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TMI Blog2018 (4) TMI 1988X X X X Extracts X X X X X X X X Extracts X X X X ..... not remitted the said sum, ld. CIT(A) was not justified in sustaining addition of Rs. 1,84,35,000/- in the hands of the assessee. 3. Ld. CIT(A) has acted against the facts of the case in sustaining estimated addition of Rs. 2,03,405/- for foreign tour expenses, though during course of search, no incriminating material was found for incurring such expenses as the same were incurred by the assessee out of his substantial amount of drawings." 2. Regarding Ground No. 1, the facts of case are that a search & seizure operation under section 132(1) of the Act was carried out at the various premises of NIMS Group as well as residential premises of its trustees. During the course of search, at the residential premises of the assessee, being one of the trustees, situated at B-4, Govind Marg, Adarsh Nagar, Jaipur, from the Bedroom of Smt. Shobha Tomar, wife of the assessee, Dr. BS Tomar, Bedroom of Dr. Anurag Tomar and Dr. Swati Tomar, the son and daughter-in-law of the assessee, gold weighing 2595.72 grams, diamond weighing 19.3 cts and 714 grams of silver was found which was valued at Rs. 55,80,042/-. 3. In his statement recorded during the course of search u/s 132(4) of the Act, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement, the assessee did not mention that the jewellery belonging to Dr. Eshan Sharma, Dr. Surabhi Tomar and Ms Pallavi Tomar was lying at his premises. Accordingly, the reply so filed by the assessee was not found acceptable and 383.68 grams of Gold jewellery and 19.3 cts diamonds were found unexplained and it was held by the Assessing Officer that since Dr. B.S.Tomar is the head of family, the addition on this account shall be made in his hand for the impugned assessment order. Accordingly, an addition of Rs. 10,43,609/- on account of unexplained investment in gold jewellery weighing 383.68 grams and Rs. 183,500/- on account of unexplained investment in 19.3 cts of diamond totaling to Rs. 12,27,108/- was made and brought to tax in the hands of the assessee. 6. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and reiterated the submissions made before the Assessing Officer. It was further contended before the ld CIT(A) that when the jewellery which was found during the course of search was owned by all the family members, then why the addition is made in the hands of the assessee alone and not in the hands of the other family members. It was fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llery which has been found from the bedroom of Dr. Shobha Tomar, Dr. Anurag Tomar and Dr. Swati Tomar belongs to all the family members who were staying jointly with the assessee at the relevant point in time. The same is confirmed by the assessee in his statement recorded u/s 132(4) of the Act where the assessee has categorically stated that the jewellery so found belong to him, his wife, son, daughter in law and B.S.Tomar (HUF). Therefore, we find that the jewellery so found where remained unexplained, the addition has to be made equally in the hands of the each of the family members to whom the said jewellery belongs. Therefore, we found that the observation of the Assessing Officer that since the assessee is the head of family, the whole of the addition shall be made in his hand is not emerging from the facts on record and therefore, the same cannot be accepted. In absence of any specific identification of the jewellery belonging to the assessee and to the other family members, it would be reasonable that if the addition has to be made, it should be made equally in hands of all the family members staying with him at the relevant point in time and the assessee's HUF. 11. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer referred to the seized material which revealed that Shri Tomar has made investments of USD 3,00,000 during the FY 2014- 15 for setting up of business of gold mines, infrastructure, medical hospital and college etc. in the above stated African countries. As per the page No. 129-130 and 151-155 of annexure A-27 seized from residence of the assessee, it is evident that Mr. Bitthal Maheshwari has made a payment of USD 1,00,000 from HSBC bank account in Hong Kong on 09.05.2014. Thereafter, the AO observed that Mr. Bitthal Maheshwari after sending the payment has e-mailed the receipt to Shri B.S. Tomar for sending the payment receipt of USD 1,00,000 on 09.05.2014. The AO further observed that Mr Bitthal Maheshwari is not an Indian citizen and is believed to live in Germany since many years. The AO further observed that the Statement of Mr. Bitthal Maheshwari's real brother Mr. Goverdhan Maheshwari, who lives in Jaipur and who also escorted Mr. B. S. Tomar and his wife to Africa was recorded u/s 131 of the Income Tax Act. Mr. Goverdhan Maheshwari submitted that he will ask about the above transactions from his brother, however, till date, no details have been furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accompanied Dr. Tomar to Mozambique and other countries. Mr. Maheshwari, being a jeweller, was interested in purchasing or investing in Gold or other mines in those countries and therefore, he had given reference of Dr. B.S.Tomar for those dealings. By taking advantage of acquaintance of Dr. Tomar's with heads of Mozambique and other countries, he had remitted US$1,00,000/- in those countries. For remittance, since reference of Dr. Tomar was with those parties, copy of the mail was also sent to Dr. Tomar. Otherwise, Dr. Tomar has nothing to do with gold and other mines in foreign countries as he is fully devoted to the cause of education and medical relief. Had the payment of US$ 1,00,000/- or more been paid by Mr. Maheshari from his bank account with HSBC Bank on behalf of Dr. Tomar, evidence for repayment in India or foreign currency to Mr. Maheshwari of his relatives in India would have been found during the course of search whereas not a iota of any such evidence or entry in diary or other document was found. The allegation of the ld. Pr.CIT(C) appears to be on the basis of her own presumptions, conjectures and guess work. Since conjectures, guess work and possible stories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count number and other details of Dubai bank or date of transaction without proving proof and source of remittance or finding any incriminating material for such remittance by the assessee himself will be against the principles of natural justice for making unjustified addition of such huge sums. In assessee's case, neither any undisclosed bank account proving remittance in US$ was found during course of search nor any document, purchase deed of the property purchased or proposed or agreement in form of any asset in foreign country was found that the assessee had made investment in gold mines or in others for which remittance was made in foreign currency by himself. Without finding any incriminating material justifying any investment by the assessee himself, no addition could be made. There must be some material substance either in form of documents or the like to arrive at a ground for addition of income. The assessee has been requesting time and again to Department to make necessary enquiry from bank for the ownership of the money sent in terms of US$ to Gulf countries. Even the recipient or the bank where the money was transferred as per account number given in notice coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the Department to make a reference to FT & TR Division of CBDT to make enquiries through the Competent Authority. However, as the payments in question have been made by Sh. Bitthal Maheshwari and not by IMT or Dr. Tomar no such permission needs to be given by us. The Department is free to take any action in case of Sh. Bitthal Maheshwari. However, from the clarifications given and the facts places before us it is clear that the name of the applicant Trust does not figure on any of the papers relied upon by the Department and the payments have been made by a third party outside India and there is no material on record to show that any such funds were provided by Dr. B.S.Tomar. Therefore merely on the basis of the fact that Sh. Maheshwari sent an endorsement of payment by email to Dr. B. S. Tomar, it is not possible to derive any adverse inference in the case of the applicant trust". The issue of foreign remittance was already examined by the Hon'ble Income tax Settlement Commission (ITSC) from the material places before it by the Ld. Pr.CIT (C) and also by Indian Medical Trust. After considering material placed by both the parties, the Hon'ble ITSC has arrived at the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 18 & 19 2. Slovenia 10.11.2014 20 to 22 3. Kampala (Uganda) 22.01.2015 23 to 25 4. Italy 16.11.2014 27 & 28 When assessee visited Mozambique on invitation of Head of State for same reason of establishing Medical College and Hospital, he was accompanied by his NRI Jeweler friend Mr. Bithal Maheshwari. Mozambique being unknown and new place for Shri Maheshwari, at the assurance/verbal guarantee of the assessee (being guest of head of Mozambique), Shri Maheshwari had entered into some jewellery business dealings there. Copy of above message to assessee meant only the information (who stood Guarantor) for the remittance made by Shri Maheshwari from his own foreign bank account for his own business dealings. No incriminating material or other evidence whatsoever was found during course of search evidencing any payment by the assessee either to Mozambique or to Mr. Maheshwari or his relations in India even in post search proceedings but both the lower authorities preferred to make/sustain the unjustified addition of Rs. 1,84,35,000/- in hands of assessee. All these facts and documents relating to remittance of US$3,00,000/- were also examined by the Hon'ble Settlemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivalent to Indian Rupees 1,84,35,000/- has been transacted and transferred on behalf of Dr. B. S. Tomar to various foreign bank accounts. The basis of such findings by the Revenue is on account of certain enquiries conducted during pre-search investigation, statement of Dr. B. S. Tomar recorded during the course of search and the document seized during the course of search. It would therefore be relevant to examine the basis of such finding which has been arrived at by the Revenue. 23. Firstly, the AO has referred to certain discreet enquiries during pre-search investigation that Tomar family is making a lot of investment in countries outside India, particularly in Madagascar and Mozambique. However, we find that there is nothing available on record in terms of such inquiries which have been conducted by the Revenue and as to how the Revenue has come to such a finding. Therefore, in absence of any material on record in terms of the nature of such enquiries, the person from whom such inquiries have been made, any documentation which has been found and what is the exact findings arising out of such inquiries, we do not find there is any basic to hold that the so called discreet inqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w coming to the seized documents which have been found during the course of search. Pages 129 to 130 and 151 to 155 of Annexure A-27 relates to remittance of USD 1 lac from HSBC bank account in Hong Kong on 09.05.2014 by Shri Bitthal Maheshwari to Oceanix International FZE in Dubai UAE. There is an email communication from Christine of Axius Gold on 8th May, 2014 addressed to Dr. B. S. Tomar on his gmail account as well as his official NIMS University email ID wherein there is reference of some telecom that Dr. B. S. Tomar had with Mr. Nyrado and bank details were provided in that email communication for transfer of USD 1 lac. Thereafter, on 9th May, 2014, the transfer has happened by Shri Bitthal Maheshwari from HSBC bank account in Hong Kong of USD 1,00,000 and there is a forward email communication confirming the remittance having been and the said communication is by Shri Bitthal Maheshwari addressed to Shri B.S.Tomar. Based on the seized documents, it is an admitted position of the Revenue as emerging from the assessment order that the payment has been made by Shri Bitthal Maheshwari. However, given the fact that all the email communications have been addressed to Dr. B.S.Toma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gold of 17th July, 2014 giving the bank details for transfer of US $ 100,000 to the Oceanix International FZE. It is again not clear and there is nothing on record which suggest that there is any remittance which has actually happened in this regard. In light of the same, the mere fact that certain email communications have been addressed and forwarded to Dr. B.S.Tomar regarding the foreign remittances, to our mind, the same is not sufficient enough to hold that the remittance have been made either by Dr. B.S.Tomar or on his behalf from the undisclosed sources of income. 26. A related question that arises for consideration is as to why the email communication were addressed to Dr. B.S.Tomar. In this regard, the ld AR has submitted that Shri Bitthal Maheshwari who is a non resident and a close friend of Dr. B.S.Tomar had accompanied him to Mozambique and he was trying to take advantage of acquaintance of Dr. B.S.Tomar to further his own business interest. It was submitted that Dr. B.S Tomar has nothing to do with the remittance so made by Shri Bitthal Maheswari and the remittance were made by Shri Bitthal Maheswari from his own bank account for his own business dealings. It was fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficiaries in Mozambique. According to the CIT these investments were made on behalf of Dr. Tornar who could have paid the money in cash to the intermediaries in India or by sending money through hawala from India. The applicant denies having made any such investment out of India. It was argued that there is no references to the applicant trust in any of the papers referred to by CIT therefore these transactions are not relevant in the present proceedings. It was however clarified that Sh Bitthal Maheswari is a non-resident and a close friend of Dr. B. S Tomar and he had accompanied him to Mozambique. He was trying to take advantage of the acquaintance of Dr. Tomar with the heads of Mozambique and other countries in furthering his own interest but Dr. Tomar has nothing to do with the gold or other mine in Africa. According to the applicant the allegation made by CIT are therefore based merely on guesswork and surmises. During the hearing the A.R requested us to allow the Department to make a reference to FT & TR Division of CBDT to make enquiries through the Competent Authority. However as the payments in question have been made by Sh. Bitthal Maheswari and not by IMT or Dr. Tom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptable to the Assessing Officer. The AO brought to tax half of the total unexplained expenditure of Rs. 2,62,900/- to tax in the hands of the assessee. Further he has estimated expenses of Rs. 50,000/- on return trip to Milan and Rs. 22,000/- as return trip to Sharjah. The AO accordingly made an addition to Rs. 2,03,450/- in the hands of assessee. 32. Being aggrieved, the assessee carried the matter in appeal before the ld CIT(A) and submitted that during the course of search proceedings, no incriminating material or other evidence was found that the appellant has incurred foreign tour expenses, visa expenses and other expenses out of his undisclosed sources. It was further submitted that the assessee has incurred the foreign tour expenses out of his personal drawings of Rs. 10,17,138/- during the year. The ld. CIT(A) however confirmed the addition relying on the finding of the AO that the expenses of foreign tour on foreign travel is not relatable to drawings and no cash flow or evidence is submitted to show that such cash payment has been made out of the cumulative drawings made during the year. Further, ld. CIT(A) referred to the decision of the Settlement Commission which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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