1982 (3) TMI 89 - AT - Income Tax

Summary

Issues Involved:
1. Double Taxation of the Same Income
2. Validity of Footnotes in Disclosure Forms
3. Discrepancies in Disclosed Amounts
4. Explanation of Seized Amounts

Detailed Analysis:

1. Double Taxation of the Same Income:
The primary issue in these appeals and cross-objections is whether the AAC erred in law and on facts by holding that the amount disclosed by the assessee under section 14(1) of the Voluntary Disclosure Scheme Act, 1975 ('the VDS Act') should be reduced by his proportionate share in the amount disclosed by the firm, in which he is a partner. The assessee argued that he disclosed all concealed income, including his share from the firm of Ramjidas Babulal, under section 14(1). The ITO, however, added the firm's share income again, leading to double taxation. The AAC concluded that double taxation had indeed occurred and directed the ITO to exclude the amounts mentioned in the respective years. The Tribunal upheld the AAC's order, agreeing that the proportionate share of the firm's income should not be taxed again in the hands of the assessee.

2. Validity of Footnotes in Disclosure Forms:
The revenue argued that the assessee could not put conditions in the form of footnotes in the disclosure forms, claiming immunity from tax on the firm's share. The Tribunal disagreed, stating that the footnotes were explanatory and clarified the facts of the case. The Tribunal emphasized that the term 'immunity' should be understood in its broader sense, including exemption from taxation, as supported by the Oxford Dictionary and Law Lexicon, and not limited to immunity from penalty and prosecution.

3. Discrepancies in Disclosed Amounts:
The revenue pointed out discrepancies in the amounts disclosed by one of the partners, Shri Bajranglal, and his share from the firm. The Tribunal accepted the explanation that the partner had spread over the concealed income across different years, which was allowed by the Commissioner. Therefore, the disclosed amount for that year reflected the investment value of the relevant year.

4. Explanation of Seized Amounts:
The revenue also raised concerns about Rs. 17,000 seized during a raid at the firm's premises, arguing that the amount was not explained. The Tribunal found that the firm had disclosed Rs. 2,30,000, including the seized amount, and had satisfactorily explained it to the department. Therefore, the seized amount was not relevant to the case of the assessee.

Conclusion:
The Tribunal concluded that the assessee's disclosure under section 14(1) included all concealed income from all sources, including the firm. The AAC's order to exclude the proportionate share of the firm's income from the assessee's taxable income was upheld. The Tribunal dismissed the revenue's appeals and the assessee's cross-objections, affirming that double taxation had occurred and should be rectified.