2022 (12) TMI 1485 - AT - Income Tax

Income taxable in India - Investment made in Mutual Fund as assessable to tax in India - HELD THAT - It is clear the source of the fund is from outside India and not taxable in India. The assessee could not produce these documents during time barring period of reassessment, when the same were more than six years old documents to be obtained from the bankers. CIT(A) directed the AO to obtain from the assessee, the certified True Copies of the above documents from Standard Chartered Bank and the assessee shall bound to furnish the same, before the AO while giving effect to the appellate order. The ld. CIT(A) further directed the A.O. having satisfied himself that the source of such investment is from outside India shall delete the addition made by him. We do not find any infirmity in the direction issued by the CIT(A) CIT(A) having satisfied with the copies of the documents submitted by the assessee, has taken a conscious decision to delete the additions, since the funds are NRI Repatriation funds came outside India and is not taxable in India. Assessee also produced before us a copy of giving effect order dated 04.11.2020 passed by the AO deleting the addition made by him. Grounds raised by the Revenue does not have any merits and the same are hereby rejected.

Summary

Issues:
1. Delay in filing appeal by Revenue and Cross Objection by Assessee.
2. Addition of unexplained investment by Assessing Officer.
3. Appeal by Revenue against CIT(A) order.
4. Cross Objection by Assessee challenging Revenue's appeal.
5. Compliance with time limit for filing appeal.

Issue 1: Delay in filing appeal by Revenue and Cross Objection by Assessee:
The appeal by the Revenue and Cross Objection by the Assessee were filed after delays, but the registry noted that the Covid-19 period exclusion applied, thus no delay was deemed. The appeal was filed against an ex parte assessment order under the Income Tax Act for the Assessment Year 2009-10.

Issue 2: Addition of unexplained investment by Assessing Officer:
The Assessing Officer added Rs. 23.06 crores as unexplained investment by the Assessee, leading to an appeal by the Assessee before CIT(A). The Assessee argued that the investment was made from NRE Account on repatriation basis, sourced from outside India, and thus not taxable in India. CIT(A) directed the AO to verify documents and delete the addition if the source was confirmed to be from outside India.

Issue 3: Appeal by Revenue against CIT(A) order:
The Revenue appealed against CIT(A) remitting the matter to the AO for verification of documents, questioning the acceptance of additional evidence and the direction to obtain certified true copies of documents. The Revenue's grounds were based on procedural aspects and the validity of the evidence presented.

Issue 4: Cross Objection by Assessee challenging Revenue's appeal:
The Assessee challenged the Revenue's appeal on the grounds of procedural compliance, arguing that the appeal was filed beyond the time limit permitted by law. The Assessee supported CIT(A)'s decision to remit the matter to the AO for verification and accepted additional evidence.

Issue 5: Compliance with time limit for filing appeal:
The Assessee contended that the Revenue's appeal was filed beyond the time limit permitted by law, highlighting the discrepancy in the dates mentioned in the appeal form. The Assessee argued that the appeal should be dismissed due to the delay in filing beyond the stipulated time frame.

In conclusion, the ITAT Ahmedabad dismissed the Revenue's appeal and the Assessee's Cross Objection, upholding CIT(A)'s decision to delete the addition of unexplained investment based on the source of funds being from outside India. The judgment emphasized the non-taxability of NRI repatriation funds in India, supported by documentary evidence provided by the Assessee. The decision was based on the provisions of the Income Tax Act and compliance with procedural requirements.