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TMI Blog2022 (3) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. 707/Mum/2019 - - - Dated:- 10-3-2022 - Shri Shamim Yahya (AM) And Shri Amarjit Singh (JM) For the Assessee : Shri Ritu Kamal kishore For the Department : Shri Hoshang B.Irani ORDER PER SHAMIM YAHYA (AM) :- This appeal by the revenue is directed against the order of learned Commissioner of Income-tax(Appeals)-58 dated 13.11.2018 and pertains to Assessment Year 2007-08. 2. Grounds of appeal read as under:- 1. On facts and in circumstances of the case, the Id. CIT(A) has erred in deleting the deposits amounting to ₹ 1,32,72,864/- in HSBC, Geneva standing in the name of Blueridge Investment Corporation, where the assessee is a joint signatory to the bank account. 2. On facts and in circumstances of the case, the Ld. CIT(A) has erred in not appreciating the submission made by the assessee on 24.10.2017 in page 3, that he had not provided any specific service or made any specific contribution to Blueridge Investment Corporation and still was made a joint signatory to the HSBC, Geneva account, thereby indicating nexus and control over the funds by the assessee. 3. On facts and in circumstances of the case, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case there is a change in your address. 5. In case your answer to the above questions are in the negative, provide your statement in an affidavit duly signed and notarized and sent it to the office of the undersigned. 5. The AO noted the response of the assessee as under:- (a) He is residing in the UAE for the last 35 years. (Copy of passport have been submitted) (b) The base note of HSBC, Geneva account shows his address in India for the reason that a copy of his passport was given by HSBC, Abu Dhabi to HSBC, Geneva for opening of the bank account. The account opening documentation requires a permanent address in India, which was taken from the passport. (c) The source of deposit made in HSBC, Geneva was out of the funds transferred from HSBC, Abu Dhabi. He further confirms that the same do not have any source in India. (d) The HSBC, Geneva account was opened through HSBC, Abu Dhabi in which his address is stated as P.O. Box 46611, Abu Dhabi, UAE which is the same as that of the Abu Dhabi account. Also, the assessee submitted that the address as mentioned in the base note as Singh Pole, Jodhpur is a house where his mother and brother are stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not-given. Also/ no details of the Iraqi national, Mr. Nazar Khan is given. It is a mere self-serving letter without any documentary evidence wherein the onus of the ownership of the account is being shifted to another person without any evidence to support it, (c) With regard to the account in the name of the assessee and his brother, the assessee stated in his affidavit that the amount in HSBC, Geneva was transferred from HSBC, Abu Dhabi and that it is his money that was transferred. The assessee chose not to produce any bank account details in order to support the claim that he made. (d) With regard to the both the accounts held in the name of Blueridge Investment Corporation and that of the assessee and his brother, it must be noted that the assessee is an Indian citizen; he has immovable and movable properties in India and the base note of the HSBC, Geneva account also clearly mentions an address in India, fact, he has used his Indian passport to open the accounts in HSBC, Geneva. He has been filing his return of income in India. During the assessment proceedings, notice u/s 133(6) of the Act was issued to both NSDL and CDSL in order to find out the demat accounts h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes all income from whatever source derived which - (a) is received or is deemed to be received in India in such year by or on behalf of such person; or ' (b) accrues or arises or is deemed to accrue or arise to him in India during such year . During the assessment proceedings and as can be seen from the facts of the case that the assessee has not made out a case that the deposits in the above mentioned accounts in HSBC, Geneva do not fall within the ambit of this provision of law. 8. Thereafter, AO referred to case laws from Hon ble Delhi High Court decision in the case of Nova Promoters and Finlease P.Ltd. 342 ITR 169 and Hon ble Supreme Court decision in case of Sumati Dayal vs CIT (1995) 214 ITR 801(SC) and CIT vs Durga Prasad More [1971] 82 ITR 540 and concluded as under:- In view of the above, the peak amount as appearing in the Base Note of the assessee's HSBC account in AY 2007-08 being USD 3,00,495 in Jan, 2007 which translates to ₹ 1,32,72,864/- (@ ₹ 44.17 per USD being the exchange rate in Jan, 2007 as per RBI) is hereby added to the total income of the assessee as income which is received or is deemed to be received in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r). During FY 2005-06 (AY 2006-07), the respondent resided in India for a period of 45 days which does not exceed the maximum threshold limit specified in Section 6 of the Income-tax Act, 1961 ( the Act ) and accordingly, the respondent was non-resident for AY 2006-07. Details of stay in India prior to FY 2005-06 and subsequent to FY 2005-06 as per the passport are as under:- Financial Year No. of days of Stay 2001-02 40 2002-03 44 2003-04 29 2004-05 42 2006-07 22 2007-08 47 2008-09 32 2009-10 38 2010-11 47 2011-12 50 During the year, the respondent assessee filed his return of income on 30.3.2007 declaring an income of ₹ 178/-. Since the respondent assessee was a non-resident, as per Section 5(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of USD 1,184,851 in February 2006 and the other account bearing no 5094495795 was in the joint names of the respondent assessee and his brother Devendra Singhvi having a peak balance of USD 9,537 in November 2005. The respondent assessee filed objections vide letter dated 7.11.2014 to the reopening of the assessment and also submitted copies of letters filed with DDIT (Inv.) Unit-III in response to the summons u/s 131 of the Act. The objections were disposed-off by the Ld. AO vide order dated 12.11.2014. Thereafter the AO issued statutory notices which were duly served upon the assessee calling upon to furnish the bank account statements of HSBC, Geneva and in case the respondent assessee is not in position to submit the same, he was directed to fill up the Consent Waiver Form enclosed with the notice. The AO also supplied the respondent assessee this information as to two accounts namely one in the name of a Company viz. Blueridge Investment Corporation wherein the respondent assessee was merely a joint signatory being a director of the Company and second was the respondent assessee s personal account jointly held along with his brother. The assessee replied the AO queries by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to bring any evidences on record to show that the respondent is having any beneficial interest in the company i.e. Blueridge Investment Corporation or the bank account held by the company with HSBC Geneva. On the contrary the respondent filed three independent/third party evidences to show that he has no beneficial interest either direct or indirect in the company namely Blueridge Investment Corporation or the bank account held by the company held with HSBC Geneva. These evidences are as follows: i. Letter dated 04/12/2014 of Blueridge Investment Corporation addressed to the Income Tax Department (Pg 205) ii. Letters dated 22/04/2015 and 10/02/2016 of HSBC Geneva addressed to the Company Secretary of Blueridge Investment Corporation (Pg 257-258) iii. Letter dated 22/04/2015 of Blueridge Investment Corporation addressed to the Income Tax Department enclosing the certificate of election and incumbency of directors and officers by the LISCR Trust Company, the appointed registered agent of Blueridge Investment Corporation duly apostilled/notorized by Special Agents of Liberia Maritime Authority (Pg 259-268). 5. The Ld. CIT (A) after appreciating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the money belonged to the assessee and therefore prayed that the order of ld. CIT(A) may be set aside and that of AO may be restored. 7. The ld AR while controverting the arguments of the ld DR submitted that the respondent is an individual residing in Abu Dhabi, UAE since 1976 and is working with Al Nasser Holdings as Group Advisor Director (formerly as Managing Director). The ld AR also stated that during FY 2005-06 (AY 2006-07), the respondent resided in India for a period of 45 days which did not exceed the maximum threshold limit specified in Section 6 of the Income-tax Act, 1961 ( the Act ) and accordingly, the respondent was non-resident for AY 2006-07. The ld AR submitted that ld. CIT(A) after admitting the additional evidences were are placed at page nos. 257-335 of the paper book forwarded the same to the AO for examining the same and sending a remand report. The ld AR submitted that the respondent could not place the necessary evidences before the AO because of the fact that the respondent was residing in Abu Dhabi, the bank account was located in Geneva, Switzerland and the company Blueridge Investment Corporation was incorporated in Liberia. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CO 266 to 269/Del/2015 AY 2006-07 to 2009-10. The decision of the tribunal was upheld by the Hon ble Delhi High Court in CIT Vs Suresh Kumar in ITA No. 85/2013,100/2013 87/2013 order dated 25.02.2013. The ld AR also relied on the recent decision of the Hon ble ITAT Delhi Bench in the case of Jatinder Mehra vs Addl.CIT in BMA No. 1/Del/2020 and Co. No 26(Del/2021). The ld AR In ground no 3 the revenue has relied on the decision of Hon ble SC in the case of GVK Industries Ltd. (supra) which is distinguishable as the said case is related to FTS. In ground no 4 the revenue has relied on the decision of Hon ble Bombay HC in the case of Soignee R Kothari vs DCIT (supra), which is also distinguishable as this is related to Writ petition against reopening of assessment wherein their Lordships have not expressed any opinion on merits. 8. We have heard the rival contentions and perused the material placed before us. The undisputed facts are that Respondent is an individual residing in Abu Dhabi, UAE since 1976. The Respondent is a Chartered Accountant, working with Al Nasser Holdings as Group Advisor Director (formerly as Managing Director). During FY 2005-06 (AY 2006-07), the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO also supplied a copy of base note received from French Authorities under Indo-French Fiscal Treaty to the respondent assessee. As per base note copy of which is filed at Pg. 185to 189 of the paper book ,there are two accounts with HSBC Geneva. The first account bearing number 5094029263 is in the name of Blueridge Investment Corporation which was incorporated in Liberia having a peak balance of USD 1,184,851 in February 2006 and the other account bearing no 5094495795 was in the joint names of the respondent assessee and his brother Devendra Singhvi having a peak balance of USD 9,537 in November 2005. The respondent assessee filed objections vide letter dated 7.11.2014 to the reopening of the assessment and also submitted copies of letters filed with DDIT (Inv.) Unit-III in response to the summons u/s 131 of the Act. The objections were disposed-off by the Ld. AO vide order dated 12.11.2014. Thereafter the AO issued statutory notices which were duly served upon the assessee calling upon to furnish the bank account statements of HSBC, Geneva and in case the respondent assessee is not in position to submit the same, he was directed to fill up the Consent Waiver Form enclosed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idge Investment Corporation). The ld CIT(A) observed that the department has failed to bring any evidences on record to show that the respondent is having any beneficial interest in the company i.e. Blueridge Investment Corporation or the bank account held by the company with HSBC Geneva. On the contrary the respondent filed three independent/third party evidences to show that he has no beneficial interest either direct or indirect in the company namely Blueridge Investment Corporation with HSBC Geneva. The assessee filed the following evidences: iv. Letter dated 04/12/2014 of Blueridge Investment Corporation addressed to the Income Tax Department (Pg 205) v. Letters dated 22/04/2015 and 10/02/2016 of HSBC Geneva addressed to the Company Secretary of Blueridge Investment Corporation (Pg 257-258) vi. Letter dated 22/04/2015 of Blueridge Investment Corporation addressed to the Income Tax Department enclosing the certificate of election and incumbency of directors and officers by the LISCR Trust Company, the appointed registered agent of Blueridge Investment Corporation duly apostilled/notorized by Special Agents of Liberia Maritime Authority (Pg 259-268). 9. As re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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