TMI Blog2017 (9) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... sed income for the Block Period at ₹ 55 lakhs - AO rejected books of accounts and on the basis of the declaration made under the VDIS 1997 sought to tax the Assessee - Held That:- Tribunal has reighly dismissed the Revenue's appeal inter-alia holding that under the provisions of Chapter XIV(B) of the Act, the undisclosed income for the Block Period has to be completed on the basis of material found in the course of the search. This declaration made by the respondent - Assessee under the VDIS scheme is not material discovered during the course of search as it was made after the search. Therefore, the same can not form the basis of assessment under Chapter XIV(B) of the Act. - Decision of this Court in CIT v. Vinod Danchand Ghodawat [2000 (6) TMI 13 - BOMBAY High Court] followed. - Decided against the revenue. - Income Tax Appeal No. 29/2004 - - - Dated:- 18-7-2017 - M. S. Sanklecha And Manish Pitale, JJ. A. Parchure and Bhushan Mohta, Advs. for the Applicant C.J. and S.C. Thakar, Advs. for the Respondent ORDER P.C. This appeal under Section 260-A of the Income Tax Act, 1961 (Act) challenges order dated 28th November, 2003 passed by the Income Tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 1997. Thus, allowed the appeal of the respondent - Assessee. (e) Being aggrieved with the order dated 29th February, 2000 of the CIT (A), the Revenue filed an appeal to the Tribunal. The Tribunal by the impugned order dated 28th November, 2003, on bare reading of Section 132(4) of the Act, dismissed the Revenue's appeal by upholding that the statement/letter dated 15th January, 1998 was not made during the course of search but much after the search was completed on 4th December, 1997. Consequently, it held that the letter dated 15th January, 1998 would not have evidentiary value of a statement under Section 132(4) of the Act. Thus, dismissed the Revenue's appeal. (f) The grievance of the Revenue is that the letter dated 15th January, 1998 is self incriminating statement made by the respondent- Assessee before the assessment was completed. Therefore, the same was binding upon the respondent-Assessee, as a statement under Section 132(4) of the Act. (g) For the proper appreciation of the Revenue's grievance, Section 132(4) of the Act is reproduced as under:- (4) The authorized officer may, during the course of the search or seizure, examine on oath any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent - Assessee's books of accounts and on the basis of the declaration made under the VDIS 1997 sought to tax the respondent - Assessee. Thus, making an addition of ₹ 65 lakhs to determine the income for the Block Period at ₹ 1.20 crores. (c) Being aggrieved, respondent carried the issue in appeal to the Commissioner of Income Tax (Appeal) (CIT (A)). By an order dated 29th February, 2000, the Commissioner of Income Tax (Appeal) inter- alia held that the VIDS declaration could not have been made the basis for addition by the Assessing Officer. This for the reason that the VDIS declaration was made on 31st December, 1997 i.e. much after the search was completed on 4th December, 1997. Further, the declaration made was without any evidence linking it to any material/information found by the Assessing Officer during the course of search. Thus, it could not be relied upon for the assessment under Chapter XIV-B of the Act which brings to tax undisclosed income found during the course of search. Thus, CIT (A) by order dated 29th February, 2000, allowed the appeal of the respondent - Assessee. (d) Being aggrieved, the Revenue carried the issue in appeal to the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the assessee and against the Department. Mr. Thakar learned counsel for the respondent - Assessee also invites our attention to the decision of Madras High Court in case of CIT v. P. K. Ganeshwar [2009] 308 ITR 124 and the Delhi High Court in CIT v. Ravi Kant Jain [2001] 250 ITR 141 to the same effect. (f) As the impugned order of the Tribunal has only applied to the decision of this Court in Vinod Danchand Ghodwat (supra), no fault can be found with the same. (g) Accordingly question No. 2 is answered in affirmative i.e. in favour of the respondent - Assessee and against the Revenue. 5. Regarding Question No. (3):- (a) The impugned order of the Tribunal records a finding of fact that the declaration made by the respondent-Assessee in its Return of Income for the Block Period of ₹ 55 lakhs is fully substantiated. The Revenue disputes that the purchases of timber from M/s Associated Lumbers Ltd., and M/s OMP International Ltd. were not explained. Admittedly, these transactions are unrecorded transactions. The addition that was sought to be made in respect of these unrecorded transactions is the capital required for making purchases of unrecorded purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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