TaxTMI 
TaxTMI 
2017 (11) TMI 2090
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....nt received a list of persons holding bank account with HSBC, Geneva, in which list, Assessee name was included. Pursuant thereto notice u/s. 148 was issued to the Assessee for Assessment Year 1996-97, 1997-98, 2001-02 to 2004-05 (nine years in all). During the course of an intense scrutiny assessment proceedings the Assessee proved that the bank account with HSBC, Geneva, was a bona fide and legal account opened by the Assessee during the course of his status as Non Resident in India and that such account was closed within reasonable time of the Assessee's return to India, as permitted by the Foreign Exchange Management Act (FEMA). There has been no addition to Assessee's assessed income on ^account of transactions with HSBC, Geneva. The Assessee explained all transactions in the said account to the satisfaction of the Learned Assessing Officer. 5. During Assessee's status as Non Resident in India the Assessee had also opened a bank account with Citi Bank, Singapore. Upon his return to India during AY 2003-04, the Assessee stopped operating the said account. Shortly after return to India during FY 2002-03 the Assessee took up ill health and in the process forgot to close the sa....
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.... the another foreign bank account namely City Bank, Singapore with A/c No,092344, which was also one of the basis of re-opening of the assessment, the AO observed that the aforesaid bank account is also in US Dollar Currency. On perusal of the transaction in the aforesaid account, the AO observed that the total earnings from the aforesaid bank account is USD 1478.68. However the assessee offered the USD 1448.83 (1478.68 - 29.85) i.e. after claiming the loss of USD 29.85 from HSBC. Since the loss from HSBC was ignored by the AO, the correct amount, of interest only was observed by the AO to be USD 1478.68 which was converted into Indian rupees at Rs. 67,220/-and taxed in the hands of the assessee. I found that the assessee has himself offered the interest for taxation in this revised return filed on 18.09.2014. 10. Further the AO observed that the assessee had not declared the Short Term Capital Gains of Rs. 92,041/-in the original return of income filed on 17.05.2004, which was subsequently declared by the assessee in the revised return of income filed on 18.09.2014. Since the revised return was filed on 18.09.2014, it was held to be a belated revised return, the AO did not give co....
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.... the benefit to all other persons, shortly after the issue of circular the aforesaid amendment to section 10(4)(ii) was made through Finance Act (No.2) of 1991, with effect from 01.04.1991, so that the benefit extends to all. 17. The Reserve Bank of India vide Notification No. FEMA 5 /2000-RB dated 3rd May 2000 (clause 10) specifically permits an NRI to continue to hold NRE/FCNR Deposits till maturity even after permanently return back to India. The RBI on its website http://www.rbi.org.in/scripts/FAQView.aspx?!d=52 has specifically opined that NRE Deposits can be held till maturity even after return to India. (Relevant extracts reproduced below) C Facilities to returning NRIs/PIOs When an account holder becomes a person resident in India, deposits may be allowed to continue till maturity at the contracted rate of interest, if so desired by him 18. Section 10(4)(i) which exempts interest earned on notified government securities specifically uses the term "In case of non-resident...", but in case of section 10(4)(ii) the term used is "In case of an individual". This indicates that benefit of section 10(4)(ii) would not be restricted to residential st....
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.... with his bankers to provide any supporting document or give name of the payee but the bank was also not able to do so as the matter is very old. The assessee was provided only ten days to respond when over three months were available to complete the assessment. The assessee requested for more time which was denied. The assessee requested the AO to seek information u/s. 1.53(6) from the Bank but he regarded the entire deposit as assessee's income. 23. It was argued by learned AR that the assessee had been working in Saudi Arabia at a very senior post for 22 years. The Deposit in question is about two months remuneration of assessee. The assessee had substantial investments in NRE/FCNR deposits with banks in India and overseas. Surely the deposit in HDFC Bank could be the maturity value of such investments. The assessee has three sons staying in USA for long period of time, they could have also sent money from USA. All the investments and assets acquired by the assessee are out of accretion of income earned during his status as a Non Resident Indian. 24. The assessee has satisfactory explained almost all transactions in his foreign bank accounts and almost 99% of transactions ....