AI Drafter 
TaxTMI 
TaxTMI 
2005 (5) TMI 553
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....ficer has not granted immunity to him under Foreign Exchange Immunity Scheme 1991 and has added the sum of Rs. 2,57,000 as his income under section 68 of the Income-tax Act. The facts of the case are described by the Assessing Officer in his order passed under section 143(3) read with section 147 of the Act. In brief assessee claimed before the Assessing Officer that it received a remittance of Rs. 2,57,000 from NRE A/c of one Shri Vinod Goel on or about 1-1-1992. The said receipt was credited in his saving bank A/c. No. 21999 of Dena Bank, Parel, on account of realisation of DD No. 734768 dated 1-1-1992 issued by ANZ Grindlays Bank, 90, M.G. Road, Mumbai branch. The money was transferred from NRE saving bank A/c No. OIS/BP/23639/00 of Mr. Vinod Goel/Ms. Ciril Goel. The assessee claimed immunity before him under "Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds" (Immunities and Exemptions) Act, 1991 (Act No. 41 of 1991) and contended that no enquiries can be made for nature, source and purpose of the remittances received under said scheme. In support of his claim orders from FER Appellate Board were filed. The Assessing Officer, however, did not accept the c....
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....licable to the facts of the appellant's case. In fact, the appellant was also a part of the Foreign Exchange Racket, which was unearthed by the Enforcement Directorate, Mumbai. The Enforcement Authorities discovered that one Shri Sanjiv Goel holding power of Attorney to operate the NRE account of Shri Vinod Goel, a Canadian citizen was operating the said account by flouting the various provisions of FERA. The large amount of foreign currencies were purchased from the local market and credited to the NRE account of Shri Vinod Goel, through M/s. Thomas Cook. These amounts were then, utilised for issuing cheques to the various persons as gifts under the Immunity Scheme, 1991, after charging the beneficiaries the amount of NRE cheques plus the premium. Shri Sanjiv Goel admitted before the Enforcement Authorities that the said NRI account was being misused for issuing bogus cheques. 5. The Assessing Officer has passed a well reasoned and a speaking order. He has discussed all aspects of the case. The submissions made by the appellant before him has been duly considered by him. 6. Having regard to the facts and circumstances stated above, I hold that the provisions of section 68 ar....
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....ve to be treated as valid. According to the learned counsel his assessee has also obtained cheques from the NRE A/c of Vinod Goel and, therefore, as are in Ramesh C. Mehta's case (supra), the credit into the A/c of assessee from NRE A/c should be treated as valid. In particular, learned counsel referred to para 25 of the above order (Ramesh C. Mehta's case (supra)). The FER Appellate Board held that the remittances contemplated for the immunities is the remittance to a recipient from a NRE A/c and not the remittances into the NRE A/c. From this learned counsel inferred that remittances from NRE A/c of Vinod Goel to his client should get immunity. In brief, the learned counsel emphasized that similarly placed persons like Smt. Meenu Agrawal and Shri R.C. Mehta have been given immunity by the FERA Appellate Board. In view of this the assessee is also entitled for immunity. The learned counsel then referred to sections 3 and 4 of the Remittance of Foreign Exchange Immunity Act, 1991 to highlight the point that such remittances cannot be questioned under Income-tax Act. 4. On the other hand learned Departmental Representative from the Department relied on the order of the authoritie....
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....9 of 1995 in writ petition No. 1537 of 1995. The Govt. of India through Dr. B.Y. Chandrachud for RBI, one of the respondents, submitted before the Court that as far as petitioner Vinod Goel was concerned investigations so far carried out showed that the story put up by the petitioner (Vinod Goel) in the petition is totally false that he had, in fact, during the period November 1991 to March 1992, through his CA, illegally purchased foreign currency worth Rs. 10 crores approximately from local market and encashed the same through Thomas Cook India Ltd., Bombay as per the arrangements made by the petitioner with Thomas Cook and on the basis of authority letter given by the petitioner to the said CA in fictitious name, viz., "V. Goel", that said CA had signed the encashment certificate as V. Goel and Thomas Cook issued cheques against the encashment of the above illegally purchased foreign currencies, that the proceeds of the above cheques were deposited into NRE A/c No. BP 2365900 of the petitioner jointly held by him with his wife with ANZ Grindlays Bank. Further investigations revealed that draft in favour of SBI was issued by ANZ Grindlays Bank from the said bank A/c for purchase ....
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....drafts, cheques drawn on banks situated outside India, etc. The said definition in our opinion does not cover a situation which....(not legible) that a foreign citizen entering the country with foreign currency choosing not to declare the same and depositing the same in NRE A/c. (page 21)...... 3.In our opinion there is no question of either the petitioner or any person claiming to be recipient from his (Vinod Goel enjoying and immunity). Thus a person allegedly ...... (not legible) received the foreign exchange from his NRE A/c cannot be covered by the definition of the recipient and cannot thus be held to enjoy any immunity." 8. Thus the story of Vinod Goel that he brought foreign exchange into India though without declaration form, was not believed by Honourable Bombay High Court. 9. Section 2(a) and 2( b) of Remittance of Foreign Exchange Immunities Act, 1995 defines "recipient" and "remittance" as under : (a)"recipient" means a person as defined in clause (31) of section 2 of the Income-tax Act, 1961 (43 of 1961), who receives any remittance under this Chapter : (b)"remittance" means remittance made in foreign exchange by any person resident outside India to a p....