TaxTMI 
TaxTMI 
2024 (7) TMI 130
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....ey (Undisclosed Foreign Income and Asset) and Imposition of Tax Act, 2015. (2) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the investment in the shares of the foreign company, RH Global Pte. Ltd. was made out of declared income, without having regard to the fact that layering of funds was done through various paper companies as clearly established in the assessment order and hence the affairs of the company itself were not beyond doubt. (3) On the facts and tin the circumstances of the case and in law, the dl. CIT(A) erred in holding that the alleged imports by various Indian entities were adequately explained without considering the facts that the assessee failed to prove the genuineness of imports with supporting books of account and other relevant documents. (4) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in ignoring the fact that some of the alleged import parties could not be traced at the given address, some did not comply with the notices and some such parties did not have the creditworthiness to do import transactions and thus, the import by such parties ....
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....d on all these documents, proceedings u/s. 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of tax Act, 2015 (for short, the Black Money Act) were initiated and ld. PDIT (Investigation), Kolkata vide order dated 05.05.2019 directed ADIT (Inv.), Unit-3(4), Kolkata to carry out the proceedings under the Black Money Act (hereinafter referred to as "the Act"). 4. The ld. Assessing Officer during the course of proceedings issued notices under the Act to the assessee and noted that the assessee held 1000 nos. of shares as on 18.05.2011 and 13,13,372 nos. of shares in RBGPL as on 21.03.2015. Even in the year 2019, the assessee was still holding 21,17,567 nos. of shares of RBGPL, Singapore. 5. Thereafter the ld. Assessing Officer examined the income tax returns for A.Ys. 2012-13 to 2018-19 and found that the assessee had not disclosed the foreign income and assets in Schedule 'FA' of the Income Tax Return, which needs to be provided as per 4th proviso of Section 139(1) of the Income Tax Act, 1961. The ld. Assessing Officer also noticed that the assessee being a resident other than not ordinarily resident in India within the meaning of section 6(6) of the I....
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....outside the country from a disclosed source in India. The investment made by the assessee in RB global Pte Singapore by the assessee was from disclosed banking channels and had been done by following the prescribed guidelines of the RBI. Further, the details given in the table with regard to investment made in RB Global establish the source of funds used for investing in foreign asset. Reliance was placed on the case of Srinidhi Karti Chidambaram vs. PCIT (W.A. No. 1125 of 2018 wherein the Hon'ble Madras High Court has held that the Black Money Act was enacted to deal with the problem of black money, i.e., undisclosed foreign income and asset. If the asset is purchased outside the country from a source within the country which is disclosed then the Black Money Act cannot be attracted. Reference was made to FAQ No. 17 of Circular No. 13 of 2015 dated 6th July 2015 issued by the CBDT wherein it was clarified that where a person holds certain foreign assets which are fully explained and acquired out of tax paid income but the same has not been reported in Schedule FA of the IT Return in the past, the assets will be treated as fully explained and the same will not be ....
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....xamined all three bank accounts of RB Global Pte. Ltd., however, arbitrarily added the total credits of SBI, Singapore bank account of the company in the hands of the assessee. Extracts of the other two bank accounts were examined and reproduced by the Ld. A.O. in his order but finding no infirmity, he made no addition on account of the other two bank accounts. 8. Subsequently during the course of proceedings, ld. Assessing Officer firstly referred to the financial year-wise details of the amount credited in USD in the Account No. 27600183120100 of M/s. R.B. Global Pte. Ltd., Singapore maintained at SBI, Singapore and the same is as under:- Sl. No. FY Total amount credited in USD 1. 2011-12 4266227.87 2. 2012-13 3600465.27 3. 2013-14 8665721.87 4. 2014-15 2387346.14 Total amount credited in USD 18919761.20 Average Exchange Rate for the FY 2019-20 is Rs. 70.4059 Total amount credited in INR as pe average Exchange Rate of Conversion from USD to INR for FY 2019-20 133,20,62,815.07 9. The ld. Assessing Officer further examined the details of entities, which have remitted the funds in the alleged SBI, Singapore ....
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....port of goods mostly timber and that the goods have been exported from Singapore to India and passed through the Custom Authorities. However, since the relevant documentary evidences were not filed, the ld. Assessing Officer was of the view that Shri Akhilesh Singh and its associate entities have routed the funds from India to abroad in the alleged SBI, Singapore account. Thereafter ld. Assessing Officer discussed about the credits in the other two bank accounts held with UCO Bank and Citi Bank but since the Competent Authority only shared the information about SBI, Singapore Bank account No. 27600183120100, the ld. Assessing Officer treated the total amount of credits in SBI, Singapore during financial years 2011- 12 to 2014-15 at Rs. 133.21 cr. (converted from USD 18919761.20 at the average exchange rate of 70.4059) as unexplained foreign income and assets. 10. During the course of assessment proceedings under the Black Money Act, ld. Assessing Officer shared the information about various Bank transactions entered into by Shri Akhilesh Singh with RBGPL regarding the investments made in the equity of RBGPL and that the said funds have been remitted through the disclosed Bank ac....
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....king investments in RBGPL through his disclosed Bank account but the tax filing intricacies are not known to the assessee and the Income Tax Forms were filed by the Authorized Representative and assessee was not aware as to why information in Schedule 'FA' was not filled in the return for A.Ys. 2012-13 to 2018-19. However, the same were duly filed in the return for A.Y. 2019-20. It was also submitted that all the alleged transactions in the Bank account of SBI, Singapore of RBGPL were done before commencement of 2015 and it was also submitted that all the equity shares in the form of investment in the equity of RBGPL have been acquired by the assessee out of its declared source in India. The Hon'ble Madras High Court in the case of Srinidhi Karti Chidambaram -vs.- PCIT (W.A. No. 1125 of 2018) has held that "the Black Money Act, 2015, was enacted to deal with the problem of Black Money, that is undisclosed foreign income and asset. If an asset is purchased outside the country, from a source, within the country, which is disclosed, then Black Money Act, cannot be attracted. It is not the case of Department that there is any income from the source outside India, which has not been dis....
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....e duly supported by copy of invoices and bill of entries. Even the transactions/imports of goods are duly reflected in financial statement of entities in India, where in few cases even the assessee is a Director/proprietor and that the respective bill of entries for goods imported have got Customs clearance. Reliance placed on the decision of Coordinate Bench, Delhi in the case of ACIT, Range-17 -vs.- Jatinder Mehra (2021) 128 taxmann.com 152 (Delhi-Trib.), wherein it was held that "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". 14. The ld. CIT(Appeals) after going through the evidences, various documents filed by the assessee proving that the investments made in the RBGPL from 2011 onwards are through the Bank a....
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....ngly, ld. CIT(Appeals) deleted the entire addition of Rs. 133,20,62,815/- holding that no case is made out for addition under Black Money Act, 2015. Aggrieved, the Revenue is in appeal before the Tribunal. 15. Ld. D.R. firstly referred his following written submission:- "BEFORE THE HON'BLE MEMBERS, 'C BENCH, ITAT, KOKATA Submission in the matter of Shri Akhilesh Singh having PAN: AKUPS0920P in BMA Appeal in. 03/KOL /2023 for the Assessment Year 2020-21. Your Honours, With reference to the directions of the Hon'ble Bench vide order sheet dated 29/02/2024, it is submitted as under: (1) A report has been received from the JCIT, Range-13, Kolkata vide Letter No. JCIT-13/BMA/2023-24, dated 06/03/2024, enclosing the copy of the report of DDIT (Investigation), Unit-3(4), Kolkata, dated 05/03/2024, i.e. from the jurisdiction in which the assessment u/s 10(3) of the BMA was originally completed. These reports, which are self-explanatory, are submitted herewith for kind perusal and consideration. (2) The relevant assessment records in 2 (two) parts have been received from the present AO. These will be carried to the court on the date....
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....orts from M/s R.B. Global Pte Ltd and payments have been made against imports from the said company. However, the CIT(A) did not consider it necessary to remand the matter to the AO and obtain his views on these documents before deciding the issue in favour of the assessee. The decision of the CIT(A) was, therefore, grossly in violation of the principle of natural justice and the order passed by deserves to be set aside. Enclo: as stated above. Yours faithfully, Sd/- [ Abhijit Kundu ] CIT(DR), ITAT-2, Kolkata" 16. Ld. D.R. further added that the assessee had not disclosed the information about the investments in equity in the Company located at Singapore in the income tax return furnished in A.Ys. 2012-13 to 2018-19 and also has not used the one-time window available under the Black Money Act. He also submitted that most of the concerns, which have remitted the funds in the Bank account and with SBI, Singapore in the name of RBGPL are either owned by the family members of the assessee/HUF or other friends and relatives. The assessee as a beneficial owner is having interest in all these concerns and the purpose of remitting the funds h....
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....mble assessee from its bank account in India to RB Global Pte. Ltd, Singapore in its SBI, Singapore Bank Account towards the investment in equity shares of the foreign company. The Source of such funds remitted by the assessee from India through its Bank of Baroda bank account for the purchase of equity shares in RB Global Pte. Ltd., Singapore is also represented in a tabular format for the ease of Your Honour's perusal at page 113, Annexure: 'E' of our paper book, Volume I. which were presented before the Ld A.O. during the course of assessment. It is humbly submitted that the ITRs & ITR Acknowledgments for A.Y. 2011-12, 12- 13, 13-14 & 19-20 of Shri Akhilesh Singh are marked as Annexures: 'A', 'B', 'C' & 'D' from pages 1 - 112 of our paper book, Volume I. It is also humbly submitted that we have marked and annexed the extract of the Bank Statement of Shri Akhilesh Singh maintained with Bank of Baroda (Kolkata) at pages 114 - 119 of our paper book, Volume I at Annexure: 'F' - this is the bank account of the assessee from which remittances were made to RB Global Pte. Ltd., Singapore for the purchase of equity shares from disclosed sources of funds of the a....
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....ments showing remittance of USD 56,500 from Akhilesh Singh to RB Global Pte. Ltd., Singapore (along with communications to Bank of Baroda including Form A2 enclosing the Application cum Declaration & Declaration under FEMA 1999) at Annexure: 'M' of our paper book, Volume I. Documents showing remittance of USD 44,500 from Akhilesh Singh to RB Global Pte. Ltd., Singapore (along with communications to Bank of Baroda including Form A2 enclosing the Application cum Declaration & Declaration under FEMA 1999) at Annexure: 'O' of our paper book, Volume I. Documents showing remittance of USD 44,500 from Akhilesh Singh to RB Global Pte. Ltd., Singapore (along with communications to Bank of Baroda including Form A2 enclosing the Application cum Declaration & Declaration under FEMA 1999) at Annexure: 'Q' of our paper book, Volume I. vi. In the case of Srinidhi Karti Chidambaram v. PCIT [W.A. No. 1125 of 2018], the Hon'ble Madras High Court had held that the Black Money Act, 2015, was enacted to deal with the problem of Black Money, from a source, within the countiy, which is disclosed, then Black Money Act, cannot be attracted. It is not the case of the Department th....
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.... and sworn before the Hon'ble First Class Magistrate is marked and annexed at pages 157 - 159 of our paper book, Annexure: 'S', Volume I wherein at serial no. 6 of the said affidavit, the assessee has recorded his statement vide the affidavit on oath stating that the investments made in RB Global Pte. Ltd., Singapore by him was made from disclosed sources and had been done through banking channels after following the prescribed guidelines of the RBI and due declarations under FEMA Regulations. ix. It is also submitted that the assessee was a director of the Singapore based company RB Global Pte. for which he received Director's Fees. As per Article 16 of the DTAA between India and Singapore, the director's fees received by Shri Akhilesh Singh (resident of India) in capacity of him being the director of RB Global Pte. Ltd., Singapore, a company formed and incorporated in Singapore (Certificate of Incorporation of the company in Singapore is marked and attached at Annexure: 'A', page 1 of Volume II of our paper book), was taxable in Singapore and not in India. Thus, the assessee had paid applicable taxes on such Director's Fees received from RB Global Pte. Ltd. in Singapore ....
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....ed opportunity to examine the information nor cross-examine the individuals making adverse statements under duress. In this regard, we rely on the following judgments: (xii) It is important to place on record the retraction affidavits of Shri Sashi Bhusan Singh and Shri Vivek Kumar Singh which has been marked as Annexure: 'T' & 'U' in Volume I of our paper book. Both individuals have categorically and unequivocally stated in the sworn affidavits before the Hon'ble First Class Magistrate that they were joint directors with the assessee in 3 & 5 companies, respectively. (xiii) It is humbly submitted that the Ld. A.O. at page 70 onwards of his Assessment Order framed u/s. 10(3) of the Act, observed that funds were remitted to RB Global Pte. Ltd., Singapore through Shri Akhilesh Singh and his associate entities which were controlled and managed by him. In this regard, it has been humbly submitted that merely due to non-compliance of the proprietors of the concerns to the notice u/s. 131 issued under the I.T. Act, 1961 and unverified information, the assessee was conjecturally deduced as the owner and controller of all 14 proprietorship concerns. In this conne....
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....oney was received by it, cannot be treated as the Undisclosed Foreign Income and Assets of the assessee under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. (xvii) It is alleged inter-alia in para 4.1 of the assessment order. In this regard, it is pertinent to point out that he has not submitted specific reply which has been sought by this office vide letter dated 25.08.2021 bearing DIN & Notice No. ITBA/COM/F/17/2021- 22/1035092518(1) and letter dated 08.10.2021 bearing DIN & Notice No. ITBA/COM/F/17/2021-22/1036257553(1) respectively. In response to the said letters, assessee has only referred his previous submissions, which does not completely and fully address the queries raised by these two letters dated 25.08.2021 & 08.10.2021 of this office Rebuttal: That the assessee has duly responded to notice dated 25.08.2021 vide e-mail dated 10.09.2021 and also that the assessee vide compliance dated 25.01.2022, has fully addressed and clarified the queries raised in two letters dated 25.08.2021 & 08.10.2021. (xviii) That in page 81 of the impugned order the Ld AO alleged inter-alia: 7.5. In view of ....
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....0/1020882356(l) dated 21/11/2019 the copies of the Audited financials of R B Global Pte Ltd, for FY 2011 to 2018 showing the yearly sales and purchases of the company. c) Also with that the assessee has furnished, the Bank statements of accounts maintained at SBI, Singapore (A/c No. 27600183120100), CITI Bank, Singapore (A/c No. 0/860398/001) and UCO Bank, Singapore (A/c No. 1010727002) showing the debit and credit entries during the assessment proceedings. d) Also with that the assessee has furnished Extract of the Credit entry highlighting remittance made from India along with explanation for each credit entry (Trade/Investment) as seen in bank statement(s) above. e) Also with that the assessee has furnished the copies of the Income Tax assessment order of R B Global Pte Ltd under Singapore Tax Authorities for AY 2012 to 2019. f) Also with that the assessee has furnished the copies of Invoices and Bills of Lading of all trade related transactions of RB Global Pte. Ltd. along with Bill of Entries (denoting custom's clearance), etc. g) Also that the assessee has furnished the party ledgers for the sales transactions. h) Further ....
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....rovisions of law. In this regard reliance is also placed upon the judgment of the Delhi - Tribunal in the case of ACIT, Range 70, New Delhi v. Jatinder Mehra[2021] 128 taxmann.com 152 (Delhi - Trib.), wherein it was held that 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. xix. It is humbly submitted that the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, as its name indicates, is targeted only at the undisclosed foreign income and undisclosed foreign asset. Referring to the Statement of Objects and Reasons, and the Long Title to the Act, we humbly submit that the Act has been made to deal with Black Money, that is undisclosed foreign income and assets. The Act m....
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....ve. (e) Also with that the assessee has furnished the copies of the Income Tax assessment order of R B Global Pte Ltd under Singapore Tax Authorities for AY 2012 to 2019. (f) Also with that the assessee has furnished the copies of Invoices and Bills of Lading of all trade related transactions of RB Global Pte. Ltd. (g) Also that the assessee has furnished the party ledgers for the sales transactions. (h) Further that the assessee has furnished before the ADIT/DDIT 3(4) vide compliance dated 27.12.2019 to letter No. ITBA/COM/F/17/2019- 20/1021965057(1) dated 09/12/2019 the details of the imports made or any advances made in lieu of imports and also the sales details in prescribed format and also the Audited Balance sheet and ITR of the Indian entities in which your assessee was a director. (i) Also that the said imports and the corresponding sales of the Indian entities are duly reflected in their respective Bill of Entries on which Custom clearances have been duly complied with and have been marked and annexed (on a sample basis) for your honour's kind perusal in Paper Book Volume HI. It establishes that the entire credit summat....
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....t. xxiii. It is humbly submitted that the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 20L5, as its name indicates, is targeted only at the undisclosed foreign income and undisclosed foreign asset. Referring to the Statement of Objects and Reasons, and the Long Title to the Act, we humbly submit that the Act has been made to deal with Black Money, that is undisclosed foreign income and assets. The Act makes provisions for dealing with such income and assets, to provide for imposition of tax on undisclosed foreign income and assets and for matters connected therewith or incidental thereto. Thus, the provisions of the Act cannot be invoked or applied in a case where there is no undisclosed foreign income or asset. Section 2(11) of the Act, defines "undisclosed asset located outside India". The asset must be located outside India, it must be held by the assessee, and the assessee must have no explanation about the source of investment in such asset or the explanation is not satisfactory. Section 2(12) defines ''''undisclosed foreign income and asset". It is submitted that the various provisions of the Act will apply, or can ....
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.... decisions referred and relied by both the sides. Revenue is aggrieved with the finding of ld. CIT(Appeals) deleting the addition made by the ld. Assessing Officer at Rs. 1,33,20,62,815/- made on account of alleged undisclosed foreign income and assets under the provisions of Black Money Act, 2015. The proceedings under section 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 were initiated in the case of the assessee on the basis of information from Competent Authority, Singapore about bank account held with SBI, Singapore in the name of RBGPL, Singapore. Though the facts have been discussed in details in the preceding paras but for the sake of convenience, we will take them briefly and note that the assessee is a shareholder and Director in RBGPL. Credit entries alleged to be undisclosed foreign asset and income being funds remitted from India to RBGPL during the period from 20.05.2011 to 28.04.2015 (i.e. date of account opening and closure) in the bank account held at SBI, Singapore bearing A/c. No. 27600183120100 are in challenge before us. Though there are two other Bank accounts held with Citi Bank, Singapore and UCO Bank, Singapor....
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....the proceeding, ld. Assessing Officer observed that the total credits appearing in the SBI, Singapore upto the period 25.11.2015 are undisclosed foreign asset and income of the assessee. We further notice that the ld. CIT(Appeals) after being made available with various details about the source of investment in equity by the assessee and also the purpose of remittance of funds, which was only on account of import of goods mainly timber from Singapore, found that the transactions carried out were genuine and are for the commercial expediency. Ld. CIT(Appeals) opined that it is not a fit case for invoking provisions of the Black Money Act, 2015 and deleted the impugned addition by observing as follows:- "3.3(a) I have carefully considered the facts qf the case and submission of the appellant. All the credit entries in the bank A/c. of R. B. Global Pte. Ltd., Singapore have been considered as undisclosed foreign assets of the appellant and these have been added in the hands of the appellant under BMA, 2015. Appellant had explained that he had initially made remittances to the account of R. B. Global Pte. Ltd., Singapore, as per rules laid down by the RBI and in conformity wit....
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....quent increase in the number of shares held by the appellant in that" company is fully explained. 3.3(c) Main allegation against the assessee is that he has floated a number of concerns with the help of his friends and relatives and used these concerns as well as the concerns controlled by him, to siphon off bank loans and other unaccounted funds available with the assessee to the foreign: bank A/c. of Singapore based company in the guise of bogus imports made from the said company. A.O. has discussed the role of 17 such proprietorship concerns which have been used to siphon off fund from India. However, it is noticed that 11 out of 17 concerns are filing separate returns of income. Further, A.O. has only pointed out certain discrepancies regarding addresses of such concerns and their non-compliance to summons u/s.131 of the LT. Act, 1961 blit he has failed to satisfactorily establish that these concerns are in any manner controlled by the assessee. Allegations are not backed by supporting evidences and the assessee has also refuted the allegations of the A.O. in this regard. Apart from the discrepancies regarding addresses and non-compliances to summons u/s.131, A.O. has ....
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....ated various companies to deal with these businesses and has been regularly importing timber and other related products from other countries. It appears that for commercial expediency he had floated a company at Singapore and had thereafter routed his imports through Singapore basest company. During appellate proceedings appellant has produced most of the Bills of Entry or reference No. of the Bills of Entry in respect of the goods imported from abroad. Bills of entries are in the nature of certificate from the Customs Authority regarding receipt of imported goods in India. These documents/details were also produced before the A.O. In addition, during appellate proceedings, appellant has also produced other supporting evidences in the form of Inspection certificates issued by the Forest Authorities. Timber and other Forest products imported from abroad are subject to inspection by Forest authorities. These can be moved beyond the Ports only after receipt of certificate from the Forest Authorities. These certificates also mention the quantity of imported goods. Appellant has produced these certificates to further support bills of entries and to establish that imported goods were rec....
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....rcumstances, it appears that A.O. has jumped to the conclusion regarding import fraud without any basis. 3.3(g) For invoking provisions of BMA, 2015, A.O. has mentioned two reasons, first, the Foreign Assets were not declared in Schedule-FA of the LT. Returns and secondly, assessee was the beneficiary of the Bank A/c. of the foreign company. However, from the above discussion, it is apparent that the initial remittances to the Bank A/c of the Foreign Company and subsequent remittances by various Indian entities on account of import from R. B. Global Pte. Ltd., were from disclosed sources. Remittances were made through banking channels and most of these persons were filing returns of income. Under the circumstances, not mentioning foreign assets in schedule FA of the Income Tax Returns is only a technical default. For this default appellant may be liable for penalty u/s.43 of the BMA, 2015 and A.O. may take necessary action in this regard. But FAQ No.17 of Circular No.13 of 2015 dated 06.07.2015 issued by CBDT comes to the rescue of the appellant and his foreign income/assets may not be considered undisclosed. In reply to question No. 18, it was clarified that when a person....
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.... 13 of the BMA, 2015 is not applicable in appellant's case. Rather his case is covered by clarification vide Query No. 17 of Circular No.13 of the BMA, 2015. Non-reporting of foreign assets in schedule-FA of the Income Tax Return was only a technical default and as per clarification issued by FAQ No. 17 of Circular No.13 of the BMA, 2015, the foreign assets acquired out of declared income in Singapore cannot be considered as undisclosed assets. However, A.O. may ascertain whether assessee was required to offer his global income in India as per I.T. Act, 1961, being a resident of India. 3.3(i) In view of the discussion in the preceding paras, it is apparent that the credit entries in the bank A/c. of R. B. Global Pte. Ltd., Singapore are fully explained. Initially, assessee had made remittances to the foreign bank A/c. out of his declared source in India. Hence, no adverse view can be taken in this regard. Subsequently, when the company started its commercial operations, it has received payments from India on account of material supplied to various Indian entities. Without pointing out even a single instance of bogus imports, A.O. has jumped to the conclusion that payment h....
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....e would first like to peruse the relevant provisions of Black Money Act, 2015 applicable in the instant case. "Undisclosed asset located outside India" is defined in Section 2(11) and means "an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in such asset or the explanation given by him is in the opinion of the ld. Assessing Officer unsatisfactory". 21.1. Further Section 2(12) of the Act defines "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. 22. Section 4 of the Black Money Act deals with the scope of total undisclosed foreign income and asset and the said provision is reproduced below:- "4. Scope of total undisclosed foreign income and asset (1) Subject to the provisions of this Act, the total undisclosed foreign income and asset of any previous year of an assessee shall be....
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....ide India or not, and whether there is any undisclosed foreign income and assets located at outside India or not. In the above referred provision of section 2(11), one of the important elements is that the assets located outside India should be treated as undisclosed, if the assessee has not given explanation about the source of investment in such assets. 24. In the instant case, the alleged addition has been made towards undisclosed assets in the form of funds remitted from India to Singapore in the Bank account held with SBI, Singapore in the name of RBGPL. Admittedly, the assessee is a Director and shareholder of RBGPL. Various documentary evidences have been placed in the paper book, which are more than sufficient to prove that RBGPL is a registered company in Singapore and is regularly assessed to tax and filing the audited financial statement with the authority at Singapore. Secondly it is also an admitted fact that the assessee being a Director has been receiving salary from RBGPL and is regularly filing the income tax return at Singapore and is paying due taxes. The ld. Assessing Officer has taken note of this fact and has observed that the assessee has received income i....
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....tment in the equity of RBGPL through declared sources. In other words, the assessee has sufficient explanation about the source of investment in the form of equity shares of RBGPL held abroad. However, the assessee did not mention the details of such foreign assets in the form of equity shares in Schedule 'FA' in the income tax return. Even when the assessee, who was filing regular income tax return in Singapore and paying due taxes thereon on the salary earned from RBGPL and even when remittances made to SBI, Singapore to RBGPL for investment in equity of the RBGPL Company duly supported by source for making such investment, but still the assessee did not fill the column in Schedule 'FA' of the income tax return. Under the given facts, one cannot ignore the possibility that the person, who prepared and filed the income tax return for the assessee may not have asked for the relevant information, which was required to be filled in the income tax return. It is not so that the assessee had no explanation about the source of investment in the assets in the form of equity shares of a Company in Singapore but bone of the contention is that the assessee has not declared the said asset in ....
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....Director's Remuneration payable from S.R. Worth Ltd to Shri Akhilesh Singh (31.03.2010 to 31.03.2013) A.O. & CIT(A) at pages 128 Form 26AS of Shri Akhilesh Singh (F.Y.: 2009-2010 to 2012-2013) A.O. & CIT(A) at pages 129 to 144 Documents showing remittance of USD 56,500 from Shri Akhiilesh Singh RB Global PTE Ltd (Communications to Bank of Baroda & Procedural compliances as per RBI & FEMA Norms) A.O. & CIT(A) at pages 145 to 147 Loan Confirmation Certificate from Shruti Wood & Woods (P) Ltd to Shri Akhilesh Singh A.O. & CIT(A) at page 148 Documents showing remittance of USD 44,500 from Shri Akhiilesh Singh RB Global PTE Ltd (Communications to Bank of Baroda & Procedural compliances as per RBI & FEMA Norms) A.O. & CIT(A) at pages 149 to 151 Confirmation Certificate from Shruti Wood & Woods (P) Ltd to Shri Akhilesh Singh A.O. & CIT(A) at pages 152 Documents showing remittance of USD 44,500 from Akhilesh Singh to RB Global PTE Ltd (Communications to Bank of Baroda & Procedural compliances as per RBI and FEMA Norms) AO & CIT(A) at pages 153to 155 "Ledger Acco....
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....countries also. The assessee has furnished the following details about RBGPL including its Memorandum of Articles, Annual Report and Financial Statement for the alleged period along with copies of invoices and Bill of Lading, Bill of entries, Custom Clearance documents, etc. and the same are listed below:- SI. No. Nature of Documents 1 Certificate confirming incorporation of company (R B Global PTE Ltd) in Singapore A.O. & CIT(A) at page 1 2 Memorandum and Articles of Association of R B Global PTE Ltd A.O. & CIT(A) at pages 2 to 24 3 Annual Report and Financial Statements of R B Global PTE Ltd for the year ended at 31.12.2011 A.O. & CIT(A) at pages 25 to 37 4 Annual Report and Financial Statements of R B Global PTE Ltd for the year ended at 31.12.2012 A.O. & CIT(A) at pages 38 to 67 5 Annual Report and Financial Statements of R B Global PTE Ltd for the year ended at 31.12.2013 A.O. & CIT(A) at pages 68 to 99 6 Annual Report and Financial Statements of R B Global PTE Ltd for the year ended at 31.12.2014 A.O. & CIT(A) at pages 100 to 131 7 Details of Credit Su....
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....ining period and remittances, which have been made from various concerns to RBGPL. Had the alleged concerns being fictitious or accommodation entry providers, then, there would have been no material in the form of bill of entry issued by the Custom Authorities, transportation documents, High Seas Sale Agreement by the concerns relating to importing goods. The assessee through the ld. Counsel for the assessee has furnished all the details regarding alleged concerns with the tax authorities, having PAN, filing regular income tax returns and duly assessed to tax. The list mentioned in the assessment order contains many names but only few which also includes Private Limited Companies have only dealt with the assessee during the said period and the transactions which are part of the Bank statement of SBI, Singapore, for each of such transaction, there is evidence which proves that against the funds remitted outside India, goods have been received in India by registered business concerns. So, when against the funds which have been remitted outside India and there are goods which have been received in India, then practically no asset remains located outside India, because the profit, if a....
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....1) (supra). We, however, find that the facts of the said case are different from the facts of the instant case. In the case of Rakesh Manhar Bhansal (supra), where there was information about the Bank accounts held abroad in the name of Rakesh Manhar Bhansali, the same was denied by Mr. Rakesh Manhar Bhansali and did not voluntary disclosure any information about such bank account held in British Virgin Island. However, in the instant case, the assessee has never denied to have an interest in the Company namely RBGPL Singapore and various transfers made from India to RBGPL, Singapore. In the instant case, the assessee has provided all the material information necessary to explain the source of investment in the equity in RBGPL, identity and creditworthiness of RBGPL and also supplied the proof of filing income tax return in Singapore and paying due taxes on the salary earned. Therefore, since the facts of the decision of Coordinate Bench, Mumbai in the case of Rakesh Manhar Bhansali (supra) are different, the ratio laid down therein cannot be applied in the instant case. 32. As far as the decision relied upon by the ld. Counsel for the assessee in the case of Srinidhi Karti Chid....
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....or assessment year 2016-17 (relating to previous year 2015-16) or any subsequent assessment year by a person, being a resident (other than not ordinarily resident), then he shall be liable for penalty of Rs. 10 lakhs under section 43 of the Act. The penalty is, however, not applicable in respect of an asset being one or more foreign bank accounts having an aggregate balance not exceeding an amount equivalent to Rs. 5 lakhs at any time during the previous year. 33. From going through the answers of the above two questions given by CBDT (supra) , so far as the Question No. 17 is concerned, we note that even if an assessee declares the assets in the income tax return in Schedule FA, mere reporting of such asset or income of the return does not mean that the source of investment in the asset has been explained. Therefore, explaining the source of investment is of prime importance which the assessee has successfully demonstrated before us. Similarly if we go through the answer of Question No. 18, we find that if a person holds certain assets, which are fully explained and acquired out of tax paid in India but not reported in Schedule FA of the Income Tax Act or not declared such asse....