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TMI Blog2025 (1) TMI 1395X X X X Extracts X X X X X X X X Extracts X X X X ..... ich her spouse was a director. Reason for rejection by the DRP that, it is baffling and beyond one's logic as to why in this digital era any person would carry dollars physically. We agree with assessee, is absolutely a flimsy reason and of no consequence for rejecting the assessee's explanation. It is immaterial for the purpose of proving the genuineness of the transaction, we hold, as to why any person would carry dollars in cash ,as long as the fact of the assessee carrying the dollar in cash was duly evidenced with documents which is not disputed by the Department also. DRP has also noted that the assessee has failed to explain the source of 50,000 USD which we find is absolutely incorrect. All the documents filed by the assessee duly explain the source of 50,000 USD as being from withdrawals effected from SSPL. DRP has not pointed out as to how the said documents failed to prove the source of 50,000 USD. Revenue authority had no substantial reasons for rejecting the assessee's explanation of the source of deposits in cash in her bank account which we find was duly evidenced with proper supporting documents. No reason to confirm the order of the AO and the addition, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recording finding that the assessee had failed to discharge her onus of explaining the source of investment with the supporting documents, when the fact on record are completely to the contrary reflecting that the assessee had filed all supporting evidences, explaining the source of the said investment, as coming out of the advances given by her son to the assessee from his foreign account. Addition made on account of unexplained investment is held to be untenable on the facts, and the AO is directed to delete the same. Addition made to the income of the assessee on account of cash deposited in her bank account, source of which remained unexplained - HELD THAT:- Asessee's explanation of the credit in her bank account being the reimbursement of her travelling expenses by "SHTL" was rejected for the reason that the assessee failed to explain the relationship between her and the said company and rationale for the said transaction. We have noted that the assessee had explained that she was promoter director of the said company, and she had visited also for the official purpose, and the company, therefore, reimbursed her travelling expenses. Therefore, the assessee, we find, had explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stamp duty charges and registration fees of Rs. 26,19,000/- for the aforementioned immovable property. iv) Unexplained cash deposit in bank account of the assessee of Rs. 2,07,440/-, under section 69A of the Act. 4. It was contended that the AO had proposed the above additions in a draft order passed in terms of provisions of section 144C(3) of the Act, to which the assessee had filed objections to the DRP, and the DRP accordingly, after considering the contentions of the assessee rejected all the objections of the assessee in its order passed under section 144C(5) of the Act. The AO accordingly thereafter passed final order in accordance with the directions of the DRP making all the aforementioned additions to the income of the assessee. Aggrieved by the same the assessee has come up in appeal before us raising the following grounds: 01. That the Income Tax Officer, Ward -1, International Taxation Ahmedabad and Ld DRP has erred both in law and on facts while making the various additions of Rs. 2,64,45,446/- against the returned Income of Rs. 385/-, and therefore the additions made while passing the order u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 is requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in support of its contentions, it was directed to list in tabular form all the documents which were placed before the authorities below i.e. AO/DRP ,to prove the source of the cash deposited in bank account, and the investments made in immovable property. The said direction was complied with by the ld.counsel for the assessee, and shall be referred to in our order as and when required. 9. Taking up the first issue raised in ground no.4, regarding the source of cash deposited in the bank account of the assessee amounting to Rs. 35,67,644/- remaining unexplained, we find that the assessee's explanation of the same was to the effect that the same represented 50,000 USD deposited in her bank account, which was sourced from withdrawals made from a company in South Africa where the assessee's spouse was a director; that this amount of 50,000 USD was carried in cash by the assessee immediately after withdrawing in SA to India; that the same was declared to the Custom Authority in India, and on reaching India, it was immediately deposited in Indian NRE bank account of the assessee. It is noted that it is an undisputed fact that the assessee is a non-resident and all the transactions no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or a contra confirmation along with ledger account of the said company. 12. Before the DRP, the assessee submitted additional evidences explaining that the amount withdrawn from the "SPPL" was in South African currency "ZAR" and the AO had incorrectly converted it at US dollar exchange rate therefore arriving at a much larger figure of withdrawal in Indian Rupees. That on conversion of ZAR withdrawn in US Dollars it matched with the figure of 50,000 US Dollars and there was factually no discrepancy in the amount withdrawn from the South African Bank account and deposited in the Indian Bank account. That after withdrawal of this currency, it was converted in USD amounting to 50,000 USD, which was carried to India, and declared in currency declaration forms at Ahmedabad Airport, and thereafter deposited in NRE account of the assessee. It was pointed out that these amounts were withdrawn both by the assessee and her husband from "SPPL" and deposited in the NRE bank account in India which was a joint account with her husband. All the documents evidencing the above facts were filed before Ld.CIT(A), which being additional evidences were was sent to the AO for his comments, who agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's explanation of the source of cash deposited amounting to Rs. 35,67,644/-. The assessee's explanation of the amount having been sourced from the withdrawal made from the "SPPL" in which her husband was a director, is not disputed by the authorities below. In fact, as noted above by us, the assessee had filed all documentary evidences, proving the same ,right from bank statement of "SPPL" showing withdrawal of the necessary amount in the currency of the country of residence i.e. ZAR, the document evidencing the conversion of ZAR in 50,000 USD by the assessee and her husband, declaration of this 50,000 USD to the Custom Authority in India when the assessee and her husband carried the amount immediately after withdrawal from South Africa to India, and deposited the same immediately thereafter in the Indian Bank NRE account of the assessee, jointly held with her husband. The assessee has also filed confirmation of the said facts from the auditors of the "SPPL". The assessee, we have noted, also explained the relationship between the said company and herself by pointing out that her spouse is a director of the company, which was one director company. All these evidences have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee regarding the source of the same as having been paid by a foreign company, Sea Horse Technologies Ltd. ("SHTL"), directly to the developer of the said plot i.e. Macrotech Developers in two instalments. On 17.3.2021 Rs. 69,28,545/-, and on 30.3.2021 of Rs. 1,30,92,817/-. 19. Before us, the assessee has listed evidences filed in this regard to the authorities below as under: 1) Sea Horse Technologies Limited Bank Statement with AFRASIA Bank A/c No. 001600004032011. Where the amount transfer to Macrotech Developers Limited is reflected on 17/03/2021 and 30/03/2021 respectively. 2) Confirmation/Resolution of Sea Horse Technologies Limited for payment of US $520,045.54 to Macrotech Developers Limited on behalf of spouse of the Assessee 3) Confirmation of Transactions by Capital Horizons, a Management Company of Sea Horse Technologies Limited for payment of respective amount of respective date to Macrotech Developers Limited on behalf of Mr. Sanjeev Bhatt, Assessee's spouse. 4) Share Certificate of Sea Horse Technologies Limited in the name of The Trishul Trust 5) Statutory Register of The Trishul Trust and details of settler and benificiaries of Trust 6) Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant has failed to explain source of investment/purchase of property of Rs.20021362/- and the same has been treated as unexplained investment/purchase of property of the assessee. Therefore, this objection raised by the applicant is not tenable and is hereby rejected. 22. On perusal of the above, it is revealed that the Revenue authorities did not dispute the fact of the amount being invested by "SHTL" and payment being made by them directly to the developers. The only reason apparently for rejecting the assessee's explanation is that there is no explanation as to why this amount has been transferred by the said foreign company on behalf of the assessee, and also on account of proper confirmation of the said transaction not being filed by the assessee from the foreign entity. 23. As for the reason for rejecting the assessee's explanation in the absence of any explanation furnished by the assessee, as to why the impugned investment was made by the foreign entity, we do not find any substance in the same. As long as there is no dispute about the fact of the investment being made by the said foreign entity, why the foreign entity made the investment, does not impinge in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the above, the assessee had submitted copy of her ICICI Bank account reflecting credit of 25,97,110/- as coming from the bank account of her son, from his foreign account viz. Investec Specialist Bank Account. Copy of the said account of the assessee's son; confirmation from her son, along with foreign exchange advice and payment advice of investment bank was filed, as also ITR of his son. The reason for rejecting the assessee's explanation by the DRP is contained in para 8.3.1 to 8.3.4 as under: "8.3.1 The panel has considered the content of the objection, the stand taken by the Ld. AO, submissions made and arguments presented by the Ld. AR. This panel notes that the explanation of the applicant regarding the proposed addition of Rs. 26,49,000/- on account of unexplained investment u/s 69 of the I.T. Act, 1961 is carefully gone through, however, the same is not acceptable on the following grounds; 8.3.2 The applicant had paid an amount of Rs. 2619000/- towards stamp duty and Rs. 30000/- for registration fees. During the course of DRP proceeding the applicant stated that the amount of Rs. 26,49,000/- has not been paid by the her and the amount of Rs. 26,49,000/- was pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of unexplained investment is held to be untenable on the facts, and the AO is directed to delete the same. Ground No.6 is allowed. 31. Ground No.7 relates to the addition made to the income of the assessee on account of cash of Rs. 2,07,440/- found deposited in her bank account, source of which remained unexplained. The orders of the authorities below as well as the arguments of the ld.counsel for the assessee before us are to the effect that the same pertained to the reimbursement of travelling expenses to the assessee by a company viz. "SHTL" in which she was a director; that the invoices of the travelling expenses viz. tickets purchased by the assessee were filed as evidence; ledger account of the company making reimbursement was also filed; as also the bank statement of "SHTL" and the ITR of the said company. The assessee, before us, has tabulated evidences so filed by in support of her explanation as under: 1) Travelling tickets buy from Satguru Travels Private Limited, South Africa. The Invoice for the same is attached 2) 50% of ZAR 86,860/- i.e. ZAR 43,430/- * Rs. 4.78/- 2,07,440/- travelling expenses reimberse by Sea Horse Technologies Private Limited. The Led ..... X X X X Extracts X X X X X X X X Extracts X X X X
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