TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 429
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.....2012 by the DDIT (Inv.). Unit-II(2), Pune. In the above search assessee was also covered. The original return of income was filed by the assessee on 03.10.2008 declaring total income of Rs.. 1,34,74,428/-. The Return of income was Processed u/s. 143(1) of the Act by accepting the returned income. 4. Consequent to the search, the case was selected for scrutiny by issue of notice u/s. 153A of the Act. In response, assessee filed return of income on 27.06.2014 declaring total income at Rs.. 1,34,89,990/-. Accordingly, notices u/s. 143(2) and 142(1) of the Act were issued and served on the assessee. In response, authorised representative of the assessee attended and submitted the relevant information as called for. 5. The assessee is an individual and during the year, he has earned income from House Property, income from Profit or Gains of Business/Profession, Capital Gains, and income from other sources. 6. Assessee has offered additional income in the return of income filed in response to notice u/s. 153A of the Act on account of interest received from the overseas bank account in HSBC Private Bank (UK) Ltd., of Rs.. 15,562/-, which was not offered in the original return of incom....
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....t to the bank account of the Assessee, both accounts with HSBC Pvt Bank (UK) Ltd, London, on 08-02-2008. Thereafter the said sum was remitted from the said bank account of the assessee at London to India to his NRE Account No. 004213110000034 with Bank of India, Tardeo Branch on 11-02-2008 Subsequent to receipt of the remittance in the said NRE account, funds were transferred to the Bank account of assessee's new Proprietary Concern, namely M/s Chiranika Properties' as Proprietor's Capital for its real estate business. Again a sum of GBP 150000 was withdrawn by the assessee from his funds lying with Lennox on 27-05-2008, which was transferred on behalf of Lennox by Hereford Properties Ltd Inc from its bank account to the bank account of the assessee at London, and subsequently remitted by the assessee to India to his NRE Account with Bank of India, Tardeo branch. The said amount was also transferred to Chiranika Properties as Proprietor's Capital. Chiranika Properties utilized the said funds to purchase lands for its real estate business. The said lands are held by Chiranika Properties as Stock- in-Trade." 9. Further, summons were issued to the assessee and ....
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....oney from it's employer / principal. 8.30 Thus, the undeniable conclusion is that the credits, which are appearing in the HSBC Pvt. Bank (UK) Ltd, London of the appellant and the NRE account of the appellant maintained with Bank of India, Tardeo branch, Mumbai are unexplained cash credits, as the nature and source of such credit had not been satisfactory explained by the Appellant, during the course of the proceedings. 8.31 As far as the addition of Rs. 16,091/ (GBP 202.84) is concerned, I have noted that the Appellant had continuously changed his stand, during the course of the various proceedings. In the assessment proceedings, it had been contended this represented petty cash on hand deposited in the foreign bank account. In the letter dated 04.07.2016, before the undersigned the Appellant had stated that this is refund of commission charged by bank against credit card expenses debited earlier. However, the Appellant failed to co-relate these credit entries with the credit card expenses. 8.32 A perusal of the letter dated 05.08.2016 reveals that the appellant had again changed his stand regarding the addition of Rs. 16,091/-, wherein it has been claimed that the sam....
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....fshore companies, registration of ships and the formation of Panama trusts and foundations. There, are no taxes imposed on offshore companies that only engage in business outside of the jurisdiction. Offshore companies incorporated in Panama, and the owners of the companies, are exempt from any corporate taxes, withholding taxes, income tax, capital gains tax, local taxes, and estate or inheritance taxes, including gift taxes. Panama offers an additional benefit not available in many offshore tax havens i.e. being able to conduct business within the offshore jurisdiction. 8.38 There are extensive laws in Panama to protect corporate and individual financial privacy. Strict confidentiality laws and regulations apply to documentation of offshore corporations, trusts and foundations, with severe civil and criminal penalties for violations of confidentiality. The names of corporate shareholders are not required to be publicly registered. Panama also has very strict banking secrecy laws. Panamanian banks are prohibited from sharing any information about offshore bank accounts or account holders. The only exception is a specific Panamanian court order in conjunction with a criminal inv....
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....is based on presumptions, surmises and are contrary to the facts on record and further not supported by any independent evidence on record whatsoever and therefore is not tenable and is liable to be rejected. 4. The various damaging and arbitrary observations made by the CIT (A) in his order are purely based on non-application of mind and on presumption, surmises and conjectures which are not supported by any kind of evidence on record and are not tenable and liable to be rejected. 5. The various decisions relied upon by the CIT (A) on pages 24 to 44 of his order are distinguishable and not applicable to the case of the Appellant 6. The CIT (A) erred in dismissing grounds of appeal no. 6 & 7 raised before him. 7. The Appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 13. At the time of hearing, Ld. AR of the assessee submitted that the present appeal is against order passed by the Assessing Officer u/s. 153A of the Act and he brought to our knowledge the relevant facts of this case, assessee is an individual and he was resident only from A.Y. 2004-05, however, before the above said assessment year assessee was not ordinar....
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....ection 139 of the Act and he brought to our notice 4th proviso which was introduced in Finance Act, 2012 and it is applicable only from A.Y. 2012-13. With regard to disclosure of information about foreign bank account, he submitted that assessee has filed the return of income on 25.09.2012 in which assessee has disclosed the same in A.Y. 2012-13 except certain small interest income earned by the assessee. Further, he submitted that assessee has disclosed all the information before search party on 04.12.2012. Further, he submitted that the observations made by the Ld. CIT(A) at Para No.8.7 is factually incorrect statement. 19. Further, he brought to our notice Para No. 8.8 of the appellate order and objected to the observations made by the Ld. CIT(A) that assessee has not brought to the knowledge of the Assessing Officer with regard to assessee being retained as an advisor by Salome Holdings INC and assessee has not brought any material in support of the same. In this regard he brought to our notice Page No. 138 of the Paper Book wherein the Assessing Officer in the original Assessment Order passed u/s. 153(3) of the Act dated 03.12.2008 in which the Assessing Officer has disclosed....
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....tance of USD 10,00,000 to the bank account of the assessee with HSBC Private Bank (UK). 24. Further, he brought to our notice Page No. 57 of the Paper Book which is also confirmation received from M/s. Lennox Overseas Inc., for the remittance of USD 10,00,000/- on 12.02.20008 and GBP of 1,50,000 on 27.05.2008 along with the bank statements of M/s. Lennox Overseas Inc.,. this confirmation and bank statement also submitted before the Ld.CIT(A). 25. Further, assessee has filed the application for admission of additional evidences dated 17.06.2002 and he submitted that assessee has filed affidavit before ITAT and has filed the statement of affairs of the assessee for the foreign income and assets / liability for the period F.Y.1998-99 to F.Y. 2008-09, financial statements of M/s. Lennox Overseas Inc., for the period F.Y. 1998-99 to F.Y. 2008-09, financial statements of Salome Holdings INC for the period F.Y. 1998-99 to F.Y.2008-09 and financial statements of Hereford Properties Limited for the period F.Y. 2007-08 to 2008-09. He submitted that the following evidences goes to the root of the matter and he prayed that the additional evidences may be admitted for adjudication. 26. Furth....
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....Y. 2007-08 to 2008-09. These additional evidences were submitted before us in support of the claim of the assessee that assessee has earned the income which is outstanding with M/s. Lennox Overseas Inc., and assessee has received USD 10,00,000 during the year and also GBP 1,50,000 during the assessment year 2009-10. 30. As per the financial statements submitted before us as additional evidences shows that assessee has an outstanding amount of USD 1435198 as on 31.03.1999 continues to held till A.Y. 2008-09 with the addition of remuneration income. The same was shown in the financial statements of M/s. Lennox Overseas Inc., and assessee has declared that the funds received by the assessee only out of the amounts outstanding in the books of the M/s. Lennox Overseas Inc., and whatever assessee has received from Salome Holdings INC and Hereford Properties Limited is on behalf of M/s. Lennox Overseas Inc.,. In the financial statements of M/s. Lennox Overseas Inc., which is submitted before us is the financial statements from F.Y. 1998-99 to 2008-09 these financial statements were certified by JD Jhaveri & Associates, Chartered Accountants and this CA based in Mumbai. Since assessee has....
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....3. The CIT (A) erred in disregarding the entire evidence which was filed by the Appellant to explain the source of the aforesaid credits during the year under consideration of Rs 108,96,000/- (GBP 1,50,000/-) and Rs. 25,63,871/- (GBP 35,295.58) appearing in the foreign account of the Appellant. 4. The CIT (A) erred in making addition of Rs. 25,63,871/- received by the Appellant towards proceeds of Life Insurance Policy, which represents receipts of capital and not income liable to tax. 5. The CIT (A) erred in holding that the said foreign bank account at London is undisclosed and thus credit appearing in the said bank account is also undisclosed. 6. The observation made by the CIT (A) to the effect that the said foreign bank account was used basically to launder the unaccounted money of the Appellant for investing in real estate is based on presumptions, surmises and are contrary to the facts on record and further not supported by any independent evidence on record whatsoever and therefore is not tenable and is liable to be rejected. 7. The various damaging and arbitrary observations made by the CIT (A) in his order are purely based on non-application of mind and on pre....
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....d by the Appellant b) The CIT (A) erred in disregarding the explanation offered by the Appellant in respect of said credit and further narration of the entries shown in the bank statement which clearly indicates that the said credits are not in the nature of income chargeable to tax. 2. The CIT (A) erred in holding that the said foreign bank account at London is undisclosed and thus credit appearing in the said bank account is also undisclosed. 3. The observation made by the CIT(A) to the effect that the said foreign bank account was used basically to launder the unaccounted money of the Appellant for investing in real estate is based on presumptions, surmises and are contrary to the facts on record and further not supported by any independent evidence on record whatsoever and therefore is not tenable and is liable to be rejected. 4. The various damaging and arbitrary observations made by the CIT (A) in his order are purely based on non-application of mind and on presumption, surmises and conjectures which are not supported by any kind of evidence on record and are not tenable and liable to be rejected. 5. The various decisions relied upon by the CIT (A) on pages 21 ....