9911796707
TMI Blog2022 (4) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... and beyond this period, CMF was under any obligation to share the profits with the assessee. Even in various information received through FTTR, not single information has been received that either Fedrigoni or CMF has given any money for their India operation for supply of currency notes to Assessee. This finding of ld. CIT (A) without any rebuttal or material information on record cannot be tinkered with. Accordingly, the finding of the ld. CIT (A) that after the assessee had become NRI, no income has arisen or accrued in India, i.e. after 01.04.2015 and, therefore, even in terms of section 9(1)(i) no income is taxable in the hands of the assessee is upheld. CIT (A) has held that post 31.12.2012, the assumption made by the AO after the period 01.01.2013 is purely based on presumption that there might be continuation of terms and conditions of this agreement which was without any basis or evidences albeit on conjectures and surmises. The alleged money received by the assessee through various dubious entities during FYs 2015-16 2016-17 as alleged by the AO that assessee might have received money on account of share of profit from CMF in connection of its Indian activities is wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces rendered by the assessee to Fedrigoni in India. Thus, even the FTTR reference cannot be considered as material on record to support the case made out by the Assessing Officer, which goes to prove that his assessment of income was purely based on surmises and presumptions as noted above. Thus, not only the finding of the ld. CIT (A) is confirmed but the information supplied by the CIT DR has no correlation or effect so as to reverse the finding of the ld. CIT (A). Accordingly, the submissions of the ld. CIT DR are rejected and the order of the ld. CIT (A) is affirmed. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of profits or any payment as per the agreement from CMF from FY 2011-12 onwards which is also evident from return of income for AYs 2012-13 to 2016- 17, and also the observations made by the Assessing Officer in his assessment order. 5. Assessing Officer has noted the details of the turnover, net profit and exemption claimed for AYs 2008-09 to 2016-17 , for the sake of ready reference, is reproduced as under :- A.Y. Turnover (Rs.) Net Profit (Rs.) Exemption claimed (Rs.) Returned Income (Rs.) 2008-09 23,97,27,764 23,19,14,203 23,42,20,336 11,852 2009-10 N/A N/A N/A N/A 2010-11 12,91,51,125 8,04,71,209 8,04,71,209 - 2011-12 15,95,32,863 19,06,06,942 19,06,06,942 1,712 2012-13 1,83,63,941 (1,86,816) NIL (1,86,815) 2013-14 3,17,20,171 (71,91,682) NIL (72,07,437) 2014-15 4,82,23,439 (12,08,100) NIL (12,08,100) 2015-16 43,97,651 6,18,578 NIL NIL 2016-17 1,92,76,329 52,05,057 NIL NIL 6. A search and seizure action and survey operation u/s 132 and 133A of the Act was conducted on the premise of the assessee on 26.12.2016. It is a matter of fact that, at the time of search the assessee had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in his foreign bank accounts were not disclosed to the Income-tax Department which might have been connection with supply of currency papers in India. But, there is not an iota of evidence or information that any such payment received in the alleged entities belonging to the assessee or where he could be said to be involved for carrying out any services in India or that income had arisen or accrued in India for any business activities. Assessing Officer has tried to draw inference on his presumptions. Thereafter, based on this presumption and allegation that commission income was earned by the assessee on the ground that assessee might have rendered some services to Fedrigoni as it continued to supply the bank note paper to its buyer i.e. RBI, he proceeded to apply the average net profit rate of 9.72% earned by the assessee on the amount paid by the RBI to Fedrigoni in the immediately preceding three assessment years i.e. 2009-10 to 2011-12. Based on this figure, he has tried to interpolate and make an estimate of the income of the assessee from AYs 2012-13 to 2017-18 in the following manner :- (A) (B) (C) Assessment Year Amount paid by RBI to Fedrigoni (Rs. in cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This fact has also been noted by the ld. CIT (A) in his order. There are various other observations by the AO with regard to certain entities outside India where allegedly assessee had interest or related to such entities who had entered into for rendering of services for supply of currency notes to different countries outside India through Fedrigoni and the same will be dealt, when we deal with the arguments put-forth by the ld. counsel for the assessee. 11. Certain informations or references received through Foreign Tax and Tax Research (FTFR) has been discussed by the ld. CIT (A) and also the report of the AO which has been discussed threadbare by the ld. CIT (A) on page 150 onwards of his order. 12. However for the sake of reference, the discussion of these entities in the assessment order based on certain inquiry, especially regarding St. James Technologies Limited, which has been heavily referred by Assessing Officer to draw his conclusions for drawing his presumptions that assessee might be getting income which has not been disclosed. The relevant portion as incorporated in the following manner:- Pages 165 to 201 D "12.1 M/s St James Technologies Limited (SJTL) 12.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re its date of incorporation. Ans. As per an understanding between Nextgen General Trading LLC and Fedrigoni S,p,A,, the royalty fee to Nextgen or any other nominated company was to be paid on safe of thread to paper manufacturers. As per the above statement, the paper manufacturers were located in Russia,. Switzerland, Italy (manufacturing paper for India). The entire quantify of thread shown was sold to paper mills in Russia, Switzerland and Italy, The Italian producer (Fedrigoni) used the thread in paper sold this paper to India. Therefore, the entire quantity of thread was produced in Italy and sold cut of India to the above countries. The technology of thread was developed by myself S. P, Gupta (together with Nextgen Genera/ Trading LLC) and Fedrigoni after a long research. As soon as there was a success in getting orders, a new company St, James Technologies Ltd. was registered in Dubai for the simplification of accounting of this business. (iii) In the statement given to Investigation Wing the Appellant had admitted that the SJTL Is sharing around 50% of the profits with Sh. S.P. Gupta as per a verbal agreement with the company. In statement of assessee recorded u/s 132( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above facts, it is clear that St. James Is a front company, through which Sh. S.P. Gupta continued his business relationship as agent of M/s Fedrogoni's. 12.1.5 During the course of appellate proceedings, the appellant had explained that due to his specialized knowledge in chemicals S. other security related features in Currency Paper, it had suggested application of specialized chemicals to M/s Fedrigoni, which can create colour shifting on security thread as a new security feature in currency paper. They had signed agreement dated 17.4.2015, wherein the patent of this technology will he registered by them in their name and the royalty @20% will be received by the appellant on sale of such paper by M/s Fedrigoni. The amount of 20% royalty will be shared by the appellant @50% with his employer M/s Next Gen Trading LLC (NGTL). Thereafter, M/s NGTL6. the appellant had signed a letter by virtue of which M/s NGTL nominated M/s SJTL to claim 50%. of Royalty due to It from M/s Fedrigoni. The following documents have been seized/filed by the appellant in this regard; • The licence agreement dated 01.01.203 6 between Satya Prakash Gupta, M/s Next Gen Trading LLC (NGTL) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plain paper from M/s NGTL & Sh, SP Gupta to M/s SJTL with copy marked to M/s Fedrigoni for assignment of share of M/s NGTL (50% of royalty) to M/s SJTL as per clause 2 of the agreement dated 1.1.2016. The invoices will be raised by M/s SJTL and share of Mr. S.P.Gupta will be there In the receipts (31 50% of receipts under the principle of ''Diversion by overriding title". It had been signed by Sh Tarun Maheshwari and the appellant. (iv) Letter dated 17.12.20IB from M/s Fedrigoni on the letterhead of Fabriano signed by Mr EligioBallabio, Commercial director to M/s SJTL regarding confirmation of Royalties. It mentions that • The details of payments of Royalty by bank transfer for 3 invoices dated 25.7.20:16 for Euro 13264*3.23, dated 25.7.2016 for Euro 1305017.23 and dated 13.10.2016 of euro 2237036. • There is annexure attached mentioning some invoices & the amount of royalty. • It mentions that withholding tax @ 10% on Royalty paid had been deducted before making this payment. (v) The copy of email dated 27,12,2018 exchanged between EligioBallabio and the appellant that mentions all the sequence of events leading to development of patent, rights of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We had made an agreement to pay percentage of royalty on the invoice value of the product produced and sold all over the world. Q.55 Please state whether you have any other association with M/s. Fedrigoni S.P.A. Ans. I am only associated with M/s Fedrigoni S. p. A for two special vehicles M/s Green Peas Solution Ltd., UAE and St. James Technologies, UAE in addition to this, J am under active business understanding to manufacture security threat and e-passport in India. Q.68 In your answer to Q.52, you have said that you have developed security thread alongwith St. James Technologies tor Ms Fedrigoni S.P.A, Kindly tell its when exactly did you develop this security thread. Ans. I developed this thread around May, 2015. Q.69 Please state where you developed this security thread. Ans. I developed this security thread hi the laboratories of M/s Fedrigoni SpA in Milan Q.70 Has M/s Fedrigoni SpA supplied this security thread Developed by you to any party till date? Ans. M/s Fedrigoni S,p,A has supplied this thread to M/s Landquart, paper manufacturing company in March, 2006 M/s Arfo Wiggins, France in August 2016. Q.71 How much money has M/s Fedrigoni S. p. A given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant alongwith the comments on these observations are as under: 12.1.7.1 It is observed as under: (a) As per the interim agreement of 2015, the infrastructure for the development of security technology was to be provided free of cost by M/s Fedrigoni in turn patent was to be registered in its name and the financial support was to be provided by M/s NexGen Trading LLC (NGTL) fit technical competence was that of the appellant, for which M/s NGTL & appellant were to receive 10% each, of total Royalty @20% for 5 years from 1,1.2016 from M/s Fedrigoni. M/s NGTL had assigned its rights of receipt of royalty to M/s SJTL- Some of the documents are on the letter heads of M/s Fabriano and some are notarised in Dubai. Even the seized invoices refer to the agreement dated 1,1.2016 and claim of Royalty on quarterly basis by M/s SJRL from M/s Fedrigoni as per the terms of the agreement. (b) As per these documents, all these activities had been taken up by the appellant abroad after becoming NRI w.e.f. 1.4.2015. The patent had been developed abroad and as reflected on these, documents, the use of patent by M/s Fedrigoni had not been for supplies to India, the payments had been received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from all users in this line of business product, will be patented by the inventor in the name of another company for just 10% Royalty for a 5 years period only. Further the appellant will share 50% of Royalty with another entity for providing financial support. There Is nothing on record, what financial support was provided by M/s NextGen and what was utilisation of Infrastructure of M/s Fedrigoni in this regard, as the whole process of creation, testing, trial, registering the patent had just taken few months (between May 2015 to Dec 2015) as per the documents, before the commercial terms for supply of it were finalised in the agreement dated 1.1.2016, (c) Further there is no ownership structure of M/s NextGenTading LLC (NGTL) available in the assessment order, thus the facts stated by Sh. Tarun Maheshwari in his affidavit that he is a minority shareholder cannot be ascertained. But It appears from the totality of facts above that Mr Tarun Maheshwari has full control on financial decisions of M/s NGTL, as it had unilaterally signed the tri-party agreement for providing financial support in lieu of 10% share In Royalty and later assigned it to its 100% ownership entity M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bull; Appellant was the only authorized signatory of bank account With First Gulf Bank (FGB). • The appellant had stated that he is the Director of the company and on behalf of the company, he helped P-1/s Fedrigoni S. p.A to make special paper for the Central Bank of Indonesia and helped it to procure that order. For these services, M/s Fedrigoni S.P.A has paid M/s Green Peas Business Solutions Limited around 2 million Euros till date. The relevant part of the statement recorded u/s 132(4) of the IT Act, 1961, or 29.12.2015 during search, is as under: "Q.79What is the source of income of M/s Green Peas Business Limited and what is your relationship with it? Ans. I am the Director of M/s Green Peas Business Solutions Limited and Shri Tarun Maheshwari is the owner. It provides advisory services to M/s. Fedrigoni S.p.A. and has received around 2 million Euros from M/s. Fedrigoni S.p.A. till date. 12.2.2 The AO concluded that from the above facts, that it is clear that the appellant was owner of above company and was not merely a Partner. 12.2.3 During the course of appellate proceedings, the appellant had submitted that this company was not part of the SCN issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 15.11.2018 on the letterhead of M/s Fabriano and signed by Mr EligloBalabio, Director Commercial, Fedrigoni, which confirms the facts stated by the appellant in his statement u/s 132(4). (b) M/s GPSS's financials are controlled by the appellant as he is the only authorised signatory of bank accounts of M/s GBPL. As per available records, Mr. Tarun Maheshwari is 100% shareholder of it. 12.2.5.1 It Is observed that here again the structure of the entity is same as M/s SJTL. On papers, the owner is Sh. Tarun Maheshwari, the authorized signatory to bank account Is only the appellant. The client is again M/s Fedrigoni, who Is making the payment to the M/s GBPL for certain services rendered by the appellant. Sh. Tarun Maheshwari had mentioned in his notarised affidavit that this company was closed on 30.12.2018. There is nothing on record about it and regarding the money lying in its accounts. There is no statement or evince that shows that the appellant is employed with M/s GBPL & is drawing any remuneration from it. The business interest of the appellant & its relation with M/s GBPL does not have any clarity, except the fact the appellant has all financial control, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1B75E3 of this company, it is observed that In F.Y, 2015-16 on 08.03.2016 there is a credit of 1,05,0000 Euro from Fedrigoni S.p.A. which Is equivalent to ₹ 7,92,43,500/- fat the conversion rate of 75.47 from Euro to INR). 12.3.1.2 Further as per the information received. In the bank account of the appellant In Emirates NBD, Bank Street Branch having account number 0315067643902 total Credits from Fedrgoni S.p.A. In the F.Y. 2015-16 is ₹ 11,97,909/- and In F.Y. 2016-17 it is ₹ 18,97,742/-. 12.3.1.3 From the perusal of Client Information profile of the account opening form, it is observed that the business relationship between the assesses and Fedrigoni S.p.A. was still intact and ongoing and the same is evident from the relevant portion of this account opening form received from foreign country which is shown below: ……….. 12.3.1.4 The observation of the AO on the basis of these documents is reproduced as under: "It is dear that although the assessee's commission income came as business receipts from a foreign Client, it is to be noted that this commission was derived from the profit earned by the foreign client by safe of cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that during the course of search, in the answer to Q No 122, the appellant had responded as under: "Q122 I am showing you Page no. 37 of Annexure A4, which is the original incumbency certificate of M/s Sterling Global Partners Limited seized from your room in your residence at H-3/1, Model town, Delhi Kindly tell us about this document and why it is lying with you. Ans. After receiving notice from the Income Tax Department, I had requested Sh. Tarun Maheshwari to get the ownership. document for M/s Sterling Global Partners Limited from the RAK authorities so that I could submit the same to the Department. " 12.3.5 The appellant had explained that the amounts of ₹ 30,95,651/- received in bank account no 0315067643902 are the reimbursements of travelling expenses claimed & received from M/s Fedrigoni. Certain such claim invoices had been seized also. 12.3.6 The observations in this regard are as under: (a) The seized incumbency certificate had been issued by Govt of Ras AI Khalmah. As per the contents of this paper, Mrs. Lisa Thompson is 100% shareholder, director & secretary of this company. However as per the part 3 of Barclay account application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defining the services & corresponding remuneration. Thus, the entity, the relationship of the appellant, services provided and corresponding consummate remuneration to this entity by M/s Fedrigoni are all doubtful. Further the purpose of travelling on behalf of M/s Fedrigoni and claim of reimbursement of travelling expenses of the appellant from May 2015 onwards without any agreement of activities clearly points towards a strong relation of the appellant with M/s Fedrigoni in all these years. 12.4 Anglo Manx Trust and Ballenta Inc. 12.4.1 As per the assessment order, there are facts & observations made by the AD which are as under: 12.4.1.1 During the course of search, it has been found that during the FY 2015-16, the appellant had received 7 million Euros (₹ 50.49 crores) from M/s Ballenta Incorporated, Samoa and 4 million Euros (₹ 28.85 crores) from M/s Anglo Manx Trust Company Limited, Isle of Man, in his personal accounts in Dubai (Euro 9Mn) and Singapore (Euro 2Mn). Both Anglo Manx and Ballenta are mentioned in the Panama Papers as dubious entities of Mossack Fonseca. 12.4.1.2 The appellant previously in his submission dated 18.04.2016 stated that he had n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment. Q.120 Kindly tell us if you are a shareholder, Beneficial Owner or the Ultimate Beneficial Owner of M/s Ballenta Incorporated. Ans. Neither am I a shareholder, nor a Beneficial Owner, nor the Ultimate Beneficial Owner of M/s Ballenta Incorporated. By not being a Beneficial Owner and Ultimate Beneficial Owner I mean that I am neither a shareholder of the company nor have created any nominal shareholder and nor have ever executed any understanding or agreement with any person at any time in this connection." The copies of the loan agreements were submitted during post-search inquiries on 17th January 2017. 12.4.1.3 Through the bank statements received from UAE Tax Authorities, it was verified that during the period January to March 2016, the appellant had received an amount of 9 million Euros from Anglo Manx Trust Company Limited and Ballenta Incorporated in his bank account in Bank of Baroda, Dubai and the same was transferred to his accounts in India. Further 2 million Euros were transferred from his Citibank account in Singapore. A further amount of 0.4 million Euros was received from Nextgen General Trading LLC in the same period. 12.4.1.4 The Panama Pape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies with doubtful creditworthiness that too Mossack-Fonseca linked off-shore entities, evidences regarding the same companies were found in his emails during post-search inquiries paint a different picture. In one email, the office secretary of Nextgen, Ms. Sruthi Anvas was seen to have emailed Anglo Manx Trust Company Limited in July 2016. Her email dated 12th July 2016 is reproduced as under: "Dear Ms Claire, I am sorry to bother you for a favor as the matter is urgent. This payment is stopped by the Bank may be because Ballenta is appearing in list leaked by Panama. Therefore the Bank urgently needs signed and stamped copies of the agreement as well as the Invoice. I am attaching herewith a copy of Invoice modified by and Invoice No: NXT/BAL/CI/BD/0516-480A. Kindly discuss with Mr. Chris and if convenient he should organize to sign and stamp the agreement as well as the attached Invoice and mail the scanned Copy of the same at the earliest convenient to him. Your kind support in this matter shall be highly appreciated." Further correspondence between Sruthi Anvas of Nextgen General Trading LLC and Claire Cain and Ewan Heap of Anglo Manx (Isle of Man) indica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Garg on 7th September, "Can you send me copy of loan agreements for 11 Million Euros (1 + 1 + 1 + 1 + 7). Will finalise agreement based on the same". This was followed by a reply from Vineet Garg with a draft of an assignment agreement dated 29th July, 2016 between Ballenta Incorporated (Lender), Anglo Manx Trust Company Limited, Satya Prakash Gupta (Borrower) and Nextgen General Trading LLC (Assignee) as per which assessee assigned the rights and obligations under the loan agreements to Nextgen and was to transfer the loan amount within 15 days of the agreement. This clearly indicated the loan assignment agreements were backdated. On being confronted, the assessee replied: "This is an unsigned never used format which may be prepared by my social contacts Vinay Mangla and Vineet Garg and is just an internal discussion which is totally without my knowledge." • The next day, on 8th September, an email was sent by Vi nay Mangla to Vineet Garg with draft letters from Nextgen to Anglo Manx (dated 20th December 2015) and Ballenta (dated 1st February 2016) confirming that Sh. S.P. Gupta is its full time employee and loan may be granted to him on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Sh. S.P Gupta informed that loan was assigned by Anglo Manx Trust Company Ltd and Ballenta Incorporated to M/s NextGen. On being asked about copy of assignment letters, we were informed that it was a verbal agreement. It was discussed that to establish genuineness of the repayment to Mis NextGen instead of Anglo Manx Trust Company Ltd and Ballenta Incorporated, the assignment needs to be confirmed by all parties concerned at the effective date when the verbal agreement was made which was prior to the date of actual repayment to M/s NextGen in August 2016. Sh. S.P Gupta asked for draft copy of confirmation letter/ agreement to be confirmed by all parties which was provided to him as per his instructions. For the said draft Sh S.P Gupta provided to us signed copy of assignment agreement dated 9th Feb 2016 between Anglo Manx, Ballenta and Sh S.P. Gupta. The said assignment agreement dated 9th Feb 2016 is signed by all parties concerned i.e. Anglo Max, Bellanta and Sh S.P. Gupta. On the same basis and format, Sh S.P Gupta asked to create assignment agreement with M/s NextGen. I cannot vouch for authenticity of information/ documents or parties involved. We relied on the information p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee was only in the nature of loan since inception. During the course of Survey and Search proceedings also, it was stated by the assessee that the amount of 11 Million Euros received by the assessee was for setting up a petroleum project only. The statement gets substantiated from email of 06.01.2016, wherein assessee informed AngloManx that it received the amount for setting up of storage facilities for LPG as well as retail outlets for distribution ... ... It is thus apparent that there is never any change in the statement of assessee and the stand of the assessee gets substantiated from various above said emails exchanged between assessee and AngloManx. ... The above referred emails of January & February, 2016 and BRC make it evident that the nature of receipt of loan by assessee from AngloManx and Ballenta was disclosed much before Panama Leak and survey and search & seizure ... " The above contention of the assessee is not acceptable. From the above discussion, it is clear that the assessee's own unaccounted money was routed back to his personal account in the form of loans. It is clear from the mail communication between Vinay Mangla and Vineet Gar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a from the website of ICIJ there is relation of M/s Ballenta with Mossfon subscribers limited and Anglo Maxn Trust as shareholder and intermediary respectively. The source of receipts/credit entries from where the loans had been given to appellant by these entities is not available on records. Further the loan agreements filed by the appellant are on plain paper, which can be created anytime for any date. There is no assignment document filed by the appellant for assigning the loan by these entities to M/s NGTL. There are no circumstances brought on record by the appellant, like earlier debt/transactions of these tax heaven entities with M/s NGTL, which had led to assignment of this amount by these dubious entities to M/s NGTL. It is observed from the documents & activities undertaken by Mr.Tarun Maheshwari that M/s NGTL is controlled by him, who is allegedly front person of the appellant. Due to the name of these tax heaven entities figuring in panama leaks, the appellant had routed this amount back to his account in Dubai and later allegedly to its front entity M/s NGTL. Thus, the appellant had control of this money, which had been routed his account from these dubious entities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s needed to underline here that had the original agreement continued into existence, the assessee would be getting 14% of the receipts of Fedrigoni from BRBNMPL and SPMCIL irrespective of any financial condition of Fedrigoni and in turn would have to pay taxes on his commission from Fedrigoni from A.Y. 2012-13 onwards. 12.5.4 Further, as discussed above, while on one hand assessee showed no income from Fedriqoru in India whereas on the other hand he has received payments in FY 2015-16 and 2016-17 in his account or in the accounts of some foreign entities in which he was associated as authorized signatory or Partner or Director. It is very important to underscore here that whatever business entity assessee is associated with, Fedrigoni is also engaged. The same is evident from the fact that Fedrigoni is associated with NextGen, SJTL, Green Peas Business solutions and Sterling Global Partners Ltd. 12.5.5 It is also seen from the Memorandum of Association of St. James Technologies Ltd. and Green Peas Business Solution that though the activities of the companies as mentioned as General Trading, Investments etc, however these entities are associated with Fedrigoni in a highly specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n crores) (C) Amount received by Sh. S.P. Gupta as per books of account (Rs. in crores) (D) Percentage of Fedrigoni receipts accrued to Sh. S.P. Gupta (C*100/B) 2008-09 197.93 18.14 9.16 2009-10 109.59 13.21 12.05 2010-11 98.82 7.85 7.94 Average percentage of Fedrigoni receipts accrued to Sh. S.P. Gupta 9.72 12.5.10 Estimating an average of 9.72% of the revenue for the supply of currency paper, the revenue accrued to Sh. S.P.Gupta from A.Y. 2011-12 to 2017-18 is estimated as under: (A) AY (B) Amount paid by RBI to Fedrigoni (Rs. in crores) (C) Estimated revenue of Sh. S.P. Gupta - 9.72% of (B) (Rs. in crores) 2012-13 226.68 22.03 2013-14 53.33 5.18 2014-15 304.32 29.58 2015-16 517.48 50.23 2016-17 231.18 22.47 2017-18 289.71 28.16 Total 157.65 12.5.11 On the basis of amount received by Fedrigoni S.p.A from BRBNMPL, the total undisclosed income of the assessee has been estimated to be ₹ 1S7.65 Crores as mentioned in above table. However, on the examination of various issues, it has been found that the total undisclosed receipts of the assessee, which accrued to assessee between AY 2012-13 to AY 2017-18 but w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts & circumstances of the case, it is held that (i) There is nothing on record to prove o r even indicate that agreement of the appellant with M/s CMF signed in 2006 (modified in 2007 for only sharing of profits) was extended or renewed after 31.12,2012. There is neither any statement of any person u/s 132 (4) /133A/131 of the I T Act 1961 nor any material seized during the search indicating anything more than what this agreement has, in term s of change of any clause or extension of dates etc., to support the contention of the AO that the appellant continued to be the partner in profits with M/s CMF even beyond 31.12.2012. Further, the appellant had not fifed any document to claim that the agreement was cancelled/terminated prior to 31.12.2012. The only argument of the appellant is that there were no sharable profits after 1.4.2011. In these facts & circumstances of the case, there is no dispute that the original agreement signed in the year 2006, between the appellant with M/s CMF was valid till 31.12.2012 only. Further there is no evidence on record or denial, either by M /s CMF or the appellant, that the appellant discontinued to give its services suddenly after 1.4.2011. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 31.3.2011. M/s CMF had stated certain reasons in its letter dated 4.1,2018, which are not backed by any credible documentary evidence. As discussed in above para, the documentary evidences submitted by the appellant prima facie do not have any impact on profits of M/s CMF at least for AYs 2011-12 to 2014-15. Without analysis of complete comparative financials of Indian operations for the years under consideration vis-à-vis earlier years, in the light of above analysis on claim of M/s CMF, the proposition of M/s CMF about Its losses from Indian operations cannot be accepted." 14. Finally, the observation and the conclusion of the ld. CIT (A) from paras 15.1 to 15.5 are as under :- "15.1 There is no evidence on record either in the form of seized material or statement to prove that the agreement of 2006 signed between M/s CMF & the appellant had been extended beyond 31.12.2012. Thus the appellant was entitled for his share of profit from M/s CMF for its Indian operations for the period 1.4.2011 to 31.3.2012. Beyond this period, M/s CMF is not under any obligation to share the profits with the appellant on account of this agreement. There is nothing on record to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2.1) while analysing the transactions in these entities, which raises doubts on veracity of such transactions. It is observed that the appellant had no substantial business receipts in India from 1.4.2011 to 31.3.2015 and suddenly within 2 years of acquiring the NRI status, was flushed with work of developing patent for M/s Fedrigoni, became beneficial owner of the company involved in restructuring the business of giant company like M/s Fedrigoni in South America, got the special paper made for central bank of Indonesia for M/s Fedrigoni, was entrusted with ₹ 80er by dubious entities, without any legal guarantee, to develop LPG distribution network in India, without any prior experience in this line of business. Even this amount of ₹ 80 crores was dubiously transferred to M/s Nexgan without any documents in support of such assignment. In such a short span of less than 2 years of becoming NRI, the amounts of ₹ 141.5cr had come in the control of the appellant. Suddenly the flows of money, including the regular flows supposed to flow on account of patent in future years also, stopped after the name of the appellant figured in Panama Leaks. Sudden discovery of talent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pts have accrual/arisen from any activities /connection in India. 15.3 The appellant had filed certain documents from M/s CMF, wherein the claim, that there were no sharable profits after 1.4.2011, had been made. The claim had been analysed above and lacks credibility as per the discussion in para 11.2.3, 11.2.4 & para 14.3 above. In the absence of any financials of M/s CMF for Indian operations, the claims made in the latter dated 4.1.2018 by MIs CMF are rejected. The only alternative left in such circumstances, is to accept the estimation made by the AO on the basis of receipts of M/s CMF. As discussed in para 14 above, the income is being assessed on the accrual basis as per this estimation only and not on receipt basis of money received abroad in dubious entities, as finally adopted by the AD. Thus, the all the pre-conditions of accrual of share of profit receivable to the appellant for the period 1.4.2011 to 21.12.2012 i.e. valid agreement, evidence of supply of material by M/s CMF in India and no evidences of losses to M/s CMF during this period, are fulfilled. Further, there are possibilities, as discussed above, that these accrued amounts have been routed abroad by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 16. Before us, ld. counsel for the assessee, Shri Gaurav Jain reiterating the entire facts and background of the case (as discussed herein above) submitted that all the additions in the present assessments have been made in pursuance of search & seizure action u/s 153A. On the date of search, the assessments for AYs 2012-13 to 2015-16 had already attained finality and stood concluded and therefore, same cannot be reckoned as abated assessments in view of second proviso to section 153A. For all these years, admittedly no incriminating document or any adverse information or material was found so as to indicate that assessee has earned any undisclosed income nor there is any reference to any seized material, albeit there was information post search which again has no relevance on the computation of income made by the AO which was purely based on presumptions and estimate basis. In all the assessment years, AO has merely made additions on estimate of net profit of presumed accrued income and that to be without any material information that any such income had accrued or arisen in India by the assessee through any business connection in India for which alleged income has been assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Fedrigoni SPA Italy. (hereinafter referred to as ('Overseas Enterprises') in tendering process. 4. Copy of Email dated 04.02.2013 from the overseas enterprise confirming that they have issued dated 04.01.2012 to the assessee in which services rendered by the assessee have been elaborated." 17.5 The aforesaid order clearly establishes that, the aforesaid agreement(s) were not undisclosed to Revenue or were any new document found in the course of search, but were already on record of the Revenue. Further, the aforesaid agreements contained the terms and conditions relating to scope of services agreed between the assessee and Fedrigoni, including consideration therefor (detailed supra) and did not throw any light on actual income earned by the assessee on the basis of said agreement subsequently. Thus, the aforesaid agreement was not incriminating evidence in any manner, which was either undisclosed or resulted in detection of any undisclosed income earned by the assessee. Furthermore, it is submitted that the aforesaid agreement only had a limited validity upto 31.12.2012 and was, therefore, not relevant for alleged income to be earned after that period and there was no eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign company, viz., St. James Technologies Limited (SJTL) incorporated in UAE, which had received some income in its bank account outside India, including from Fedrigoni. No evidence/document suggesting nexus of said receipt with alleged commission income was found, nor has even been referred to in the assessment order. On the basis of some preliminary documents, the assessing officer conducted enquiry from the assessee as also made foreign reference through FTTR Division of CBDT. 17.9 The receipt by SJTL were found for the period from September 2016 to March 2017 (relevant to assessment year 2017-18) i.e. when the assessee had become non-resident in India, w.e.f. 01.04.2015, which comprised of 3.5 million Euro from Nextgen General Trading LLC and 4.8 million Euro from Fedrigoni. On reference to FTTR, the Revenue collected the following information: - SJTL was incorporated on 03.05.2016 (i.e. when the assessee had become non-resident in India); - While Mr. Tarun Maheshwari is shown as the 100% owner of SJTL, as per KYC in Bank Account of the said company in UAE, the assessee and Mr. Tarun Maheshwari are shown as partners; - The assessee is a sole authorised signatory in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [@ Pg 20-23 of AO] 17.15 Similarly during the course of search, the Revenue found certain documents relating to foreign company, viz., Green Peas Business Solution Limited, incorporated in Dubai in 2016 (i.e. when the assessee was non-resident in India) and that said company had received 2 million Euros in June 2016 (i.e. after incorporation of company and in the period when assessee was non-resident, relevant to assessment year 2017-18.) 17.16 No incriminating material or document was found suggesting that the aforesaid amount was paid by Fedrigoni in relation to alleged commission income earned by the assessee in India in relation to supply of currency paper to RBI. 17.17 During the course of search/investigation and assessment proceedings, the assessee submitted that the aforesaid income was in relation to independent advisory services rendered by Green Peas Business Solutions Ltd. to Fedrigoni relating to acquisition of foreign company in Brazil having no relation/nexus whatsoever with any transaction in India, specifically supply of currency paper to RBI, for which a confirmation dated 15.11.2018 from Fedrigoni directly to assessing officer, attached at Page no. 999 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent transaction between Fedrigoni and Sterling Global. 17.24 In the aforesaid facts, it is submitted that no incriminating material/evidence relating to nexus of receipts by Sterling Global with alleged commission income was found in the course of search or, otherwise. The only material with the department was uncorroborated and unauthenticated information by way of the name of Sterling Global in ICIJ Database along with the information received from FTTR Division whereby, the assessee was named as beneficial owner which remains uncorroborated to prove that the assessee was the real beneficiary of the aforesaid income. 17.25 Reference in this regard can be made to the recent decision of Bangalore bench of Tribunal in the case of ACIT v. Reindeer Software Solutions Pvt. Ltd.: ITA No. 1354/Bang/2017 wherein the addition made on the basis of information available in the newspaper report was deleted observing as under: "9………………..The amount has been reported in the news articles relied upon by the A.O. without carrying out adequate due diligence and without being ratified by the appellant or the investors. 10. In view of the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of alleged commission income and nexus of aforesaid receipt with that income. The allegation of the aforesaid receipt to be in lieu of alleged undisclosed commission income was purely based on assumption, surmises and conjectures, de hors any material suggesting the same. 17.31 Considering that the aforesaid receipts related to the period when the assessee was non-resident in India, the onus was on the Revenue to prove with positive evidence on record that such receipts had nexus with India. Furthermore, the scope of section 153A is restricted to incriminating material found in the course of search. 17.32 In view of the above, even with respect to the captioned issue, no incriminating material was found in the course of search. Thus, the CIT(A) has rightly deleted additions made on the basis of allegations made in the assessment order qua the aforesaid receipts in foreign bank account, outside India. VI. Anglo Manx Trust [@Pg 29-43 of AO] 17.33 During the course of search, the Revenue found that the assessee had received loan of 7 million Euros from Ballenta Incorporated, Samoa and 4 million Euros from Anglo Manx Trust Company Ltd. Isle of Man, during the financial year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, it is submitted that the entire impugned additions made by drawing nexus of receipts in the bank account of assessee or associated entities outside India with accrual of income in India/undisclosed commission income in relation to supply of currency paper to RBI was purely based on assumption, surmises and conjectures, de hors any incriminating material/evidence found in the course of search, drawing the aforesaid nexus. 17.38 Accordingly, the aforesaid additions were beyond the scope of assessment under section 153A as also 143(3) of the Act. 17.39 It is the respectful submission of the assessee, that the aforementioned receipts in foreign bank account of the assessee or in the bank account of associated companies were in the period relevant to assessment year 2016-17 to 2017-18, when the assessee was non-resident in India, in the following manner: o St. James Technologies Ltd. - September 2016 to March 2017 (relevant to assessment year 2017-18) [Refer Pg 17 of AO] o Green Peas Business Solutions Ltd. - June 2016 [@Pg 999 of AO] o Sterling Global Partners Ltd. - March, 2016 [Refer Pg. 27 of AO] o Re-imbursement of expenses - December 15 - Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 17. He further submitted that the ld. CIT (A) has admitted that there is no evidence found during the course of search or otherwise relating to earning of income from supply of currency paper to RBI was found and thereafter in the cases where assessments had attained finality and are unabated assessments, no addition can be made de hors any incriminating material found during the course search. In support, he strongly relied upon the judgments of Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla [2015] 380 ITR 573 and following decisions :- (i) Pr. CIT, Central 2, New Delhi vs. Meeta Gutgutia Prop. M/s. Ferns 'N' Petals 395 ITR 526 (Del.); (ii) CIT vs. Continental Warehousing Corporation 374 ITR 645 (Bom.); (iii) CIT vs. RRJ Securities 380 ITR 612 (Del.); (iv) PCIT vs. Kurele Paper Mills P. Ltd. ITA No.369 of 2015 (Delhi HC). 18. Without prejudice, he submitted that the additions made on presumption and accrual basis is not sustainable on facts of the present case, because no payment admittedly has been received after 01.04.2011 for the reason that :- (i) the assessee has not raised any claim for recovery of any income/money upon Fedrigoni; (ii) the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade u/s 68 despite he was held as non-resident. The Tribunal as well as Hon'ble High Court has held that onus was on the Revenue to prove that credit in the bank account was as a result of income accrued in India and being an NRI carrying out activities outside pertains to any activity carried out in India and, therefore, no addition could have been made. In this case, in fact, no such amount has been credited in any of Indian account or the account of the assessee even after 01.04.2015 for any operations relating to India. Thus, no addition could have been made simply on hypothetical surmises that assessee might have got certain revenue as a commission agent for supply of currency paper by CMF to RBI when CMF and RBI both have denied any middleman or broker or commission agent was involved, thus, in these assessment years, the ld. CIT (A) rightly deleted the additions and strongly relied upon the observations made by the ld. CIT (A). 22. Ld. CIT DR on behalf of the Revenue submitted that there was an agreement which means the assessee and CMF wherein assessee had shown income from AYs 2006-07 to 2010-11. The agreement was valid upto 31.12.2012 but foreign entity CMF continued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement dated 25.03.2006 was seized during the search and seizure operation against the assessee on 26.12.2016. The assessee has shown positive income till A.Y. 2011.- 12 from Fedrigoni and claimed exemption u/ s 10AA of the I.T. Act. Subsequently, the assessee claimed that no service was rendered to Fedrigoni Group while supplying security paper to RBI with subsidiaries. However, Fedrigoni continued to supply currency paper to RBI through its subsidiaries (BRBNMPL). Fedrigoni does not have any other agent for supply of currency paper. However, the assessee has received money from Fedirgoni, Italy in various foreign entities and assessee's bank accounts subsequently. The assessee claimed that it had not received any sum from Fedrigoni after 01.04.2011 for currency paper supply to RBI. In its support the assessee filed a letter from Fedrigoni SPA. The designation of signatory is not mentioned in the letter. Various information's were received from foreign Tax Authority which shows that assessee has received money from Fedrigoni SPA Bank accounts of concerns directly controlled or beneficiary is the assessee. During search/ post search proceedings such accounts could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany. The assessee shifted this fund to various bank accounts after Panama Papers Leak (page 31 and 32 of AO). The emails were found during search for redrafting of loan agreement after Panama Paper Leak (Page 37 of AO). The Assessing Officer has held this loan transaction as share transaction held to commission income from Fedrigoni (page 43 of AO). The Assessing Officer has estimated income on the basis of three years average of F.Y. 2008-09,2009-10 and 2010-11 of commission percentage on Fedrigoni Receipt at 9.7% for various A.Y. 2012-13 to 2017-18 . First Appellate Proceeding The CIT (A) has varied the percentage rate and restricted the addition upto the date of validity of agreement till 31.12.2012. Main Agreements of Ld. AR There is no incriminating evidences found during the search, therefore, concluded assessment case not be disturbed u/s 153A. Arguments Against Non Incriminating Materials found during search & subsequent investigations: 1. During the search proceedings service agreement between Fedrigoni SP A and the assessee was found and the services by the assessee to Fedrigoni SPA continued as per the final investigation report from Italy Authority (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (with office in Delhi-India- 110033, A-6, G.T. Karnal Road, Industrial Area), has supplied services to the benefit of FED RIGONI SPA. b. the services provided by STERLING SECURITY SYSTEM, are confirmed by the information found in the databases employed by the Guardia di Fin nza, totaling 1,057,922.00. No other relations are recorded in the subsequent tax years. c. According to queries of the same database, in the same year 2012, Fedrigoni SPA received services also from London Security Solutions Ltd. (with office in Mayfair, London- UK W1S 1YH, 3rd 13-14 Hanover Street- VAT Reg. no. GB 940908809, ceased on 08.11.2016), for the amount of 1,929,357.00 euro, a company already mentioned in our previous letters. d. Our counterparts of the Isle of Man informed us that London Security Solutions Ltd. Is linked to Mr. Satya Parkash Gupta, as he has been identified as the beneficial owner of the shareholdings nominally held by the parent company GROSVENOR Nominees Limited with office in the Isle of Man. e. Therefore, it is highly probable that Satya Parkash Gupta has used the UK company London Security Solutions Ltd. In order to: • Circumvent the rules of the "integ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked by above auditors to clarify by some aspects: Question 1: Among documentation acquired, some contacts emerged with a company called Sterling Exports. In other words, what is the role played by the latter, and what is the difference from the role carried by the SSS? Answer: To the best knowledge of the company, the existence of two contractual relationships seems to be due to the fact that Sterling Exports was a company operating in several business activities, of which Mr. Gupta already was contact person before he started his relationships with the company whereas 555 subsequently incorporated, was destined to operate in the business of "security elements". Question 2: Do you know why after a initial relationship with India companies without prejudice to the presence of the same person Sh. Satya Parkash Gupta, the relationships moved on to British and United Arab Emirates companies. Answer: The company doesn't know why Mr. Gupta moved on to operate through British and United Arab Emirates Companies. Request Number 2: The Italian company provided the following documentations: 1. Agency agreement of 19.06.2004 between Cartier Milani Fabriano SPA and St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory agreement between Fedrigoni SPA and Green Peas Business Solutions Ltd, without date, entered into force (Execution Date) on 01.07.2015. 15. License agreement between Fedrigoni SPA and St. James Technologies Ltd. - along with several annexes- without date, and with effect from 01.01.2016. 16. License agreement between Fedrigoni SP A and Khidmaty Technologies FZE, along with several annexes, dated 11.12.2018, and in force from 01.01.2019, undersigned by Marco Nespolo- CEO of Fedrigoni SPA - and Satya Parkash Gupta. 17. Letter of 31.01.2020 with which Fedrigoni SPA communicated the suspension of relationship with Khidmaty Technologies FZE. 18. Reply dated 21.02.2020 of Mr. Gupta to the preceding letter. Request Number 3 The Italian company provided the following documentation: 1. Invoices issued by London Security Solutions Ltd. for the period from 01.01.2010 to 31.12.2013, along with relevant bank transfers and charts of connection between invoices and payments. 2. Invoices issued by London Security Solutions Ltd. in the year 2014, along with the relevant bank transfers. 3. Invoices issued by Sterling Global Partners in the year 2015, along with the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, interalia: - On the documentation certifying the services received(a series of e-mail communications between Satya Parkash Gupta and Fedrigoni SPA executives), deemed insufficient to prove the sizeable costs accounted for and deducted. - On the balance sheets of London Security Solutions Ltd. filed at the UK Companies House from which there is no income comparable to the amounts invoiced to Fedrigoni SPA. On the fact that Satya Prakash Gupta, resulting from the mails as the material author of the services and indicated by Fedrigoni SPA as London Security Solutions Ltd contact person, does not appear to have any role within the British company. In the framework of the same audit, Fedrigoni SPA, in order to support the services invoiced by Sterling Global Partners Ltd., exhibited a report drawn up by Satya Prakash Gupta in which there are business data of Fedrigoni SPA easily acquirable within the Italian company itself. Therefore, significant doubts emerged about the real type and adequacy of the services invoiced. As regards the services invoiced by Green Peas Business Solutions Ltd., a report was obtained, such report would consist in the continuation of the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt" for the period 2010/2012) As far as London Security Solutions Ltd. is concerned, the Italian company provided charts of calculation of the commissions accrued from 2010 to 2014 for supplies of paper and security tread. In particular, the commissions concerning supplies of the security thread have been attested by the invoices 49/14, 50/14, 51/14 and 741/14. From the examination of the documentation, it was found that charts of calculation of the commissions related to invoices nn. 9/14, 10/14, 14/14, 17/14, 18/14, 19/14 were missing. In any event, from the excel chart gathered it was possible to detect that: - Invoice 9/14 was issued in balance (6 %) of the commissions accrued on the amount of paper sales, equal to 5.091.187,30 Euros whose advances 7% had already been settled with invoices 2/13, 3/13 and 7/13. - Invoice 10/14 was issued in balance (6%)of the commissions accrued on the amount of paper sales, equal to 5.712.063,80 Euros, whose advances (7%) had already been settled with invoices 4/13 and 8/13. - Invoice 14/14 was issued in balance (6%) of the commissions accrued on the amount of paper sales, equal to 1.984.217,91 Euros , whose advances (7%) had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fedrigoni SF A which is taxable in India as service provided in India. It would be proper to estimate income on the basis of revenue of Fedrigoni as percentage which was earlier shown by the assessee where assessee's income was exempt u/s 10AA. As service is provided in India the income is chargeable u/s 9 of IT Act. Hence, the action of AO to Tax the Income even after becoming assessing non-resident should be upheld." 24. In response, ld. counsel for the assessee has filed a rejoinder submissions and the relevant text of which is reproduced as under:- 1. The Ld. DR has filed written synopsis dated 31.01.2022 and in his submissions and also placed reliance on the result of enquiries conducted through FT & TR Division, which was furnished to the assessee in six volumes. 2. At Pages 1 to 2, the Ld. DR has reiterated the facts of the case as per the assessment order, which have already been discussed and summarized by the assessee in the Synopsis-II. 3. It would be pertinent to note that the entire discussion in the assessment order was with respect to receipts by following foreign companies, which included receipts from Fedrigoni: (a) St. James Technologies Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In so far as two assessment years, viz. AY 2016-17 and 2017-18 are concerned, which were abated after search, it is the submission of the assessee, that the assessee was non-resident in India in those years and, therefore, in those years initial onus was on the Revenue to prove that the assessee had earned/accrued income in India by bringing with positive/tangible/concrete evidences on record, which has not been discharged in the present case by the AO, despite foreign references being made over a period of 6 years. Reliance in this regard is placed on the decision(s) of Delhi High Court in the case of Suresh Nanda: ITA No. 85,100,87/2013 (approved by Supreme Court) and the recent decision of Mumbai bench of Tribunal in the case of ITO v. Rajeev Suresh Ghai: 132 Taxmann.com 234, referred in Synopsis II at pages 16-19, which are not repeated for the sake of brevity. 9. Be that as it may, even otherwise, the result of enquiries conducted through foreign references, which were commenced in 2016 and are still going on after lapse of 6 years, which have been reproduced by Ld. DR at Pages 3 to 10 of his submissions, relating to the foreign companies referred supra, and loan received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue for the first time before the Tribunal, more so since complete facts for the same are also not on record like - (i) Ownership of LSS; (ii) Role of assessee in LSS as owner or otherwise; (iii) Nature of services provided by LSS to Fedrigoni and whether or not such services were related to supply of bank note paper to RBI and/or role of assessee therein; (iv) Period of services rendered; (v) amount received by LSS from Fedrigoni; (vi) or any amount received by assessee at any time from LSS or in relation to transactions between LSS and Fedrigoni/RBI; (vii) No circumstance available to lift corporate veil of LSS. 14. Thus, even the new plea is based on assumptions and presumptions, for which complete facts are not on record, nor has been pointed out by Ld. DR. 15. In view of the above, references to aforesaid new company, viz. LSS are also based on pure assumptions, which are totally irrelevant and needs to be completely ignored. 16. Be that as it may, even otherwise, since the complete facts are not on record, the aforesaid additional plea is not permissible to be taken for the first time before the Tribunal." DECISION 25. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2011 to AY 2017-18. The allegations made by the AO and the interpretation on which he has drawn his presumption after referring to certain foreign entities, has been duly explained by the ld. counsel as stated above which has not been rebutted before us nor has been found favour by the ld. CIT (A). Ld. CIT (A) has given a very categorical finding that no evidence has been found in the form of seized material or statement to prove that agreement of 2006 between CMF and assessee was extended beyond 31.12.2012 and beyond this period, CMF was under any obligation to share the profits with the assessee. Even in various information received through FTTR, not single information has been received that either Fedrigoni or CMF has given any money for their India operation for supply of currency notes to Assessee. This finding of ld. CIT (A) without any rebuttal or material information on record cannot be tinkered with. Accordingly, the finding of the ld. CIT (A) that after the assessee had become NRI, no income has arisen or accrued in India, i.e. after 01.04.2015 and, therefore, even in terms of section 9(1)(i) no income is taxable in the hands of the assessee is upheld. 26. In fact, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns even remotely suggest that assessee has earned or received any payment in any account for supply of currency paper notes from CMF or Fedrigoni entity for Indian supply. The observation and the information as supplied by the CIT DR has been rebutted by the ld. counsel for the assessee as incorporated above and from the perusal of the same, we find that there is nothing which can lead to any inference or the conclusion that the receipts from foreign companies were in relation to services rendered by the assessee to Fedrigoni in India. Thus, even the FTTR reference cannot be considered as material on record to support the case made out by the Assessing Officer, which goes to prove that his assessment of income was purely based on surmises and presumptions as noted above. Thus, not only the finding of the ld. CIT (A) is confirmed but the information supplied by the CIT DR has no correlation or effect so as to reverse the finding of the ld. CIT (A). Accordingly, the submissions of the ld. CIT DR are rejected and the order of the ld. CIT (A) is affirmed. 30. Thus, all the following additions made by the Assessing Officer in various assessment years which has been challenged by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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