9911796707
TMI Blog2009 (5) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 from NRE account of one Shri Vinod Goel. The said amount was credited in the SB account No. 21999 of Dena Bank, Parel and the amount was realized by demand draft No. 734768 dt. 1st Jan., 1992 issued by ANZ Grindlays Bank, 90, Mahatma Gandhi Road, Mumbai Branch. It appears that the said amount was transferred from NRE saving account No. OIS-BP-23639-00 of Mr. Vinod Goel/Ms. Cirilla Goel. The assessee pleaded that the amount of Rs. 2,57,000 was received by him under the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 (in short 'Foreign Exchange Immunity Act') and therefore, the said amount could not be taxed. The assessee also took the plea that as per the immunity given under the said Act, no enquiry in respect of the nature, source and purpose of the remittance can be made or instituted. The assessee has also filed the order passed by FERA Board dt. 30th June, 1997. The AO was of the opinion that the order filed by the assessee has no relevance with the claim made in respect of Rs. 2,57,000 as the said order remanded some 37 cases back to the adjudicating officer of the Enforcement Directorate to redo said cases in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Bombay, in the review petition filed by Shri Vinod Goel dt. 14th Feb., 1996, it was observed that there is no question of either the petitioner or any person claiming to be the recipient from him (i.e., Shri Vinod Goel) any person claiming to be a recipient from him, enjoy the immunity. The entire case of the Enforcement Directorate was based on the fact that Shri Vinod Goel had not filed the foreign declaration form by taking the stand that there was a rush at the customs counters at airport and hence, he could not file required declaration under FERA. The AO, therefore, brought to tax the sum of Rs. 2,57,000 as income from undisclosed sources. The said assessment order was in first round reached before the Tribunal and the Tribunal framed the question whether the assessee was entitled to immunity under the Foreign Exchange Remittance Scheme, 1991 and if not whether the deposits of Rs. 2,57,000 in his Dena Bank account can be said to be otherwise satisfactorily explained. The Tribunal has also considered in detail the case of Shri Vinod Goel, who was a Canadian citizen and was also holding the Canadian passport, from whom the assessee has received the said amount. After elaborat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shri Sanjiv Goel exchanged the collected foreign currency from local market, as alleged, at M/s Thomas Cook and that was credited to NRE account of Shri Vinod Goel. Mr. Sanjiv Goel issued the cheques by taking the premium from the beneficiaries. On the basis of the information from DDI, Unit-3, Mumbai and Dy. Director, Foreign Exchange Regulation Department, proceedings under s. 147 were initiated against Shri Anil Tibrewalla and assessment was framed making addition in respect of amount received from Shri Vinod Goel. The said matter reached the Tribunal by way of appeal on the issue of validity of the notice issued under s. 148. The Tribunal after elaborate discussion and also considering the observations made by the Hon'ble High Court of Bombay in the review petition filed by Shri Vinod Goel against the Enforcement Directorate as well as in the appeal being Review Petn. No. 22 of 1995 (in Writ Petn. No. 647 of 1995) and the Appeal No. 729 of 1995 (in Writ Petn. No. 1537 of 1995) held that the observations of the review petition and other material which were heavily relied by the tax authorities would only prima facie show that the remittance of the gift was not in convertible f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suspect. There should be a reasonable basis to believe that the income chargeable to tax has escaped assessment. The assessee has not earned income from any other source except the interest income. It is not the case of the Revenue that he has any income generating activity from which income was earned and the same has escaped assessment. In 1997, when the AO initiated the reassessment proceedings, Mr. Sanjiv Goel having retracted his earlier statement the AO could not have merely based on his first statement without any other supporting material to reopen the assessment. At the stage when the reasons were recorded for reopening the assessment the AO had no material to prima facie show that gift given to the assessee was also not genuine. Neither the first statement of Mr. Sanjeev Goel nor the letter of FERA authorities pinpoint that the gift received by assessee is not genuine. In the case of Coca Cola Export Corporation vs. ITO (1998) 146 CTR (SC) 250 : (1998) 231 ITR 200 (SC) the Hon'ble Supreme Court observed that the decision taken by different Departments exercising powers under different enactments cannot constitute information to the ITO for the purposes of reopening assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and initiate proceeding under the GT Act, 1958. Question No. 2-Whether the non-resident donor of any India Development Bond will be exempt from gift-tax? Ans.-Yes the non-resident donor will be exempt from gift-tax. Sec. 6(1)(a) of the Act provides that the non-resident Indian or the overseas corporate body owning the bonds as well as the person resident in India to whom a gift of such bond is made, will not be required to disclose the source of the investment in such bonds. For this reason, and in view of the specific provision in s. 6(1)(b) of the Act barring any inquiry or investigation under the direct tax laws merely on the ground of owning such bonds, the tax authorities cannot initiate any proceedings for levy of gift-tax on the non-resident owner of such bonds.' In the light of the decision of the Hon'ble Supreme Court in the case of UCO Bank vs. CIT (I999) 154 CTR (SC) 88 : (I999) 237 ITR 889 (SC), the circulars issued by the CBDT are binding on the Department and unless there is positive evidence to show that the assessee's case is not covered by the Immunity Act, reopening is not permissible under s. 148 of the Act. The order of the Hon'ble Bombay High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng is arrived at after considering the issue on merit as CBDT Circular No. 611, dt. 30th Sept., 1991 as well as scheme of 'Foreign Exchange Immunity Act' has been examined and hence, observations and findings in the decision of Anil Tibrewala, are squarely applicable to the present case. It is seen that both the tax authorities have given much more importance to the observations of their Lordships in Review Petn. No. 22 of 1995 and Appeal No. 729 of 1995 which was filed by Shri Vinod Goel which were mainly concerned for freezing the bank account operation of Shri Vinod Goel in ANZ Grindlays Bank and City Bank under s. 73(3) of the FERA 1973, In the said judgment, the validity of the impugned show-cause notices were kept open for being urged before the statutory authority under FERA and also for urging the same in writ petition which may be filed after the order of the adjudication was passed by the adjudicating authority. Though the matter was carried to the Hon'ble Supreme Court by Shri Vinod Goel by way of SLP but the same was disposed of without expressing any opinion on merit, and thereafter, Shri Vinod Goel again filed review petition in the Hon'ble High Court of Bombay. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
