TaxTMI 
TaxTMI 
2017 (11) TMI 1850
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt Year 2002-03) 2. These appeals by the four assessee's are against the respective orders of the ld. CIT(A), pertaining to assessment year 2002-03, wherein reopening as well as merits of the addition regarding deposits in the foreign bank account have been challenged. The grounds are common except for the change in amounts involved. For the sake of reference, the grounds of appeal from ITA No. 2795/Mum/2011 are being referred as under: 1. The learned CIT (Appeal) has erred in law and on sustaining the order of the A. O. reopening the assessment u/s. 147 of the Income Tax Act. 2. The learned CIT (Appeal) has erred in law and on the facts or sustaining the addition of Rs. 37,67,807/- without appreciating the fact that the A. O. had no authentic material before him relating to the trust, trustee, settlor, beneficiaries, whether the trust is specific or discretionary and dates of deposit in the bank account. 3. Without prejudice to Ground No. 2, (a) The learned CIT (Appeal) has erred in law and on the facts of the case in sustaining the addition of Rs. 37,67,807/- as income of the assessee without ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of Rs. 48,552/- on account of unaccounted interest income. ITA Nos. 2795 to 2798/Mum/2011 (Assessment Year 2002-03) 5. These appeals relate to foreign bank account found in LGT Bank, Liechtenstein in the name of Manichi Trust. Brief facts of the case are that the Assessing Officer received information that the assessee was beneficiary of Marnichi Trust, having account in LGT Bank, Liechestien. The information received also gave summary of the Bank statement of the said Trust as on 31.12.2001 in which the opening balance was US $ 309,154.74 and the accrued interest thereon was US $ 83.82. Since this information was not disclosed by the assessee in his Income-tax Return, the assessment was re-opened by issue of notice u/s. 148 on 30.03.2009 and was served on the assessee on 31.03.2009. 6. The assessee in response denied knowledge of any such trust. Subsequently, the Assessing Officer issued following show cause notice: "The Income Tax Department had received information that you are a beneficiary of the bank account opened in the name of Marnichi Trust Vaduz in LTG Bank, Liechtenstien. The amount deposited in the bank or the benefits derived out o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... anonymously. In contrast to trusts of most other countries, Liechtenstein trusts can be revoked at any time and the assets will be returned to the owner. Furthermore, such trusts as well as their maintaining shell entities are only charged 0.1% (minimum 1,000 Swiss francs) annually. Liechtenstein thus is known to be a tax haven. Investigations Germany According to the lead prosecuting office responsible for economic crime in Bochum, which is supported by prosecuting offices in other towns as well as the criminal police, currently about 600 to 700 individual are suspected in the investigations. In addition, search warrants have been issued. An official confirmation about the total number of suspects and amount of money involved has not yet been issued. According to the prosecutors, current investigations provide a "very high level of evidence." The affair became known on February 14, 2008, when a raid was conducted against Klaus Zumwinkel, the chief executive of Deutsche Post AG, under the suspicion that he evaded about 1 million ($1.46 million) in taxes. Pressured by the government, Zumwinkel resigned from his position. Similarly a number of other ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted to a "culture of secrecy and deception" According to the report DBS holds 1,000 declared accounts versus 19,000 that are not declared to the IRS, The report recommended a number of steps including tighter regulations for financial institutions. Other Countries On February 24, 2008, it became apparent that secret bank information had also been sold to the British tax authorities and that about 100 individuals in the UK are at risk for investigations for tax evasion. The information also provided the governments of Australia, Canada and France with data. On February 26 it became known that the German Government was willing to share relevant data of the about 4,500 accounts with other governments; two third of these accounts belong to accounts of non-German individuals or entities, Fiscal authorities in Ireland, Finland, Italy, the Netherlands, Norway, Greece and Sweden indicated interest, and while the Danish government initially declined - it considered the material to have been stolen - it appears to have reversed its position. The governments of the Czech Republic and Spain have also announced investigations derived from Germany's list. India, however, has thus....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... his total income. 8. Against the above order, the assessee is an appeal before the ld. CIT(A) challenging both the reopening as well as the merits of the case. As regards the reopening, the ld. CIT(A) confirmed the reopening by holding as under: The first ground of appeal is against the reopening of the assessment by invoking the provisions of section 147 of the Income Tax Act, 1961. The appellant had not made any specific submissions on this issue except of relying on the decision of the Hon'ble Supreme Court of India in the case of Coca-Cola Export Corporation vs. ITO reported in 231 ITR 200 wherein it has been held that letters issued by Government of India limiting dollars remittances under provisions of Foreign Exchange Regulation Act, Income Tax Act and Foreign Exchange Regulation Act operates in different fields. And letters are not information in possession of ITO" for purposes of reopening income tax assessments. The AO had reopened assessment for AY 2002-03 on March 30, 2009. This means that the assessment has been reopened within the time limit of 6 years from the end of the assessment year. The AO was in possession of fresh information which was very specif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have been disclosed. Further, the original order was u/s 143(1) and the information pertaining to the appellant were specific and therefore, the AO was correct in reopening the assessment u/s 147. 9. As regards the merits of the addition, the ld. CIT(A) confirmed the same also. The ld. CIT(A) wherein observed as under: 9. The AO had received specific information regarding the undisclosed income of the appellant in the form of the summary of the bank statement of the Trust in which the appellant is the beneficiary. The bank summary stated that the name of the trust is Manichi Trust. The beneficiaries are four individuals viz., * Hasmukh Gandhi * Madhu Gandhi * Nirav Gandhi * Chintan Gandhi All the above four individuals are residing at 802, Citadel, 18-B, L D Ruparel Marg, Malabar Hill, Mumbai - 400 006. This information received by the AO matches completely with that of the appellant. The date of forming the trust was 10/12/93. The status of the account is 'active'. The bank account no of the Trust is 0145733. The entire information available with the AO was provided to the appellant. The AO made the addition since the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d. Counsel of the assessee submitted that the information received in this case is as on 31.12.2001 which falls prior to the previous year involved. The only information Assessing Officer has is that the assessee is a beneficiary of a Trust which has a bank account in LGT Bank, Liechtenstein. Merely on this information, the Assessing Officer has jumped and concluded that the beneficiary has contributed in the said bank account. The ld. Counsel of the assessee submitted that the time limit of section 149(1)(b) for reopening where only addition for interest is involved, is violated. The ld. Counsel referred to the case laws for the proposition that the reopening should be based upon the reason to believe and not reason to suspect. The ld. Counsel of the assessee further submitted that it is the discretionary trust and not a specified trust. In this regard, he referred to the Hon'ble Supreme Court decision in the case of ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC). The ld. Counsel of the assessee submitted that any liability in this regard should be fastened on the settler and not the assessee. The ld. Counsel referred to the Hon'ble Bombay High Court decision in the case o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Department, on the other hand, submitted that at the stage of reopening, the Assessing Officer need not conclusively prove that there has been concealment on the part of the assessee. He submitted that the Assessing Officer only needs to have a reason to believe. In this case, data were obtained from the sovereign government of Germany from the employee of the LGT Bank, Leichtenstein. This information was passed on to the sovereign government of India. Thereafter, the said information comes into the possession of Central Board of Direct Taxes and, thereafter, to the assessing officer. In this regard, the ld. Counsel of the department submitted that the confidential report containing confidential documents are available. He produced the same for the verification of the Bench. We have gone through these documents. The ld. Counsel of the assessee took objection that the Bench cannot rely on any document which is not confronted to the assessee. However, on going through the records, we find that the copy of the relevant documents have already been provided to the assessee. Hence, this objection of the assessee is not sustainable. The ld. Counsel for the Department submitted that ide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....others (supra) are identical to the present case. The confidential folder provided to us by the ld. Counsel for the Department also contained in the documents assessee's names as well assessee's in the case of Shri Ambrish Manoj Dhupelia and (supra). The distinction sought by ld. Counsel of the assessee being in the present case and the case of Dhupelia group is not sustainable as documents are similar. In the said decision of the tribunal in ITA Nos.3544, 3545 & 3546/Mum/2011 for assessment year 2002-03 vide order dated 31.10.2014, the tribunal had upheld the reopening as well as the addition of the amount of deposit in the bank account in the hands of the assessee's. The relevant portion of the order may be gainfully referred as under: 2.2. We have considered the rival submissions and perused the material available on record. Since identical facts/issues are involved and all the assessees are relatives, therefore, these appeals are being disposed of by this common and consolidated order. In the case of Shri Mohan Manoj Dhupelia the facts in brief are that the assessee filed return of income u/s 139(1) of the Act on 1st August 2002 showing total income of Rs. 1,97,6....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll not be limited in time. These documents are available at pages from 1 to 15 of the paper book filed by the ld. Special Counsel. We are reproducing hereunder the exhibit list (Hearing) on Taxhaven Bank and US tax Compliance (July 17 and 25, 2008) for ready reference and proper conclusion. United States Senate PERMANENT SUB COMMITTEE ON INVESTIGA TIONS Committee on Homeland Security and Governmental Affairs Carl Levin, Chairman Norm Coleman, Ranking Minority Member EXHIBIT LIST Hearing On TAX HAVEN BANKS AND U. S. TAX COMPLIANCE July 17 and 25, 2008 1. Marsh Foundations, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 2. Wu Foundation, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 3. Greenfield Foundation, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 4. Laity Foundation, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 5. a. Statement of former LGT Treuhand employee, formerly known as Henrich Kieber. b. Liechtenstein w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Documents regarding withdrawal of$1 00,000 by JCMA Foundation/william Wu from LGT through HSBC Hong Kong and Shanghai Banking Corp. Hong Kong, June 2002. 24. Excerpt from Resolution, The Foundation Board of JCMA Foundation, indicating statement of assets asper3l December2001 in the total amount of USD 4.283,4 73 .49. dated February 7, 2002. 25. Excerpt from Resolution, The Foundation Board of JCMA Foundation, indicating inventory of assets and liabilities at 31 December 2003 showing a total of USD 2.1 7Z145.9 7, dated March 10, 2004. 26. Excerpt from Resolution of the Foundation Board of JCMA Foundation, showing assets as per 31 December2004 amount to USD 1,202,636.25, dated February 13, 2006. 27. Excerpt from Resolution of the Foundation Board of JCMA Foundation, showing assets as per 31 December2005 amount to USD 1,188,957.64, dated March 30, 2006. 28. Excerpt from Resolution of the Foundation Board of JCMA Foundation, showing assets as per 31 December2006 amount to USD 422,249.10, dated April 18,2007. 29. WI report on Veline Foundation after a March 27, 2000, client visit. 30. Statement of asset as per 31.12.2000, Veline Foundation, dated February 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....regarding Luperla Foundation, Valuz. 48. Memorandum for the File, dated December 17, 2001, regarding Luperla Foundation, Valuz. 49. Memorandum for the File, dated December 18, 2001, regarding Luperla Foundation, Valuz. 50. Memorandum for the File, dated December 20,2001, regarding Luperla Foundation, Valuz. 51. Documents regarding Beverly Park Corporation. 52. IRS Information Document Requests (IDR) regarding Beverly Park Corporation. 53. State of Delaware, Division of Corporations, Entity Details for Beverly Park Corp., listing Incorporation Dates of December 17, 1991, and January 3, 1997. DOCUMENTS RELATING TO GREENFIELD ACCOUNTS: 54. LGT Memorandum for the Record, dated March 27, 2001, memorializing a March 23, 2001 meeting regarding Maverick Foundation between LGT and Harvey and Steven David Greenfield. 55. WI Summary of Maverick Foundation as of December 31, 2001, dated January 1, 2002., 56. LGT report on Maverick Foundation, undated. 57. LGT report on TSF Company Limited, undated. 58. LGT report on Chiu Fu (Far East) Limited, undated. 59. LGT Background Information/Profile for Maverick Foundation, dated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns on Cross-Border Banking and Financial Services Activities. Country Paper USA (Effective Date June 1, 2007), prepared by UBS. 87. Excerpt of Key Clients in NAM, Business Case 2003-2005. 88. Correspondence of UBS to Clients dated November 4,2002, We are writing to reassure you that your fear is unjustified and wish to outline only some of the reason why the protect ion of client data cannot possibly be compromised .... UBS's entire compliance with its QI obligations does not create the risk that his/her identity be shared with U.S. authorities. 89. Martin Liechti (Head of UBS Wealth Management Americas) email, January2007, regarding net new money goal and Year of the Pig. 90. Referral Campaign BU Americas, June 2002 (Swiss watch await!). 91. Overview Figures North America, prepared by UBS. 92. Case Studies Cross-Border Workshop NAM. 93. UBS Memorandum, dated November 15, 2007, re: Changes in business model for U.S. private clients. 94. Talking Points for Informing U.S. Private Clients With Securities Holdings About The Realignment Of Our Business Model Plus Q&.A. DOCUMENTS RELATED TO OLENICOFF: 95. Statement of Facts, United States of America vs. Brad....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Counter-Surveillance Training * Foreign Credit Cards * Hold Mail * Shred Files Liechtenstein Secrecy Laws Article 14 of the Banking Act: "The members of the organs of banks and their employees as well as other persons acting on behalf of such banks shall be obliged to maintain the secrecy of facts that they have been entrusted to or have been made available to them pursuant to their business relationships with clients. The obligation to maintain secrecy shall not be limited in time." Article 11 of the Trustee Act "Trustees are obliged to secrecy on the matters entrusted to them and on the facts which they have learned in the course of their professional capacity and whose confidentiality Is in the best interest of their client. They shall have the right to such secrecy subject to the applicable rules of procedure in court proceedings and other proceedings before Government authorities." Article 10- Data Confidentiality: 'Whoever processes data or has data processed must keep data from applications entrusted to him or made accessible to him based on his professional activities secret, notwithstanding other legal c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us cases with imprisonment of no less than one year. Imprisonment and fine can be combined." 6. The scope and impact of the LGT tax Investigation and any lessons learned Tax Office Strategy The ATO is investigating the use of Liechtenstein entities and bank accounts in collaboration with other revenue agencies. In Australia, we are conducting 20 tax audits which are likely to raise tax liabilities In excess of $100 million. Anecdotal information suggests that relatively few Australians are involved in Liechtenstein arrangements relative to citizens from other countries. Liechtenstein -The ATO is currently reviewing the taxation affairs of Australian taxpayers who appear to have concealed income in offshore entities located hi banking secrecy jurisdictions and tax havens. ~M have a particular focus on taxpayers who have used the services of the LGT Group and Its trustee entity, LGT Treuhand Aktiengesellschaft in Vaduz. Liechtenstein (LGT.) * LGT Treuhand A.O. operates a fiduciary or trustee service and establishes and administers legal entitles such as anstalts, stiftungs (foundations) and trusts for its clients. - * LGT B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and currencies. Further, safety deposit facilities can be arranged for clients to secure other valuable items such as art and jewellery which may also form part of the Investment portfolio. Funds owned by entities that are establish d by LGT for its clients are commonly Invested with its own bank or funds management entities: * LGT Bank in Liechtenstein; * LGT Capital Invest Limited Grand Cayman; and * LGT Portfolio Management (Cayman) Limited. At the clients direction, funds may be invested with a third party bank, usually operated In a banking secrecy jurisdiction. The ATO understands that for a trust or foundation to be established by LGT, substantial funds must be settled In the trust or foundation for it to be economically viable for LGT. LGT clients are wealthy investors who typically Invest a small portion of their total wealth in a LGT structure and who do not need access to these funds to supped their domestic lifestyle. LGT plays an active role in servicing and administering the clients Liechtenstein entity. For example the bawd members of a foundation will be LGT employees. They are responsible for administration of the entity and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y documents, and exchanging information with our Tax Treaty partners. More importantly, the sharing of intelligence between International tax agencies has provided a unique understanding of Liechtenstein financial services and entitles end will provide an opportunity to engage with Liechtenstein to achieve greater transparency and exchange of Information. The ATO welcomes news that new laws In Liechtenstein will enhance regulation and transparency in relation to some legal entities. However, we are concerned to see the detailed law and Its proposed implementation in 2009 to determine whether there are practical changes to trustee/banking practices. Lessons learned * Project management strategies are essential to successful audit outcomes. * Sharing of information with other revenue agencies expedites the progress of cases. * Our compliance activities have resulted in disclosures or settlements. 2.3. We are reproducing hereunder the salient features of the Host Trust reg. Home -The trust Reg. can be structured like a company limited by shares or foundations as an instrument for commercial activitie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39; 150 (2010) - Member of UNO, EFTA, EEA and WTO The Principality of Liechtenstein is a politically, economically and socially very stable country for investors. Company The company limited by shares is suitable for all economic objectives, in particular for: . international commercial transactions or . as a holding structure for subsidiary companies. - The company limited by shares qualifying as private asset structure pays an annual tax of CHF 1 '200 only. - The coupon tax of 4% is not any longer levied on dividends distributed from income accrued after January 1, 2011. - The profits earned are not subject to any further tax. - Bearer or registered shares are admissible. The minimum nominal value is not regulated. It is also possible to issue voting shares. The Liechtenstein law does not ask for any qualifying shares to be held by the directors. - The general meeting of the shareholders is the supreme authority. - The board of directors conducts and manages the company business. - The auditor has to examine the annual accounts and reports to the general me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmitted to the Liechtenstein tax administration. - In case of losses or liabilities only the assets of the trust reg. have to be used to cover them. - The minimum capital to constitute a trust reg. is CHF 30'000. Foundation The foundation may be constituted as: . one for private use, especially as family foundation; . charitable foundation. - The founder endows assets for a specific purpose and regulates the beneficial interest. - The foundation qualifying as private asset structure pays an annual tax of CHF 1 '200 only. - Neither the endowment to the foundation nor the distributions to the beneficiaries or the profits earned are subject to any further tax, - The supreme authority is vested in the members of board who also take care of the administration. - The founder may designate other bodies as e.g. protectors, collators and auditors. - An individual as founder may by creating retained founder's rights preserve for himself the authority to revoke the foundation and to amend the foundation documents. - Only if the foundation pursues commercial activities ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....5% on the taxable net income. Companies pursuing business transactions and having been constituted prior to January 1, 2011, are until December 31, 2013 subject to a specific annual capital tax of 0.1 % of the assets held only, at least CHF 1 '200 per year. It is not necessary that such an offshore company sets up an office in Liechtenstein or employs people. The management of such an offshore company can be provided on a contractual basis by the Liechtenstein trustee. - Regulation of succession/avoidance of inheritance tax Especially foundations are qualified for all purposes of estate planning as well as to avoid inheritance tax. The succession in the assets is regulated by the socalled by-laws. These are regulations setting forth who the first beneficiary of the assets is and who qualifies as second beneficiary once the first has died. As no formal change of ownership takes place in case of succession, no inheritance tax becomes payable. - Asset protection by means of a holding company If assets - earmarked for the personal benefit only - are held by a holding company (normally a foundation) not all assets are endangered....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Liechtenstein 1m Duxer 4 P.O.Box 240 FL-9494 Schaan Principality of Liechtenstein Tel.: +423 239 66 33 Fax: +423 239 66 44 [email protected] www.holzhacker-lawfirm.com Tel.: +423 392 42 45 Fax: +423 3924246 host -trust [email protected] www.host-trust.com Black money: Liechtenstein joins India in stash funds fight Press Trust Of India: JakartalNew Delhi, Thu Nov 21 2013, 19:53 hrs. Liechtenstein, one of India's important partner nations in fighting overseas tax abuse and black money, on Thursday shed its secrecy cloak and joined the league of a host of other countries for automatic exchange of information and mutual assistance in tax matters. The country, a landlocked jurisdiction in Central Europe, became the 62nd signatory to a worldwide convention, accepted by almost all economic superpowers and formulated by the Paris-based Organisation for Economic Cooperation and Development (OECD), an international policy-advisory body that formulates global tax standards to fight tax evasion and concealment of illicit funds. Switzerland, in October....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r reopening of the assessment wherein it was specified that a tax-evasion petition (TEP) has been received from CBDT. As per the information contained in the said TEP the assessee is a beneficiary of Ambrunova Trust and Merlyn Management SA. In the return of income the assessee neither offered any income with reference to the trust nor disclosed any details to the effect that the appellant was a beneficiary of the said trust. The Assessing Officer, from the, summary of the trust account in LTG Bank, found credit balance of US $ 24,06,604 as on 31/12/2001 (Rs. 11,60,99,390/- @ 48.242 per USD) interest accrued of USD 13500 (equivalent to Rs. 6,51,267/-) was credited to the said account. As the same was not reflected in the return of income thus, the Assessing Officer correctly presumed that income has escaped assessment. Even vide letter dated 23/9/2009 the Assessing Officer showed details (a) information of trust, (b) details of settler of the trust, (c) purpose of creating trust, (d) copy of trust deed, (e) asset and bank accounts held by the trust in India and abroad and (f) benefit received by the appellant during the financial years relevant to Assessment Year 2002-0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hange treaty and therefore, there could not have been any cross examination." 2.4.2 So far as the contention of the assessee that enough opportunity was not provided to the assessee is concerned we find no merit in this assertion as is evident from para-28 (pg-14) of the order of the ld. CIT(A) (ITA No.3546/M/11) wherein un-controverted finding is that the assessee chose not to use the same when it was provided . Therefore, from this angle also the assessee is having no case. The totality of the facts clearly indicates that the Assessing Officer rightly assumed jurisdiction to reopen the assessment. Thus, this ground of the assessee in the respective appeal is dismissed. 3. The next ground pertains to confirming the addition of Rs. 2,34,64,398/- on account of alleged undisclosed income. The crux of argument advanced on behalf of the assessee is that the addition was made by the AO without appreciating the fact that the alleged trust was discretionary trust and neither the amount was accrued/credited nor the name of the assessee appeared as beneficiary of Ambrunova Trust. On the other hand, the ld. Special Counsel brought to our notice certain documents evide....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the skin and miss the soul of the Regulation. [909 A-B]. (3) Over-judicialisation can be subversive of the justice of the law. To invalidate the Board's order because the Regional Inspector did not suspend the certificate is fallacy. The Board's power is independent and is ignited by 905 the report, which exists in this case, of the Regional Inspector. There is an overall duty of oversight vested in the board to enforce observance of rules of safety. [909 D] (4)To set aside the order on the ground that the Regional Inspector had no power to recommend but only to suspend and report that his recommendation influenced the Board's order is to enthrone a processual nicety do dethrone plain justice. Suspension, on an enquiry, predicates a prior prima-facie finding of guilt and to make that known to the Board implicitly conveys a recommendation. The difference between suspension plus report and recommendatory report is little more than between Tweedledum and Tweedledee Recommendations are not binding but are merely raw materials for consi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... community. The Board must quit, as a legal pendry, if any dreadful deviation, deficiency, default or negligence anywhere in the mine occurs. This is a good case for new principles of liability, based on wider rules of sociological jurisprudence to tighten up the law of omission and commission at the highest levels. Responsibility and penalty must be the concomitants of highly-paid power vested in the top-brass. Any deviance on the part of these high-powered authorities must be visited with tortious or criminal liabilities. [908 F-H, 907 D-FI (The Court emphasized the need for evolving a code of strict liability calling to utmost care not only the crowd of workers and others but the few shall care or quit so that subterranean occupations necessary for the nation are made as risk-proof as technology and human vigilance permit). 3.2 So far as the contention of the ld. Counsel for the assessee that such documents were not provided to the assessee is also incorrect as we have discussed in earlier paras of this order that not only....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he tribunal's order, it has been held that the assessee is a beneficiary of Ambrunova Trust. In the present case, the only distinction is that the assessee's are beneficiary of Manichi Trust. The ld. CIT(A) in his appellate order has elaborately considered the issue of reopening. His order is well reasoned. Furthermore, we refer to the decision of Hon'ble Apex Court in the case of Rajesh Jhaveri Stock Brokers P. Ltd (supra) as under:- "Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to lax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the AO has cause or justification to know or suppose (hat income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the AO should have finally ascertained the fact by legal statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Managnese Ore Co, ltd. v. ITO(1991) 191 ITR 662, f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the assessee without any information to the assessee, is equally an unbelievable story. We do not find any relevance in ld. Counsel of the assessee's submission that the data were stolen by the foreign bank employee and it was not the case of a whistle blower. How this affects the veracity of information has not been spelt out. 18. In our considered opinion, the above evidence is cogent and sufficient. Furthermore, we note that in terms of the extant secrecy provisions of liechestein, no further information from the said bank can be obtained by the A.O. The assessee is clearly trying to get benefit under this provision and denying the existence of the said bank account. This as per the facts discussed hereinabove is a self serving statement not at all sustainable. In the background of the above discussion, the onus now is clearly on the assessee to prove that the assessee has no beneficial interest in the said bank account or that the said bank account is a fictitious story, which the assessee has failed to discharge. Hence, the impugned additions in the hands of the assessee are justified and I uphold the same. 19. As regards reference of the learned counsel of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....challenged both the reopening as well as merits of the addition. The ld. Commissioner of Income Tax (Appeals) affirmed both the action of the Assessing Officer by holding as under: 6.2 In the assessment order for A.Y.2002-03, it was elaborately discussed about the undisclosed income which was deposited by appellant and his family members in LGT Bank in the name of Manichi Trust, Vaduz, sources of which have not been disclosed by the appellant. The appellant's share @ 25% out of undisclosed income worked out to Rs. 37,67,807/- and was added to the total income of the appellant for the A.Y.2002-03-. For the year under consideration, the appellant had not disclosed any interest income / benefit derived out of the interest accrued or otherwise on deposit / asset in LGT Bank in the name of Manichi Trust, Vaduz, Liechenstein in the return of income filed for the A.Y.2005-06. 6.3 When the above specific information was confronted to the appellant, the appellant merely denied the existence of such trust and being beneficiary of the trust without adducing any iota of evidence in support of its claim, which therefore remained only as a self serving statement. There was credible and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elusive, evasive or restrained in disclosure. Further, it has been held that "it is the duty of the revenue authorities to be mindful of clues and coincidences and bring them to the logical conclusion, otherwise clandestine tax evasion through shady economic deals null go undetected, as appears to be the order of day. India is neither a tax heaven nor a banana republic." 6.5 Hence, in view of the above discussion, it was held that all the contention of the appellant that he is not aware of being a beneficiary of any such trust is not acceptable unless the appellant brings on record any such evidence to establish its self-serving claims. 6.6 The appellant has also claimed that there is no tangible material to have to believe that there is income escaping assessment and no such income is chargeable to tax. In this regard, it is stated that the contentions of the appellant with regard to validity of issue of notice has already been dealt with by the A.O. elaborately. However, it is important to note here that the information received by the department also contained a summary of bank account as on particular date which showed that interest has been ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f appeal, the statement of facts and the authorized representatives written submissions. The appellant's AR has referred to various case laws in his written submissions but they are not applicable to this case because of its peculiar nature. Here reassessment has been done on the basis of tangible information. In the light of the detailed reasons given in para 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8 above, I see no reason to differ from the A.O.'s finding. I, therefore, confirm his assessment order. 25. Against the above order, the assessee is in appeal before us. 26. We have heard both the ld. Counsel and perused the material on record. Both the Counsel reiterated the submissions in the assessee's appeal for assessment year 2002-03 dealt by us as above. As regards reference to time limit u/s. 149(1)(b) for reopening by the ld. Counsel of the assessee is concerned, we find that this ground was not raised before the authorities below. Before us also, no cogent reason was submitted for not raising the same earlier. Moreover, this is a general submission by the ld. Counsel of the assessee without reference to relevant facts. Hence, in our considered opinion, this limb....