2002 (8) TMI 252 - AT - Income Tax

Issues Involved:
1. Deletion of additions of unexplained amounts of gift.
2. Non-applicability of immunity under the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities & Exemptions) Act, 1991.
3. Interpretation of CBDT Circular No. 611 dated 30-9-1991.
4. Applicability of section 4 of the Remittances in Foreign Exchange (Immunities) Scheme, 1991.
5. Consideration of RBI's letter regarding the prescribed date for filing declarations.
6. Applicability of section 69 of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Deletion of Additions of Unexplained Amounts of Gift:
The Assessing Officer (AO) found deposits of Rs. 1 lakh in the assessee's account and required an explanation for the genuineness of these deposits. The assessee claimed that the deposits were received under the Remittance of Foreign Exchange (Immunities and Exemption) Act, 1991, through a demand draft. The AO, however, rejected this claim because the declaration was not filed within the prescribed 15-day period and added the amount as unexplained under section 69 of the Income-tax Act.

2. Non-applicability of Immunity under the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities & Exemptions) Act, 1991:
The AO argued that the immunity under the Special Act was not available because the declaration was not filed within the 15-day period as required by section 3 of the Act. The CIT(A) noted that the declaration was indeed filed late, but the assessee claimed exemption under section 4 of the Act, which does not depend on the conditions of section 3.

3. Interpretation of CBDT Circular No. 611 dated 30-9-1991:
The CIT(A) and the Tribunal considered the CBDT Circular No. 611, which clarified that remittances in foreign exchange are exempt from tax under the Income-tax Act. The Tribunal found that the circular supports the contention that section 4 of the Special Act provides exemption independent of section 3.

4. Applicability of Section 4 of the Remittances in Foreign Exchange (Immunities) Scheme, 1991:
Section 4 of the Special Act states that any remittance received under the Act shall not be taken into account for any proceeding under the Income-tax Act. The Tribunal held that section 4 operates independently of section 3 and provides exemption for remittances even if the declaration under section 3 was not filed within the prescribed period.

5. Consideration of RBI's Letter Regarding the Prescribed Date for Filing Declarations:
The RBI's letter indicated that declarations filed after the prescribed date do not qualify for immunity under the scheme. The Tribunal noted that the assessee did not claim immunity under section 3 but rather exemption under section 4, which does not require adherence to the 15-day declaration period.

6. Applicability of Section 69 of the Income-tax Act:
Since the Tribunal held that the remittances are exempt under section 4 of the Special Act, the addition under section 69 of the Income-tax Act was not applicable. The Tribunal concluded that the remittances received by the assessee should not be taken into account for any proceedings under the Income-tax Act, thus negating the addition made by the AO.

Conclusion:
The Tribunal upheld the CIT(A)'s decision, confirming that the remittances received by the assessee are exempt under section 4 of the Special Act, and dismissed the revenue's appeals. The Tribunal emphasized that section 4 provides an independent exemption from tax proceedings under the Income-tax Act, irrespective of the conditions in section 3. Consequently, all the appeals by the revenue were dismissed.

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