TaxTMI 
TaxTMI 
2023 (6) TMI 22
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.... 2. For that on the facts of the case, the impugned order is at best capable of being classified 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 ill....
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....9 the assessee lodged claim to get the surrender value of its policies. Against the total investment made by the assessee as well as his father, 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 s....
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....various case laws in this regard. The matter of examination in this case is not the tax liability of surrendered value of the insurance policies. In the instant 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....
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....ous issues, the total undisclosed foreign income & asset of the assessee is computed as below: Amount (Rs.) Undisclosed foreign income & asset [as discussed above] 1,08,01,726 Tax payable @ 30% as per Section 3 of the 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 c....
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....ative expenses incurred by the Fund Manager and the cost of the insurance of the policy holder. Perusal of the papers relating to the M/s. Scottish Provident International Life Assurance Ltd. shows that assessee had opted for Momentum Single Life Policy for the period of 20 years. For 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 ....
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....ndia. Thereafter, assessee's father has continued paying the premium for the next 8 years. Assessee was well aware of the investments made with the foreign investment funds. W.e.f. 05-12-2017, assessee transferred these policies in the name of his father but assessee can not escape the fact that he was the 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 t....
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....ney (UFIA) and Imposition of Tax Act, 2015, is confirmed." 6. Aggrieved, the assessee is now in appeal before this Tribunal. Ld. Counsel for the assessee has filed a paper book containing 454 pages containing following details: "1. Details of days spent in Abroad for the assessment years 2001-02 & 2002-03. 2. Passport ( 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 Ackn....
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....tory notes on provisions relating to tax compliance for undisclosed foreign income and assets as provided in chapter VI of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015] INTRODUCTION THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015 (referred to here as 'the Act') as passed by the Parliament received the assent of the President on the 26th May 2015. The Act contains provisions to 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 a....
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.... USD 157713.37 [equivalent to INR 1,08,01,725/-] being the amount of premium paid by 2 offshore entities has been assessed u/s 10(3) of the BMA and confirmed by the Ld. CIT(A) on the solo ground that the asset was not disclosed in Schedule FA of the ITR. 10(a) It is reiterated once again that the money USD 157713.37 paid by non-residents was never an Indian money and therefore, remained, all along, outside the scope of BMA. It was assessee's understanding, honest and bonafide belief that as the money is not falling under the ambit of BMA, there 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 2....
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....M/s S.S.Global FZE) to its director Shri Swapan Sadhan Bose being father of the Appellant (a non-resident) for the purpose whatsoever, is governed by the law of said foreign country and such consideration is extremely extraneous to the fact of the present case. Above all, appellant provided services to the said foreign company and received due service charges which he regularly and properly reflected in his ITR in each year and the Department never detected that he received something extra. Ld. CIT(A)'s statement in this regard is purely an assumption or presumption when he 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 ne....
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.... parameters laid down by the Companies Act it is apparent that there is no any arrangement, contract etc. between M/s S.S.Global FZE or its director Shri Swapan Sadhan Bose being father of appellant with the assessee regarding payment of premium. There is no demonstration by the revenue that assessee exercises any control as a shareholder of M/s S.S.Global FZE over that company. There is no evidence that assessee has received any interest therefrom over and above the income earned from the company for providing services. It is not also demonstrated that assessee exercises any control to appoint directors or control the management or policy 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 fat....
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....T(A) erred in confirming the action of ld. AO of making the addition towards undisclosed foreign assets at Rs. 1,08,01,726/- under the provisions of Black Money (UFIA) And Imposition of Tax Act, 2015 for the alleged investment in life insurance policies in the name of the assessee. Before moving further, we would like to recapitulate the facts of the case which are that the assessee was a non-resident Indian during the FY 2000-01 & 2001-02. During his stay outside India at UAE he took two insurance policies, one from Standard Life Assurance Company; Policy No. B00007108 commenced on 04.12.2000 and the second from Scottish Provident International Life 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 ....
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....ch asset or the explanation given by him is in the opinion of the Assessing Officer unsatisfactory; Section 2(12) of BMA, 2015: "undisclosed foreign income and asset" means the total amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India, referred to in section 4, and computed in the manner laid down in section 5." 12. Further, we find it relevant to go through one of the questions in questionnaires issued by CBDT vide 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....
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....ney earned in India. Complete details of the bank account along with date of payment of the premium of the insurance policy supports this fact that the assessee has successfully explained the source of investment in the alleged foreign asset in the form of investment in insurance policy. 15. Now as far as the other limb of Section 2(11) of Black Money Act, 2015 is concerned about the disclosure of the said asset, we find that the premium payment to the two life insurance policies was discontinued from 2010 onwards. These policies commenced in the year 2000 and they were for a period of 21 years. In the middle of the term of the policy, the premium payment was discontinued. As stated by ld. Counsel for the assessee, the assessee was of bona fide belief that the policies have been discontinued and the amount so invested have been forfeited. It was only during the FY 2018-19 that the assessee came across the information of being eligible to lodge the claim for refund of surrender value which was followed by the necessary process and the surrender value was finally received in the bank account of the assessee held in India. Further, the assessee duly disclosed the amount so received....