2024 (2) TMI 1234 - AT - Income Tax

Addition of income declared by assessee under Voluntary Disclosure of Income Scheme, 1997 (VDIS, 1997 ) - Relevant year of assessment - HELD THAT - The fact that VDIS-97 of the assessee was not considered due to the fact that payment was made beyond the time limit prescribed under the scheme. Question in addition of the investment would arise the year of liability is to be determined included investments/purchases/ expenditure for the financial year 1997-98 relevant to assessment year 1998-99 for invoking the provisions of Section 68 of the Act. We noted none of the authorities below have brought out anywhere in the orders that the investments are made in financial year 1997-98 relevant to assessment year 1998-99, whereas assessee has tried to establish the fact that the investments related to earlier assessment years i.e from 1991-92 to 1997-98. We do not agree with the findings of the lower authorities that investments/ purchases/ expenditure were made in the financial year 1997-98 relevant to assessment year 1998-99 except amount declared under VDIS 97 on 26.12.1997. Assessee already tried to establish the fact that these investments were pertaining to previous assessments years 1991-92 to 1997-98. Hence, in our view addition made in the assessment year 1998- 1999 cannot be sustained and accordingly, we delete the addition. This issue of the assessee is allowed. Assessment of income from house property - ALV determination - CIT(A) has given directions to the assessee as well as the AO to adopt annual letting value on the basis of Municipal valuation adopted by Chennai Corporation for rising the rental value - HELD THAT - We find no infirmity in the findings of the ld. CIT(A) and further direct the AO to adopt the municipal value adopted by Chennai Corporation for assessing rental value. This issue raised by the assessee is dismissed as per above direction. Charging of interest u/s. 234A, 234B and 234C - We find no infirmity in the order of the ld. CIT(A) and direct the AO to charge interest as per the provisions of the Act. This issue raised by the assessee stands dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Addition of Rs. 1,50,10,000/- declared under Voluntary Disclosure of Income Scheme, 1997 (VDIS, 1997).
3. Assessment of income from house property.
4. Charging of interest under Sections 234A, 234B, and 234C of the Income Tax Act, 1961.

Summary:

1. Condonation of Delay:
The appeal was time-barred by 14 days due to the appellant's official travel as a Member of Parliament. The Tribunal condoned the delay and admitted the appeal, as the Departmental Representative could not controvert the reason for the delay.

2. Addition of Rs. 1,50,10,000/- under VDIS, 1997:
The primary issue was the addition of Rs. 1,50,10,000/- declared by the assessee under VDIS, 1997, which was treated as undisclosed income for the assessment year 1998-99. The Tribunal noted that the assessee had declared this amount for various years from 1989-90 to 1997-98 and paid taxes accordingly. However, the Revenue did not accept the declaration due to late payment of taxes. The Tribunal found that the lower authorities did not establish that the investments were made in the financial year 1997-98 relevant to the assessment year 1998-99. The assessee provided evidence that the investments related to earlier assessment years. Therefore, the Tribunal deleted the addition, allowing the assessee's appeal on this issue.

3. Assessment of Income from House Property:
The issue involved the determination of the annual letting value (ALV) of the SRM Nightingale School property. The CIT(A) directed the Assessing Officer to adopt the ALV based on the municipal valuation by Chennai Corporation. The Tribunal found no infirmity in this direction and dismissed the assessee's appeal on this issue, instructing the Assessing Officer to follow the municipal valuation for assessing rental value.

4. Charging of Interest under Sections 234A, 234B, and 234C:
The assessee contested the charging of interest under Sections 234A, 234B, and 234C. The Tribunal found no error in the CIT(A)'s order and directed the Assessing Officer to charge interest as per the provisions of the Act, dismissing the assessee's appeal on this issue.

Conclusion:
The appeal filed by the assessee was partly allowed, with the Tribunal deleting the addition of Rs. 1,50,10,000/- under VDIS, 1997, and dismissing the other issues raised by the assessee. The order was pronounced on 23rd February 2024 at Chennai.