9911796707
TMI Blog2016 (2) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered partnership firm of which Petitioner No. 2 was an erstwhile partner. Petitioner No. 1 filed its return of income for Assessment Year (AY) 1994-95 on 30th November, 1994 disclosing nil income. The Assessing Officer (AO) completed the assessment of the Petitioner No.1 on 18th March, 1997. The dissolution of Petitioner No. 1 took place during the AY. On dissolution, the assets of Petitioner No. 1 in the form of land was transferred to one of the partners at the book value of Rs. 59,84,802/-. The AO noticed that the market value of the said land was Rs. 5,68,00,000. Accordingly, the taxable income of Petitioner No. 1 was computed by the AO at Rs. 5,08,15,200/- being the difference in the market value and that at which the land was tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue directions, instructions and directions to the authorities for the proper administration of the KVSS. Under Section 96 (2) the Central Government was empowered to issue general special orders or instructions as to the principles or procedures to be followed by authorities in the work relating to the KVSS. 5. It is stated that pursuant thereto the Ministry of Finance, Government of India, issued circulars by way of clarifying the KVSS 1998 in the form of questions and answers. Question No. 18 of the instructions dated 7th October, 1998 provided the basis of calculating disputed income. Question No. 18 and the answer thereto read as under: "Question No.18: Section 90(1) of the Scheme refers to the sum payable that may be determined by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3.98- After 31.3.98 30,04,26142,50,000________72,54,261 Tax Unpaid 81,58,391 'Disputed Tax' in terms of sec. 87 (f) of the Finance Act 81,58,392 'Disputed Income' in terms of section 87 (e) of the Finance Act determined by applying the marginal rate applicable to Petitioner No.1 of 44.8 per cent 1,82,10,694 Amount payable under the scheme as per section 88 of the Finance Act @ 35 per cent 63,73,743 7. However, Respondent No.1 determined the amount payable by the Petitioner No.1 as Rs. 1,03,87,456. Respondent No.1 applied the marginal rate of 44.8% (40+10% surcharge) on the tax paid till the date of declaration, whereas the Petitioners had calculated it on the basis of the unpaid tax i.e. at Rs. 81,58,391/-. As a result while the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alk of any marginal rate to be applied. Also, it appears to the Court that the marginal rate was premised on an Assessee having to pay tax at different slab rates depending on the level of income. However, where the tax is on capital gains, there is only a single rate of tax i.e. 33.6%. In such event, the adoption of a 'marginal rate' is not apposite for determining the disputed income. In other words, the impugned instructions of the Ministry of Finance regarding applicability of a marginal rate to the unpaid tax for determining the disputed income cannot apply where the taxable income arises only from capital gains and to which a uniform rate of 33.6% applies. 10. It is sought to be contended by Mr Gupta, learned counsel for the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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