TaxTMI 
TaxTMI 
2011 (7) TMI 441
X X X X Extracts X X X X
X X X X Extracts X X X X
....s as gifts ? 3. Whether the learned Income-tax Appellate Tribunal was right in law in holding that the assessee in fact has disclosed the receipt of the India Development Bonds during the course of filing of the return of income for the assessment year 1997-98, therefore, the query regarding the possession of the India Development Bonds falls outside the purview of the block assessment especially since this argument was taken for the first time before the learned Tribunal and does not form a part of the order of the Assessing Officer and that of the Commissioner of Income-tax (Appeals) ?" 3. The brief facts of the case are that on August 21, 1998, a search and seizure operation was conducted at the residential and business premises of the group for which the assessee is a member. During the course of search, the books of account and other incriminating material were seized including FDRs in the name of the assessee who is the wife of Sri R. K. Gupta, a group member. She stated that she received these India Development Bonds (IDB) of U. S. dollars of 10,000 each by way of gift on November 14, 1994, and February 21, 1995. The amount of Rs. 5,69,884 after maturity of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... K. Corporation Ltd. [2011] 331 ITR 303 (Cal) wherein it was observed that (headnote) : ". . . the date of effect of the scheme was the date as mentioned therein. The Tribunal was correct in law in holding that the sanctioned scheme shall be conclusive evidence of fulfilling of requirements regarding consent of the Central Government/CBDT Circular No. 683, dated June 8, 1994. The assessee was exempted from fulfilling the provision of sections 80 and 139 of the 1961 Act, in view of the BIFR's order dated March 17, 1994, and it must be held that the revised return of loss filed by the assessee should be treated to have been validly filed." (2) CIT v. Vinod Dhanchand Ghodawat [2001] 247 ITR 448 (Bom) wherein it was held that (headnote) : ". . . Chapter XIV-B of the Income-tax Act, 1961, had no application to the facts of the case and the addition made by the Department on the ground of undisclosed income was erroneous." (3) CIT v. Ravi Kant Jain [2001] 250 ITR 141 (Delhi), wherein it was observed that (headnote) : ". . . admittedly, the undisclosed income was not determined on the basis of any search material and the Assessing Officer was proce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....laws, will not make any enquiry with regard to remittances in foreign exchange received under the Remittances in Foreign Exchange (Immunities) Scheme, 1991, or gift of any India Development Bond from a nonresident Indian/overseas corporates body. There should, therefore, be no apprehension of any prejudice against the persons in receipt of remittances under the scheme or donees of the India Development Bonds. There should also be no fear of any harassment by the tax authorities. 10. From the above, it appears that no inquiry can be made from the bond holder regarding the source. The immunities are absolute. 11. Apart from the abovementioned immunities, the very intention of the Legislature in which the above referred Act was brought into existence was also clarified by the Central Board of Direct Taxes as there was an apprehension expressed in some quarters that the Income-tax Department would prejudicially view the remittances received under the Scheme framed under the Act. The Central Board of Direct Taxes, vide its Circular No. 611, dated September 30, 1991, removed all such apprehensions and the relevant portion thereof are as under (see [1991] 191 ITR (St.) 319) : &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ill not be taken into account for the purpose of any proceeding under the Income-tax Act, 1961. 5. Similar immunities and exemptions are provided under sections 6 and 7 of the Act in relation to non-resident Indians or overseas corporate bodies owning the foreign exchange bonds and persons resident in India to whom the said bonds have been gifted by nonresident Indians or overseas corporate bodies." 12. Further a Press Note was issued by the Government of India, Ministry of Finance, Department of Economic Affairs on October 1, 1991, and that also was to clear the apprehension and doubts regarding the interpretation of the Act and the two Schemes framed thereunder and Government of India, Ministry of Finance, clarified all such queries made and made it known and question No. 5 and its reply is important (see [1991] 191 ITR (St.) 322, 324) : "Question No. 5 : It is provided that the Foreign Exchange Bonds (India Development Bonds) may be held by banks acting in a fiduciary capacity on behalf of non-resident Indian/overseas corporate bodies, but when such bonds are gifted to a person resident in India, is it necessary that the identity of such non-resident Indi....