TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 2207
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....mother. Apart from that assessee has also challenged the assessment order dated 30/03/2015 being barred by limitation. 3. The brief facts qua the issue pertaining to the addition of Rs. 10,50,41,824/- made by the ld. AO by treating the deposits in the foreign bank accounts with HSBC Bank, Geneva of Chagganlal Suchak Family Trust (CSFT) considered as undisclosed income of the assessee are that, assessee is a practicing chartered accountant in whose case, a search u/s. 132(1) was carried out on 10/08/2011 and prior to the search, the Income Tax department was in possession of some information which was in the form of a base note that CSFT had bank accounts in HSBC Bank, Geneva and assessee's name was appearing therein. During the search, it was found that assessee alongwith his wife Mrs. Indira D Thakkar was managing the affairs of the off-shore discretionary trust which had as many as eight bank accounts in HSBC Bank, Geneva which had the balance of US$ 31,29,878/- as on February 2007. Apart from that it was found that a sum of Rs. 57,00,000/- was deposited in the bank account No. 163813 by Mr. Dilip Thakkar, i.e., assessee as karta of Dilip J Thakkar HUF. 4. In response t....
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....or Indian Income. 3 Subsequently SBI had issued 150 RIB's to the applicant Mr Suryakant Suchak on 31st October 1998. 4 The RIB's issued by SBI on 31.10.1998 matured on 01.10.2003 Chagganlal Suchak Family Trust was settled on 24.05.2001. At the time of settlement, no bank account was opened in India. The settlement of Resurgent India Bonds into Chhaganlal Suchak family Trust was already decided at the time of Formation of trust i.e 24th May 2001. As per Para 5 of Trust deed on Pg 3 and Para 10 of Trust deed on Pg 4, Mrs. Kantaben Chagganlal Suchak (wife of Chagganlal Suchak) had already intended that RIB's held by Mr. Suryakant Suchak will form part of trust fund because the funds always belonged her husband Mr. Chagganlal Suchak. Thus, all the maturity proceeds would be automatically dwelled in the trust. The bank account of Chagganlal Suchak Family Trust was opened in HSBC Geneva on 20/102003. These facts form a part of trust deed and are also duly sworn by Mr Suryakant Suchak before Notary Public of London vide his affidavit dated 10.06.2015. 5 Further, the trust had invested maturity proceeds of RIB into various fiduciary deposits and li....
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....Thakkar and his two daughters had also received the benefits. The AO observed that the Trust was a discretionary private trust with all the unlimited powers vested in the hands of the Trustees/Protector to apportion money, to make investment decisions or to increase or decrease the ratio of the benefits to the beneficiaries. The AO thus concluded that the Chagganlal Suchak Family Trust (CSFT) was created by Mr Dilip J. Thakkar in association with his family members and in-laws as a Special Purpose Vehicle to channelize the unaccounted income and park it outside the country in HSBC Bank Geneva. Therefore, the fund parked in CSFT was held to be belonging to Sh. Dilip J. Thakkar and was held to be his income which had not been offered to tax. The peak amount standing for FY 2005- 06 was USD 2361551.79 equivalent to Rs. 10,50,41,824/- which was added to the total income of the assessee for AY 2006-07. 8. The ld. AO has also referred to certain materials found during the course of search which are highlighted in the following manner :- "i) On page No. 134 of Annexure-3 of the loose papers seized from the appellant's residence during search, Smt. Indira D. Thakkar is ment....
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....B) in 2003 from Sh. Chagganlal M Suchak and Chagganlal Suchak Family Trust (CSFT) (xi) Page No. 174 of Annexure A-3 of the loose papers seized from the premises of Sh. Dilip J-Thakkur show certain transactions of 1 million sterling pounds between Chagganlal Suchak Family Trust (CSFT) and SCS Family Trust (SCSFT), in which Sh. Dilip J Thakkar and Smt. Indira D Thakkar are trustees (xii) Page No. 33 to 42 of Annexure A-1 show the active involvement of Sh. Dilip J Thakkar and Smt. Indira D Thakkar in the affairs of SCS Family Trust (SCSFT), which in turn received benefits from Chagganial Suchak Family Trust (CSFT) (xiii) Page No. 25 of Annexure A-2 of the loose papers seized from the premises of Sh Dilip J Thakkar is a resolution passed during the meeting of the trustees of Chaggarilal Suchak Family Trust (CSF T) on 21/ 10/2004 signed by Sh. Dilip J Thakkar and Smt. Indira D Thakkar for opening a new bank account with HSBC, Geneva in place of the existing account No. 13280 (xiv) Page 33 to 42 of Annexure A-1 are the Trust Account mandate for opening the account of SCS Family Trust (SCSFT) with HSBC Private Bank-(Suisse) Statutory Auditors Hong Kong ....
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....ar 5090174140 15.7. The following information also appeared in the base documents received from DGIT (Inv) Mumbai: i. That the name of the assessee Sh. Dilip J Thakkar is mentioned in the document. ii. Address- That the name of the assessee is appearing on this document along with his residential address. iii. That the name of assessee is appearing in the name of "Nom du profit client" as DJT/IDT as Trustee of Chagganlal Suchak Family Trust (CSFT). iv. That in the said documents in the heading "Lien personnel/profit client" - it is mentioned as account Holder and details "du lien" as trustee. V. That in the said document Sh. Suryakant Suchak, Sh. Madhu Suchak & Sh. Shirish Suchak is mentioned as Attorney in the subsequent pages in profiles clients concerns. vi. That in the said document the assessee Sh. Dilip J Thakkar is mentioned as beneficial owner/account holder in profit clients concerns. 10. Thus, AO concluded the fact that assessee is maintaining foreign bank account in HSBC Bank Geneva, Switzerland not only emerged during the course of search but also corroborated with the base documents received from the ....
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....ot been received till date. However information from HSBC Bank Singapore in case of SCS Family Trust (SCSFT) has been received, which will be discussed in upcoming Para. 15.15 The assessee's contention that he is not the account holder and that he and his family members have not derived any benefit from the above bank account and that the account was opened by his in lows in the name of Chagganlal Suchak Family Trust (CSFT) for the benefits of his children and grandchildren and he and his wife role is that of a protector/ author and signatory? Trustee so that the distribution proceeds of the same is done equitably and fairly. The contention of the assessee is not acceptable on the following grounds as already discussed & again reproduced below. Reasons detailed herein above and reiterated as under 1 That the name of the assessee Sh. Dilip J Thakkar is mentioned in the document. 2 That the name of the assessee is appearing on this document along with his residential address 3 That the name of assessee is appearing in the name of "Nom du profit client as DJTADT as Trustee of Chagganlal Suchak Family Trust (CSFT) 4 That in the said docu....
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....on the following conclusion emerges which clearly rebuts the contentions of the assessee Sh. Dilip J. Thakkar i. That the stamp paper for the creation of Trust ie. Chagganlal Suchak Family Trust (CSFT)was purchased in Mumbai. ii. That the Trust settled by Kantaben C Suchak is having address 256. Upper Palace, Orchandi Sadashiv Nagar Bangalore in. That the trust is settled in India. iv. That as a corollary of point no i, ii & iii, it is clear that the Chagganlal Suchak Family Trinit (CSFT) is an Indian Trust. v. That the assessee Sh. Dilip J Thakkar and his family members have derived financial benefits from the maturity proceeds of RIB. vi. That being an Indian trust Chagganlal Suchak Family Trust (CSFT) has to submit to the laws of the Republic of India which include IT. Act. vii. That being an Indian juridical person the Chagganlal Suchak Family Trust (CSFT) has violated law in not filing its return of income viii That the Chagganlal Suchak Family Trust (CSFT) has not only not filed the return of income but has also not disclosed the foreign bank account in HSBC Bank Geneva ix. That the submission of....
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....1.79 which is added in F.Y. 2005-06 ie. A.Y. 2006-07, the balance amount US $ 768326.49 is added as his undisclosed income for F.Y. 2006-07 Le. the relevant A.Y. 2007-08. Considering the conversion rate of UD S to INR as prevailing in March 2007 at Rs. 44.02/-, the total deposit works out in INR at Rs. 3,38,21,732/-, is added for the A.Y. 2007-08. Penalty u/s 271(1)(c) is initiated separately (Addition For A.Y. 2006-07 INR at Rs. 10,50,41,824/-) 11. Ld. CIT(A) has confirmed the addition made by the ld. AO in his detailed order and all his relevant observations; we shall discuss in the subsequent paragraphs. 12. Before us, the assessee representing himself, first of all submitted that the observations and the finding of the ld.AO are either incorrect or wrong conclusions have been drawn. The ld. AO's certain allegations have been rebutted with reference to certain documents in the following manner :- Page No./ Para Allegation Reply/Remark 55/6.7 1. Page No. 134 of Annexure-3 of the loose papers seized from the residential premises of Sh. Dilip J Thakkar during search, Smt. Indira D. Thakkar is clearly mentioned as one of the principle beneficiary. This....
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.... Annexure A-2 of the loose papers seized from the premises of Sh. Dilip Thakkar shows the Suchak Family's Chart highlighting the interest of Sh. Dilip Thakkar in various concerns of the Suchak family and Chagganlal Suchak Family Trust (CSFT) Page 174 of PB. It shows family chart of Suchak family and the respected entities. Dilip Thakkar is just mentioned as protector and neither Trustee nor Beneficiary. Iv. Page No. 128 to 134 of Annexure A-3 of the loose papers seized from the premises of Sh. Dilip J Thakkar show's details of some financial transactions related to Carlton Corporation, which in turn is related to Chagganlal Suchak Family Trust (CSFT). This paper relates to Carlton Corporation and nothing to do with CSFT. The only common thing is both are settled by Suchak family. Appellant is neither trustee nor beneficiary V. Page No. 152 and 153 of Annexure A-3 of the loose papers seized from the premises of Sh. Dilip Thakkar shows receipt of Resurgent Indian Bonds (RIB) in 2003 from Sh. Chagganlal M Suchak and Chhaganlal Suchak Family Trust (CSFT). Page 178 of PB; it shows distribution of RIB which was invested by Suryakant Chhaganlal S....
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....ghlighting various observations of the ld. CIT(A) in his entire order he has given his brief comments which are as under :- No. CIT(A) Observations Our Comments 11.3.1 The appellant has firstly argued that the addition has been made in his case only on the basis of unsigned unauthenticated stolen data of HSBC Bank, Geneva, which was already available with the search party and it was not the case that this data was found from the premises of the appellant during the course of the search. Thus, it was claimed that no incriminating material was found during the course of the search on the basis of which such addition was made The addition of Rs. 10.50 Crore being peak balances as per base note was carried by search party during action and not found at the premises of appellant. 11.3.1.1 in this regard it is seen that while the data in respect of HSBC Bank Geneva was the starting point of the investigation, ultimately a search was conducted u/s 132 of the Act in the case of the appellant on 10.08.2011 where incriminating material in the form of documents, loose papers etc. were found indicating how Sh. Dilip J. Thakkar was managing and controlling the day to day....
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....dition made on a/c of CHHAGANLAL SUCHAK FAMILY TRUST (CSFT). v) On Page No. 155 of Annexure A-3 found and seized from the appellant's house, it has been alleged by Madhu C Suchak, that E distribution of Khoday funds to Smt. Indira D. Thakkar and distribution of trust funds by the appellant to his family members have taken place without consent from the trustees. These papers are Carlton Trust Chhaganlal and not Suchak Family Trust (CSFT). Same can be verified. No addition is made on account of Carlton Trust. It has no relevance to the addition made on a/c of Chhaganlal Suchak Family Trust (CSFT). vi) On page No. 79 of Annexure A-2 of the loose papers seized from the appellant's house during search action, the Suchak family Group Structure is drawn It is a family tree. vii) Page No. 94 and 95 of Annexure A-2 of the loose papers seized from the appellant's house refers to RIB bonds These are documents relating to RIB Bonds. viii) Page No. 6 of Annexure A-1 is again another letter dated 20 January 2011 to HSBC Private Bank (Suissee) Statutory Auditors, Geneva directing transfer by Swift GBP of Pounds ....
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....e trustees of Chagganlal Suchak Family Trust (CSFT) on 21/10/2004 signed by Sh. Dilip J Thakkar and Smt. Indira D Thakkar for opening a new bank account with HSBC, Geneva in place of the existing account No. 13280. These papers are of SCS Family Trust. Same can be verified. No addition is made on account of SCS Family Trust. It has no relevance to the addition made on a/c of Chhaganlal Suchak Family Trust (CSFT). xiv) Page 33 to 42 of Annexure A-1 are the Trust Account mandate for opening the account of SCS Family Trust (SCSFT) with HSBC Private Bank-(Suisse) Statutory Auditors Hong Kong Branch /Singapore Branch/Nassau Branch dated 28/08/2010 signed by Dilip J Thakkar and Indira D Thakkar. This said mandate form shows the country in which the trust is resident as INDIA as well as the incorporation also in INDIA These papers are of SCS Family Trust. Same can be verified. No addition is made on account of SCS Family Trust. It has no relevance to the addition made on a/c of Chhaganlal Suchak Family Trust (CSFT). CIT(A) got confused between Suryakant Suchak Family Trust (SCS FT) & Chhaganlal Suchak Family Trust (CSFT). 11.3.1.3 Thus, the above material fo....
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....m not sure but it must have been out of the savings of Late Sh. CM Suchak, the Settlor, who was a British Citizen Q. 11 I am showing you pages numbered 128 to 134 of Annexure A 3 found and seized from this promise. Kindly confirm the same and explain as to the locus of various companies like Chalais Holding Ltd. (Liberia), Elkay Finance Ltd. (Jersy), Boise Holding Ltd., Chalais Holding (Canada) Ltd. Akashi Investments Statutory Auditors (Bahamas), Kansu Corporation Ltd. (Bahamas) and Sumotec Ltd. (BVI) with respect to Carlton Corporation. Carlton Trust was created for benefit of Chhaganlal Suchak Family Ans Yes, I confirm that the said papers were found at this premise. All the above mentioned companies are under the Carlton Corporation, the Trust. This is the recording of a meeting held with the trustees by two principal beneficiaries in Jersey on 23.01.2003. The two beneficiaries being Sh Suryakant Suchak and Madhu Suchak. It records the discussion that took place at the meeting. Q. 12 I am showing you page number 152 of Annexure A3 found and seized from this premise. "Kindly confirm the same and also tell in ....
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....m this premises Kindly confirm the same On this page at serial number 6 to 9 certain funds in sterling pound have been mentioned against then names of Mitali R. Lakhanpal and Deval E Anthony (your daughters) Indira D Thakkar (your wife) and yourself and against each entry certain funds have been mentioned as on 1.1.2003 and subsequent accretion to entry is seen and finally the amounts standing to the credit of each of the above mentioned names are as under - Mitali Lakhanpal Sig Pound 90,000 Deva El Anthony Sig Pound 90,000 Indira Thakkar Sig Pound 1,36,000 Dilip Thakkar Sig Pound 14,400 On date of search admitted that these are legacy from father in laws to family members of appellant This paper also mentions the names of other members of Suchak Family and denotes amounts Thising to the credit of their names as well. In light of this explain what is the above figures credited against your name and in the name of family members denotes. In the backdrop of the names of members of Suchak Family also appearing in the same vein. Also explain where was the above mentioned amount received by you and your family members and were they offered for India....
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....uciary capacity and not as beneficial owner. My two daughters were beneficiary of the trust earlier, during which time they did not receive any benefit from the trust. As of now they are no more beneficiaries 11.3.1.6 Extracts of Statement of Sh. Dilip J. Thakkar recorded on 19.09.2011 under section 131 of the Income Tax Act 1961 are as under: Q. 3 Page No.1. This is a direction given by you in your letter dated 08/08/2011 to the HSBC Private Bank, Geneva to remit 1 million pounds by swift GBP to the account with HSBC Private Bank (Suisse) Statutory Auditors, Singapore, of SCS Family Trust (SCSFT). Please explain the complete nature of transaction stated in this letter and the source of fund involved, along with the accounting entry in the books of account of both the payer as also the receiver. This is also stated to be referred by one Mr. Sangram Singh, please give details of the involvement of said Mr. Sangram Singh Ans As decided by the settlor Smt. Kantaben C SuchakThis amount is transferred from the sub account of Sh. Suryakant Suchak with HSBC P Bank, Geneva to and account with HSBC PVT. Bank, Singapore, Sh.....
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.... transferred as benefit to him. No money is received by appellant Q. 7 Page 26: This is again a similar letter dated 31/07/2009 addressed to Mr. Anish Suryakant Suchak, Canada informing the transfer of CAD 250,000 each to the account Nos 0284688 and 0347825 with Scotia Bank in Ontario. the beneficiaries being the addressee's sons Krish and Kunal. Please explain the details of the remitting bank account and the source of funds along with accounting entries Ans This is a letter signed by me and my wife as trustees of M/s Chagganlal Suchak Family Trust (CSFT) as distribution of two beneficiaries. Master Krish Anish Suchak and Master Kunal Anish Suchak as decided by the settior. This has also been declared to Canadian tax authorities. Letter is signed as Trustee for benefit to nephew of wife who stays abroad. Q. 8 Page 33 to 42 This is the Trust Account mandate for opening the account of SCS Family Trust (SCSFT) with HSBC Private Bank-(Suisse) Statutory Auditors Hong Kong Branch / Singapore Branch/Nassau Branch dated 28/08/2010 signed by Dilip Thakkar and Indira D Thakkar. This said mandate form shows the country in wh....
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.... furnish the beneficiaries Ans This page is a copy of minutes of Chagganlal Suchak Family Trust (CSFT) regarding operation of its existing bank account with HSBC, Geneva. Since I do not control the bank accounts, I do not have the bank statements and the same are directly sent to the Settlor, Smt. Kantaben C Suchak. Q. 27 Page 118 This is a letter addressed by you as director of Kansu Corp. Dated 11/03/2008 to the Director, Elkay Finance Ltd. Jersey acknowledging the debt and asking to set off the interest receivable by Kansu Corp. Please give full details of the transactions which involve mutual liability to and from the Elkay Finance Ltd Ans It is a letter written to Elkay Finance Ltd, Jersey on behalf of Kansu Corp. Ltd. In my capacity as a Director of Kansu Corporation for recovery of loan given to M/s Elkay Finance Ltd. 11.3.1.7 From the above, it is seen that the administrative address of the Trust is Sh. Dilip Thakkar's office address at M/s Jayantilal Thakkar & Co. 111(A), M.G Road Fort Mumbai. As the authorized signatory of bank account Sh. Dillip J. Thakkar was actively invol....
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....oduced hereunder A Trust Deed is declaration. a Stamp Paper used of India does not make the Trust an Indian. All assets in Trust are of abroad and all events carried out were overseas. No beneficiaries were Indian nor Se ttlor was Indian. Without Prejudice If Trust is Indian please tax Trust and not appellant. Q. 14 I am showing trust deed of Chagganlal Suchak Family Trust (CSFT) made on 24th May 2001, and registered in Mumbai (annexed to This statement as annexure 3). Kindly go through the same and comment on the taxability of Chagganlal Suchak Family Trust (CSFT) in India in light of the fact that it is a trust registered in India. The Trust Deed is not registered. All trustees were Non Resident and sons of Kantaben Suchak. Kindly refer Page 118 of Paper Book. None of family members of appellant were beneficiaries. Stamp Paper was used as it was settled in India. Thereafter same was transferred to Geneva. Hence same cannot be treated as Indian Trust. It is not a Charitable Trust. Moreover, Trust has no income and hence not taxable. Ans This trust was formed by the Mrs. Kantaben C Suchak while she was on a short visit t....
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....ve not received copy of Trust Deed received from Canadian Authority. It is denial of natural justice. Copy of Trust Deed is attached on Pg. 110-120. CIT(A) is confused between RIB proceeds received as legacy visa- vis the SUCHAK CHHAGANLAL FAMILY TRUST (CSFT) fund for three sons. Q. 11 Did you or any of your family members received any RIB Bonds or any proceeds out of its maturity either from Chagganlal Suchak Family Trust (CST)or any other trust or from any of its trustees, beneficiaries or any relative of the trustees or beneficiaries? Ans My father in law Sh. C. M Suchak had set aside a corpus for the benefit of and children and grandchildren, which was invested in Resurgent India Bonds. These bonds matured in 2003 which was distributed to and children and grandchildren as legacy. Accordingly, my wife received pound 1,36,000 daughter Mitali received pound 90,000, and my daughter Deval, residing at Toronto received pound 90,000 as legacy. These amounts have been shown as legacy received in 2003 Please read answers on left. Q No On page 4 Paragraph 10 of the trust deed of Chagganlal Suchak Family trust (CSFT) (ann....
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....s family members and in-laws as a Special Purpose Vehicle to channelize the unaccounted income and park it outside the country in HSBC Bank Geneva. Therefore, the fund parked in CSFT was held to be belonging to Sh. Dilip J. Thakkar and was held to be his income which had not been offered to tax. The peak amount standing for FY 2005-06 was USD 2361551 79 equivalent to Rs. 10,50,41,824/-which was added to the total income of the assessee for AY 2006-07. It is obseized that documents of various other entities are highlighted to demonstrate the operation of Chhaganlal Suchak Family Trust I was acting as protector of Chhaganlal Suchak Family Trust (CSFT) and carried out bank transaction as per the direction in Trust Deed. Correspondence address in India is not a conclusive evidence when settlor and beneficiaries are all settled abroad. Incriminating material are nothing but correspondence with bank or account opening forms. The conclusion of AO that fund belong to appellant is only on basis of surmises & conjectures without any documentary evidence or any money trail. Infact appellant have not received any benefit upto 2012 or till date 11.3.2. As regards the claim of ....
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.... for AY 2006-07 The affidavit from Suryakant Suchak clearly state that Carlton Trust was dismantled and Chhaganlal Suchak Family Trust (CSFT) was created. This was benefit of 3 sons of SCS Whereas SCS FT was created by Suryakant Suchak for benefit of his family members. No documentary evidences have been produced by AO to come to conclusion that fund in trust belongs to appellant. 11.3.3 In view of the above, it is clear that the claims of the appellant that no incriminating material was found during the course of the search in his case and that the additions have made in his case in respect of deposits made in third party's bank account with which he has no connection, have no merits and are hereby rejected. Till date AO or CIT(A) has not confirmed as to what is incriminating documents found in search. All papers found are duly explained and relevance are established. 11.4 As can already be seen from the above discussion, the Incriminating maternal found as a result of the search and the other enquiries made clearly show the close connection of Sh. Dilip J. Thakkar and his wife Smt. Indira D. Thakkar in not only creating the Trust but also managing a....
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.... visit to India and they had house in Bangalore, the address of which is provided at the 1st page of the said deed. It was formed with an initial corpus of GBP 100 and trustees were all family members who were and even today, NRI's. The trust had no fund and no income. Later the trust was transferred to Geneva when it received funds out of the dissolution proceeds of Cariton Corp oration, deposited in three sub-accounts of beneficiaries with HSBC Bank, Geneva. Since the trust is based In Geneva and is not managed and controlled from India, it is not taxable in India. In May 2001, when the trust was formed in India till it was shifted to Geneva, trust had no income at all and hence there was no question of its taxability. The return of income was not filed in India as it has no income The whole structure of formation of Trust has been explained and there is no deviation from the explanation given on 10.08.2011 till date 11.4.2 While Initially the stand of Sh. Dilip J. Thakkar was that he was only a "Protector" or advisor of the CSFT, he later admitted that his family members were beneficiaries in the Chagganlal Suchak Family Trust (CSFT) for "sometime" in the past. Also....
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....ipts as legacy of his late father in law Sh. CM Suchak. The relevant extracts are as under On the date of search it was informed by appellant that his family has received RIB proceeds to extent mentioned. However, no proceeds of the trust fund of SCS FT Is received by any of appellant family member Q. 11 Did you or any of your family members received any RIB Bonds or any proceeds out of its maturity either from Chagganlal Suchak Family Trust (CST)or any other trust or from any of its trustees, beneficiaries or any relative of the trustees or beneficiaries? Already replied. Ans My father in law Sh. C. M. Suchak had set aside a corpus for the benefit of and children and grandchildren, which was invested in Resurgent India Bonds. These bonds matured in 2003 which was distributed to and children and grandchildren as legacy. Accordingly, my wife received pound 1,36,000 daughter Mitali received pound 90,000, and my daughter Deval, residing at Toronto received pound 90,000 as legacy. These amounts have been shown as legacy received in 2003. Q. No. On page 4 paragraph 10 of the trust deed of Chagganlal Suchak Family trust (CSF....
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....riminating material found during the course of the search that not only the funds were being transferred on the express directions of Sh. Dilip J. Thakkar from one account to another, he was also deciding important matters like opening of new foreign bank accounts etc. The incriminating material found was duly confronted to the appellant and the relevant extracts of his statements are as Appellant transferred fund only in capacity of Protector and as referred for achieving object towards the beneficiaries. He was never the beneficiary of any trust. And his family was made beneficiary for limited time to receive RIB Bonds. Operation of account of overseas Trust does not make the same as undisclosed or taxable in India. 11.4.4.1 Extracts of Statement of Sh. Dilip J. Thakkar recorded on 10/11.08.2011 under section 132(4) of the Income Tax Act, 1961 are as under: Q. 21 I am showing you page number 174 of Annexure A-3 found and seized from this premises, Kindly explain the same. Ans Yes, I confirm that the said paper was found and seized from my residence. This is an advice sent to HSBC Bank Geneva to transfer funds from th....
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....cided by the settlor Smt. Kantaben C Suchak. This amount is transferred from the sub account of Sh. Suryakant Suchak with HSBC Pvt. Bank, Geneva to and account with HSBC Pvt. Bank, Singapore, Sh. Sangram Singh is the Relationship Manager at HSBC Pvt. Bank, Singapore. Q.5 Page No. 6 This is again another letter dated 20 January 2011 to HSBC-Private Bank (Suisse) Statutory Auditors. Geneva directing transfer by Swift GBP of Pounds 1,00,075/- to the account of HSBC Private Bank, (Suisse) Statutory Auditors, Singapore for the benefit of SCS Family Trust (SCSFT). This is referred by Vidya Viswanambaran / Sachin Jumani. Same as above Ans This is the draft letter to be addressed to HSBC Pvt. Bank, Geneva for transfer of funds to SCS Family Trust (SCSFT)s Bank account with HSBC Pvt. Bank, Singapore. The two names mentioned Vidya Viswanambaran and Sachin Jumani are the Relationship Managers at HSBC Pvt. Bank, Singapore Q. 6 Page 10- This is a letter dated 04/11/2009 addressed to Anish S Suchak and Mrs. Bella Anish Suchak, confirming transfer of GBP 1,000,000 by wire transfer, from the trust account with HSBC Private Bank....
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....ount opening forms of SCS Family Trust (SCSFT) with HSBC Pvt. Bank, Singapore. This trust is based in Dubai and not in India. SCS Family Trust (SCSFT) is not an Indian Trust and hence, returns of income is not filed in India. Since the Trust is not an Indian Trust, it has no PAN and its books of accounts are not maintained in India. Annexure A-2 AQ. 26 Page No. 25: This is a resolution passed during the meeting of the trustees of Chagganlal Suchak Family Trust (CSFT) on 21/10/2004 signed by you and your wife for opening a new bank account with HSBC, Geneva in place of the existing account No. 13280. Please confirm whether such new account has been opened and if so give details of the new account and the cancellation of the old account. Copy of the bank statements shall be provided since you and your wife are authorized to operate the bank accounts. Also furnish the beneficiaries. Ans This page is a copy of minutes of Chagganlal Suchak Family Trust (CSFT) regarding operation of its existing bank account with HSBC, Geneva, Since I do not control the bank accounts, I do not have the bank statements and the same are directly sent to t....
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....nd only had two to three transfer instructions which was done by appellant. Two/three document does not prove that appellant is managing total affairs from India. Appellant had power of attorney to operate does not make overseas Trust taxable in India. The conclusion that Appellant created trust to channelize unaccounted money is pure conjectures and thought process of CIT(A) without any trail or evidence that any money is received. Without prejudice Peak balance cannot be taxed in A.Y. 2006-07. 14. Another very important fact which has been brought on record is that FT & TR division of CBDT had written a letter to the Swiss Federal Tax Administration to seek the information and clarification on the various bank accounts of Chagganlal Suchak Family Trust with HSBC Geneva. Swiss Federal Authorities although have provided the information and the report for five cases related to 'Chagganlal Suchak Family Trust'. However, one very important clarification by the Swiss Authorities which has been mentioned by the FT & TR letter as under :- "3. The Swiss Competent Authority in their letter had also stated that the beneficiaries of the trust are third parties wi....
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.... 1. Anil Madhu Suchak 2. Neela Madhu Suchak (London - U.K.) 3. Anish Suryakant Suchak 4. Deepa Suryakant Suchak (London - U.K.) 5. Monisha Shashi Devani 6. Sonia Shashi Devani 7. Promodini Shashi Devani (London - U.K.) 8. Geeta Shirish Suchak 9. Neha Shirish Suchak 10. Dev Shirish Suchak (Montreal - Canada) 11. Dina Suryakant Suchak (London) 12. Vandana Shirish Suchak (Montreal) 13. Doris Madhu Suchak (London) 17. Assessee also drew our attention to name of the trustees of Chagganlal Suchak Family Trust in the bank account of Chagganlal Suchak Family Trust, the scan copy of which is as under:- 18. The correspondence address mentioned is also of UK. Lastly, he drew our attention to the affidavit of Mr. Suryakant Chagganlal Suchak, wherein he has clarified everything that who are the beneficiaries and that sole beneficiary was himself and his immediate family. The affidavit of Suryakant Chagganlal Suchak is reproduced hereunder:- "I, Suryakant Chhaganlal Suchak, aged 76 years, residing at 3 Neela Close, Ickenham, Uxbridge, Middlesex, UB10 8NZ, United Kingdom, si....
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....tel in down town Montreal, Canada, in 1982. f. Thereafter, under the leadership and vision of our father, late Mr. C.M. Suchak, the family went into other businesses in Saudi Arabia, Germany etc. which increased the family's wealth considerably but none of it was generated in India. 6 During his lifetime, my father, Mr. C.M. Suchak invested GBP 1.5 million in 1998 Resurgent India Bonds, of State Bank of India, which was open for investments only by NRIs. Because of his advancing age, the said investment was made in the names of myself and my wife Mrs. Dina Suryakant Suchak. (Both NRIs) 7 In 2003, out of the total maturity proceeds of GBP 2.2 million, invested in said RIB Bonds, large part of the proceeds was deposited in Chhaganlal Suchak Family Trust account as per wishes of my late father who died in 1999. 8a. Chhaganlal Suchak Family Trust (CSFT) was settled on 24th May 2001 by Mrs. KantabenChhaganlal Suchak and appointed herself and her three sons Suryakant, Shirish and Madhu as first Trustees, all of whom were together for a brief period at the family's summer home in Bangalore. The said Trust was settled with an initial amount of GB....
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.... or belonged to Mr. Dilip J. Thakkar, Mrs. Indira D. Thakkar, and/ or their two daughters, Mrs. Mitali R. Lakhanpal and Mrs. Deval E. Anthoney and the said Chhaganlal Suchak Family Trust was never a Tax Resident of India as it had no taxable income in India." "I, Suryakant Chhaganlal Suchak, aged 76 years, residing at 3 Neela Close, Ickenham, Uxbridge, Middlesex, UB10 8NZ, United Kingdom, since last 29 years, hereby solemnly state and affirm as follows :- 1. My mother, Mrs. KantabenChhaganlal Suchak settled SCS Family Trust on 15th March 2004 with GBP GBP75.00 while she was on a short visit to Mumbai to visit her daughter, Mrs. Indira D. Thakkar (my elder sister). This SCS Family Trust was settled by my mother for the benefit of myself and my immediate family members consisting of my wife Mrs. Dina Suryakant Suchak, my son Mr. Anish Suryakant Suchak and his family members, my daughter Mrs. Deepa Jaitha and her family members. None of them has ever been a Tax Resident of India during last 30 years. No bank account of SCS Family Trust was ever opened in India. 2. The bank account of SCS Family Trust in Singapore clearly shows that in July 2011 init....
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....nder DTAA u/s 90/90 A of the IT Act was made by the Competent Authority i.e FT & TR Division, CBDT to Swiss Federal Tax Administration vide letter D.O.F. No 504/118/2012-FTD-1 dated 05-12- 2012 . This fact was communicated to the A.O vide letter D.O.F. No504/125/2012-FTD-1 dated 04-03- 2013 . Hence, in view of Explanation (viii) of section 153B(1) of the Act, the time-barring date got extended by one year. The assessment order was passed on 30-03-2015 which was within the limitation date. Hence, ground of appeal no 1 may be dismissed. 2 -Paras 6.7 to 6.17.2 of the show-cause dated 12-11-2014 on page nos 55 to 66 of assessment order Paras 11.3.1.1 to 11.3.1.12 of appellate order. During the search on the assessee u/s 132 of the Act on 10-08-2011, several incriminating material were unearthed relating to the role of the assessee and his wife in the Chagganlal Suchak Family Trust (CSFT) and operation of eight bank accounts held by the trust in HSBC Bank, Geneva. Further, corroborative statements of the assessee recorded on 11-08-2011, 19- 09-2011 and 16-04-2012 showed that the assessee and his wife created the above trust and used it as Special Purpose Vehicle to channeliz....
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.... vi) All the four family members of the assessee submitted consent waiver forms to enable Indian government to receive information from HSBC Bank, Geneva. Hence, ground of appeal no 4 may be dismissed. 5 & 9 Para 15.03, paras 16.1 to 16.5 of the assmnt order Para 11.4.3& 11.4.3.1 of appellate order. Family members of the assessee were beneficiaries of maturity proceeds of SBI Resurgent India Bonds in 2003 . As per paragraph 10 on page 4 of the trust deed, the RIB were part of corpus of CSFT and at maturity the same should merge with the trust fund and be utilized for the benefit of the beneficiaries. His wife and daughters received legacy proceeds from the Trust. This goes on to prove that the assessee and his family members were beneficiaries of the CSFT . Hence, ground of appeal nos 5 & 9 may be dismissed. 7 - Para 13.1 & 14.1 of appellate order No statement of a third party has been relied upon by the A.O in the assessment order. It is not clear who the assessee wants to cross-examine. Further, the A.O had provided to the assessee copies of all the incriminating material sought to be relied upon for making addit....
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....nt is opened in the name of any beneficiary trust or family trust in the hands of an Indian Tax Payer, what is most relevant is, firstly, what is the nature and source of the funds deposited in the bank account or if the source of the deposits are not known then ostensibly onus is on the individual to rebut with proper evidence; and secondly, who are the actual beneficiaries of the trust and who has ultimately received the funds from the said bank account. Any trustee if in his fiduciary capacity is managing the affairs of the trust or his name is mentioned as trustee cannot be per se held to be the legal or beneficial owner of the bank account or beneficiary of the trust fund. Now whether the amount deposited in the impugned foreign bank account is liable to be taxed in the hands of the assessee, which we will discuss in light of facts and material brought on record in forthcoming paras. 24. First of all, from the perusal of the trust deed, the copy of which are appearing from pages 112 to 118, it is seen that deed of trust was made as Chhaganlal Suchak Trust on 24/05/2001; and Mrs. Kantaben Chhaganlal Suchak is the 'settler'; and trustees of the trust are; (i) Kantaben....
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....tioned as trustees; and secondly, certain documents were found to show that assessee was somehow managing the affairs of the trust and also involved and instructions being given to the bank for investment purpose. First of all, simply being a trustee that does not mean that either assessee or his wife are the beneficiaries of the trust or managing the affairs of the trust as relatives of the trustees in fiduciary capacity can infer that the funds belong to the assessee when nothing has been found that the source of the funds has been routed through assessee or assessee was beneficial owner of the fund. We have already discussed the source of funds in the trust and who all were the ultimate beneficiaries of the fund. Then how a conjectural linkage can be drawn implicating the assessee without any nexus substantiating such presumption that amount deposited in the foreign bank account belongs to the assessee. 26. In any event, the department, invoking the provisions of Article 26 of India-Swiss DTAA pertaining to exchange of information, solicited details from the Swiss Federal Authorities. In response, the Swiss Authorities duly furnished the bank statements. However, in an unambi....
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....hagganlal Suchak Family Trust was invested in mutual funds as directed by him in that trust, he and his wife were the trustees, however, the said bank account also was closed and the entire funds were deposited to the beneficiaries for his wife Mrs. Dina Suryakant Suchak and his daughter Ms. Deepa Jaitha and another daughter Mrs. Anika and son Mr. Anish S Suchak. Another important fact which is that, there is ITAT order for A.Y. 1998-99 in the case of Suryakant Suchak who was UK citizen wherein the Tribunal while dealing with the issue of investment of Rs. 1.5 million GBP in State Bank of India's Resurgent India Bonds in October 1998, the Tribunal held that the assessee was a non-resident residing outside India since several decades, therefore, he qualifies the primary condition of being NRI individual for making the investment. Thus, it clearly shows that the source of funds in RIB was made by Mr. Suryakant Suchak. Accordingly, the source of funds was never made by the assessee or his wife. Once the source of funds is neither by the assessee nor he or his family were beneficiaries, we do not find any reason to hold that the peak balance in the foreign bank account should be ad....
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....wo grand children can acquire one half of the share as per the valuation of the flat at the time of her death. After her death on 03/02/2005, flat was valued by the Approved Valuer at Rs. 1,10,00,000/- and half of it (Rs. 55,00,000/-) plus compensation for late payment aggregated to Rs. 57,00,000/- which was paid to Ashok Jayantilal Thakkar through from Dilip Jayantilal Thakkar HUF in his mother's bank account and there by paid by cheque as legacy to Jehil Ashok Thakkar. Thus, it was submitted that the payment was made from the bank account of the assessee as Karta of HUF through declared sources hence it could be held that the payment made was from undisclosed sources. The complete fund flow has been given at page 148 of the paper book which is reproduced hereunder :- 31. The assessee had also filed an affidavit of Mr. Jayhil Ashok Thakkar before the authorities below about the payment of Rs. 57,00,000/ -. Once assessee has given the source of funds as given above from his bank account, we fail to understand how the payment of Rs. 57,00,000/- remain unexplained. Accordingly, the addition made by the ld. AO is deleted. 32. The other grounds which have been raised by the a....
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....se and that the request is to be entered into for the time period from 1 April 2011 until 31 March 2012 With the letter dated 13 March 2015, HSBC Private Bank provided us with the requested information. We intend to transfer the following information to the requesting authority. In accordance with Article 26 DTA CH-IN, administrative assistance for questions concerning the application of domestic law can only be provided for information starting from the financial years 2011/2012, as the prior years are not covered by the temporal scope of Article 26 of the amended Double Tax Agreement between India and Switzerland. Therefore we can only provide you with information from 1 April 2011 (cf. decision A-4232/2013 of 17 December 2013 of the Swiss Federal Administrative Court). a) Bank statements of the following accounts in HSBC, Geneva in the name of Chhaganlal Suchak Family. Trust, with narration of individual transaction is requested from 1 April 2003 to 31 March 2012: Swiss Federal Tax Administration FTA Nina Ulich Eigerstrasse 65 CH-3003 Bem Tel. +41 58 464 46 76. Fax +41 58 452 35 99 nina ulrich@estv admin ch www estv.admin ch Document 3 CH 33 0868 9050 9114 8234 1....