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TMI Blog2006 (9) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... y grievance of the assessee is that the CIT(A) erred in confirming the addition of Rs. 22,50,000 as undisclosed income of the assessee. The addition is made in the hands of the assessee on the basis that an NRI gift of Rs. 20,00,000 received under the Remittance of Foreign Exchange (Immunities) Scheme, 1991 by one M/s Vishwamurti Trading Consultancy Services Pvt. Ltd. in which assessee was a director, was a bogus gift arranged by the assessee and the assessee paid Rs. 20,00,000 being amount of the gift, plus service charges of Rs. 2,50,000 to arrange this bogus gift, out of his undisclosed income. 3. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is a director shareholder, under the Foreign Exchange (Immunities) Scheme, 1991. As clarified by the Central Board of Direct Taxes, vide Circular No. 611, "the relevant provisions of the Act, as explained above (in the circular), make it very clear that the Assessing Officers, in any proceedings under the direct tax laws, will not make any enquiry with regard to remittances received in foreign exchange under the Remittances in Foreign Exchange (Immunities) Scheme, 1991". Yet the source of the receipt under the said scheme was investigated by the Assessing Officer. The defence for not granting this immunity was that the said immunity is available only to the recipient and not a third party. It is contended that the gift was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the foreign remittance and make an addition in respect of the same in the hands of other connected person on the ground of such person having paid the consideration for this remit-tance. That is a hyper technical approach and is against the legitimate expectations of the assessees in general. Once the CBDT goes on record to say that "there should be no fear of any harassment by the tax authorities", it cannot be open to the Assessing Officer to examine the same transactions indirectly in the hands of persons other than the recipient of the foreign exchange remittance for the purposes of making addition in respect of the said remittances. For this reason alone, the addition confirmed by the CIT(A) is contrary to the scheme of the immunity sc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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