TaxTMI 
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2024 (7) TMI 130
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....sition 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 were held by the AO to be nongenuine as per the findings on pages 51 to....
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.... 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 Income Tax Act. The ld. Assessing Officer also noted that the assessee had not disclosed the undisclo....
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....apore 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 treated as undisclosed foreign asset. It was further clarified that the assessee had, wherever made any declaration in any ....
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....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 account of RBGPL. The proceedings initiated by the ld. Assessing Officer only involved the funds remitted to the SBI Account No. 27600183120100 of RBGPL, Singapore. Even though there were other two Bank acc....
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.... 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 accounts held in India and has been remitted through the Banking channel after fulfillment of relevant formalities. However, since the assessee did not disclose the said information in the Income Tax return und....
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....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 disclosed in the returns submitted by the assessee". During the course of appellate proceedings, when ld. CIT(Appeals) was informed that against the funds remitted from Indian concerns to RBGPL, there has been equal....
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....oprietor 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 accounts duly disclosed in the income tax return/financial statements of the assessee, that RBGPL is duly registered with the Singapore Tax Authorities and paying regular tax that the assessee is also filing the incom....
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.....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 of hearing for production before the Hon'ble Bench. Besides, the AO, who had completed the assessment, has also submitted voluminous data in a PEN DRIVE, as stated to have been received from the assessee in a CD in course of proceedings before him. T....
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....T(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 have not been disclosed before the ld. Assessing Officer. He submitted that the assessee had filed various additional evidences before the ld. CIT(Appeals), who erred in calling for a remand report from the ld. Assessing Officer. Reliance placed on the decision of Coordinate Bench, Mumbai in the case of Rakesh Manhar Bhansali -vs.- A....
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....d 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 assessee in India as shown in a tabular format at page 113, Annexure: 'E' of our paper book. Each and every remittance made from Shri Akhilesh Singh (through disclosed and accounted sources) to RB Global Pte. Ltd. Singapore for the purchase of equity shares has been made through banking channels and after due compliances as per RBI and FEMA Norms. Reflection of each remittance....
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....aroda 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 that there is any income from the source outside India which has not been disclosed in the returns submitted by the assessees. An extract of the said judgment is extremely relevant in the facts of the instant assessee's case: "214. It is an admitted fact that the foreign asset in each case was acquired with money that was disclosed in the books of account of the assessee (and tax paid) and which was remitted through banking channe....
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....lations. 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 as per the Article 16 of the DTAA between India & Singapore and his income on such account was assessed by the relevant authorities in Singapore. Article 16 of the DTAA between India & Singapore is reproduced hereinunder for the sake of your honour's convenience: "Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other....
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....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 connection, reliance is placed on the decision of the Hon'ble Supreme Court in Laichand Bhagat Ambica Ram vs. CIT [1959] 37 ITR 288 (SC) wherein it relied on its earlier judgement rendered in the case of Omar Salav Mohamed Sait [1959] 37 ITR 151 (SC) where it was held that no addition can be made on the basis of surmises, suspicion and conjectures. Further, in the case of CIT (Central) Calcutta vs. Daulat Ram Rawatmull (87 ITR 349) the Hon'ble SC has held that the onus to prove that the apparent is not the real is on the party who claims it to....
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....espectively. 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 the above discussion in para 7.3 & 7.4, it is clear that Shri Akhilesh Singh has siphoned off its undisclosed money to the three bank accounts of M/s R B Global Pte Ltd., Singapore 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) in the mode of import remittance/ investment through its various fictitious companies and proprietorship concerns which are controlled and managed by him but operated in the name of his family members and other persons. 7.6. In this regard, it is pertinent to mention here that the ....
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....s 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 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 the 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....
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.... 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 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 a....
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.... 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 summations in the bank accounts are on account of trade turnover transactions therefore cannot be 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. In this regard, we humbly also invite Your Honour's attention to Volume II of our paper book wherein we have marked and annexed all copies of Invoices and Bills of Lading of all trade related transactions of RB Global Pte. Ltd., Singapore and it has been annexed date-wise (Annexures: 'J', 'L', 'N' & 'P'). For the sake of clarity and better adjudication, we also humbly submit a Ledger Account of Companies (based in India) in the books of RB Global Pte. Ltd., Singapore on account of turnover transactions related to trade (marked and annexed at Ann....
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....a". 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 be invoked, only if there is an undisclosed foreign asset (or income) within the meaning of Section 2(11) and 2(12) of the Act. xxiv. We humbly submit that the provisions of Chapter III (Tax Management) or Chapter IV (Penalties) or Chapter V (Offences and Prosecutions) of the Act can be invoked 4 only, if there is an undisclosed foreign asset (or income) within the meaning of Section 2(11) and Section 2 (12) of the Act. Thus, in the absence of any undisclosed foreign asset or income, the Act cannot be applied or invoked. Thus, we humbly pray before Your Honour that in light of the arguments advanced and precedents relied upon by your humble assessee, the appeal of the assessee may please be allowed". 18. Ld. Counsel for the assessee further concluded the submissions stating that it is neither a case of undisclosed assets located outside ....
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....eing 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, Singapore held in the name of RBGPL, but the information regarding the same was not received from the Competent Authority, Singapore. The assessee provided all necessary details about these Bank accounts also and the same are mentioned in the assessment order. However, the ld. Assessing Officer has confined the quantum of addition only with regard to the transactions carried out in the account held with SBI, Singapore. We take note of the fact that on few occasions, when the appeal came up for hearing, reference was made about the other two Bank accounts held with Citi Bank, Singapore and UCO Bank, Singapore, but since the ld. Assessing Officer has consciously discussed all the Bank accounts and dealt with these details but has not referred to the credit entries appearing in the other two Bank accounts for making the additions, we are not inclined to deal with the tra....
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....gapore 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 with the FEMA, 1999. Thereafter, when the company started its commercial operations, it has received money from companies/conopms controlled by the appellant as well as from other Indian entities and these transactions are purely commercial, in nature. Indian entities, including those controlled by the appellant have imported timber and other forest products from R. B. Global Pte. Ltd., Singapore and made import remittances to the foreign entities through banking channels. However, A.O. is not convinced. He is of the opinion that the alleged import transactions are not genuine and the appellant has floated a number of proprietary concerns in the names of his relatives and friends and used these concerns to siphon off his undisclosed funds to the foreign entity. A.O. has further alleged that the appellant has siphoned off loans taken from bank and routed these funds to the....
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....y 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 given the picture that unaccounted cash has been rotated through the bank A/c. of the said proprietary concerns. However, perusal of the information given on page No.68 of the assessment order shows that over-all not more than 10% of the deposits in such concerns are in cash. Balance 90% are through cheques, RTGS etc. Further, in the case of proprietary concerns which have not filed their return of income (details given on page No.68 to 70) only around 5% of deposits are in cash. Thus, A.O. has failed to make a proper case regarding mis-use of import transaction. 3.3(d) In the order, A.O. has mentioned about import fraud and siphoning off of bank loans. But, neither the A.O. has given any details of the bank loans and the manner in which these have been siphoned off nor the A.O. has discussed anything about the alleged import fraud. Whether no goods have been received against the ....
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....ies. 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 received in India as certified by two authorities, they-are, Customs Authority and Forest Authority of the State Government. They have independently certified the physical receipt of the imported timber and other forest products. Regarding imports by other Indian entities, appellant has clarified that he does not have access to the documents of those entities and he has vehemently denied any connection with those parties. Linder the circumstances, bills of entries or certificates from Forest Authorities have not been produced in respect of imports by other Indian entities but the Bills of Lading issued by R. B. Global Pte. Ltd., Singapore have been submitted both before the A.O. as well as during appellant authority to establish the import of goods. After perusal of these documents it is apparent that the concerns managed by the appellant have imported goods from R. B. Global Pte. Ltd., and the paym....
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.... 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 holds certain Foreign assets which are fully explained and acquired out of tax paid income then these would not be treated as undisclosed Foreign Assets, even if these assets were not declared in Schedule - FA of Income Tax return in the past. This view is also supported by the judgement of Hon'ble Madras High Court in the case of Srinidhi Karti Chidambaram vs. PCIT (WA No. 1125 of 2018). The other contention of the A.O. that the appellant was the beneficiary of that A/c as per the KYC, it is noticed that the said A/c was used for handling Bank transactions of the Singapore based company. A.O. has not pointed out even a single instance when the personal banking transaction of the assessee has been made through this account. R. B. Global Pte. Ltd., Singapore was incorporated by the assessee at Singapore and he held most of the shares of that company and also acted as director of that company in the initial y....
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....en 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 have gone from India to foreign bank A/c. without any genuine imports. A.O. has also jumped to the conclusion that all the Indian entities doing transaction with R. B. Global Pte. Ltd., Singapore are controlled by the appellant and appellant in connivance with proprietors of such Indian entities, has siphoned off his undisclosed funds to the bank A/c. of R. B. Global Pte. Ltd., Singapore. In the assessment order, A.O. has pointed out certain discrepancies regarding addresses of some of the proprietorship concerns. Further, there was no compliance from most of these concerns to summons u/s.131. But these facts alone cannot establish that defaulting concerns are controlled by the assessee. Most of the receipts in the Bank A/c. of such concerns are through RTGS and cheques. A.O. should have made enquiries to establish fund trail of these concerns before arriving at any conclusion. Most of these concerns have been regularly filing thei....
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....id 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- (a) the income from a source located outside India, which has not been disclosed in the return of income furnished within the time specified in Explanation 2 to sub-section (1) or under subsection (4) or sub-section (5) of section 139 of the Income-tax Act; (b) the income, from a source located outside India, in respect of which a return is required to be furnished under section 139 of the Income-tax Act but no return of income has been furnished within the time specified in Explanation 2 to sub-section (1) or under sub-section (4) or sub-section (5) of section 139 of the said Act; and (c) the value of an undisclosed asset located outside India. (2) Notwithstanding anything contained in sub-section (1), any variation made in the income from a source outside India in the assessment or reassessment of the total income of any previous year, of the assessee under the Income-tax Act in accordance with the provisions of section 29 to section 43C or sect....
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....iling 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 in INR 7,08,47,050 from 2013 to 2019 and had paid total income tax in Singapore at Rs. 82,53,263/-. Though there is a mistake at the end of the assessee that he being a resident of India should have declared global income in his income tax return in India, but apart from not disclosing the global income in the return, sufficient details have been filed to prove that taxes have been paid in the country where salary was earned and there is no prejudice caused to the revenue in terms of Double Taxation Avoidance Agreement (DTAA) with Singapore. We thus note that for the alleged period, income earned by the RBGPL as well as the income received by the assessee from RBGPL has been disclosed with the authorities in the country, where it is earned and due taxes have been paid. 25. Now coming to the part of credits in the account with SBI, Singapore in which funds were remitted by the assessee for making investment towards purchasing of equity shares in RBGPL. The details of such foreign remittances made to RBGPL in t....
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....ource 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 the income in the income tax return and has not opted for making declaration in the window provided under the Act. But barring these errors, so far as the issue as to whether the investment made abroad in the equity capital of RBGPL by the assessee is explained, we are of the view that the same does not fall in the category of undisclosed foreign income and assets as defined in section 2(11) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and also does not fall in the category of any "undisclosed foreign income and asset" located outside India as defined in Section 2(12) of the Black Money Act as complete explanation to our satisfaction have been filed by the assessee and the documents in support thereof are as follows:- Nature of Documents ITR Acknowledgement and Income Tax Return for the A.Y.: 2011-2012 A.O. & CIT(A) at pages 1 to 22 ITR Acknowledgement and Income Tax Return for the A.Y.: 2012-2013 A.O. & CIT(A) at pages 23 to 46 ITR Acknowledgement and Inc....
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....rom 01.01.2014 to 31.12.2014) A.O. &CIT(A) at pages 156 Retraction Affidavit of Shri Akhilesh Singh filed before First Class Magistrate (Sworn on 21.02.2022) A.O. & CIT(A) at pages 157 to 159 Retraction Affidavit of Shri Sashi Bhushan Singh filed before First Class Magistrate (Sworn on 24.02.2022) A.O. &CIT(A) at pages 160 to 161 Retraction Affidavit of Shri Vivek Kumar Singh filed before First Class Magistrate (Sworn on 24.02.2022) A.O. &CIT(A) at pages 162 to 163 Extract of Email application to obtain certified copies of the order sheet in course of proceedings u/s 10(3) of the Black Money Act for A.Y.: 2020- 2021 AO & CIT(A) at pages 164 to 165 27. From going through the above details of the source of funds available with the assessee for making investment in equity of RBGPL during the period 2011 to 2015, we are satisfied with the finding of ld. CIT(Appeals) that proper explanation has been given about the source of funds applied for making investment in the equity shares of RBGPL and the same have been channelized through the authorized banks and information about the sender and receiver have been provided by the assessee at the time of making payment. There....
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....e A.O. & CIT(A) at pages 143 to 184 9. Ledger Account of Companies (based out of India) in the books of R B Global PTE Ltd - reflecting turnover transactions from 01.06.2011 to 31.12.2011 A.O. & CIT(A) at pages 185 to 191 10. Copies of Invoices and Bills of Lading of all transactions of R B Global PTE Ltd (from 01 06 2011 to 1.12.2011) A.O. &CIT(A) 192 to 261 11. Ledger Account of Companies (based out of India) in the books of R B Global PTE Ltd - reflecting turnover transactions from 01.01.2012 to 31.12.2012 A.O. & CIT(A) 262 to 267 12. Copies of invoices and bills of lading of all transaction of RB Global PTE Ltd. (from 1.1.2012 to 31.12.2012 AO & CIT(A) at pages 268 to 331 13. Ledger Account of Companies (based out of India) in the books of R B Global PTE Ltd - reflecting turnover transactions from 01.01.2013 to 31.12.2013. A.O. &CIT(A) at pages 332 to 350 14. Copies of Invoices and Bills of Lading of all transactions of R B Global PTE Ltd (from 01 01 2013 to 31.12.2013. A.O. & CIT(A) 351 to 444 15. Ledger Account of Companies (based out of India) in the books of R B Global PTE Ltd - reflecting t....
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....mited Companies/Limited Companies, who are having their Bank accounts in India and disclosing the transaction in the regular returns under VAT/GST/Income Tax and are assessed to tax. We, therefore, find that the ld. Assessing Officer erred in only focusing up the credit entries in the Bank account with SBI, Singapore and failed to take note of the goods received against such remittances and which have entered into the regular business cycles of the various business concerns. The ld. Assessing Officer also erred to take note of the fact that RBGPL, Singapore is not only exporting goods in India to the alleged concerns but other concerns in India and abroad also. Further importing of goods from other countries is a part of regular business activity. The ld. CIT(Appeals) has taken note of this aspect and on finding that it is not a case of creating asset/earning income outside India through undisclosed sources but it is merely a commercial transaction between two concerns of which one is in India and one is based on abroad has given relief to assessee. We would like to observe that the purpose of Black Money Act, 2015 is mainly to bring those cases into light where resident-assessees ....
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....Hon'ble Madras High Court squarely applies on the facts of the instant case because the assessee has also proved that the source of investment made outside India are from the disclosed source in India. We would further like to take note of the clarification on tax compliance for undisclosed foreign income and asset issued by Central Board of Direct Taxes vide Circular No. 13 of 2015 dated 6th July, 2015 and specifically take note of Questions No. 17 and 18 and their answers referred in this Circular:- 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 i....