TaxTMI 
TaxTMI 
2026 (6) TMI 80
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....- "1. The Ld. Commissioner of Income Tax, (Appeals) - 3, ('Ld. CIT-A') was not justified in confirming the order of the Ld. Deputy Director of Income Tax (Investigation) - 1, ('Ld. DDIT') passed u/s. 10(3) of the Black Money (UFIA) and Imposition of Tax Act, 2015 ('the Act'), making an addition of Rs. 2,69,91,144 as undisclosed foreign income to the returned income of the assessee, without appreciating the facts and circumstances of the case and without appreciating the submissions and the information and documents produced during the assessment and appellate proceedings. 2. The Ld. CIT-A was not justified in confirming the order of the Ld. DDIT, passed u/s. 10(3) of the Act, making an addition of Rs. 2,69,91,144 to the returned income of the assessee as undisclosed foreign income, ignoring the fact that undisclosed foreign income is assessable in the year in which it is earned, i.e. AY 2017-18 in this case, and not in the year in which it comes to the knowledge of the Assessing officer, i.e. AY 2021-22. 3. The Ld. CIT-A was not justified in confirming the order of the Ld. DDIT, passed u/s. 10(3) of the Act, making an addition of Rs. 2,69,91,144 to the re....
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....t for the AY 2021-22 which is against the provisions of section 3(1) of the BMA Act, which prescribes for a tax in respect of the total undisclosed foreign income and asset of the previous year at the rate of 30 percent of such undisclosed income and asset." "Ground No. 2(b) The Ld. AO has erred in law and on facts in initiating the proceedings for A.Y. 2021-22 and serving a notice under section 10(1) of Black Money (UFIA) and Imposition of Tax Act, 2015, ("BMA") on 11.04.2022 upon the appellant w.r.t. the alleged undisclosed foreign income received during Previous Year 2015-16 and 2016-17 and thus assessing the alleged undisclosed foreign income received in Previous Year 2016-17 under section 10(3) of BMA Act for the AY 2021-22. Without prejudice, the Ld. DCIT has erred in serving the said notice and assessing the undisclosed foreign income in the garb of the information received by him on 31.03.2021 prior to the jurisdiction assigned to him on 31.03.2022 that is a year before the jurisdiction was assigned to him." 2.3 The assessee has pleaded for the admission of aforesaid additional grounds of appeal filed before the Tribunal, and has relied upon the judgmen....
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....ame to the notice of the AO under the 2015 Act in Financial Year: 2020-21, it became the previous year and consequently the year 2021-22 became the assessment year. 3.4 The AO initiated assessment proceedings by issuing notice dated 11.4.2022 u/s. 10(1) of the 2015 Act. The AO granted another opportunity to the assessee vide notice dated 04.05.2023 seeking details of his income from abroad and sources of such income. The assessee submitted its response before the AO wherein the assessee submitted that the assessee is an American(USA) resident since 1996 to 2004, and had done service in American companies. But from 2008, the assessee came back to India and was residing in India for more than 182 days in a year since then, hence, his status in India was resident Indian. It was submitted by the assessee that during the financial year 2015-16 and 2016-17, the assessee had received social security amount of $ 1232 per month in USA which was already shown in the USA Income-tax return filed from time to time with the US Revenue authorities. It was submitted that as per India-USA DTAA-Article 20, Social Security Benefits paid by the Contracting State to the Resident of other Contracting....
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.... was claimed by the assessee to have been declared in the return of income filed in the USA with US tax authorities, and as per the ITR filed by the assessee in the USA, the assessee purchased the aforesaid property in September, 1999 for a consideration of USD 2,53,000 and sold the property during August, 2016 for a consideration of USD 4,05,000/- . The AO observed that the assessee has further contended that the property was held for more than 36 months, and that there is a capital loss in this transaction after taking the benefit of indexation and no tax is payable in India as per the provisions of the 1961 Act. The AO issued summons to the assessee to provide the copy of sale deed of the property so that the capital gain or loss earned by the assessee could be ascertained, but the assessee did not provide copy of the sale deed to the AO . Further, the AO could not gauge from the bank statement submitted as to the nature of credits in the said bank account. Thus, in the absence of documentary evidences, the AO brought to tax the amount of USD 4,05,000/-(Rs. 2,69,91,144/-) as an unexplained credits which was added by the AO to the income of the assessee as undisclosed income unde....
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....ed or foreign asset was declared under the Indian tax law. The ld. CIT(A) observed that it could not be proved that there is no resultant taxable gain from the said transaction or whether the capital loss computed by the assessee was correct or genuine. There was no disclosure of the foreign asset by the assessee, as is mandated under the 2015 Act. Thus, the action of the AO in invoking the provisions of 2015 Act was upheld by the learned CIT(A), and the credit of USD 4,05,000 which was not declared in the Indian income-tax return, was held to be an undisclosed foreign asset by the Ld. CIT(A), and the addition of Rs.2,69,91,144/- as was made by the AO being undisclosed foreign income under 2015 Act was sustained by ld. CIT(A). 5. Aggrieved, the assessee filed an appeal with the Tribunal, and the assessee has raised as many as seven grounds of appeal in the Memorandum of Appeal filed with the Tribunal. The assessee has also raised additional grounds of appeal as above. The grounds of appeal as well additional grounds of appeal raised by the assessee are reproduced by us in the preceding para's of this order. The Ld. Counsel for the assessee opened arguments before the Bench. The ....
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....counsel for the assessee relied upon the guidelines dated 23.01.2018 for handling cases under the 2015 Act, and submitted that the date of assigning of the jurisdiction shall be the date of receipt of information by the AO and, which in the instant case is 31st March, 2022, and the correct assessment year under the circumstances under the 2015 Act ought to be assessment year 2022-23. It was submitted that the AO erred in framing assessment for the assessment year 2021-22. Therefore, the assessment framed by AO is bad in law. It was further submitted that as per the instruction dated 23.01.2018 issued by the CBDT, before passing assessment order, the learned AO is under an obligation to issue a Show Cause Notice(SCN) to the appellate, which he failed to do so and, hence, the assessment is bad in law. It is further submitted that the AO has to seek approval from the Addl./Jt. CIT, (Inv.), and then assessment order has to be issued within seven days from the date of the approval i.e., from 14.06.2023, while the assessment order has been passed on 03.07.2023 i.e. after a gap of 19 days of the approval and, hence, the said order is bad in law. It was further submitted that the proceedin....
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....ted that proper opportunity of hearing was duly given by the AO to the assessee. The ld. CIT-DR relied upon the provisions of Section 6 of the 2015 Act, and in particular Section 6(2) and 6(3) of the 2015 Act. It was submitted that it is only when the jurisdiction was assigned in favour of ld. DDIT(Inv.) on 31.03.2022, then only he could have issued notice u/s. 10(1) of the BM Act. The ld. CIT-DR prayed to uphold the additions as were made by the AO and sustained by ld. CIT(A) 2015 Act. 5.3 In rejoinder, the Ld. Counsel for the assessee submitted that information came to the notice of the AO on 31.03.2021. Notice u/s. 10(1) of the 2015 Act was issued on 11.04.2022. There is violation of CBDT instructions dated 23.01.2018. The date of assignment of jurisdiction i.e. 31.03.2022 shall be deemed to be the date of receipt of information by the AO. The assessment ought to have been framed for assessment year 2022-23, but the Revenue framed assessment for ay: 2021-22, which is bad in law. It was submitted that AO has not issued show cause notice and no draft assessment order was framed and, hence the whole assessment is bad in law. It was further submitted by Ld. counsel for the assess....
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....igher taxes to make up for the revenue leakages caused by the evasion. The money stashed away abroad by evading tax could also be used in ways which could threaten the national security. 6.2.2 It is also stated that the Central Government is strongly committed to the task of tracking down and bringing back undisclosed foreign assets and income which legitimately belong to the nation. Thus, this new legislation i.e. 2015 Act deals with undisclosed assets and income stashed away abroad. 6.2.3 It also recognizes that Hon'ble Supreme Court of India has also expressed concern over this issue. The SIT constituted by the Central Government to implement the decision of the Supreme Court has also expressed the views that measures may be taken to curb the menace of black money . Internationally a new regime for automatic exchange of financial information is fast taking shape, and India is a leading force in this effort. 6.2.4 The 2015 Act has provided for stringent measures to enable taxation of undisclosed foreign income and assets, and to punish by way of stringent penalties as well prosecution of the persons indulging in illegitimate means of generating money causing loss to the ....
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....foreign income so far as social security is concerned. 6.3.3 Further, it was observed by the AO that there are credits in the bank account on account of sale of assets, and the said credits were also not disclosed in the return of income filed by the assessee. The aforesaid information came to the notice of AO on 31.03.2021. The concurrent power and jurisdiction to perform functions of the AO under BM Act, 2015 was assigned in favour of ld. DDIT(Inv.)-I, Gurugram by ld. Principal Director of Income Tax(Inv.), Chandigarh vide orders dated 31.03.2022. The AO issued notice u/s. 10(1) of the BM Act, 2015 to the assessee on 11.04.2022. The assessee submitted that the amount of US $ 3,82,502.91 was received and credited on 29.08.2016 in his PNC Bank after deductions, towards sale of his house situated at 43, Brookside Rd., Edison, NJ 08817. The gross consideration for sale was US $ 4,05,000 and the amount received after deductions was US $ 3,82,502.91. It is claimed that the said house was purchased on 03.09.1999 for US $ 2,53,000/- . The sale and purchase transactions were claimed to be duly disclosed in the return of income filed with US Revenue authorities in the year when the sale....
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.....03.2022. The notice u/s. 10(1) of the 2015 Act was issued on 11.04.2022. The asset being House No. 43, Brookside Rd., Edison, NJ 08817 came to the knowledge of the AO on 31.03.2021. As per deeming fiction created by clause (c) of Section 72 where any asset has been acquired or made prior to commencement of the 2015 Act, and no declaration in respect of the such asset is made under Chapter VI of 2015 Act, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of the 2015 Act shall apply accordingly. The 2015 Act has come into force on 01.07.2015. As per charging Section 3 of the 2015 Act, the undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the AO. The assessee being resident during assessment year 2016-17 has not made any declaration under Chapter VI of 2015 Act of the undisclosed foreign income and asset. The assessee has claimed to have disclosed the aforesaid foreign asset in the Schedule FA filed for assessment year 2016-17. Moreover, disclosure in Schedule FA itself is not sufficient,....
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....tory. Similarly, "undisclosed foreign income and asset" means the total amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India, referred to in Section 4 of the 2015 Act, and computed in the manner laid down in Section 5 of the 2015 Act. Section 3 is a charging section which stipulates that there shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of the 2015 Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty percent of such undisclosed income and asset. Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. Even undisclosed foreign bank account (even if it is closed prior to enactment of 2015 Act) is an undisclosed asset within the four corner of the 2015 Act. Further, it stipulates that "value of an undisclosed asset" means the fair market value of an asset (including financial interest in any entity) determined in such manner....
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....rities specified in Section 116 of the 1961 Act shall be the tax authorities for the purposes of the 2015 Act. It is provided in Section 6(2) of 2015 Act that every such authority shall exercise the powers and perform the functions of a tax authority under the 2015 Act in respect of any person within his jurisdiction. It is further stipulated vide Section 6(3) of 2015 Act that subject to the provisions of Section 6(4) of 2015 Act, the jurisdiction of a tax authority under the 2015 Act shall be the same as has been under the 1961 Act by virtue of orders or directions issued u/s. 120 of the 1961 Act (including orders or directions assigning the concurrent jurisdiction) or under any other provision of the 1961 Act. It is further stipulated vide Section 6(4) of the 2015 Act that the tax authority having jurisdiction in relation to an assessee who has no income assessable to income-tax under the 1961 Act shall be the tax authority having jurisdiction in respect of the area in which the assessee resides or carries in its business or has its principal place of business. The information in the instant case as to foreign income and asset came to knowledge of the AO on 31.03.2021, while the ....
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....3-2004, evidences related to sources of making investments in the aforesaid house acquired in 1999, but only statement is made that he was working in USA from 1993 to 2004, and social security details for the period from 1993 to 2007 are submitted. The evidences presently submitted do not conclusively support the contentions of the assessee more so keeping in view stringent provisions and mandate of statute viz. 2015 Act. It is also claimed in written synopsis that the assessee filed certain documents viz. copy of mortgage documents and the copy of the passport, which was filed before ld. CIT(A) vide letter dated 21.04.2025 on 24.04.2025 which was filed after the conclusion of remand report proceedings by the AO but the same were not considered by ld. CIT(A). The assessee has chosen not to file such aforesaid evidences before the Tribunal. It is also contended by the assessee before the Tribunal that he is of old age and matter being very old, and that if some more time is granted to the assessee and accordingly if one more opportunity is provided to the assessee, then the assessee will get all the relevant documents to support his contentions. However, it is observed that the asse....
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....ppellant was a Non-Resident from 1996 to 2008 and was employed in USA from 1996 to 2004. In 2008 he had returned to India and was staying in India till 2021 when he had gone back to USA. Besides, he is an old man of approx. 75 years and suffering from neurological issues. His wife is adso a cancer patient and both of had returned to USA in 2021, Besides, having stayed in USA for a long time and having been in employment, he was not very well versed with the laws and procedures in India and that too which were enacted in the recent past c.g. BMA. During his employment in USA, the appellant had acquired a residential house for USD 2,53,000 in 1999 which was sold in 2016 for USD 4,05,000 and the appellant received USD) 3,82,502.91 as proceeds of sale after deducting expenses on sale related thereto, The said transaction was duly declared by him in his US Tax Return filed for the year 2016. There was a capital loss as per capital gains calculations and the appellant has not claimed in his Income Tax Return in India. However, the appellant bas duly disclosed his foreign income and assets in his IT'Rs in India ay per luw und there Is no adverse inference drawn therefrom. Actually....
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.... The Hon ble Commissioner may kindly be pleased in pass mich other order as deemed fit. Prayed accordingly, Document 3 साधकर विà¤à¤¾à¤— Government of India, Income Tax Department, Office of the Addl. Commissioner of Income Tax, Range -1, Gurgaon 4 Floor, HSIIDC Building, Vanijya Nikunj, Udyog Vihar, Phase-V, Gurgaon Email-id: - [email protected] F.No: Addl.CIT Range-1/ GGN/2024-25/ 2333 Dated :- 17.01.2025 To, The Commissioner of Income Tax (Appeal-3), Gurugram Sir/Madam, Sub; Remand report in the case of Sh. Atanu Banerji having PAN . ASTPB8561G for the A.Y, 2021-22 Reg .- ************** Kindly refer to the subject cited above. BRIEF FACTS 2.1 Sh. Atanu Banerji a resident individual assessee was a Non- Resident from 1996 to 2008 and was employed in USA from 1996 to 2004. Information available with the department revealed that assessee has bank account bearing no. 8013623334 in PNC Bank, USA. On porusal of the bank account statement, it is seen that he had received $ 1232 per month during FY 2015-16 & FY 2016-17 as Social Security Amount. However, the same was not declared by him in his....
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....pital loss as per US and Indian Law, calculation submitted by the assessce is as under: Date Particulars Amt in USD Amt In INR 10.05.2016 Sales of Property ni 43 Brookside Road, Edison New Jersey | ZMow, USA 405000 03.09.1999 Leis :- Indexed cost of acquisition ( $ 253000×1125/389] 731684 326684 LONG TERM CAPITAL LOSS IN INA -21771777 ( 15 was Equal to INE 66.6448, at the time of sales) Further assessee has furnished US Individual Income Tax return for the year ending 2016, wherein assessce has disclosed the receipts of USD 4,05,000/- under Part II of Long Term Capital Gains and Losses- Assets Held More than One Year. The relevant part of US Individual Income Tax return is reproduced as under: Document 7 Long-Term Capital Gains and Losses-Assets Held More Than One Year Soo lajnaclona for how to figura the penounits to ondipr on the Boa Inige Thus tóth hà ng bo carlor lo completo If you round oli conta lu While doAns M Non I/es pont A lo thế bìnhl Pawwwser No pain or buy from Fund) 89-4, Pan #; PO-Pod Daskind anton il com count (a) and porcina e non e/f ochann ja ta Total for all lorenterm tinesactions reported on Férin 1009-0 kr wtion basis....
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....n, NJ 08817. It is seen from the perusal of the sale deed and American Land Title Association settlement statement, assessee has sold the above property Brookside Road, Edison, NJ 08817 for USD 4,05,000/- and has received USD 3,82,764 after expenses. However, Assęssee has not furnished source of USD 2,53,000/- Document 8 used for purchase of above property which still remains unexplained and accordingly the sale value of USD 4,05,000/- as per section 2(11) of the Act. "(11) -undisclosed asset located outside Indiati means an asset (including financial interest in any entity) located outside India, heid 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;" Further, assessee has furnished that capital gain on sale of above house property was capital loss as per US and Indian Law. However on perusal of the return filed for the AY 2017-18 under the Income Tax Act, it is seen that assessee has not furnished any income or loss under the Schedule CG. Accordingly, the claim that the assessee h....
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....S F-378, Sarita Vihar, New Delhi-110076 Ph. 40810610 Mob: 9810007734 Email: [email protected] 18 March, 2024 Hon'ble Commissioner of Income Tax, Appeals-3, HSIDC Building, Vanijya Nikunj, Udhyog Vihar-Phase V, Gurgaon, Haryana-122001 Respected Sir, Re: In the matter of Atanu Banerji, PAN: ASTPB8561G. A.Y. 2021-22. Appel against the order of the Ld. JCIT. Inv-1, Gurgaon under section 10 of the Black Money (UFIA) and Imposition of Tax Act. 2015 Rejoinder to the Remand Report dated 17.01.2025 This is in connection with the abovementioned matter. We have received the remand report vide your letter and DIN: ITBA/APL/M/17/2024-25/1072608862(1) dated 27.01.2025. We understand that the Ld. Addl. Commissioner has mainly made two observations. Our pointwise response to these observations is as follows: 5.1.1 Assessce has not furnished the employment documents of USA for the period 1996 to 2008. Moreover, Assessce has not furnished any copy of passport stamps in support of resident status. Accordingly, the resident stars during the pertod 1996 to 2020 is not determined. However, as per return submitted by the assersee. assessee was resident individual for the year unde....
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....ld an Immovable propertyin USA. which he has duly declared in his ITK file in USA. As per the ITA filed by the assessee in USA, the assesses purchased the property in September, 1999 for a consideration of USD 253,000 and sold the property during Aug. 2016 for a consideration of USD 405,000, Further, tiie assessee has contended that since the property was held by him for more than 36 months and he has incurred Capital Laoss after indexing the Cost of Acquisition. The assessee also provided the computation In this regard. 7. Summon was issued to the assessee to provide the copy of the sale deed of the property so that the Capital gains ur loss incurred hy him could be ascertained. However, he did not provide the copy of the sale deed. Also, the bank account statement of the bank account held by the assessed was analysed and it was found that the exact nature of the credlis could not be gouged from the narration In the statement, Therefore, in the absence of complete documentary evidence, the amount of USD 405,000 (405,000*66.6448=2,69,91,144) is considered us unexplained credits and therefore, proposed to be added in the returned income of the assessed as his undisclosed income. ....