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TMI Blog2013 (2) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on which the Assessing Officer relied on has not been authenticated and is not clear from whom the documents were obtained. 5. The Commissioner of Income Tax (Appeals) failed to consider that the authenticity of documents is inadmissible in evidence and it requires to be attested under section 3(2) of the Diplomatic and Consular Office (Fees) Act 1948. 6. The Commissioner of Income Tax (Appeals) ought to have appreciated that even by the documents given by the Assessing Officer, amount was available from March 2000 and hence cannot be added as unexplained income for the AY 2002-03. The assessment proceedings for assessment in AYT 2002-2003 is therefore, barred by limitation. 7. The Appellant further submits that addition cannot be sustained without appellant being given opportunity to examine the veracity of the documents and verifying the same with the bank. 8. The Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer who had failed to appreciate that it cannot be taken that the appellant has agreed for any addition, but only those additions which have the sanction of law and that too when no penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Webster Foundation with declaration of acceptance with the confirmation of the transfer of the above sum to the Foundation s ownership under the signature of the persons managing the Foundation. 6. Information is also on record to show who the beneficiaries under the said Foundation are. The translated portion of the information in German language is as under : Translated portion of the information in German Language : {Reference : imtransalator.com} LGT Bank in Liechtenstein, A Member of Liechtenstein Global Trust. Statement of Beneficial Ownership Ref: LTV/BAL/2664 Account/Securities Account 0163517 Contracting Partner, Webster Foundation, Vaduz The undersigned explains herewith that he/she is himself entitled to the ultimate economic assets. The fact that he is entitled to the economic assets, in the end, economically. 1. Name Mammen Mappillai Surname Kandathil Mammen Date of Birth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9490 Vaduz Mand No.:TH 71049 Foundation Date: 27.3.2000 Status : Actively Last Customer Visit : 24.3.2000 To Administrative Councils and Endowment Councils. Profile Management Trustreg., Drawing right : Individually Telser Marcel, Triesen Bankers: LGT Bank in Liechtenstein AG, Vaduz A/c. No. 0163517AB Several Investment Consultant - Meier Dirk Representative - LGT Treuhand AG, Vaduz Principal - Private Principal Fixed fees - 1000 27.3.2003 Flat rate fees Minimum 5500 due on 27.3.2003 Assets for 31.12.2001 770796.60 Swiss Franc Invoiceable Flat rate fee 5500 Purpose Possession,proofcontracts authorities Instructions for Management, Accounting etc. History: According to OBV from 14.11.2000 Enclosure 4/4 Documents should still be signed by the father and the son. Remuneration in cash for the settlement of the final account of the Institution allowed to draw. Property status and decision in 2001 from customer allowed to sign. Property status and decision in 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me clear. 1. The assessee had visited Vaduz, Liechtenstein on 24th March, 2000. 2. The assessee, the elder son Kandathil Mammen Mammen has created the endowment on 24th March, 2000 by transferring 1,23,000 euro dollars. The name of the trust created is Webster Foundation represented by the trustee Peter Meier who in turn opened a bank account with LGT Bank with A/c. No. 0163517. The beneficiaries named are the father and the two sons. The said account as on 31.12.2001 showed a balance of 7,78,437.80 Swiss Franc kept in safe custody Account which is inclusive of accrued interest. There was a debit to this account on account of flat rate fees and the net balance is shown at 7,70,796 Swiss Franc. This information is evident from the account statement dated January 1,2002 which is reproduced as under: Webster Foundation 9490 Vaduz Vaduz, January 1assessee, 2002 DME/PK2/09:26:57 Summary As on 31.12.2001 Acc. Overview: No. accounts/Portfolios Cur. Amt. Curr. Rate Amt. in CHF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in Asst. Year 2002-03. In any case, the said sum of CHF 770,796.70 would include Euro 123,000 referred hereinabove. It is requested that copies of the said documents and all other documents and papers that maybe relied upon by the Department maybe given to me. 14. In view of the above submissions made on 10-11-2009 the Assessing Officer issued summons under sec. 131 of the Act to the assessee to ascertain all the facts and circumstances relating to the transaction in question. The assessee personally attended before the Assessing Officer. The Assessing Officer asked various questions to which the assessee also given reply. The Assessing Officer after putting various questions to the assessee and after receiving reply, observed as under : Before the examination is concluded, I would like to sum up that the information received and taken on record shows that there is a private family Trust in the name of M/s. Webster Foundation, Vaduz created by you on 24.3.2000. Yourself, your father and your brother are directly associated with the said Trust. The initial Endowment was Euro 123000 and the Foundation in turn opened a bank account with LGT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the aforesaid depositions of the assessee observed that : The signatures found in the documents are that of the assessee and the same exactly tallies with the signature found on the returns of income filed and the sworn statement. Since the assessee is the founder of the trust, and in the declaration of endowment he confirmed that he had lawfully acquired the money and that he was competent to dispose of the money, the sources for the balance in the said bank account has to be treated to be his contribution and the same has to be brought to tax as his unexplained investment u/s 69 of the Act, in the absence of any evidence to show that the same is out of accounted for income. The contention that the initial contribution cannot form part of the subject matter of assessment for the current assessment year has to be ignored in view of the fact that the assessee failed to explain the composition of the balance outstanding as on 31.12.2001. It is for the assessee to explain the break up of the amount in the safe custody account as on 31.12.2001. The possibility of withdrawals from the said account and subsequent fresh investments into the account cannot be ruled out. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17AAA EUR with LGT Bank in Liechtenstein Aktiengesellschaft, Vaduz. In the said declaration it was confirmed that the assessee had lawfully acquired and was entitled to dispose freely of these monies and it was also confirmed that the said declaration of endowment was free from mistakes, threat or compulsion. The said declaration was duly signed by the assessee. The declaration was also accepted by the said M/s. Webster Foundation with declaration of acceptance with the confirmation of the transfer of the above sum to the Foundation s ownership under the signature of the persons managing the Foundation. 20. Information on record also showed that the beneficiaries under the said Foundation are, Mammen Mappillai Kandathil Mammen, Mammen Arun and Mammen Kandathil Mammen. Information was also on record to show what the balance in the said account as on 31-12-2001 was at 778,437.80 (Swiss Franc). The entire information with regard to the declaration of endowment in favour of M/s. Webster Foundation, the beneficiaries and bank details were provided to the Assessing Officer by the Central Board of Direct Taxes ( CBDT for short), Ministry of Finance, Government of India and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the CIT(Appeals) followed the decision of the Hon'ble Supreme Court in the case of Devi Prasad (72 ITR 194) (SC) wherein it was held that the burden of proof lies on the person whose account is credited to explain the source of the same. He also relied on the decisions of the Hon'ble Supreme Court in the case of Sumati Dayal v. CIT (214 ITR 801), Kale Khan Mohammed Hanif v. CIT (50 ITR 1) (SC) and Sreelekha Benerjee (49 ITR 112) (SC). He further observed that in fact Hon ble Kerala High Court in the case of CIT v. C.P. Adam (105 ITR 465) (Ker) has held that the Revenue is entitled to collect information from any source available to it and is not obliged to reveal the source. But still the Department gave all papers available with it to the assessee before confronting him based on these evidences. In view of the above, the assessee s contention that Department should prove credited amounts of assessee was held to be not valid. If the assessee wanted to establish that the amounts mentioned in the bank pertained to earlier years, the burden of proof would lie on him which was not discharged in this case. As far as the Revenue is concerned, the CIT(Appeals) observed, it gath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer thereafter by taking into consideration all the facts and circumstances, the addition was made. The CIT(Appeals) by following the decisions in the cases of CIT v. East Coast Commercial Company Ltd. (63 ITR 449) (SC), Ramanlal Kamdar v. CIT (108 ITR 73) (Mad) and Malwa Texturising P. Ltd. Ors. V. ACIT (77 TTJ 995) (Indore) confirmed the addition made by the Assessing Officer and dismissed the appeal filed by the assessee. 26. Aggrieved by the order of the CIT(Appeals), the assessee has come up in appeal before the Tribunal. The learned counsel for the assessee submitted that the documents, relied on by the Assessing Officer, are not authenticated and on the basis of that no addition can be made u/s 69 of the Act. 27. Even as per the documents relied on by the Assessing Officer the amount was available from March, 2000 and it cannot be added as unexplained investment for the assessment year 2002-03 and therefore it cannot be added as unexplained income for that year. The learned counsel for the assessee further argued that based on the single entry no addition can be made. The Assessing Officer has not explained the source of the assessee. Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2001 was ₹ 2,26,38,378/- which pertains to the assessment year 2002-03 relevant to the previous year 2001-02. Accordingly, the addition was made in the assessment year 2002-03. The main argument of the learned counsel for the assessee is that the addition made by the Assessing Officer by invoking sec. 69 of the Act was not relating to the assessment year under consideration. We are not agreeing with the submission of the learned counsel for the assessee for the simple reason that on the facts of the case stated above, the summary bank statement in the letterhead of LGT Bank of Liechtenstein Aktiengesellschaft, Vaduz as on 31.12.2001 shows the balance amount of Euro 7,78,437.80 Swiss Franc amounting to ₹ 2,26,,38,372/-. Therefore, we are of the view that the Assessing Officer has rightly added the same for the assessment year 2002-03 and has rightly confirmed the same by the CIT(Appeals). 30. Another submission made by the learned counsel for the assessee is that without any authenticated material/documents section 69 of the Act cannot be invoked by the Assessing Officer. The Assessing Officer received information from CBDT and after scrutinizing all those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... got nothing to do with the said Foundation. I earnestly hope that the Department would reciprocate its gesture by not penalising me by way of penalty or other punitive measures as a good gesture to the cooperation I have extended to the Department. 32. From the above it is very clear that the assessee has admitted before the Assessing Officer to pay the taxes. Therefore, after considering the entire material on record, bringing all the material to the notice of the assessee and after detailed questionnaire and discussion with the assessee, the Assessing Officer has invoked section 69 of the Act. Thereafter, the assessee agreed to pay the taxes. Therefore it cannot be said that the addition made by the Assessing Officer was purely on the basis of agreement by the assessee. 33. The learned counsel for the assessee has also argued that as per the Evidence Act, the addition made by the Assessing Officer is based on certain material without there being any evidentiary value. With regard to this argument of the learned counsel for the assessee, we are of the view that the Income Tax authorities are not bound by strict Rules of Evidence as held bythe Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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