9911796707
TMI Blog2023 (11) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to submit the consolidated ledger account of M/s. Lennox Overseas Inc., from F.Y. 1998-99 to F.Y. 2008-09 with the movement of balances during this period before the AO. Since the additional evidences also submitted before us needs verification accordingly, we remit this issue also back to the file of the Assessing Officer to verify the claim made by the assessee along with consolidated ledger accounts of M/s. Lennox Overseas Inc., from the assessee and verify the same and delete the addition if found proper. Accordingly, ground raised by the assessee is allowed for statistical purpose. Addition of petty foreign currency in hand this being a small petty cash deposits it does not need any proof of earning. This being a petty cash held by the assessee, we direct the Assessing Officer to delete the same. Addition of amount from HSBC Life (UK) Ltd., toward paid up value of Life Insurance Policy - We observe from the record that assessee has received insurance maturity amount of GBP 35295.58 and assessee has submitted a confirmation from HSBC Life (UK) Ltd., and relevant bank statement along with the confirmation of insurance policy from HSBC Life (UK) Ltd., goes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Business/Profession, Capital Gains, and income from other sources. 6. Assessee has offered additional income in the return of income filed in response to notice u/s. 153A of the Act on account of interest received from the overseas bank account in HSBC Private Bank (UK) Ltd., of ₹. 15,562/-, which was not offered in the original return of income. Further, Assessing Officer observed that assessee holds an account in HSBC Private Bank (UK) Ltd., London and details of the account and subordinate accounts are mentioned in the Assessment Order. With reference to the above, the assessee was asked to submit the complete bank statement of the account and to explain the nature and source of the credit entries appearing in the bank account. In response assessee has submitted the bank account statement from F.Y.2005-06 to F.Y.2012-13 and explanation with regard to credits appearing in the bank account over the period. 7. From the above statement and explanation, Assessing Officer observed that assessee has not offered for tax in the returns of income filed during the year the following two credits as explained below: Sr. No. Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s Capital for its real estate business. Again a sum of GBP 150000 was withdrawn by the assessee from his funds lying with Lennox on 27-05-2008, which was transferred on behalf of Lennox by Hereford Properties Ltd Inc from its bank account to the bank account of the assessee at London, and subsequently remitted by the assessee to India to his NRE Account with Bank of India, Tardeo branch. The said amount was also transferred to Chiranika Properties as Proprietor's Capital. Chiranika Properties utilized the said funds to purchase lands for its real estate business. The said lands are held by Chiranika Properties as Stock- in-Trade. 9. Further, summons were issued to the assessee and his statements were recorded on oath u/s. 131 of the Act and relevant statement is reproduced at Page No. 4 of the Assessment Order. 10. After considering the submissions of the assessee and statement recorded on oath u/s. 131 of the Act, Assessing Officer observed that assessee has not submitted any documentary evidences to justify the claim that funds available in the foreign bank account were earned outside India and that they had been offered to tax outside India. Accordingly, As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91/ (GBP 202.84) is concerned, I have noted that the Appellant had continuously changed his stand, during the course of the various proceedings. In the assessment proceedings, it had been contended this represented petty cash on hand deposited in the foreign bank account. In the letter dated 04.07.2016, before the undersigned the Appellant had stated that this is refund of commission charged by bank against credit card expenses debited earlier. However, the Appellant failed to co-relate these credit entries with the credit card expenses. 8.32 A perusal of the letter dated 05.08.2016 reveals that the appellant had again changed his stand regarding the addition of Rs. 16,091/-, wherein it has been claimed that the same represented commission charged by bank for deposit of small currencies and coins of different countries to convert the same into GBP. Thus, the appellant had given three totally different explanations for the same petty entries before the tax authorities. In view of these unsubstantiated contradictory and conflicting explanations, the addition made by the AO amounting Rs. 16,091/ needs to be confirmed. 8.33 The fact that the unaccounted bank account maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal benefit not available in many offshore tax havens i.e. being able to conduct business within the offshore jurisdiction. 8.38 There are extensive laws in Panama to protect corporate and individual financial privacy. Strict confidentiality laws and regulations apply to documentation of offshore corporations, trusts and foundations, with severe civil and criminal penalties for violations of confidentiality. The names of corporate shareholders are not required to be publicly registered. Panama also has very strict banking secrecy laws. Panamanian banks are prohibited from sharing any information about offshore bank accounts or account holders. The only exception is a specific Panamanian court order in conjunction with a criminal investigation. 8.39 Panama has few tax treaties with countries that have strong economic ties to it, further protecting the financial privacy of offshore banking clients who are citizens of other nations. Panama also offers the benefit of having no exchange controls. This means that for individual clients of Panama's offshore banking, as well as for offshore business entities incorporated in Panama, there are no limits or reporting requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f evidence on record and are not tenable and liable to be rejected. 5. The various decisions relied upon by the CIT (A) on pages 24 to 44 of his order are distinguishable and not applicable to the case of the Appellant 6. The CIT (A) erred in dismissing grounds of appeal no. 6 7 raised before him. 7. The Appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 13. At the time of hearing, Ld. AR of the assessee submitted that the present appeal is against order passed by the Assessing Officer u/s. 153A of the Act and he brought to our knowledge the relevant facts of this case, assessee is an individual and he was resident only from A.Y. 2004-05, however, before the above said assessment year assessee was not ordinary resident of India until previous Assessment Year. 14. Further, he brought to our notice Page No. 1 to 7 of the Paper Book which is return of income and financial statements filed by the assessee. He brought to our notice Page No. 3 of the Paper Book to highlight the remuneration received from Salome Holdings INC of ₹. 781,020/- which the assessee has regularly declares in his return of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. Further, he submitted that assessee has disclosed all the information before search party on 04.12.2012. Further, he submitted that the observations made by the Ld. CIT(A) at Para No.8.7 is factually incorrect statement. 19. Further, he brought to our notice Para No. 8.8 of the appellate order and objected to the observations made by the Ld. CIT(A) that assessee has not brought to the knowledge of the Assessing Officer with regard to assessee being retained as an advisor by Salome Holdings INC and assessee has not brought any material in support of the same. In this regard he brought to our notice Page No. 138 of the Paper Book wherein the Assessing Officer in the original Assessment Order passed u/s. 153(3) of the Act dated 03.12.2008 in which the Assessing Officer has disclosed the nature of profession income from the management consultancy activity and also it was disclosed that fee from company and the remuneration from Salome Holdings INC. 20. Further, he brought to our notice Page No. 28 of the Ld.CIT(A) order in which he has discussed the issue relating to panama based entities and observed that the material on record clearly shows that assessee has br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this confirmation and bank statement also submitted before the Ld.CIT(A). 25. Further, assessee has filed the application for admission of additional evidences dated 17.06.2002 and he submitted that assessee has filed affidavit before ITAT and has filed the statement of affairs of the assessee for the foreign income and assets / liability for the period F.Y.1998-99 to F.Y. 2008-09, financial statements of M/s. Lennox Overseas Inc., for the period F.Y. 1998-99 to F.Y. 2008-09, financial statements of Salome Holdings INC for the period F.Y. 1998-99 to F.Y.2008-09 and financial statements of Hereford Properties Limited for the period F.Y. 2007-08 to 2008-09. He submitted that the following evidences goes to the root of the matter and he prayed that the additional evidences may be admitted for adjudication. 26. Further, he brought to our notice Page No. 91 of the Paper Book I, in which assessee has filed return of income for the A.Y.1995-96 onwards and assessee files the return of income regularly and he also brought to our notice the details of pending balances with M/s. Lennox Overseas Inc., which was earned by the assessee during the period when the assessee was non-resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before us as additional evidences shows that assessee has an outstanding amount of USD 1435198 as on 31.03.1999 continues to held till A.Y. 2008-09 with the addition of remuneration income. The same was shown in the financial statements of M/s. Lennox Overseas Inc., and assessee has declared that the funds received by the assessee only out of the amounts outstanding in the books of the M/s. Lennox Overseas Inc., and whatever assessee has received from Salome Holdings INC and Hereford Properties Limited is on behalf of M/s. Lennox Overseas Inc.,. In the financial statements of M/s. Lennox Overseas Inc., which is submitted before us is the financial statements from F.Y. 1998-99 to 2008-09 these financial statements were certified by JD Jhaveri Associates, Chartered Accountants and this CA based in Mumbai. Since assessee has submitted financial statements and which is submitted as an year end balances by bringing on record the fact that assessee held enough funds with M/s. Lennox Overseas Inc., and we also observe that the financial statements of Salome Holdings INC and Hereford Properties Limited also certified by the same auditor. Since these documents proves that assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g addition of Rs. 25,63,871/- received by the Appellant towards proceeds of Life Insurance Policy, which represents receipts of capital and not income liable to tax. 5. The CIT (A) erred in holding that the said foreign bank account at London is undisclosed and thus credit appearing in the said bank account is also undisclosed. 6. The observation made by the CIT (A) to the effect that the said foreign bank account was used basically to launder the unaccounted money of the Appellant for investing in real estate is based on presumptions, surmises and are contrary to the facts on record and further not supported by any independent evidence on record whatsoever and therefore is not tenable and is liable to be rejected. 7. The various damaging and arbitrary observations made by the CIT (A) in his order are purely based on non-application of mind and on presumption, surmises and conjectures which are not supported by any kind of evidence on record and are not tenable and liable to be rejected. 8. The various decisions relied upon by the CIT (A) on pages 27 to 45 of his order are distinguishable and not applicable to the case of the Appellant 9. The CIT (A) e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me chargeable to tax. 2. The CIT (A) erred in holding that the said foreign bank account at London is undisclosed and thus credit appearing in the said bank account is also undisclosed. 3. The observation made by the CIT(A) to the effect that the said foreign bank account was used basically to launder the unaccounted money of the Appellant for investing in real estate is based on presumptions, surmises and are contrary to the facts on record and further not supported by any independent evidence on record whatsoever and therefore is not tenable and is liable to be rejected. 4. The various damaging and arbitrary observations made by the CIT (A) in his order are purely based on non-application of mind and on presumption, surmises and conjectures which are not supported by any kind of evidence on record and are not tenable and liable to be rejected. 5. The various decisions relied upon by the CIT (A) on pages 21 to 42 of his order are distinguishable and not applicable to the case of the Appellant 6. The CIT(A) erred in dismissing grounds of appeal no.4 raised before him. 7. The appellant craves leave to amend or alter any grounds or add a new ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that all the informations were already brought on record by the assessee and prayed that additions sustained by the Ld.CIT(A) may be deleted. 39. On the other hand, Ld. DR submitted that assessee has made the insurance investments and not filed any details or documents and established that it is an insurance policy before any authority. Accordingly, he relied on the orders of the lower authorities. 40. Considered the rival submissions and material placed on record, we observe from the record that assessee has received insurance maturity amount of GBP 35295.58 and assessee has submitted a confirmation from HSBC Life (UK) Ltd.,, and relevant bank statement along with the confirmation of insurance policy from HSBC Life (UK) Ltd., goes to prove that the credit received by the assessee in his bank account is nothing but insurance surrender value. Since the bank itself has submitted the confirmation of surrender value from insurance company. Therefore, it goes to prove that what assessee has received is only an insurance surrender value. Therefore, we do not see any reason to hold otherwise. Further, this information relates to A.Y. 2009-10, we do not see any reason to hold it oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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