TaxTMI 
TaxTMI 
2019 (3) TMI 1167
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.... Tribunal partly allowed the appeal of the Assessee but rejected the ground on which the present Appeal has been filed by the Assessee before this Court regarding the additions of Rs. 14,65,500/- made by the CIT (Appeals) after giving notice of enhancement to the Assessee with regard to an alleged gift by a Non Resident India (NRI) to a partner of the Assessee Firm. 2. The present Appeal was admitted on 12.03.2009 on the following substantial questions of Law: "1) Whether the Appellate Tribunal is correct in law in dismissing the miscellaneous petition filed in terms of Section 254(2) of the Act for the rectification of 'mistake of fact' as well as 'mistake of law' in the earlier order passed by them in overlooki....
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....or disclosed to the department, I am offering the total sum of Rs. 14,65,500/- as my undisclosed income for tax." 4. The learned CIT (Appeals) made the said additions in the hands of the Assessee with the following findings recorded in his order dated 31.12.2002:- "NRI gift remittances received by the Appellant: Rs. 14,65,000/- 10.15 Regarding NRI gift remittances amounting to Rs. 14,65,000/-, the appellant reiterated the submissions made before the Assessing Officer vide its letter dated 23.10.2001 wherein it was explained with details of the donors and amounts gifted by them. It was further pointed out that since the gifts were confirmed by the accepted these NRI gift remittances as genuine transactions. It was conten....
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...., nor disclosed to the department, I am offering the total sum of Rs. 14,65,500/- as my undisclosed income for tax. As already observed, the NRI gift transactions aggregating to Rs. 14,65,500/- were in no way connected with the total sales turnover of Rs. 4,00,78,555/- in lieu of which the appellant declared the undisclosed income to the extent of Rs. 79,68,000/-. More often, it is found that gift transactions from the NRIs are nothing but a colourable device. As observed by the Foreign Exchange Regulation Appellate Board in the case of Smt. Shanthi Devi Jain vs. Director of Enforcement, reported in 89 Taxman 197 "making of gifts in foreign exchange is a common mode of money laundering". Having regard to the fact that these alleged....
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....ase of Smt.Shanthi Devi Jain vs. Directors of Enforcement reported as 89 Taxman 197 wherein it was held by the Foreign Exchange Regulation appellate board that making of gifts in foreign exchange is a common mode of money laundering, held that these alleged NRI gifts were not forming part of the total sales turnover of flats. Therefore, keeping in view, the confession made by Sri V.Subramanian, the C.I.T. (Appeals) held that the NRI gifts amounting to Rs. 14,65,500/- should be treated as part of undisclosed income in the hands of the assessee. To this extent, the assessment is enhance by the C.I.T. (Appeals). 11. We have considered the submissions of the learned representatives of the parties and the materials placed before us. We ....
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....(NRI) was also produced. Hence, there was no addition of undisclosed income was made in the hands of the Assessee at that point of time and such returns filed by the Assessee was also accepted by the Assessing Authority. 8. It was also urged that the learned CIT (Appeals) could not give an enhancement notice to the Assessee and make the aforesaid additions after the search at the business place of the Assessee had taken place and the same could not have formed part of the block period at all. He has further submitted that the learned Tribunal has erred in not correcting the said mistake upon the Miscellaneous Petition filed by the Assessee under Section 254 of the Act. 9. The learned counsel for the respondent/Revenue however submi....
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....m through an alleged NRI and was undisclosed income. There can be no better evidence than the said specific admission of the Assessee. Never, gifts have been accepted by any Assessing Authority by treating the explanation and confirmations given by the Assessee as sufficient and never was the NRI Donor produced and found to be genuine by the Assessing Authority. The CIT (Appeals) has discussed all these aspects after the specific enhancement notice was given by him and thereafter giving the cogent findings of the facts. 12. We hold that on the admission of the Assessee himself that such money was his own undisclosed income brought back in the country through alleged NRI gifts was the best evidence and in our opinion was sufficient to bri....