TaxTMI 
TaxTMI 
2018 (4) TMI 1054
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....ession of certain amounts of foreign currencies, including US $ 21.111. Kuros 440, Yuan 255. Yen 2000 and UAH Dirhams 30. When assessee was confronted with this fact and asked about source of the same, the assessee, in the statement under section 132(4) stated that "As regards the above referred 21,221 US Dollars, I have to state that since last about 25 to 26 years, we are undertaking foreign tours and every time we take US Dollars with us, and, hence, the same have been saved from the same. In addition to the same, some Dollars have been received by my daughter as gift in USA and some of them have been saved by her from her service also. As regards the Kuros, some of them have been saved out of the Euros that which were taken for the tour to Germany'-. In the course of scrutiny assessment proceedings for this assessment year, the assessee was once again asked the source of the foreign currency found during search operation. The explanation given by the assessee, vide letter dated 15th November 2007, was as follows: " ...As regards foreign currencies, the nature of possession and source of acquisition of the same are as under : US$ 21111/- Euro 440/- Yuan 225/- Yen ....
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....h foreign exchange. At that time nothing in respect of so called gift was mentioned by the assessee. Vide answering question No. 20 of the statement recorded on 30. OS. 2005. it was contended that "since last 25 to 26 years, we are going on foreign tour and we are taking USD with us. USD found and seized from my residence is saved out of those USD purchased for such past hours. Besides, my daughter has received some dollars as gift and she has also saved some dollars from her service." Thus, at no point of time the contention of so called gifts from donors of Mistry group and Mitul Desai were claimed. The only mention of the gift was in respect of the daughter of the assessee who is studying at USA. Whereas in the contention given in the course of assessment proceedings, there is no mention regarding any gift claimed to have been received by the daughter of the assessee. Besides, the period of the gift shown is August, 2002 and December, 2003. Accepting without admitting the contention of the assessee regarding receipt of the gifts and money kept in the form of dollar out of such gifts upto the date of search i.e. 30.OH.2005, then in that case it becomes clear that the assessee was....
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....claration of Cyrus as 12.04.2007. Though both the declaration seems to be executed before the same Notary on the same type of paper and simultaneously. Thus, the declarations are neither acceptable nor maintainable and suffers from patent, irregularities which renders them as inadmissible piece of material or evidence. Thus, in nutshell, there is apparent contradiction between the two different stands taken at the lime of search and at the time of assessment proceedings. Besides. when any person receives gifts from the donor, the declaration in this regard is always executed at the time of the gift. In the instant case of the assessee the so called gifts were received in August, 2002 / December, 2003 whereas the declarations were made as late as April, 2007. Whereas for all other gifts received during the relevant previous years under assessment proceedings, the declarations were executed at the time of the gift itself Therefore, the contention of the assesses is rejected and treated as unsatisfactory explanation. A reference was made to the Foreign Exchange Control Authorities for violation of The Foreign Exchange Control Act and consequent to such intimation the Appropriate Autho....
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....ign currency was acquired through disclosed income or undisclosed income. If the sources are not explained, then it is treated by the Income Tax Department from undisclosed sources and required to he added it's 69A as unexplained money. However, if the Gift is made then the Gift Deeds singed and accepted by the Donee immediately at the time of accepting the Gift. In the instant case of the assessee the gifts were received in August, 2002'' December, 2003 whereas the declarations were made as late as April. 200". Hence, the gift deeds were signed much after the acquisition of Gifts which were also not proper in the eyes of law as per the defects pointed by the Assessing Officer in the Assessment Order. It was contended by Learned Counsel that the source of foreign currency was accumulated over the years out of purchases for foreign trips made in last 20 to 25 years. At the lime of the search the Appellant had not staled anything about receiving the gifts from donors of Mistry group and Mitul Desai were claimed which is further evident by the reply to question no.20 of the statement recorded on 30/OH 2005. It was replied that the foreign currency was saving out of the foreign tours t....
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....0.39) and UAE Dirhams (30 @ Rs. 11.88) is concerned, having regard to the fact that, beyond any dispute or controversy, the assessee was regularly travelling abroad to the countries where these currencies are used, that the assessee had purchased reasonable quantities of these foreign currencies for his use, and the quantities of these currencies found in possession of the assessee were of small amounts, we are of the considered view that the explanation offered by the assessee was reasonable and ought to have been accepted. Similarly, a small amount of foreign currency in US Dollars, say US $ III out of US $ 21,111. could be treated as explained by bonafide savings out of the foreign currency purchased for travelling in past. To this limited extent (i.e. US Dollars 111, Euros 440, Yuan 255. Yen 2000 and UAE Dirhams 30), in our considered view, no addition as explained investment under section 69A was really warranted. That leaves us with US $ 21,000 for which we have to consider assessee's explanation of having received the same out of gifts. The explanation of the assessee, as we have noted earlier in this order, is that Kewas K Mistry gave a gift of US $ 5,000 to the assessee, C....
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....nation about the gifts is simply unacceptable. In any event, there is no contemporaneous evidence in support of these'gifts. The transaction is not through banking channels, and the source of such huge amount of cash, huge by any standard- and more so b_\ US standards where availability of cash of US S 5.000 with each member of the household is most unlikely, is not explained with respect to details of bank withdrawals or an) other source. Similarly, in alater decision in the case of Sumati Dayal v. CIT ((1995) 214 ITR 801 (SC)]. Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, "This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities. .................. Similarly the observation that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available.................. In our opinion, the majority opinion after considering s....
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....' (false in one thing, false in everything) which has been referred to with approval by the Hon'ble Calcutta in the case of Amal Kumar Chakraborty v. CIT (([1994) 207 ITR 376 (Cal)]. In this case, Hon'ble Calcutta High Court has observed that. "Here, we go by the dictum 'fulsus in una, falsus in omnibus'. Though applicable in criminal law, it is a sound principle to apply in taxation when the matter is one of finding of fact on the basis of statements of witness and their judicial evaluation. It is seen that in 1975, the assessee gave a false statement by stating that he had no connection with the bank deposits. Later, he makes a volte face and says that the deposits are from money supposedly declared in 1971. Therefore, the later statements of the assessee could not be held to be credible as the source of deposits." It is clear that, in the present case also, the assessee has given an initial explanation and he himself abandoned this explanation later and came out with an altogether different theory. Applying the dictum 'falsus in uno. Johns in omnibus', even subsequent explanation does not have any credence. In the light of these discussions, and bearing in mind entirety of the c....