TaxTMI 
TaxTMI 
2025 (5) TMI 1397
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.... mentioning of USD 200,000 (equivalent to Rs. 1,30,23,210/-) was an asset which was receivable by the assessee in F.Y. 2010-11 but the assessee did not disclose this assets in his ITR of A.Y. 2011-12. The undisclosed foreign assets came to the notice of the AO in F.Y. 2018-19 and the same was assessed to tax in A.Y. 2019-20. 2. Whether on the frets and circumstances of the case and in law, Ld. CIT(A) is correct in deleting the addition of Rs. 8 on account of investment in the share of Innovation Worldwide Limited and ignoring the fact that under provision for reporting the foreign asset or income in Schedule- FA has existed since A.Y. 2012-13 and the assessee should have reported the investment in IWL from A.Y. 2012-13 but the assessee reported since A.Y. 2017-18 subsequent to search on 28.11.2017. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) is correct in ignoring the fact that the assessee was beneficial owner of 5% share in IWL within the meaning of Explanation to section 139(1) of the Act. 4. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) is correct in ignoring the fact that the assessee was c....
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....th the order of the ld. CIT(A), the revenue is in appeal before us. 6. The ld. DR appearing on behalf of the Revenue vehemently argued that the ld. CIT(A) has failed to appreciate that the assessee was holding the share of Hong Kong Company and was beneficial owner of one debit note of US $ 2 Lakhs. The Ld DR further contended that the assessee has never disclosed these transactions in the Return of Income (ROI) for AY2016-17 and hence they are taxable in the year, when it comes to the notice of the Assessing Officer. The Ld. DR relied upon the order of the Assessing Officer. 7. The ld. Counsel for the assessee while supporting the order of the ld. CIT(A) has pointed that it is a matter of fact that the assessee has disclosed the share holding in the return of income filed for AY 2007-08, when these shares were acquired by the assessee and also in the return of income filed in response to the notice of 153A of the Act. He drawn our attention to the paper book page-3. He further draws the attention of the Bench towards the finding of the prosecution Court TIS HAZARI in complaint case No.7331/2019, wherein, the learned Court has observed as under: - "In the present cas....
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....9 of the Income Tax Act which stood obliterated and become non-est in view of mandate in (Neeraj Jindal). The argument that the return being filed is an afterthought is also not tenable because in return 31.03.2018 for the A.Y. 2017-8 accused has already declared the asset in schedule FA which was much prior to the issuance of show cause notice dated 11.03.2019 and the authority given to the complainant dated 16.04.2018. From the admitted facts on record it is clear that the ingredients of section 50 of the Black Money (UFIA) and Imposition of Tax Act, 2015 are not attracted in the present case and the accused Himanshu Gupta, S/o Shri Ganesh Chand Gupta is discharged" 6.2 In respect of the disclosure of said shareholding in IWL in ITR for A. Y. 2007-08, it was further observed in the above order as follows: 15. From the bare perusal of the said provision, it is clear that the legislature has used the expression "Willfully fails". It is admitted position in this case that the accused has self-declared the fact of holding of 5% share (i.e. 01 share of Rs. 19,790/-) in foreign company WL, Hong Kong in its statement u/s. 132(4) of the Income Tax Act Ex. CW-1/C. A bare....
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....gn Asset as defined in Section 2(11) of the BMA, which reads as follows: "Undisclosed asset located outside India" 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 Assessing Officer unsatisfactory" 6.4 From the above definition, an asset is considered as undisclosed foreign asset only if the source of investment therein is not satisfactorily explained. However, as held in the order quoted above, the source of investment in share of IWL is adequately explained. Therefore, the addition of Rs. 8 on account of value of the share of IWL is not tenable and is hereby deleted. 6.5 Regarding the further contention that the AO has ignored the universally acceptable concept of a corporate entity being a separate legal entity separate from its shareholders, and which can hold assets and earn income as per its objects, and that the said foreign company is subject to governance and assessment laws as a separate entity, and furthe....