TaxTMI 
TaxTMI 
2019 (6) TMI 994
X X X X Extracts X X X X
X X X X Extracts X X X X
....w, the CIT(A) was correct in deleting the addition of Rs. 3,65,85,330/- made by A.O ignoring the fact that information related to HSBC accounts of the assessee not disclosed to Indian taxation department was received by Govt. of India from the French Government under DTAA. 3) Whether on the facts and circumstances of the case and in law, the CIT(A) was correct in upholding the contention of the assessee that it is fabricated/manufactured data with some malafide intention, and has ignored the fact that the assessee did not give any evidence /proof in this regard. 4) Whether on the facts and circumstances of the case and in law , the CIT(A) erred in ignoring the fact that the assessee did not sign consent waiver form for carrying out any further enquiry from Swiss HSBC Branch which could have provided all relevant information. The CIT(A) has ignored this vital issue in his order and stated that AO should have proved reliable and authentic evidence, whereas the assessee himself thwarted such attempt. More so when assessee has not denied before any authority that such account does not belong to him. 5) The Appellant prays that the order of the Ld. CIT(A) on t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were companies registered in the British Virgin Islands and that these companies have no nexus with any transactions of any entity in India and, therefore, the same fell outside the purview of the Indian Income Tax Act, 1961. The assessee also explained that he had dealt with the aforestated entities in the capacity of a Non-Resident Indian. Apart from the aforesaid, assessee also raised a preliminary objection of assailing the authenticity of the Base Note itself, as according to him, the same was prepared on the basis of stolen data and, therefore, the same could not be relied upon to fasten any tax liability on the assessee. The assessee also asserted that he did not maintain any bank account in his name in any branch of HSBC in Switzerland. So far as his name and address being mentioned in the Base Note, the assessee explained that the address stated was as per his passport, which was given to the bank as a document for verification at the time while opening the account for CBAY Systems U.S, in which he was the chairman and CEO. When the two impugned entities i.e. Zetec Ventures Ltd., Zeke Limited opened their account in the same branch of HSBC in which CBAY systems held its a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uestion so as to assess the peak credit in the three bank accounts as income of the assessee. It was also submitted before the CIT(A) that the addition was not within the scope and ambit of section 5(2) of the Act since the assessee was a Non-Resident Indian and there was no material to say that any of the transactions contained in the stated bank accounts were having any Indian connection. The CIT(A) has reproduced the entire submissions of the assessee. The CIT(A) further noticed that the onus was on the Assessing Officer to prove that the amounts reflected in the three bank accounts were sourced from India and that the bank accounts in question belonged to the assessee. As per the CIT(A), the AO did not discharge such onus and that it cannot be presumed that the amounts in three bank accounts in question belonged to the assessee without any evidence to corroborate the action of the AO. In fact at page 38 of his order, the following factual findings made by the CIT(A) is worthy of notice: "I have carefully seen the facts of the case and submission made by the assessee. Here the assessing officer has asked the assessee to prove that the amount reflected in the HSBC acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue is in appeal before us. 9. At the time of hearing, the learned representative for the respondent assessee, at the outset, stated that the decision of the CIT(A) in the case of Hemant Shri Hemant Mansukhlal Pandya relied upon in the impugned order had since come up before the Tribunal and in the case, reported at 174 ITD 101, the Tribunal has confirmed the action of the CIT(A) in deleting the addition made to the income of the assessee. The learned representative pointed out that the facts and circumstances leading to the addition in the instant case stand on identical footing as were considered by the Tribunal in the case of Shri Hemant Mansukhlal Pandya (supra), and, therefore, in this view of the matter, contended that the decision of the CIT(A) to be affirmed. 10. The learned CIT-DR appearing for the Revenue has not disputed the factual matrix brought out by the learned representative for the respondent but referred to the discussion made by the AO in support of the case of the Revenue. In particular, the CIT-DR has referred to the discussion made by the AO in para 7.2 of the order to point out that the assessee was not forthcoming in producing the bank account statemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eke Limited based in British Virgin Islands and assessee is a Director in one of the two entities and so far as the second entity is concerned, assessee founded the same. The claim of the assessee was that none of the bank accounts in question have any relation or connection to India or to any of assessee's transactions in India. We find that the case set up by the AO is on a presumption that the assessee has routed money sourced from India through three entities to the bank accounts in question. 13. In this background, the first and the foremost issue which arises for consideration is the question of onus on the respective parties (i.e. assessee and Revenue) and whether the same has been discharged? Aligned to this question, is the scope and ambit of the income assessable in India in the hands of a nonresident which is governed by the provisions of section 5(2) of the Act. In fact, such a situation has been examined by our co-ordinate Bench in the case of Shri Hemant Mansukhlal Pandya (supra). The bare provisions of section 5(2) of the Act bring out that in case of a non-resident assessee, the total income that is liable to be taxed shall comprise of income, which is received o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as categorically held that the burden lies upon the department to prove that a particular asset is within the taxing provisions. Therefore, we are of the considered view that when the AO found that the assessee is a non resident Indian, was incorrect in making addition towards deposits found in foreign bank account maintained with HSBC Bank, 25 Hemant Mansukhalal Pandya Geneva without establishing the fact that the said deposit is sourced out of income derived in India, when the assessee has filed necessary evidences to prove that he is a non resident since 25 years and his foreign bank account and assets did not have any connection with India and that the same have been acquired / sourced out of foreign income which has not accrued / arisen in India." The aforesaid discussion by our co-ordinate Bench reveals that the onus was on the Department to prove that the particular asset in question was within the taxing provisions of the Indian Income Tax Act, 1961. The proposition has been arrived at, relying on the judgment of the Hon'ble Supreme Court in the case of Parimisetty Seetharaman vs. CIT [57 ITR 532]. Therefore, we proceed further on the premise that the onus was on the AO ....