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Query asked by Manjuanth BK on February 3, 2021

Re: VsVs

In search assessment only one issue is addition of Rs. 100 was made as bogus purchase, which was confirmed by CIT-A and ITAT after considering the arguments, held that the GP rate is around 10-11% in the earlier asst years, hence this year it confirmed GP rate at 20% and in the process gave relief of Rs. 80 out of Rs. 100 addition made. The department and the assessee have challenged the order before HC. The assessee files form1&2 under VsVs for Rs. 20 only and form 3 is issued and no demand is outstanding as the taxes paid in installments post assessment have been adjusted. After Form -3 was issued HC has disposed the departmental appeal by quashing the order of ITAT and directing it to decide the issue afresh.

What are the options available to the assessee. Does the income declared under VsVs becomes final or it has to be treated as non est in the light of order of HC.

In fresh order to be passed by the ITAT whether the income offered under VsVs will be telescoped ? or

(If ITAT confirms addition of Rs. 100 and whether the final income taxed will become Rs. 120/- or it will be Rs.80.(after considering Rs.20 declared under VsVs?)

When the matter came before the High Court , whether the availing of  the benefit of VSVS was brought to the notice of the Honourable Court .  If  it  was  not brought to the notice of the High Court it may lead to misrepresentation before the High Court . It may be desirable to file Review petition before the High Court  and get  a clarification . As the matter is set aside to the Tribunal , the Tribunal has to decide on merit .  The assessee cannot get the benefit of telescope of the amount offered under VS V.s .  The assessee may not get the credit for the  amount paid under Vsvs   if the addition is confirmed by the Tribunal .   

 


 

2 comments on “VsVs
  1. KEEN OBSERVER says:

    The moot question arises when FORM 1 AND 2 were filed then the HC should have been sounded.Now two parallel proceedings has happened.Q no 56 of circular dated 04/12/20 is also not helpful.THE CLOSURE OF ISSUE is now a OPEN ISSUE.

  2. Manjuanth BK says:

    Memo filed before HC for withdrawing the assessee’s appeal and also permission granted for withdrawl, however, till date the assessee has not filed Form 4 before the DA. Whether non filing of Form 4 will invalidate the declaration under VsVs as per section 4(6) of VsVs ?

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