TaxTMI 
TaxTMI 
2021 (5) TMI 904
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, for which, the assessee is also offering an explanation about its nature and source, thus not fulfilling the requirements of S.69. 3. The CIT(A) erred in confirming the addition of Rs. 25,97,980/- based on information received from DDIT(I&CI) via Australian Tax Office that there was receipt of money through alleged hawala system by the Appellant's Son from various parties, all of whom were living outside India, which was assumed to be transferred from the Appellant to his son without any evidence on record and a statement given by the appellant's son before the Australian tax authorities, the copy of which had not been provided to the Assessee and on mere suspicion and conjectures no addition can be made and hence the addition made may be deleted. 4. The CIT(A) erred in not appreciating that no transaction has taken place between appellant and his son and also that the transactions, which would be repaid by the Appellant's son and not the appellant himself, as confirmed by the parties providing loans, were outside the Jurisdiction of the Income Tax Act, where no provision has been provided under which such foreign transactions could be taxed, and he....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erty located at 13, Bayliss Road, Kardinya were arranged by me, to him, for use at my direction i.e. to purchase a family home for my wife, Shagun and my other son Shikhar to reside in. I confirm that the amounts do not constitute consideration of income for other son Shikhar to reside in. I confirm that the amounts do not constitute consideration or income for the Shagun in return for any goods or services or otherwise. Rather, simply money arranged by me to my son so that my family could purchase and live in their own home in Australia. I conduct my business on my own and give help to my family as I may deem fit. I categorically deny any implication or my instruction that I am carrying on my business pursuant to a bare trust arrangement with my son. I confirm that there is no trust that has been set up, bare or otherwise, in India or overseas under which Shagun is entitled to disbursement or any benefit. I further confirm that the amount transferred to Shagun in 2010 related to a payment made in the Australian Department of Immigration for the finalization of my wife and my permanent residency application to Australia. Any inference that amount was earned by Sha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s mere an afterthought devised by the Assessee to escape from the tax liability. Repeating his observation as above, he added Rs. 25,97,980/-under section 69 as unexplained investment made by the Assessee in the total income of the Assessee. 7. Against the above order assessee appealed before the learned CIT(A). The learned CIT(A) elaborately noted the submissions of the assessee. The assessee interalia refuted the allegations. The assessee also referred to the confirmations submitted. It was further submitted that the Department has not given the copy of the document received from Australian tax authorities even though the assessee has requested for the same. It was further submitted that the addition cannot be made under section 69 in as much as the impugned amount doesn't fall under the realm of provisions of section 69. Several case laws were also be referred. It was also submitted that the investment was in the name of the son and the property stands in his name in a foreign country and hence assessee cannot be subject to addition under section 69 of the I.T. Act. 8. The learned CIT(A) was not convinced he referred to the affidavit submitted by the assessee before the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ishinchand Chellaram v. CIT [1980] 125 ITR 713 (SC) page 269 - 274 of PB-III (at Para 6 at page 274) wherein it was held that where employee of one office of assessee made, through a bank, telegraphic transfer of certain amount to employee of another office, the ITO, on the basis of letters from bank manager, not shown to assessee, treated amount so remitted as income from undisclosed sources, it was held that the revenue authorities did not produce copies of the letters, addressed by the ITO to the manager of the bank. Copies of these letters, if produced, would perhaps have shown that the suggestion that the amount was remitted by the assessee was made by the ITO and taking the cue from this suggestion, the manager of the bank might have stated that the telegraphic transfer was sent by the assessee. burden of proof lay on department to show that remitted amount belonged to assessee by bringing proper evidence. Reliance is placed on the decision of the ITAT Jodhpur Bench in the case of R.K. Synthetics v. ITO [2004] 3 SOT 268 (Jodhpur)[l 7-10-2O03] page 275- 278 of PB III (at Para 10 at page 277) where based on an admission made by partner of assessee-firm before Central E....
X X X X Extracts X X X X
X X X X Extracts X X X X
....irmed by the CIT (A) may be deleted. Without prejudice, The investment is not in the name of assessee hence addition cannot be made under section 69 of the Act. Reliance is placed on the decision of the Hon'ble High Court of Punjab 85 Haryana in the case of CIT v. Roshan Lal Seth [1989] 45 Taxman 187 (Punjab & Haryana) Page 295 -297 ofPB III (Para 12 at page 297) where it was held that an amount deposited with a firm in name of assessee's wife, could not be assessed in hands of assessee unless either person in whose name deposit stood or firm in whose books deposit appeared, was called upon to explain deposit. Since neither of them was called upon to do so. There was, thus, clearly no warrant for adding the sum to the income of the assessee. Without prejudice to the above, 5. Ground 2 No addition can be made under section 69 of the Act where assessee has offered an explanation Facts The appellant has discharged the burden by providing confirmation by giving the explanation and giving statement on oath on several occasions. (Page 4 - 17 of PB I) and (Page 24 -28 of PB I) Ms. Komal Rupani has stated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Shagun Thakur whereas in fact, there was no transfer and merely the words 'arranged' have been picked from the affidavit of the assessee; which in no manner can be construed to be indirect payments made by the Assessee to his family. The word "arrange" in no means signify that the assessee has made payment through indirect methods. The affidavit and statements have to read as a whole, the revenue cannot pick up few words from the affidavit and come to the conclusion that the amount received by son from different persons from abroad is belongs to the appellant, ignoring the various statements given on oath from time to time before tax authorities. Therefore, in absence of any evidence, addition made merely on the basis of presumption and assumption cannot be sustained Reliance is placed on the decision of the Hon"ble Supreme Court in the case of Umacharan Shaw & Bros. v. CIT [1959] 37 ITR 271 (SC)[15.O5.1959] page 305-310 of PB III (last para at page 309) wherein it was held that there was no material on which the Income-tax Officer could come to the conclusion that the firm was not genuine. There are many surmises and conjectures, and th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Dadri Cement Ltd. v. CIT [1974] 94 ITR 303 (Bombay)[ 10.07.1973] page 422 -427 of PB III (last para at page 426) where it was held that burden of proving that sale proceeds of cement were received by assessee company or by someone on its behalf in taxable territories was on department and in absence of material in that behalf, department would suffer and not assessee-company Summary of submission may be considered. (At Page 43 of PB I) In view of the above contentions, since the department has not proved as how the same is taxable in India in the hand of the assessee, the additions confirmed by the CIT(A) may be deleted." 10. Per contra learned Departmental Representative relied upon the order of Assessing Officer. 11. Upon careful consideration, we find that the addition is solely made on the basis of statement of the assessee's son before Australian Tax Authorities and affidavit by the assessee before them that fund found in possession of the son were arranged by assessee by hawala transaction. When confronted by the investigation department of the Revenue, the assessee has rebutted the above allegation. The rebuttal or refusal by the assessee has only be....