TMI Blog2015 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... en up simultaneously. The decision rendered in the case of CIT v. Naveen Gera [2010 (8) TMI 194 - Delhi High Court] is applicable to the facts of the instant case wherein held that, if the details of the properties already disclosed to the Department under VDIS, then it cannot be said that the Department came in possession of any information which it did not possess earlier. - Decided in favour of assessee. Addition made in respect of vehicles - undisclosed income of the assessee was computed under investment method - AO took the view that the depreciation is admissible only if the undisclosed income is computed under the income method - CIT(A) held that the depreciation is admissible as deduction against income determined even under "investment" method also - Held that:- There should not be any dispute that the depreciation is a statutory deduction and the same is allowable as deduction while computing the total income. Further the depreciation is a non-cash expenditure. The total income may be computed under different methods and the "investment" method is only method of computing the total income. Hence, even if the value of vehicles is taken at cost, the depreciation should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted from the aggregate value of assets for the purpose of arriving at the income. The assessee has pointed out that the liability towards creditors are collated from the seized material only and the assessee has also linked the outstanding liability with specific seized material. However, it is seen that the Assessing Officer did not bring any material on record to disprove the claim of the assessee. We notice that the CIT(Appeals) has observed that the Assessing Officer was not correct in ignoring the seized materials in selective manner, i.e., the view of the CIT (Appeals) was that the seized materials should be given due credence in toto, unless contrary is shown. - Decided in favour of assessee. Addition made towards insufficient drawings - CIT(A) deleted the addition - Held that:- It is an admitted fact that the Assessing Officer has made this addition on estimated basis without making reference to any of the seized materials. It is a well settled proposition of law that the block assessment can be made only on the basis of seized materials. Apart from this legal position, we notice that the learned Commissioner of Income-tax (Appeals) has also taken into consideration ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed by him under VDIS scheme and in support of the same he produced the necessary documents. The Assessing Officer noticed that the VDIS certificates was issued by the Commissioner only to the extent of ₹ 5,33,334 and hence agreed with the contentions of the assessee only to the extent of the abovesaid amount and assessed the balance amount of ₹ 35,97,357 as undisclosed income of the assessee. 4. It is pertinent to note that the assessee had filed the VDIS declaration on December 29, 1997, i.e., much before the date of search wherein all the investments made in the immovable properties had been disclosed to the Department. However, the assessee appears to have failed to pay the full tax before the due date prescribed under the VDIS scheme and hence the VDIS certificate was issued only to the extent of tax paid by the assessee. Hence, the assessee contended before the learned Commissioner of Income-tax (Appeals) that he had already disclosed all the immovable assets to the Department through the VDIS scheme and non-acceptance of the same on technical reasons would not make the same as undisclosed assets . Accordingly it was contended that the Department should h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re amount of tax before the due date. Under these set of facts, the right course that was available to the Department was to assess those income, i.e., that was not covered by the VDIS certificate, by reopening the assessments under section 148 of the Act. It appears that the Department has failed to assess those income under section 148 of the Act. In our considered view, the Department is not entitled to make good its failure by assessing those assets under block assessment proceedings, since the block assessment made under Chapter XIV is a complete code by itself and it is well settled proposition that the regular assessment proceedings and block assessment proceedings are parallel to each other and can be taken up simultaneously. We notice that the case law relied upon by the Revenue have been rendered under different contexts. On the contrary, the decision rendered by the hon'ble Delhi High Court in the case of CIT v. Naveen Gera [2010] 328 ITR 516 (Delhi) is applicable to the facts of the instant case, i.e., the hon'ble Delhi High Court has held that, if the details of the properties already disclosed to the Department under VDIS, then it cannot be said that the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken the value of stock at tag price , i.e., at selling price, whereas, he has taken the value of stock at cost price. In the remand report, the Assessing Officer submitted that the assessee had accepted the value determined by the search officials in the statement recorded and accordingly contended that the said value only should be assessed. However, the learned Commissioner of Income-tax (Appeals) was convinced with the contentions of the assessee and accordingly directed that the addition of ₹ 2,28,031 (mentioned as ₹ 2,28,061) should be deleted. 11. We heard the parties on this issue and perused the record. We notice that the Assessing Officer has simply placed reliance on the sworn statement given by the assessee at the time of search, wherein the assessee had accepted the value of ₹ 12,86,021. However, the assessee has pointed out that the abovesaid value was determined on the basis of selling price, whereas the cost price of those goods actually work out to ₹ 10,57,990. There should not be any dispute that the value of stock is normally valued at cost or market price, whichever is lower. Though the assessee might have admitted the value determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the assessee's mother (2500 gms), spouse (3750 gms) and that declared under VDIS scheme (1000 gms). The learned Commissioner of Income-tax (Appeals) did not accept the claim of receipt of gifts (1500 gms) by the assessee. It is customary for the ladies in the Indian families to possess silver articles. Considering the quantity of the silver articles accepted in the hands of each of the member of family, we do not find any infirmity in the order of the learned Commissioner of Income-tax (Appeals) on this issue also and accordingly uphold the same. 16. The next issue relates to the addition relating to sundry creditors. The Assessing Officer did not accept the claim of deduction of liability towards sundry creditors to the tune of ₹ 22,91,570. Before the learned Commissioner of Income-tax (Appeals), it was submitted that the Assessing Officer has accepted the sundry debtors balance declared by the assessee, but rejected the claim of liability towards sundry creditors. It was further submitted that the sundry debtors balance represent credit sales and sundry creditors balance represent credit purchases. Accordingly it was submitted that the sales could not have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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