Answers to queries on Vivad Se Vishwas Scheme

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The Union Honourable Finance Minister, Mrs Nirmala Sitharaman during her budget speech on February 1, 2020 (2020) 420 ITR 115 (St) (146) proposed to introduce a scheme at para 126 of the speech for settlement of disputes. Subsequently, the Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act) was introduced. The Scheme was extended from time to time and the last date for payment under the VSV Act, 2020 extended until October 31, 2021 by CBDT, vide Notification No. 75 of 2021 dated June 25, 2021 (2021) 435 ITR (St) 25. The said scheme has benefited the taxpayers to reduce the tax litigation. When the scheme was introduced the research team of the itatonline.org had anticipated that the taxpayers may require a number of clarifications. Itatonline.org had requested the panel of experts consisting of Dr. K. Shivaram Senior Advocate, CA Rajan Vora and CA Pradeep Kapasi to answer queries arising on Vivad Se Viswas Schme to assist the tax consultants and tax payers. The expert panel started answering the queries raised by the tax consultants on February 28, 2020 and till date the expert panel have answered more than 750 questions only on the Direct Tax Vivad Se Viswas Act, 2020. From May 15, 2021 on words the itatonline.org has introduced the new section on “Ask your questions” which answers questions regularly. It is proposed that this new panel will answer the questions pertaining to Direct Tax Vivad Se Viswas Act, 2020.
See also Vivad Se Vishwas Scheme: The Law, Procedure And Dilemma where a link to all necessary resources is given

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The answers given below are in response to queries asked by other people.
Query

hi,

In the return filed, there is a refund of 2,00,000. However, after assessment in search case, an addition of disputed demand of 8,00,000 including 2,00,000 interest. Later, 6,00,000 is paid on the tax added.

Please issue clarification on the refund in the return filed.
Answer (read more)
Query

Marriage took place in 2015. Thereafter, due to disputes, divorce of the couple was finalized by the court in September 2019. The court gave jewellary to the girl as per the list finalized by the court. The list of jewellary contains some jewellary given by the relatives of the girl at the time of marriage and some jewellary was given by the bridegroom parents, etc. Now, the girl wants to sell this jewellary and from the amount received from the sale of jewellary wants to purchase the house in a foreign country.

1. I want to know whether the sale of jewellary is liable to long term capital gain keeping in view the base year 2015 by applying indexation.
2. Whether the funds can be utilized for purchase of property outside India and can take benefit u/s 54.
Please guide me.
Answer The same will be subject to long term capital gain with the benefit of indexation. Benefit of section 54F  will be available if the assessee satisfies the conditions therein. The seller cannot get the benefit of section 54F or section 54   in respect of  investment made for buying a residential  house  at   abroad . Law is amended   by the Finance  ( No .2 ) Act… (read more)
Query

Assessee having both PAN and TAN filed an appeal before CIT(Appeal) against the order of DCIT u/s.271C in the month of March,2019. Appeal is still pending as on 31st January,2020. Assessee wants to opt VSVS. Please advise how and where information to be given as there is no provision of S.271C in the dropdown list of sections which assessee should select and upload the form.
Answer  In case of technical issues with respect to the portal, it is advisable to approach your designated authority under VSVA for further clarifications. In case no response is received the assessee is adviced to file writ petition before High Court .      (read more)
Query

In the facts of the given case, the Appeal of the assessee company against the Order of ITAT was pending in the High Court (pending as on 31st January, 2020). Now the High Court has allowed the appeal of the assessee setting aside the Order of ITAT and restoring the Appeal of Department for decision afresh [Assessee was successful at the stage of CIT(Appeals)]. Now, the assessee company wants to avail of the DTVsV Scheme so as to give quietus to the issue. What would be the quantum of “Disputed Tax” – 100% or 50% (since, now the pending appeal in ITAT is that of the Department) in terms of Section 3 r.w. the First Proviso of DTVSV Act?? Please advise.

Answer From, what we understand is that, the High Court has passed an order after January 31, 2020 for fresh adjudication and now the matter is pending before the ITAT. Since the order pending as on the specified date i.e. January 31, 2020 is already adjudicated upon. The assessee  may not be  eligible for VSAV.  However may one may… (read more)
Query

The CIT (A) deleted the said addition. The revenue filed appeal in ITAT about delay of 500 days. As the appeal was filed late by the revenue, to cover the delay, the Assessing Officer reopened the case u/s 148 and made the same addition which was made earlier by the ITO. I am of the opinion if original assessment is pending in appeal, the assessing officer cannot issue notice u/s 147/148 on the same issue and the same addition cannot be made again. Please give your opinion.

Thanking You.
Answer It is a well settled proposition in law that once the issue is subject-matter of appeal during the pendency of appeal, issuance of notice of reassessment has to be considered bad in law, as decided by the Hon'ble jurisdictional High Court in the case of Ador Technopack Ltd. [2004] 271 1TR 50 (Bom)(HC) which in turn was followed in the case of Metro Auto Corpn v… (read more)
Query

While filled up the Form 1 in Part E tax payment details in the space / box in respect of BSR Code, Date Challan Sr No & Amount I could not enter the data. Though I have alrady deposited some amount before filing the declaration
Answer In case of any technical issue with the portal it is advisable to contact  designated authority under the act and convey your grievances  or may write to Baord . In case no respose is received one can approch the High Court by filing writ petition    (read more)
Query

If we receive a car costing 4000000 in exchange of defective car costing 900000 will the received amount will be treated as gift and will be taxable
Answer The provision for gifts are contained under section 56 (2) (x) of the Act, the said section  refers the definition of property from 56 (2) (vii) of the Income tax Act, 1961 (Act). As per the explanation to 2nd proviso to section 56 (2) (vii) (c) of the Act, ‘property’ means immovable property being land or building… (read more)
Query

Assessee main order is dismissed upto ITAT penalty order dismissed upto cit(A) but pending before ITAT. How much amount the assessee will pay.
If he has not filed appeal against quantum order before High Court
If has filed appeal against quantum order.
Whether is is eligible for penalty amount and if yes at what rate
Answer From what we understand from your query is that there is a quantum appeal and penalty appeal. Assuming the quantum appeal is eligible for VSVA i.e. a deemed appeal exists on the specified date ie 31 -1 -2020 ,  upon declaring the same under VSVA, the declarant assessee will have to pay only the disputed tax… (read more)
Query

A corporate assessee wants to opt VsV Scheme.
In its case, certain additions were made in income and certain additions were made in Book Profit.
Finally, tax was charged u/s 115JB being higher than the tax under normal provisions of the Act.
On dismissal of its first appeal, second appeal filed by the assessee is spending before ITAT.

Question
1. on opting Vsv Scheme, whether the assessee has to pay tax on the additions made to normal income plus tax on the additions made in Book Profit.

Thanks Sir
Answer It may not be desirable for the assessee to opting for VSV Scheme. Thee assessee has to pay the tax on the amount disputed in the appeal  before the Appellate Tribunal .  By opting the VSV Scheme the assessee may  get the immunity for penalty and interests , however  the assessee is liable to pay the tax as per… (read more)
Query

If Original assessment order passed by AO contains a mistake apparent on record in one of the issues/ additions. Can assessee file application under the Vivad Se Vishwas Scheme and simultaneously Rectification Application u/s 154 to the A.O. The time limit for filing rectification has not expired.

Answer  Yes  the assessee can make an application under section 154 of the Act.  The assessee should request the Assessing Officer to  pass the rectification order  . After the receipt of the rectification order the assessee can avail the benefit of the  VSVA on other issues which are pending before the appeal before the Commissioner Income- Tax ( Appeals)    (read more)