TaxTMI 
TaxTMI 
2013 (2) TMI 889
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....ciated that the documents on which the Assessing Officer relied on has not been authenticated and is not clear from whom the documents were obtained. 5. The Commissioner of Income Tax (Appeals) failed to consider that the authenticity of documents is inadmissible in evidence and it requires to be attested under section 3(2) of the Diplomatic and Consular Office (Fees) Act 1948. 6. The Commissioner of Income Tax (Appeals) ought to have appreciated that even by the documents given by the Assessing Officer, amount was available from March 2000 and hence cannot be added as unexplained income for the AY 2002-03. The assessment proceedings for assessment in AYT 2002-2003 is therefore, barred by limitation. 7. The Appellant further submits that addition cannot be sustained without appellant being given opportunity to examine the veracity of the documents and verifying the same with the bank. 8. The Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer who had failed to appreciate that it cannot be taken that the appellant has agreed for any addition, but only those additions which have the sanction of law and that ....
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....on with declaration of acceptance with the confirmation of the transfer of the above sum to the Foundation's ownership under the signature of the persons managing the Foundation. 6. Information is also on record to show who the beneficiaries under the said Foundation are. The translated portion of the information in German language is as under : Translated portion of the information in German Language : {Reference : imtransalator.com} LGT Bank in Liechtenstein, A Member of Liechtenstein Global Trust. Statement of Beneficial Ownership Ref: LTV/BAL/2664 Account/Securities Account 0163517 Contracting Partner, Webster Foundation, Vaduz The undersigned explains herewith that he/she is himself entitled to the ultimate economic assets. The fact that he is entitled to the economic assets, in the end, economically. 1. Name Mammen Mappillai Surname Kandathil Mammen Date of Birth 28-12-1922 Address No. 28, G.N. Chetty Road, T. Nagar, Chennai-17. Domicile India National....
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....dings u/s 148. On receipt of the reason for issue of notice u/s 148, the assessee replied as under : "On the basis of the reasons provided by you by your letter dated 24.4.2009. I have written to LGT Bank, Lichtenstein on 14/5/2009 requesting them to verify the details of the Trust purported to have an account with LGT Bank and the beneficiaries in the said Trust. The Bank has replied by their letter dated 08/7/2009 copy of which is enclosed (Original Bank letter is produced for your perusal). The Bank's letter will show that they have no information of any such Trust or the stated beneficiaries in the Trust. In view of the Bank's confirmation, the reassessment is without merits and therefore, the proceedings may be dropped." 10. The request of the assessee was considered. It is seen from the copy of the letter annexed to the above that in reply to the communication claimed to have been addressed by K.M.Mammen as L/r of Late Mr. K.M. Mammen Mappillai, the bank has stated as under : Due to the Liechtenstein banking act, the bank can disclose information about any possible business relation between a bank client and the bank only to authorized p....
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....Thereafter, the assessee filed a letter dated 10-11-2009 in which he has made the following submissions : "I herewith enclose a copy of my letter dated 14.5.2009 addressed to LGT Bank requesting them to furnish a copy of the document creating the Trust under the name & style of Webster Trust Foundation. However, the said bank vide its letter dt. 8.7.2009, a copy of which has already been furnished to the Department, declined to furnish the information sought by me. I also enclose a copy of my letter dt. 29.10.2009 addressed to LGT, Treuhand, the Trustees of the alleged Webster Trust Foundation, requesting them to furnish a copy of the document creating the said Trust for your information. I shall furnish their reply, if and when received, upon receipt of the same. I submit that I am neither aware of the existence of the aforesaid trust nor the Declaration of Endowment purported to have been signed by me on 24.3.2000. I submit that I have not signed any such document. Both the documents, the Declaration of Endowment and the letter referred herein below, shown to my authorised representative during the course of income tax proceed....
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....st (Foundation). What would you like to say?" It was replied by the assessee as under : "Ans. I am not aware of the existence of Webster Foundation. I have never signed any document in connection with the said Trust. On the basis of information received from the Department, I have taken appropriate steps to approach LGT Bank and LGT Treuhand requesting them to furnish a copy of Trust deed of Webster Foundation and the details of account with LGT Bank. LGT Bank has replied that I am not an authorized person and therefore information cannot be furnished. LGT Treuhand has so far not replied to my letter which would clearly imply that I am not a beneficiary or author of the said Webster Foundation. However, I do not intend to enter into a long drawn protracted litigation with the Department on this issue and therefore I am willing to pay the taxes to protect my reputation and to avoid needless publicity in the matter provided that no penal action be initiated against me." 15. Subsequently, the Assessing Officer asked another question, "Do you want to say anything else?" The assessee replied that: "Ans. Once again I reite....
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....g the appeal, the CIT(Appeals) posted the same for hearing on 23.11.2010. The assessee filed a letter dated 22.11.2010 in which he requested to adjourn the case to after April, 2011 for the reason that he has to get some clarifications from the bank authorities because the entire addition has been made by the Assessing Officer based on the information given by the bank. The CIT(Appeals) posted the case on 21.01.2011 giving the assessee further time of 10 days but there was no response from the assessee. The CIT(Appeals) proceeded to dispose of the case based on the grounds of appeal and statement of facts filed by the assessee. 18. The main argument of the assessee before the CIT(Appeals) was that "the re-opening was not valid in law, the evidence on record with the Assessing Officer is not acceptable evidence and addition is based on conjuctures and surmises, the documents relied on by the Assessing Officer are not authenticated, date of investment by assessee was not established by Assessing Officer, section 69 cannot be invoked and the initial contribution by assessee cannot be assessed in this assessment year....". Insofar as the validity of re-opening is concerned, the CIT(....
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....ns." 21. For that proposition the CIT(Appeals) followed the decision of the Delhi Bench of the Tribunal in the case of Hersh W. Chadda, 43 SOT 544 (Del). Moreover, the papers received by the Assessing Officer are on the letterhead of LGT Bank in Liechtenstein (a member of Liechtenstein Global Trust) and the paper was initialed at the corner of this page. (Copy was attached to the CIT(A)'s order as Annexure-I). In view of the above, the CIT(Appeals) in respect of the contention of the assessee that the papers are neither attested nor authenticated, held the same to be devoid of merit and hence dismissed it. 22. The next contention raised by the assessee before the CIT(Appeals) was that the entire addition cannot be made in the year under consideration. The CIT(Appeals) observed that it is within the exclusive knowledge of the assessee as to when he deposited the money, when he withdrew etc. He further observed that instead of giving this information and co-operating with the Department, the assessee was asking the Department to prove his deposits into his bank account. What is known and in the possession of the Department is the summary of bank account as on 31.12.01 on the....
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....So the contention of the assessee that he does not know anything about investment in this Foundation was rejected. From the documents which were enclosed to the appellate order it could be seen that all of them are signed by the assessee only and hence he could not feign ignorance nor reject those documents. The CIT(Appeals) further held that the signature of the assessee on the sworn statement taken by the Assessing Officer, Return of income filed by the assessee and the signature in all these documents which shows investment in Webster Foundation was the same and hence the assessee could not deny these transactions. 25. The next objection raised by the assessee before the CIT(Appeals) was that the addition cannot be purely on agreed basis. He further observed that the Assessing Officer did not make the addition solely on the basis of admission of assessee. The CIT(Appeals) held that it could be seen that the department gathered full evidence of assessee's unaccounted investment in Webster Foundation, gave copies of the evidences which are going to be used against him, full opportunity to rebut the same was given to him, a detailed sworn statement was recorded from him. Taking ....
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....learned DR submitted that when the Assessing Officer brought all the material facts to the notice of the assessee and after detailed discussion and confrontation, the assessee agreed to pay taxes. Therefore, the addition made by the Assessing Officer is on the basis of various documents and also based on the assessee's agreement to pay taxes. The learned DR further submitted that the assessee has failed to discharge onus cast upon him. Therefore the CIT(Appeals) has rightly confirmed the order of the Assessing Officer. 29. We have heard both the sides, perused the records and gone through the orders of the authorities below. In this case the assessee had filed his return of income on 29.7.2002. Thereafter, the Assessing Officer received information from CBDT, Ministry of Finance, Government of India that on 24.3.2000 the assessee made a declaration of endowment in favour of M/s. Webster Foundation, 9490, Vaduz whereby the Foundation was endowed with the sum of Euro 123,000. The said sum of Euro 123,000 was transferred to the Foundation's account No.0163517AAA EUR with LGT Bank in Liechtenstein Aktiengesellschaft, Vaduz. The said Foundation was created by the assessee and was dul....
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....y the assessee with seal. These pages attached to the CIT(A)'s order show the information received by the Assessing Officer from the CBDT, Ministry of Finance, Government of India. Therefore, it cannot be said that the information is not authenticated. Further the information given by the LGT Bank in Liechtenstein shows that even as per the LGT Bank, the beneficiaries are the assessee, his brother and his father. When this information was confronted with the assessee, the assessee admitted that the declaration of endowment signed by him is similar to his signature as in all other papers shown to him and therefore in our opinion the Assessing Officer has discharged his onus by producing all necessary material and also showed the same to the assessee and after confrontation with the assessee the Assessing Officer has made the addition. Therefore, the addition is based on certain very important documents which related to the assessee's investment. 31. Further, the Assessing Officer has called for the explanation from the assessee and thereafter issued summons u/s 131 of the Act and made detailed enquiry with the assessee with regard to the investment in Webster Foundation. The asse....