9911796707
TMI Blog2021 (6) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... ccountant Member For the Appellant : Shri Rajendra Kumar (D.R) For the Respondent : Shri P. Murali Mohan Rao. ORDER PER SMT. P. MADHAVI DEVI, J.M. : This is Revenue s appeal filed for the Assessment Year 2013-14 against the order of the Commissioner of Income Tax (Appeals)-4, Hyderabad Dt.20.07.2017. 2. The brief facts of the case are that the assessee, an individual and one of the promoters and Chairman of M/s. Lanco Infratech Limited filed his Return of Income for the Assessment Year 2013-14 on 31.7.2013 admitting total income of ₹ 3,42,66,780 (income from salary of ₹ 3,37,87,481 and income from other sources of ₹ 7,01,407). The Return of Income was processed u/s. 143(1) of the Act and subsequently the case was selected for scrutiny. 4. During the course of assessment u/s. 143(3) of the Act, the Assessing Officer observed that there were credits in assessee's Axis Bank A/c. No.836486982 totalling to ₹ 17,78,15,615 deposited in US $. The assessee explained that the same were received form his NRI account maintained with Barclays Bank and Standard Bank Ltd., Mauritius duly complying with the guidelines of the Regulatory Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the receipts brought into India from outside sources cannot be taxed in India. In support of the same, the assessee referred to provisions of Section 5(1)(c) and 6(6) of the Income Tax Act and submitted that no enquiry on the source of income earned outside India can be called for. However, the Assessing Officer has held that the assessee has not filed any evidence in support of his residential status, to be called as resident but not ordinary resident of India . Therefore, he did not consider the claim of the assessee. Accordingly, the Assessing Officer treated the total amount of ₹ 17,78,15,615 as unexplained credit and brought it to tax u/s. 68 of the Act. Aggrieved, the assessee preferred an appeal before the CIT(Appeals) and the CIT(A) granted relief to the assessee by following the ITAT order in assessee's own case for the earlier assessment years 2011-12 and 2012-13. Against the relief granted by the CIT(Appeals), the Revenue is in appeal before us by raising the following grounds : 1. The CIT(A) erred in holding the status of the assessee ;as Resident but not ordinarily resident. 2. The CIT(A) erred in deleting the addition made ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-2011. Assessing Officer also verified the website of SEBI and noted that in the 'red herring' prospectus of M/s. Lanco Infratech Limited, the above said company was shown as a single person company in which assessee is the sole shareholder of single share available as on 29-07-2006. Based on the above, Assessing Officer came to the conclusion that the above said company is nothing but an alter ego of assessee and therefore funds, if at all proved to be transferred from M/s.Vitrual International Ltd., Mauritius to the bank account of assessee in Mauritius, still do not explain the source of funds in the hands of assessee. Considering the above and also the legal position as discussed by him in para 6 of the assessment order, he came to the conclusion vide para 8 of the assessment order as under: 8. The assessee who is a high net worth individual and who has significant business interest in India, as can be seen from the Statement of Affairs, has failed to furnish sufficient evidence with regard to nature and source of ₹ 78,04,58,374/- credited in the NRI Ledger. The assessee has merely relied on a copy of a certificate of loan from a company in Mauritius ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,374/- has been made from the assessee's own Overseas Bank account and thus income, if any had already been received in abroad. Consequently the question of receiving the same income again in India does not arise. Hence, such receipt shall not be taxed under Section 5(2) of the Act. b. The assessee has merely transferred his own money from Mauritius to India and no credit has been obtained by the assessee as the money has been transferred from his Barclays Bank, Mauritius to NRI A/c. held in Axis Bank and Indusind bank. This tantamount to nothing but passing of money from right hand to left hand. Hence, no addition can be made as Unexplained Credit u/s.68/69/69A/69C of the act. c. The assessee has received the above said amount from his Barclays Bank, Mauritius to NRI A/c. from the loan obtained from M/s.Vitrual International Limited, Mauritius in support of which the assessee has submitted confirmation letter from M/s.Vitrual International Limited, Mauritius. d. Without prejudice to the above, the assessee has not only established the source of the money as also established the source to source by way of submitting the confirmation from M/s.Vitrual Internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are received into Mauritius account, then that becomes source of the source which cannot be examined by Assessing Officer, unless there is any incriminating evidence. Except presumptions and allegations, virtually there is no evidence against assessee that these funds received into his bank account in Mauritius are his own incomes from India or 'round trip' funds of assessee as alleged. Therefore, all the grounds raised on this issue, particularly Ground No.10 11 does not require any consideration on the facts of the case. 12. Coming to the issue of creditworthiness of the above said company, there is no dispute with reference to the funds. It has its own funds and Ld.CIT(A) took pains to examine and hold that it is creditworthy. Nothing was brought on record to counter the findings of Ld.CIT(A), except contending that the order of the CIT(A) is not correct. Therefore, the ground regarding creditworthiness of the company particularly from Ground No.6 to 10 also does not require any consideration. Para 13 . . Para 18 . 19. In view of the legal principles as stated above, provisions of Section 5(2) are also not applicable as the amount receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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