TMI Blog2017 (5) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... ar linkages between the amounts disclosed before the ITSC and the amounts declared by M/s. Dolphin Developers Ltd. was discernable. This court cannot review or second guess the findings of fact as would an appellate court. Given these parameters, the inference of facts having regard to the totality of circumstances, this court is of the opinion that the findings of fact which the ITSC rendered cannot be set aside or interfered with. The writ petition has to fail and is, therefore, dismissed. - W. P. (C) 5185/2016 - - - Dated:- 15-5-2017 - S. Ravindra Bhat And Najmi Waziri, JJ. For the Petitioner : Sh. C.S. Aggarwal, Sr. Advocate with Sh. Prakash Kumar, Advocate. For the Respondents : Sh. Zoheb Hossain, Sr. Standing Counsel with Sh. Deepak Anand, Jr. Standing Counsel ORDER Mr. Justice S. Ravindra Bhat 1. The petitioner seeks a direction to quash the order of 03.05.2016, passed by the Income Tax Settlement Commission, Additional Bench -II, New Delhi (hereinafter referred to as Settlement Commission or ITSC ) under Section 245D(2C) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). The said order had rejected the petitioner's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO in Form No. 34BA has been made on 10.03.2016 complying with the requirements u/s 245C(4) of the Income Tax Act. 7. The Ld. A.R. submitted that additional income has been declared on the basis of compilation of the seized material printouts taken from the Hard-Disk (HD-33), assessment year wise working of additional income which has been tested and cross checked by Net Asset Method has been offered for taxation. Accordingly, as the figure arrived at by 'net assets' method is more, that figure has been offered as income. 8. It was pointed out by the Bench that in schedule-I1 of 'Income-Outgoings' for F.Y. 2008-09 the opening balance has been whereas in para 28 of SOF (Page 92) and elsewhere it has financial affairs of the applicant are 'in continuation' with the earlier years. It was also brought to the notice of the applicant that in the 'compilation certificate' on page 160 of SOF, the applicant's C.A has stated, inter-alia, that there are variations in the opening balances as are appearing in the ledger accounts for the F.Y. 2008-09 (under reference) as compared to the closing balances of the preceding year i.e. F.Y. 2007-08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es who have undertaken 23 projects towards the furtherance of the objectives of real-estate development. Besides M/s Dolphin Developers Ltd., these companies are M/s Gam Builders, M/s Pragati Structure Pvt. Ltd, M/s Dolphin Infra Project Ltd., M/s Dolphin Structures Ltd., M/s Illec Trading Pvt. Ltd. and M/s Ashwariya Coloniser Pvt. Ltd. These are separate entities carrying out their activities as mandated by their Articles of Association and are assessed to tax as independent tax payers. 7.1 On the other hand, M/s ABC (of which Mr. Vishwanath Gupta claims to be the controlling person) appears to be an amorphous entity, and certainly not a legal entity. The transactions appearing on seized papers particularly the hard disc marked as HD-33, and the excel sheet forming a part of these accounts, clearly show that the unaccounted monies received are against a particular property in a particular project against each buyer. No evidence has been brought before us to substantiate the claim of the applicant that the unaccounted money related to special and specific requirements of the customers/investors in the projects . This being so, the cash components paid by the investors has onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said disclosure of the sum of ₹ 10.80 Crores is supported by statement of affairs drawn from the seized material (i.e. print out from HD-33) duly certified by the chartered accountants compiling the same. The said statement of affairs have been summarized in paras 34, 35 and 36 of Annexure-II filed before the settlement commission. It is further submitted that in the order dated 18.03.2016 under Section 245D(2B) of the Act the ITSC specifically required the petitioner to explain the said statement of affairs on the basis of which he disclosed sums aggregating to ₹ 10.80 Crores. 6. The petitioner submits that the Settlement Commission also erred in holding that the manner in which the income was earned was not explained. It is submitted that the petitioner had duly explained the manner in which the income has been earned. In fact, the petitioner had furnished detailed information in Annexure-I and Annexure-II, filed before the Settlement Commission. The sources of funds received in cash by the Petitioner in his proprietary concern M/s. ABC, which were recorded in the books of account/ excel sheet found from the Hard Disk (HD-33) found from the computer during the sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not a legally sustainable finding. It was emphasized that under the scheme of Chapter XIX-A of the Income Tax Act, the basic criteria or objective is revenue recovery, in respect of undisclosed income. In doing so, the idea of the settlement is to move away from a rigid insistence on the form and letter of the law but rather to ensure that the tax net yields substantial recovery of tax. This essential or basic consideration was entirely overlooked by the ITSC in the facts of this case. It was lastly argued that in the absence of any specific provision under Section 245 D prescribing the conditions to hold that an application is invalid, in the present case, the petitioner could not have been denied relief, more so because the Principal Commissioner in his report and had not alleged that the application did not satisfy the requirements of law. In fact, there was full and truthful disclosure of all material facts and the findings of the commission to the contrary are unsustainable. 10. The revenue, in its counter affidavit and by the submission of its counsel Mr. Zoheb Hossain, argues that merely because an order was made under Section 245D the petitioner could not claim a veste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. In the context of these provisions, the Supreme Court had an occasion to examine the issue of true and full disclosure and the stage where the same must be made in the case of Ajmera Housing Corporation (supra). In that case, the assessee applied for immunity under section 245C(1) of the Act disclosing additional income of Rs. 1.94 crores (rounded off) for the assessment years 1989-90 to 1993-94 which was in addition to income declared in the return filed before the AO. The Commissioner opposed the disclosures made by the assessee as not being true and full disclosures and suggested that the income of the group assessees should not be settled at less than Rs. 223.55 crores. The arguments on the question of whether the Settlement Commission should allow the application to proceed further were concluded and order was reserved at which stage, the assessee filed revised settlement application declaring additional income of Rs. 11.41 crores. The Settlement Commission passed an order on 17.11.1994 deciding to proceed with the application of settlement. The Commission directed the revenue to furnish a further report. The further report stated that the income disclosed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31. We are convinced that, in the instant case, the disclosure of ₹ 11.41 crores as additional undisclosed income in the revised annexure, filed on 19th September, 1994 alone was sufficient to establish that the application made by the assessee on 30th September, 1993 under Section 245C(1) of the Act could not be entertained as it did not contain a true and full disclosure of their undisclosed income and the manner in which such income had been derived. However, we say nothing more on this aspect of the matter as the Commissioner, for reasons best known to him, has chosen not to challenge this part of the impugned order. 13. It is evident from the above narrative that the petitioner is aggrieved by the rejection of his application. He contends that the total unaccounted amount declared (over Rs. 10 crores) should have been accepted. The revenue had successfully opposed the application, contending that the assessee had not made full disclosure and that the amount declared had never belonged to him, but rather to M/s. Dolphin Developers Ltd, who had accepted cash but not declared it. This was accepted by ITSC. The petitioner has given his explanation and version as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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