TMI Blog1990 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... was not justified to uphold the action of the ld. Assessing Officer by observing that not withstanding the fact that the income had been disclosed stating that such disclosed income was from ' Industrial undertaking', the appellant was further under a legal obligation to link the disclosed income under the Amnesty Scheme with the industrial undertaking for the purpose of ss. 80HH and 80-I ignoring the spirit and scope of the Scheme as elucidated and clarified by the senior officers of the Board. In any case, rejection of the claim of deductions of Rs. 11,32,391 each under ss. 80HH and 80-I in the facts and circumstances of the case, was unwarranted and unjustified keeping in view the scope and spirit of the Amnesty Scheme implementation wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure out of books had been incurred. The Assessing Officer, therefore, came to the conclusion that the income disclosed under the Amnest Scheme was not derived from the industrial under taking, and, therefore, deductions under ss. 80HH and 80-I could not be allowed. The submission of the assessee before the Assessing Officer was that the Department was prohibited from making any enquiry regarding the source of income, The Assessing Officer has observed: "....I do agree that under the Amnesty Scheme the Department is prohibited from enquiring into the source of income." He further observed: "...the attempt of the assessee appears to be to disclose the higher income by paying the tax only at 60 per cent of this amount (as 40 per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chief Commissioner was whether in cases where the assessee firm or company declares stock under the Voluntary Disclosure Scheme and took it into profits for a particular year, whether the firm/company was entitled to benefits under ss. 80J, 80H, 80HH,80HHA, 80-I, etc. On the disclosed income. The answer was under: "Yes, such assessee making declarations are entitled to get benefits under these exemption provisions provided under the law." Sh. Mohan Lal, referring to this clarification by the Chief Commissioner, pointed out that the declaration of stock would not necessarily mean that it represented the business income. The investment in such stock could be as income from undisclosed sources and not as income derived from the indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be accepted as derived from the industrial undertaking, and, therefore, entitled to deductions under ss. 80HH and 80-I. He also referred to a circular contained in D.O. No. 281/50-86-IT(Inv. III),dt. 17th June, 1986 from Sh. S.K. Roy, Member (Investigation), CBDT. In particular, he referred to para 3 of the said circular, stating that the matter was considered in a meeting of the Board, which was strongly of the view that if such voluntary returns were made the basis of roving enquires to find out the date of acquisition of the wealth and substantive assessments are made for years other than the year in which the income has been disclosed without the ITO having any material on record, it would be absolutely contrary to the spirit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is precluded from making any enquiry about the source and nature of income voluntarily disclosed under the Amnesty Scheme. It is a different matter, if the Department could prove, on the basis of material available with it, that the income disclosed by the assessee is not derived from the industrial undertaking but from some different source. No such material has been brought on record the Revenue. We are in agreement with the learned counsel for the assessee that even the stock declared could not be straightway accepted as the concealed stock of the industrial undertaking. Such stock could be purchased from the funds available from other sources but disclosed under the Amnesty Scheme as stock of the industrial undertaking. The Chief Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, when sold, will get converted into money and ultimately its income which is to arise out of stock on sale will qualify for deduction under ss. 80HH and 80-I. It is, therefore, immaterial whether the stock or the income is disclosed. The end-result of both the disclosures will remain the same. 7. Taking into account totality of the circumstances, e.g., the declaration made by the assessee which has to be accepted on its face value in view of the circular of the CBDT contained in D.O.No. 281/50-86-IT (Inv.III), dt. 17th June,1986 and the clarification issued by the Chief Commissioner and circumstantial evidence disclosed above, we have no hesitation in holding that the income voluntarily disclosed under the Amnesty Scheme can be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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