9911796707
TMI Blog2021 (10) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... al") in the wealth tax proceedings of the Appellant for AY's 2007-08 to 2013-14, wherein vide order dated 24 December 2020 (bearing Wealth Tax Appeal Nos.2 to 8/Mum/2020), it has been held as under: a) That the Appellant was nominated as one of several beneficiaries of an offshore irrevocable discretionary trust, settled in the year 1989 by the Appellant's non-resident late maternal uncle Shri Pratap Malpani, governed by the laws of Guernsey ("Malpani Trust"). b) That the Appellant was not a contributor to the Malpani Trust structure. c) That the Appellant is not liable to be construed as sole beneficiary of the Malpani Trust. d) That the Revenue cannot collapse the offshore trust structure i.e., corporate veil cannot be lifted, since offshore entities are independent entities are taxable in their respective jurisdictions. e) That the Appellant was not the 'substantial owner' of assets held by Kinetic Holdings Ltd. f) That bank accounts in foreign jurisdictions pertaining to offshore entities of the offshore trust could not be treated as bank accounts of Appellant even though for compliances by the offshore trustees in relation to local anti-money launde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case and in law, the Lower Authorities erred in invoking the provisions of BMA (reserving the Appellant's position as to constitutionality thereof) overlooking that the alleged foreign assets and/or income purported to be brought to tax in the hands of the Appellant were not sourced from India, and die legal ownership whereof was vested in the offshore discretionary trust(s) and/or corporate entities within the framework of such offshore discretionary trust(s); as such precluding authority in law to seek to bring to tax in the hands of the Appellant such foreign assets and/or income, whose 'situs' was not India, and which remained amenable to tax strictly in their offshore jurisdictions. 4. That, the Revenue has failed to appreciate the distinction between "undisclosed" and "part disclosure". The Appellant prays that based on the facts and information available with the Lower Authorities, the question of any jurisdiction based on such facts having been duly undisclosed does not arise and hence the CIT(A) order ought to be quashed along with all consequential action thereto. 5. That the purported invocation of the provisions of section 4 of BMA proceeds on the fata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee that formation of Avit Investment Ltd./Kinetic Holdings Ltd. and related entities/structures by Pratap Malpani took place in the early and mid-1980 's is concerned, the same is not disputed at present but this information needs to be thoroughly and independently enquired and investigated into; as such, the Revenue had no power to approbate and reprobate, including through purporting to contend that certain instruments of migrated trust (including Bird International Foundation) were unavailable with Revenue, despite these very instruments coming to be furnished to the Appellant as part of the FT&TR documents provided inspection of to the Appellant, and therefore available on the files of the Revenue. 7. That the Commissioner (Appeals) has erred, in law, in purporting to rely upon certain documents produced by the AO which are unsigned, unstamped and have no record of formal receipt by the concerned FT&TR division, and hence cannot be considered as valid evidence under the provisions of Indian Evidence Act, 1872. 8. That the Lower Authorities have erred in overlooking the duly apostilled/notarized documents received from the relevant foreign parties, prior to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly considered the factual position in its order under the Wealth Tax Proceedings. 12. That the Lower Authorities have erred in concluding that the provisions of BMA were applicable to the Appellant in circumstances by disregarding the fact that the trust structure had not effected any distribution to the beneficiaries, and as such no income was capable of being brought to tax in the hands of the Appellant. These facts had inter alia been corroborated by certificates of the original and the easting Guernsey trustees, i.e. Michael Collins on 7 March 2016, and Confiance Limited, Guernsey on 15 and 24 March 2016, which -was not disputed by the Revenue. 13. The Lower Authorities misplaced reliance upon retracted statements of Shri G L Lath and failure to consider that Shri G L Lath's statements constituted 'hearsay evidence' which had no standing in law, and similarly, reliance upon purported statement of Ms. Nita Shivdasani without grant of opportunity for cross-examination, thus violated quintessential principles of natural justice; which has led to egregious legal errors, in effect, nullifying scope for Revenue to rely thereupon. The Hon'ble Tribunal has duly consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove is contrary to the principles of natural justice, and liable to quashed in limine. 18. The Appellant prays that until the disposal of this appeal or such time, a stay be granted against the implications arising from the proceedings before the CIT(A) filed u/s. 15(l)(a) that may result in quantification of the amount of tax payable, against the order passed u/s. 10(3) of the Act. The same could lead to multiplicity of proceedings, with the possibility of such proceedings becoming meaningless if ultimately the order passed by the Lower Authorities is found to be invalid on grounds of jurisdiction; and undue hardship to the Appellant if the apparent unlawful and unrealistic demand arising on account of non-appreciation of entire facts of the case and consequential settled legal position, is made to be recovered. This in turn would not be in consonance with the powers of the Tribunal to ensure that the fruits of success in such appeals are not rendered meaningless or nugatory. 19. Your Honour may consider that such order of jurisdiction relying upon misplaced facts, available with the authorities prior to the BMA coming into force and continuing thereafter, and which have alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The assessee has simply stated certain case specific facts and requested for keeping the notice issued u/s 10(1) of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA, 2015) in abeyance. It is to be noted that the WP filed by the applicant against the order of the hon'ble ITSC dated. 29th September, 2017 is under Income Tax Act, 1961 but the notice issued to the assessee u/s 10 (1) is related to the Black Money, 2015. These two things are quite different and can never be clubbed as scheme of taxation is completely different. Further, the AY for which WP filed is different (AY 1998-1999 to 2014-15) from the AY for which notice u/s 10 (1) of BMA, 2015 (AY 2016-17) issued. Hence, the claims of the assessee and his request to keep the notice u/s 10(1) in abeyance is emanating from his lack of awareness of the scheme and purpose of bring BMA, 2015. 4. In his letter dated 18.12.2017, the assessee further raised some more objections. They are discussed and dealt, with as below. 4.1. It was averred that notice u/s 10(1) of BMA, 2015 issued to assessee is ex-facie prematxire, but failed to give any reasoning why it was premature. It is a vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax". 4.5. On perusal of the clause (ii) to the section 5, it is very clear that: where the assessments related to foreign asset and income have been covered under the Income-Tax Act and such income only to be reduced from the income assessed under BMA, 2015, but not vice-a-versa. In other words, undisclosed foreign asset and income have to be assessed under Black Money Act only from the AY 2016-17. It is to be noted that this act came into force w.e.f 1st July, 2015 and hence the first year of assessment under BMA is AY 2016-17. In cases where foreign income or assets were assessed under Income Tax Act, 1961, before the application of the BMA, 2015, the assessee can seek reduction to the extent assessed under IT Act, 1961 from the total income assessed under BMA, 2015. But the reverse is not possible, 4.6. In the assessee's case, the foreign assets and income were considered and assessed under Income Tax Act vide assessment orders u/s 143(3) r.w.s.l53A for A.Y.s 98-99 to 2014-15 made on 30.03.2016 and served on the assessee on 31.3.2016. These assessment orders for A.Y.s 98-99 to 2014-15 were quashed by the Hon'ble High Court of Bombay in its order dated. 10.08.2016 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Munir Merchant, Mrunal Parekh, Mr. Chirag Naik, Mr. Hasmukh Ravaria, Ms Vaijayanti Sharma i/b. MZM Legal, for the Petitioner. Mr. Anil C. Singh, ASG with Mr. Sham Walve, for the Respondents. CORAM: SUNIL P. DESHMUKH & ABHAY AHUJA, JJ. DATE: 30th MARCH 2021. P.C:- Petitioner in the present Writ Petition seeks mandamus to have infrastructural facility in place for disposal of appeal preferred by the Petitioner on jurisdictional issue against the order dated 17th January, 2019. The same has been pending. It is submitted on behalf of the Petitioner, requests for its disposal have not been responded to. 2. Learned ASG on behalf of the Respondent submits that it is not a case that no infrastructure facility is available and the matter could have been properly prosecuted by the Petitioner. 3. In the interregnum, it appears that assessment proceedings pursuant to the show cause notice about which jurisdictional issue has been raised, have been proceeded with. Learned Counsel for the Petitioner submits that if those are decided, the appeal would be rendered redundant. 4. Having regard to the submissions on either side, it appears to be expedient if the Appellate Authority dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and bad in law. 5. That, in the facts and circumstances of the case, and in law, the Adjudicating Authority has erred in invoking the provisions of section 4 of the BMA against the Appellant, disregarding that section 4 applies in case of undisclosed foreign asset and/or income, overlooking that in a preceding year when the Appellant did in fact have a beneficial interest in a foreign discretionary trust structure, such a disclosure of beneficial interest, albeit not an 'asset', was validly made under the aegis of the Income-tax Act, 1961. 6. That, in the facts and circumstances of the case and in law, after appreciating that the assessment years in contention in the pending writ petition, viz. AY 1998-99 to 2014-15, were distinct from the assessment year in relation to which the notice under BMA was issued, viz. AY 2016- 17 are different, the Adjudicating Authority nevertheless proceeded to 'cherry picking', in order to return a finding of jurisdiction, without any supporting factual basis, and overlooking cessation of the Appellant's beneficial interest in the foreign discretionary trust, with effect from is 15 July 2014. 7. That, in the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee for a rectification under section 12, may appeal to the Commissioner (Appeals) 8. Referring to the above section learned CIT(A) noted that under section assessee is not allowed to raise any other ground relating to the assessment as these are appealable under remaining limbs of the sub-section. Thereafter learned CIT(A) observed that the assessee has taken nine grounds of appeal spanning various issues related to the letter of the AO disposing off the jurisdictional objection raised by the assessee before him. That in his view, Section 15(l)(b) of the Act is very specific and is strictly limited to the determination of the liability of the appellant to be assessed under the provisions of BMIT Act 2015 based on the facts and circumstances existing in the case of the assessee. No other adjudication can be made under these provisions. In light of the limited scope of an appeal under section 15(l)(b), the Grounds no. 1, 2 and 3 of assessee's appeal which are connected with disposal of objections by the AO in conformity with the rules of natural justice are found to be beyond the scope of an appeal filed under section 15(l)(b) of the BMIT Act and hence, cannot be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endent taxable entities outside India. Therefore, assessee can only be a beneficiary and remain a beneficiary." 10. Submission also included that the appellant is pursuing income tax proceedings under which notice have been issued and assessment made for A.Ys.2008-09 to 2013-14, A.Ys. 1998-99 to 2007-08 & A.Y. 2014-15. It was submitted that Revenue continues to pursue the right to assess to tax the assessee for the offshore trust assets under Income Tax Act these must stand excluded from the remit of BMA (this submission is advanced without prejudice to the primary contention that there is no scope to bring to tax in India in the hands of the assessee either the corpus or income of the offshore Malpani Trust). It was also pointed out that in a detailed submission dated 18.12.2017 on the limited issue of jurisdictional objections it was inter alia pointed out that the BMA had no application to the assessee's case emphasizing that the show-cause notice issued was premature as the assessee had time until 31.3.2018 to file a return of income for A.Y. 2016-17 under section 139(4) of the I.T. Act. The said submission reproduced has following conclusion :- "The jurisdictional facts ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and which is duly disclosed by the Appellant in the Schedule FA of the Income Tax Return for AY 2014-15 & 2015-16. Copy of Schedule FA for AY 2014-15 & AY 2015-16 is enclosed in Annexure 1. b) Letter dated 28 August 2017 of Pr. Commissioner of Income Tax (Central)- 2 issued to Income Tax Settlement Commission (ITSC) concedes trusts created by Pratap Malpani. Further, it is conclusively established that the equity interests in Kinetic Holdings Limited belonged to (Late) Pratap Malpani. It follows that it is not in dispute that the (Late) Pratap Malpani appointed Albany Trustee Company Limited as trustee of the offshore 'corpus' settled upon trust by him. Moreover, it confirms that there is no documentary material on record to show that Appellant had unaccounted money, or money that has escaped tax or money that was remitted through illegal channels. Copy of Letter dated 28.08.2017 of Pr. CIT (Central)-2 is enclosed in Annexure 2. c) The Appellant relies on the findings recorded by the Hon'ble Tribunal in wealth tax proceedings of the Appellant, wherein it has been conclusively held, in para 30 of its order, that "The case of the revenue is not that the investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l ownership/beneficiary irrespective of the ownership shown in relevant docuemnts. That hence, any decision under Wealth Tax Act where the concept of 'beneficial ownership' or mere 'beneficiary' is not there, cannot be imported to decide the issues in BM Act. Thereafter learned CIT(A) observed that since the appeal papers did not contain the documents/information which had been before the Assessing Officer at the time of issue of notice under section 10(1) of the Act, it was found necessary to call for details of such documents from the Assessing Officer. He noted that it was also informed by the assessee that the assessment order under section 10(3) of the BMIT Act had been passed by the Assessing Officer on 31.3.2021. He noted that the Assessing Officer has intimated that the details of various documents/information available with the Assessing Officer and which have been relied upon for issue of notice under section 10(1) of the Act have been elaborated in detail in the assessment order passed by the Assessing Officer. He noted that these documents have already been shared with the assessee and are in the knowledge of the assessee. He observed various documents/information quote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t established existence of offshore entitles in which the assessee was the sole beneficiary / beneficial owner of the assets in these entities. These accounts are: LIST OF BANK ACCOUNTS IN SINGAPORE Bank Branch A/c no Name of Account Credit Suisse AG Singapore 125042 Mokopane Ltd Credit Suisse AG Singapore 125114 Kinetic Holdings Ltd Credit Suisse AG Singapore 125132 Alea Management Limited Barclays Bank PLC Singapore 91321400 Vashovardhan BIrla & Shloka Birla Barclays Bank PLC Singapore 91312600 Vashovardhan Birla & Avanti Birla Barclays Bank PLC Singapore 91321300 Vashovardhan Birla & Vedant Birla Barclays Bank PLC Singapore 91320000 Mokopane Ltd Barclays Bank PLC Singapore 91318600 Confiance Limited as Trustee of The Banyan Trust Barclays Bank PLC Singapore 91403600 Kinetic Holdings Ltd. TABLE -3 LIST OF BANK ACCOUNTS IN SWITZERLAND BANK BRANCH A/CNO NAME OF ACCOUNT CREDIT SUISSEAG SWITZERLAND 1367551 KINETIC HOLDINGS LIMITED CREDIT SUISSEAG SWITZERLAND 1494489 ANDRID LLC CREDIT SUISSEAG SWITZERLAND 722484 ALEA MANAGEMENT HSBC BANK/CREDIT SUISSE BANK SWITZERLAND 1541518 5 ALEA MANAGEMENT HSBC BANK/CREDIT SUISSE BANK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banyan Trust (Guernsey) (xii) Confiance Ltd as Trustee of The Banyan Trust (xiii) Nebola Trust (xiv) The Bird International Foundation (xv) Capital Wizard Limited (xvi) Zeus (xvii) Epicor Software (xviii) Avit Investments Limited (xix) AAL (S) Pte Ltd (xx) Stripe 10 LP -Carlyle Partners V (xxi) The LP Property Trust (xxii) Felt Learning Limited The layers or intermediate companies are companies which provide web of intricate layering by functioning as subscribers, directors, authorized signatories, settlers, trustees, protectors etc. of the front entities. Such entities were identified by the AO as below: SN Name of the Layering Entitles Service Provider (i) Credit Suisse Trust CREDIT SUISSE GROUP (ii) Manex Ltd (iii) Blue Sea Administration Ltd (iv) One Sun Limited (v) Snow Fall Limited (vi) Verduro Associated Ltd (vii) EFG Reads Trust Company Limited Jersey (viii) HSBC Guyerzeller Trust AG HSBC GROUP (ix) Codivo Management AG (x) First Corporate Director Inc (xi) Corhold Ltd. (xii) GZ Trust Corporation (xiii) Confiance Limited CONFIANCE GROUP (xiv) Consec Ltd. (xv) CCD Alpha Ltd. (xvi) CCD Beta Ltd. (xvii) CN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Bank, Singapore with account number 91513600, being held by Confiance Ltd as the Trustee. !n the name of The Banyan Trust Capital Account, there is an account with Royal Bank of Scotland International bearing account number 56450634. 2. NEBDA TRUST REG. As per the information received from the French authorities in the year 2011, the assessee had a Client Profile on the records of HSBC, Geneva. This profile with BUP ID 5090181710 was created on 10.02.2005 and assigned personal ID 140826 and Personal No. 181710. Assessee's profile was further linked to one NEBDA TRUST REG, which had BUP ED 5090281709. No further details have been received in this regard from the bank. 3. NEBOLA TRUST REG., LECHTENSTEIN Nebola Trust Reg. is registered in Liechtenstein. The date of entry in the Register of Liechtenstein is reported as 02.06.1998 and it was cancelled on 20.03.2012. The present status is shown as in liquidation. No further details about the formation of the Trust, the settlor, corpus fund, terms and conditions, beneficiaries and trustees, details of assets and investments held by the Trust and its bank accounts etc., are known. Nebola Trust Reg. is shown as the sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d whose assets were held indirectly for the assesses? as the ultimate beneficial owner, the Trust Deed was not produced to the Bank. As per letter dated 13.08.2011 from Mokopane Ltd to Credit Suisse Bank, Singapore, it is reported that the Trustee of The Banyan Trust is HSBC Guyerzeller Trust Company AG. This is in turn confirmed by the letter dated 23.08.2011 written by HSBC Guyerzeller Trust Company AG to Credit Suisse AG, Singapore in connection with Mokopane Ltd declaring therein that the settler of the trust is The Bird International Foundation and that the beneficiaries are Shrl Yashovardhan Birla and his family and that protectors are Andrew Hart and Geoffrey Spencer. 5. THE BANYAN TRUST (GUERNSEY) It is seen that the assessee had changed the service provided from HSBC to CCS Trustee Group/ Confiance Group of Guernsey in the year 2011-12 and the layering entities which acted as shareholders and directors of the front companies were also changed accordingly from HSBC group entities to CCS Trustee/ Confiance Group entities. After this, in the bank records, the name of the Trust is mentioned specifically as The Banyan Trust (Guernsey), These details are reaffirmed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MITED The company was incorporated in Jersey on 23.09.1985. The company has since been re-domiciled and registered in Guernsey on 12.11.2013. At the time of incorporation, the beneficial owner is stated as Shri Pratap Malpani of Singapore. Till 01.01.1990, the shares were shown in the name of Shri Pratap Malparsi (60 shares) and two other fiduciary companies, Nelson Management Services Ltd and ETC Management Services (Isle Of Man) Ltd (20 shares each). Shri Pratap Malparsi was still holding 60 shares in Kinetic Holdings Ltd in his own name till date of his untimely demise on 14.02.1990. Regarding the assets or properties held if any, in the name of Kinetic Holdings Ltd as on 01.01.1990, there is no information. After the demise of Late Pratap Malpani, the shares of Kinetic Holdings Limited were reportedly transferred to three fiduciaries of Albany Trustee Group, namely, Pennymore Investment Corporation Inc. Island Nominees Ltd and Continental Nominees Ltd and continued to be in their names till 01.01.1999. Thus, it is evident that the Albany Trustee Group came to hold the shares of Kinetic Holdings Limited after the demise of 3hrt. Pratap Malpani only. The actual descendants of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) 56, Cairnhill Circle, Singapore (iii) Flat C-8, Lees Place, London USD 3,839,102.38 (B) INVESTMENT IN COMPANIES (i) AAL (PTE) LTD, Singapore (524,999 shares) USD 524,999.00 (ii) Lee Place Property Ltd, London (1 share) USD 1.55 (C) AGENTS ACCOUNT USD 18,892.58 (D) CASH AND DEPOSITS USD 65,282.63 The Financial statements reveal that Kinetic Holding Limited had very little accumulated profits till 31.12.2010, USD 111,208.67 as per the data, The issued and paid to capital is USD 100. But loan of USD 9,106,369.54 received from Nebola Trust Reg., the sole shareholder, was outstanding in the books of Kinetic Holdings Ltd as on 3112.2010. This loan is stated to be interest free and unsecured without any specific time frame of repayment. During the period 01.01.2011 to 17.01.2012, this loan has been assigned by Nebola Trust Reg,, Liechtenstein in favour of The Bird International Foundation, Panama having far Birla as beneficial owner. Since from 21.01.2011 the shareholding of Kinetic Holdings Limited had changed hands from Nebola Trust Reg., Liechtenstein to Corhold Limited as nominee of The Bird International Foundation Panama, it is evident that this assignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d installment regarding property no.17 at Cairnhill Circle, Singapore during the year 2010-11. Regarding the property at Flat C-8, Lees Place, London, the assessee had denied that he had any knowledge about it. However, Shri G. L. Lath, his wealth manager had clearly stated in his statement that the property at OS was acquired: through some trust. The entity Lees Place Properties Ltd is a company fn which Kinetic Holdings Ltd and another entity Purewell Investments Ltd have one share each, out of the total issued capital of 4 shares. The remaining shares are held by nominee directors. Kinetic Holdings Limited is shown as a director in Lees Place Properties Ltd and C-S is shown as the address of Kinetic Holdings Ltd in its statutory return filings. This address Flat C-8, Lees Palace, London is found mentioned as the address of Herritor Investments Ltd also as per data available on the public domain. The delivery challan produced by !he assessee himself during the course of income-tax assessment proceedings shows that vehicle, was purchased for his son who is studying at UK, also showing Flat C-3, Lees Palace, London as the address for delivery. In account no.125114 with Credit S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1780 WITH CREDIT SUISSE BANK, SINGAPORE The account was opened on 21.02.2008. At that time, Credit Suisse Trust was the service provider and one of its companies Glue Seas Administration Ltd was acting as the Director/ secretary of Kinetic Holdings Ltd and hence acting as authorized signatory of the bank account. The authorized signatories have been authenticated by Shri. Bharat Ankaraju, assessee's advisor who has been issued Limited Power of Attorney to operate this account. This account has since been dosed on 28.02.2012 and the balance has been transferred to account no. 32257120 in the name of Brian Hams S Co maintained with the private bankers of UK, namely C Hoare & Co, London. This further establishes the fact that the assesses is having such fiduciary arrangements with persons other Than the regular bankers Elke law firms etc.. The details o! which have not been revealed till date. In the documents filed with the Bank, the assesses Shri Yashovardhan Birla has been identified as the Beneficial Owner of all assets / deposits In the said bank account. Perusal of the credit / debit notes, copies of which were part of the information received shows that substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed, there are no substantial transactions found during the relevant period. This account has since been closed and the balance transferred to Kinetic Holdings Ltd's a/c.56474312 with RBS, Guernsey. (iv) KINETIC-ACCOUNT NO.56474312 WITH ROYAL BANK OF SCOTLAND, GUERNSEY The existence of this account is revealed from the letter dated 25.04.2014 written by Kinetic Holdings Ltd to Barclays Bank, Singapore requesting to close the account Mo.91403800 with them and to transfer the remaining balance to A/c. No.56474312 in the name of Kinetic Holdings Ltd with Royal Bank of Scotland, Guernsey. No further information is available about this account as on date. (v) KINETIC -A/C No.33257120 OF BRIAN HARRIS & CO WITHC HOARS & CO, LONDON As mentioned supra, the presence of an account in the name of Brian Harris & Co with private bankers C Hoars & Co, London is established from the letter of Kinetic Holdings Ltd addressed to Credit Suisse, Singapore. Further details of beneficial ownership of this account and the investments /assets held thereunder are not yet known. 2. ALEA MANAGEMENT LTD Alea Management Ltd was incorporated under the laws of The Common wealth of The Bahamas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per documents an the records of the Bank, Limited Power of Attorney dated 1E.06.20G7 was granted to Shri. Bharat Ankaraju as Administrator on behaEf of the assesses. The copy of incorporation documents were provided by Credit Suisse Trust Ltd vide its letter dated 08.08^2007 to Shri BhaitAnkaraju, so as to facilitate the opening of an account for A[ea Management Ltd with Credit 5uisse Bank at Singapore. Thereafter, account no.l2S132 was opened with Credit Suisse Bank, Singapore in 2007. It is further seen that in add it ion to thJs existing account no,l25132, a new account has also been opened with Credit Suisse Bank, Singapore as can be seen from the letter of Alea Management Ltd dated 04.07.2011 addressed to Credit Suisse AG, Singapore regarding the new account proposed to be opened in the name of Alea Management Ltd. It is confirmed therein that the beneficial ownership of the new account is Mr. Yashouardhan Birla, being the beneficial owner of the Bird International Foundation, This account no.125132 was dosed subsequently onll.ll.Z012 and the balance / all assets were transferred to Alea Management Ltd - HSBC A/C13518394. The summarv of transactions during the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spread across different countries. The documents filed with the banks once again bring to the fore that the sole beneficial owner is the assessee Shri Yashovardhan Birla only and the Power of Administration has been granted to Shri Bharat Ankaraju to deal with the accounts, There are payments to Confiance Ltd as the Shareholder which again establishes the fact that there are accounts in the names of the Intermediate layer entities also which are held for the beneficial ownership of the assessee. Since Confiance Ltd is the Trustee of The Banyan Trust, which in turn is having the assessee as its sole beneficiary, all these accounts, irrespective of The fact whether they are held in the name of the front entities themselves or others like the Layer entities in this case, the sole beneficial owner of all such assets held there under is the assessee, Shn Yashovardhan Bfrla himself, as can be seen from the documents. In his order, the AO has discussed the evidences and Investments in these accounts in detail and the findings are summarized as under. (i) MOKOPANE - ACCOUNT No.0835-1282411 WITH CREDIT SUISSE, ZURICH The information about this account is made available from 01.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Banyan Trust, The Banyan Trust Capital Account and The Bird International Foundation. Substantial sum has. been transferred to Capital Wizard Ltd and The Banyan Trust Capital Fund. It Is also seen that money have been transferred for the credit of A/c. No. 88022936 of Capital Wizard Ltd's account with Coutts & Co, Hong Kong, a private banker. (iv) MOKOPANE- ACCOUNT NO.050038915 The only information available on date about the account is the Debit Note issued by Credit Suisse, Singapore to Mokopane Ltd intimating funds transfer from Mokopane Ltd's A/c. no. 125042- 01-780 to this account no. 050038915 No further details are available as on date about this account. (v) MOKOPANE- ACCOUNT NO.56448176 WITH ROYAL BANK OF SCOTLAND The correspondences found in A/c.N0.91320000 of Mokopane Ltd with Barclays Bank, Singapore contains information on the account opened with RBS International in the name of Mokoparie Ltd which also shows that substantial funds have been transferred to this new account with RB5, Further details about this account not ascertained as on date. MOKOPANE -ACCOUNT WITH HSBC, LUXEMBOURG The correspondence dated 12.09.2011 from Credit Suisse; Singapo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und furnished to the bank which fact was admitted by the assessee's wealth manager Shri G. L Lath also. As per the copies of letters addressed to the bank by Sorwood Development SA, it is seen that the bank had been issued a standing instruction to debit this account towards the credit card bills of Shri Yashovardhan Birla up to USD 50,000 per month and in fact the credit card bilk of the assessee had been found to have been debited to the account. The liquidation fee for Alea Management Limited, another entity connected to the assessee, has also been paid from the account of Sorwood Development S,A which reinforces the nexus of Sorwood with the other entities of the assessee. There are written Instructions to the bank, which is supported further by the confidential client notes, to transfer assets of Sarwood Development S.A. which held by the bank, to the newly opened account No.0835-1282441-3 in the name of Mokopane Limited, an entity of which the assessee is the beneficial owner. There are remittances made from the account of Sorwood Development to Herritor Investments Limited, with narration "Dividend to the shareholder". This clearly established the fact that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Though the assessee had claimed that certain amounts had been invested through LRS from FY.2007-08 to 2011-12, no further details about the nature of investment made, incorporation details of the company and its business operations were revealed in full, During the course of assessment proceedings, it has been claimed by the assesses that the entire sum invested in Herritor Investments Ltd has since been returned to him in the year 2012. However, the assessee has failed to provide any details or evidence of such receipt of money back from Herritor Investments Ltd. As per the information available on the public domain, Herritor Investments Ltd is reportedly a LJK based company and the address is shown as Flat C-8, Lees Palace, London which is the same property found listed in the Balance Sheet of Kinetic Holdings Limited. This address is shared by Kinetic Holdings Ltd also and both are listed as Directors of a company Lees Palace Properties Ltd, UK. Both companies are shown to be holding 1 share each in Lees Palace Properties Ltd This address of Lees Palace is also found mentioned m the letter addressed to Credit Suisse requesting to hand over the contents of the overseas safe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he incorporation details and structure of holding of the entity. 11. FELT E LEARING This entity was revealed for the first time by the assessee in his written submissions dated 18.03.2016. According to the letter, the shares are held by The Banyan Trust. However, no information regarding the incorporation details, capital and net assets of this entity has been submitted till date. 12. AAA (S) PTE LTD In the financial statement of Kinetic Holdings Ltd as on 17.01.2012, investment ins AAA (S) Pte Ltd is shown. No further details regarding the incorporation and holding structure are revealed tit] now, about this entity. 13. AVIT INVESTMENTS LTD According to the submission of Shri. G. L. Lath, part of the holding in an Indonesian company PT South Asia Pacific Viscose Ltd was made in the name of Avit Investments Ltd through the Credit Suisse AG as the front during the lifetime of Shri Ashokvardhan Birla. It was further submitted that the stakes were sold in FV 2007-08 and the proceeds have been credited to offshore Trusts / accounts set up by the assessee. This was denied by the assessee and no further details have been submitted by the banks concerned. Subsequently, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s discussed earlier. There are remittances to and from this entity over a period of time and the amounts involved are quite substantial. Certain payments have been clearly mentioned as towards property at Singapore. There are references to Client A/c also. The exact nature of these transactions and the details, of the client a/c mentioned therein are not yet known, 18. THE BANYAN TRUST Substantial sums have been found transferred to Banyan Trust from other offshore front entities of the assesses as discussed in the earlier. The Banyan Trust has an account with Credit Suisse Bank, Singapore with account number 91513600, by Confjance Ltd as the Trustee. In the name of The Banyan Trust Capital Account, there is an account with Royal Bank of Scotland Internal tonal bearing account number 56450534. Substantial sums have been found transferred to Banyan Trust from other offshore Front entities of the assesses In the name of The Banyan Trust Capital Account, there is an account with Royal Bank of Scotland International bearing account number 56450634 having considerable 39. OTHER ENTITIES From the bank account statements of the assesses, transfer of substantial sums to a few ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore account? of the assessee as on December, 2012. vii. That the assessee has two flats at London. First one situated at C-8, Lees Palate, London, which was purchased during Late Ashokvardhan Birla's time and the second Flat at B-S, Lees Palace, London, which was purchased out of remittances from India through LRS by the assessee probably in the name of a company, which is 100% owned by the assessee, which has an account in H5BC London. viii. That after the demise of Shri Ashokvardhan Birla, assessee's father, in the year 1990, a trust was formed in the year 1992 by the assessee and one Shri D. K. Agarwal, who was authorised to manage it. That the credit lying in the accounts of assessee's father Late Ashokvardhan Birla was transferred to this Trust created in 1992. ix. That there was some undisclosed investment in an Austrian company (read, PT South Pacific Asia Viscose Ltd) held in the name of Credit Suisse AG (read, Avit Investments Ltd) which was sold in the FV .2007-08 and the proceeds from undisclosed stake sate was credited to Credit Suisse AG's account and was routed to some of these trusts. x. He confirmed and corroborated! the statement given by Ms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue of notice under section 10(1) and has denied his liability to be assessed under section 10(3) of the Act raising various issues. Learned CIT(A) thereafter rejected the assessee's contention that the assessee has time to file return of income for the relevant assessment year until 31.3.2018. learned CIT(A) held that there was fetters on the Assessing Officer placed by section 10(1) of the Act specifying the time frame in which the notice is to be issued either with reference to filing of income tax return or with reference to the BMIT Act. He noted that the section does not even specify that such notice should only be issued after the return of income under Income Tax Act has been filed. Referring to the provisions of section 10(1) of the Act, he noted that the issue of notice under section 10(1) of the Act, the only requirement is coming of any information to the notice of the Assessing Officer. Thereafter he referred to the definition of 'undisclosed asset located outside India' as per section 2(10) of the Act. He observed that the information available with the Assessing Officer has been elaborately discussed above and he noted that there were sufficient assets outside th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's claim that source of corpus of the foreign discretionary trust was not the assessee but rather the assessee's maternal uncle who settled upon trust his income earned outside India and that the assessee ceased to be beneficiary beyond 14.07.2014. In this regard, the ld. CIT(A) referred to the trust deed submitted and found that the document is unauthenticated and is signed by two unnamed directors. Thereafter, he referred to the assessee's submissions showing summary of share capital and shares of Kinetic Holdings Limited and the declaration signed by one M B Collins purported to be a director of Albany Trustee Company and a letter from Confiance dated 24.03.2016 and addressed to the assessee for the clarification that Mr. Birla may have been mentioned as beneficial owner or beneficiary in some of the bank accounts opened by them and that in the trust deed the assessee and his family were in the class of discretionary beneficiaries during their transteeship. He also referred to the assessee's reliance in the case of Malaysian International Trading Corporation vs. Mega Safe Deposit Vaults (P.) Ltd. [2006] 68 SCL 52 (Bom) to claim that where no evidence is adduced regarding fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cident and died along with the father of the assessee in 1990. That subsequent structures referred by the assessee has been created subsequent to his death. That if Mr. Malpani was the settler of the first trust, the person handling the affairs of the subsequent trusts and transfer of such assets to such trusts, if correct, has not been identified. That trust deed of subsequent trusts have not been provided. That in absence of any document relating to Nebola Trust, Bird International Foundation and Banyan Trust which are trusts existing at the relevant point of time, the irrelevant discussion made by the assessee in respect of a trust which ceased to exist in 1998 is found infructuous and not worthy of discussion. That clauses in the old Trust Deed cannot be used to elaborate on the provisions of some other trust for which the Trust deed is not available. 21. Thereafter, the ld. CIT(A) proceeded to elaborate upon the trusts created in tax heaven countries, etc. In this regard, he referred to the ITAT decision in the case of Renu Thadani [2020] 117 taxmann.com 804 (Mum-Trib.). He elaborately referred from the said decisions running into several pages. He noted that in the above ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficiaries? Thereafter the ld. CIT(A) held that the assessee cannot place reliance on the earlier trust (even if accepted as true). Thereafter, the ld. CIT(A) reiterated the proceedings under BMIT Income Tax Act, 1961 as asset and income specific. That there was onus cast on the assessee to explain the source of the individual assets and income as identified by the A.O., wherein the documents have been found indicating that the assessee was the beneficial owner of such assets. That since the assessee has been cited as a beneficial owner and not the discretionary beneficiary of these assets, there was no question of waiting till distribution of trust corpus to treat these as assessee's income as assets. He further held that summary of share capital of shares in the case of Kinetic Holdings filed by the assessee does not offer any assistance in identifying assets of the company and source of finance in acquisition of such assets, if beneficially owned. He observed that it is noted that the A.O. has enough direct evidences in form of bank documents and bank fillings indicating the assessee to be beneficial owner of such bank accounts and funds therein. He further held that without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim that there is no documentary evidence on record to show that the assessee has unaccounted money or money that has escaped tax or money that was remitted through illegal channels. He held that BMIT Act does not put any such onus on the assessee before the issue of notice u/s.10(1). The only requirement is existence of information and nothing else. In this regard, he referred to the decision of Independent Media (P) Ltd. 210 Taxmann 14 (Delhi) (2012) 23. Thereafter, he referred to the assessee's claim (on a without prejudice basis) that he was served with invalid notices under the Act, wherein authorities proceeded to endeavor to bring to tax the same assets and/or income which are now being assessed by the A.O. under BMIT Act. He noted that the Revenue authorities continues to pursue the right to assess to tax the assessee for offhosre trust assets under the Act. Hence, this must be excluded from the ambit of BMIT Act. He distinguished the decision referred by the assessee in this case and held that in absence of any specific bar on proceedings under BMIT Act in such circumstances, the action of the A.O. in issuig notice u/s.10(1) of the Act cannot be faulted. 24. Thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has significant information with reference to the beneficial interest in such accounts are found to be disclosed in this schedule. 26. The ld. CIT(A) further referred to the assessee's contention that the A.O. incorrectly concluded that the assessee has undisclosed foreign income and/or assets during the relevant assessment income, overlooking the assessee's denial in this regard and relying upon the pending proceedings concerning Chapter XIX-A which was neither contradictory nor self serving. The ld. CIT(A) noted that the assessee is claiming that the assets under reference are being assessed parallel under the I.T. Act and hence, assessment of these assets under the BMIT Act is invalid. The ld. CIT(A) further noted that it has been claimed that the Revenue is proceeding substantively in reliance upon the order dated 27th September, 2017 of the Hon'ble ITSC under section 2450(4) of the Income Tax Act 1961. That it is also claimed that the findings of the ITSC have been considered and rejected by the Hon'ble Tribunal in a later dated order (the copy of the order has been filed before me but has not been admitted as an evidence), it is claimed that the analysis and conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause of the search action appears flawed. That the BMST Act had specific provisions that such persons could not avail of the declaration window. Once the Act itself did not permit such declaration, the assessee cannot claim grievance in this regard unless he challenges the vires of the relevant provision. Further, the fact that these assets had come to the notice of Investigation Unit or the Income Tax Authority prior to coming in force of the Act has no impact on the power and functions of the Authority under BM Act. The scope of assets contemplated under BM Act is clear from the Board's Circular No. 13 of 2015. 31. The ld. CIT(A) concluded that there was no estoppels against continuing both the Acts and the grounds raised by the assessee is found not tenable. Thereafter, the ld. CIT(A) distinguished some of the decisions referred by the assessee and finally concluded as under: 10. In light of elaborate discussion with respect to the various grounds raised by the assessee, the claim of the assessee that he is not liable to be assessed under BMIT Act is not found acceptable. The grounds of appeal no. 4 to 9 raised by the assessee in his appeal in this regard are not found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 Trust was migrated by Albany to Nebola trust (Liehtenstein) in 1998, with Credit Suisse Limited as trustee; onwards by Credit Suisse to Bird International Foundation (Panama) in 2010 with HSBC Guyerzeller Limited as trustee; and finally, to Banyan Trust (Guernsey) in 2011 with Confiance Limited as trustee, whose trusteeship services have since been taken over by Praxis Trustees Limited, Guernsey (information published on the world wide web; i.e. in public domain). A fair, reasonable, harmonious interpretation of the progenitor Instrument of Trust (PB Vol.1 @ pg. 1-22), including recitals, clauses 1 to 7 read with 9.1; 10, 11.1, 8.4, 13, 15 and First Schedule (Parts I & II), Second Schedule, clauses 2(20) to (23), 8(1), 8(7) & 11, establishes an irrevocable discretionary trust was established, with transmigratory powers, duties and responsibilities. The duration of the-Trust Period set forth in clause 2(1)(b) of the Instrument of Trust stipulates the 'trust' must remain intact for: (i) eighty years from the date of the declaration of trust; (ii) death of the last survivor of the descendants of King George the Fifth of England; or, (iii) such earlier date as the trustees m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n offshore trust became liable to declaration in Schedule FA. Accordingly; in AY 2014-15, independently of foreign assets acquired under the Liberalized* Remittance Scheme duly declared in Schedule FA, the Appellant duly declared (within the constraints *of limitation of characters in the online form); in the return of income filed under s.139 IT Act, in Schedule FA-(F), that he was among nominated*beneficiaries of The Banya Trust, which along with all companies, trusts and entities thereunder, formed part of the offshore discretionary trust settled by (Late) Shri Pratap Malpani, with its address at Elizabeth House, St. Peter Port, Guernsey GY 11EW, United Kingdom, under the trusteeship of Confiance Limited, Guernsey. The Settlor of The Banyan Trust was disclosed as Bird International Foundation, Albany Trustee Company Limited, Pollet House, St. Peter Port, Guernsey, United Kingdom, reflecting trust migration by the trustees (PB Vol.5@ Pages 2298-2299). CESSATION RE: MEMBER OF CLASS OF BENEFICIARIES OF TRUST 13. Upon the Appellant ceasing to be a member of the class of beneficiaries of the Trust in July 2014 (PB Vol.5 @ Page 2306), the obligation of the Appellant to declare sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in India, irrespective of whether such foreign assets or income stand in the name of the assessee or in the name of another person. In the present case, it is not in dispute that there is the foreign assets or income in contention are not standing in the name of the Appellant. It is the case of the Appellant that the foreign assets and income in contention form trust wealth settled in 1989 by a non-resident maternal uncle, whose income was not chargeable to tax in India, and whose Estate was in fact probated in Singapore (ITSC order, PB Vol.1, Pg. 379 records the fact that the Estate was probated in Singapore). The core jurisdictional objections of the Appellant are summarized, below: 19.1 Absence of 'jurisdictional fact' under BMA, in view of the Appellant not having made any contribution to the corpus or income of the Trust: 19.1.1 The fundamental jurisdictional pre-requisite for initiating proceedings under BMA is *that the foreign asset or income shall have been acquired from income chargeable to tax under the Income-tax Act, 1961 which has escaped assessment for reasons attributable inter alia to tax evasion. Accordingly, it is imperative for the AO to es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, plainly as a corollary that there was no 'information' available with the AO to justify initiation of proceedings under BMA. 19.1.5 It is *not available for the Revenue contend inconsistently that there has been no movement of investments from India either by the settler or beneficiaries (including the Appellant) for purposes of WT Act proceedings, but that a converse position is available in the BMA proceedings. The facts simply cannot be altered depending on the statute under invocation by the Revenue. Either there was a movement of funds from India, or there was not. When Revenue concedes no movement of investments occurred from India, no enquiry under BMA can be justified, much less pursued. 19.2 Absence of 'jurisdictional fact' under BMA; in circumstances where the Appellant not being the recipient of income/distribution from the Trust, duly certified by the trustees inter alia in the 'source of trust wealth' certification issued by the *trustees in June 2017, remined undisputed by the Revenue m the WT Act proceedings of the Appellant. The fact that there has been no distribution by the Trust(s) to the Appellant is independently supporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1), delivered in wealth tax proceedings, precluding taxability in the hands of the Appellant under IT Act until distribution of Trust income, but no liability whatsoever under BMA. 19.5 Settled position of law in relation to -a beneficiary of a discretionary trust merely having a right to have the trust administered, laid down in CWT v Mrs.O M M Kinnison [1986] 4 SCC 1987 (Judgment Compilation- Master Tab 3) read with Gartside v IRC LR [1968] SC 553 (Judgment Compilation- Master Tab 2) 19.6 Distinction recognized, in the law of trusts, between trust ownership and beneficial ownership, by the Indian Trusts Act, 1882; accorded due recognition in the realm of taxation. This Hon'ble Tribunal in Yasmin Properties (P.) Ltd. v. ACIT [1993] 46*ITD 331 (Bombay) held: "When a trust is created,*the ownership over the property is split into two: (i) the legal ownership which is acquired by and rests with the trustee; and (ii) the beneficial ownership which is; acquired by the beneficiary virtue of transfer under the trust and which is enjoyed by him. It is very important and curious instance of dual ownership which allows the separation of power of management and the rights of enj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in compliance with Swiss anti-money laundering laws). In fact, the source of trust wealth certification of June 2017 distinctly sets forth that other beneficiaries of the Trust are all non-residents, and it would be in order therefore to proceed the reasonable premise that Form A's exist beyond those on which the Appellant's name appears; 19.11 Expert opinion of Swiss (foreign) lawyers Reichlin Hess dated 11 January 2016 in relation to requirement of Swiss anti-money laundering laws to declare any one or more beneficiary(ies) of a trust as 'beneficial owner' for -limited purposes of anti-money laundering compliances bearing no nexus with taxation (PB Vol.1 @ Page 37-53) which remains uncontroverted by the Revenue both in the IT and WT proceedings of the Appellant. 19.12 Distinct recognition by the CBDT of a "variance", between 'beneficial ownership' under BMA from that utid.er Prevention of Money Laundering (Maintenance of Records) Rules, 2005, clarified in FAQ #31 by CBDT Circular No.13 of 2015 dated 6 July 2015, in recognition of the fact that the remit of anti-money laundering compliances is the aim of verifying and validating no money laundering an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, this Hon'ble Tribunal .in the Appellant's s.17 WT Act proceedings (PB Vol.5 @ Page 1946-2028), after duly examining the contention of the Revenue that assets of the Trust constituted the wealth of the Appellant, held: 23.1 the Appellant was nominated as one of several beneficiaries of . an offshore irrevocable discretionary trust, settled * in the year 1989 by the Appellant's non-resident late maternal uncle Shri Pratap Malpani, governed by the laws of Guernsey (PB Vol.5, pg. 2010, para 23) 23.2. the Appellant was not a contributor to the Trust structure (PB VoL5, pg. 2015, para 30). 23.3 the Appellant is riot liable to be construed as sole beneficiary of the Trust (PB Vol.5, pg. 2011, para 24). 23.4 the Revenue cannot collapse the offshore trust structure i.e., corporate veil cannot be lifted, since offshore 1:ntities are independent .entities taxable in their respective jurisdictions (PB. Vol 5, pg. 2016, para 32). 23.5 the. Appellant was not the 'substantial owner' of assets settled upon Trust held through Kinetic Holdings Ltd'. (PB Vol.5, pg. 2011, para 25) 23.6 bank accounts in foreign jurisdictions pertaining to offshore entities could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraph.9.4.2, 9.4.3, 9.4.4), 27.2 the claim of the Appellant as to *the discretiona1y trust has not been proved since the Appellant had not furnished -any credible legally tenable evidence to identify the Settlor or the original terms of the Trust (paragraph .9.2.4)., 27.3 that the Appellant had not produced documentary evidence or other material to demonstrate the manner in which the corpus fund as settled or resettled from one trust structure to another trust structure and even the trust deeds in relation to resettled corpus (para 9.2,5), 27.4 * the Appellant is the sole beneficiary/beneficial owner and contributor of the assets / investments being held in the name of offshore Trusts/ entities (para 9.2.16), 27.5 the Appellant had put into place and managed an intricate web of entities hidden behind the corporate veil i.e., a structure for his exclusive benefit, thereby being the ultimate sole beneficiary:- this was language lifted by the .Commissioner (Appeals) directly from the assessment order para 5.14.25 (para 9..2.6)*, 27.6 the Appellant is the real owner of assets / investments / bank balances based on Form A declarations of Beneficial Owner under Swiss Penal Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner (Appeals) proceeds on the basis that since this evidence was not in existence at the time of decision taken by the AO to issue notice under section 10(1) of the BMA, it cannot be admitted as fresh evidence. Despite which, the Commissioner (Appeals) conveniently examined and lifted vast sections of the assessment order dated 31.03.2021 passed by AO [Refer PB Vol.5, Pg. 2031 to*2269], which was also not in existence at the time of issuance of notice under *section *10(1) of the BMA, and in fact was issued subsequent to the ITAT WT order, betraying arbitrariness, caprice and indiscipline, which is not liable to be treated lightly. PRESENT APPEAL INSTITUTED *ON JURISDICTIONAL DETERMINATION 30. The present appeal No. 1/BMA/2021 was instituted on 17 May 2021. 31. Following the issuance of notice of hearing by the AO on 27 May 2021 in relation to the 'stay' application of the Appellant in relation to the assessment order, the Appellant instituted Stay Application No. 61/Mum/2021 on 28 May 2021, which came to be granted at a hearing held on 4 June 2021. GRANT OF STAY BY THIS HON'BLE TRIBUNAL 32. Despite grant of an order of 'stay' by this Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Commission [(1969) 2 AC 147], namely, the entitlement "to enter upon the enquiry in question". If there was an* entitlement to enter upon an enquiry, into the question, then any subsequent error could only be regarded as an error within the jurisdiction. The best known formulation of this theory is that made by Lord Darman in R.v. Bolton [(1841) 1 QB 66]. He said that the question of jurisdiction is determinable at the commencement, not at the conclusion of the enquiry." 33.4 Smt Shrisht Dhawan v Shaw Bros. [1992] 1 SCC 534, wherein it was held "What, then, is an error in respect of jurisdictional fact? A jurisdictional fact is one on existence or non-existence of which depends assumption or refusal to assume jurisdiction by a Court, tribunal or an authority. In Black's Legal Dictionary it is explained as a fact which must exist before a court can properly assume jurisdiction of a particular case. Mistake of fact in relation to jurisdiction is an error of jurisdictional fact. No statutory authority or tribunal can assume jurisdiction in respect of subject matter which the statute does not confer on it and if by deciding erroneously the fact on which jurisdiction depends the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investments were moved from* India" (par 30 of the Order dated 24 December 2020), no scope remains for the Revenue to fulfil the 'jurisdictional fact, for purposes of invoking *BMA, i,e. contribution by the Appellant from income that was exigible to tax in India, but has escaped assessment under the Income-tax Act, 1961. 35. The position that this Hon'ble Tribunal is the final fact-finding authority is well settled, in Ganapathy & Co. v. CIT (2016) 11 SCC 274. No new information or documentation has come to the hands of the Revenue between 24 December 2020 *and the hearings that concluded in August 2021 in the BMA proceedings before this Hon'ble Tribunal, and none has been produced/confronted to the Appellant by the Revenue. In the circumstances, conclusive and binding findings of fact, rendered by the final fact-finding authority, i.e. this Hon'ble Tribunal, on the basis of distinct concessions made by the Revenue, in the course of WT Act proceedings, must preclude the Revenue *from re-inventing or re-engineering matters or engaging in surmise or conjecture for purposes of BMA proceedings.. 36. Thus, whe.re the progenitor Instrument of Trust is an undisputed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017] 81 taxmann.com 138 (Mumbai - Trib.) held that "It is well accepted position of law that in the income*tax proceedings theory of approbation and reprobation is not applicable. The revenue authorities are not expected to blow hot and cold together. The AO appears to have fallow d the rule of " head I win tail you* lose", whereas the revenue authorities are expected to work in fair and transparent manner." DOCTRINE OF FAIR PLAY IN ADJUDICATION. 38.. The doctrine of fair play in adjudication also proscribes the Revenue from acting arbitrarily, * inconsistently and capriciously. In K.L: Tripathi v. State Bank of India (1984) 1 SCC 43., it was held "The basic concept is fair play in action administrative, judicial or quasi-judicial. The concept of fair play in action must depend upon the particular lis, if there be any, between the parties. "Similarly, in State of Orissa v. Binapani Dei (1967) 2 SCR 625 it was held "An order by the State to the Prejudice of a person in derogation of his vested rights may be made only in accordance with the basis rules of justice and fairplay." STATUTORY FRAMEWORK OF BMA 39. The framework .of s.2(11) BMA defines an "undisclosed asset locate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terlink with the IT Act, apparent inter alia from s.59 BMA, s.4 BMA and s.40, 42, 43, 49, 50 BMA, all of which distinctly refer to returns of income under s.139 of the IT Act. 49. The stipulation in s.2(15) BMA that "all other words and expressions used herein but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act", warrant that regard must be had to definitions of 'beneficial owner' and/or 'beneficiary' available in the IT Act, i.e., s.139(1) Explanations 4 & 5. 50. In fact, as set forth above, the fifth proviso to s.139(1) IT Act, introduced with effect from 1 April 2012, simultaneously with revising the form for 'return of income' under s.139 IT Act to include Schedule FA, imposes a statutory obligation to file a return of income by a person who holds any asset (including any financial interest in any entity) located outside India as a 'beneficiary owner' and/or 'beneficiary. ' Introduction of Schedule FA was plainly the precursor to the introduction of BMA, including a declaratory regime in s.59 BMA. 51. Examining thus, the definition *of a 'beneficial owner', within the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue, for it cannot be reasonably contended by the Revenue that 'beneficial ownership' under the WT Act is distinct from that under the IT Act or the BMA. 56. Equally, the absence of definitions of 'beneficial ownership' *or 'beneficiary' in the BMA cannot take the case of the Revenue any further, in circumstances where BMA is materially linked with disclosures under s.139(1) IT Act and imports definitions of IT Act via s.2(15) BM.A. 57. The case asserted by the Revenue that 'beneficial ownership' and/or 'beneficiary' definitions in Explanation 4 & 5 of s.139(1) have no application to BMA is inconsistent with CBDT FAQ no. 31* in the binding CBDT Circular No.13 of 2015 dated 6 July 2015 which makes express reference to Explanation 4 and 5 of section 139 of the IT Act, in relation to matters of 'beneficial ownership' and 'beneficiary' in relation to foreign asset and income, and reproduces verbatim those definitions stating these apply ''for the purpose of the Act", i.e. BMA, leaving no scope for Revenue to argue to the contrary. 58. Absent any statutorily drawn distinction or deeming fiction to demarcate the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is* liable to be read with s.2(9) which contemplates inter alia "where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person" and/or where "the property is held for the* immediate or future benefit, direct or indirect*, of the person who has provided the consideration" and/or transactions in fictitious names. Emphasis must be had to the use of 'consideration provided or paid', pointing ultimately to 'source' or 'contribution', since that is the determinant for benami property, with the statute ultimately premised on confiscation of benami property. Significantly, Revenue has not advocated, in the present case, that the definition of 'beneficial ownership' under the Prohibition of Benami Property Transactions Act, 1988 has any bearing on issues arising under BMA. 63. Under PMLA, a 'beneficial owner' is defined in s.2(1)(fa) to mean "an individual who ultimately owns or controls a client of a reporting entity or the person on whose behalf a transaction is being conducted and includes a person who exercises ultimate effective control over a juridical person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, that the definition of 'beneficial interest' under Companies Act, 2013; must have any bearing on interpretation under BMA. 65. The Hon'ble Income Tax Appellate Tribunal, Delhi Bench in ACIT v. Shri Jatinder* Mehra (order dated* 7 July 2021 in BMA No. 01/Del/2020), relying inter alia upon the ruling of this Hon'ble Tribunal in the matter of Kamal Galassni v. ACIT (order dated 10 September 2020 in ITA Nos.138-142/Mum/2019), has examined the scope and framework under BMA of 'beneficial owner"'. With respect, the Appellant submits that on the issue of 'beneficial ownership' and 'beneficiary', the definitions in IT Act, s.139(1), Explanations 4 &*5, must determine scope for the Appellant to be treated as beneficial owner or beneficiary for purposes of BMA: AMBIT OF FORM A UNDER SWISS ANTI-MONEY LAUNDERING LAWS 66. The SCN disregards* the binding CBDT circular No. 13 of 2015 dated 6 July 2015 (@ CBDT Circulars Tab 5), which in FAQ 31, clarifies that PMLA declarations - bound to be treated as analogous .to Swiss anti-money* laundering declarations - cannot be reckoned for determining 'beneficial ownership' or 'beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a beneficiary of a discretionary trust into a beneficial owner of the assets of such trust. 72. Independently, the Appellant has relied upon the apostilled foreign law expert opinion of renowned Swiss law firm Reichlin Hess dated 11 January 2016 (PB Vol.1, Pg. 37 to 53)., which also certifies that Swiss AML compliances have no bearing on matters of taxation. The Revenue having hitherto had the benefit of this foreign law expert opinion in both . the IT Act and in the WT *Act proceedings, has elected not to contest its correctness, nor led any evidence to the contrary, thus rendering it liable to be treated as unassailable. As a corollary, it must follow that the Revenue concedes that AML compliance s are not determinative of matters of taxation. 73. The CBDT clarification, in this regard, vide Circular No.13 of 2015 dated 6 July 2015, in FAQ No. 31 specifically puts it beyond the realm of any doubt that the determination of "beneficial owner" would be "at variance with the- defemination of beneficial ownership provided under Rule 9(3) of the PMLA (Maintenance of Records) Rules, 2005". 74. Thus, it is apparent that 'beneficial owner' for purposes of PMLA and for BMA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be precluded from claiming beneficial* ownership of the corpus, it must follow that one or more beneficiaries of a discretionary trust may be liable to be declared as 'beneficial owner' for R.9(3) compliance purposes. 76. In matters of trust structures, a trustee is. proscribed from claiming beneficial ownership of assets comprising the trust and must therefore put forth the name *of one or more beneficiaries, depending on regulatory stipulations, including * forms, protocols,* legal obligations, etc. liable to be discharged by trustees. The mere act of corporate trustees ensuring due compliances in relation to trusts, through causing any one or more of several beneficiaries to make declaration(s) for anti-money laundering purposes, whether under PMLA or the analogous Swiss anti-money 1ai:indering framework, is incapable of causing vestiture upon such beneficiary(ies) of the t:mst assets within a discretionary trust structure. A regulatory declaration caused by trustees; who are ineligible to declare themselves as .. beneficiaries, cannot alter the entitlements of one or more beneficiaries under an instrument of trust, or have the legal effect of* causing one or more be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 2019, without grant of opportunity to the Appellant to rebut material. The Impugned Order has also transgressed the legally permissible realm within the framework of a 'jurisdictional' adjudication, through overlooking that this Hon'ble Tribunal's order dated 24 December 2020 constituted relevant evidence in favour of the Appellant, and was bound to be considered in the jurisdictional Adjudication, and also *importing the findings in the assessment order; in effect virtually rendering meaningless the 'jurisdictional' determination contemplated by s.15(1)(6) BMA. 82. It was not available to the Commissioner (Appeals) to overcome. this Hon'ble Tribunal's *order, through a fleeting observation that: "In light of clear distinction between the two laws, it is held that the above decision cannot be treated as binding precedent, not even as a normal precedent. It is liable to be treated as a normal evidence produced by the assessce at the time of appellate proceedings. Since this evidence was not in existence at the time of decision taken any the AO to issue notice under section 10(1) of the BMIT Act, it cannot be admitted as fresh evidence now." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mumbai Trib.) this Hon'ble Tribunal has held that "AO is not justified in placing the onus of proving a negative on the assessee". 89. It must follow then that the onus must lie on the Revenue to prove that a particular asset is within taring provisions - CIT v. Daulat Ram Rawatmull [1973] 3 SCC 133 --Para 17, Parimisetti Seethatamamma v. CIT [1965] 57 TIR 532 (SC) - Para 7, DCIT (IT), Mumbai v. Hemant Mansukhlal Pandya [2018] 100 taxmann.com 280 (Mumbai Trib.) - Para 17. 90. The Appellant having, in prior proceedings under the IT Act and the WT Act, relied upon the source of trust wealth certificate issued in June 2017 (PB Vol.5 @page nos.2303 to 2307) by trustees Confiance Limited, as entitled to rely upon such uncontroverted document by way of explanation, to establish that the Appellant was not a contributor to the foreign assets or income of the Trust. 91. Such a certificate issued by the trustees was bound to constitute valid evidence, and a satisfactory explanation, more so in circumstances where the Revenue had conceded in WT Act proceedings that the Appellant had not made any contribution to the Trust (from out of income taxable in India). Para 30 of the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encies, certain trustees have to be appointed or replaced. For that purpose, generally the power to appoint or re-appoint trustees lies with the settlor or vests in the declaration of trust itself. Similarly, in this case, it was given to assessee's father and mother. After their lifetime; it devolved on the assessee Merely because, it is exercised by the assessee, it does not make the trust to lose its identity. The trust still will continue with the new trustee. The properties attached to the trust will continue to be the properties of the trust. It is wrong to presume* that the properties governed by the trustee will be* considered as the properties of the individual beneficiary who exercises the appointment of trustees. In the given case, .no doubt the assessee is vested with the power to appoint or remove the trustees, does not change the status of the trust and its independent functioning". (Vol. 5, pg 2014, para 29). POWER OF APPOINTMENT AND REMOVAL OF TRUSTEES CANNOT LEAD TO CONCLUSION THAT APPELLANT IS SOLE BENEFICIARY OF TRUST 95. In any event, the contention of Revenue that the vestiture of power of appointment and removal of trustees in the Appellant renders the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry and beneficial owner of the assets and income of the Trust Thereafter, the power *was vested in Sunanda Birla. Again, applying the contention of Revenue to such a fact pattern, Sunanda Birla should have become the sole beneficiary and beneficial owner of the assets and income of the Trust. That power of appointment and removal no doubt finally vested upon the Appellant (under clause 8(1) of the Trust- @ Vol.1, page 18), but where such power had hitherto vested in Ashokvardhan Birla, it must follow that (according to the case of the Revenue) Ashokvardhan Birla became the beneficial owner of assets and income settled upon trust. Thereafter, the beneficial ownership of assets and income vested upon Sunanda Birla, .and* only finally in the Appellant, Such a theory of revolving 'beneficial ownership' depending on who is vested with power of appointment and removal, is completely inconsistent -with the provisions of the Instrument of Trust. 99. Fourthly, the Revenue has neither asserted *nor laid evidence in support of any purported exercise by the Appellant of the power of appointment and removal of trustees, and has completely overlooked (A) clause 8(3) of the Instrument o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hands of the Appellant, overlooks that the trustees are lawfully incorporated entities, several of which have been the trusteeship arms of leading global banks, each rendering trusteeship services which are regulated under the laws of the countries of their incorporation, each bearing. full accountability to their respective statutory and regulatory authorities, who in tum are bound, through international treaties, to render full cooperation with the Indian Competent Authority, including exchange of tax information. It is a matter of record, in the present proceedings, that the Swiss Federal Tax Administration is actively engaged with the Indian Competent Authority. The Appellant has reliably learnt that the Indian Competent Authority has actively engaged with the Guernsey Tax Office; however, no documentary evidence obtained by the Indian Competent Authority from the Guernsey Tax Office has been made available to the Appellant. The Appellant asserts that material exculpatory evidence is available to the Indian Revenue, which is not being shared with or delivered* over to the Appellant*, and in the circumstances, there is grave prejudice, jeopardy and detriment being caused to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Trust. In the return filed for AY 2015-16 (Vol.5, pg.2302) the Appellant specifically declared cessation of status of 'beneficiary' on and with effect from July 2014, in the following terms: "The Banyan Trust & All Companies/ Trust/ Entities, thereunder (Discretionary Trust) Upto 14.07.2014". Therefore, no scope arose to-treat the Appellant as non -compliant with s.59 BMA in AY 2016-17, when BMA came into force on and from 1 July 2015. 104. In any event, s.59 BMA had no application to the Appellant, in the facts of the case, in view of: 104.1. by virtue of the Appellant having no 'beneficial ownership' in relation to foreign assets or income of the Trust, no corollary obligation arose to make a s.59 BMA declaration. In fact, express incorporation of Chapter A"V of the IT Act (ss.159 to 181) into BMA, vide s.70 BMA, in turn preserved the statutory remit and entitlement of beneficiaries of discretionary trusts available under the IT Act, to not be treated as beneficial owners in relation to such assets or income until distribution, and to be exigible to income tax restricted to the remit of distribution; 104.2 the Appellant, by making full a d true disclosure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration under s.59 in circumstances where at no stage prior to July2014 did the Appellant, merely by virtue of being a nominated beneficiary, have anything more than a hope that the trustees will exercise discretion in favour of the Appellant. Thus, absent 'beneficial ownership' of the Appellant in relation to the assets and/or income of the Trust at any time prior to 1 July 2015, there was no scope for any such declaration under*s.59 BMA to be made by the Appellant; 104.6 furthermore, s.59 BMA imposes an obligation to make a declaration in respect of information* that is not available to the Indian Revenue, whereas the present BMA proceedings are based on information that has been long available with the Revenue, hitherto deployed in both IT and WT proceedings against the Appellant. As such, there was no scope for any declaration to be filed by the Appellant under s.59 BMA. In fact, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015, specifically stipulate in Rule 9 that if such information has heady been obtained by FT&TR by the Revenue, then any declaration encompassing information will be liable to rejection by the Principal- Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad a statuto1y obligation under s.59 BMA to make a declaration as to (allegedly) undisclosed foreign assets and income is wholly inconsistent with the statutory framework of s.71(d) BMA, which operates as an express bar to the Appellant from resort to s.59 BMA; in light of proceedings underway under s.153C IT Act in relation to* AYs.2008 09 to 2013-14 and under s.148 IT Act for AY 1998-99 to AY 2007-08 andAY2014-15 pertaining to the subject foreign assets and income (currently in abeyance, owing to s.245C IT Act proceedings, currently pending adjudication in Writ Petition No.862 of 2018 in the Hon'ble Bombay High Court). SCHEME OF BMA- DUTY OF & ONUS UPON REVENUE 105. The AO must initiate proceedings under BMA through the issuance of a show cause notice under s.10(1) BMA, based on 'information'. 106. Upon receipt of a show cause notice issued under s.10(1) BMA, the recipient thereof may elect to file a reply or decline to comply; as the case may be. 107. The AO is entitled, under s.10(2) BMA, to continue enquiries after delive1y of a notice under s.10(1) BMA, for the purpose of obtaining "full information", ahead of carrying outan assessment under s.10(3) BMA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that the Appellant was seeking to settle, through the ITSC, matters concerning foreign assets or income of the Trust, is perverse. 113. The Appellant was thus constrained to challenge the ITSC order dated 27 September 2017, which came to b stayed by the Hon'ble B9mbay High Court. 114. In the circumstances, no scope arises for the Revenue to rely upon the findings of the ITSC, in proceedings under BMA. In any event, since the subsequent order of this Hon'ble Tribunal in WT proceedings made on 24 December 2020 has concluded that the Appellant has.no beneficial interest or ownership whatsoever in the assets or 41come of the Trust, there can be no scope for the Revenue to continue to rely upon the ITSC order, which has been stayed.. NO SCOPE TO RELY UPON ITSC ORDER IN BMA PROCEEDINGS 115. In the case of ITO v. Dhrangadhra Chemical Works (P.) Ltd. [1989] 28 ITO 499, this Hon'ble Tribunal held that "the Settlement Commission cannot exercise or supersede the powers of the ITAT. This has been well settled by a decision of the Supreme* Court in the case of CIT v. B.N Bhattachargee [1979] 118 ITR 461". Further, in Hooghly Mills Ltd. v. CIT (1990) SCC OnLine Cal 336; it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed to defeat the . salutary statutory right and remedy prescribed in s.15(1)(b) BMA that entitles a noticee under s.10 BMA to initiate a jurisdictional challenge, rather than participate in assessment proceedings. Details of the one-year delay in disposal of the jurisdictional challenge, followed by the Commissioner (Appeals) declining to set down the s.15(1) (b) BMA appeal, warranting written representations caused to be made to the CBDT on behalf of the Appellant in order to establish requisite infrastructure for a s.15(1)(b) appeal, and finally the Article 226 Constitution of India remedy availed by the Appellant, culminating in the order dated 30 March 2021 of the Hon'ble Bombay High Court, are set forth in the Stay Application. The Hon'ble Bombay High Court order of 30 March 2021 is at Paper Book Vol.5, at pages 2029-2030. 119. In circumstances where the Revenue has conceded, during the WT Act proceedings before this Hon'ble Tribunal, that there was no contribution: by the Appellant to the Trust, the Revenue cannot be per1nitted to assert in BMA proceedings that there is contribution by the Appellant to the Trust. In the circumstances, there is no scope for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and again in ITO v. Kranti Impex Pvt Ltd. (ITA* No.1229/Mum/2013, order dated 28.02.2018 - Para 6 & 7) the issue as to 'dumb documents' has been extensively considered by this Hon'ble Tribunal. 124. The Commissioner (Appeals) placed heavy reliance on the judgment of this Hon'ble Tribunal in the case of Ren Tharani v. DCIT [2020] 117 taxmann.com 804 (Mumbai Trib.) to allege that on similar facts, addition ill respect of foreign bank account held in the name of Tharani Family Trust, of which Ms. Renu Tharani was a beneficiary, was upheld by this Hon'ble Tribunal. The case is distinguishable; since in that case, the assessee declined to. sign the consent waiver letter to enable the Revenue to obtain* all necessary details from the foreign bank, and accordingly; an adverse inference was drawn by this Hon'ble Tribunal; and consequently the additions were upheld. In the present case, not only has the Appellant duly co-operated with all relevant authorities, but rather this. fact is also* affirmed by the relevant competent authority; i.e. the Swiss Federal Tax Administration. Thus, the case of Renu Tharani (supra) is not applicable. 125. Similarly, an unsigned lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in relation to the accumulation of trust wealth over three decades, from various investments in multiple international jurisdictions, including Indonesia, etc., and instead purports to rely upon Confiance letters dated 20 April 2012 and 24 April 2012, which lack material detail. In fact, the PCIT letter dated 28 August 2017 (Vol.1, pg.311) being based on the notarized source of trust wealth certification issued in June 2017 by Confiance Limited, prior Confiance letters which were also available with the Revenue at the time of issuance of the PCIT letter cease to be.at relevance. The Revenue has also obtained the records of formation and shareholding patterns of Kinetic Holdings Limited and Avit Investments Limited, and therefore, no scope remains to assert that the Appellant is a contributor to the Trust. 128. The Revenue having also conceded the existence and validity of the Trust and the Instrument of Trust dated 7 September 1989 in the IT Act proceedings and the WT proceedings, through inter alia purporting to rely upon covenants concerning appointment and removal* of trustees, etc., is precluded from challenging the validity of the Instrument of Trust in BMA proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was li1nited strictly to the person in relation to Whom administrative assistance was sought, under the relevant bilateral treaty framework, and therefore any additional Form A's pertaining to other beneficiaries of the Trust were not forthcoming to the Revenue. Thus; a limit d disclosure in conformity with the tax exchange network protocols, cannot be relied upon by Revenue to claim that the Appellant is the only beneficiary. In any event, the Hon'ble Tribunal in* the wealth tax proceedings of the Appellant, aft r referring to the beneficiaries listed in* Part II of First Schedule of Instrument of Trust, has categorically rejected this contention of the Revenue as to 'sole beneficiary', holding that- ''24. From the above chart of beneficiaries, it is clear that the assessee is not the only beneficiary, it consists of other beneficiaries, who are direct lineal descendants of Late Shri Pratap Malpani, Late Ashokvardhan Birla and spouses of their respective descendants. In airy case, it could be seen that a charitable organization ii also one of the beneficiary together with assessee and aforesaid individuals. Hence, even if aforesaid individuals other than a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia by Mr. Michael Collins, whos association with the Trust dates back thirty plus years. Mr. Michael Collins participated in a June 2017 validation of the source of trust wealth reconfirming that in 1989 the shareholding interests of Kinetic Holdings Limited. were settled upon trust vide instrument of Trust dated 7 September 1989. b) The Revenue, in the course of IT Act proceedings, asserted that the right, power and authority vested upon the Appellant, under the Instrument of Trust, for the appointment and removal of* trustees, established that the Appellant was in control of the Trust, and further was the sole beneficiary and beneficially owned its assets/income, which was thus taxable in the hands of the Appellant. Revenue has, in particular, relied upon clause 8 of the Second Schedule to the instrument of Trust, to assert that the power of appointment *of new trustees and removal of trustees conferred ultimate control to the Appellant. c) Having relied upon the Instrument of Trust, and in particular upon the power for the appointment and removal of trustees contained therein, it is not available to the Revenue to now claim in BMA proceedings that the Instrument of Trust do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited as 1:1ustee; and in*2011, the trust assets are migrated to The Banyan Trust, with Confiance Limited (Guernsey) as trustee. Migrations of trusts are, in fact, legally recognized as a matter of Indian law, *specifically under section 75 of Indian Trusts Act, 1882. g) Confiance Limited issued a source of trust wealth certification in June 2017, in consultation and coordination with former trustees, lawyers of the trustees and lawyers of the non-resident beneficiaries. of the Trust, which provides comprehensive details of creation and/or migration of trusts, and also the source of wealth and -investments from time* to time which was taken into consideration by the PCIT, who in turn accepted in letter dated 28 August 2017 (Vol.1,@ pg. 311) that the assets of Kinetic Holdings Limited and Avit Investments Limited belonged to Late Mr. Pratap Malpani. Each of* the trustees, some trusteeship arms of leading international banks, and* also Confiance Limited, have at all material times lawfully carried on, at the material time, the business of trusteeship, with full accountability to the * jurisdictional authorities in the country of incorporation. The Indian Revenue, through Tax Informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings. The position that the Appellant has ceased to be a beneficiary was also put forth in the WT Act proceedings before this Hon'ble Tribunal and was uncontroverted by the Revenue. The order dated 24 December 2020 records the submission of the Appellant as to cessation of the Appellant's status as beneficiary of the Trust, at paragraph 18(3) at Page 1976-1977. As such the position that was not contested* by Revenue in the IT and/or WT proceedings cannot now be contested in the BMA proceedings, on the principle of approbate and reprobate. b) The source of wealth statement dated 27 June 2017, duly issued by existing Trustees of the Banyan Trust i.e., Confiance Limited *(now succeeded by Praxis Trustees Limited) has certified that the existing class of beneficiaries was wholly replaced on 14 July. 2014 by a new class of beneficiaries, which does not include the Appellant or any other Indian residents. c) In order to counter the belated allegation of the Revenue* that the Appellant has not produced authentic material in relation to cessation as beneficiary, a clarificatory validation of the June 2017 source of trust wealth certification has been obtained also from Praxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar the signature of the Appellant, is both irrelevant, and in any event liable to treatment as 'dumb documents', with no sanctity in the eyes of law. 5. COnfiance letter dated 20 and 24 April 2012 a) During the IT Act proceedings, the Appellant relied upon the 'source of trust wealth' statement, issued in June 2017 by the trustee Confiance Limited (now succeeded by Praxis Trustees Limited), which had carried out a detailed analysis of the creation of the irrevocable offshore discretionary trust by the non-resident settlor/contributor of AT-351 Trust, migration of trusts and assets from time to time, and also certified that the existing class of beneficiaries was wholly replaced on 14 July 2014 by a new class of beneficiaries which did not include the Appellant or any other Indian residents. It is not open to Revenue to cherry pick documents issued by the trustees, disregarding that the assets of. Kinetic Holdings Limited and Avit Investments Limited are admitted by the PCIT to have been held at the material .time by Late Mr. Pratap Malpani. b) In any event, since the Revenue has unequivocally admitted, in the WT Act proceedings that the Appellant is not a contributor to the Tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / 2013-IT * (INV.II)], dated 18 December 2014 wherein it is made clear time and again that admissions retracted subsequently do not serve any useful purpose. Reliance is also placed on* the ruling of D.S. Agencies & Associates v. ACIT [(2017) 82 taxmann.com 252 (Mum. Trib.) - Para 24] wherein it was held that additions made on the basis of retracted statements are without a y basis and deserved to be deleted absent corroborative material on record.* b) *In any event, Mr. Lath has made statements inconsistent with documentary material available * on record with the Revenue as to beneficial ownership of Kinetic Holdings Limited and/or Avit Investments Limited of Shri Pratap Malpani, which has also been conceded by PCIT letter dated 28 August 2017 (Vol.1, Page 311). c) In the course of cross-examination of Mr. Lath the Appellant established that the Appellant was not a contributor of any asset in any form, from India or any foreign asset, the Appellant was not a contributor to the corpus of Banyan Trust or any other entities therein, and further that the Appellant has not received any distribution as a beneficiary in his individual capacity in India or abroad (refer question no.2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant* in order to enable the Appellant to cross-examine the sons who are claimed . to have issued statements. Copies of such statements were bound to have been furnished to the Appellant. instead, the Revenue claims that since.one of the sons was resident in the house of the Appellant, therefore, the Appellant was bound to be aware. of such statements. The law prescribes that a statement that is being relied upon by the Revenue must be produced to the party against whom such a statement is intended to be used, and an opportunity for cross-examination is liable to *be afforded. Having failed to fulfil the minimum criterion *prescribed in law for admissibility* into evidence of such purported. statements, it was not available to the Commissioner (Appeals) to rely upon such contentions, all culled out of an impugned ITSC order, to the detriment of the Appellant 10. Appellant is sole beneficiary of the Trust a) The Revenue submission is significant, for the reason that it is inconsistent with the case of the Revenue that the authenticity of the Instrument of Trust is in question. b) * There is error on the part of the Revenue in cherrypicking clauses of the Instrument of Tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the framework of tax information exchange, encapsulated in TIEAs has the limitation of delivering documents strictly pertaining to the person in respect of whom an enquiry is initiated for information request, and no further. f) The Revenue * submission also completely disregards order- of this Hon'ble Tribunal, which his already rejected this very contention in the WT proceedings, and concluded that the case of the Revenue as to the Appellant being the sole beneficiary is unsustainable (refer para 29- page 2014). g) No scope exists for treating the Appellant as sole beneficiary of the entire assets and income of the Trust exigible to BMA in the hands of the Appellant. Such an interpretation would result in denuding and eviscerating lawful rights and entitlements of *other beneficiaries under the Instrument of Trust. h) The Appellant, by virtue of having ceased to remain a member of the class of beneficiaries of the Trust, in July 2014, cannot be treated as a' beneficiary at all; much less a sole beneficiary. 11. To determine benencial ownership under BMA section 139(1) Explanation 4 & 5 cannot be relied upon a) The Revenue contends section 139(1) of IT Act is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BDT circular exclude the beneficial owners' definition under the PMLA Act, 2002 and restricts the definition of beneficial owner to that defined under section 139(1) of the Income Tax Act? [Ground Nos - 5, 8, 11 and 12] 11 4 Whether the Tribunal order dated 24 December 2020 in Wealth Tax proceedings can be relied upon by the appellant for the proceedings under BMA? [Ground Nos - 1 and 2] 22 5 Whether the assets have already been considered in the proceedings under the Income Tax Act, 1961? {Ground Nos-2 and 15} 24 6 If the appellant was precluded from filing voluntary declaration under Section 59 of the BMA due to express bar under Section 71 of the BMA, can he be liable to tax under BMA? 26 BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, MUMBAI IN THE APPEAL OF SHRI YASHOVARDHAN BIRLA (APPELLANT) BLACK MONEY APPEAL NO. 1/MUM/2021 -AY 2016-17 HEARING DATES: 3rd and 11th AUGUST, 2021 The Appellant, most humbly and respectfully, submits the following submission in support of its claim and in rebuttal of the submissions of the Appellant for Your Honour's kind consideration ISSUE 1 Whether the appellant has discharged the onus placed upon him to satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .al ownership of GWU Investments Ltd., a Cayman Island based company, by the assessee. Finally, even if there is a dispute about the alleged trust, the dispute is with respect oftaxability of funds found with the trust and the source thereof. Clearly, therefore, the issue adjudicated upon in the said decision has no relevance in the present context. The very reliance on the said decision presupposes that the assessee was discretionary beneficiary simplicitor of a discretionary family trust, and nothing more-an assumption which is far from established on the facts of this case. The ratio laid down in the case of Renu Tharani (supra) for distinguishing the judgement in case of Commissioner of Wealth Tax, Rajlwt v Estate of HMM Vikramsinhji of Gondal [2014] 45 taxmann.com 552 (SC) squarely applies in the present case also as no trust deeds have been produced by the appellant at all in the present case as was in the above case. also there is no evidence even about existence, leave aside the nature of trust. Also, in the case of HMM Vikramsinhji of Gondal (supra), admittedly trust deeds were produced before the Supreme Court and this fact is mentioned in the judgement: "5. Thus th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vider of the appellant and can be removed by the appellant at will (mentioned in Trust deed- Paperbook - Volume 1 - Page 19). On 20th April 2012, Confiance Limited submitted that the Mokopane Limited was asset contributor of the Banyan Trust and 4 days later in the same month of April 2012 it has issued a certificate that Yashovardhan Birla was the asset contributor of the Banyan Trust. (Both certificates are mentioned on Page 185-186 of Paperbook - Volume I submitted by the appellant and also extracted in first written submission of the Revenue on Page 96 -97 ). Now yet again to prove its mettle in doing Somersault, Confiance Limited (now Praxis Trustees Limited) has on 4 August 2021, (within 1 day of the request by the appellant who has allegedly ceased to be beneficiary of the Banyan trust way back on 14 July 2014) issued a certificate stating that the Yashovardhan Birla did not contribute any assets to the Banyan Trust. Alas! how do we place reliance on what Confiance Limited has to say! Also, it cannot be ascertained whether Confiance Limited is a trustee of the alleged Banyan trust because of the non-availability of trust deeds. The appellant's counsel has also co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets) and Imposition of Tax Act, 2015, because both the conditions are satisfied i.e. the appellant is a beneficial owner of the undisclosed foreign bank accounts and has not provided any explanation whatsoever about the source of the investment in such accounts. ISSUE-2 Whether the Appellant has ceased to be beneficiary with effect from 14 July 2021 and does the Black Money Act apply retrospectively? The appellant has merely stated that he has withdrawn from the status of discretionary beneficiary in Banyan trust from 14 July 2014 however no authentic supporting documents have been provided for the same. Also no new trust deeds have been provided after 2000. Instead only a unauthenticated letter from Confiance Limited, who is appellant's service provider is submitted which cannot be admitted as reliable evidence as it is a self-serving document. Since no trust deeds have been provided by the appellant of any trusts created after original trust settled by Mr Malpani the beneficiaries of all the above mentioned trusts are not ascertainable. Excerpts from The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ("BMA") 1. Short title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such retrospective applicability, in the following manner - Rule 3 (1) (e) Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 (e) value of an account with a bank shall be,- (I) the sum of all the deposits made in the account with the bank since the date of opening of the account; or (II) where a declaration of such account has been made under Chapter VI and the value of the account as computed under sub-clause (I) has been charged to tax and penalty under that Chapter, the sum of all the deposits made in the account with the bank since the date of such declaration: Provided that where any deposit is made from the proceeds of any withdrawal from the account, such deposit shall not be taken into consideration while computing the value of the account. Rule 3(l)(e) relating to valuation of asset, being an account with a Bank, provides that - "the sum of all the deposits made in the bank account from the date of opening of the account", shall be deemed to be the value of such asset. Thus, from the above provisions it is' clear that the assets acquired prior to the commencement of the Act will also be covered under the provisions of the BMA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er VI of the Act and pay tax on both the assets? Answer: The declaration may be made in respect of both the house property and the bank account at their fair market value. The fair market value of the house property shall be higher of its cost and the sale price, less amount deposited in bank account. If the cost price of the house property is higher the declarant will be required to pay tax and penalty on (cost price - sale price) of the house. If the sale price of the house property is higher the fair market value of the house property shall be nil as full amount was deposited in the bank account. The fair market value of the bank account shall be as determined under Rule 3(1) (e) and tax and penalty shall be paid on this amount. (Please also refer to the illustration under Rule 3(3) for computation of fair market value.) Further, it is advisable to declare all the undisclosed foreign assets even if the fair market value as computed in accordance with Rule 3 comes to nil. This may avoid initiation of any inquiry under the Act in the future in case such asset comes to the notice of the Assessing Officer. Rule 3(3) of the Black Money (Undisclosed Foreign Income and Assets) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset. Is he eligible for declaration under section 59 of the Act? Answer: As far as ownership is concerned, as per section 2(11) of the Act "undisclosed asset located outside India" means an asset held by the person in his name or in respect of which he is a beneficial owner. The definition of "beneficial owner" and "beneficiary" is provided in Explanation 4 and Explanation 5 to section 139(1) of the Income-tax Act, respectively (which is at variance with the determination of beneficial ownership provided under Rule 9(3) of the PMLA (Maintenance of Records) Rules, 2005). Therefore, for the purpose of the Act "beneficial owner" in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person. Further, "beneficiary" in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary. Therefore, as per the Act the beneficial owner is eligible for declaration under section 59 of the Act. There may be a case where a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition provided Under the Income-tax Act is required to be seen. According to provisions of Section 84 of The Black Money Act, only certain provisions of The Income-tax Act are made applicable to the black money act. This Section does not include the provisions of Section 139 (1) of The Income-tax Act. Therefore, the beneficial ownership is required to be understood with respect to its dictionary meaning and also other provisions of other statute also keeping in mind the nature of the object and purposes of the Black Money Act. Following are some of the laws where the term beneficial owner has been defined: Definition of Beneficial Ownership under various Indian Laws Section 139(1) of Income Tax Act, 1961 Explanation 4. - For the purposes of this section "beneficial owner" in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person. Explanation 5. - For the purposes of this section "beneficiary" in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oting agreements; (b) where the client is a partnership firm, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of/ entitlement to more than fifteen percent of capital or profits of the partnership; (c) where the client is an unincorporated association or body of individuals, the beneficial owner is the natural person(s), who, whether acting alone or together, or through one or more juridical person, has ownership of or entitlement to more than fifteen percent of the property or capital or profits of such association or body of individuals; (d) where no natural person is identified under (a) or (b) or (c) above, the beneficial owner is the relevant natural person who holds the position of senior managing official; (e) where the client is a trust, the identification of beneficial owners) shall include identification of the author of the trust, the trustee, the beneficiaries with fifteen percent or more interest in the trust and any other natural person exercising ultimate effective control over the trust through a chain of control or ownership; and [(f) where the client or the owner of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andi of offshore trust business has been explained in sufficient detail. (Para 26-28, 43). Further paras 22-25 of the said judgement also detail the actions taken against firms engaged in helping with tax evasion. 34 .....Their Lordships has disapproved and deprecated the conduct of the assessee in not signing the consent waiver form, in the judgment reported as Soignee R Kothari's case (supra) 44 ....... The relevant question is whether she is beneficial owner of the said company or not. HSBC documents show that she is the beneficial owner, and there is nothing, save and except for self-serving statements of the assessee and contents of some unverified and uncorroborated letter of functionary of HSBC Private Bank- which has been indicted in several parts of the world for colluding with unscrupulous tax evaders and money launderers, to controvert that position .... 45 ....... Cayman Island is one of the few jurisdictions in the world where public records of the beneficiaries of firms and companies, like GWU Investments Ltd., are not maintained, and it is only with effect from 2023, that is if the promises made by the Government of Cayman Islands can be believed at face value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who is the natural person beneficial owner thereof. As for the Trust, there is no corroborative evidence about the statement, but nothing turns thereon as well. The assessee being discretionary beneficiary owner of the trust, and beneficial owner of the underlying company, is not mutually exclusive anyway but the claim of the assessee being a discretionary beneficiary of the trust is without even minimal evidence. 47. As regards the repeated references to Hon'ble Supreme Court's judgment in the case of Estate of HMM Vikramsinhji of Gonda (supra), ........... These observations have no relevance in the present context. Firstly, neither there is any trust deed before us, nor the question before us pertains to taxability of income of the trust. Secondly, beyond a mention in the base note as a personnes legales tides" (i.e. related legal persons), there is no evidence even about existence, leave aside nature, of the trust. Thirdly, the point of taxability here is beneficial ownership of GWU Investments Ltd., a Cayman Island based company, by the assessee. Finally, even if there is a dispute about the alleged trust, the dispute is with respect of taxability of funds found with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tein. The tax laws of government of India do not apply. Hence, reference to cases which are in the Indian context are not at all applicable. Some of the salient features of trust in liechestein are already mentioned in the above said tribunal order. Hence, reference by the id. Counsel of the assessee to apply Indian case laws to that governed by law of Liechestein is bereft of cogency. Mohan Manoj Dhupelia v DCIT (Mumbai) [2014] 52 taxmann.com 146 (Mumbai - Trib.) 3.2. We note that the said documents were received officially by the Government pursuant to an investigation made by permanent sub-committee on investigation of United States Senate. ......... It is a common knowledge that discretionary trusts are created for the benefit of particular persons and those persons need not necessarily control the affairs of the trust. Still the fact remains that they are the sole beneficiaries of the trust. Thus totality off acts clearly indicate that the deposit made in the bank account of the trust represents unaccounted income of the assessee, as the same was not disclosed by the these assessees in their respective returns in India, consequently, the addition was rightly made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 185,186 of Paper book Volume I. The appellant's counsel has incorrectly stated that the Federal Act on Combating Money Laundering in the Financial Sector passed by the Federal Assembly of the Swiss Confederation (Swiss PMLA) and the Indian PMLA are in pari materia. Firstly, there is no definition of beneficial owner given in the document for Swiss PMLA submitted by the appellant. Hence, it is incorrect to say that it is in pari materia with India PMLA, wherein beneficial owner is defined in Rule 9(3) of the PMLA (Maintenance of Records) Rules, 2005. Furthermore, nothing is brought on record to explain how these two laws are in pari materia. During hearing, it was submitted that the purpose of the AML regulations is to identify beneficial owners to stop drug trafficking and terrorism, but what was conveniently ignored was that one of the purposes of the AML regulations is also to stop tax evasion. It is interesting to note that Section 88 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has expressly made tax evasion a scheduled offence under the Prevention of Money laundering Act, 2002 Amendment of Act of 15 of 2003 88. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on record that assessee is not the only beneficiary. Therefore, we have to consider the actual legal ownership rather than deemed ownership which is without any evidence on record, to show that assessee has the legal ownership on bank account and other assets held by Trust. 40. Therefore, in our considered view, the addition made by the AO on account of bank balance of the offshore entities as part of wealth of the assessee is farfetched and without any evidence of ownership as well as the definition of assets does not include the offshore bank account as part of assets as per the Wealth Tax Act, 1957. Accordingly, the ground raised by the assessee in this regard is allowed. Analysis It would be pertinent to note that the provisions of the Wealth Tax Act, 1957 (hereinafter referred as WTA) are not in pari materia with the provisions of the BMA in as much as that the charge of tax u/s 3 the WTA is on the net wealth i.e. assets belonging to the assessee, whereas the charge of tax under the BMA is on any undisclosed asset (including financial interest in any entity) located outside India held by the assessee or in respect of which he is a beneficial owner. Therefore, as self-ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed foreign income and asset and Section 5 deals with the computation of the total undisclosed foreign income and asset. In the present case, the assessing officer has only sought to tax undisclosed foreign assets (foreign bank accounts) under the Black Money Act. The dispute is not regarding undisclosed foreign income. Interplay between Black Money Act and Income Tax Act Section 4(3) of the BMA which defines scope of the Act provides that undisclosed asset brought to charge under the BMA will be excluded from the scope *of Income tax act. Whereas in the Income tax act there is no such provision which excludes assets from BMA if they are already taxed under the Income Tax Act. Interestingly, in both the laws there is no non-obstante provision ousting the jurisdiction of the Assessing Officer under the other law. Thus, the asset may be brought to tax under either of the laws and section 4(3) of the BMA ensures that there will be no double taxation. Conclusion In the present case, the assessment orders for AY 1998-99 to 2014-15 have been quashed by the Bombay High Court in its order dated 10th August 2016. Thus, no income/assets for those assessment years have been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year relevant to any previous year prior to such previous year has not been issued and the time for issuance of such notice has not expired; or (iii) where any information has been received by the competent authority under an agreement entered into by the Central Government under section 90 or section 90A of the Income-tax Act in respect of such undisclosed asset. Explanation. - For the purpose of this sub-clause asset shall include a bank account whether having any balance or not. The appellant's counsel has contended that the appellant was precluded from filing voluntary declaration for the undisclosed assets located outside India, since in case of appellant, search was conducted by the income tax authorities in the year 2014. The said plea is without any legal basis because no provision under the BMA specifically excludes the persons ineligible to file voluntary declaration. Also, it is elucidated in the first submission by the Revenue, the BMA applies retrospectively. Thus, even assets purchased and disposed of before the BMA came into force are chargeable to tax under the BMA. (See Page 3-6 of the first submission). Further, the contention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the ld. CIT(A) that he has not examined the original documents based upon which the notice was issued, rather he has relied upon the final assessment order. In fact, the entire order of the ld. CIT(A) dismissing the jurisdictional issue is elaborately relied upon the final order of the A.O. We note that when the issue before the ld. CIT(A) was jurisdictional defect in issue of notice and the Hon'ble Bombay High Court had directed the ld. CIT(A) to dispose it off and that the assessment proceedings to go on, the reliance by the ld. CIT(A) in dismissing the jurisdictional challenge by taking the huge recourse of the final assessment order and even admitting that original documents were not examined by the ld. CIT(A) is not sustainable in law. While deciding the above jurisdictional issue, the ld. CIT(A) cannot rely upon the final assessment order. In other words, the findings in the final assessment order cannot be relied upon to overcome the jurisdictional defect/challenge. The jurisdictional issue has to be decided by reference to the materials relied upon the A.O. in disposing of the jurisdictional challenge. Hence, the ld. CIT(A)'s extensively reliance upon the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in existence when the notice was issued. This is more so when on the other hand the ld. CIT(A) is himself placing reliance upon the final order of the A.O. which obviously was not in existence at the time when the notice was issued. 41 We note that the Hon'ble Supreme Court in the case of Suzuki Parasrampuria Suitings Ltd. (supra) has held that the assessee cannot take shifting stand under different proceedings and such stand was liable to be rejected on the touch stone of the legal maxim of approbate and reprobate. In the present case, we note that the Revenue as well as ITAT cannot take shifting stands under different proceedings, when after evaluation of the same facts the ITAT had taken a decision in favour of the assessee that these assets do not belong to the assessee. Now we at the ITAT cannot take a contrary view by shifing the stand that ITAT's own findings and decision has no precedential value. This being so, the denial of liability by the assessee under Black Money Act under the jurisdictional challenge duly succeeds in view of the above said ITAT order in Wealth Tax proceedings. 42. Now we note that the legal maxim of approbate and reprobate applies to the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon'ble Supreme Court in the case of CIT vs. Estate of HMM Vikramsinhji of Gondal (supra). In Commissioner of Wealth Tax vs. Estate of HMM Vikramsinhji of Gondal [2015] 5 scc 666]: "A discretionary trust is one which gives a beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. The trustees must exercise their discretion as and when the income becomes available, but if they fail to distribute in due time, the power is not extinguished so that they can distribute later. They have no power to bind themselves for the future. The beneficiary thus has no more than a hope that the discretion will be exercised in his favour."(Judgment Compilation - Master Tab 1), delievered in wealth tax proceedings, precluding taxability in the hands of the Appellant under I.T. Act until distribution of Trust income, but no liability whatsoever under BMA. 43. On examination from the touchstone of the aforesaid case law, the ownership of these assets cannot be thrust upon the assessee. Hence, the denial of liability by the assessee at the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se documents are referred in AOs final order and the documents have been confronted to the assessee.This is palpable violation of natural justice and ld CIT(A) has fatally erred in rejecting the claim without himself examining the records.This proposition is duly supoerted by Honbe Supreme court decision in the case of Andaman Timber Industries Vs CCE vide order dated sept 2, 2015 46. We further note that in notice to the assessee, the Assessing Officer has referred to the names of certain bank accounts and Form-A obtained from banks for establishment of beneficial owners identity. Now in this regard it is the contention of learned Counsel of the assessee that declaration of beneficial owner in Form A is made for distinct purposes under the Swiss anti money laundering Act. In the submission above it has already been noted that in the aid of Swiss AML Act, the Swiss bankers Association has issued a Code of Conduct for Swiss Banks with regard to the exercise of due diligence (CDB Guidelines), wherein model Form A is prescribed for the declaration of identity of the beneficial owners. However, as clarified by the Swiss Federal Tax Administration, vide its letter dated 30.6.2015 it do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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