TaxTMI 
TaxTMI 
2023 (4) TMI 1178
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....ch the application was filed relate to the Assessment Years 2010-11 to 2017-18. In the application before the Settlement Commission, the petitioner made disclosures under the following three heads:- "(i) ' Excess realisation of gold':- This is stated to be the difference between the gold which was shown in the records of the petitioner as sold for the realisation of amounts due under gold loans availed by its customers and the actual quantity of gold sold during the relevant period. In other words, the disclosure referred to the excess of gold sold over and above the accounted figures. The petitioner disclosed Rs.85.37 Crores as income under this head; (ii) An ad-hoc voluntary disclosure of Rs.2 Crores; and (iii) 'D is-allowance of interest on debentures amounting to Rs.109.92 Crores ' :- This represents the income received by the petitioner on account of late disbursement of interest on debentures issued by the petitioner from time to time." 3. The petitioner's application before the Settlement Commission passed through the 1st stage under Section 245D(1) of the Act, after the commission was satisfied that proceedings were pending for the years in question, t....
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....writ petition filed by the petitioner [W.P(C)No.22792/2019], holding that the writ petition was not maintainable before the Madras High Court and the petitioner ought to challenge the order of the Settlement Commission before this Court. It is accordingly that this writ petition was filed before this Court. 5. Sri. P.S. Raman, learned Senior counsel appearing for the petitioner on the instructions of Adv. G.Harikumar, would contend that the order passed by the Settlement Commission is clearly irrational and unsustainable in law. 6. Regarding the issue of non-accounting of interest on nonperforming assets, it is a specific case of the learned Senior Counsel that there is a specific bar under Section 45Q of the Reserve Bank of India Act which prohibits non-banking financial companies like the petitioner from recognising as income, the interest on non-performing assets. It is submitted that despite pointing out before the Settlement Commission that the issue has been settled by the judgment of the Supreme Court in CIT v. Vasisth Chay Vyapar Ltd; [2018] 90 taxmann.com 365, [where the Supreme Court categorically found that the provisions of the Reserve Bank of India Act will take prec....
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....petitioner had actually sold 29.6 Tons of gold during the relevant period. In other words, it is the submission of the learned Senior Counsel that the solitary case of the gold pledged by P.M.Reji could not have been seen as representing the purity of the entire quantity of gold actually sold in auction by the petitioner during the relevant period. 8. Sri. Jose Joseph, the learned Standing Counsel for the Income Tax Department, would contend that the Settlement Commission had rightly rejected the application filed by the petitioner. It is submitted that one condition that is fundamental to an application for settlement of cases under the provisions of the Income Tax Act, 1961, is full and true disclosure, as evident from a reading of Section 245-C of the Act. It is submitted that the fact that purity of gold which had been sold in various auctions, was estimated at 80% for working out the income of the petitioner under this head. It is submitted that if the claim of 80% purity is accepted, the quality of gold is only 19.20 Carat which is substantially less than the 22 Carat, which is the usual standard for the manufacture of gold ornaments. It is submitted that the contention that....
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....n percentage is a matter for ascertainment and cannot be a ground to hold that there was no full and true disclosure by the petitioner. It is submitted with reference to internal page 8 of Ext.P12 order that in the case of gold pledged by the aforesaid P.M.Reji, the purity of the gold that was sold in the auction as per the auction conducted in terms of the guidelines issued by the RBI shows that the purity of gold pledged by P.M. Reji was only 79.24 %, which is even less than the value adopted by the petitioner while offering amounts for settlement. It is submitted that this is a clear indication of the fact that the report filed by the Department before the Commission is wrong. It is submitted that after the Fair Practices Code of the RBI came into force, the purity of the gold was verifiable. It is reiterated that the statement given by the Managing Director cannot be the basis to hold that the petitioner had to offer interest on NPA accounts for reasons already stated. 10. Having heard the learned Senior Counsel appearing for the petitioner and the learned Standing Counsel appearing for the respondents, I am of the view that the writ petition is liable to be allowed. The proce....
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....me higher income had to be offered by the assessee for arriving at a settlement. Therefore, taking into consideration the spirit and mandate of the provisions contained in Chapter XIX and merely for the reason that further amounts had to be offered by the assessee, the Settlement Commission cannot reject the application for settlement. This is not to say that the assessee is not required to make full and true disclosure. 11. In the facts of this case, one of the main reasons which weighed with the Settlement Commission is the alleged non-disclosure owing to the fact that the purity of gold which was sold in the auction was determined at 80% (on average) to arrive at the previously undisclosed income under this head. There appears to be some material on record to suggest that the yardstick adopted by the assessee was correct. Similarly, the documents produced by the Department could also be scrutinised by the Commission to determine whether the purity of gold sold in auction should be taken at some higher value than 80% for the purpose of determining whether the assessee is required to disclose further income and to pay tax, interest and penalty on the same. However, it was wrong o....