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2016 (7) TMI 194 - GUJARAT HIGH COURT

2016 (7) TMI 194 - GUJARAT HIGH COURT - TMI - Benefit of Voluntary Disclosure of Income Scheme (VDIS) - Held that:- The issue involved in this matter is squarely covered by the decision in case of Nitin P. Shah alias Modi v. Deputy Commissioner of Income Tax [2004 (12) TMI 64 - GUJARAT High Court ] where this Hon'ble Court has held that the certificate issued under Section 68 (2), cannot be cancelled or revoked. - Identical issue was also raised before the Hon'ble High Court of Allahabad in .....

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MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MRS MAUNA M BHATT, ADVOCATE FOR THE OPPONENT : MR SN DIVATIA, ADVOCATE COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) Since the common question of arises, both these appeals are being heard and decided together by way of this common oral judgment. 2. Tax Appeal No.1436 of 2006 challenges order dated 07/07/2006 passed by the ITAT in IT (SS)A No.33/Ahd/2001 for the block period 03/11/1986 to 20/10/1997 and the said appeal c .....

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l No.1467 of 2008 challenges the order passed by the ITAT in IT (SS) A No.73/Ahd/2001 for the block period 03/11/1986 to 20/10/1997 and the said appeal came to be admitted on the following questions of law: (1) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in upholding the validity of block assessment proceedings initiated u/S.158BD on 29.10.1999 by AO? (2) Whether on the facts and in the circumstances of the case, the Income Ta .....

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bunal was justified in law in upholding the addition of ₹ 4,80,000/-in the hands of the appellant? 4. Learned Counsel for the revenue has contended that the ITAT has committed a serious error by quashing and setting aside the order passed by the Assessing Officer as confirmed by the CIT (Appeals) and thereby deleting the addition of ₹ 75,50,000/-. He has further contended that the ITAT has committed an error by allowing benefit of Voluntary Disclosure of Income scheme to the assessee .....

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d contended that orders passed by the authorities are just and proper and no interference was required to be made by the tribunal and therefore order passed by the ITAT may be quashed and set aside. 5. On the other hand, learned Advocate Mr.Divetia for the assessee has mainly contended that the issue involved in this matter is squarely covered by the decision in case of Nitin P. Shah alias Modi v. Deputy Commissioner of IncomeTax [2005] 276 ITR 411 (Guj) where this Hon'ble Court has held tha .....

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sue was also raised before the Hon'ble High Court of Allahabad in case of Bhagwat Prasad v. Commissioner of IncomeTax (2003) 183 CTR (All) 626 wherein it has been held that once a valid certificate had been granted to the petitioner by the CIT under the VDIS 1997, he was entitled to the immunity under Section 68 of the Finance Act, 1997 and the impugned proceedings under Section 158BD taken against the petitioner were illegal. Lastly, he contended the ITAT's order is just and proper and .....

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ed before the Commissioner of Incometax (Appeals) and the Revenue's appeal on this count was dismissed by the Tribunal. 24. Section 68 of the VDIS reads as under: "68. Voluntarily disclosed income not to be included in the total income.( 1) The amount of the voluntarily disclosed income shall not be included in the total income of the declarant for any assessment year under the Incometax Act, if the following conditions are fulfilled, namely: (i) the declarant credits such amount in the .....

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respect of the same". The said provision on a plain reading makes it clear that the amount of voluntarily disclosed income shall not be included in the total income of the declarant for any assessment year under the Act if the specified conditions stand fulfilled. The conditions are: (i) the declarant credits such amount in the books of account, if any, maintained by him for any source of income or in any other record, and intimates the credit so made to the Assessing Officer; and (ii) the .....

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on as prescribed in section 68(1)(i) is required to be considered. 25. **** 26. As can be seen from the form of declaration, the declarant is required to attach copies of relevant entries made in the books of account or any other record along with the declaration in duplicate. The purpose behind the scheme providing for making of entries in the books of account or any other record is to ensure that the same declared income (asset) is not relied upon to explain away some other income (asset) by a .....

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VDIS, is returned for the subsequent assessment years. Thus, making of credit on the basis in the books of account or in other record assumes importance for the purpose of wealthtax payable for the subsequent assessment years also. The requirement of furnishing the copies of the entries in duplicate along with declaration form indicates that one set is retained by the Commissioner along with declaration made by the concerned assessee while the second set is forwarded to the Assessing Officer hav .....

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Assessing Officer in the present case has, while making addition of ₹ 137 lakhs in the fresh assessment made pursuant to the order of set aside, taken upon himself to give a goby to the certificate issued by the Commissioner as if the said certificate had been issued by the Commissioner without verification or application of mind. The court is not prepared to proceed on such an assumption, though it was so contended by learned counsel for the Revenue. The fact that the Commissioner is sup .....

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r's contribution to a provident fund maintained by the company after computing the same by considering both as salary. The fund was recognised by the Commissioner. According to the Assessing Officer, the commission so paid did not partake of the character of salary and, hence, the contribution made in relation to such commission was proportionately disallowed in the assessment proceedings. After deciding on the merits of the dispute between the parties and taking into consideration the terms .....

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e Commissioner under rule 3 of Part A of the Fourth Schedule to withdraw at any time the recognition already granted if, in his opinion, the provident fund contravenes any of the conditions required to be satisfied for its recognition and if during the assessment proceedings for any particular assessment year the taxing authority finds that the provident fund maintained by an assessee has contravened any of the conditions of recognition, he may refer the question of withdrawal of recognition to .....

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