TaxTMI 
TaxTMI 
2021 (5) TMI 904
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.... 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 hence the said addition may be deleted. II. Addition of Rs. 30.00.000/- on account....
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....ome 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 Shagun is incorrect. I trust this information, combined with documents establishing my financial capacity are now sufficient to establish ....
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.... 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 Australian tax office. Referring to the above he held that it was clear that assessee has transferred several amounts to his family members in Australia through hawala. He further noted that the funds....
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....e 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 Excise authorities that they had received certain processed man-made fabrics from processors which were without cover of invoices and without payment of Central Excise duty, Assessing Officer made addition under section 69 of the Act. Further, a copy of the statements recorded by ....
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.... 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 on oath and confirmed to certain transaction with assessee's son. (Page 29 - 30 of PB I) The Assessee has furnished proof of repayment of loan to Mr. Sanjay Balkrishna and confirmation from Mr. Trevor Fernandes. (Page 24 -28 of PB I) Proposition The appellant has discharged the burden by providing confirmations giving the explanation, and giving statement on oath on....
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....t 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 the conclusion is the result of suspicion which cannot take the place of proof in these matters. Addition confirmed by the CIT (A) may be deleted. Without prejudice to the above, 6. Ground 4 Transactions were between parties outside the jurisdiction of Indian Incometax Act, 1961, hence addition cannot be made. Facts The transactions pertaining to deposits in the accounts of Mr. Shagun Thakur a Citizen of Australia and a Non-resident for Indian Income tax Law, and other n....
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....ssee, 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 been referred by the A.O. without bringing on record the actual rebuttal. There is absolutely no other material in the hand of the A.O. of proving the addition in the hands of the assessee. Despite the assessee's request, the copy of information received from Australian tax Authority has not been given to the assessee. In these circumstances, the addition made, which is based upon the information from a foreign source, without confronting the same to the assessee and without any corroborative material is not at all sustainable. The case laws referred by the ld. Counsel of the assessee ....