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TMI Blog2024 (10) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion is based on the involvement of Mr. Shreekanth Shenoi, an employee of the company who facilitated the remittance. The DRP suggested that the amount might have been a gift from Mr. Shenoi rather than a salary remittance. We find this contention to be without merit. The evidence on record clearly shows that Mr. Shenoi was merely facilitating the withdrawal and transfer of the performance incentive from the company s account to the NRE account of Mrs. Aashita P. Pancholi. The remittance receipt and the certificate from the employer both confirm that the amount was a part of Mrs. Aashita s performance bonus, and there is no evidence to suggest that it was a gratuitous gift from Mr. Shenoi. The employer s statement that this was part of the company s usual practice for handling such remittances further supports the assessee s explanation. Section 56(2)(x) applies to gifts or transfers without consideration, but in this case, the remittance was part of the salary earned by Mrs. Aashita P. Pancholi for services rendered in the UAE. There is no element of a gift or gratuitous receipt involved, and hence, the DRP s alternative finding u/s 56(2)(x) of the Act is incorrect and is acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... External) and NRO (Non-Resident Ordinary) bank accounts in India. 2.1. The assessee did not file his Income Tax Return (ITR) for A.Y. 2018-19, as his only taxable income in India was Rs. 42,000/-, which was below the threshold for mandatory filing. Based on Specific Financial Transaction (SFT) information, the Assessing Officer (AO) initiated proceedings under Section 148A/147 of the Act. The proceedings were initiated after identifying the following transactions: 1. Purchase of immovable property for Rs. 1,23,76,000/-. 2. Investment in shares of Rs. 67,00,000/-. 3. Credit card payments amounting to Rs. 10,12,294/-. 2.2. During the assessment proceedings, the assessee furnished all requisite documents and explanations concerning the SFT transactions. After verifying the documentary evidence, the AO did not make any additions with respect to the immovable property purchase, share investment, or credit card payments. However, the AO identified certain credits in the assessee s NRO account (SBI Account No. 10295568709) as follows: Rs. 89,00,000/- credited on 23/03/2018. Rs. 89,00,000/- credited on 22/03/2018. Rs. 25,00,000/- credited on 21/03/2018. 2.3. The assessee explained the sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to the AO to proceed with the alternate treatment as income to be taxed under Section 56(2)(x) of the Act. The AO passed the order u/s 143(3) of the Act r.w.s. 144C (13) of the Act adding Rs. 25,00,000/- under section 69A of the Act as unexplained credit. 3. Aggrieved by the order of the AO, the assessee is in appeal before us with following grounds of appeal: That, the A.O. erred in making an addition of Rs. 25,00,000/- in respect of the credit in NRO Bank Account ( and not NRE account) of the assessee (jointly held with his wife) which, in turn, was transferred from his NRE Bank Account (jointly held with his wife), on the ground of remaining unexplained pursuant to the directions of the Dispute Resolution Panel, although the A.O. had expressed his complete satisfaction with the evidences including additional evidences filed before the DRP in his Remand Report dt.9-11-2023 and the DRP has simply made assumptions and presumptions to suit its own convenience without affording any opportunity of hearing and without adducing any evidence contrary to the finding of the A.O. in the remand report. It is submitted that on the basis of the evidences produced, the amount of Rs. 250000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. We also observed that there are many such withdrawal by the said Mr. Shenoi during the period covered by the statement. 5. On the other hand, the Departmental Representative (DR) argued that the Rs. 25,00,000/- credited to the assessee's NRO account on 21/03/2018 was not properly explained. The DR emphasized that the remittance of AED 145,000 (Rs. 25,60,654/-) to the NRE account was made through Mr. Shreekanth Shenoi, an employee of the company Water Systems Speciality Chemicals DMCC, where the assessee s wife, Mrs. Aashita P. Pancholi, worked. The DR contended that Mr. Shenoi withdrew the amount from the company s bank account and deposited it into the NRE account of the assessee and his wife. The DR argued that this transfer, facilitated by Mr. Shenoi, raises questions about the nature of the transaction. The DR submitted that the employee (Mr. Shenoi) does not have the authority to withdraw money from the company's account and deposit it into the NRE account. The DR argued that this fact indicated that the amount could be considered unexplained or not directly related to salary. The DR contended that even if the amount was shown as received in the NRE account, it cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emittance from the employer is well-documented and legitimate. Therefore, we find that the AO s addition of Rs. 25,00,000/- under Section 69A is unsustainable and should be deleted. 6.3. The Dispute Resolution Panel (DRP) took an alternative view that the amount of Rs. 25,00,000/- should be treated as a gift under Section 56(2)(x) of the Act. This conclusion is based on the involvement of Mr. Shreekanth Shenoi, an employee of the company who facilitated the remittance. The DRP suggested that the amount might have been a gift from Mr. Shenoi rather than a salary remittance. We find this contention to be without merit. The evidence on record clearly shows that Mr. Shenoi was merely facilitating the withdrawal and transfer of the performance incentive from the company s account to the NRE account of Mrs. Aashita P. Pancholi. The remittance receipt and the certificate from the employer both confirm that the amount was a part of Mrs. Aashita s performance bonus, and there is no evidence to suggest that it was a gratuitous gift from Mr. Shenoi. The employer s statement that this was part of the company s usual practice for handling such remittances further supports the assessee s explana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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