TaxTMI 
TaxTMI 
2016 (12) TMI 1086
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....ed for orders today, i.e. 14th December, 2016. 1. The petitioner in W.P.(C) 1706/1999 (hereafter "Inter Craft") challenges a demand by the respondent (hereafter called "the revenue"), demanding a sum of Rs. 72,17,068/- through notice dated 24.02.1999 (which was later amended to Rs. 68,61,775/-) under the provisions of the Kar Vivad Samadhan Scheme, 1998. It also seeks a declaration that its liability to pay under the Scheme is limited to Rs. 48,28,578/- (calculated @ 35%) on the basis of disputed income at Rs. 1,37,95,937/- by applying marginal rate of 46% tax. The other petitioner ("Old Village" hereafter) in WP(C) 1707/ 1999 challenges a similar demand for Rs. 27,10,363/- and Rs. 13,39,857/- and seeks a declaration that its liability und....
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....t does not include any demand relating to erroneous refund and where a show-cause notice is issued to the declarant in respect of seizure of goods and demand of duties, the tax arrear shall not include the duties on such seized goods where such duties on the seized goods have not been quantified. EXPLANATION.- Where a declarant has already paid either voluntarily or under protest, any amount of duties, cesses, interest, fine or penalty specified in this sub-clause, on or before the date of making a declaration by him under section 88 which includes any deposit made by him pending any appeal or in pursuance of a court order in relation to such duties, cesses, interest, fine or penalty, such payment shall not be deemed to be the amount unpai....
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.... rate of fifty per cent of the tax arrear; (v) where the tax arrear includes the tax, interest or penalty determined in any assessment on the basis of search and seizure proceedings under section 132 or section 132A of the Income-tax Act, 1961 (43 of 1961)- (A) in the case of a declarant, being a company or a firm, at the rate of forty-five per cent of the disputed income; (B) in the case of a declarant, being a person other than a company or a firm, at the rate of forty per cent of the disputed income;" 4. According to the declaration filed by Inter Craft, the total disputed income - on the basis of which tax arrears had to be computed was Rs. 1,37,95,937/- as against the total assessed income of Rs. 2,11,76,055/- for AY 1995-96. The ....
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....s defined in Section 87(3) to mean the whole or so much of the total income as is relatable to the disputed tax. The term "disputed income" as used in the Scheme does not refer to the income in the dispute by way of appeal etc. but it refers to the income which is relatable to the disputed tax. The term "disputed tax" has been defined to mean the tax determined and payable but remaining unpaid on the date of the declaration. The designated authority will work out the disputed income relatable to disputed tax by applying marginal rate applicable for the relevant assessment year for that assessee and thereafter determine the sum payable in accordance with Section 88 of the Scheme." 7. The respondent urges that in terms of the assessme....
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....ner's grievance is limited to the Scheme for reduction of the demand for finalization of its request for settlement under the Scheme. Instead of Rs. 72,17,068/- in the case of Inter Craft (which was later modified to Rs. 68,61,775/-) the petitioner claims its liability is limited to Rs. 48,28,578/- while Old Village claims a reduced liability of Rs. 16,78,665/-. In essence, both petitioners argue that the liability is less. 9. Undoubtedly, there are some observations in the three judgments supplied by the petitioners which support them that Section 140A adjustment is not overridden by virtue of non-obstante clause in Section 88. This Court, however, notices that those observations did not give importance to the definition of "tax arrea....