TaxTMI 
TaxTMI 
2023 (6) TMI 22
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....ed as a case of mere change of opinion, hence, the assessment is bad in law should be quashed. 3. For that on the facts and circumstances of the case, the Ld. C.I.T.(A) was wrong in dittoing the order of the A.O. and confirming the amount of Rs.1,08,01,726/- is being computed as undisclosed foreign asset as per the Provisions of the Black Money (Undisclosed Foreign Income and Assets] and Imposition of Tax Act, 2015 and the same is being assessed u/s. 10(3) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act,2015 which is completely arbitrary, unjustified and illegal. 4. For that on the facts of the case, the Ld. CIT(A) ought to have considered that the assessee had discharged its onus by furnishing all the relevant documents in connection with the insurance premium paid and also proved the identity as NR1 during his stay in Dubai for the year 2000 & 2001, creditworthiness of Standard Life Assurance Company & Scottish Provident International and genuineness of transactions, thus his action is completely arbitrary, unjustified and illegal. 5. For that on the facts of the case, the Ld. CIT(A) was wrong in not considering the facts that payment ma....
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....after certain deduction a reduced amount received in assessee's bank account in India through his father which is duly offered in the income tax return filed by the assessee and due taxes paid thereon. Based on this information about the income from foreign sources, ld. AO carried out proceedings u/s 10 of the Black Money Act, 2015. Ld. AO noted that the assessee has failed to declare the alleged foreign assets i.e. investment in life insurance policies in his income tax return. Summons u/s 131 of the Act issued to the assessee on 13.11.2018 to furnish necessary information. Various submissions were filed by the assessee stating the facts of the case, details of investments made in the insurance policies, reasons for discontinuation of the policy, communications from the insurance companies for lodging the claim to take the surrender value of the policy, details of payment made by the assessee during the period when he was non-resident Indian and the other payments made by his father who is a also non-resident Indian. Further, it was submitted by the assessee that the premium on these two policies were paid only during the period 2002-2010 and thereafter, it was discontinued an....
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....case, the matter has been examined under the provisions of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act. 2015. The core issue is that the assessee had made foreign investment through insurance policies which he failed to disclose the same in his ITRs. The assessee was the insured person and the owner of the policies and accordingly, during the period when he was resident in India, he should disclose the same in the respective schedule of his ITRs. Moreover, the case laws referred by the assessee is relating to Income Tax Act, 1961 and not related to the core issue of the case, hence, the same is respectfully distinguished from the facts of the case of the assessee. 13. The contention of the assessee that he had not made investment in foreign policies after returning to India have been carefully considered and not found acceptable on the basis of above detailed analysis and available evidences. The documents/evidences as received from the foreign jurisdictions have dearly stated that the assessee had made investment in foreign Insurance policies and he was the insured person and owner of the foreign insurance policies. The assessee after becoming R....
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....he said Act 32,40,518 Add: Interest u/s 40 of the Black Money Act Rs.5,52,508/- 5,52,508 Interest u/s.234A of the Income Tax Act: Rs.32,405/- Interest u/s.234B of the Income Tax Act: Rs.3,56,457/- Interest u/s.234C of the Income Tax Act: Rs.1,63,646/- Total Tax payable in the light of Rule 12 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 Rs.37,93,026/- Assessed u/s 10(3) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015." 5. Aggrieved, the assessee preferred appeal before ld. CIT(A) and again reiterated the submissions as were made before ld. AO but failed to get any relief as ld. CIT(A) was of the firm view that the assessee was aware of the investments made in foreign but neither he disclosed those assets in the income tax return nor availed the opportunity to declare these foreign assets when one time compliance window was provided under Chapter VI of Black Money Act, 2015. Relevant extract of the observation of ld. CIT(A) confirming the action of ld. AO of assessing undisclosed foreign income and assets at Rs. 1,08,01,726/- under the Black Money (UFIA) And Imposition ....
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....or this policy, appellant had to pay US dollar 989.60 every year as regular contribution amount and US dollar 1039.08 as Regular Contribution Investment Element. For these policies life insurance covered was for US dollar 1,00,000. It appears that Shri Srinjoy Bose had purchased 10 such policies. Thus, total annual premium payable was US$ 9896. First payment date was 14-12-2000 and last payment date for the policy was 14-12-2019. (c) Appellant has raised objection whether the premium paid by the appellant comes under the definition of assets. The word 'assets' includes property of every description whether it is movable or immovable property. Further, property also has very wider meaning in its real sense. It not only includes money and other tangible things of value but also includes any intangible things considered as a source of income or wealth. There are no definite definition of the term property in Transfer of Property Act, 1882 but it has been defined differently in different acts. Section 2(11) of Sale of goods Act, 1930 gives some definition of property whereas section 2(c) of the Benami Transactions (Prohibition) Act, 1988) defines property as: "Property' means pro....
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....e beneficial owner of these foreign assets. Surrender request in respect of these policies was sent in October, 2018. Under the circumstances, assessee should have declared these assets while filing his Return of income from A.Y. 2012-13 onwards or under one time window provided as per Chapter-VI of BMA, 2015. (d) Appellant further submits that after he came back to India, his father continued paying the premium without his knowledge. However, this does not seem logical. In the first place, assessee was aware right from the beginning that he had opted for the Investment Plan (with Life Insurance cover) with foreign funds. Secondly, his father continued paying premium from his business concern, namely, M/s. S.S. Global FZE. Assessee was also getting some income from the same concern for some services rendered and this income was declared in his return of income. He claims that his father paid Insurance premium from the same business concern which may be considered as gift to son. However, the documents reveal that M/s. S.S. Global FZE is a company in which there are other share holders, other than the family members. Thus, payments from such business concern for the personal benef....
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....No. A8745789) of Srinjoy Bose. 3. Salary Certificate from SS GLOBAL FZE, Dubai, UAE 4. Standard Life Assurance Policy certificate [B0007108] & Scottish Provident International [M021001210] 5. Details of SS Global Fze from whose bank account the payment for the term insurance policies was made. 6. Payment details of Insurance Policies paid by Swapan Sadhan Basu (Father) & payment confirmation 7. Letter to A.O. from Swapan Sadhan Basu (Father) regarding payment of Premium. 8. Return Acknowledgement, computation of total income & tax, Balance sheet & profit & Loss a/c. for the assessment year 2001-02 to 2006-07. 9. Return Acknowledgement, Hard copy of return, computation of total income & tax, Balance sheet & profit & Loss a/c. for the assessment year 2007-08 to 2017-18. 10. Return Acknowledgement, Hard copy of return, computation of total income & tax, Balance sheet & profit & Loss a/c. for the assessment year 2018-09 to 2020-21." 7. Further, ld. Counsel for the assessee reiterated the submissions made before the lower authorities and also referred to the following written submissions placed on record: "1. Section 2(11) of the Black Money Act provides- (a) taxabili....
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....deal with the menace of black money stashed away abroad. It, inter alia, levies tax on undisclosed assets held abroad by a person who is a resident in India at the rate 30 per cent of the value of such assets, provides for a penalty equal to 90 per cent of the value of such asset, and also provides for rigorous imprisonment of three to ten years for wilful attempt to evade tax in relation to a undisclosed foreign income or asset. 7. Circular No, 13 of 2015, dated 06.07.2015 Question No. 17: A person has some undisclosed foreign assets. If he declares those assets in the Income -tax Return for assessment year 2015-16 or say 2014-15 (in belated return) then should he need to declare those assets in the voluntary tax compliance under chapter VI of the Act? Answer: As per the Act, the undisclosed foreign asset means an asset which is unaccounted/the source of investment in such asset is not fully explainable. Since an asset reported in Schedule FA does not form part of computation of total income in the Income tax return and consequently does not get taxed, mere reporting of a foreign asset in Schedule FA of the Return does not mean that the source of investment in the asset has ....
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....here is no scope to declare the same in Schedule- FA of the ITR. 10(b) However, any financial interest in any foreign entity is foreign asset as per BMA. In this case, it is an admitted fact that the policy was discontinued and appellant had no actionable claim to paid premium. He had no idea whether the insurance companies will return the paid premium amount or not in future. His right to receive back the money was never crystalized at any point of time up to F.Y. 2017-18. It was in the F.Y. 2018-19, the insurance companies wanted to pay back only a part of total premium and Appellant has sent his surrender request in October 2018, his actionable claim has been triggered. He assigned his right to his father. Later, he received equivalent INR of USD 85624.29 and receivable USD 55355.99 from his father through banking channel. Moreover, he has honestly offered both the amount so received/receivable as income in A.Y. 2019-20 and paid tax of Rs. 39.00 lakh thereon despite having a bonafide belief that the money so received/ receivable was not falling within the 'Scope of total income' u/s 5(l)(c) of the I.T.Act, 1961. 10(c) As per Section 5(1)(c) income accrues or arises outsi....
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....e himself has used the word "Possibility". 10(b) [2021] 128 taxmann.com 152 (Delhi - Trib.) IN THE ITAT DELHI BENCH 'C' Additional Commissioner of Income-tax, Range 70, New Delhi v. Jatinder Mehra INCOME TAX/BLACK MONEY ACT: To identify a beneficial owner of an asset, said person should have nexus, direct or indirect to source of asset and he must have provided funds for said asset; mere account opening form of an overseas bank account where assessee was mentioned as beneficial owner of account, mentioning details of his passport as an identification document, did not necessarily, in absence of any other corroborative evidence of beneficial ownership of assessee over asset, lead to taxability in hands of assessee under Black Money Act In the present case, admittedly premium was paid by two non-resident foreign entities from their own sources and he didn't have any nexus, direct or indirect to such payments and therefore, he cannot be the beneficial owner of such payment. 10(c). In the aforesaid judgment, beneficial ownership has been dealt with in the following manner:- As stated earlier the Black Money Act, 2015 does not define the term 'beneficial owners....
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....y decision of that company. Thus, the test of beneficial ownership as per the criteria laid down under the Companies Act, 2013 does not satisfy that assessee is a beneficial owner of the premium paid by the foreign entities M/s S.S.Global FZE or Shri Swapan Sadhan Bose. It is more so because of the fact that he has assigned the whole surrender value including his own share to his father and insurance companies paid accordingly. At one point of time, money was returned back to the foreign entities. Thereafter, Appellant received as gift from his father. S.S.Global FZE which were not at all controverted by the Assessing Officer as well as the Ld. CIT(A). In view of this it may kindly be held that the Commissioner (Appeals) was incorrect in confirming the addition in the hands of the assessee. Considering the above facts and following the judgement, the Ld. CIT-(A) has erred in law and on facts in assuming his section and the appeal should be allowed." 8. In the concluding remarks, ld. Counsel for the assessee stated that the source of investment towards the premium paid for the two insurance policies is from the income earned by the assessee in the capacity of non-resident Indian ....
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....Assurance Ltd.; Policy No. M021001210 commenced on 14.12.2000. Assessee's father Mr. Swapan Sadhan Bose is also a non-resident Indian and was living in UAE much before the assessee became non-resident Indian and as stated by the ld. Counsel for the assessee, assessee's father is still a non-resident Indian and also runs a business concern in the name of M/s. S.S. Global FZE. The first two premiums of two insurance policies were paid by the assessee during his stay in UAE as non-resident Indian but thereafter, he returned back to India to carry on his business activities. From 2002 to 2010 the premiums on the two insurance policies were paid by assessee's father from his individual source/from M/s. S.S. Global FZE. Though the policy was for a period of 21 years but since the assessee made up his mind not to return to UAE, his father discontinued the payment of premium. Since the terms of the policies were not followed and premiums were not paid, the assessee had a firm belief that the premium so paid will be forfeited by the insurance companies and the assessee will not receive anything against the investments made. It was only during the year 2018 that the assessee received an info....
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....turn for assessment year 2015-16 or say 2014- 15 (in belated return) then should he need to declare those assets in the voluntary tax compliance under chapter VI of the Act? Answer: As per the Act, the undisclosed foreign asset means an asset which is unaccounted/the source of investment in such asset is not fully explainable. Since an asset reported in Schedule FA does not form part of computation of total income in the Income tax return and consequently does not get taxed, mere reporting of a foreign asset in Schedule FA of the Return does not mean that the source of investment in the asset has been explained. The foreign asset is liable to the taxed under the Act (whether reported in the return or not) if the source of investment in such asset is unexplained. Therefore, declaration should be made under chapter VI of the Act in respect of all those foreign assets which are unaccounted/the source of investment in such asset is not fully explainable." 13. Now, in light of the provisions of Section 2(11) & 2(12) of the Black Money Act, 2015 first we notice that in the instant case the issue is only with regard to the alleged undisclosed foreign asset i.e. the investment in the in....