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2019 (7) TMI 1327 - SC - Income TaxJurisdiction of High Court u/s 260A - reversal of finding of facts - unexplained income - unexplained deposits - HELD THAT - The impugned judgment has added as unexplained income basically on the ground that the assessee has been unable to present declaration forms that had been filled in by him at the time of his visits to India from abroad. Keeping in mind the fact that these declaration forms were asked for long after such expenditure had, in fact, been incurred, it cannot possibly be said that the Appellate Tribunal s judgment and findings therein are perverse, which is the only entry on facts for the High Court 2006 (1) TMI 120 - MADHYA PRADESH HIGH COURT exercising its appellate jurisdiction under Section 260-A of the Income Tax Act, 1961. Having heard learned counsel for both the parties, we are clearly of the view that the High Court ought not to have interfered with the Appellate Tribunal s Judgment as no substantial question of law arose therefrom.
Issues:
1. High Court setting aside the reasoned order of the Appellate Tribunal regarding unexplained deposits. 2. Applicability of declaration forms for foreign currency brought into India. 3. Assessment of unexplained deposits by the Assessing Officer. 4. Consideration of foreign currency exchange vouchers as evidence. 5. Validity of High Court's judgment under Section 260-A of the Income Tax Act, 1961. Issue 1: High Court setting aside the reasoned order of the Appellate Tribunal regarding unexplained deposits: The Appellate Tribunal had found that the entire sum of $7,55,534 deposited by the assessee was explained, and thus, $3,14,534 equivalent to ?1,03,49,720 could not be considered unexplained deposits. The Tribunal highlighted the relevance of foreign currency exchange vouchers and the lack of evidence provided by the Assessing Officer to disprove the assessee's claims. The High Court, however, added the sum of ?1.03 crores as unexplained income due to the absence of declaration forms for foreign currency brought into India. The Supreme Court noted that the High Court's interference was unwarranted as no substantial question of law arose from the Appellate Tribunal's judgment. Issue 2: Applicability of declaration forms for foreign currency brought into India: The Assessing Officer had disregarded the foreign currency exchange vouchers presented by the assessee, which indicated the amount of foreign currency brought into India. The Tribunal found the assessee's explanation plausible, considering the correlation between the exchange vouchers and the date of arrival in India. It emphasized that the absence of declaration forms did not negate the possibility that the foreign currency was lawfully brought into India and utilized or taken back by the assessee. The Supreme Court agreed with the Tribunal's assessment and reinstated its decision. Issue 3: Assessment of unexplained deposits by the Assessing Officer: The Assessing Officer had only credited $4,41,000 out of the total $7,55,534 deposited by the assessee, treating the remaining $3,14,534 as unexplained deposits. The Tribunal, however, highlighted that the revenue failed to provide evidence to refute the assessee's claims regarding the foreign currency brought into India. It concluded that the assessee's explanation was acceptable, especially in the absence of evidence on the utilization of the dollars brought into India during specific periods. Issue 4: Consideration of foreign currency exchange vouchers as evidence: The Tribunal extensively reviewed the details provided by the assessee, including a chart of foreign currency brought into India on different occasions. It noted that the revenue did not counter the assessee's submissions effectively, leading to the acceptance of the assessee's explanation. The Tribunal emphasized that the assessee had adequately explained the sources of the deposits in NRE accounts and FDRs, leading to the deletion of the addition made by the Assessing Officer for unexplained deposits. Issue 5: Validity of High Court's judgment under Section 260-A of the Income Tax Act, 1961: The Supreme Court found that the High Court's decision to add the sum as unexplained income based on the absence of declaration forms was not justified. It reiterated that the Appellate Tribunal's findings were not perverse, and no substantial question of law arose for the High Court's intervention. Consequently, the Supreme Court allowed the appeal, setting aside the High Court's judgment and reinstating the decision of the Appellate Tribunal. This comprehensive analysis of the legal judgment highlights the key issues, the arguments presented, and the final decision rendered by the Supreme Court in reinstating the Appellate Tribunal's reasoned order.
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