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TMI Blog2013 (8) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... le to explain the genuineness of these deposits and to establish the identity of the depositors. Since, the assessee bank came into existence with effect from 1.6.1995 and prior to its incorporation, the assessee was a Co-operative Bank set up under the provisions of Multy State Co-operative Bank Society Act of 1985. On 31st May 1995 the assessee was converted into a Corporate Bank in the name and style M/s. Development Credit Bank Ltd. Therefore, from 1.6.1995 till the end of the block period the assessment has been framed u/s 158 BC and for the period prior to 1.6.1995 Block Assessment was completed u/s 158BD. In the mean time the assessee filed writ petition No.7 93/99 before Hon'ble High Court challenging the seizure of amount of Rs. 10.65 crore. Though the writ petition filed by the assessee was admitted by the Hon'ble High Court but it is till pending adjudication. A notice u/s 158 BC was issued on the assessee on 11.02.1999 requiring the assessee to furnish the requisite return. The assessee contended that no incriminating material was found or seized in the course of search and seizure and the assessee has no undisclosed income therefore, it was not liable to submit return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d declare income under VDIS. 2. Before us, the Learned DR has contended that the CIT(A) has accepted the explanation of the assessee regarding the claim of some persons about ownership of the deposit and further it was accepted on the basis of declaration made under VDIS. The Learned DR contended that the income declared under the VDIS scheme charged to tax as if such amount were the total income of the declarant. The declaration under VDIS has a limited immunity it could not be invoked in the assessment proceeding relating to some other person. He has relied on the decision of the Hon'ble Supreme Court in case of Jamuna Prasad Kanhaiya Lal Vs. CIT (1981)130 ITR 245 and submitted that the Hon'ble Supreme Court has held that the declaration under VDIS had to relate to Income actually earned by the declarant and the immunity to the declarant alone and not to other persons to whom the income really belonged; He has further contended that if a person made a false declaration under VDIS with respect to amount which was income of some body else, then there is no bar against the investigation by the AO to find out the true source of credit. Learned DR has referred to the Assessment Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the above decisions the amount in the Bank Account and fixed deposit cannot be said to be unexplained credit in the hand of the assessee bank u/s 68 of the Income Tax Act. Alternatively the AR of the assessee has submitted that so far as the block assessment framed u/s 158 BD in the hand of erstwhile Cooperative Bank, the benefit of Section 80P was available and therefore, the said addition cannot be taxed as exempt u/s 80P. 5. In the rebuttal the Learned DR has submitted the provisions of Section 80P are applicable only with respect to the income from business of banking by the Co-operative Bank and not on the income earned from extra business/banking activities. Further the deposits are not from the members of the Co-operative Bank, therefore, the benefit of section 80P is not available on such undisclosed income. 6. We have considered the rival submissions and carefully perused the relevant material on record. As regards the explanation of the assessee that depositors have subsequently claimed the amount in the Bank Account and fixed deposit as they have declared the income under VDIS, it is to be noted that the immunity available under the VDIS is only to the declarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the assessee to prove credit worthiness of the depositors and source of deposit. In those circumstances when the assessee bank discharged its onus to place on record the name and address of the depositors with confirmation that the deposits have been made by the identifiable person, the Hon'ble High Court and this Tribunal have held that no addition can be made u/s 68. Whereas in the case in hand the deposits are not in the name of the identifiable person and further the assessee fail to furnish the correct name and address of the depositors. Moreover, in the statement recorded u/s 132 (4) the Branch Managers of the assessee Bank have categorically admitted that the deposits in bank accounts and the FDRs are in the name of nonexisting and fictitious parties. Therefore, in the facts of the assessee's case where deposits were admittedly in the name of non-existing and fictitious process and the assessee fail to explain and produce the correct name and address of the depositors then the decision relied upon by the AR would not help the case of the assessee. 7. The CIT (A) has given much emphasis on the appraisal report but its appraisal report cannot be a basis of assessment as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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