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TMI Blog2024 (9) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to explain the transactions in the foreign bank accounts by admitting the additional evidences filed before him. The assessee had made submissions before the AO in the course of remand proceeding as well as before the Ld. CIT(A) after receipt of the remand report. Even if the Ld. CIT(A) passed his order within a month of the remand report, it is not the case that the he didn t consider the submissions of the assessee on the rejoinder of the remand report. Rather, the ld. CIT(A) has passed a detailed order considering and taking into account the submissions of the assessee and has substantially reduced the additions as made by the AO. We, therefore, do not find any instance of violation of natural justice in this case. The assessee was allowed sufficient opportunities to explain the transactions in the foreign bank accounts. The case laws relied upon the assessee are not found applicable to the peculiar facts of this case as discussed above. Therefore, the grounds taken by the assessee in respect of providing insufficient opportunities and violation of principle of natural justice are dismissed. Reopening u/s 147 - Mere deposits in the bank account cannot lead to the conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the foreign bank accounts of the assessee were undisclosed and that the income had escaped assessment. Therefore, the ground taken by the assessee in this regard is found to be baseless, and is dismissed. The facts of the case laws as relied upon by the assessee in this respect are found to be totally different and not directly applicable to the facts of the present case, as the nature of underlying transaction was specified in the reasons recorded in this case. Whether quantification of escaped income is necessary? - The quantification of escaped income was necessary only if the case was reopened u/s.149(1)(b) of the Act, which stipulates that the cases beyond 4 years cannot be reopened unless the income escaped assessment is Rs. 1 Lakh or more. In the present case, the provision of Section 149(1)(c) of the Act was applicable and no quantification was required if the cases were reopened in respect of escapement of any income in relation to any asset located outside India. This specific provision the case laws relied upon by the assessee are not found applicable in the present case as those cases are not related to foreign account cases. Therefore, the objection of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other material as available with him as well as the return of income. We have to, therefore, examine as to what were the incriminating materials found during the search and what were the other materials available with the AO, to assess/reassess the total income of the assessee. In the present case, incriminating materials regarding non-disclosure of foreign bank accounts in the Income Tax returns, was already available with the department in the form of the documents which were confronted to the assessee in the course of the statement recorded during the search. The correctness or authenticity of these other incriminating materials has not been questioned. Therefore, any evidence found in the course of search that corroborates the other materials as already available with the department, partakes the character of incriminating material found during the search. Such corroborating evidences found during the search may be documentary or oral and the same has to be considered by the AO during the search assessment as per section 153A of the Act. Therefore, we have to examine whether any documentary or oral evidence was found in this case during the search, which corroborates the incri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounts belonged to his sister, no documentary evidence could be provided and an evasive reply was given by the assessee that the documents will be available with the banker or Mr. Chaturvedi. If so, why the documents couldn t be obtained and furnished by the assessee. Not only the assessee had signed the account opening forms for all the foreign bank accounts, but he was also in constant touch with Merrill Lynch through his telephone number as acknowledged in the statement. The evidences as available with the Revenue leave no doubt that the assessee and the assessee only, along with his wife, were the actual owner of all the foreign bank accounts. Therefore, the action of the AO to treat all the foreign bank accounts as belonging to the assessee is upheld. The grounds taken by the assessee and his wife that they being settlors, no addition could have been made in their hands are rejected. Credit entries in the bank accounts as income of the assessee and accordingly made the addition in the hands of the assessee and his wife, 50% on substantive basis and 50% on protective basis - As rightly pointed out by the assessee only the real income has to be taxed as held by the Hon ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The foreign bank account ledgers were the accounts of the assessee only, the only difference being that it was maintained by a 3rd party i.e. the Bank. All the entries in the bank account ledgers pertained to the assessee only which was in essence the books of accounts of the assessee in respect of his bank transactions - CIT(A) had rightly upheld the applicability of section 68/69A of the Act in respect of the credit entries appearing in the foreign bank accounts. The ground taken by the assessee in this regard is, therefore, rejected. Carry forward of losses - The assessee has contended that the return for the block period was filed within the time. The provision of Section 139(3) of the Act stipulates that in order to carry forward a loss under the head business or capital gain , the return of income has to be filed within the time as allowed u/s 139(1) of the Act. Thus, according to this provision, the assessee must file his original return of income within the time stipulated u/s 131(1) in order to carry forward the loss. In the present cases, no return of income was filed claiming any loss within the time limit as prescribed u/s. 139(1) of the Act. Therefore, the direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipinbhai P Patel. As a result, the entire addition has now to be considered in the hands of Smt. Manjulaben B Patel as legal heir of Sri Bipinbhai P Patel only on substantive basis and there is no requirement for making any protective addition in her hand as Individual. Therefore, the ground taken by the assessee as well as the Revenue in respect of substantive verses protective addition in the two hands, has become infructuous and is dismissed. - ITA Nos: 31 to 39/Ahd/2020 40/Ahd/2020 C.O. Nos: 54 to 61 63/Ahd/2020 62/Ahd/2020 And IT(SS)A Nos: 01 to 06/Ahd/2020 C.O. Nos: 47, 49, 50, 52, 51 53/Ahd/2020 And ITA Nos: 41 to 49/Ahd/2020 50/Ahd/2020 And IT(SS)A Nos: 07 to 12/Ahd/2020 Ms. Suchitra Kamble, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member For the Assessee : Shri Tushar Hemani Sr. Advocate Shri Parimalsinh B. Parmar, AR. For the Revenue : Dr. Darsi Suman Ratnam, CIT. DR Shri Ashish Revar, Sr. DR ORDER PER BENCH: The above 82 appeals pertain to Late Shri Bipinchandra Prabhudas Patel (hereinafter referred to as the assessee ) and his wife Smt. Manjulaben Bipinbhai Patel in respect of assessments completed for 17 assessment years (A.Y.) from A.Y. 2000-01 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.01.2000, the supplementary deed of trust dated 07.01.2000, the company formation letter, deed of amendment dated 30.03.2021, Revocation of Trust Deed dated 19.11.2012; Shri Bipinchandra P. Patel accepted that he had signed on the deed of trust as well as the other documents related to establishment of a trust with Merrill Lynch Bank and Trust Company (Cayman) Ltd. However, he stated that he had signed on these forms as settlor in order to help his blood-sister late Smt. Prabhavatiben Amin and brother-in-law late Shri Jashbhai Amin who were settled in London, in order to help them to bring their money from Africa to London. The Assessing Officer found this explanation to be a concocted story; and on the basis of material available on record and the statement of Shri Bipinchandra P. Patel, initiated action against the assessee and Smt. Manjulaben B. Patel for 17 assessment years under different provisions of Act as follows: - i) U/s 147 of the Act : for AYs 2000-01 to 2009-10 ii) U/s 153A of the Act : for AYs 2010-11 to 2015-16 iii) U/s 143(3) of the Act : for AY 2016-17 4. Apart from the aforesaid foreign accounts, cash and jewellery were also found during the search operations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlor in order to help his blood sister namely Late Smt. Prabhavatiben Amin and brother-inlaw Late Jashbhai Amin (who were settled in London) to help them bring their money from Africa to London. However, the AO held that all the credits reflected in these bank accounts were income of the assessee and consequently, additions were made in respect of such credits for the period from AYs 2000-01 to 2013-14. 8. In respect of four foreign bank accounts held by the assessee with HBS , the information regarding which was received through FT TR division of the CBDT; the entire credits as reflected in these bank accounts were treated as income of the assessee and additions were made in AYs 2013-14 to 2016-17. The total additions made in respect of credits reflected in foreign bank accounts from AYs 2000-01 to 2016-17 aggregated to Rs. 24,18,78,960/-. As the foreign bank accounts were held by the assessee and Smt. Manjulaben B. Patel jointly, the Assessing Officer had made the addition of Rs. 24,18,78,960/- in the hands of both the persons in the following manner: - (i) 50% of the amount was added on substantive basis; (ii) 50% of the amount was added on protective basis. 9. Aggrieved with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly settlor and Merrill Lynch was the director of the Company, therefore the ld. AO ought to have called on relevant information from the directors rather than calling the information from settlor and as such the act of ld. AO is arbitrary to make impugned addition of Rs. 54,43,228/- to the returned income. - No documents were found during search or thereafter to prove that the funds in the alleged foreign bank accounts are transferred or sourced by the appellant and likewise the ld. AO also not proved that the appellant has received or has been enriched in any manner whatsoever by any funds from the alleged foreign bank accounts, - Ld. AO has grievously erred in passing the order on False Statement / Grounds/basis that incriminating documents were found or gathered from searched premises whereas the addition was made based on the documents gathered from unknown sources. - Ld. AO has passed the impugned order with the predetermined mind set to make high pitched assessment which can be proved from the fact that details and statements related to offshore trust accounts were provided almost after 22 months post search conducted and that too after number of requests made by your appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et off as per sections 70, 71, 72, 74 of the Act. Grounds of appeal in ITA Nos. 1895/Ahd/2019 to 1903/Ahd/2019 in ITA Nos. 1905 to 1914/Ahd/2019 are same as in ITA No. 1894/Ahd/2019 (except the amounts mentioned in Ground 1.01 and in Ground 1.04 of each appeal and a ground regarding substantive protective addition taken in ITA No. 1914/Ahd/2019). 13. Grounds of appeal in IT(SS)A No.569/Ahd/2019 for A.Y. 2010-11 are as under: 1.00 Order passed u/s 153A r.w.s. 143(3) of the Act is void and deserved to be quashed: 1.01 On the facts and in circumstances of your appellant's case and in law, Id. CIT(A) failed to appreciate that - - Your appellant was simply settlor and Merrill Lynch was the director of the Company, therefore the ld. AO ought to have called on relevant information from the directors rather than calling the information from settlor and as such the act of Ld. AO is arbitrary to make impugned addition of Rs. 61,02,094/- to the returned income. - No documents were found during search or thereafter to prove that the funds in the alleged foreign bank accounts are transferred or sourced by the appellant and likewise the Id. AO also not proved that the appellant has received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in alleged foreign bank accounts, during appellate proceedings, the same should be allowed to be set off against returned income of the same year and carry forward of the same to subsequent year(s) for being its set off as per sections 70, 71, 72, 74 of the Act. Grounds of appeal in IT(SS)A Nos. 570/Ahd/2019 to 574/Ahd/2019 575 to 580/Ahd/2019 are identical as in IT(SS)A No.569/Ahd/2019 (except the amounts mentioned in Ground 1.01 and in Ground 1.03 of each appeal). 14. Grounds of appeal in ITA No.31/Ahd/2020 for A.Y. 2000-01 filed by the Revenue are as under: 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in restricting the addition of Rs. 54,43,228/- to Rs. 38,58,950/- on account of undisclosed income from foreign bank account, by not appreciating the facts involved in this case. . 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the income on account of STCG/LTCG which relate to transactions in shares and find place in bank statement showing realized gain/loss. 3. The issue involved is related to undisclosed foreign bank accounts which falls within the ambit of exception under para 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional ground No. 3 has been raised as under: 3.00 On the facts and in the circumstances of your appellant s case and in law, ld. CIT(A) erred in confirming the addition of Rs. 10,00,000/- on account of jewellery found from Locker No.-17 not owned by your appellant on the ground that explanations given by your appellant do not corroborate with supporting evidence and as such it is not reliable. Ld. CIT(A) also failed to appreciate that the said locker was never operated since last 10 years as confirmed by the bank. 17. Grounds of appeal in ITA No.1915/Ahd/2019 for A.Y. 2016-17 filed by the assessee is also identical to grounds in ITA No. 1894/Ahd/2019 except that an additional ground No. 3 has been raised as under: 3.00 On the facts and in the circumstances of your appellant s case and in law, ld. CIT(A) erred in confirming addition of Rs. 52,41,977/-- on protective basis on account of jewellery found during the course of search though full details has been confirmed on this account in the hands of Smt. Jigishaben Patel, daughter-in- law of your appellant by virtue of order dated 07.01.2019 arising out of appeal No. CIT(A)-12/320/CC 1/2017-18. 18. Grounds of appeal in ITA No.50/Ahd/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther before or during the course of hearing of the appeal. 20. We will take A.Y. 2000-01 2010-11 as the lead year(s) and discuss the grounds taken by the assessee as well as by the Revenue in detail in these years. The appeals pertaining to A.Y. 2000-01 are ITA No.1894/Ahd/2019 filed by the assessee and ITA No.31/Ahd/2020 filed by the Revenue. The assessee has also filed CO No. 54/Ahd/2020 in ITA No.31/Ahd/2020 with delay of 99 days. The delay was explained to be on account of Covid pandemic and, therefore, the delay is condoned. The appeals pertaining to A.Y. 2010-11 are IT(SS)A No.569/Ahd/2019 filed by the assessee and IT(SS)A No.01/Ahd/2020 filed by the Revenue with CO No.47/Ahd/2020. 21. We have heard Shri Tushar Hemani, Sr. Advocate and Shri Parimalsinh B. Parmar, AR appearing for the assessee as well as Dr. Darsi Suman Ratnam, CIT.DR on the various grounds taken in these appeals. Shri Tushar Hemani, Ld. Senior Counsel explained that the various grounds taken by the assessee can be categorized in following four categories: i. Principle of natural justice; ii. Reopening under Section 147 of the Act for the A.Ys. 2000-01 to 2009-10; iii. Completion of unabated assessment without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the Ld. CIT(A) which was examined by the AO in the course of remand proceedings. The assessee had made further submissions in respect of year wise net income calculated as per bank statements, post remand report. Thus, sufficient opportunities were allowed to the assessee before the Ld. CIT(A) as well. The Ld. CIT.DR relied upon the decision of Hon ble Calcutta High Court in case of Hydro Carbon Services (P.) Ltd. vs. Union of India, [2021] 131 taxmann.com 175 (Calcutta) in support of his contention that there was no violation of natural justice. 24. We have carefully considered the rival submissions and also gone through the assessment order. The Revenue has furnished a timeline chart of the events that took place in this case, which is reproduced below: Assessment Proceedings Sr. no. Date Event Reference Remarks 1. 02.12.2015 Search Statement u/s 132 Para 2.1-2.2 Pg 1-2 of AO 2. 03.12.2015 Statement recorded where asked to explain contents of letter in Qs no 30. Para 5.9 Pg 31 of AO 3. 11.01.2016 Statements by (A) Para 5 Pg 18 of CIT (A) Order 4. 27.01.2016 Statements by (A) Para 5 Pg 18 of CIT (A) Order 5. 27.05.2016 Statements by (A) Para 5 Pg 18 of CIT (A) Order 6. 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. 04.05.2019 Letter of Summarized statement of income from bank accounts of NAD investment furnished to Ld. AO by Assessee Pg 43 of CIT (A) 27. 07.05.2019 Letter dated 04.05.2019 acknowledged by Ld. AO Ld. / AR furnished details and explanations Pg 40 43 of CIT (A) 28. 30.09.2019 AO Remand Report Para 5 Pg 37 of CIT(A) 29.. 07.10.2019 Remand Report received by Assessee Para 8.16 Pg 51 of CIT (A) 30. 19.10.2019 Rejoinder of Assessee Para 6 Pg 41 of CIT(A) 31. 21.10.2019 Hearing post Remand Report Para 7 Pg 44 of CIT (A) 32. 24.10.2019 Further Submission by Assessee Para 7 Pg 44 of CIT(A) 33. 30.10.2019 CIT(A) Order 25. It is evident from the above chart that assessee was allowed sufficient opportunity to represent his case before the AO as well as before the Ld. CIT(A). The assessee had for the first time requested the AO to give a copy of the documents on 29.08.2017, which was provided to him on 22.09.2017. These documents were basically the statement of foreign bank account which should have been available with the assessee himself. Still, when he demanded the copy of the same from the AO, it was provided to him. However, no compliance was made before the AO in spite of repeated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t find any instance of violation of natural justice in this case. The assessee was allowed sufficient opportunities to explain the transactions in the foreign bank accounts. The case laws relied upon the assessee are not found applicable to the peculiar facts of this case as discussed above. Therefore, the grounds taken by the assessee in respect of providing insufficient opportunities and violation of principle of natural justice are dismissed. Reopening u/s. 147 of the Act 27. The cases for the A.Ys. 2000-01 to 2009-10 were reopened under Section 147 of the Act by issue of notice under Section 148 dated 23.11.2016. The assessee had raised objection against the reopening which was disposed off by the AO vide order dated 28.07.2017. Shri Hemani, the Ld. Sr. Counsel explained that the reopening was done merely on the basis of details of foreign bank accounts received from FT TR division of CBDT. The deposits appearing in the foreign bank account were apparently on account of interest, dividend, person cheque deposits, wire transfers, call loan/ fixed loan/ loan etc. According to the AO, the amounts deposited in the bank accounts were required to be taxed as per the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowings decisions: 1. Mahesh Kumar Gupta vs. CIT, 363 ITR 300 (Allahabad) 2. Novo Nordisk India P. Ltd., [2018] 95 taxmann.com 225 (Kar.) (E) Reopening was barred by limitation The Ld. Senior Counsel explained that the AO had resorted to Clause (c) of Section 149(1) of the Act which was inserted w.e.f. 01.07.2012 for issuing notice u/s. 148 of the Act. Prior to 01.07.2012, the reopening was permissible only up to a period of 6 years from the end of relevant assessment year. Thus, the limitation for reopening for A.Y. 2005-06 and earlier years had expired on or before 31.03.2012. According to the Ld. Sr. Counsel, A.Ys. 2000-01 to 2005-06 had attained finality on 31.03.2012 and it was not permissible to reopen cases for these years beyond 6 years period, as a vested right was created in favour of the assessee for these years. Ld. Senior Counsel emphasized that it is well settled that subsequent amendment (w.e.f. 01.07.2012 in this case) cannot empower the AO to reopen the assessments which had already become time barred under the earlier provision, prior to such amendment coming into force. He placed reliance on following decisions in support of this legal proposition: 1. S. S. Gadg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening under Section 147 of the Act, it will be relevant to reproduce the reason as recorded by the AO. The assessee has filed a copy of the reason in the paper book which is reproduced below: The assessee has furnished the return of income. It was gathered that there are bank account having account number ICA03B39 and 16503B39 held in Merrill Lynch Bank in the name of a company, M/s Nad Investment Ltd. This company is registered in Cayman Islands. The foreign bank accounts were held in the name of the company M/s NAD Investments Ltd through a trust, whose settler were Shri Bipinchandra Patel and Mrs. Manjula Patel and ultimate beneficiaries were his own family members. 2. In the meantime, a search u/s 132 of the I T Act was carried out at the residence of Shri Bipinchadra Patel and Mrs. Manjulaben Patel at 2, Shantivan Society, Sussen-Tarsali Road, Vadodara on 02.12.2015, During the course of the search, a statement on oath u/s 132(4) of the Income Tax Act, 1961 was recorded on 02/12/2015 of Shri Bipinchandra Patel. In the statement, in the initial questions, he was specifically asked to state whether he or his family members were holding any foreign bank accounts / were beneficiar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22989.11 40.241 925105 2008-09 2824.59 45.917 129697 4.2 The exchange rate taken into consideration is the average exchange rate for the relevant year as available on the website of Reserve Bank of India at https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/1477 BST130913. pdf. 4.3 Various other deposits are, also, observed in these two bank accounts by way of call loan/fixed loan/ loan , which is written in the description column of the bank statements. Also, from the bank statements, it: is seen that the assessee had indulged in mutual funds transactions on a regular basis. Therefore, these amounts credited into these bank statements need to be taxed as per the prevailing provisions of the Income Tax Act, 1961. 5. Therefore, I have reasons to believe that the income chargeable to tax has escaped the assessment within meaning of provisions of section 147 read with Explanation 2 (d) of the I T Act for the year under consideration. 6. The notice u/s 148 of the Act is issued after taking prior approval u/s 151(1} of the Act from the Pr. Commissioner of Income Tax, Central, Surat as per his letter Nc SRT/PR. CIT(C)/HQ/Approval/148/2016-17/3234 dated 15.11.2016 received in th;; office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(4) of the Act and the documents confronted therein as well as the information received through FT TR Division; analysed the information as available and thereafter recorded his detailed, independent and logical reason for escapement of income. We don t find any semblance of borrowed satisfaction on the part of the AO. 32. The facts of the cases relied upon by the Ld. Sr. Counsel in respect of this submission are found to be all different. In the case of Harikishan S. Virmani (supra) , the issue was reopening beyond 4 years and the Hon ble Gujarat High Court had held that there was no allegation of assessee s failure to disclose truly and fully any material facts, whereas in the present case, the foreign bank accounts were not disclosed by the assessee in their respective income tax returns. Further, this decision was in the context of reopening beyond 4 years and in consideration of Proviso to section 147 of the Act. In fact, the Proviso to section 147 of the Act is not at all applicable in the case of reopening on account of undisclosed foreign assets and, therefore, the assessee can t derive any benefit from this decision. 33. In the case of Varshaben S. Patel (supra), the reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was necessary only if the case was reopened u/s. 149(1)(b) of the Act, which stipulates that the cases beyond 4 years cannot be reopened unless the income escaped assessment is Rs. 1 Lakh or more. In the present case, the provision of Section 149(1)(c) of the Act was applicable and no quantification was required if the cases were reopened in respect of escapement of any income in relation to any asset located outside India. In view of this specific provision the case laws relied upon by the assessee are not found applicable in the present case as those cases are not related to foreign account cases. Therefore, the objection of the assessee regarding non-quantification of escapement of income is without any merits, and is dismissed. Whether reopening was barred by limitation? 36. The real serious objection of the assessee is against the reopening of the cases for the A.Y. 2000-01 to 2005-06. The Ld. Sr. Counsel contended that prior to 01.07.2022, the reopening was permissible only up to 6 years period. Therefore, the limitation for reopening u/s. 147 of the Act for A.Y. 2000-01 to 2005-06 had expired on or before 31.03.2012. According to the Ld. Sr. Counsel, the subsequent amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is 6 years. The time limit of 6 years is not sufficient in cases where assets are located outside India because gathering information regarding such assets takes much more time on account of additional procedures and laws of foreign jurisdictions. It is proposed to amend the provisions of section 149 so as to increase the time limit for issue of notice for reopening an assessment to 16 years, where the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Amendments are also proposed to be made in section 147 of the Income-tax Act to provide that income shall be deemed to have escaped assessment where a person is found to have any asset (including financial interest in any entity) located outside India. The provisions of sections 147 and 149 are procedural in nature and will take effect from 1st July, 2012 for enabling reopening of proceedings for and assessment year commencing prior to this date. This is proposed to be clarified through an Explanation stating that the provisions of these sections, as amended, by the Finance Act, 2012, shall also be applicable for any assessment year beginning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able point of time between the expiry of the time provided under the old Act and the commencement of the amending Act. The legislature has given to section 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry, of the period provided become barred. (Emphasis supplied) 40. The Hon ble Court Supreme Court has categorically held in that case that the legislature did not intend to attribute greater retrospectivity to the amending provision than what was expressly mentioned in the Act. By applying this ratio, the amended provision will be certainly applicable in the instant cases as the legislature had expressly provided greater retrospectivity to it. As already mentioned earlier, an Explanation was inserted to section 147 of the Act which categorically stipulated that the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad become barred under the old provisions. 42. In the case of K M Sharma (supra) the Hon ble Supreme Court has held as under: 13. Fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to sub-section (1) of section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective . 14. To hold that the amendment to sub-section (1) would enable the authorities to reopen assessments, which had already attained finality due to bar of limitation prescribed under section 149 as applicable prior to 1-4-1989, would amount to give sub-section (1) a retrospective operation which is neither express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the judgement of Hon ble Supreme Court in the case of S.C. Prashar v. Vasantsen Dwarkadas Hungerfor Investment Trust Ltd. [1963] 49 ITR 1 (SC) and reproduced the following portions in that order: 93. ....If the 1948 Amendment could be treated as enabling the Income Tax Officer to take action at any point of time in respect of back assessment years within eight years of March 30, 1948 then such cases were within his power to tax. We have such a case here in CA No. 509 of 1958 where the notice was issued in 1949 to the lady whose husband had remitted Rs 9180 to her from Bangkok in the year relative to Assessment Year 1942-43. That lady was assessable in respect of this sum under Section 4(2) of the Income Tax Act. She did not file a return. If the case stood governed by the 1939 Amendment the period applicable would have been four years if she had not concealed the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned in the new law if its operation is retrospective. All other cases are covered by the law in force at the time action is taken . It is from these viewpoints that these appeals, in our opinion, should be judged. (Emphasis supplied) 45. The Hon ble Supreme Court in the case of S.C. Prashar (supra) had unambiguously held that the notice for reassessment should be judged by the law as existing on the date of issue of notice and that if the notice and the assessment year is within the time period in compliance to the retrospective law, such notice can t be questioned. The principle that the liability to the State is independent of any consideration of time and the legislature is capable of enacting retrospective law was endorsed by the Hon ble Supreme Court in that case. 46. The case of Tata Teleservices (supra) is found to be totally different on facts. The issue involved in that case was application of section 201(3) of the Act and the amended provision was not made expressly with retrospective effect. 47. The decision of Hon ble Delhi High Court in the case of Brahm Dutt (supra) was analyzed by the Bombay bench of the ITAT in the case of Deputy Commissioner of Income-tax v. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, turns on the dismissal of the SLP either. We are in complete agreement with the decision of the ld. ITAT Bombay in that case. The other decisions of Mumbai Tribunal relied upon by the assessee were delivered following the non-binding ratio in the case of Brahm Dutt (supra) and can t be given any weightage. 48. The assessee has also strongly relied upon the judgement of Hon ble Gujarat High Court in the case of Kiara industries Private Limited versus ITO [2023] 147 taxmann.com 585 (Gujarat) . The issue involved in that case was reassessment notices issued on or after 1-4-2021 under the erstwhile sections 148 to 151 by relying on Explanation s in the Notification No. 20/2021, dated 31-3-2021 and Notification No. 38/2021, dated 27-4-2021 which extended applicability of aforesaid provision as they stood on 31-3- 2021, before commencement of Finance Act, 2021, beyond period of 31-3- 2021. It was held by the Hon ble Court that as unamended provisions of reopening itself ceased to exist on 1-4-2021, Notification Nos. 20/2021 and 38/2021 cannot extend the time limit and that CBDT's Instructions No. 1 of 2022 dated 11-5-2022 which, if permits Jurisdictional Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the present case. 49. A somewhat similar issue was involved in the case of Principal Commissioner of Income-tax v. Karina Airlines International Ltd. decided by Hon ble Delhi High Court [2024] 165 taxmann.com 421 (Delhi). In that case a search was conducted on 7-4-2016. Section 153A, as it stood prior to 01 April 2017, envisaged a search assessment being undertaken in respect of each assessment year falling within six assessment years . By virtue of Finance Act, 2017 the block period for search assessment was extended to ten assessments years on account of the introduction of the concept of relevant assessment year or years , which was defined by Explanation 1 to Section 153A of the Act. Simultaneous amendment was also made in Section 153C and the concept of relevant assessment years was adopted therein. In that case the satisfaction u/s 153C was recorded on 15-5-2019, i.e., after amendment to section 153C by Finance Act, 2017 had come into effect and the block period of six assessment years was extended to ten assessment years. The Ld. ITAT had held that since the date of search in that case was 07.04.2016, the amendment brought by the Finance Act, 2017 would not be appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judicial pronouncements as discussed above; we are of the considered opinion that the AO had rightly reopened the assessment for the A.Ys. 2000- 01 to 2005-06. Further, in view of the discussions in para-29 to para-50 above we don t find any merit in the objection taken by the assessee against reopening of the cases for the A.Y. 2000-01 to 2009-10. Accordingly, the grounds taken by the assessee in this regard are dismissed. Completion of unabated assessment without incriminating material 52. This ground is involved in the A.Ys. 2010-11 to 2014-15, for which assessment were completed u/s. 153A of the Act. According to the Ld. Sr. Counsel, A.Ys. 2010-11 to 2014-15 are unabated assessment years, whereas, A.Y. 2015-16 is the case of abated assessment. The Ld. Sr. Counsel submitted that no incriminating material was found in the course of search at the premise of the assessee. The assessee was only confronted with certain documents in relation to foreign bank accounts held with MLB. He had drawn our attention to the various questions put to the assessee in the statement recorded under Section 132(4) of the Act and explained that the documents were merely confronted to the assessee dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any incriminating material found during the search and were not justified in the eye of law. 55. Per contra, Dr. Darsi Suman Ratnam, Ld. CIT. DR submitted that during the course of search, documents relating to formation of NAD Investment Ltd. and operation of bank account in its name with Merrill Lynch Bank (MLB) were found. In addition, certain loose paper file, pen drives and backup of images of 2 Samsung mobiles were also seized and inventorized in which certain evidences regarding foreign investment of the assessee was found. Further, that the search was conducted precisely for the reason that the foreign bank accounts of the assessee were not disclosed to the Department in their Income Tax returns. The information as available with the Department was confronted to the assessee in the course of statement recorded during the search. Therefore, the admission of the assessee in the statement under Section 132(4) of the Act that he was settlor of the trust and that the beneficiaries of the trust were all his family members constituted incriminating material. The Ld. CIT.DR submitted that in spite of being confronted with all the documentary evidences which clearly established tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. However, the Court has nowhere mandated that the addition in the completed assessments has to be only on the basis of incriminating material found during the search. The Hon ble Apex Court has gone through the erstwhile scheme of block assessment under Section 158BA of the Act, analyzed the object and purpose of introduction of Section 153A of the Act pertaining to search assessment and taken note of the difference of opinion in the judicial pronouncements of different High Courts. The conclusion as recorded by the Apex Court in Para 14 of the order in the case of Abhisar Buildwell (supra) is found to be as under: 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdict ion for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequence of information available with the department, on the basis of which the reason to believe is formed that any person is in possession of money, bullion, jewellery or other valuable articles or things which represent his income and which has not been or would not be disclosed for the purpose of Income Tax Act. The precise purpose of conducting search operation is to get hold of evidences having a bearing on the tax liability of a person, which the said person is seeking to withhold from the assessing authority. From the facts as narrated in the assessment order as well as from the statement recorded u/s 132(4) of the Act, it prima facie appears that the department was already in possession of certain specific information in respect of foreign bank accounts of the assessees, which were not disclosed in their income tax returns. For this reason, search operation u/s. 132 of the Act was conducted to unravel further evidences, and in the course of search the assessee was confronted with the information/documents already available with the department. The statement of the assessee recorded u/s. 132(4) of the Act is reproduced in the assessment order and it is found therefrom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were confronted to the assessee in the course of the statement recorded during the search. The correctness or authenticity of these other incriminating materials has not been questioned. Therefore, any evidence found in the course of search that corroborates the other materials as already available with the department, partakes the character of incriminating material found during the search. Such corroborating evidences found during the search may be documentary or oral and the same has to be considered by the AO during the search assessment as per section 153A of the Act. Therefore, we have to examine whether any documentary or oral evidence was found in this case during the search, which corroborates the incriminating material already available with the department regarding existence of foreign bank accounts of the assessee. 62. In the course of search, a loose paper filed containing 1 to 54 pages, one Pen Drive (one master copy one working copy) and back up of image of Samsung Mobiles was seized and inventorized vide Annexure-A1 dated 02.12.2015. The copy of loose papers vide Annexure-A1 contained visiting cards of one Shri Anil Chaturvedi. In one card Shri Anil Chaturvedi wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement u/s. 132(4) of the Act and he had stated that this correspondence was related to his late sister Smt. Prabhavatiben Amin. However, no evidence in this regard was brought on record by the assessee. On the other hand, in the Confidential Client Profile Sheet of NAD Investment Ltd. which was signed by the assessee and which is reproduced at Page Nos.12 to 14 of the assessment order, the assessee had disclosed his present banking relationship with Barclays Bank. Therefore, the correspondence with Barclays Bank found during the search was not in respect of assessee s sister as contended in his statement, but it pertained to the assessee himself. Thus, corroborating evidence in the form of correspondence with Barclays Bank was found during the search which confirmed the disclosure as made by the assessee in the other material i.e. Confidential Client Profile Sheet of the bank account with MLB . 64. As already mentioned earlier, visiting cards of Shri Anil Chaturvedi representing Merrill Lynch Bank and Hinduja Bank, Switzerland were found in the course of search. In the course of statement u/s. 132(4) of the Act, the assessee was required to explain the financial transactions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period 10/06/2011 to 04/12/2012 totalling to $2,71,669/- by way of wire transfer to different accounts. The Company NAD Investment Ltd. was a property of a trust, whose settler as well as beneficiary were you and your wife Smt. Manjulaben Patel. Therefore you are request to explain these withdrawals of $2,71,669/-. Ans 6:- All transactions are done under the instruction of account holder (Smt. Prabhavatiben). Q 7 Do you know any person Shri Jignesh Patel to whom amount of $50,000/- has been transferred on 10/06/2011 from bank a/c no. ICA03B39 in Meryl lynch bank of the company NAD Investment Ltd. Ans 7:- At present I am unable to recollect .. I am unaware of the said person. Q 8 Do you know any person Shri Hitesh Patel to whom amount of $30,000/-, $40,000/- and $30,000/- has been transferred on 16/06/2011 from banc a/c. no. ICA03B39 in Meryll lynch bank of the Company NAD Investment Ltd. Ans 8:- I am unable to recollect and also I am unaware of the said person. Q 9 Do you know any entity Anjaneya Hospitality Ltd. to whom amount of $50,000/- has been transferred on 23/06/2011 from bank a/c no. ICA03B39 in Meryll lynch bank of the company NAD Investment Ltd. Ans 9:- I am una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search in the form of visiting cards of Sh Anil Chaturvedi representing the foreign banks and communication of Barclays Bank as referred above, also corroborate the other incriminating materials . The Ld. Sr. Counsel has contended that the statements recorded by the Revenue doesn t constitute incriminating material for which he has placed reliance on certain judicial pronouncements. We have carefully gone through the referred decisions and it is found that they rather support the case of the Revenue in the given facts and circumstances. 68. In the case of Best Infrastructure (India) (P.) Ltd. (supra) a search was conducted in the case of investor of assessee 'T' as well as the assessee and 'T' had stated to have provided accommodation entry to the assessee, that he had received cash from assessee and in return he had given entry for share capital. In support of its assumption of jurisdiction under section 153A, the revenue had placed reliance on the statements of 'T' under section 132(4) and opined that for the purposes of section 153A these statements, by themselves, constitute incriminating material. Further, the statement of one of the Director of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132(4) of the Act. The reliance here is not on mere statements u/s 132(4) but also on the other materials that were duly confronted to the assessee. 70. The issue involved in the case of Harjeev Agarwal (supra) was computation of undisclosed income for the block period u/s 158BC of the Act and it was held by the Hon ble Delhi High Court that a statement recorded under section 132(4) can form a basis for a block assessment, only if such statement relates to any incriminating evidence of undisclosed income unearthed during search and seizure. The relevant part of the order is reproduced below: 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words evidence found as a result of search would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the scope of statement recorded under section 132(4) of the Act. To reiterate, it was held by Hon ble Delhi High Court in the case of Harjeev Agarwal (supra) that the statement under section 132(4) can be recorded not only in respect of books and documents found during the search, but also in respect of all matters relevant for the purpose of investigation connected with any proceedings under the Act. Under the circumstances, there was nothing wrong if the statement of the assessee was recorded during the search in respect of the foreign bank accounts, the information regarding which was received by the department through other sources. Such statement can be considered as incriminating evidence vis- vis the other material available with the Revenue and can be certainly utilized to compute the total income of the assessee as held by the Hon ble Supreme Court in the case of Abhisar Buildwell (supra) . 73. In the case of B. Kishore Kumar v. Deputy Commissioner of Incometax, Central Circle-IV (1), Chennai [2014] 52 taxmann.com 449 (Madras) the Assessing Officer had made additions as undisclosed income on basis of sworn statements of assessee made during search and seizure. The Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated assessment without incriminating material and against considering the statement u/s 132(4) as incriminating evidence, are dismissed. Grounds on the merits of the addition. 75. Shri Hemani, Ld. Sr. Counsel explained that the AO had made addition in respect of all the credit entries reflected in the foreign bank accounts by treating the same as income of the assessee. In first appeal, the Ld. CIT(A) had held that the bank statements had to be read in totality and that the expenses/debits as appearing in bank statements has also to be considered. By adopting this approach, the Ld. CIT(A) had partly confirmed the addition and partly allowed relief to the assessee after calling for a remand report from the AO. The detailed calculation of additions confirmed/deleted was as per Annexure 1 to 17 of the Ld. CIT(A) s order. The Ld. Sr. Counsel submitted that the bank accounts were held in the name of company NAD Investment Ltd. and Bipinbhai Patel and Manjulaben Patel were merely settlors of the Trust through which the foreign bank accounts were held. He further submitted that all the funds in the foreign bank accounts were transferred from overseas and belonged to the assessee s sister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age and no specific fault was found in the year-wise net income as worked out. The quantification of expenses, gain/loss of MF transactions and other income worked out on the basis of the entries in the foreign bank accounts, was not under dispute. Therefore, the Revenue s appeal against quantification of income as made by the Ld. CIT(A) were required to be dismissed since no fault was found by the AO in quantification of income at the remand stage. 78. The Ld. Sr. Counsel submitted that the assessee had incurred losses in certain years in MF transactions but the Ld. CIT(A) had ignored the losses and adopted Nil value for those years, which was not correct. The Ld. CIT(A) had denied the losses on the count that set off of losses was possible only if the returns were filed within the due date as per the provision of the Act, which was not the case. The Ld. Sr. Counsel submitted that even if such losses were not claimed in the return of income, the losses for the period prior to search must be allowed, for which reliance was placed on the decision of AP high Court in the case of CH Mohan vs. ACIT, (369 ITR 189) (AP). The Ld. Sr. Counsel further submitted that the assessee had filed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC). He submitted that AO was duty bound to give relief to the assessee wherever due even if it was not claimed by the assessee, for which, he relied on the decision of Hon ble Gujarat High Court in the case of S.R. Koshti Vs. CIT reported in (2205) 276 ITR 165 (Guj.). The Ld. SR. Counsel vehemently contended that the Ld. CIT(A) was not justified in adopting Nil amount in place of losses, which has resulted in denial of benefit of carry forward and set off of such losses in the succeeding years. 81. Per contra, Dr. Darsi Suman Ratnam, Ld. CIT.DR submitted that the assessee and his wife were settlor of the foreign bank accounts and as held by the ITAT, Ahmedabad in the case of Dr. Atul T Patel. v. DCIT (2019) 108 taxmann.com 227 (Ahd)(Trib.) , the settlor has to explain the investments which were not accounted for in his books of accounts or not disclosed to the revenue authorities. He further submitted that apart from making a bald statement that the trust deed documents and the foreign bank account documents were signed by the assessee in order to help his sister, the assessee didn t bring any evidence on record to establish that the amounts in the foreign bank accounts were tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. According to the Ld. CIT. DR, considering the express provision of section 115BBE of the Act, the Ld. CIT(A) was not correct in allowing set off or deduction of the expenditure as appearing in the foreign bank accounts, as such deduction was not permissible. According to the Ld. CIT. DR, the entire credit as appearing in the foreign bank accounts was liable to be taxed without allowing any set off on account of expense or loss. He further submitted that the Ld. CIT(A) was correct in disregarding the losses, as losses could have been carried forward only if the returns were filed within the due date as prescribed u/s. 139(1) of the Act, which was not complied in the present cases. He further submitted that the case laws as relied upon by the Ld. Sr. Counsel were all different on facts and not applicable to the facts of present case. Our findings on ownership of the bank accounts 83. We have carefully considered the rival submissions. The first objection of the assessee is that Shri Bipinbhai Patel and Manjulaben Patel were merely Settlors of the Trust through which foreign bank account were held in the name of company NAD Investment Ltd. That an affidavit of Shri Bipinbhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had admitted that all these documents were signed by him and his wife. Thus, the evidences brought on record by the AO establish that the actual owner of the foreign bank accounts was the assessee himself. It is true that in the course of statement recorded u/s. 132(4) of the Act, the assessee had stated that the foreign bank accounts were opened by him to help his sister Smt. Prabhavatiben Amin. However, the assessee has not explained as to why his sister, who was resident of UK (and earlier resident of Kenya), could not have opened the foreign bank accounts herself. Being a non-resident, she must be having her own account in the foreign countries. What necessitated the assessee to open foreign bank accounts on behalf of her sister? Further, if the foreign bank accounts were opened on behalf of her sister, why the ultimate beneficiaries of the foreign bank accounts and that of the Trust were not his sister or her husband or her family member. Why the ultimate beneficiaries of the trust were his own son, daughter-in-law and granddaughter of the assessee and why his sister or his family members were not named as ultimate beneficiary of the trust in the documents? No explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion of the affidavit was ignored. The Hon ble Gujarat Court had held that the Commissioner (Appeals) was not correct in accepting only part of the affidavit. The facts of that case being totally different, the assessee can t derive any benefit from the said decision. In the present case neither the assessee has supported his affidavit with any shred of evidence not any part of the affidavit was accepted by the Revenue. 87. The contention of the assessee is that neither the funds were transferred from India nor the funds were brought into India from the foreign bank accounts. However, the assessee has not brought on record any evidence in this regard. Further, merely because no funds were transferred out/into India from the foreign bank accounts, it doesn t absolve the assessee from his onus to explain the source of credits appearing in the foreign bank accounts. The assessee being resident in India, his global income was liable to be taxed in India. Under the circumstances, the onus was squarely on the assessee to explain and bring on record the evidences for source of credits as appearing in the foreign bank accounts. Apart from making a bald statement that foreign bank accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her any such evidence was brought on record by the assessee. In the absence of any contrary evidence to his declarations as made while opening the foreign bank accounts of the assessee, there was no occasion for the Revenue to conduct any enquiry with Shri Anil Chaturvedi. The contention of the assessee that no specific material was found to demonstrate that the transactions were carried out by the assessee is found to be baseless. All the evidences were confronted to the assessee and have also been discussed in detail in the assessment order, which leave no doubt about the ownership of the bank accounts. It will be apposite here to refer to some of the evidences. 90. The evidence regarding foreign bank account no. I6503B39 with Meryll Lynch bank in the name of M/s. NAD Investment Ltd., was also confronted to the assessee in the course of statement recorded u/s. 131 of the Act on 27.05.2016. The relevant questions and reply of the assessee is reproduced below: Q. No.10 In the said cheque signed by Shri Vijay M Patel for $ 6200 dated 24/05/2000, the payments is stated to be made to B.P. Patel and has been deposited in the bank account no.16503B39 in Merrill Lynch in the name NAD Inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t other country. Qs No. 28 Does mobile number 09898453287 belongs to you and used by you only? Ans : Yes. But when I give it in repairs, I don't know who uses it. Qs, No. 29 Have you made any telephonic conversation from 09898453287 with Merrill Lynch bank authorities on 12/03/2012 requesting for transfer of funds? Ans : As advised by our lawyer, I have telephoned to Merrill Lynch time and again. Qs. No. 30 Have you ever signed any account opening forms/documents for any other foreign bank accounts? Ans : As directed by my sister and Mr. Chaturvedi, I may have signed many papers. Qs. No.34 You are shown a notarized letter dated 16/08/2012 signed by you and your wife Smt. Manjulaben Patel, whereby it is stated that all balance trust funds, after revocation of trust with Merrill Lynch Bank, shall be transferred to bank account number 11370 in Hinduja Bank (Switzerland) Ltd. in the name of Nad Investment Lid having IBAN No CH12 0882 7001 1370 0184 0. Kindly state whether this foreign bank account number 11370 in Hinduja Bank (Switzerland) Ltd. belongs to you/your wife or not? Ans: The account belongs to NAD Investment Ltd. 91. It is evident from the above statement that the cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for deduction of any expense from such addition. 93. We do not find any merit in the objection raised and the grounds as taken by the Revenue. As rightly pointed out by the assessee only the real income has to be taxed as held by the Hon ble Supreme Court in the case of Godhara Electricity Co. Ltd. (supra) . The real income can be worked out only after considering all the entries i.e., on the credit side as well as on the debit side as appearing in the foreign bank accounts. Therefore, the Ld. CIT(A) had rightly considered the totality of all the transactions as appearing in the foreign bank accounts and allowed relief to the assessee in respect of the expenses as evident from the bank accounts. The contention of the Revenue that all the additions were in the nature as mentioned in section 68 or section 69 of the Act is also not found correct. The AO had reproduced the description of the credit entries appearing in the bank accounts in the assessment order from which it is found that large number of credit entries were in respect of dividend, interest, STCG, LTCG etc. and the assessee was entitled to claim deduction for the expenses incurred in earning the income of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , rejected. 96. Another objection of the assessee is that after considering the debit entries in the foreign bank accounts there were losses in certain years and the Ld. CIT(A) directed that the losses should be ignored for the purpose of computation of total income. Accordingly, income for all the years in which loss was computed was taken at Nil and the loss was not allowed to be carried forward and set off with income of subsequent years. The assessee has contended that the losses falling within the block period must be allowed for which reliance has been placed on various judicial decisions. It is found that all the decisions as relied upon by the assessee were rendered in the context of block proceeding u/s. 158BC of the Act, where a single assessment order for the entire block period was required to be passed. In the scheme of assessment u/s. 153A of the Act, there is no concept of block period and the assessment for each year is required to be completed separately. Further, in the block period only unaccounted income for the entire block period was required to be computed whereas in the proceeding u/s. 153A of the Act, the total income of the assessee (including unaccounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culative in nature as there can be no speculation in mutual fund transactions. Therefore, the contention of the assessee that the loss should be treated as short term capital loss was accepted. However, the ld. CIT(A) had only held that the assessee was not eligible to carry forward and set off of the losses with income of following years. The correctness of the loss as worked out by the assessee was neither examined by the AO in the course of remand proceeding nor by the ld. CIT(A). 99. The Ld. CIT(A) has annexed detailed working of the income and loss for different years vide Annexure-1 to Annexure-17 of his order. We have gone through the said working and it is found that the quantum of loss as mentioned therein can t be held as correct. The assessee had only considered the difference between sale and purchase value of mutual funds, as reflected in the foreign bank accounts, to work out the income / loss in such transactions. This approach itself is not found to be correct. In the working as attached by the Ld. CIT(A), the details of purchase and sale of mutual funds transacted during the year is not reflected and only net figure of Difference between sale and purchase of MFs is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S $52848.72 (subject to verification) only during the entire period from A.Y. 2000-01 to 2016-17. This net income for the entire period is based on the presumption that there was no opening stock at the beginning and no closing stock remains at the end of the period; and in the absence of any contrary evidence this will be a realistic approach. By working out the profit or loss in mutual fund transactions without taking into account the year-wise opening stock and closing stock of mutual funds, the assessee was taxed on artificial income in certain years, while the losses in the other years were ignored. In view of this discrepancy, we deem it proper to set aside the matter to the file of the AO to work out the correct profit or loss for different years on account of mutual fund transactions in the following manner: (i) The AO should work out year-wise profit/loss of mutual fund transactions after taking into account the closing stock and opening stock of shares/mutual funds for each year after allowing an opportunity of being heard to the assessee. For this purpose, he may call for the details from the assessee in respect of the opening stock/closing stock for the different years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atel on substantive basis. Therefore, the protective addition of Rs. 52,91,977/- as upheld by the Ld. CIT(A) in the hands of Smt. Manjulaben B Patel deserves to be deleted. 104. Per contra, Dr. Darsi Suman Ratnam, the ld. CIT.DR had no objection for allowing relief in respect of protective addition of unexplained jewellery in the hands of Smt. Manjulaben Patel subject to verification of the contention of the assessee that the entire substantive addition in respect of unexplained jewellery was accepted in the hands of Smt. Jigishaben Patel. 105. We have carefully considered the rival submissions. The relevant order passed in the case of Smt. Jigishaben Patel has been brought on record vide a separate paper book. It is found therefrom that the addition of unexplained jewellery of Rs. 1,03,86,888/- was made in the hands of Jigishaben Patel, 50% on protective basis and 50% on substantive basis. The Ld. CIT(A)-12 vide order dated 07.01.2019 had directed that the entire addition should be made in the hands of Smt. Jigishaben Patel on substantive basis. As per order giving effect to CIT(A) s order, the AO vide order dated 11.03.2019 had made addition of Rs. 1,04,83,953/- on account of une ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted by him at that time. Whereas, during the assessment proceedings, Smt Kusumben Patel has stated in her submission filed in this office on 18.09.2017 that the jewellery belong to Shri Bipin Patel and his family. However, Shri Bipinchandra Patel vide his submission filed in this office on 05.10.2017 has stated that the jewellery belongs to Smt. Kusumben Patel and her late husband Shri Vinod Patel and his name was kept as third holder for convenience. Surprisingly Shn Bipin Patel in his submission filed in this office on 10.10.2017 and 13.11.2017 has confirmed that the jewellery does not belong to Smt. Kusumben Patel and hesusband but it belongs to his late brother Shri Vinayak Patel. The submission of Shri Bipin Patel is summarized as under- The jewellery belong to the legal heirs of his late brother, Mr. Vinayak Patel, who passed away in 1995 and left behind a will wherein he was a executor. He filed for the probate before the city civil judge in Bangalore in 1996. In the meantime he had distributed all his jewellery among women of the family and jewellery of some of some of the women members of the family are lying with him which was kept in the said locker No.17 somewh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive basis and there is no requirement for making any protective addition in her hand as Individual. Therefore, the ground taken by the assessee as well as the Revenue in respect of substantive verses protective addition in the two hands, has become infructuous and is dismissed . 110. The issue involved in all other appeals filed by the assessee as well as by the Revenue is identical to the issues as discussed in ITA No. 1894/Ahd/2019, ITA No. 31/Ahd/2020 with CO No. 54/Ahd/2019, IT(SS)A No. 569/Ahd/2019 IT(SS)A No. 01/Ahd/2020 with CO NO. 47/Ahd/2020, which have been discussed in detail in this order. Therefore, the decisions as given in these appeals, as discussed above, will be applicable mutatis mutandis in all other appeals as well. 111. Before we close, we must place on record our sincere appreciation to the ld. Sr. Advocate Sh. Tushar Hemani the ld. CIT-DR Dr. Darsi Suman Ratnam for their erudite presentation and in-depth analysis of the issues involved in this appeal, which has helped us immensely in disposal of these appeals. 112. The final outcome of these appeals is summarized in the table below: Sl. No. ITA No. A.Y. Appeal filed by Outcome 1-2 ITA Nos. 1894 /Ahd/2019 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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