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TMI Blog2016 (2) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... s against order of CIT(A)-II, Aurangabad, dated 11.03.2004 relating to block assessment period 01.04.1987 to 10.07.1997 against order passed under section 158BC(c) r.w.s. 143(3) of the Income Tax Act, 1961 (in short the Act ). Further, three cross appeals filed by the different assessees and the Revenue are against different orders of CIT(A)-II, Aurangabad, all dated 10.03.2005, relating to block assessment period 01.04.1987 to 10.07.1997 against respective orders passed under section 158BC(c) r.w.s. 143(3) of the Income Tax Act, 1961 (in short the Act ). Further, the assessee Shri Bhikan Bapurao Shelke has also filed an appeal against the order of CIT(A)-II, Aurangabad, dated 10.03.2005, relating to block assessment period 01.04.1987 to 10.07.1997 against order passed under section 158BC(c) r.w.s. 143(3) of the Income Tax Act, 1961 (in short the Act ). 2. This bunch of appeals relating to different assessees, who all are connected were heard together and are being disposed of by this consolidated order for the sake of convenience. However, reference is being made to the facts and issues in ITA No.588/PN/2004 to adjudicate the issues. 3. Before adjudicating the merits of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes paid under the VDIS Scheme, 1997 have been directed to be refunded along with nominal interest @ 6% per annum from the date of petition. Further, the learned Departmental Representative for the Revenue referred to the facts of the present case and pointed out that in all the appeals filed by the Revenue, the tax effect was below ₹ 10 lakhs and in view of CBDT Circular dated 10.12.2015, the appeals of the Revenue were not maintainable. 6. We proceed to decide the present appeal after referring to the facts in ITA No.588/PN/2004. 7. The grounds of appeal raised by the assessee are as under:- 1) The CIT(Appeals) erred in confirming the order of ACIT, Circle 2(1), Dhule in which the appellant was denied the immunity and benefits of the VDIS, 1997, particularly when the issue is pending with Aurangabad High Court Bench in writ petition No.5065 of 1999. The CIT(Appeals) erred in confirming the order of the A.O. in which the interpretation of the VDIS, 1997 is made against the appellant. The appellant craves leave to add/alter/amend/delete any of the grounds of appeal. 8. Further, an additional ground of appeal has been raised by the assessee, which re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of ₹ 5,95,000/- during the course of search action itself. The details of unexplained income being offered are tabulated at page 2 of the assessment order. The Assessing Officer further noted that the assessee has shown the total income including undisclosed income and the returned / assessed income at the same figure. However, this fact was not correct because the assessee was not assessed to tax. The Assessing Officer further noted that except for ₹ 1 lakh, which was offered by the assessee as unexplained cash for assessment year 1998-99 during the course of search action, the income declared for the remaining assessment years have been declared under VDIS, 1997. Further, a request was made to allow the due credit for the income disclosed and taxes paid under VDIS, 1997 and it was also requested that the same should not be taken for taxation under the Income-tax Act. The Assessing Officer rejected the contention of the assessee as the declaration in VDIS, 1997 was made only after search action, hence, the disclosure of total income was treated as undisclosed income under section 158BB of the Act and was taxed for the block period under section 113 of the Act. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich does not require any adjudication of facts and hence, the same is admitted though, there was no representation by any Authorized Representative on behalf of the assessee or by the assessee herself. 12. On perusal of record and after hearing the learned Departmental Representative for the Revenue and an order passed by the Hon ble Bombay High Court, Bench at Aurangabad in WP No.5065/1999, we proceed to decide the present appeal. A search and seizure action under section 132 of the Act was conducted at the premises of the assessee on 10/11, July, 1997, during which various documents, books of account and other incriminating material was seized and impounded. The assessee was confronted with the entries in the documents seized and in the statement recorded during the course of search, the assessee admitted to the undisclosed income of ₹ 6,65,000/-, out of which ₹ 1 lakh related to assessment year 1998-99, i.e. the year of search and the return of income for which was still not due. Before the assessment proceedings could be taken up, the assessee made a disclosure under the VDIS, 1997 of income totaling ₹ 5,65,000/- relating to the block period, except to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed by the Aurangabad Bench of the Hon ble High Court holding that the assessee would not be entitled for immunity under the said VDIS, 1997, wherein search under section 132 of the Act was carried out and because of the same, the scheme of VDIS, 1997 was not applicable. Reliance in this regard was placed on the decision of Apex Court in Hemalatha Gargya Vs. CIT, AP Another (20 03) 9 SCC 510, wherein the Apex Court had held that the assessee was not entitled to the benefit of scheme. The perusal of the said judgment reflects that the Counsel for the petitioner had relied on the said judgment to contend that if the assessee was not entitled for the benefit of scheme, then the Revenue authorities should refund or adjust the amount paid by the assessee under the VDIS, 1997. The said contention of the petitioners was objected to by the learned Counsel for the Respondents that the petitioners were not entitled for the refund of amount and also no interest was to be awarded while refunding the amount. However, the Hon ble High Court in the said Writ Petition held as under:- 11. It is held that, the petitioners would not be entitled for the benefit of the said scheme, in effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the directions of the Hon ble High Court, we hold that since the assessee is entitled to the refund of taxes paid under the VDIS, 1997 along with interest @ 6% from September, 1999, the same may be adjusted against the demand raised under the block assessment order. The ground of appeal No.1 raised by the assessee is thus, dismissed and the alternate plea raised by the assessee vide additional ground of appeal is thus, allowed. ITA Nos.1304/PN/2005 1233/PN/2015 15. The cross appeals filed by the assessee relate to the block assessment order passed under section 158BC(c) r.w.s. 143(3) of the Act for the block period i.e. from 01.04.1987 to 10.07.1997. The assessee has raised identical grounds of appeal as in ITA No.588/PN/2004 i.e. it was entitled to the benefit of VDIS, 1997 and the total undisclosed income should be assessed at Rs.Nil during the block period, by way of ground of appeal No.1. The issue vide ground of appeal No.2 is in respect of allowance of credit for taxes paid under VDIS, 1997. The facts and issue arising in the present appeal are identical to the facts and issue in ITA No.588/PN/2004 and our decision in ITA No.588/PN/2004 shall apply mutatis mut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the tax effect was below ₹ 10 lakhs. In view of CBDT Circular No.21/2015, dated 10.12.2015, we dismiss the appeal filed by the Revenue being not maintainable for low tax effect. ITA NOs.1305/PN/2005 1235/PN/2005 18. The cross appeal filed by the assessee for the block period 01.04.1987 to 10.07.1997. The issue raised in the present appeal by the assessee is identical to the issue raised by the assessee in the earlier appeals i.e. ITA No.1304/PN/2005 . Since the facts and issues are identical, ground of appeal No.1 raised by the assessee is dismissed, ground of appeal No.2 raised by the assessee is allowed and the ground of appeal No.3 raised by the assessee is dismissed. The appeal of the assessee is thus, partly allowed. 19. Now, coming to the cross appeal filed by the Revenue in ITA No.1235/PN/2005. The issue raised in the present appeal is identical to the issue in ITA No.1233/PN/2005 and the tax effect in the present appeal is below ₹ 10 lakhs. In view of the admission of the learned Departmental Representative for the Revenue, we dismiss the present appeal filed by the Revenue as not maintainable in line with instructions issued by the CBDT Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure on investment did not tally. The CIT(A) in this view observed that both the investments were independent of each other and required to be explained accordingly. On being directed by the CIT(A) vide its letter dated 05.10.2004, the Assessing Officer called for clarification from the assessee, who submitted reply on 21.10.2004, in which it was submitted that since the investment was almost during the same period, they were not separate from each other. The CIT(A) did not accept the explanation of the assessee for the reasons that the details of investment made by M/s. Royal Finance did not reconcile with the details of investment made in Dewarpada (Malegaon) Petrol Pump by the assessee. Neither the dates nor the amounts or for that matter, items of expenditure tallied on the any account. Therefore, the said amount was added to the total income of the assessee and the assessment was enhanced to that extent. The relevant findings of the CIT(A) are vide para 9 at page 8 of the appellate order. 25. The assessee before us has failed to controvert the findings of the CIT(A). During the course of appellate proceedings, the Assessing Officer sought clarification from the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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