TaxTMI 
TaxTMI 
2025 (7) TMI 1157
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....tances of the case and in law, Ld. CIT(A)'s Order is without application of mind, perverse and untenable in law which requires to be set aside. 3. Under the facts and the circumstances of the case and in law, Ld. CIT(A) erred in : a. upholding that of Assessment Order being without DIN. b. dismissing the ground on the basis that the Assessing Officer ("A.O." in short) in Remand Report has provided a copy of the front page of DIN generated order ignoring the fact that a look of the said DIN generated Order would reveal an order different from the Assessment Order passed through manual to system functionality in ITBA with vital omissions in the said impugned DIN generated Order. 4. Under the facts and the circumstances of the case and in law, Ld. CIT(A) has erred in holding that the prior approval given vide letter No.700 dated 30/09/2021 under Section 153 D of the Act given by Ld. Additional Commissioner of Income Tax, Central Range, Udaipur to the Assessment Order dated 30/09/2021 does not suffer from non-application of mind, more so in a situation when there are two different Assessment Orders with different contents. 5. Under the f....
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....ional FZC UAE was given by the Appellant from HBS account and was given on her instructions as the bank account was controlled by the Appellant and name of the BWR Trust is used to avoid tax liability. 13. Under the facts and circumstances of the case and in law, Ld. CIT(A) erred in holding that the Bank itself is not a Trustee but service provider and Appellant herself is only beneficiary for credit entries and income earned which fact is contrary to facts on record. 14. Under the facts and circumstances of the case and in law, Ld. CIT(A) erred in law in holding that the claim of the appellant that initial fund was given to BWR Trust by Dr. K. K. Jain, her brother-in-law has no evidence which finding is again contrary to facts on record. 15. Under the facts and circumstances of the case and in law, Ld. CIT(A) erred in holding that the Appellant in her Return of Income filed under Section 153 A of the Act, herself claimed as owner of the HBS Account ignoring the duly verified notes appended to the said return of income. 16. Under the facts and circumstances of the case and in law, Ld. CIT(A) erred in applying the theory of Pith and Substance in r....
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....at the same was issued without document identification number ("DIN") as mandated by CBDT. 5. The Ld. AR for the Appellant has raised technical objections that from the face of the impugned Assessment Order, it is evident that no DIN as mandated by CBDT in its Circular No. 19/2019 [F No. 225/95/2019-ITA.II] dated 14.08.2019 has been indicated. The Ld. AR of the assessee has asserted that in terms of Para No. 3 of the said Circular the manual issuance of the Assessment Order is permitted only in certain exceptions only and there is no case made out by the department that Assessee case falls in any of the aforesaid exception like PAN not available, wrong PAN, delay in PAN migration etc .. Thus, in view of the Para No. 4 of the said circular any communication/order not in conformity with the Para No.2 of the said circular, is treated as invalid and deemed to have never been issued/passed. 6. The Ld. DR has vehemently objected to this by asserting that Assessment Order in this case was passed through ITBA system through manual to system functionality in ITBA and DIN was also generated as is evident from Para No. 14 of the Ld. CIT(A) Order and also from remand report of the AO whe....
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....o. 106, 107 and 108/Agra /2019 on 06.11.2019 Hon'ble ITAT, Mumbai Bench in the case of Smt. Shree Lekha Damani vs. DCIT reported in 173 TTJ 332 (Mum.) Hon'ble ITAT Mumbai Bench in case of I.T.A. No. 6656/Mum/2017 Arch Pharmalabs Ltd & Arch Impex P. Ltd. 13. On the contrary, the Ld. DR has objected and placed reliance on Order of Ld. CIT(A) at para no. 100-101. He has further asserted that assessment proceedings commenced from 03.02.2020 with issuance of notice u/s 153A of the Act and sufficient time has been taken by AO in passing the Assessment Order on 30.09.2021 and during this period, such kind of central circle cases are always discussed and apprised with respective higher authorities on regular basis. Thus, arguments raised by Ld. AR are not sufficient to prove non-application of mind. 14. We have considered the rival submission and material placed on record. Bench is of the view that except for the allegation of approval being given on same day and Assessment Order being passed without DIN, there are no other objections by the Assessee. The Assessment Order has been upheld on the grounds of DIN as per our decision supra. Further, Bench is of the view ....
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....and in her statement recorded u/s 131 of the Act, assessee has stated that she has no bank account or property in any foreign country. However, department proceeded further with inquiries and obtaining of information by FT & TR Division and post two references certain bank accounts statements from Hinduja Bank were made available. 20. Thereafter, based on this information available from FT & TR post search proceedings, the AO proceeded to make assessment on the basis of these bank statements being bank accounts maintained with Hinduja Bank, Switzerland. During the assessment proceedings, the Assessee denied the ownership of these bank statements or portfolio statement or any asset outside India or in any foreign country, however, the AO made the addition of entire portfolio with Hinduja Bank as on 31.12.2013 in the hands of the Assessee at Rs. 20,07,18,875/- vide Para No. 5.15.3 of Assessment order and Rs. 1,41,97,602/- in respect of coupon or dividend or interest income vide Para No. 5.18.1 of Assessment Order and Rs. 80,10,38,714/-u/s 69/69A vide Para No. 5.19.1 and 5.20 of Assessment Order. 21. The Assessee assailed the Assessment Order before CIT(A) and raised the legal o....
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....hus various documentary evidence filed by Assessee are not reliable. 25. The Assessee challenged the Assessment Order before Ld. CIT(A) and this issue of various additions made in individual hands has been dealt by Ld. CIT(A) in para-No. 19 at page no 109-110, Para No. 22, 23, 24, 25, 26, 26.3.2 at page no. 106-137 of CIT(A) Order. Though the CIT(A) has accepted the version of the Assessing Officer that bank accounts/portfolio investment/statements belong to the Assessee. However, Ld. CIT(A) has granted partial relief to the extent of Rs. 43,85,56,389/-, on account of duplicity/multiplicity or double addition, claim of notional gain being assessed in the hands of the Assessee. Accordingly, Ld. CIT(A) has granted relief as per the information in the following chart submitted by Assessee, which has been perused; Summary of Additions made/Relief granted by CIT(A) Addition made the AO Status as per CIT(A) S.No Basis Amount (Rs.) AO reference Basis of Grant of Relief by CIT(A) Addition Deleted Addition Sustained CIT Order Pg No. 1 Credit entries in HBS A/c 20,07,18,875 Para 5.15 Pg. 23-24 Double addition 20,07,18,875 0 Para 22.....
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....nt would contribute USD 12 Million or Equivalent to her family. The Ld. AR has drawn our attention to written submission placed on record and which are also found mentioned at page no. 53-56 of CIT(A) Order. 28. The Ld. AR has submitted that family settlement was there in the family of Assessee and other family members, whereby Mr. K. K. Jain was obliged to provide funds to the family of Assessee., Pursuant to the said family settlement deed dated 23.08.1995, a Trust named BWR Trust was formed with instrument of Trust Deed dated 22.02.2000 available at page no. 81-105 of PB Vol. 1, wherein Assessee brother-in-law was protector, and Assessee was named as Settlor of Trust. The said Trust utilized the investment company, named Vibrant Properties Limited incorporated in the year 2000, in which BWR Trust was only shareholder for making investment of the trust funds. The said fact is verifiable from BWR Trust Documents as well as Vibrant Properties Ltd first Balance sheet as on 31.12.2002 available at page no. 175-180 of PB Vol. 1 and page no. 281, 297 of PB Vol. 2. 29. The Ld. AR has further submitted that it is the said Company, wherein Mr. K K Jain contributed about USD 7.2 Mill....
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....ed. 3. The initial funds poured in the trust fund by Mr. KK Jain of about USD 7.2 million approximately as a result out of family settlement deed was transferred by him in the account of the BNP Paribas held by the Vibrant Company Ltd under the control of trust for the purpose of investment. The same has been affirmed in the Confirmation of Mr. KK Jain at Pg 109 of the PB Vol 1. The entries in the bank statement of BNP Paribas are verifiable from Pg No. 281 & 297 of PB Volume 2. Thus, the source of the fund in the BNP Paribas Bank A/c held by the Vibrant Properties Ltd is established and also the Ld. AO has not pointed out any infirmity in the source of the funds held by the Vibrant properties Ltd. BNP Paribas S. No Page No. Date of Transaction Description Value as on Date Amount US Dollars 1 281 (PB Vol 2) 06.03.2000 Payment Order 06.03.2000 37,26,191.17 2 297 (PB Vol 2) 27.11.2000 Payment Order 27.11.2000 35,41,071.36 Total Amount Rs. 72,67,262 (Approx 7.2 million) 4. The funds initially poured in are also duly reflected in the financial statements of the Vibrant Properties Ltd as a loan payable f....
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....nds being belonging to Trust - BWR Trust is duly established. Thus, no addition u/s 69A in the hands of the Appellant is justified. 9. The Ld. AO made the addition of USD 1,29,62,840 i.e. Rs. 80,10,38,714 u/s 69 made on account of the portfolio assets/investments. The CIT(A) confirmed the deletion of USD 30,63,193 amounting to Rs. 18,92,90,047 on account of reducing the current account balance (liability) and taking the value of net amount of assets and also deleted the addition of Rs. 3,62,82,410 being difference arising on account of market valuation as against cost. Thus, the addition in INR was reduced to Rs. 57,54,66,185 by the Ld. CIT(A) which in terms of USD amounts to $ 93,12,504 which is verifiable from the BWR Trust Financials while holds the HBS A/c. BWR Trust Financials - 31.12.2013 CIT(A) Order Particulars Amount PB Pg Reference Particulars Amount (1 USD = 61.795) CIT Order Reference Net Current Assets 93,12,504 113 CIT(A) has deleted the addition of 3,62,82,410 being market value to cost value & has taken net value of assets and difference amount of USD 30,63,193 amounting to Rs. 18,92,90,047 deleted. 57,54,66,185 128....
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.... Statements Particulars Amount PB Pg Reference Particulars Amount PB Pg Reference Current Account Balance -30,63,193.58 113 Total CURRENT ACCOUNT Balance -30,63,193.58 266 13. The Ld. Assessing officer has alleged the HBS Bank Account to be belonging to Assessee on the basis of mere presumption and has not validated any facts and there was no questioning done from Mr. Nikhil Jain from whose premises the alleged incriminating material was found and not even from the corporate trustees and the managing signatories of the holding BWR Trust. The notes to returns filed by the assessee during the course of assessment proceedings were not at all considered by the Ld. AO and not even no basis was given as to how and why the explanation given by the appellant was not found sufficient. 14. Therefore, the allegations levelled up by the Ld. AO that the BWR Trust owned and operated foreign bank account with Hinduja Bank, Switzerland, under the code name "Tera Panth" belongs to the appellant is clearly rebutted from documentary evidences placed on record. 15. The BWR Trust ("Family trust") is the real and beneficial owner of the fund....
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....issued by the assessing officer under section 133(6) of the Act to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the assessing officer and there is no discussion on this aspect. Thus, we find that the tribunal rightly dismissed the appeal filed by the revenue." 17. Further, the Reliance is placed on the case of Most Rev Dr. Joseph Marthoma v. ITO [2015] 60 taxmann.com 172 (Cochin-Trib.) wherein it has held that the monies in bank account held by the assessee in the fiduciary capacity of trust cannot be held to be unexplained u/s 69A in his hands. (Reference is further invited to written submissions placed before CIT(A) at Pg W.S 49 of PB Vol 1 at Para No. 96) 18. The Ld. AO has not discharged the burden of proof as to how the unexplained income or investment belongs to the appellant. The mere fact that certain valuables were found does not justify the invocation of Section 69A. A foundational requirement for applying this provision is that the assessee must be conclusively established as ....
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....criminating material was found for alleged unaccounted asset or income in the hands of the Assessee and the very basis of additions in the hands of the Assessee is mere word file/draft letter found from laptop/pen drive of Mr. Nikhil Jain who is nowhere connected to the Assessee. The addition for bank balances or portfolio statement belonging to Trust is also based on information received post search proceedings and no such bank account statements/existence thereof were found during search in the case of the Assessee. 34. The Ld. AR has drawn our attention to initial para of the Assessment Order, wherein it is mentioned that search was in case of GBH American hospital group and Ld. AO directly issued notice u/s 153A of the Act whereas the basis of entire impugned assessment is information/bank statement or portfolio statements obtained post search proceedings. Thus, he argued that Ld. AO was not justified to issue notice u/s 153A of the Act, when the basis of addition is not the incriminating material found during search in case of the Assessee, but the third-party information/material found in case of another person. The Ld. AR has further argued that in such a situation the be....
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.... Apex Court in the case PCIT Central-3 V/s Abhisar Buildwell (P.) Ltd [2023] 149 taxmann.com 399 (SC) and drawn our attention to the relevant para of the said judgment wherein the law is laid down that in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during search under section 132 or requisition under section 132A of the Act, 1961 in the case of the assessee. 37. The Ld. AR further drew our attention to the fact that the issuance of notice u/s 153A of the Act has been confirmed by Ld. CIT( A) merely on the ground that search was conducted in the case of the Assessee and admittedly there is no adverse finding on the position that assessment for the year under consideration was not pending and duly completed before the date of search in case of the Assessee. He has further asserted that absence of incriminating material found during the search in case of the Assessee is not under dispute ....
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.... I, Smt. InduBala Porwal, aged about 71 years, having PAN AEKPP3897E and residing at 6, Technocrate Society, Moti Mangri Scheme, Udaipur. I am regularly filing my return of Income with the income tax department. I am having income from House Property, some Interest income from Bank accounts as well as some income from certain investments and other sources. The said income and sources have been declared by me in returns of income filed with Income Tax department. I am an old lady with multiple medical problems including heart condition, diabetes, rheumatoid arthritis, osteoarthritis, thyroid condition and hyperlipidemia. My husband died in 1994 leaving behind four kids. I have two married sons and two married daughters. Since I am not very educated, I have been making my investments and other decisions based on the - suggestions/advice from my family members and friends or through informal advisors/ Investment agents. I live with my elder son who is mentally challenged person since his birth. My younger son has lived away from me. There was a search on 10.01.2019 at offices of the GBH American Hospital and residential premises of Directors including my res....
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....e return u/s 153A is expiring, I am constrained to file my returns of income within the prescribed time period without incorporating the details/information of any such income or transactions. Needless to mention that no documents/ material was found during the search from my premises. Though primary disclosure of facts relevant for the purpose of return of income is made by me by way of these notes to return of income, however, in the absence of complete details/documents, relevant columns/tables of income tax return form could be filed only after such details/information/documents are received and necessary working basis such information/documents is made. After receipt of complete details, if required, I will file further details to reflect accurate position for the captioned assessment years for tax assessment purposes. I am in the process of getting full bank statement and related details for the purpose of ascertaining impact of such details on my returns and intimate your goodself accordingly as soon as possible for tax assessment purpose. I sincerely hope that your goodself will understand my position / Medical condition, limitation as we....
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....ompany Ltd, which entry is duly verified from relevant bank statement of Vibrant Properties Ltd (PB No. 893, 875 Vol 3), these credits are apparently visible in the bank statement, which are extracted here for sake of ready reference: 45. Similarly, the portfolio statements (PB No. 261-265 PB Vol. 1) as on 31.12.2013 reflects total value of various assets at USD 12375698.34, which is reported to be the value of asset at cost with Hinduja Bank and current account liability at USD 3063193.58. The said portfolio balance is duly reflected in the balance sheet of BWR Trust (PB No. 113 of Vol. I) and statement of assets and portfolio statements available at page no. 261-265 and 266-270 of PB Vol. 1. Thus, it is evident that investment is also owned by BWR Trust. Moreover, as we have already noted above that first credit in the bank account statement named "TeraPanth" has come from Vibrant Properties Ltd on 19.07.2013, which is the date of account opening. The relevant entry of bank credit on 19.07.2013 is found verified from Page No. 893 of PB Vol 3 and further credit at page no. 891 of PB Vol. 3, which matches and gets verified from corresponding debit in relevant bank account statem....
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....served that the authorities below merely brushed aside the aforesaid documentary evidences without assigning any cogent reasons and merely on the pretext of having information from F T & TR division, no inquiries have been made. Nothing has been brought on record in rebuttal of documentary evidence brought by the Appellant on record. 50. It is trite law if the AO is not satisfied with any documentary evidence, then he is free to conduct necessary inquiries, however, Ld. AO as well Ld. CIT(A) as placed one sided reliance on ITR disclosure as contained in form of the ITR, whereas the factual position and primary disclosure made in the notes to return of income (PB No. 23-24 of PB Vol 1) has not been considered at all, wherein the Assessee has duly explained that she was signatory in the bank accounts only and source of funds emanated from Trust Funds, which were contributed by Mr. Kirit Kumar Jain in terms of deed of family settlement and partition deed available at page no. 106-108 of PB Vol. 1. The declaration of Mr. KK jain of having contributed the funds to the trust remains uncontroverted. 51. It is also noted that no documentary evidence has been brought on record to esta....
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....laptop of Mr Nikhil Jain. Further, it is also noted that there is no statement or fact brought on record that such draft letter/word file was stated to be belonging to Assessee by Mr. Nikhil Jain. Even in post search proceedings, statements of Assessee were recorded u/s 131 of the Act but there was no reference to any material found from her possession during search in case of Assessee herself. The assessment for year under consideration was not pending at the date of search and well before the same, it got completed and attained finality. 58. The Ld. CIT(A) has upheld the invocation of section 153A of the Act on the premise that there was a search in case of the Assessee herself. However, the factual foundation of absence of discovery of incriminating material found during search in case of the Assessee has been completely overlooked. Thus, Bench is of the view that resort to Section 153A without there being any incriminating material for year under consideration, is not justified merely on the ground that there was search u/s 132 of the Act in case of the Assessee. 59. Thus, following the law laid down by the Hon'ble Apex Court in PCIT Central-3 V/s Abhisar Buildwell (P....
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.... 377.50 110-1147961 04/07/2013 TRANSFER TO 8135220 05/07/2013 4,566.66 100-1148000 05/07/2013 SPOT GBP/USD Exchange rate 1.50130000 05/07/2013 28.52 200-0710006 16/07/2013 DIVIDEND 5.000.00 FRANKLIN TI-TEMP QUẢ BO TD-A-QHIS 16/07/2013 160.00 190-045/419 18/07/2013 OTT FVG - 18/07/2013 2.922,495.23 910-1152219 25/07/2013 HANDLING FEE FOR TRANSFER-SP35442 25/07/2013 2,612.12 25/07/2013 OUT OF POCKET FEE-SP35442 25/07/2013 1,008.00 109-1154427 25/07/2013 SPOT USO/GOP Exchange rate 1.54045202 25/07/2013 13.8G 200-0757325 DATE 01/07/2013 01/07/2013 04/07/2013 04/07/2013 04/07/2013 Pg 907 of Vol 3 907 TERAPANTH Name Account Number 0011634.001.000.840 CH5008827001153401840 IBAN Geneva, 08.04.2020 Page 15 / 46 01.07.2013 30.12.2015 Period Date Text Reference Value Date Debit Credit Balance 31.01.2014 SALE (SPOT) 120-926119 31.01.2014 123 380 02 -408 315.64 PARVEST EQUITY BRAZIL FD CAP USD LU0265266980 Executed on :2014/01/28 Rate : 100.11000 Gross Ammount 123565.37 Comminvon 0.00 Brokerage : 000 Federal 52amo -185.35 03.02.2014 COUPONS STATE BANK INDIA 4.125% 12-01.08.17 US....