TaxTMI 
TaxTMI 
2026 (7) TMI 1711
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....arned CIT(A) erred in law and on facts in deleting the addition of Rs. 11,35,975/- made by the AO under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. ii) That the CIT(A) failed to appreciate that the undisclosed foreign receipts in question were not disclosed by the assessee as required under the BMA, 2015, and the conditions of Section 4 and Section 5 of the said Act were duly satisfied for taxation under the BMA. iii) That the learned CIT(A) erred in holding that the income had already been settled by the Settlement Commission under the Income-tax Act and hence could not be taxed under the Black Money Act, ignoring that the scope and objective of the BMA are distinct and apply independently to undisclosed foreign assets/income. iv) That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. v) That the grounds of appeal are without prejudice to each other. vi) That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal." 2.2 Grounds of appeal raised by Revenue i....
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.... "i). That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on facts in deleting the addition of Rs. 1,23,82,520/- made by the AO under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. ii) That the CIT(A) failed to appreciate that the undisclosed foreign receipts in question were not disclosed by the assessee as required under the BMA, 2015, and the conditions of Section 4 and Section 5 of the said Act were duly satisfied for taxation under the BMA. iii). That the ld. CIT(A) erred in holding that the income had already been settled by the Settlement Commission under the Income Tax Act and hence could not be taxed under the Black Money Act, ignoring that the scope and objective of the BMA are distinct and apply independently to undisclosed foreign assets/income. iv) Ld. CIT(A) failed to consider that appellant did not furnish documentary evidences and parties confirmation against sales return and documentary evidences in support of sales return reflecting in ERP of appellant. v) Ld. CIT(A) failed to consider that incriminating email and whatsapp chat....
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....y limitation as once proceedings under the 1961 Act is initiated against the assessee, then proceedings under the 2015 Act cannot be reinitiated/ reinvestigated. The assessee relied upon provisions of Section 4(2) of the 2015 Act. The assessee also claimed before the AO that the undisclosed income of the assessee has already been assessed, vide order of Settlement Commission dated 28.02.2023 passed u/s 245D(4) of the 1961 Act. The AO rejected the contentions of the assessee on the grounds that the assessee has not produced any evidence to substantiate that the aforesaid amount of foreign income of Rs. 1,23,82,520/- was offered for taxation in its return of income and/or that the said income has been brought to tax owing to assessment or reassessment, or has already been brought to Income-tax under the 1961 Act. As per AO, there is no evidence that the aforesaid income was added to the total income of the assessee. As per AO, Merely because settlement commission has alluded the foreign transactions while bringing to tax some of these transactions, it could not be said that the foreign income sought to be assessed in the present assessment already stands assessed. The AO observed tha....
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....g the course of search operations conducted by Revenue on 29.05.2018. It was submitted that sales returns were duly recorded in books of accounts. The AO rejected the contentions of the assessee as the entries were made to counter the cash received from Mr. Chirag Batra and his employees which was not recorded in books of accounts. As per AO, the ledger account submitted by the assessee in its support is an isolated documents not bearing any link to the financial statements. The assessee has not provided any cancelled invoice in the ERP system nor any confirmation from the parties from whom sales return has been made. The AO relying on emails and whatsapp chats, held that the assessee is in habit of taking cash outside India. Thus, as per AO, it is clear that sales returns are made against cash received outside India, which have not been recorded in the books of accounts. Further, as per AO, the sales return in cash through Hawala modus is a direct suppression of turnover and amounts to non-disclosure of foreign income under the 2015 Act. The AO referred to various provisions of 2015 Act, and held that the amount of Rs. 1,23,82,520/- is the undisclosed foreign income and asset of t....
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.... assessment year, on 03.10.2018, having declared income from 'Profits and Gains from business or profession', declaring total turnover of Rs. 69,25,62,481/- and gross total income of Rs. 6,45,22,100/- 6.2 There was a search and seizure operations conducted by Revenue u/s 132 of the 1961 Act, on 29.05.2018, at the various residential and business premises of Shri Tarun Tahiliani and cash of Rs. 35,24,000/- was seized by the Revenue. The assessee was also covered under the aforesaid search and seizure operations conducted by Revenue u/s 132 of the 1961 Act. As per Revenue, various incriminating material were found and seized during the course of search and seizure operations carried on by Revenue u/s 132 on 29.05.2018 which, inter-alia, include seized material evidencing that the assessee has made sales outside India during the year and the income there from was not declared in the return of income filed by the assessee with the department. Notice u/s 153A of the 1961 Act was issued by the AO to the assessee on 10.10.2019 for the impugned assessment year, to make assessments pursuant to search conducted by Revenue u/s 132 against the assessee on 29.05.2018. 6.3.1 Thereafter, th....
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....Act, on 13.12.2022, wherein both the parties were heard by Settlement Commission. 6.3 In the meantime, the AO issued notice dated 31.03.2022 u/s 10(1) of the 2015 Act to the assessee, to frame assessment u/s 10(3) of the 2015 Act. It is not the case of any of the rival parties before us that the notice earlier issued by the AO to the assessee u/s 153A of the 1961 Act, dated 10.10.2019 to frame search assessment, was withdrawn by Revenue. The AO vide its notice dated 31.03.2022 u/s 10(1) of the 2015 Act required assessee to furnish information and documents related to the following accounts:- "a) Details/quantum of product sent to abroad for exhibition. b) Details/quantum of products sold the foreign exhibition. c) details of income arised from the foreign sales/exhibition. d) Bank account statements with narration of credit entries e) Details of all assets fixed and financial held outside India." 6.4. The assessee participated in the assessment proceedings conducted by the AO under the 2015 Act, and submitted the details called for by the AO, vide reply dated 31.08.2022. After considering the submissions of the assessee, the AO iss....
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..... Thus, the applicant company has fully satisfied the provisions of Section 245H. The overall additional income is not on account of any suppression of any material facts in the application. The additional income offered does not disclose any variance from the manner in which the additional income had been earned. Hence, the applicant company is entitled to immunity from penalty under the Income-tax Act for the assessment years which are settled in this order. For the same reasons, we also grant immunity from prosecution under the Income-tax Act to the applicant company for the assessment years which is settled in this order." 6.5 Thus, as could be seen from the aforesaid order of settlement commission, that it duly considered sales return of Rs. 1,23,82,520/- vide its order dated 28.02.2023 passed u/s 245D(4) of the 1961 Act, which is now subject matter of dispute between rival parties with respect to proceedings under the 2015 Act, for the impugned assessment year. The assessee has already claimed the said sales returns as being duly accounted for in books of accounts supported by bill of entry, and was part of its income offered to tax under the head 'Profits and Gains of Bus....
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....asset of the previous year at the rate of thirty per cent. 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. (2) For the purposes of this section, "value of an undisclosed asset" means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed." "Section 4 Scope of total undisclosed foreign income and asset. (1) Subject to the provisions of this Act, the total undisclosed foreign income and asset of any previous year of an assessee shall be,- (a) the income from a source located outside India, which has not been disclosed in the return of income furnished within the time specified in Explanation 2 to subsection (1) or under sub-section (4) or sub-section (5) of section 139 of the Income-tax Act; (b) the income, from a source located outside India, in respect of which a return is required to be furnished under section 139 of the Income-tax Act but no return of income has been furnished within the time speci....
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.... the 1961 Act in accordance with the provisions of section 29 to section 43C or section 57 to section 59 or section 92C of the 1961 Act, shall not be included in the total undisclosed foreign income under the provisions of 2015 Act. Similarly Section 4(3) of the 2015 Act stipulates that the income included in the total undisclosed foreign income and asset under the 2015 Act shall not form part of the total income under the 1961 Act. 6.6 Thus, the condition as specified u/s 4(2) of the 2015 Act stood met in the instant case as there is variation in computation of income vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) of the 1961 Act, and the same was brought to income-tax under the head 'Profits and Gains of Business or Profession' within Section 29 to 43C of the 1961 Act vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4), and hence the said income which has already suffered taxation vide order dated 28.02.2023 cannot be brought to tax once again under the 2015 Act vide Section 4(2) and 4(3) of the 2015 Act, otherwise it will lead to double taxation firstly under the 1961 Act and secondly under the 2015 Act, which is not permissible ke....
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.... date of issue of notice initiating such proceedings and concluded on the date on which the assessment is made. Further, First proviso to Section 245F(2) of the 1961 Act stipulates that where an application is filed under section 245C of the 1961 Act after 1st June 2007, the Settlement commission has exclusive jurisdiction from the date on which the application is made, upto the date on which the application is rejected, or not allowed to be proceeded with, or, declared invalid, as the case may be. It is not the case of any of the rival parties before us that the said notice u/s 153A was withdrawn by Revenue. This leave no matter of doubt that proceedings before Settlement Commission are an assessment proceedings to compute the income of the assessee chargeable to tax, where in the income is computed through the process of settlement. Thus, Section 4(2) of 2015 Act refers to assessment or reassessment proceedings and, inter-alia, to variation in income in accordance with provisions of Section 29 to 43C, which in our considered view the income arrived at through the process of settlement is covered being one of the modes to frame assessment through statutory process of settlement, a....
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....r 2015-16, the assessment has been framed u/s 10(3) of the 2015 Act by the AO on the grounds that there being undeclared proceed from the sales made by the assessee to the tune of Rs. 11,35,975/- outside India during exhibition organized by the assessee in Hongkong through its Agent namely Mrs. Sunita Vachani. The assessee contended that the sales made during said exhibition was Rs. 5,90,369/-. The AO observed that sales made were to the tune of Rs. 17,19,055/-, while Rs. 11,35,975/- was reversal of sales which is nothing but non-genuine entry made to adjust the cash received on account of said sales. The ld. CIT(A) deleted the addition. The Settlement Commission vide its order dated 28.02.2023 passed u/s 245D(4) has brought to tax additional income to the tune of Rs. 16,43,577/- over and above the income offered to tax by the assessee in its application filed with Settlement Commission u/s 245C(1) on 01.11.2019. The said additional income is with respect to Hong Kong Exhibition conducted by the assessee through its agent Mrs. Sunita Vachani. The Settlement Commission observed that based on incriminating material available on record payments totaling to Rs. 16,43,577/- was received....