2010 (1) TMI 1179 - AT - Income Tax

Summary

Issues:
1. Addition on account of pension received from M/s Nest West Staff Pension Fund, UK.
2. Addition represented deposits in the bank accounts of the assessee.

Analysis:
1. The first issue pertains to the deletion of the addition on account of pension received from M/s Nest West Staff Pension Fund, UK. The AO observed that the assessee had not disclosed pension receipts from the late wife's employer and interest on pension from Lloyds Bank Jersey. The AO contended that the global income of the assessee was taxable in India due to his residential status. However, the assessee claimed that the pension and interest income from a foreign country were not part of his total income in India under the DTAA between India and UK. The CIT(A) accepted the contention that the amount received was family pension, not taxable under Article 23(3) of the Indo UK Double Taxation Avoidance Agreement, and deleted the addition. The tribunal remitted this issue back to the AO for fresh consideration due to lack of cooperation from the assessee during assessment proceedings.

2. The second issue involves the deletion of the addition represented by deposits in the bank accounts of the assessee, which remained unexplained despite multiple opportunities provided. The tribunal, having remitted the main issue back to the AO, also remitted this issue for fresh consideration. As a result, all three appeals filed by the Revenue were allowed for statistical purposes. The tribunal emphasized the importance of providing the assessee with adequate opportunity to present their case during the assessment process.

In conclusion, the tribunal's judgment focused on the tax treatment of pension income, specifically categorizing it as family pension under the DTAA provisions, and highlighted the necessity of cooperation and submission of necessary details by the assessee during assessment proceedings to ensure a fair and comprehensive evaluation of the tax liabilities.