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2014 (11) TMI 599 - HC - Income TaxInterpretation of provisions of Kar Vivad Samadhan Scheme, 1998 Held that - During the pendency of revenue appeal, assessee availed the benefit of KVSS, 1988 meaning thereby he has accepted the addition as made by the AO in the assessment order - As a matter of fact assessee, like in the earlier years, could have gone for K.V.S.S. for the assessment year under appeal also - a statement was also required and on that basis AO made the addition - by making declaration under KVSS, 1998 for the A.Y. 1986-87, the assessee has admitted that promissory note of ₹ 1,68,000/- pertains to him - AO is fully justified in taxing interest income on this promissory note for all the assessment years under Appeal as such no substantial question of law arises for consideration Decided against assessee.
Issues:
Challenge to judgment of Income Tax Appellate Tribunal regarding Kar Vivad Samadhan Scheme, 1998 interpretation and equating with Voluntary Disclosure Income Scheme; findings of Tribunal on Settlement Commission, double taxation, and KVSS, 1998. Issue 1: Interpretation of Kar Vivad Samadhan Scheme, 1998 The appellant challenged the Tribunal's judgment on interpreting the provisions of the Kar Vivad Samadhan Scheme, 1998. The appellant, deriving income from various sources, had appealed against the assessment orders for multiple years. The Tribunal reversed the CIT (Appeals) findings and restored the Assessing Officer's conclusions. The appellant contended that under the Scheme, issues were settled. The Tribunal noted that the appellant availed the benefit of KVSS, 1988 during the pendency of the revenue appeal, implying acceptance of additions made by the Assessing Officer. The Tribunal upheld the Assessing Officer's addition of salary received by a specific individual for the relevant assessment years, stating that the appellant could have opted for KVSS for the year under appeal. The Tribunal referred to a Government Circular emphasizing that the Samadhan Scheme does not decide judicial issues but determines the payable sum under the Scheme. The Tribunal's decision was based on the appellant's admission through KVSS declaration, supporting the Assessing Officer's additions. Issue 2: Equating KVSS, 1998 with Earlier Scheme The Tribunal's judgment was challenged for indirectly equating KVSS, 1998 with an earlier Voluntary Disclosure Income Scheme. The Tribunal reversed the CIT (Appeals) order on various grounds, including interest income on promissory notes and other earnings. The Tribunal referred to specific findings by the CIT (Appeals) regarding salary income and other additions, supporting the appellant's contentions. The Tribunal reversed the CIT (Appeals) order, upholding the Assessing Officer's additions based on the appellant's declaration under KVSS for a previous year. The Tribunal emphasized the appellant's admission through KVSS declaration, justifying the Assessing Officer's additions for the assessment years under appeal. Issue 3: Settlement Commission and Double Taxation The Tribunal's ultimate findings were challenged concerning the Settlement Commission, double taxation, and KVSS, 1998. The appellant's counsel pointed out the Tribunal's order deleting certain additions, such as interest income and dividends, based on specific findings by the CIT (Appeals). The Tribunal directed the Assessing Officer to verify and readjudicate certain additions after considering the cash flow statement and benefit availed under KVSS. The Tribunal partly allowed all appeals, setting aside the CIT (Appeals) order on specific issues for further verification by the Assessing Officer. The Tribunal's findings were supported by the respondent's counsel, emphasizing the correctness of deductions made and supporting the Tribunal's order. The High Court upheld the Tribunal's decisions on all issues, finding no need for interference and deciding in favor of the Department against the appellant. In conclusion, the High Court upheld the Tribunal's judgment, dismissing the appeal and deciding in favor of the Department on all issues raised by the appellant. The Tribunal's findings were deemed just and proper, with no interference required, ultimately disposing of the Tax Appeal.
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