TaxTMI 
TaxTMI 
1999 (11) TMI 5
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....eturn of income for the assessment year 198182 on May 8, 1981, declaring an income of Rs. 41,380. The assessment under section 143(3) was framed by the Assessing Officer on March 27, 1986, and an addition of Rs. 6,08,578 was made on account of alleged bogus purchases. The Assessing Officer had also raised another dispute about four payments totalling Rs. 1,42,749 having been made in contravention of section 40A(3) of the Act. However, no separate addition on this score was made on the ground that the same stood covered in the addition of Rs. 6,08,578 on account of bogus purchases. The assessee filed an appeal before the Commissioner of Income-tax (Appeals) (for short "the CIT(A)") on April 21, 1986, in which both the issues about the bogus purchases as well as payments in contravention of section 40A(3) of the Act were agitated. During the pendency of the aforesaid appeal, the assessee filed a revised return on March 31, 1987, to take the benefit of the amnesty scheme, then in vogue, and offered an additional amount of Rs. 3 lakhs for taxation. The assessee also submitted that the tax of Rs. 74,700 due on the additional income may be adjusted out of the excess amount already pai....
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....p; S and A Steel Industries, Mandi. Gobindgarh. 26-6-1980 | Rs. 17,000 | -do. 13-11-1980 | Rs. 40,000 | Khurmi Steel Corporation, Mandi, Gobindgarh -------------------------------------------------------------------------------- The case put up by the assessee was that since the four parties were genuine and the payments had been made to them in cash on their insistence, the same fell within the exceptions provided in the Circular No. 220 (F. No. 206/17/76-ITA-II, dated May 31, 1977) issued by the Central Board of Direct Taxes and as such no disallowance under section 40A(3) could be made. The Commissioner of Income-tax (Appeals) accepted this explanation in respect of the first three payments of Rs. 24,000, Rs. 61,795 and Rs. 17,000. However, he upheld the disallowance of the fourth payment of Rs. 40,000 on the ground that the genuine ness of the same had not been proved. Thus, out of the addition of Rs. 1,42,749 only an addition of Rs. 40,000 was sustained. The Commissioner of Income-ta....
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....ance. We have heard counsel for the parties and perused the records. The only defence of the assessee before the authorities below has been that the transactions fell within the exceptions provided in the Board's circular dated May 31, 1977. No doubt the explanation rendered by the assessee in respect of the payments of Rs. 24,000 and Rs. 40,000 would be covered by the exceptional circumstances as provided in the Board's circular, yet that by itself will not entitle the assessee to claim the relief. There is a further requirement provided in the Board's circular itself for furnishing of a confirmatory letter from the concerned parties. The relevant extract from the said circular is being reproduced below for the sake of convenience : "It can be said that it would generally satisfy the requirements of rule 6DD(j), if a letter to the above effect is produced in respect of each transaction falling within the categories listed above from the seller giving full particulars of his address, sales tax number/permanent account number, if any, for the purposes of proper identification to enable the Income-tax Officer to satisfy himself about the genuineness of the transaction. The Income-....
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....out the scheme. It would be relevant here to reproduce questions Nos. 1 and 2 and the answers thereto which would resolve the issue in hand. "Question No. 1.-What will be the procedure required to be followed by the assessee who wants to declare income or wealth in respect of the past years (a) in cases where the assessments pertaining to those years are already completed ; (b) in cases where the assessments in respect of those years are pending. Answer.-In cases where the assessments are already completed, the taxpayer should approach the concerned Commissioner of Income-tax with the full disclosure of the amounts of income and/or wealth concealed in various years and should also file returns for the relevant years. He should also produce evidence of payment of taxes before March 31, 1986. The filing of the returns will be regularised by issue of formal notices under section 148 of the Income-tax Act/section 17 of the Wealth-tax Act. In cases where the assessments are pending, the taxpayer should file revised return before the Income-tax Officer along with evidence of payment of taxes. Question No. 2.-In respect of completed assessments, the question will arise whether the as....