TaxTMI 
TaxTMI 
2025 (7) TMI 1157
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....thout 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 facts and circumstances of the case and in law, the Ld. CIT(A), has erred in upholding: a tha....
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....iability. 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 relation to HBS Account. 17. Under the facts and circumstances of the case and in law, Ld. CIT(A) erred in holding that the Appellant was required to file declaration under Chapter VI of the Black Money (Undisclosed For....
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....o. 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 wherein he has contended that DIN was generated and DIN generated Assessment Order was also given to the Assessee. 7. We have heard rival submissions, and it is noted that that Ld. CIT(A) has adjudicated this ground in Para No. 14 of its Order by giving following findings: "14. In the groun....
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....liance 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 that various case laws relied upon by the Assessee are clearly distinguishable from the case in hand, thus, cannot be applied. Moreover, none of the parties has brough on our record, the said approval for our examination, therefore, merely on the ground that approval is given on same day, the Assessment Order cannot be held invalid. ....
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....ter, 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 objection with respect to wrong invocation of the provisions of section 153A of the Act and also contended that the additions were wrongly made in hands of the Assessee merely on the basis of bank accounts or information in relating to accounts, wherein she is just authorized signatory and entire asset/income belong to BWR Trust, which is family tr....
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....s 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 22.4 Pg 119 2 Interest and Dividend Income 1,41,97,602 Para 5.18 Pg 28 Reversal of certain entries in Bank A/c and deductions 1,22,65,056 19,32,546 Para 26.3.2(c) Pg 137 3 Portfolio assets 80,10,38,714 Para 5.19 Pg 28-29 1. Difference amount of Rs. 3,62,82,410 being market value to cost value 2. Net value of assets by granting set off against the negative current A/c balance 22,55,....
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....ed 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 Million, which he was obliged to contribute in terms of family settlement deed dated 23.08.1995. The said company utilized the contributions received for making investment of trust fund, which is verifiable from bank account statement and other verification trail submitted in the form of chart in written synopsis. 30. The Ld. AR has further argued in the written submissions as under: Appellant submitted various documentary evidence including trust deed of BWR Trust, its incorporation documents and other supporting documents es....
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....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 from the BWR Trust at Pg 180 of PB Vol 1. In the BWR Trust Financials also for the year end 31.12.2002, the loan advanced to the Vibrant Properties Ltd is shown duly as loans receivable at Pg 6 of PB Vol 4. Thus, the source of funds initially received in Vibrant properties Limited is thus established and proved and clearly verifiable from the documentary evidences placed on record. 5. Later in year 2013, the trust funds were transferred to the Hinduja Bank A/c from the BNP Paribas Bank A/c held by the Vibrant properties Ltd. (which fact is also verifiable from relevant bank entries as in the following verification chart: S.No. BNP PARIBAS WEALTH MANAGEM....
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....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. 57,54,66,185 128-129 10. The Ld. AO made the addition of Rs. 80,10,38,714, from which the CIT(A) confirmed the deletion of Rs. 3,62,82,410 being the difference arising on account of market valuation as against cost& other deletion by reducing the difference amount of liability current amount and taking the net value of assets of USD 30,63,193 amounting to Rs. 18,92,90,047 which reduced the addition to Rs. 57,54,66,185. 11. The amounts of gross assets/investments and current account negative balance and net value of assets is clearly verifiable from the BWR Trust Financial statements and the CIT(A) has taken up the figures duly according to the books of accounts maintained by the Trust, thus there is no dispute over the source of money and the funds transferred are genuine. 12. The aforesaid verification is also being explained fr....
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....nth" 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 funds and has claimed its ownership through their official documents where the same has been duly reflected, thus there arises no dispute over the fact that the same do not belong to Assessee/Appellant. The Foreign Bank Account belongs to the BWR Family Trust, for which she was merely an authorized signatory. 16. The appellant has provided sufficient documentary and supporting evidences including trust deeds, incorporation documents of Vibrant Properties Limited, family settlement deeds, Deed of change in trustees, Confirmation from Dr. KK Jain, financial statements of BWR Trust and Vibrant Properties Ltd. including Bank Statements and Ledgers etc. to support the claim that the funds belonged to the BWR Trust, which is managed and controlled by non-resident trustees which was not at all considered by the Ld. AO and was termed as unreliable and not genuine without even conducting proper inquiry or examination of the documents. Reliance is placed on the case of Principal Commissioner of Income-tax v. Sreeleathers....
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....tify the invocation of Section 69A. A foundational requirement for applying this provision is that the assessee must be conclusively established as the owner of the money, bullion, jewellery, or other valuable articles in question. In the present case, the appellant has consistently disclaimed ownership of the said Bank Account and has provided a plausible explanation regarding their source and possession. Once such a denial is made, the burden squarely shifts to the Revenue to establish ownership with credible evidence having a nexus to the appellant. The AO has not brought any material on record to substantiate that the appellant was the actual owner of the alleged unexplained assets. The inference drawn by the AO, based merely on possession, is legally untenable. It is affirmed in subsequent judicial precedents, wherein it has been held that possession alone is insufficient to invoke Section 69A unless ownership is first established. Accordingly, the addition made is without proper foundation and deserves to be deleted. In support of the above contentions the reliance is placed on the following judicial precedents: * Mangilal Agarwal v. Assistant Commissioner of Income-tax [20....
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....n/material found in case of another person. The Ld. AR has further argued that in such a situation the better course available with Assessing Officer is to follow the procedure prescribed u/s 153C of the Act, subject to fulfillment of conditions specified therein, which admittedly has not been followed. 35. The Ld. AR has vehemently objected and supported the legal position that once the assessment proceedings are not pending on the date of search and there is no incriminating material found during search, the completed assessment proceedings could not be disturbed. He has placed reliance on judgment in the case of CIT Vs Kabul Chawla 380 ITR 573 (Del) and also cited reliance on following judicial precedents :- PCIT, CENTRAL IT, NEW DELHI V. MEETA GUTGUTIA [2018] 96 TAXMANN.COM 468 (SC) PCIT, DELHI 2 V. BLUEBIRD SOFTWARE P. LTD. [2020] 119 TAXMANN.COM 348 (SC) COMMISSIONER OF INCOME-TAX-20 V. DEEPAK KUMAR AGARWAL [2017] 398 ITR 586 (BOMBAY-HC) Jai Steel (India) Vs Astt Commissioner of Income Tax (2013) 259 CTR (Raj) 281. M/s Jadau Jewellers & Manufacturers Pvt. Ltd., B-1, Trimurti Circle, Govind Marg, Jaipur in ITA No. 686/JP/2014 dated 14.12.2015 ALL CARGO GLOBAL LOGI....
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.... is not under dispute and it is also not disputed that no assessment is pending for year under consideration at the time of search. 38. On the contrary, the Ld. DR has argued that search was there in the case of the Assessee and accordingly, in view of the specific section 153A of the Act, the AO was justified in issuing notice u/s 153A of the Act to Assessee calling upon filing of the return of income u/s 153A of the Act within 30 days. The Ld. DR has argued that since jurisdiction u/s 153A of the Act was validly assumed therefore, the AO was justified in making addition in respect of information/material gathered during post search proceeding based on letter written which was found in pen drive/laptop of Mr. Nikhil Jain. He has further relied upon the findings of the CIT(A) in Para No. 16/16.1 of its Order and supported his findings by relying upon the judgment of Principal Commissioner of Income-tax v. Mehndipur Balaji [2023] 147 taxmann.com 201 (Allahabad) 447 ITR 517(Allahbad). 39. The Bench has considered the rival submissions, material placed on record including written submissions, synopsis, judicial precedents referred by both parties. 40. It is noted that there was fam....
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....l premises located at 6 Technocrate Society, Moti Mangri Scheme, Udaipur by Income Tax department. At the time of search, I was not present at the search premise, however, my statement was recorded later u/s 131 of the Act during post search proceedings. During the course of search, some Cash & Jewellery were found which was explained out of the available sources declared by me. However, I have not yet carried out reconciliation of various items of assets as it takes time to obtain copies of relevant documents / information. In addition to this, some other information/documents etc. are also required to cross verify the details/information found so as to make full and accurate disclosure. I have already taken necessary steps to gather the said information in this regard, however, soliciting, compiling and preparation of such details/information would take some time please. I further state that the best of my memory there was a bank account with M/s Hinduja Bank in Geneva which was opened with funds from a foreign Trust. Thereafter, with the funds available in the said bank account, An investment was made in company namely Shanvi International FZC in free trade zone, in. Dubai, of....
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....nt time so as to bring on record full information. It is my desire & endeavor to fully cooperate with the tax department. I also hope that your goodself will appreciate my bonafide intention and cooperation. I intend to fully cooperate with your department now as well as later. I am filling these returns in good faith and reserve all my rights available to me under the law to protect myself. Thanking You [InduBala] 41. From the Trust Deed, i.e. Deed of Instrument available at PB page no. 81-105 of PB Vol.1, it is evident that family Trust (BWR Trust) was created on 22.02.2000 itself (PB No. 101, Vol. 1) with corporate Trustees being BNP Jersy Trust Corporation Limited and BNP Private Bank & Trust Cayman Ltd. holding the Trust funds. In the confirmation of Dr Kirti Kumar Jain (Page No. 109 of PB Vol. 1), he has confirmed that he has provided the funds to Trust about USD 7.2 Million. 42. The amount of USD 7.2 Million was credited in the bank accounts of Vibrant Properties Ltd. Jersey Island on 6.03.2000 and 17.11.2000 and is verifiable from page no. 281 and 297 of PB Vol. 2. 43. Vibrant Properties Ltd was incorporated in the year 2000 (page no. 152 of PB Vol. 1) as per the ....
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..... 3. Similarly, opening account credit entry in Hinduja account no. 0011634.001.000.978 is dated 22.07.2013, which is also verifiable from corresponding debit in bank account of Vibrant Properties Limited available at page no. 873 of PB Vol. 3. 46. Considering totality of facts and circumstances, the Bench is of the view that Appellant has demonstrably proved that bank account with Hinduja Bank was opened with the Funds of the Trust and Hinduja bank account and portfolio of various assets maintained in account named Terapanth also belongs to BWR Trust and the said portfolio of assets is duly reflected in the Balance Sheet of BWR Trust as on 31.03.2013. It is also noted that the relevant disclosure of investment made by BWR Trust with Hinduja Bank in portfolio assets at cost is also reflected in notes forming part of the balance sheet available at page no. 116, 123, 130, 137, 144, 151 of PB Vol. 1. 47. We also note that Ld. CIT(A) has itself given the relief of notional gain added by considering market rate as compared to cost of investment. The notional gain of Rs. 3,62,82,410/- has been considered by Ld. CIT(A) and consequential relief has been given by deleting it while arrivin....
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....ee is not the beneficiary of the BWR Trust rather than as per Part C of the BWR Trust instrument of formation available at page no. 101 of PB Vol 1, the issues of first Protector and Settlor are the initial beneficiaries. 52. The Ld. AO as well as Ld. CIT(A) have not controverted the existence of the family settlement deed, BWR Trust, Vibrant Properties Pvt Ltd. The existence of the same is evident from family partition deed, incorporation certificate, MOA and AOA and Trust documents available at page no. 106-108, 152-174, 81-106, 109 of PB Vol. 1. Thus, once the existence of the Trust and source of funds as well as entries in the bank statement reflecting credit therefrom from Vibrant Properties Limited is established by the Assessee, we find substance in the explanation of the Assessee that asset or income in the bank account maintained with Hinduja Bank does not belong to Assessee in her individual capacity and rather of BWR Trust and Assessee is just signatory to the bank account maintained with Hinduja Bank, Switzerland and not even a beneficiary. 53. In view of the aforesaid, addition made u/s 69A of the Act deserves to be deleted as ownership of investment or assets has be....