TaxTMI 
TaxTMI 
2021 (1) TMI 381
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....rla group of cases on 07.01.14. The AO observed that assessee is the main person belonging to this group. Assessee filed his original return of wealth on 29.07.2008 declaring a net wealth of Rs. 42,25,940/-. Subsequently, reassessment proceedings were initiated by issue of notice u/s 17 on 28.03.2014 and duly served on the assessee. In response, the return of wealth was filed on 13.03.2015 admitting net wealth of Rs. 1,62,10,100/-. Notice u/s 16(2) of the Wealth-tax Act was issued and served upon the assessee on 16.03.2015. Subsequently, assessee furnished revised return of wealth on 25.03.2015 admitting total net wealth of Rs. 2,30,03,500/-. 4. During the search proceedings, the residence of assessee at Birla House, 21 Mount Pleasant Road, Mumbai - 400006 was also covered. At this premises, some diamond jewellery, gold jewellery and silver articles/utensils etc. were found. The above said jewelleries were valued by Govt. Approved Valuer and subsequently kept under prohibitory orders passed u/s 132(3) of the I.T. Act 1961. 5. In the sworn statements recorded u/s 132(4) of the Act, the assessee submitted that all the ancestral wealth was duly reflected in the wealth tax return....
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....ring the course of assessment proceedings and inquiries, AO observed that FT & TR division, CBDT, Govt of India, obtained information from various tax jurisdictions and based on the above information, it was observed that assessee is the beneficial owner of several entities held abroad. The details of entities where assessee or his family members have beneficial interest are given below :- S. NO. Account No Account held in the Name Information received from 1 125042 Mokopane Limited Credit Suisse AG, Singapore 2 125114 Kinetic Holdings Limited Credit Suisse AG, Singapore 3 125132 Alea Management Limited Credit Suisse AG, Singapore 4 91320000 Mokopane Limited Barclays Bank PLC, Singapore 5 91318600 Confiance Limited as Trustee of the Banayan Tree Barclays Bank PLC, Singapore 6 91403800 Kinetic Holdings Limited Barclays Bank PLC, Singapore 1 91321400 Shaloka Sujata Birla and/ or Yashovardhan Birla Barclays Bank PLC, Singapore (Stated to be disclosed to Dept) 8 91312600 Yashovardhan Avanti Birla and Yashovardhan Birla Barclays Bank PLC, Singapore (Stated to be disclosed to Dept)....
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.... in various accounts was considered as net wealth for this assessment year by the AO. 12. In the net result, the AO treated the difference between revised return and the return filed in response to section 17 as undisclosed wealth to the extent of Rs. 67,93,400/-, the un- reconciled jewelleries determined by the AO to the extent of Rs. 3,19,18,345/- as undisclosed wealth and the offshore assets in various entities listed by the AO in which assessee is the beneficial owner were treated as undisclosed assets which are immovable properties and bank deposits held by the entities abroad to the extent of Rs. 1,25,93,63,283/-. 13. Aggrieved by the order of AO, assessee preferred the appeal before Ld. CIT(A). The assessee filed a detailed submission objecting to the reopening of assessment u/s 17 of the Act, on account of additions based on non-reconciliation of jewelleries, immovable properties held in Singapore and London and bank deposits in foreign banks held in the foreign entities (the ownership are held by the discretion Trust) in which, assessee is one of the named beneficiary. 14. After considering the submission of assessee, Ld. CIT(A) rejected the contentions of assesse....
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....y items for wealth tax purposes in the hands of the assessee. It was further submitted that M/s. Shearson Investments & Trading Co. Ltd. has also offered these items for wealth tax purposes in its return filed for the year relevant to A.Y. 2013-14. It was also submitted that a number of jewellery items belonging to the related companies of the assessee group have been considered for wealth tax purposes in the hands of the assessee, though, the same are regularly being considered for wealth tax purposes in the hands of the said related companies. 6.3.3. It is noted that the AO has rejected the contention of the assessee that certain unreconciled jewellery items of the assessee are being shown in the Wealth Tax returns of the related companies on the ground that in the Wealth Tax returns of the related companies, the item wise break-up has not been submitted and only some lumpsum amount has been shown and therefore, it is not possible to verify whether the said unreconciled items of jewellery are the same items which are being disclosed by the said related companies in their Wealth Tax returns. Further, though the assessee had contended that a detailed valuation rep....
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.... contended that the value of the flat at Singapore and London were computed on a different method and not as per Schedule III of the Wealth Tax Act, 1957. 7.3 It is observed that the above contentions of the assessee have been duly adjudicated by the Hon'ble Income Tax Settlement Commission (ITSC) vide its order u/s. 245D(4) dated 27.09.2017 on the assessee's application before them. In the Order u/s.245D(4), the Hon'ble ITSC discussed in detail all the issues on which the application was made by the assessee including the issue of beneficial ownership over the said 2 properties at Singapore and London. In para 4.1 of its order the Hon'ble ITSC has referred to the statement on oath of Shri G L Lath, trusted confidante of the assessee group for the last 40 years wherein it was informed that M/s Kinetic Holdings Ltd. is having one flat at Singapore and one flat at London and also foreign bank account with Barclays Bank, Singapore, however, the beneficial owner of all these assets is the assessee himself. 7.4 In para 13 of the Order u/s.245D(4), Hon'ble ITSC observed that references were made in accordance with the provisions of section 90 of the ....
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....cords of the banks with admissible documentary evidences like passport copy or the beneficial owner. It is therefore a legal necessity for these fiduciaries and front companies to reveal to the banks the real owner of the assets that they holding in their names to get an account opened with the bank..." "...This makes it mandatory for the member banks to observe certain measures of basic due diligence in establishing the identity of its clients. This concept of "beneficial owner" is therefore explained by the banks in Form A itself by way of notes as under: "...the concept of "beneficial owner" refers to the person who is the ultimate owner of the deposited assets. The beneficial owner does not necessarily have to be granted power of attorney or signatory authority for the business relationship..." "...13.6.1. In this regard, it is worth referring to the "Declaration of the Trust" made on 07-09-1989 by Albany Trustee Co. Ltd. [produced by the applicant on 22-01-2015 before the DDIT(lnv.)]. As per clause (u) of this Declaration of Trust, "Power to remove the Trustees" and "Power to appoint one or more persons or companies to be a trustee ....
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....d by the AO to value the said two properties is valid, fair and reasonable. Accordingly, the addition made by the AO in the hands of the assessee on this account is upheld and the appeal of the assessee on this ground is dismissed, 16. With regard to ground No. 4 raised before us, after considering the submission of assessee, Ld. CIT(A) partly allowed this ground with the following observations :- 8.2 The contentions of the assessee as well as the assessment order have been duly considered. In course of the appellate proceedings, the assessee contended that bank accounts whether held in India or outside India are excluded from chargeability of wealth-tax, that the AO provided vague explanation for making addition of the balances in the bank accounts as wealth in the hands of the assessee, that the AO erred in making addition of amounts held in foreign bank accounts of corporate entities as belonging to the assessee, that the AO did not provide details of Rs. 96,29,53,3567- added to the returned wealth of the assessee and that three accounts, viz. A/c.no.91321400, 91312600 and 91321300 held in Barclays Bank, Singapore were opened only during A.Y.2012-13 and disclosed by ....
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.... outside India; (a) An individual who is not a citizen of India (whether resident and ordinarily resident or not) (b) A resident but not ordinarily resident individual and a resident but not ordinarily resident HUF; (c) - A non-resident (may be individual or HUF or company); 8.5.2 Further, Wealth tax is levied on the value of assets and the term "assets" is defined u/s.2(ea) of the W.T.Act and includes "cash in hand". In case of individual and HUF cash in excess of Rs. 50,000 is taxable wealth and in the case of a company, any amount not recorded in the books of accounts. 8.6 In the instant case, the assessee, Shri Yashovardhan Birla is a citizen of India and is a resident and ordinarily resident of India. Thus, he is liable to pay wealth-tax in respect of his world assets (i.e. on the assets located in India as well as on the assets located outside India), which are otherwise not exempt under the Wealth Tax Act, 1957. 8.7 From the detailed discussion made in paras 7.3 to 7.5 above in respect of immovable properties of Kinetic Holdings Ltd. located in Singapore and London wherein it was held that these properties are assessable ....
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....has wrongly considered the deposits in 3 of the foreign bank accounts which have already been disclosed to the Department. It is observed that on page 13 of the assessment order, the AO himself has observed that Account nos. 91321400, 91312600 and 91321300 with Barclays Bank PLC, Singapore are stated by the assessee to be disclosed to the Department. The AO is therefore directed to verify the claim of the assessee that Account nos.91321400, 91312600 and 91321300 with Barclays Bank PLC, Singapore have been duly disclosed by him and if found correct, to exclude the aggregate deposits in these 3 foreign bank accounts for Wealth Tax purposes. Accordingly, Ground no. 4 of the appeal is partly allowed. 17. Aggrieved with the above order, assessee is in appeal before us on the grounds mentioned below:- 1. The Learned Assessing Officer (A.O.) has erred in issuing the notice u/s.17 of the Wealth Tax Act, 1957 and passed the order dated. 31.03.2015 without providing the reasons for re-opening which is bad in law and needs to quashed 2. a) The Learned CIT(A) has erred in confirming that there is no provision in the Wealth Tax Act, 1957 to revise the return filed ....
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....tion is therefore based on incorrect facts and hence needs to be deleted. 3. a) The Learned CIT(A) has erred in confirming the addition for Rs. 29,64,09,927/- to the returned wealth of the assessee on account of two flats at Singapore and London mentioned as belonging to Kinetic Holdings Limited without considering that the said flats are not owned by the assessee and are owned by a Corporate entity outside India without considering the facts and circumstances of the case. The same be considered and the additions be deleted. b) The Learned CIT(A) has erred in confirming the aforesaid addition on the basis of the order passed by the Hon. Income Tax Settlement Commission without considering the facts and circumstances of the case. c) Without prejudice to the above, the Learned CIT(A) has erred in not adjudicating the ground relating to the valuation of the flat at Singapore and London on a different method and not as per Schedule III of the Wealth Tax Act, 1957. The same be considered. 4. a) The Learned CIT(A) has erred in confirming the amount of Rs. 96,29,53,356/-deposited in bank accounts held by various entities i.e. Companies outside India to ....
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....iciary of the subject trust. 4. The Assessing Officer (AO) made additions to the 'net wealth' of the Assessee, in relation to the offshore assets lying within the subject offshore trust, on the premise that these constitute undisclosed wealth of the Assessee. 5. The Commissioner of Wealth Tax (CWT) has, in appeal, confirmed additions by the AO. 6. The Revenue relies upon clause 8 of the Second Schedule to the Instrument of Trust to assert that the power of appointment of new trustees and removal of trustees (powers used in war time emergency situations) conferred ultimate control to the Assessee. Plainly, this is a misreading of the Instrument of Trust. Based on erroneous interpretation of the legal ambit of 'appointment and removal' of trustees, the Revenue purports to collapse the offshore irrevocable discretionary trust, treating its offshore assets, as subsumed into and taxable in the hands of the Assessee. 7. The Revenue has not disputed the correctness of the certificate dated 13June 2017 (Paper book Vol.C, pgs 1, 3-23) issued by Mr. Michael Collins. director of trustee- Albany Trustee Company Limited, verifying the Instrume....
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....f preservation of the corpus and accretions, in aid of the objects of the trust. 14. The multitude of protections inter se the settlor, the trustee and the beneficiaries, within the framework of the Indian Trusts Act, 1882, extend inter alia to powers capable of exercise by trustees, in manner stipulated in section 11, to powers of appointment of trustees under sections 73 and 74, coupled with migration of trust property to new trustees under section 75, and finally to powers of revocation of trusts under section 78. 15. Under section 11 of the Indian Trusts Act, 1882, it is the "trustee" alone who is empowered to and bound (by fiduciary obligations) to fulfill the purpose of the trust, including to obey the directions of the settlor/author of the trust given at the time of its creation. 16. Under section 73 and 74 of the Indian Trusts Act, 1882, in circumstance of death, disability, insolvency, etc., a new trustee may be appointed by the person(s) nominated for that purpose (if any), or alternately, a civil court may fill the vacancy on application by a beneficiary, looking inter alia to the interests of all beneficiaries. 17. Inherent to the fr....
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....ees, under section 75 of the Indian Trusts Act, 1882. Migration of trust assets4 does not alter the irrevocable nature of the trust settlement, rather the discretion merely becomes vested with new or additional trustees, as the case may be. 22. The law does not sanction 'collapsing' a trust, but contemplates 'revocation' within the framework of section 78 of the Indian Trusts Act, 1882. However, in light of clause 15 of the Instrument of Trust, declaring the trust to be 'irrevocable', 'revocation1 is ruled out. 23. The contention of the Revenue, therefore, that the power of appointment and removal of trustees vested in the Assessee, must render the assets of the trust exigible to wealth tax in the hands of the Assessee, is inconsistent with the plain language of the Instrument of Trust and/or the statutory framework governing trusts. 24. The duration of the Trust Period set forth in clause 2(1)(b) of the Instrument of Trust bears relevance, stipulating that the 'trust' must remain intact for: (i) eighty years from the date of the declaration of trust; (ii) death of the last survivor of the descendants of King George the....
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....rdhan Birla and (Late) Sunanda Birla, again 'beneficiaries', prior to the power devolving upon the Assessee, and therefore, if the contention of the Revenue were to be accepted, it would follow that the trust assets vested in the said Ashokvardhan Birla, irrespective of whether or not he exercised the power of appointment of new trustees - a contention merely to be stated to be rejected. 29. Testing the contention raised by the Revenue further, the wide and unfettered discretionary powers conferred upon the trustees, including migrating the trust to other trustees under the aegis of clause 8(3), which finds statutory recognition in section 75 of the Indian Trusts Act, 1882,inherent where to distinct corporate trustees may be appointed from time-to-time, establishes the argumentumad absurdum, since each such trustee would then become liable to offer up the assets of the trust to tax in its hands. 30. Therefore, power of appointment of new or additional trustees, whether reserved for exercise by the settlor or trustees or beneficiaries or third parties, does not confer power or control over the assets of an irrevocable trust, such that would render the asset....
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....o the Assessee. The impugned actions of the Revenue purporting to render offshore trust assets to exigibility under the Indian Wealth Tax Act are thus vitiated by irregularity. 36. Section 6 of the Wealth Tax Act, 1957 excludes from its remit assets of non-resident corporate entities as held in Calcutta Tramways Co. Ltd. v. CWT [1972] 86 ITR 133 (SC), which also construed the doctrine of company distinct from its shareholders. Absent invocation of Explanation 2(b) to section 6, i.e. where 'control and management of its affairs is situated wholly in India", no scope exists to lifting the corporate veil of non-resident companies to render offshore trust assets exigible to tax in the Assessee's hands. 37. The scope and ambit of exercise of discretionary powers of a trustee includes retaining assets intact, thereby enabling accumulations, or alternately effectuating distributions, from time-to-time, as may be considered appropriate in the absolute unfettered discretion of the trustees. Similarly, distribution may be effected, to one or more beneficiaries, and in cash or in specie, and it is only upon such a 'distribution' that such an individual benefi....
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....nd the corollary conclusive admission by the Revenue as to the existence of the offshore trust structure established by (Late) PratapMalpani, in 1989 in relation to offshore assets in the ownership of (Late) PratapMalpani, on application of principles of preponderance of probabilities, it must follow that the (Indian) Wealth Tax Act, 1957 cannot have application to offshore assets comprising the offshore irrevocable discretionary trust structure and/or the offshore trustees, and as such and otherwise, the impugned additions are liable to be set aside on that short ground, without more. 45. A plain reading of the Instrument of Trust establishes that the trustees shall exercise discretion in matters of accumulation and/or distribution (clauses 6, 8, 9, 10). 46. The settled legal position is that 'A discretionary trust is one which gives a beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. The trustees must exercise their discretion as and when the income becomes available, but if they fail to distribute in due time, the ....
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....ts cannot supersede the governing Instrument of Trust, which determines rights, powers, obligations, privileges, limitations inter se between the settlor, trustees and beneficiaries; (F) the limited purpose of AML compliance is to ensure that 'source' of monies banked by a corporate entity are legitimate; (G) no requirement has been shown by Revenue to exist under the AML framework whereby the name of each and every single beneficiary of a trust is to be declared; (H) the act of the trustees offering up the name of any one of several beneficiaries is incapable of being equated as vesting upon such beneficiary the trust assets or to cause one or more beneficiaries to surrender or relinquish or waive distribution by the trustees- according to AML compliances the effect (erroneously) advocated by Revenue of denuding trustees' powers to effect, in absolute discretion 'distribution' to one or more beneficiaries entitled under the Instrument of Trust, would render the trustees accountable to other beneficiaries for abdication of duties; (I) apart from limitations inherent within the prescribed AML declaration form, particularly a la....
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....81 and 1985, the Assessee was a minor, with no independent source of income. When the shareholding interests settled upon trust in 1989, the Assessee was a student at University, with no independent source of income. The Revenue's case that the Assessee is a contributory to and/or beneficial owner of the trust is pure conjecture. The case of money laundering' (para 8.7.CWT order) also remains unsubstantiated. 53. The Revenue's unsubstantiated case of 'money laundering' is at best a red herring, and by virtue of lacking cogent evidence or legal foundation, is devoid of merit. In the absence of Revenue disputing settlement of the corpus by (Late) PratapMalpani17, no scope can remain for conjecture or surmise that the Assessee was a contributory. 54. The Revenue has failed to establish that the Assessee is the beneficial owner of the offshore entities comprising the trust structure, or has 'financial interest' therein, and as such, there is no scope for addition of the value of the assets of offshore entities to the 'net wealth' of the Assessee. 55. In the absence of the wealth tax return, in prescribed form, containing an....
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....l interest', in the assets of the offshore trust. 61. In any event, as one of several beneficiaries (at the material time) it cannot be reasonably contended that the Assessee has exclusive 'financial interest' in the assets of the offshore trust, so as to enable the Revenue to subsume offshore immovable assets, investments and/or bank accounts held through offshore companies, in the hands of the Assessee. 62. Under the Wealth Tax Act, 1957, sums lying to the credit of a bank account, offshore or otherwise, do not constitute an 'asset', and the contention advanced by the Revenue that sums lying to the credit of an offshore bank account belonging to an offshore trust are 'non- productive' assets amenable to the Act, is inconsistent with s.2(ea), which treats cash in hand above Rs. 50,000 liable to be accorded treatment of non-productive asset. Revenue has not discharged the burden of changeability of trust assets under section 3. 63. The fatalities in the impugned order reassessment proceedings are stark. The CWT proceeds on the footing that the "assessee and his family members have beneficial interest in the following bank accou....
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....s an order of the Wealth Tax Settlement Commission to be reckoned within the framework of section 22-I Wealth Tax Act. 68. This Hon'ble Tribunal vested with judicial powers, is not an 'Income Tax Authority' and as such and otherwise, is not bound by orders of the Hon'ble ITSC in independent proceedings under the Wealth Tax Act. The ITSC is an authority for composition. The ITSC cannot exercise or supersede the powers of this Hon'ble Tribunal: ITO v. Dhrangadhra Chemical Works (P.) Ltd. [1989] 28 ITD 499 (Bombay Trib.). The Hon'ble ITSC cannot travel beyond the Income Tax Act, 1961- the Hon'ble ITSC order did not bind the Hon'ble Income Tax Appellate Tribunal in matters of Surtax Act, 1964:Hooghly Mills Ltd. v. CIT [1992] 62 Taxman 83 (Calcutta). In any event, no estoppel arises on questions of law. 69. Admittedly, no power of search and seizure was exercised under S.37-A, nor statements recorded under s.37 of the Wealth Tax Act; reliance is placed by the Revenue on statements of Shri G L Lath recorded under s.131 of the Income-tax Act, overlooking that these cannot have direct bearing on wealth tax reassessment proceedings, which ar....
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....;unexplained cash credit under s.68of the IT Act. Whereas for prior years the Revenue has not contested the position knowing and confirming existence of Trust and companies/investments even for prior periods. 75. The CWT has upheld the AO's valuation of offshore immovable property. Independent of the principle contentions of the Assessee that the offshore immovable property is not exigible to wealth tax in the hands of the assessee, and in any event, that the existing valuation mechanism within sections 7, 12-A, 16-A and Schedule III of the Wealth Tax Act does not extend to offshore assets of an offshore discretionary trust.for invocation of Rrs 8 & 20 reasons to justify that it is 'not practicable' to value the immovable property under Rule 3 are mandatory, whereas none are available, in the present case. 76. In Amrit Banaspati Co. Ltd. v. CWT [2014] 226 Taxman 147 (SC) the Supreme Court proscribed the ipse dixit by the AO, to hold that discretion provided to AO to invoke Rule 8 shall be exercised judicially, with the AO duty bound to record satisfaction of Rule 8. 77. In light of the settled legal position, invocation of Rule 8 without provi....
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....eiterate explanations to the complete satisfaction of the AO. 19. On the other hand, Ld. DR submitted that AO has issued proper notice u/s 17 of the Wealth Tax Act and during the search, assessee has confessed that he has not explained the quantum of jewellery. AO has properly recorded the reasons for reopening of assessment and moreover assessee has filed revised return of wealth after submission of the return of wealth belatedly in response to notice issued u/s 17 of the Wealth Tax Act. The main issue is offshore accounts and entities controlled by the assessee and this information was obtained by the department only with the proceedings initiated by FT & TR Division, CBDT. It was found that assessee is a real owner of the entities existed outside India and the ultimate beneficial owner is the assessee and assessee being a resident of India, his global assets is taxable in India. He submitted that Ld. AR has advocated the present arguments which are not submitted before AO and Ld. CIT(A). He submitted that he relied on the orders of Settlement Commission in assessee's own case, however, it is in the matter of income tax, he submitted that Ld. CIT(A) also relied on the decis....
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....that an offshore irrevocable discretionary trust was settled in relation to private assets of the settlor i.e Shri Pratap Malpani for the benefit of several beneficiaries and one of them is the assessee. For brevity, the details of beneficiaries are given below as per Part II of the first schedule of the declaration of Trust :- i) Late Shri Pratap Malpani - settlor cum beneficiary ii) Mrs. Vibha Malpani - wife of settlor iii) Sudarshan and Ashutosh Malpani - sons of settlor iv) All the lineal descendants of settlor v) Ashok Vardhan Birla - Late father of assessee vi) Sunanda Birla - Late mother of assessee vii) Yashovardhan Birla - Assessee viii) Sujata Mehta - Sister of assessee ix) All lineal descendents of Shri Ashok Vardhan Birla x) Spouses of above said descendants of settlor xi) Any organization or association having charitable objects as per the laws of India and Guernsey. 24. From the above chart of beneficiaries, it is clear that the assessee is not the only beneficiary, it consists of other beneficiaries, who are direct lineal descendants of Late Shri Pratap Malpani, Late....
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....n an application by a beneficiary considering the interest of all the beneficiaries. 28. We notice that the Ld. CIT(A) has relied on the findings of ITSC and in turn, ITSC has heavily relied on the statement of Shri G. L. Lath. The findings of ITSC are that the assessee is the sole surviving beneficiary having the right to appoint the trustees. The ITSC inferred that this amounts to having substantial interest in the property. We note that the trustees have to follow the directions of the trust deed or trust declaration by the settlor. We note that the power to nominate the trustees are, as per Clause (u) of the declaration of trust [refer page 20 of the CIT(A) order], as per which, the power to remove the trustees and power to appoint one or more persons or companies to be a trustee or trustees in place of any trustee who has been removed vests with Shri Ashokvardhan Birla during his lifetime subject thereto Smt. Sunanda Birla during her lifetime and subject thereto Shri Yashovardhan Birla during his lifetime. 29. In our considered view, a private discretionary trust is created and few trustees were appointed to look after the trusts property. There is an enabling Clause ....
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....ho happens to be bestowed with right to appoint /re-appoint the trustees, it does not inherit the right or control over the trust. As per the declaration of the trust, the trust remains an independent entity and taxable entity outside India. The entities controlled by the trust are independent taxable entities outside India. Therefore, assessee can only be a beneficiary and remain a beneficiary. 33. We are in agreement with the submission of the assessee that the narrow remit of 'assets' under section 2(ea) of the Wealth Tax Act, held to be an exhaustive definition, does not permit exigibility of offshore assets of an offshore trust to wealth tax in the hands of the Assessee. We hold that there is no room for intendment in a taxing statute. 34. Coming to the other issue that the decision of ITSC is binding on the Tribunal, we observe that the proceedings before Income Tax Settlement Commission and Wealth Tax Settlement Commission are different as the mandate of both the authorities are different under respective Acts. But the Tribunals are vested with judicial powers and they are income tax authorities or Wealth Tax Authorities as defined in respective Acts. The decis....
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....ry trusts in which assessee is one of the beneficiaries. As discussed in the earlier para nos. 22 to 35, these bank accounts are running accounts of these entities and can never be the bank accounts belonging to the assessee, eventhough for the purpose of KYC norms and Anti Money Laundering provisions, the assessee was declared as the beneficiary, it does not take away the ownership of the companies and trusts. 38. Coming to the argument of the tax authorities that the undisclosed bank accounts in the foreign bank will be considered as the cash in hand and it will be included in the taxable wealth of the assessee, this argument is misplaced considering the fact that the definition of assets in the section 2(ea) of the Wealth Tax does not have a separate assets category for cash in bank. In case the legislature intend to include the balance outstanding in the banks, for that matter in the offshore accounts as the separate category of assets, it would have included the same in the assets definition or at-least added a separate explanation for this purpose. We fail to understand, how the tax authorities equating the balance in offshore bank with the cash in hand. In case, a individ....
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....es the entire re-assessment proceedings. Reliance in this regard is placed on the decision of Hon'ble Jurisdictional High Court in the case of CIT vs Trend Electronics reported in 61 taxmann.com 308 (Bom) dated 16.9.2015 wherein, the Hon'ble Bombay High Court declared the re-assessment proceedings to be bad in law when the reasons recorded for reopening the assessment were never supplied to the assessee. Similar view was also taken by the Hon'ble Karnataka High Court in the case of PCIT vs V Ramaiah reported in 103 taxmann.com 201 (Kar) dated 2.7.2018, which placed reliance on the aforesaid decision of Hon'ble Bombay High Court, among others. It would be pertinent to note that Special Leave Petition preferred by the Revenue before the Hon'ble Apex Court against this judgement of Hon'ble Karnataka High Court was dismissed vide order dated 14.1.2019 reported in 103 taxmann.com 202 (SC). Hence the decision rendered by the Hon'ble Jurisdictional High Court had attained finality. Respectfully following the same, we hold that the entire re-assessment proceedings becomes null and void for non-supply of reasons recorded to the assessee. Accordingly, Ground No. 1 raised by the assessee i....