2019 (9) TMI 483 - AT - Income Tax

Undisclosed income on the basis of his declaration made under VDIS 1997, which did not eventually materialize - search and seizure action u/s.132 - assessee s brother was also simultaneously subjected to search on the same date - HELD THAT - In the hands of the assessee s brother also, income in the VDIS 1997 declaration was on account of entries in kaccha cash book, marriage expenses and purchase of ornaments, which is similar to the facts of the instant case. This transpires that the facts and circumstances of the extant case are similar to those of Mr. Prakash Bhikchand Agrawal, in whose case the addition has been set-aside and the matter restored to the file of AO for a fresh decision. In the absence of any distinguishing feature and respectfully following the precedent, we also set-aside the impugned order and remit the matter to the file of the AO for deciding the issue afresh - Appeal allowed for statistical purposes.

Summary

Issues:
1. Addition of undisclosed income under VDIS 1997
2. Rejection of VDIS declaration and subsequent assessment
3. Similarity of facts with another case involving VDIS declaration
4. Addition of regularly disclosed rental income

Analysis:
1. The first issue revolves around the addition of undisclosed income of ?11,96,600 made towards the assessee based on a VDIS 1997 declaration that was rejected. The search and seizure action under section 132 of the Income-tax Act, 1961 led to the assessee filing a block return with a declared undisclosed income of ?60,000 alongside a VDIS declaration offering ?11,96,600. Despite rejection of the VDIS declaration, the Assessing Officer (AO) made the addition. The CIT(A) upheld this addition, leading to the appeal before the Tribunal.

2. The rejection of the VDIS declaration and subsequent assessment was challenged by the assessee before the Tribunal. The Tribunal noted that a similar case involving the assessee's brother had the addition set aside and remitted for fresh assessment. Given the identical nature of facts, the Tribunal set aside the order and directed the AO to decide the issue afresh in line with previous directions, ensuring the assessee's right to a fair hearing.

3. The issue of similarity with another case involving VDIS declaration was crucial in the Tribunal's decision. Drawing parallels with the case of the assessee's brother, where the addition was set aside, the Tribunal remitted the matter for fresh assessment, emphasizing the need for consistency in decision-making based on precedent and similar factual circumstances.

4. The final issue pertained to the addition of regularly disclosed rental income, which was not pressed by the assessee's representative and thus dismissed. The appeal was partly allowed for statistical purposes, with the Tribunal pronouncing the order on 12th February 2019.