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Smt. Ujjwala Sanjay Pawar and Others Versus The Asst. Commissioner of Income Tax, Circle 2 (1) , Dhule and Vica-Versa

2016 (2) TMI 621 - ITAT PUNE

Refund of taxes paid under the VDIS, 1997 along with interest - Held that:- The assessee is not entitled to the immunity and benefits of VDIS, 1997, in respect of the additional income surrendered by the assessee during the course of search and consequently, is to be assessed as undisclosed income in the hands of assessee. Further, following the directions of the Hon’ble High Court, we hold that since the assessee is entitled to the refund of taxes paid under the VDIS, 1997 along with interest @ .....

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ssessee is against order of CIT(A)-II, Aurangabad, dated 11.03.2004 relating to block assessment period 01.04.1987 to 10.07.1997 against order passed under section 158BC(c) r.w.s. 143(3) of the Income Tax Act, 1961 (in short the Act ). Further, three cross appeals filed by the different assessees and the Revenue are against different orders of CIT(A)-II, Aurangabad, all dated 10.03.2005, relating to block assessment period 01.04.1987 to 10.07.1997 against respective orders passed under section 1 .....

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by this consolidated order for the sake of convenience. However, reference is being made to the facts and issues in ITA No.588/PN/2004 to adjudicate the issues. 3. Before adjudicating the merits of the issue raised by the assessee and the appeals filed by the Revenue, we would like to refer to the order sheet entries in the present bunch of appeals, wherein the appeals were listed for hearing from 18.01.2007 and were adjourned from date to date at the request of the assessee that a Writ Petitio .....

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e the case. The said request was made in ITA Nos.588/PN/2004, 1235/PN/2005, 1305/PN/2005, 1237/PN/2005 and 1292/PN/2005. The letter of authority was filed by the Counsel in some of the appeals. However, the matter was adjourned to 11.01.2016 on her request and the bunch of appeals were adjourned to 11.01.2016, since the issue arising in all the appeals was identical. On 11.01.2016 i.e. the appointed date of hearing, the learned Counsel Smt. Deepa Khare moved an application for adjournment in ITA .....

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ournment was refused to learned Authorized Representative for the assessee on this aspect and it was announced in the open Court that the matter shall be taken up for hearing. However, the learned Counsel did not appear before the Bench even on third calling of the matter and we proceed to decide the present appeal after hearing the learned Departmental Representative for the Revenue. 5. The learned Departmental Representative for the Revenue pointed out that the Writ Petition filed before the H .....

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eals of the Revenue were not maintainable. 6. We proceed to decide the present appeal after referring to the facts in ITA No.588/PN/2004. 7. The grounds of appeal raised by the assessee are as under:- 1) The CIT(Appeals) erred in confirming the order of ACIT, Circle 2(1), Dhule in which the appellant was denied the immunity and benefits of the VDIS, 1997, particularly when the issue is pending with Aurangabad High Court Bench in writ petition No.5065 of 1999. The CIT(Appeals) erred in confirming .....

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and if it is held that the aforesaid declaration filed by the appellant was nonest and void ab initio then the learned Assessing Officer may please be directed to give credit of taxes paid under V.D.I.S. 1997 scheme against the demand raised under the impugned Block Assessment. 9. The facts in brief are that an action under section 132 of the Act was carried out on the premises of assessee on 10/11, July, 1997 . During the course of search and seizure action, various incriminating documents, boo .....

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declaring total income of ₹ 1 lakh for assessment year 1998-99 as her regular income and from assessment year 1988-89 to 1997-98 at ₹ 5,65,000/- claiming that the same was declared under VDIS, 1997. The year-wise break-up of the undisclosed total income shown by the assessee in the block return totaling ₹ 6,65,000/- is tabulated at page 1 and 2 of the assessment order. The claim of the assessee was that it had gone in VDIS in 1997 for assessment years 1988-89 to 1997-98 and fo .....

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documents seized during the search action. Since the assessee was unable to substantiate his say with necessary documentary evidence, he offered undisclosed income of ₹ 5,95,000/- during the course of search action itself. The details of unexplained income being offered are tabulated at page 2 of the assessment order. The Assessing Officer further noted that the assessee has shown the total income including undisclosed income and the returned / assessed income at the same figure. However, .....

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should not be taken for taxation under the Income-tax Act. The Assessing Officer rejected the contention of the assessee as the declaration in VDIS, 1997 was made only after search action, hence, the disclosure of total income was treated as undisclosed income under section 158BB of the Act and was taxed for the block period under section 113 of the Act. The contention of the assessee in respect of income of ₹ 1 lakh declared for the current year was accepted and the same was not treated a .....

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i.e. Smt. Ujjwala Sanjay Pawar. The taxes on the same were worked out @ 60%. 10. Against the said order of Assessing Officer, the assessee filed an appeal before the CIT(A) and pointed out that there was bar against the immunity under the VDIS, 1997 only in those cases where an action under section 132 of the Act was taken. He submitted that where the scheme was signed by the President on 14.05.1997 and it came into operation w.e.f. 01.07.1997, then the scheme was only applicable to the action .....

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ard. 11. The assessee is in appeal before us against the order of CIT(A) and the first issue raised by the assessee is against denial of immunity and benefits of VDIS, 1997, to the assessee, particularly when the issue was pending before the Hon ble Bombay High Court at Aurangabad Bench in Writ Petition. An alternate plea by way of an additional ground of appeal has been raised by the assessee that if it is held that the assessee was not entitled to file a declaration under VDIS, 1997 and the sa .....

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the learned Departmental Representative for the Revenue and an order passed by the Hon ble Bombay High Court, Bench at Aurangabad in WP No.5065/1999, we proceed to decide the present appeal. A search and seizure action under section 132 of the Act was conducted at the premises of the assessee on 10/11, July, 1997, during which various documents, books of account and other incriminating material was seized and impounded. The assessee was confronted with the entries in the documents seized and in .....

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year of search. The claim of the assessee before the Assessing Officer was that since it had declared the additional income under VDIS, 1997, there was an immunity provided to the assessee and consequently, no undisclosed income could be assessed in the hands of assessee for the block period. However, the assessee furnished regular return of income relating to assessment year 1998-99 and declared income of ₹ 1 lakh. 13. The issue arising before us is that where the search under section 132 .....

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he assessee and other assessees of the group have been dismissed by the Hon ble High Court vide order dated 27.03.2015. It may be put on record that initially, the learned Authorized Representative representing the assessee had made a request that the appellate proceedings before the Tribunal be kept pending since the Writ Petition was admitted before the Hon ble High Court and the same was pending for adjudication. The said Writ Petition has been decided on 27.03.2015. The appeal thereafter was .....

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ce assessees. On 11.01.2016 also in the case of one assessee, an application was moved for adjournment on the ground that SLP was pending before the Hon ble Supreme Court. However, the learned Departmental Representative for the Revenue has furnished on record the order of the Hon ble High Court, under which the issue arising before us has been dismissed by the Aurangabad Bench of the Hon ble High Court holding that the assessee would not be entitled for immunity under the said VDIS, 1997, where .....

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titled for the benefit of scheme, then the Revenue authorities should refund or adjust the amount paid by the assessee under the VDIS, 1997. The said contention of the petitioners was objected to by the learned Counsel for the Respondents that the petitioners were not entitled for the refund of amount and also no interest was to be awarded while refunding the amount. However, the Hon ble High Court in the said Writ Petition held as under:- 11. It is held that, the petitioners would not be entitl .....

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s of the scheme, the revenue authorities are to be directed to refund or adjust the amount already deposited by the assessee in the purported compliance with the provisions of the scheme. 13. In the light of the above, the only limited order that could be passed is that the amount of tax deposited by petitioner Nos.2, 4, 5, 6 and 7 pursuant to declaration under the V.D.I.S. is required to be adjusted in tax liability, if any, of these petitioners and if as on date there is no tax liability outst .....

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drawn their Writ Petition and the same was dismissed. However, the assessee before us is petitioner No.7 in the said Writ Petition No.5065/1999 and the order of the Hon ble High Court has been passed in her case. Similarly, the other assessees before us were the petitioners in the said Writ Petition i.e. Bharat Maharu Pawar, petitioner No.6, Rajendra Popatrao Shinde, petitioner No.4, Prithviraj Chandrakant Shinde, petitioner No.5 and Bhikan Bapu Shelke, petitioner No.2 and the judgment of the Wr .....

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assessee is entitled to the refund of taxes paid under the VDIS, 1997 along with interest @ 6% from September, 1999, the same may be adjusted against the demand raised under the block assessment order. The ground of appeal No.1 raised by the assessee is thus, dismissed and the alternate plea raised by the assessee vide additional ground of appeal is thus, allowed. ITA Nos.1304/PN/2005 & 1233/PN/2015 15. The cross appeals filed by the assessee relate to the block assessment order passed unde .....

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peal are identical to the facts and issue in ITA No.588/PN/2004 and our decision in ITA No.588/PN/2004 shall apply mutatis mutandis. Accordingly, ground of appeal No.1 is dismissed and the ground of appeal No.2 raised by the assessee is allowed as the issue is same as raised by way of additional ground of appeal in ITA No.588/PN/2004 . 16. Now, coming to the ground of appeal No.3, which is against the order of CIT(A) in holding that the assessee was not a member of so-called AOP i.e. Mahendra Au .....

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in these diaries. Based on the entries in the said diaries, the Assessing Officer concluded that the AOP existed in the name and style of M/s. Mahendra Auto Services and therefore, same deserves to be assessed in the hands of AOP. The CIT(A) thus, held that the said income was assessable in the hands of AOP and not in the hands of individual in line with his appellate order dated 10.03.2005 in the case of M/s. Mahendra Auto Services. Further, since no other evidence was found during the course .....

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d of appeal No.3 raised by the assessee and the same is dismissed. The appeal of the assessee is thus, partly allowed. 17. The cross appeal filed by the Revenue in ITA No.1233/PN/2005 is against the deletion of addition of ₹ 7,87,000/- pertaining to the broken period i.e. 01.04.1997 to 10.07.1997, which was excluded since it pertains to the regular income of the current year. The learned Departmental Representative for the Revenue fairly admitted that the said appeal of the Revenue merits .....

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facts and issues are identical, ground of appeal No.1 raised by the assessee is dismissed, ground of appeal No.2 raised by the assessee is allowed and the ground of appeal No.3 raised by the assessee is dismissed. The appeal of the assessee is thus, partly allowed. 19. Now, coming to the cross appeal filed by the Revenue in ITA No.1235/PN/2005. The issue raised in the present appeal is identical to the issue in ITA No.1233/PN/2005 and the tax effect in the present appeal is below ₹ 10 lakh .....

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nd of appeal No.2 raised by the assessee is allowed and the ground of appeal No.3 raised by the assessee is dismissed. The appeal of the assessee is thus, partly allowed. 21. Now, coming to the cross appeal filed by the Revenue in ITA No.1237/PN/2005. The issue raised in the present appeal is identical to the issue in ITA No.1233/PN/2005 and the tax effect in the present appeal is below ₹ 10 lakhs. In view of the admission of the learned Departmental Representative for the Revenue, we dism .....

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. The appeal of the assessee is thus, partly allowed. 23. An additional ground of appeal by way of ground of appeal No.4 has been raised by the assessee against the enhancement of assessed income of ₹ 7,54,464/- being additional investment in Dewarpada (Malegaon) Petrol Pump from the papers found under section 133A of the Act. 24. Briefly, in the facts relating to the issue before us, the assessee had made an investment in Dewarpada (Malegaon) Petrol Pump amounting to ₹ 26,56,120/- a .....

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