9911796707
|
Home
Issues:
Whether the assessee is entitled to set-off amounts disclosed by family members under the Voluntary Disclosure of Income and Wealth Ordinance, 1975 for assessment years 1973-74 and 1974-75. Analysis: The case involved an assessee who is a Hindu undivided family. The Income-tax Officer reopened assessments under section 147(a) for the years 1973-74 and 1974-75, making additions under "Undisclosed sources." The assessee claimed the benefit of the Voluntary Disclosure of Income and Wealth Ordinance, 1975, based on disclosures made by family members. The Commissioner of Income-tax (Appeals) granted some relief, but the matter was taken to the Tribunal. The Tribunal rejected the contention that declarations by individual family members should benefit the Hindu undivided family. The key argument was whether family members' disclosures should benefit the family entity. The assessee's counsel argued that certificates under the Disclosure Scheme indicated income disclosed by family members, entitling them to benefits. However, the standing counsel contended that the Scheme's benefits were only for the declarant. Reference was made to legal precedents, including the Supreme Court's decisions in Jamnaprasad Kanhaiyalal v. CIT and Banarsi Dass v. WTO. The standing counsel emphasized the definition of "person" in the Income-tax Act, distinguishing between individuals and Hindu undivided families. The court referred to section 18 of the 1976 Act, which explicitly states that benefits under the scheme are limited to the declarant. It was highlighted that the disclosure scheme does not extend benefits to family members unless specifically provided. The court cited the Punjab and Haryana High Court case of CIT v. Meera and Co. to support the Revenue's right to dispute cash credits and limit benefits to declarants. The court also distinguished the case of Biswanath Flour Mills v. CIT, where creditors' declarations led to deletion of credits, as different from the present scenario. The court concluded that "individual" under the Income-tax Act refers to a natural person, while a Hindu undivided family is a separate legal entity. It held that benefits under the scheme apply only to the declarant, not family members, especially if they lack independent sources of investment. Therefore, the Tribunal's view that benefits go to the assessee based on its declarations was upheld, ruling in favor of the Department and against the assessee. The judgment was agreed upon by both judges, and each party was left to bear its own costs.
|
