else then there was nothing to prevent an investigation into true source of the amount. Thus, it is clear that a mere declaration by someone under VDIS is not sufficient being a satisfactory explanation of cash credit appearing in the books of the assessee which is subjected to further verification and examination to find out the true nature and source of such amount. Further, the declaration made by the claimants can be considered only with respect to those cases where the declaration under the VDIS as well as the deposits in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cogent material to be considered for assessment purposes. What is the material is the evidence and information as well as books of account detected during the course of the search and seizure proceeding and subsequent investigation. The finding of the CIT are primary based on the ground that the AO failed to discharge his duty to conduct a proper enquiry by summoning the depositors. It is pertinent to note that when the correct name and address were not furnished by the assessee and some of the deposits were in the fictitious name then the question of summoning the depositors does not arise. Even otherwise the burden to prove contrary by the AO is shifted only when the assessee discharged its primary onus of proving the credits as genuine. In the facts of the case when the assessee failed to discharge its primary onus then there was no occasion for the AO to make further enquiry to prove the contrary. 8. As regards the benefit of Section 80P it is trite law that the benefit of 80P is available only with respect to the income from the business activity relating to the members of the Co-operative Bank and not to the income which is not related to the members. In the case in hand th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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