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TMI Blog2024 (7) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ld. Assessing Officer unsatisfactory . Section 2(12) of the Act defines undisclosed foreign income and asset means the total amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India, referred to in Section 4, and computed in the manner laid down in section 5. Undisclosed assets in the form of funds remitted from India to Singapore in the Bank account held with SBI, Singapore in the name of RBGPL - Various documentary evidences have been placed in the paper book, which are more than sufficient to prove that RBGPL is a registered company in Singapore and is regularly assessed to tax and filing the audited financial statement with the authority at Singapore. Secondly it is also an admitted fact that the assessee being a Director has been receiving salary from RBGPL and is regularly filing the income tax return at Singapore and is paying due taxes. The ld. Assessing Officer has taken note of this fact and has observed that the assessee has received income in INR 7,08,47,050 from 2013 to 2019 and had paid total income tax in Singapore at Rs. 82,53,263/-. Though there is a mistake at the end of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere resident-assessees are having assets located abroad or having income in abroad but the source of such asset is not coming from any declared source in India or the source is from any other income assets located in any part of the world other than India or undisclosed source in any other part of the world. However, in the instant case, the assessee has made the investment in the equity of RBGPL from the declared sources and the funds are applied for making investment. The other remaining entries in RBGPL with SBI, Singapore are part of the regular business transactions and even though the assessee is a beneficial owner of RBGPL but he has paid due taxes in Singapore on the income earned, accrued and received in Singapore. Since the assessee has successfully explained about the source of investment in the equity of RBGPL, to our satisfaction and has also explained the source and genuineness of remaining credit entries appearing in the Bank account held with SBI, Singapore in the name of RBGPL by way of placing documentary evidences that such funds remitted outside India through proper banking channel are for the purpose of importing goods from RBGPL and complete details to this ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in ignoring the fact that some of the alleged import parties could not be traced at the given address, some did not comply with the notices and some such parties did not have the creditworthiness to do import transactions and thus, the import by such parties were held by the AO to be nongenuine as per the findings on pages 51 to 53 of the assessment order. (5) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in not appreciating the AO s clear findings in para 7.4 of the assessment order that the alleged import parties were controlled by the assessee and also ignoring the assessee s admission on oath that Vivek Kumar Singh s concerns were controlled by him. (6) On the facts and in the circumstances of the case and in law, the ld. CIT(A) while treating the imports as genuine, erred in placing undue reliance on the fact that the Singapore Tax authorities had accepted the return of income of RB Global Pte Ltd, i.e. the entity in whose account the credits of Rs. 133,20,62,815/- were received. (7) On the facts and in the circumstances of the case and in law, the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assets in Schedule FA of the Income Tax Return, which needs to be provided as per 4th proviso of Section 139(1) of the Income Tax Act, 1961. The ld. Assessing Officer also noticed that the assessee being a resident other than not ordinarily resident in India within the meaning of section 6(6) of the Income Tax Act. The ld. Assessing Officer also noted that the assessee had not disclosed the undisclosed foreign income and assets to the Income Tax Department under the onetime compliance window provided under Chapter VI of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax, 2015. 6. Notice u/s 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of tax Act,2015 (B.M. Act, 2015) was issued through ITBA Portal on 18.12.2019, which was duly served on the assessee. Further, letters were issued on 25.08.2021 and 08.10.2021 through ITBA Portal seeking several details. It was observed by the Ld. A.O. that the total credits in R.B. Global Pte Ltd Singapore was USD 1,89,19,761.20 which he computed in Indian Currency at Rs. 133,20,62,815.07. 7. Ld. Assessing Officer issued a SCN to the assessee on 19.01.2022 asking the assessee as to why R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arified that where a person holds certain foreign assets which are fully explained and acquired out of tax paid income but the same has not been reported in Schedule FA of the IT Return in the past, the assets will be treated as fully explained and the same will not be treated as undisclosed foreign asset. It was further clarified that the assessee had, wherever made any declaration in any statement recorded on oath u/s. 131 of the Act, he always meant to convey that he was the director and shareholder of RB Global Pte Limited and was also one of the authorized signatories of the bank accounts of the said company. An affidavit sworn before First class magistrate was also attached. The investment made in RB Global Pte., Singapore was from disclosed banking channels and the same had been done by following the prescribed guidelines of the RBI. The source of investment was also explained. At the time of the recording of statement u/s. 131, due to misunderstanding of the question, the assessee was confused when explaining his association with M/s. RB Global Pte Limited, wherein on one occasion (statement recorded on 26.09.2019), the assessee had mentioned about the closure of his associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 133,20,62,815.07 9. The ld. Assessing Officer further examined the details of entities, which have remitted the funds in the alleged SBI, Singapore account of RBGPL. The proceedings initiated by the ld. Assessing Officer only involved the funds remitted to the SBI Account No. 27600183120100 of RBGPL, Singapore. Even though there were other two Bank accounts, namely Citi Bank, Singapore bearing Account No. 0/860398/001 and UCO Bank, Singapore bearing Account No. 101072700, maintained by RBGPL, Singapore. However, since the Competent Authority only shared the information about the SBI, Singapore Account No. 27600183120100, the investigation and examination of the records only confined to the amounts credited in the said Bank account. The ld. Assessing Officer on examination of the details of the parties, who have remitted the funds in the said Bank account noted that most of the concerns are either owned by the assessee or his relatives or other connected persons directly known to the assessee. The ld. Assessing Officer has devoted much energy in taking all the details of such sole proprietorship concern/firms/Companies who have entered into the transactions with RBGPL. Summons unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Singh with RBGPL regarding the investments made in the equity of RBGPL and that the said funds have been remitted through the disclosed Bank accounts held in India and has been remitted through the Banking channel after fulfillment of relevant formalities. However, since the assessee did not disclose the said information in the Income Tax return under the Black Money Act, the investment made by the assessee in the equity of RBGPL was treated as undisclosed asset. During the course of assessment proceedings, it was also brought to the notice of the ld. Assessing Officer that the assessee is receiving salary from RBGPL, Singapore and the same is being offered to tax as per the Income Tax Laws applicable in Singapore and due tax at source has been deducted by the employer. The ld. Assessing Officer has captured these details at page 35 of the assessment order showing the details of taxable income from 2013 to 2019 and the cumulative figure in Singapore dollars is 1478487, which is converted in taxable income at Rs. 7,08,47,050/- and on such taxable income, the assessee had paid taxes of Rs. 82,53,263/- in the income tax return filed in Singapore. It was also observed by the ld. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, cannot be attracted. It is not the case of Department that there is any income from the source outside India, which has not been disclosed in the returns submitted by the assessee . During the course of appellate proceedings, when ld. CIT(Appeals) was informed that against the funds remitted from Indian concerns to RBGPL, there has been equal amount of imports of goods and the turnover of export sale of RBGPL, Singapore has duly been disclosed in the financial statements of the Company and also the imports have been received in India after passing through the Custom Authority verification and duly supported by documents, i.e. shipping bills, invoices, Bills of Lading, transport receipts, etc. to prove the genuineness of imports which have been made by the concerns based in India from RBGPL, Singapore and the normal business transactions have been carried out between Indian concern and RBGPL Singapore. It was also claimed that the assessee being a Director of the Singapore based company RBGPL, the Directors fees/salary, which are taxable in Singapore and not in India as per Article 16 of Double Taxation Avoidance Agreement (in short DTAA ) between India and Singapore. As regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , various documents filed by the assessee proving that the investments made in the RBGPL from 2011 onwards are through the Bank accounts duly disclosed in the income tax return/financial statements of the assessee, that RBGPL is duly registered with the Singapore Tax Authorities and paying regular tax that the assessee is also filing the income tax return in Singapore for the income from salary received from RBGPL and has paid due taxes. Ld. CIT(Appeal) also noted that the alleged funds remitted to SBI, Singapore Bank accounts by RBGPL are towards import of goods in the nature of timber and related goods that the transactions of import of goods have been carried out under the commercial expediency and funds have been remitted against such imports and that the import of goods is proved by bills of entries, bills of Lading, Shipping Bills, Customs Clearance showing that genuine transactions have been entered into between Indian Concern and the Company RBGPL. Ld. CIT(Appeals) has observed that the ld. Assessing Officer ignored the fact that the assessee has to offer his global income in the ITR as per the Income Tax Act, 1961 being resident of India but the fact remains uncontroverted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from the present AO. These will be carried to the court on the date of hearing for production before the Hon'ble Bench. Besides, the AO, who had completed the assessment, has also submitted voluminous data in a PEN DRIVE, as stated to have been received from the assessee in a CD in course of proceedings before him. These are also ready for submission before the Hon'ble Bench, if so desired. (3) The AO, who had completed the assessment, has clearly stated in his report that - Hence, in the Para no. 7.6 of the Asst. Order passed on 16.03.2022 under the BM Act, 2015 in the instant case, it is written that the bank statement along with KYC in respect of A/c No. 27600183120100 maintained at SBI, Singapore in the name of M/s R B Global Pte Ltd, Singapore has only been received from the competent authority, however, the details of other two bank accounts have not been received till date from the competent authority. Therefore, it is evident that the other two bank accounts viz. In the CITI Bank the UCO Bank, Singapore were not received from the competent authority till the date of passing the impugned order. (4) Regarding the status of any investigation/enquiry made by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Assessing Officer. He submitted that the assessee had filed various additional evidences before the ld. CIT(Appeals), who erred in calling for a remand report from the ld. Assessing Officer. Reliance placed on the decision of Coordinate Bench, Mumbai in the case of Rakesh Manhar Bhansali -vs.- Addl. CIT (2021) 132 taxman.com 20 (Mumbai-Trib.). 17. On the other hand, ld. Counsel for the assessee firstly referred to the following written submission placed on record, which reads as under:- It is humbly submitted that - Detailed documents pertaining to the assessee (Shri Akhilesh Singh) and the foreign company (i.e., RB Global Pte., Singapore) along with corroborating evidence outlining all transactions and facts, in light of which the Ld. A.O. wrongly proceeded to frame the assessment and compute the total undisclosed foreign income and asset of the assessee at the astronomical and surmisal sum of Rs. 133,20,62,815/-, have been compiled and made available for perusal of Ld. A.O. during the course of assessment. It is humbly submitted that the investment made by the assessee in RB Global Pte. Singapore was from disclosed sources i.e. banking channels and had been done by following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittance made from Shri Akhilesh Singh (through disclosed and accounted sources) to RB Global Pte. Ltd. Singapore for the purchase of equity shares has been made through banking channels and after due compliances as per RBI and FEMA Norms. Reflection of each remittance made by the assessee to RB Global Pte. Ltd., Singapore can be seen in the bank statement of Shri Akhilesh Singh maintained with Bank of Baroda (Kolkata) which is attached at Annexure: F of our paper book, Volume I. The source of such funds remitted by the assessee to Singapore for the purchase of equity shares in RB Global Pte., Singapore, are also corroborated vide the bank statement of the assessee maintained with Bank of Baroda (Kolkata) attached in the paper book, Volume I along with documents such as the Loan Confirmation Certificates from entities who had advanced loan to the assessee (Annexure: H , N P ), the assessee s statement of director s remuneration payable to him from companies (S.R. Timber Products (P) Ltd. S.R. Worth Ltd.) in which he was a director (Annexure: J K ) along with his Form 26AS from F.Y. 2009-10 to 2012-13 (Annexure: L ) showing that tax had been deducted at source for such director s rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se: 214. It is an admitted fact that the foreign asset in each case was acquired with money that was disclosed in the books of account of the assessee (and tax paid) and which was remitted through banking channels under schemes approved by the RBI. There is no allegation of Black Money or unaccounted money or money that has escaped tax or money that was remitted through illegal channels. It is not disputed by the Income-Tax Department - that the source of investment was tax paid money remitted through banking channels in accordance with schemes approved by the RBI. Relevancy of the judgement of Madras High Court in Srinidhi Karti Chidambaram vs. PCIT [W.A. No. 1125 of 2018], with this case: It is appreciated by the AO in page 44 of 85 of the order reading inter-alia The Petitioner(s) in the said case had duly disclosed the foreign asset in the revised / original return filed for AY 2016-17 before the normal assessment under Income Tax Act could have been completed. (Fact is that in that case the petitioner(s) has filed revised return under 139(5) even after the initiation of proceedings under BMA which was allowed by the Hon ble High Court). Whereas the AO has failed to take note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State. (x) The Ld. A.O. in his assessment order framed u/s. 10(3) of the Act, the total credits of the SBI, Singapore bank account of the Singapore based company M/s R.B. Global Pte Ltd. in the hands of the assessee though the said company had made normal business transactions and had paid tax on the income arising out of the said transactions in Singapore. (xi) In the assessment framed by the Ld. A.O. u/s. 10(3) of the Act, allegation was made against the assessee based on credible information on record that he floated several proprietorship concerns and he rotated and layered funds before siphoning them off to Singapore. This can be placed at page 47 onwards of the Assessment Order framed u/s. 10(3) of the Act. At pages 48-49 of his order, the Ld. A.O. observes that summons u/s. 131 of the LT. Act, 1961 were made to proprietors of 14 concerns out of which, Shri Sashi Bhusan Singh and Shri Vivek Kumar Singh (proprietors of Incredible Agency Ajanta International) appeared and had their statements recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Daulat Ram Rawatmull (87 ITR 349) the Hon ble SC has held that the onus to prove that the apparent is not the real is on the party who claims it to be so. The burden of proving a transaction to be bogus has to be strictly discharged by adducing legal evidences of a character, which would either directly prove the fact of bogusness or establish circumstances unerringly and reasonably raising an interference to that effect. (xiv) It is humbly submitted that at page 82 of the Assessment Order framed u/s. 10(3) of the Act, the Ld. A.O. held that as the sources of credits in the said proprietorship concerns and company are not disclosed by the assessee with documentary evidences during the course of proceedings, the entire credit in the bank account of 27600183120100 of RB Global Pte. Ltd. remains unexplained. Thus, the Ld. A.O. proceeded to treat the fictitious amount of Rs. 133,20,62,815/- as the undisclosed foreign asset and income of the assessee for the A.Y. 2020-21 under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. (xv) In this regard, it is submitted that the assessee during the assessment proceedings had already made elaborate submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated in the name of his family members and other persons. 7.6. In this regard, it is pertinent to mention here that the bank statement along with KYC in respect of A/c No. 27600183120100 maintained at SBI, Singapore in the name of M/s R B Global Pte Ltd, Singapore has only been received from the competent authority, however, the details of other two bank accounts have not been received till date from the competent authority. Accordingly, Bank statement of A/c. 27600183120100 maintained at SBI, Singapore in the name of M/s R B Global Pte Ltd, Singapore for the period 20 May, 2011 (date of account opening) to 28 April, 2015 (date of account closure) has only been analysed and considered at the time of passing this order. 7.7. In view of the bank statement of A/c. 27600183120100 maintained at SBI, Singapore in the name of M/s R B Global Pte Ltd, Singapore for the period 20 May, 2011 (date of account opening) to 28 April, 2015 (date of account closure), it is noticed that most of the credits in the said account has been made from the account of aforecited fictitious proprietorship concerns and other companies which are controlled and managed by Shri Akhilesh Singh. As the sources of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been marked and annexed (on a sample basis) for your honour s kind perusal in Paper Book Volume III. It establishes that the entire credit summations in the bank accounts are on account of trade turnover transactions therefore cannot be cannot be treated as the Undisclosed Foreign Income and Assets of the assessee under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. In this regard, we humbly also invite Your Honour s attention to Volume II of our paper book wherein we have marked and annexed all copies of Invoices and Bills of Lading of all trade related transactions of RB Global Pte. Ltd., Singapore and it has been annexed date-wise (Annexures: J , L , N P ). For the sake of clarity and better adjudication, we also have submitted a Ledger Account of Companies (based in India) in the books of RB Global Pte. Ltd., Singapore on account of turnover transactions related to trade (marked and annexed at Annexures: I , K , M O ). Thus, we humbly submit that a good part of the transactions on account of trade by RB Global Pte. Ltd, were with companies based in Singapore and other countries (such as UAE), and not just with Indian companies. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set . It is submitted that the various provisions of the Act will apply, or can be invoked, only if there is an undisclosed foreign asset (or income) within the meaning of Section 2(11) and 2(12) of the Act. xx. We humbly submit that the provisions of Chapter III (Tax Management) or Chapter IV (Penalties) or Chapter V (Offences and Prosecutions) of the Act can be invoked only, if there is an undisclosed foreign asset (or income) within the meaning of Section 2(11) and Section 2 (12) of the Act. Thus, in the absence of any undisclosed foreign asset or income, the Act cannot be applied or invoked. Here it is pertinent to mention that the Ld. AO has erred in not considering following facts: (a) That R B Global Pte Ltd is a company incorporated in the Republic of Singapore for the purpose of carrying on business activities in accordance with The Companies Act, Cap.50 (b) That the assessee has furnished before the ADIT/DDIT 3(4) vide compliance dated 28.11.2019 to letter No. ITBA/COM/F/17/2019-20/1020882356(l) dated 21/11/2019 the copies of the Audited financials of R B Global Pte Ltd, for FY 2011 to 2018 showing the yearly sales and purchases of the company. (c) Also with that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o trade (marked and annexed at Annexures: I , K , M O ). Thus, we humbly submit that a good part of the transactions on account of trade by RB Global Pte. Ltd. were with companies based in Singapore and other countries (such as UAE), and not just with Indian companies. We have also marked and annexed in Volume II of our paper book, the Memorandum and Articles of Association of RB Global Pte. Ltd., Singapore (Annexure: B ) and its Annual Reports and Financial Statements from 2011 - 2014 (Annexures: C to F ). Thereby, the conjectural and surmisal finding and subsequent addition of the entire credit summation (estimated by the Ld. A.O. at Rs. 133,20,62,815.07/-) of the SBI Bank Account, Singapore of RB Global Pte. Ltd., Singapore in the hands of the assessee Shri Akhilesh Singh was without all fours and is grossly in violation of the provisions of law. In this regard reliance is also placed upon the judgment of the Delhi - Tribunal in the case of ACIT, Range 70, New Delhi v. Jatinder Mehra[2021 ] 128 taxmann.com 152 (Delhi - Trib.), wherein it was held that to identify a beneficial owner of an asset, said person should have nexus, direct or indirect to source of asset and he must have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside India nor is a case of undisclosed foreign income and assets because the assessee has made the investment in RBGPL, Singapore through his declared banking sources/through unsecured loans/funds arranged from other concerns located in India and proper information has been given with the bank, which is authorized to transfer funds in the foreign exchange. He further submitted that the remaining portion of the alleged credits in the Bank account with SBI, Singapore is mainly on account of funds remitted from the Companies/concerns for importing goods from RBGPL. Goods which is mainly timber have been imported and all documentary evidences to prove the genuineness of import of goods into India and the proofs of imported goods having cleared through Custom Authorities are available on record. He also submitted that RBGPL not only exports goods to India but exports to other countries also. He lastly submitted that most of the concerns alleged to be bogus/accommodation entry providers referred to by the ld. Assessing Officer in the assessment order are firstly not bogus/shell companies/concerns and secondly only few of them have transacted with the RBGPL, Singapore and that too for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions appearing in the other two Bank accounts held with Citi Bank and UCO Bank, Singapore and confine our adjudication to the alleged credit entries appearing in Bank a/c held with SBI, Singapore in the name of RBGPL. 20. Now so far as the transactions carried out in the Bank account held with SBI, Singapore in the name of RBGPL having a total credit amount of Rs. 133.21 Cr. (approx.), which ranges during the period of Financial Years 2011-12 to 2015-16, transfer of amounts in this Bank account from India fall into two categories, namely (i) funds remitted by the assessee towards investment in share capital of RBGPL; and (ii) funds remitted by various business concerns based in India. The ld. Assessing Officer has been provided with the information that the investment made in the equity of RBGPL are through declared Banking sources/unsecured loans taken and the other credits are towards import of goods by various business concerns in India. The ld. Assessing Officer was of the view that firstly the assessee has not declared the investments in RBGPL in the income tax return or in one-time window provided in the Black Money (Undisclosed Foreign Income and Assets) and Imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank A/c. of foreign entity in the garb of import remittances. As per the KYC, appellant was the beneficiary of that bank A/c., and this account was operated Singly by the assessee. Hence, A.O. has considered all deposits made in that A/c. as undisclosed foreign assets of the appellant. In his submission, appellant has given point-wise rebuttal of A.O s contention and has also submitted supporting documents to back his arguments. 3.3(b) Appellant has submitted the details of initial remittance/ investment made in R. B. Global Pte. Ltd. All these remittances have been made through the declared bank A/cs. of the appellant and the sources of these remittances have been fully explained. Once the Singapore based company started its commercial operation, appellant has received salary/Directors remuneration. These income have been duly declared in the returns filed before the Singapore Tax Authorities in the relevant years and due taxes have been paid. In all these years appellant has earned income equivalent to Rs. 7,08,07,054/- in Indian rupees and these were duly declared in returns filed at Singapore. These earnings have been mainly invested in shares of R. B. Global Pte. Ltd., and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emittances or there were instances of under invoicing/over invoicing have not been made clear. Import remittances have been made through banks. Importers are required to submit copies of Bills of Entries with the banks after payments have been made to establish that goods have been received in India. In case of non-compliance in this regard, banks report this matter to DRI/FEMA Authorities. No such instances have been mentioned by the A.O. Imports are monitored by the DRI and Customs Authorities. Further all remittances of foreign exchange are monitored by FEMA authorities. It appears that DRI/FEMA/Customs Authorities have not raised any objections in respect of imports made by various Indian entities, including those under Direct Control and the Management of the appellant. A.O. has not mentioned even a single instance of bogus/irregular imports. On the other hand, appellant had submitted all the Bills to Lading issued by the R. B. Global Pte. Ltd., Singapore. But, A.O. could not find any discrepancies in those bills. Appellant had also submitted the bills of entries on sample basis in respect of actual receipts of goods by the concerns controlled and managed by him. These Bills o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made against those imports. Other Indian entities also appear to have made payment against imports from Singapore based company. A.O. has not been able to point out even a single discrepancy in respect of the imports made from R. B. Global Pte. Ltd. All the transactions with the Singapore based company appear to be genuine commercial transactions. 3.3(f) During the appellate proceedings, appellant has submitted the Audit Report of relevant years in respect of R. B. Global Pte. Ltd., Singapore. All the credit entries in its Bank A/c. are duly reflected in the books of accounts and after closure of the' books at the end of the relevant years, returns of income have been filed before the Singapore Tax Authority. The Singapore Tax Authorities appear to have accepted the book result (including the credit in bank A/cs) and no adverse views appear to have been expressed. Thus the tax authorities at Singapore have considered the book result of R.B. Global, Singapore to be genuine and as per their stated line of business. Hence, it cannot be said that R. B. Global Pte. Ltd., Singapore has not made genuine transaction with Indian- entities, including those controlled by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly because the assessee was the beneficiary of the Bank A/c. would not make commercial transactions of the company as his individual transaction. All the credit entries in that bank A/cs. are on account of receipt by the Singapore based company and all the credit and debit transactions are duly accounted in the books of the said company. Books of A/cs. were audited and returns of income have been filed on the basis of the Audited books of A/cs. before the Singapore Tax Authorities. 3.3(h) While arriving at the conclusion that deposits in foreign A/c. is covered under BMA, 2015, A.O. has also referred to FAQ No.26 of Circular No.13 of the BMA, 2015. However, the clarification offered therein is applicable when the foreign asset is acquired from Income chargeable to tax in India. In the appellant's case foreign income has been earned in form of salary and director s remuneration from R. B. Global Pte. Ltd./Singapore. As per the terms of DTAA between Singapore and India, salary and director s remuneration earned in Singapore was to be offered for tax in that country. This has been done by the assessee. The income earned in Singapore has been further invested in the shares of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If any discrepancies were noticed in the accounts of these concerns, suitable remedial action could have been recommended against the concerns. As discussed above, A.O. has considered all credit entries in the Bank A/c. of R. B. Global Pte. Ltd., Singapore to be non-genuine receipts, without any basis. On the other hand, assessee has established that there has been a genuine imports from the said foreign entity and payments have been made against imports from the said company. A.O. has failed to make any case for bogus imports in respect of any of the Indian entities dealing with R. B. Global Pte. Ltd., Singapore and initial remittances to the bank A/c. of said foreign company are fully explained and from disclosed sources. All the receipts in the bank A/c. of R. B. Global Pte. Ltd., Singapore are part of its books of accounts and R. B. Global Pte. Ltd. has regularly filed Returns of Income in Singapore. Foreign income earned by assessee are declared by assessee in Returns filed in Singapore, as per the terms of DTAA. Further, investment in shares of the foreign company are made out of these declared income. Hence, no case is made out for addition under BMA, 2015. Therefore, A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Act, shall not be included in the total undisclosed foreign income. (3) The income included in the total undisclosed foreign income and asset under this Act shall not form part of the total income under the Income-tax Act. COMMENT This section deals with the scope of total undisclosed foreign income and asset. Total undisclosed foreign income and asset of any previous year of an assessee shall be the income from the source located outside India, which has not been disclosed in the return of income furnished under sub-section (1), (4) or (5) of section 139 of Income-tax Act, the value of any undisclosed asset located outside India and any variation made in the income from a source outside India in the assessment or reassessment of the total income of any previous year, of the assessee under the Income tax Act in accordance with the provisions of section 29 to section 43C or section 57 to section 59 or section 92C of the said Act shall not be included in the total undisclosed foreign income and the income included in the total undisclosed foreign income and asset under this Act shall not from part of the total income under the Income-tax Act . 23. A perusal of the above provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 of the paper book (Volume I), which reads as under:- 26. From perusal of the above sheet and all the details mentioned therein for which evidences have been filed in the paper book, it is apparently clear that the assessee has made investment in the equity shares of RBGPL from the funds held in India. These funds were either owned by the assessee or has managed to take unsecured loans/advances from his friends and other relatives or has withdrawn the money from the Directors remuneration account of the Companies of which he is a Director in India. The complete explanation and details of each and every remittance and the source of such remittances stands filed and is explained. It is an admitted fact that remittance in foreign currency from India to any other foreign country has to pass through the Banking channel and the Banks are authorized agent of Reserve Bank of India and they have to adhere to the relevant guidelines prescribed by the RBI before transferring any fund in foreign currency from India to abroad. All the details regarding sender and receiver including their addresses, PAN details, Swift Code, purpose of remittances have to be mentioned in the application/format ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledgement and Income Tax Return for the A.Y.: 2019-2020 A.O. CIT(A) at pages 72 to 112 Tabular Representation of the foreign remittance made to R. B. Global PTE Ltd. by Shri Akhilesh Singh Source of such remittances. A.O. CIT(A) at pages 113 Bank Statement of Shri Akhilesh Singh for the bank account maintained at Bank of Baroda (Kolkata from 12.05.2010 to 11.04.2022 A.O. CIT(A) at pages 114 to 119 Documents showing remittance of USD 75,000 from Shri Akhiilesh Singh RB Global PTE Ltd (Communications to Bank of Baroda Procedural compliances as per RBI FEMA Norms) A.O. CIT(A)at pages 120 to 122 Loan Confirmation Certificate from Shruti Wood Woods (P) Ltd to Shri Akhilesh Singh A.O. CIT(A) at p[ages 123 Documents showing remittance of USD 38,000 from Shri Akhiilesh Singh RB Global PTE Ltd (Communications to Bank of Baroda Procedural compliances as per RBI FEMA Norms) A.O. CIT(A) at pages 124 to 126 Statement of Director's Remuneration payable from S.R. Timber Products (P) Ltd to Shri Akhilesh Singh (31.03.2010 to 31.03.2013) A.O. CIT(A) at pages 127 Statement of Director's Remuneration payable from S.R. Worth Ltd to Shri Akhilesh Singh (31.03.2010 to 31.03.2013) A.O. CIT(A) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition for lack of necessary details and assessee having not explained the purpose of remittance and confined its proceedings only to examine the various individual/firm/company/ concern, which remitted the funds to RBGPL and when the information called for under section 133(3) was not up to the mark or no information was received, it was presumed that all these companies are either shell company or are managed and controlled by the assessee. 29. When the matter travelled before the ld. CIT(Appeals), the assessee filed various details the outcome was different to what was presumed by the ld. Assessing Officer. These funds were remitted for import of goods from Singapore. RBGPL is a Company registered in Singapore and is carrying out the business of export of goods and the export is not only confined to India but other countries also. The assessee has furnished the following details about RBGPL including its Memorandum of Articles, Annual Report and Financial Statement for the alleged period along with copies of invoices and Bill of Lading, Bill of entries, Custom Clearance documents, etc. and the same are listed below:- SI. No. Nature of Documents 1 Certificate confirming incorporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book. We take note that S.R. Timber Products Pvt. Limited, Somnath Commosales Pvt. Limited, Incredible Agency Pvt. Limited have remitted the funds during the year 2011 for purchasing goods. The purpose of remittances to RBGPL is proved with the invoices issued by RBGPL, Bills of Lading/shipping bill, verification by Custom Authorities, where the value of goods is mentioned and the transportation receipts are available. Same is the situation for all the other remittances for the remaining period and remittances, which have been made from various concerns to RBGPL. Had the alleged concerns being fictitious or accommodation entry providers, then, there would have been no material in the form of bill of entry issued by the Custom Authorities, transportation documents, High Seas Sale Agreement by the concerns relating to importing goods. The assessee through the ld. Counsel for the assessee has furnished all the details regarding alleged concerns with the tax authorities, having PAN, filing regular income tax returns and duly assessed to tax. The list mentioned in the assessment order contains many names but only few which also includes Private Limited Companies have only dealt with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The other remaining entries in RBGPL with SBI, Singapore are part of the regular business transactions and even though the assessee is a beneficial owner of RBGPL but he has paid due taxes in Singapore on the income earned, accrued and received in Singapore. 31. So far as the judicial pronouncements referred by both the sides are concerned, ld. D.R. has relied heavily on the decision of the Coordinate Bench, Mumbai in the case of Rakesh Manhar Bhansali -vs.- Addl. CIT (2021) (supra). We, however, find that the facts of the said case are different from the facts of the instant case. In the case of Rakesh Manhar Bhansal (supra), where there was information about the Bank accounts held abroad in the name of Rakesh Manhar Bhansali, the same was denied by Mr. Rakesh Manhar Bhansali and did not voluntary disclosure any information about such bank account held in British Virgin Island. However, in the instant case, the assessee has never denied to have an interest in the Company namely RBGPL Singapore and various transfers made from India to RBGPL, Singapore. In the instant case, the assessee has provided all the material information necessary to explain the source of investment in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly explained and acquired out of tax paid income. However, he has not reported these assets in Schedule FA of the Income Tax Return in the past. Should he declare such assets under Chapter-VI of the Act? Answer: Since, these assets are fully explained they are not treated as undisclosed foreign assets and should not be declared under Chapter VI of the Act. However, if these assets are not reported in Schedule FA of the Income-tax Return for assessment year 2016-17 (relating to previous year 2015-16) or any subsequent assessment year by a person, being a resident (other than not ordinarily resident), then he shall be liable for penalty of Rs. 10 lakhs under section 43 of the Act. The penalty is, however, not applicable in respect of an asset being one or more foreign bank accounts having an aggregate balance not exceeding an amount equivalent to Rs. 5 lakhs at any time during the previous year. 33. From going through the answers of the above two questions given by CBDT (supra) , so far as the Question No. 17 is concerned, we note that even if an assessee declares the assets in the income tax return in Schedule FA, mere reporting of such asset or income of the return does not mean th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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