HEMANT MANSUKHLAL PANDYA, MUMBAI V. DCIT (IT) 3(3)(2), MUMBAI

CO 59/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2234 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 06-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVRAM SHRI RAHUL SARDA
• Keywords: Reopening of assessment; Residential status; Double taxation relief; Peak credit; Source of fund; Deemed to accrue or arise in india; Question of law; Reassessment proceedings
• Section: 142(1); 5(2); 147; 68; 69; 148; 144

Judgement Text

1 HEMANT MANSUKHALAL PANDYA IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI PAWAN SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.4679/MUM/2016 (ASSESSMENT YEAR: 2006-07) & I.T.A NO.4680/MUM/2016 (ASSESSMENT YEAR: 2007-08) DCIT (IT)-3(3)(2), MUMBAI VS SHRI HEMANT MANSUKHLA L PANDYA B 201/202, DHEERAJ KUNJ BAJAJ ROAD, VILE PARLE (W) MUMBAI 400 056 PAN : AGPPP6132P APPELLANT RESPONDEDNT C.O.58/MUM/2018 (ARISING OUT OF I.T.A NO.4679/MUM/2016) (ASSESSMENT YEAR: 2006-07) & C.O.59/MUM/2018 (ARISING OUT OF I.T.A NO.4680/MUM/2016) (ASSESSMENT YEAR: 2007-08) SHRI HEMANT MANSUKHLAL PANDYA B 201/202, DHEERAJ KUNJ BAJAJ ROAD, VILE PARLE (W) MUMBAI 400 056 VS DCIT (IT)-3(3)(2), MUMBAI CROSS OBJECTOR RESPONDEDNT ASSESSEE BY DR K SHIVRAM / SHRI RAHUL SARDA RESPONDENT BY SHRI HM SINGH / SHRI ABI RAMA KARTIKEYAN 2 HEMANT MANSUKHALAL PANDYA DATE OF HEARING 18-10-2018 DATE OF PRONOUNCEMENT 16-11-2018 O R D E R PER G MANJUNATHA, AM : THESE TWO APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE, BUT IDENTIC AL ORDERS OF CIT(A)-56, MUMBAI DATED 21-03-2016 FOR THE ASSESSMENT YEARS 20 06-07 & 2007-08. SINCE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE REVENUE, MORE OR LESS TAKEN UP COMMON GROUND S OF APPEAL FOR BOTH THE ASSESSMENT YEARS. FOR THE SAKE OF BREVITY, GRO UNDS OF APPEAL TAKEN FOR AY 2006-07 ARE EXTRACTED BELOW:- 1. 'WHETHER CIT(APPEAL) WAS CORRECT IN HOLDING THE CON TENTION OF THE ASSESSEE THAT IT IS FABRICATED/MANUFACTURED DATA WI TH SOME MALAFIDE INTENTION, AND HAS IGNORED THE FACT THAT THE ASSESSEE DID NOT GIVE ANY EVIDENCE/PROOF IN THIS REGARD. 2. LD. CIT(A) ERRED IN IGNORING THE FACT THAT THE ASSESSEE DID NOT SIGN CONSENT WAIVER FORM FOR CARRYING OUT ANY FURTHER ENQUIRY FR OM SWISS HSBC BRANCH WHICH COULD HAVE PROVIDED ALL RELEVANT INFORMATION. CIT(A) HAS IGNORED THIS VITAL ISSUE IN HIS ORDER AND STATED THAT AO SHOULD HAVE PROVED RELIABLE AND AUTHENTIC EVIDENCE, WHEREAS THE ASSESSEE HIMSELF TH WARTED SUCH ATTEMPT. MORE SO WHEN ASSESSEE HAS NOT DENIED BEFORE ANY AUTHORIT Y THAT SUCH ACCOUNT DOES NOT BELONG TO HIM. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A NON RESIDENT SINCE FINANCIAL YEAR 1995-96. THE ASSESSEE IS A DIRECTOR IN A COMPANY IN JAPAN AND LIVING IN JAPAN ON BUSINESS VISA SINCE 1990. THE A SSESSEE HAS GOT PERMANENT RESIDENCY CERTIFICATE FROM JAPAN IN 2001. THE ASSE SSEE HAS FILED HIS RETURN OF 3 HEMANT MANSUKHALAL PANDYA INCOME FOR AY 2006-07 ON 29-03-2007 DECLARING TOTA L INCOME OF RS.5,51,667. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF TH E INCOME-TAX ACT, 1961 ON 12-06-2007. 4. THE ASSESSMENT HAS BEEN REOPENED U/S 147 OF THE INCOME-TAX ACT, 1961 FOR THE REASONS RECORDED AS PER WHICH INFORMATION W AS RECEIVED BY GOVERNMENT OF INDIA FROM THE FRENCH GOVERNMENT UNDE R DTAA IN EXERCISE OF ITS SOVEREIGN POWERS THAT SOME INDIAN NATIONALS AND RESIDENTS HAVE FOREIGN BANK ACCOUNTS IN HSBC PRIVATE BANK (SWISSE SA, GENE VA) WHICH WERE UNDISCLOSED TO THE INDIAN INCOME-TAX DEPARTMENT. T HIS INFORMATION WAS RECEIVED IN THE FORM OF A DOCUMENT (HEREINAFTER REF ERRED TO AS BASE NOTE) WHEREIN DETAILS OF ACCOUNT HOLDERS SUCH AS NAME, DA TE OF BIRTH, PLACE OF BIRTH, SEX, RESIDENTIAL ADDRESS, PROFESSION, NATIONALITY A LONGWITH DATE OF OPENING OF THE SAID BANK ACCOUNT AND ALSO BALANCE IN CERTAIN Y EARS, ETC. ARE MENTIONED. THE INFORMATION RECEIVED FROM THE FRENCH GOVERNMENT HAS BEEN PROCESSED WITH THAT OF THE ASSESSEES INDIAN INCOME-TAX RETUR N AND FOUND THAT THE DETAILS CONTAINED IN BASE NOTE IS MATCHING WITH THE INFORMA TION PROVIDED BY THE ASSESSEE IN HIS INCOME-TAX RETURN. ACCORDINGLY, TH E DDIT(INV), UNIT VII(4), MUMBAI HAS SENT INFORMATION TO THE CONCERNED AO FOR FURTHER ACTION. THE AO ISSUED NOTICE U/S 148 OF THE ACT ON 20-11-2014 WITH THE FOLLOWING REASONS RECORDED FOR REOPENING OF THE ASSESSMENT:- 4 HEMANT MANSUKHALAL PANDYA 'THE CASE OF HEMANT MANSUKHLAL PANDYA WAS CENTRALIZ ED WITH THE UNDERSIGNED VIDE ORDER NO. DIT(IT)-LI/JURIS.L27(2)/ 2014-15, DATED 12.11.2014. INFORMATION HAS BEEN RECEIVED IN RESPECT OF HIM FRO M THE OFFICE OF DDJT(INV.)UNIT-VII(4), MUMBAI. TLIE INFORMATION PER TAINS TO HIS HAVING A BANK ACCOUNT WITH HSBC BANK, GENEVA BEARING A NUMBER BUP _$IFIC_PER_ID - 5090145003. FROM THE SAID BANK STATEMENT, IT IS SEE N THAT HE IS HAVING A PEAK BALANCE OF USD 6237932.15 IN THE SAID ACCOUNT DURIN G THE PERIOD 2005 TO 2007. IT IS FURTHER SEEN FROM TFA SAID BANK ACCOUNT THAT AN AMOUNT OF USD 444171 IS REFLECTED IN HIS CREDIT IN DECEMBER 2005. THE RECOR DS OF THIS OFFICE SHOW THAT THERE IS NO RETURN OF INCOME FILED BY HIM FOR THE R ELEVANT ASSESSMENT YEAR AND THIS INCOME THEREFORE HAS ESCAPED ASSESSMENT. THIS EVIDE NCE HAS COME INTO THE POSSESSION OF THE UNDERSIGNED; I HAVE REASON TO BEL IEVE THAT THE INCOME TO THE EXTENT OF ATLEAST USD 444171 HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PARA (D) TO THE EXPLANATION 2 BELOW SECTION 147OF'THE AC T' 5. IN RESPONSE TO NOTICE, THE ASSESSEE, THROUGH HIS A.R. SHRI V.A.PARIKH, CA, HAS FILED HIS OBJECTION FOR REOPENING OF THE ASSESS MENT, VIDE HIS LETTER DATED 25-11-2014. THE OBJECTION FILED BY THE ASSESSEE HA S BEEN DULY DISPOSED OF BY THE AO VIDE HIS ORDER DATED 28-11-2014. THEREAFTER , THE ASSESSEE HAS FILED A LETTER AND STATED THAT THE RETURN FILED U/S 139(1) SHALL BE TREATED AS THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF TH E INCOME-TAX ACT, 1961. THE CASE HAS BEEN TAKEN UP FOR SCRUTINY AND ACCORDINGLY , A NOTICE U/S 142(1) OF THE ACT DATED 28-11-2014 WAS ISSUED CALLING FOR VARIOUS DETAILS INCLUDING DETAILS OF BANK ACCOUNTS MAINTAINED IN HSBC, GENEVA IN ORIGINA L CD AND OTHER DETAILS. IN RESPONSE TO NOTICE, THE ASSESSEE, VIDE HIS SUBMISSI ON DATED 19-12-2014 STATED THAT HE IS A NON RESIDENT FOR MORE THAN 25 YEARS AN D BEING A NON RESIDENT, HE IS NOT UNDER OBLIGATION TO DECLARE HIS FOREIGN ASSETS AND FOREIGN INCOME TO THE INDIAN INCOME-TAX AUTHORITIES; HENCE, THE QUESTION OF SUBMITTING THE CD OF THE HSBC BANK ACCOUNT OR THE CONSENT WAIVER FORM DOES N OT ARISE. FURTHER, THE 5 HEMANT MANSUKHALAL PANDYA AO, ISSUED NOTICES U/S 143(2) AND 142(1) OF THE ACT ON 22-02-2014 AND ASKED THE ASSESSEE TO FILE NECESSARY DETAILS IN SUPPORT O F HSBC BANK ACCOUNT MAINTAINED IN GENEVA AND ALSO SHOW CAUSE AS TO WHY ASSESSMENT SHALL NOT BE FRAMED U/S 144 OF THE INCOME-TAX ACT, 1961 BASED ON MATERIAL AVAILABLE ON RECORD. 6. IN RESPONSE TO THE NOTICES, THE ASSESSEE, VIDE H IS SUBMISSIONS DATED 31- 12-2014 AND 05-01-2015, FILED AN AFFIDAVIT DATED 29 -12-2014 AND STATED THAT HIS FOREIGN BANK ACCOUNTS AND FOREIGN ASSETS HAVE N O CONNECTION WITH INDIA OR ANY INDIAN BUSINESS. NO AMOUNTS FROM INDIA HAVE BE EN TRANSFERRED TO ANY OF HIS FOREIGN ACCOUNTS DIRECTLY OR INDIRECTLY. FURTH ER, THE ASSESSEE CHALLENGED THE AUTHENTICITY AND CORRECTNESS OF THE BASE NOTE AND C ONTENDED THAT NO ADDITION CAN BE MADE MERELY ON ASSUMPTIONS OR PRESUMPTIONS. THE ASSESSEE FURTHER SUBMITTED THAT HE IS A NON RESIDENT INDIAN SINCE 19 90, I.E. FOR MORE THAN 15 YEARS. HE WENT TO JAPAN ON BUSINESS VISA IN 1990 A ND WORKED THERE TILL 2001 AND AFTER 2001, HE BECOME PERMANENT RESIDENT OF JAP AN, THEREFORE, THE BANK ACCOUNT MAINTAINED IN HSBC, GENEVA IS HAVING NO CON NECTION WITH INDIA AND ACCORDINGLY QUESTION OF FURNISHING DETAILS OF BANK ACCOUNTS AND FOREIGN ASSETS DOES NOT ARISE. HE FURTHER STATED THAT HE HAS FILE D HIS INCOME-TAX RETURN REGULARLY IN INDIA IN THE STATUS OF NON RESIDENT DE CLARING WHATEVER INCOME ACCRUED OR DEEMED TO ACCRUE IN INDIA AND SUCH RETUR NS HAVE BEEN ACCEPTED BY 6 HEMANT MANSUKHALAL PANDYA THE DEPARTMENT. IN THE ABSENCE OF ANY PROVISIONS T O DECLARE FOREIGN BANK ACCOUNTS AND ASSETS BY NON RESIDENTS TO INDIAN INCO ME-TAX DEPARTMENT, THE QUESTION OF DISCLOSING THOSE ACCOUNTS TO INDIAN INC OME-TAX DEPARTMENT DOES NOT ARISE AND CONSEQUENTLY, THE AMOUNT LYING IN HSB C GENEVA ACCOUNT CANNOT BE TAXED IN INDIA. 7. THE AO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT WHEN THE INFORMATION RECEIVED FROM TWO SOVEREIGN COUNTRI ES SHOWS THAT THE ASSESSEE IS HAVING BANK ACCOUNTS IN HSBC, GENEVA, I T IS FOR THE ASSESSEE TO PROVE THAT THE SAID BANK ACCOUNT HAD NO CONNECTION WITH INDIAN INCOME OR THE SAID DEPOSITS ARE NOT SOURCED OUT OF INCOME RECEIVE D OR ACCRUED IN INDIA. AS THE ASSESSEE HAS CHOSEN NOT TO PRODUCE THE DETAILS OF HIS HSBC BANK ACCOUNT AND THE SOURCE OF DEPOSITS THERETO, EVEN THOUGH HE COULD HAVE OBTAINED ALL THE DETAILS / EVIDENCES FOR THE SAME, THE ONLY COROLLAR Y THAT COULD BE DRAWN IS THAT THE ASSESSEE HAS DECIDED TO WITHHOLD THE INFORMATIO N AS IT WOULD HAVE GONE AGAINST HIM. THUS, AS PER THE PROVISIONS OF SECTIO N 114 OF THE INDIAN EVIDENCE ACT ALSO IT NEEDS TO BE HELD THAT AT THIS STAGE THA T THE INFORMATION / DETAILS NOT FURNISHED WERE UNFAVOURABLE TO THE ASSESSEE AND THA T THE SOURCE OF MONEY DEPOSITED IN HSBC ACCOUNT IS UNDISCLOSED AND SOURCE D FROM INDIA. THE AO FURTHER OBSERVED THAT THE ASSESSEE INSTEAD OF FURNI SHING RELEVANT DETAILS TO EXPLAIN THE SOURCE OF DEPOSITS FOUND IN HSBC BANK, GENEVA, QUESTIONED THE 7 HEMANT MANSUKHALAL PANDYA GENUINENESS AND THE AUTHENTICITY OF THE BASE NOTE, BUT FACT REMAINS THAT THE GENUINENESS AND THE AUTHENTICITY OF THE BASE NOTE H AS ALREADY BEEN EXPLAINED AND THE SAME HAS BEEN PROVIDED TO THE ASSESSEE. DE SPITE VARIOUS OPPORTUNITIES GIVEN, THE ASSESSEE CHOSE NOT TO OFFE R ANY EXPLANATION TO THE SOURCE OF DEPOSITS MADE IN THOSE ACCOUNTS ON THE CO NTENTION THAT AS A NON RESIDENT, HE HAS UNDER NO OBLIGATION TO PROVIDE SUC H EXPLANATION. ALTHOUGH, THE ASSESSEE CLAIMS TO HAVE NO BUSINESS CONNECTION IN INDIA, HE HAD PROPERTIES IN INDIA AND ALSO A DEMAT ACCOUNT IN WHICH THE PORT FOLIO VALUATION AS ON 16-02- 2015 IS RS.1,04,82,026 FROM 55 SHARES. DURING ASSE SSMENT PROCEEDINGS, THE ASSESSEE HAS PRODUCED PERMANENT RESIDENCY CARD OF J APAN WHICH IS VALID FROM 27-11-2001. WHEN HE WAS ASKED TO PRODUCE PROOF TO SHOW THAT HE WAS PERMITTED TO HAVE BUSINESS / PROFESSION OR WORK PER MIT IN JAPAN OR ANY OTHER COUNTRY IN WHICH WAS EARNING HIS INCOME PRIOR TO 20 01, THE ASSESSEE CHOSE NOT TO PROVIDE ANY DETAILS. THEREFORE, THE ONLY CONCLU SION THAT CAN BE DRAWN IS THAT PRIOR TO THIS DATE, THE ASSESSEE CANNOT BE ENG AGED IN ANY BUSINESS, PROFESSION OF EMPLOYMENT IN JAPAN. THEREFORE, HE O PINED THAT CREDITS FOUND IN HSBC BANK, GENEVA IS UNDISCLOSED TO INDIAN INCOME-T AX DEPARTMENT AND ACCORDINGLY MADE ADDITION OF RS.4,28,95,304 TO THE RETURNED INCOME. THE RELEVANT OBSERVATIONS OF THE AO ARE EXTRACTED BELOW :- 11. THE SUBMISSIONS OF THE ASSESSEE ARE CONSIDERED. IN THIS CASE, THE SOURCE OF MONEY DEPOSITED IN THE HSBC, GENEVA ACCOUNT HAS NOT BEEN EXPLAINED, THEN IN ABSENCE OF ANYTHING CONTRARY SHOWN BY ASSESSEE THE ONLY LOGICA L CONCLUSION THAT CAN BE INFERRED IS 8 HEMANT MANSUKHALAL PANDYA THAT THAT THE AMOUNTS DEPOSITED ARE UNACCOUNTED DEP OSITS SOURCED FROM INDIA AND THEREFORE TAXABLE IN INDIA. THIS PRESUMPTION IS AS PER THE PROVISIONS OF SECTION 114 OF THE INDIAN EVIDENCE ACT, 1872 WHICH READS AS FOLLOWS: SECTION 114. COURT MAY PRESUME EXISTENCE OF CERTA IN FACTS- THE COURT MAY PRESUME THE EXISTENCE OF ANY FACT WHI CH IT THINKS LIKELY TO HAVE HAPPENED, REGARD BEING HAD TO THE COMMON COURSE OF NATURAL EV ENTS, HUMAN CONDUCT AND PUBLIC AND PRIVATE BUSINESS, IN THEIR RELATION TO THE FACTS OF THE PARTICULAR CASE. THE COURT MAY PRESUME - .... (G) THAT EVIDENCE WHICH COULD BE AND IS NOT PR ODUCED WOULD, IF PRODUCED BE UNFAVORABLE TO THE PERSON WHO WITHHOLDS IT..,...' SECTION 114(G) OF THE INDIAN EVIDENCE ACT, 1872, TH US CLEARLY SAYS THAT THE COURTS CAN PRESUME EXISTENCE OF CERTAIN FACTS IF THE PERSO N LIABLE TO PRODUCE EVIDENCE WHICH COULD BE AND IS NOT PRODUCED, WHICH IF PRODUC ED WOULD HAVE BEEN UNFAVORABLE TO THE PERSON WHO WITHHOLDS IT. 11.1 AS THE ASSESSEE HAS CHOSEN NOT TO PRODUCE THE DETAILS OF HIS HSBC BANK ACCOUNTS AND THE SOURCE OF DEPOSITS THEREOF, EVEN THOUGH HE COUL D HAVE BEEN OBTAINED ALL THE DETAILS/EVIDENCES FOR THE SAME, THE ONLY COROLLARY THAT COULD BE DRAWN IS THAT THE ASSESSEE HAS DECIDED TO WITHHOLD THE INFORMATION AS IF PRODU CING IT WOULD HAVE GONE AGAINST HIM. THUS, AS PER THE PROVISIONS OF SECTION 114 OF THE I NDIAN EVIDENCE ACT, 1872 ALSO, IT NEEDS TO BE HELD AT THIS STAGE THAT THE INFORMATION/DETAI LS NOT FURNISHED WERE UNFAVORABLE TO THE ASSESSEE AND THAT THE SOURCE OF THE MONEY DEPOSITED IN THE HSBC ACCOUNT IS UNDISCLOSED AND SOURCED FROM INDIA. IN NOVA PROMOTERS AND FINLE ASE (P)LTD. 342 ITR 169(DEL), HIGHLIGHTING THE LEGAL EFFECT OF SECTION 68 OF THE ACT, THE DIVISION BENCH HAS OBSERVED IN PARA 32 THAT 'THE TRIBUNAL ALSO ERRED IN LAW IN HOLDING ASSESSIN G OFFICER OUGHT TO HAVE PROVED THAT THE MONIES EMANATED FROM THE COFFERS OF THE ASSESSEE COMPANY AND CAME BACK AS SHARE CAPITAL. SECTION 68 PERMITS THE ASSESSING OFFICER TO ADD THE CREDIT APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IF THE LATTER OFFE RS NO EXPLANATION REGARDING THE NATURE AND SOURCE OF THE CREDITOR THE EXPLANATION OFFERED IS N OT SATISFACTORY. IT PLACES NO DUTY UPON HIM TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS REC EIVED BY THE ASSESSEE. 11.2 THE HON'BLE SUPREME COURT IN THE CASE OF SUMAT I DAYAL VS. COMMISSIONER OF INCOME TAX (1995) 214 ITR 801 (SC) HELD THAT INCOME TAX PROCEE DINGS ARE CIVIL PROCEEDINGS AND THE DEGREE OF PROOF REQUIRED IS TO BE JUDGED BY PREPONDERANCE OF PROBABILITIES. THE HON'BLE SUPREME COURT, IN THE CASE OF CIT V DURGA PRASAD MORE [1971 ] 82 ITR 540 (SC), HAS HELD THAT 'THE TAXING AUTHORITIES WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BEFORE THEM THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMST ANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS....THE APPARENT MU ST BE CONSIDERED AS REAL ONLY IT IS SHOWN THAT THERE ARE THAT THE APPARENT IS NOT THE REAL AN D THAT TOO TAXING AUTHORITIES ARE ENTITLED TO FOUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILITY.... SCIENCE HAS NOT Y ET INVENTED ANY INSTRUMENT TO TEST THE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COURT OR TRIBUNAL. THEREFORE, THE COURTS AND TRIBUNALS HAVE TO JUDGE THE EVIDENCE BEF ORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES. THE HON'BLE PUNJAB AND HARYANA HIGH COURT, IN THE CASE OF SOMNATH MAINI V CIT [2008] 306 ITR 414 (PUNJ. &HAR.), HAS HELD THAT 'THE ASSESSING OFFICER IS TO APPLY THE TEST OF HUMAN PROBABILITIES FOR DECIDING GENUINENESS OR OTHERWISE OF A PARTICULAR TRANSACTION. MERE LEADING OF THE EVIDENCE THAT THE TRANSACTION WAS GE NUINE, CANNOT BE CONCLUSIVE. ANY SUCH EVIDENCE IS REQUIRED TO BE ASSESSED BY THE ASSESSIN G OFFICER IN A REASONABLE WAY. GENUINENESS OF THE TRANSACTION CAN BE REJECTED IN CASE THE ASSESSE E NEEDS EVIDENCE, WHICH IS NOT TRUSTWORTHY, AND THE DEPARTMENT DOES NOT NEED ANY EVIDENCE ON SU CH AN ISSUE. IN CASE OF SMT. VASANTIBAI SHAH 213 ITR 805 (BOM) THE COURT OBSERVED THAT THE INCOME TAX OFFICER IS ENTITLED TO TAKE INTO CONSIDERATION THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE CASE AND TO DRAW HIS OWN INFERENCE ON THE BASIS THEREOF. CIRCUMSTANTIAL EVI DENCE IN SUCH CASES IS NOT IMPERMISSIBLE. IN 9 HEMANT MANSUKHALAL PANDYA CASES LIKE THIS IT IS ONLY THE CIRCUMSTANTIAL EVIDE NCE WHICH WILL BE AVAILABLE. NO DIRECT EVIDENCE CAN BE EXPECTED........' IN CASE OF J S PARKER 94 I TR 616 (BOM) IT WAS HELD THAT'THE TAX LIABILITY UNDER THE INCOME TAX ACT IS OF CIVIL NATURE. TO FASTEN A TAX PAYER WITH SUCH A LIABILITY IT IS NOT NECESSARY THAT THE EVIDENCE SHOULD BE IN THE NATURE OF 'BEYOND DOUBT' AS IS REQUIRED TO FIX A CRIMINAL LIA BILITY. TAX LIABILITY CAN BE FASTENED ON THE BASIS OF PREPONDERANCE OF PROBABILITIES'. 12. THE ASSESSEE IN THIS CASE HAS NOT PRODUCED ANY EVIDENCE TO PROOF THAT THE MONEY DEPOSITED IN HIS FOREIGN BANK ACCOUNTS (HSBC PRIVATE BANK, SU ISSE (SA), GENEVA) DOES NOT HAVE AJVY SOURCE FROM INDIA. THE GENUINENESS AND THE AUTHENTI CITY OF THE BASE NOTE IS ALREADY EXPLAINED IN PARA 2 OF THIS ORDER. THE SAME HAS BEEN PROVIDED TO THE ASSESSEE. DESPITE THE VARIOUS OPPORTUNITIES GIVEN, THE ASSESSEE CHOSE NOT TO OFFE R ANY EXPLANATION TO THE SOURCES OF DEPOSITS MADE IN THESE ACCOUNTS ON THE CONTENTION THAT AS A NON-RESIDENT HE IS UNDER NO OBLIGATION TO PROVIDE SUCH EXPLANATIONS. 12.1 ON THE OTHER HAND THE ASSESSEE HAS PROPERTIES IN INDIA. HE HAS A FLAT AT VILE PARLE (W), MUMBAI FOR MANY YEARS AND ALSO DEMAT ACCOUNT NO: 12 01170000006304 IN WHICH THE PORTFOLIO VALUATION AS ON 16.2.2015 IS RS. 1,04,82, 0267- FROM 55 SHARES HELD. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS PRODUCED T HE PERMANENT RESIDENT CARD OF JAPAN WHICH IS VALID FROM 27.11.2001. WHEN ASKED TO PROVIDE THE PROOF TO SHOW THAT HE WAS PERMITTED TO HAVE BUSINESS / PROFESSION OR WORK PERMIT IN JAPAN OR ANY OTHER COUNTRY IN WHICH HE WAS EARNING HIS INCOME PRIOR TO 2001; VIDE NOTICE U/S 1 42(1) OF THE ACT DT. 4.2.15, THE ASSESSEE CHOSE NOT TO PROVIDE ANY DETAILS. THEREFORE, THE O NLY CONCLUSION THAT CAN BE DRAWN IS THAT PRIOR TO THIS DATE, THE A SSESSEE CANNOT BE ENGAGED IN ANY BUSINESS, PROFESSION OR EMPLOYMENT IN JAPAN. THE PE AK BALANCE IN HIS HSBC, GENEVA ACCOUNT DURING THE PERIOD 2005 TO 2007 IS USD 6237932.15 AS ON SEPTEMBER, 2006 WHICH TRANSLATES TO RS. 28,75,68,6727- (@ RS. 46.10 PER USD). AS PER TH E BASE NOTE THE ACCOUNT WAS OPENED IN 10.7.1998. WHAT THIS SHOWS IS THAT THE ASSESSEE COU LD NOT HAVE GENERATED ANY INCOME FROM JAPAN OR ANY OTHER COUNTRY OTHER THAN INDIA PRIOR T O 2001 THAT COULD RESULT INTO A BANK BALANCE OF RS. 28,75,68,672/- BY 2006. 12.2 THE ASSESSEE CHOSE NOT TO DISCLOSE SOURCES OF INCOME RETURNED BY HIM IN JAPAN NOR THE BANK STATEMENT OF HIS HSBC, GENEVA ACCOUNTS. FURTHE R, IT IS IN THE PUBLIC DOMAIN THAT HSBC, GENEVA HAS BEEN INQUIRED REGARDING ITS ROLE IN FACI LITATING ITS CLIENTS TO EVADE TAXES. ALSO, THE NAMES OF VARIOUS INDIVIDUALS INCLUDING THE ASSESSEE HIMSELF HAVE BEEN MENTIONED IN THE LIST OF ACCOUNT HOLDERS IN HSBC, GENEVA WHO HAS BEEN SUSPEC TED OF TAX EVASION. HENCE THERE IS A PRIMA-FACIE PRESUMPTION OF AMOUNTS IN THE SAID ACCO UNT BEING UNDISCLOSED AND SOURCED FROM INDIA. THE ASSESSMENT PROCEEDINGS OFFER AN OPPORTUN ITY TO THE ASSESSEE TO REBUT THESE PRESUMPTIONS BUT HE HAS CHOSEN NOT TO DISCLOSE HIS HSBC BANK ACCOUNTS AND THE SOURCES OF DEPOSIT DESPITE VARIOUS OPPORTUNITIES GIVEN. THE CI RCUMSTANCES OF THE CASE IN VIEW OF THE JURISPRUDENCE AS MENTIONED ABOVE POINTS ONLY TO ONE THING WITH REGARD TO THE SOURCE OF DEPOSITS IN THE HSBC, GENEVA ACCOUNTS; THAT THE DEPOSITS WER E MADE BY THE ASSESSEE IN HIS HSBC, GENEVA ACCOUNTS FROM SOURCES IN INDIA WHICH HAS NOT BEEN DISCLOSED IN HIS RETURN OF INCOME. 3001821(1: 13. IN VIEW OF THE ABOVE, THE PEAK AMOUNT AS APPEAR ING IN THE BASE NOTE OF THE ASSESSEE'S HSBC ACCOUNT IN AY 2006-07 BEING USD USD 942339.71 WHICH TRANSLATES TO RS. 4J8,95,304/- (@ RS. 45.52 PER USD) IS HEREBY ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS INCOME DEEMED TO ACCRUE OR ARISE IN INDIA FOR WHICH THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE SOURCE AND NATURE THEREOF. 8. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), ASSESSEE HAS CHALLE NGED THE VALIDITY OF REOPENING OF ASSESSMENT AND ALSO ADDITION MADE BY THE AO ON M ERITS. THE ASSESSEE HAS 10 HEMANT MANSUKHALAL PANDYA FILED ELABORATE WRITTEN SUBMISSIONS ON THE ISSUE OF REOPENING OF ASSESSMENT WHICH HAS BEEN REPRODUCED AT PARA 4 ON PAGES 4 TO 8 OF HIS ORDER. THE SUM AND SUBSTANCE OF THE ARGUMENTS OF THE ASSESSEE BEFO RE THE LD.CIT(A) ARE THAT THE ALLEGED BASE NOTE IS FABRICATED, UNAUTHORSIED, UNAUTHENTICATED AND HENCE, NOT ADMISSIBLE AS EVIDENCE. THEREFORE, THE RECORDI NG OF REASONS AND CONSEQUENT RE-ASSESSMENT PROCEEDINGS BASED ON SUCH UNRELATABLE EVIDENCE ARE VAGUE IN LAW. THE BASE NOTE IS MOTIVATED BY MA LAFIDE INTENTIONS WHICH IS FALSE AND FABRICATED AND HAS BEEN ILLEGALLY ATTRIBU TED TO THE ASSESSEE. THE REOPENING OF ASSESSMENT ON THE BASIS OF INCORRECT E VIDENCE HAS NO LEGAL SANCTITY. THERE IS NO LIVE NEXUS BETWEEN THE REASO NS RECORDED FOR REOPENING OF THE ASSESSMENT AND ESCAPEMENT OF INCOME. THE VERY BASIC REASON FOR REOPENING OF THE ASSESSMENT IS ON THE PREMISES THAT THE ASSESSEE HAD NOT FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YE AR, BUT FACT REMAINS THAT THE ASSESSEE WAS REGULARLY FILING HIS RETURN OF INC OME AND HE HAS FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR A ND THEREFORE, REOPENING OF ASSESSMENT ON INCORRECT REASONS CANNOT SURVIVE UNDE R THE LAW. THE ASSESSEE HAS RELIED UPON VARIOUS JUDICIAL DECISIONS, INCLUDI NG THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SAGAR ENTERPRISES VS ACIT (2002) 257 ITR 335 (GUJ). 9. THE ASSESSEE ALSO FILED DETAILED SUBMISSIONS ON ADDITIONS MADE BY THE AO 11 HEMANT MANSUKHALAL PANDYA TOWARDS CREDITS FOUND IN HSBC BANK, GENEVA. THE SU M AND SUBSTANCE OF ARGUMENTS OF THE ASSESSEE BEFORE THE LD.CIT(A) ARE THAT THE INFORMATION RECEIVED FROM FRENCH GOVERNMENT IS RELATED TO RESID ENTS AS MENTIONED BY THE AO, BUT THE ASSESSEE IS A NON RESIDENT AND HIS STAT US AS A NON RESIDENT IS NOT IN DISPUTE. THE NON RESIDENTS ARE NOT UNDER OB LIGATI ON TO DISCLOSE FOREIGN BANK ACCOUNTS TO THE INDIAN INCOME-TAX DEPARTMENT. THE ASSESSEE ALSO QUESTIONED THE AUTHENTICITY OF BASE NOTE BY STATING THAT THE B ASE NOTE IS NEITHER AUTHORIZED NOR IS IT VERIFIED FROM THE ORIGINAL. I T IS JUST ASTRAY SHEET OF PAPER MENTIONING SOME INFORMATION. ON THE BASIS OF UNAUT HENTICATED, UNVERIFIED DOCUMENT, NO ADDITION CAN BE MADE. THE ASSESSEE HA S REITERATED HIS ARGUMENTS MADE BEFORE THE AO TO ARGUE THAT HE IS A NON RESIDENT SINCE 1990 AND HE IS HAVING NO BUSINESS CONNECTION, WHATSOEVER , IN INDIA AND ALSO WHATEVER INCOME DEEMED TO ACCRUE OR ARISE IN INDIA HAS ALREADY BEEN DECLARED IN HIS RETURN OF INCOME; FILED FOR THE RELEVANT ASS ESSMENT YEAR, THEREFORE, MERELY SOME INFORMATION HAS BEEN RECEIVED FROM SOME SOURCE, THE SAME CANNOT BE CONSIDERED TO MAKE AN ASSESSMENT ON NON R ESIDENT IN INDIA IN RESPECT OF BANK ACCOUNTS AND ASSETS HELD OUTSIDE IN DIA. THE ASSESSEE HAS FILED AN AFFIDAVIT STATING THAT HE DOES NOT HAVE ANY BUSI NESS CONNECTION IN INDIA. THE ASSESSEE ALSO HAS GIVEN COPY OF HIS BANK ACCOUN T HELD WITH DENA BANK FROM 1998 ONWARDS. IT IS CLEAR FROM THE BANK ACCOUNT TH AT THE ASSESSEE HAS NOT 12 HEMANT MANSUKHALAL PANDYA REMITTED ANY AMOUNT ABROAD FROM INDIA. IT IS VERY MUCH CLEAR FROM THE DETAILS FURNISHED BEFORE THE AO THAT THERE IS NO CONNECTION BETWEEN HSBC BANK ACCOUNT MAINTAINED IN GENEVA AND INCOME ACCRUED OR DEEMED TO ACCRUE IN INDIA. THE AO MADE ADDITIONS ONLY ON THE BASIS OF UNAUTHENTICATED INFORMATION RECEIVED FROM OUTSIDE SOURCE WITHOUT BR INGING ON RECORD ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS DIVERTED INC OME FROM INDIA AND REMITTED ABROAD TO THE BANK ACCOUNT MAINTAINED IN H SBC BANK, GENEVA. IN THE ABSENCE OF ANYTHING CONTRARY, THE AO WAS ERRED IN M AKING THE ASSESSEE TO PROVE NEGATIVE WHEN THE ASSESSEE IS NOT UNDER OBLIG ATION TO FILE HIS FOREIGN BANK ACCOUNT AND ASSET DETAILS AND THE LAW ALSO DOE S NOT MANDATE TO FILE THOSE DETAILS, WHICH IS HIGHLY INCORRECT ON THE PART OF T HE AO TO MAKE ADDITION MERELY ON THE BASIS OF A BASE NOTE WHICH IS A PIECE OF STR AY PAPER HAVING NO LEGAL AUTHENTICITY. 10. THE LD.CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND ALSO BY RELYING UPON VARIOUS JUDICIAL PRECEDENTS REJECTE D LEGAL GROUND TAKEN BY THE ASSESSEE CHALLENGING REOPENING OF THE ASSESSMENT ON THE GROUND THAT THE AO HAD RECORDED A REASON ON THE BASIS OF INFORMATION R ECEIVED FROM INVESTIGATION WING, WHICH, PRIMA FACIE ESTABLISHES ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT, 1961. THE CASE LAW CITED BY THE ASSESSEE ARE DISTINGUISHABLE FROM THE FACTS AND THE RE IS NO MERIT IN THE LEGAL 13 HEMANT MANSUKHALAL PANDYA GROUND TAKEN BY THE ASSESSEE AND ACCORDINGLY, THE S AME HAS BEEN DISMISSED. 11. INSOFAR AS ADDITION MADE BY THE AO TOWARDS CRED ITS FOUND IN HSBC BANK, GENEVA, THE LD.CIT(A) HELD THAT THE AO COULD NOT HA VE MADE THE ADDITION WITHOUT HE HIMSELF APPLIED HIS OWN INDEPENDENT MIND TO THE FACTS AND MATERIAL GATHERED BY THE INVESTIGATION WING. THE AO SHOULD HAVE MADE HIS OWN ENQUIRIES ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING TO ESTABLISH THE FACT THAT THERE IS A NEXUS BETWEEN IN COME DERIVED IN INDIA AND BANK DEPOSITS FOUND IN HSBC BANK ACCOUNT. IN THE A SSESSMENT ORDER, THE AO; HOWEVER, DID NOT IN ANY MANNER DISCUSSED THE SOURCE OF INFORMATION OR EVIDENCES GATHERED ON THE BASIS OF WHICH IT WAS HEL D THAT THE ASSESSEE HELD THE HSBC BANK, GENEVA ACCOUNT AND BALANCE IN THE SAME R EPRESENTS ESCAPED INCOME. ON THE OTHER HANDS, THE ASSESSEE HAS FILED ENOUGH MATERIALS TO PROVE THAT HE IS A NON RESIDENT INDIAN SINCE 1990 AND HE IS WORKING IN JAPAN ON BUSINESS VISA TILL 2001 AND THEREAFTER GOT PERMANEN T RESIDENCY CERTIFICATE. THE ASSESSEE ALSO FILED HIS PASSPORTS TO PROVE HE IS IN INDIA FOR ALL THOSE YEARS ONLY FOR A LIMITED PERIOD, I.E. LESS THAN 60 DAYS. IT I S ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS FILED HIS INCOME-TAX RETURN IN THE STA TUS OF NON RESIDENT DISCLOSING INCOME ACCRUED OR DEEMED TO ACCRUE IN INDIA AND SUC H RETURN HAS BEEN ACCEPTED BY THE DEPARTMENT IN THE STATUS OF NON RES IDENT. ONCE, THE AO HAVING ACCEPTED THE STATUS OF NON RESIDENT OF THE A SSESSEE, SHOULD NOT HAVE 14 HEMANT MANSUKHALAL PANDYA QUESTIONED THE SOURCE OF AMOUNTS DEPOSITED IN FOREI GN BANK ACCOUNTS WITHOUT ESTABLISHING THE FACT THAT THE SAID DEPOSIT IS SOUR CED OUT OF INCOME DERIVED IN INDIA. THE LD.CIT(A) FURTHER OBSERVED THAT THE ASS ESSEE HAS FILED AN AFFIDAVIT AND DECLARED THAT NONE OF HIS FOREIGN ASSETS HAD AN Y CONNECTION WITH INDIA OR ANY INDIAN BUSINESS. IT IS ALSO CATEGORICALLY STAT ED IN THE AFFIDAVIT THAT THE ASSESSEE DOES NOT HAVE ANY SOURCE OF INCOME IN INDI A EXCEPT INTEREST AND DIVIDEND INCOME WHICH HE HAD ALREADY DECLARED IN HI S INCOME-TAX RETURN FOR THE RELEVANT YEARS. WITH THESE OBSERVATIONS AND AL SO BY FOLLOWING CERTAIN JUDICIAL PRECEDENTS, THE CIT(A) DELETED ADDITION MA DE BY THE AO TOWARDS CREDITS FOUND IN HSBC BANK ACCOUNT. THE RELEVANT O BSERVATIONS OF THE LD.CIT(A) ARE EXTRACTED BELOW:- 8.11 DURING THE COURSE OF APPELLATE PROCEEDINGS, A R SUBMITTED THE DECISION IN THE CASE OF ANIL KUMAR JAIN APPEAL NO.: 145/14-L5/C IT(A)-4, WHEREIN IT WAS HELD BY THE HON. COMMISSIONER OF INCOME TAX [APPEALS]-4, NEW DELHI THAT: 'IT IS DEAR THAT FOR MAKING AN ADDITION U/S 69 THE ONUS IS LAID ON THE REVENUE TO BRING ON RECORD MATERIAL FROM WHICH IT COULD BE CON CLUDED THAT THE DEPOSITS IN SUCH ACCOUNTS PERTAINED TO ASSESSEE HIMSELF. IN THE PRESENT CASE THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL WHICH COULD CONCLUSI VELY PROVE THAT THE DEPOSITS IN VARIOUS ACCOUNTS WERE MADE BY THE APPELLANT HIMS ELF OR FOR THAT MATTER IT BELONGED TO THE ASSESSEE HIMSELF. IT IS ALSO RELEVA NT TO NOTE THAT EVEN THE, AO DID NOT HAVE ANY MATERIAL TO VERIFY SUCH TRANSACTIONS A ND THEREFORE IN ABSENCE OF ANY SUCH MATERIAL, ADDITION COULD NOT BE MADE MERELY BA SED ON SOME INFORMATION WHICH HAS NOT BEEN PUT TO TEST. CONSIDERING THE PROPOSITIONS OF CASES CITED ABOVE I T IS CLEAR THAT UNLESS THE AO BRINGS ON RECORD MATERIAL WHICH SUBSTANTIVELY PROVE THAT AMOUNT OF DEPOSITS IN SUCH ACCOUNT WERE INCOME OF THE APPELLANT, NO ADDIT ION COULD BE MADE.' 8.12 I. IN THE CASE BEFORE ME ALSO THE AO HAS FAILED TO SUBSTANTIATE ITS CLAIM THAT THE AMOUNT IN QUESTION BELONGED TO THE APPELLANT. II. IT IS A PROVEN FACT THAT THE ASSESSEE IS A 'NO N RESIDENT' IN TERMS OF SECTION 6 OF THE ACT SINCE LONG AND IS FILING ITS TAX RETURNS IN IND IA REFLECTING ITS STATUS AS NON RESIDENT. IT IS ALSO APT TO NOTE THAT THE RESIDENT STATUS OF THE ASSESSEE IS NOT IN DISPUTE 15 HEMANT MANSUKHALAL PANDYA AND THE SAME WAS DULY ACCEPTED BY THE ASSESSING OFF ICER DURING THE COURSE OF REASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF T HE ACT. III. ALSO, THE CHARGING SECTION FOR THE PURPOSES OF THE ACT IS SECTION 5(2) IN CASE OF NON-RESIDENTS. IN OTHER WORDS/ FOR A SUM TO BE TAXE D IN INDIA IN THE HANDS OF THE APPELLANT, IT MUST BE RECEIVED OR DEEMED TO BE RECE IVED IN INDIA OR IT ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE TO HIM IN INDIA. TH E RESIDENTIAL STATUS OF THE APPELLANT I.E. NON-RESIDENT IS DULY ACCEPTED BY THE AO AND IS NOT IN DISPUTE. IV. RELIANCE IS PLACED ON THE JUDGEMENT IN THE CASE OF DCIT V FINLAY CORP, LTD(2003) 86ITD 626(DELHI), WHEREIN IT WAS HELD THAT: 'THE INCOME OF THE NON-RESIDENT IS CHARGEABLE ONLY UNDER SECTION 5(2) AND THE PROVISIONS OF SECTION 68 CANNOT OVERRIDE THE PROVIS IONS OF SECTION 5(2). TAXABILITY OF NON-RESIDENT CAN BE SEEN ONLY UNDER SECTION 5(2) AND THE PROVISIONS OF SECTION 69 COULD NOT BE PRESSED INTO SERVICE SINCE SUCH PRO VISIONS DO NOT OVERRIDE THE PROVISIONS OF SECTION 5(2). IT IS SETTLED LEGAL POS ITION THAT BURDEN IS ON THE REVENUE TO PROVE THAT INCOME OF AN ASSESSEE FALLS W ITHIN THE NET OF TAXATION. SECTION 5(2) BEING THE CHARGING SECTION, THE BURDEN IS ON THE REVENUE TO PROVE THAT THE INCOME OF THE NON-RESIDENT FALLS WITHIN TH E AMBIT OF SUCH SECTION.' V. RELIANCE IS PLACED ON THE JUDGEMENT IN THE CA SE OF SARASWATI HOLDING CORPORATION VS. DEPUTY DIRECTOR OF INCOME TAX[20/07 /2007] (111 TTJ DELHI 334), WHEREIN THE TRIBUNAL UPHELD THE DECISION OF DY. CIT V. FINLAY CORPORATION LTD. (2004) 84 TTJ (DEL) 788 : (2003) 86 LTD 626 (DEL), QUOTED AT POINT NO. VI IN WHICH IT WAS HELD THAT: 'THE PROVISIONS OF SECTION 68 OR SECTION 69 CANNOT ENLARGE THE SCOPE OF SECTION 5(2). UNDER SECTION 5(2), THE INCOME ACCRUI NG OR ARISING OUTSIDE INDIA IS NOT TAXABLE UNLESS IT IS RECEIVED IN INDIA .' VI. RELIANCE IS ALSO PLACED ON THE JUDGEMENT IN C ASE OF VODAFONE INTERNATIONAL HOLDING B.V V UNION OF INDIA IN 2012(SUPREME COURT) , WHEREIN IT WAS HELD THAT: 'UNDER SECTION 5(2) OF THE INCOME TAX ACT, IN CASE OF NRIS THE INCOME ACCRUED AND RECEIVED OUTSIDE INDIA CANNOT BE SUBJECT TO TAX IN INDIA. WHAT IS NOT TAXABLE UNDER SECTION 5(2), CANNOT BE TAXED UNDER THE PROVI SIONS OF SECTIONS 68 AND 69 AS UNDISCLOSED INCOME' VII. THUS, RESPECTFULLY FOLLOWING THE DECISION IN T HE CASE OF DCIT V FINLAY CORP. LTD, SARASWATI HOLDING CORPORATION VS. DEPUTY DIREC TOR OF INCOME TAX AND VODAFONE INTERNATIONAL HOLDING B.V V UNION OF INDIA IN 2012(SUPREME COURT), IT IS HELD THAT WHAT IS NOT TAXABLE UNDER SECTION 5(2) CANNOT BE TAXED UNDER THE PROVISIONS OF SECTION 68 OR SECTION 69. PROVISIONS OF SECTION 68 OR 69 WOULD BE APPLICABLE IN THE CASE OF NONRESIDENT ONLY WITH REF ERENCE TO THOSE AMOUNTS WHOSE ORIGIN OF SOURCE CAN BE LOCATED IN INDIA. VIII. THEREFORE, PROVISIONS OF SECTION 68 OR 69 HAV E LIMITED APPLICATION IN CASE OF NON- RESIDENT AND SINCE THE APPELLANT HAS DISCLOSED ALL HIS INCOME EARNED IN INDIA OR ACCRUING OR ARISING TO HIM IN INDIA BY REGULARLY FILING HIS RET URN OF INCOME AS A NON-RESIDENT, THE APPELLANT CANNOT BE TAXED FOR INCOME EARNED OUTSIDE INDIA UNLESS THE REVENUE PROVES THAT THE INCOME FALLS , WITHIN THE AMBIT OF SECTION 5(2) . NO SUCH EVIDENCE HAS BEEN BROUGHT UPON BY THE AO TO SUPPORT HIS CONTENTIONS AND HENCE THE AO'S CONTENTIONS STAND NO GROUND. IN THE PRESENT CASE, IT IS ALSO OBSERVED TH AT IN THE APPELLANT'S CASE THE ADDITION IS MADE WITHOUT REFERRING TO ANY SECTION. SUCH AN A CT ON PART OF THE AO IS NOT JUSTIFIED. IX. THE APPELLANT HAD ALSO FILED AN AFFIDAVIT DEC LARING THAT ANY OF ASSESSEE'S FOREIGN ACCOUNT OR FOREIGN ASSETS HAD NO CONNECTION WITH IN DIA OR WITH ANY INDIAN BUSINESS. IT IS ALSO CATEGORICALLY STATED IN THE AFFIDAVIT THAT THE APPELLANT DOES NOT HAVE ANY PROPRIETARY OR PARTNERSHIP BUSINESS IN INDIA NOR HE IS AN EMPLOYEE OR DIRECTOR OF ANY 16 HEMANT MANSUKHALAL PANDYA COMPANY IN INDIA. HE DOES NOT HAVE ANY SOURCE OF IN COME IN INDIA EXCEPT INTEREST AND DIVIDEND INCOME WHICH HE HAS ALREADY DECLARED IN TH E RETURN FILED. X. IN THIS REGARD, THE AO HAS ACTED MECHANICALLY IN MAKING ADDITION TO THIS EFFECT WITHOUT REBUTTING THE APPELLANT'S CLEAR AND CATEGOR IC STAND. IT IS WELL SETTLED LAW THAT AFFIDAVIT IS AN IMPORTANT PIECE OF EVIDENCE AND IF THE SAME IS NOT FOUND FAULTY, ANY ADVERSE VIEW TAKEN BY THE AUTHORITIES CONCERNED WOU LD LEAD TO SUBSTANTIAL QUESTION OF LAW. RELIANCE IS PLACED ON THE JUDGMENT OF APEX COU RT IN CASE OF MEHTA PARIKH & CO. [1956 AIR554] WHERE THEIR LORDSHIP HAS HELD AS UNDE R, 'FACTS PROVED OR ADMITTED MAY PROVIDE TO SUPPORT FU RTHER CONCLUSIONS TO BE DEDUCED FROM THEM, WHICH CONCLUSIONS MAY THEMSELVES BE CONCLUSIONS OF FACT AND SUCH INFERENCES FROM FACTS PROVED OR ADMITTED COULD BE MATTERS OF LAW. THE COURT WOULD BE ENTITLED TO INTERVENE IF IT APPEARS THAT T HE FACT FINDING AUTHORITY HAS ACTED WITHOUT ANY EVIDENCE OR UPON A VIEW OF THE FACTS, W HICH COULD NOT REASONABLY BE ENTERTAINED OR THE FACTS FOUND ARE SUCH THAT NO PER SON ACTING JUDICIALLY AND PROPERLY INSTRUCTED AS TO THE RELEVANT LAW WOULD HA VE COME TO THE DETERMINATION IN QUESTION.' XI. THUS, IN VIEW OF THE ABOVE AND CONSIDERING TH E FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISIONS IN TH E CASE OF DCIT V FINLAY CORP. LTD(2003) 86 ITD 626(DELHI), SARASWATI HOLDING CORP ORATION VS. DEPUTY DIRECTOR OF INCOME TAX[20/07/2007] (111 TTJ DELHI 334) AND V ODAFONE INTERNATIONAL HOLDING B.V V UNION OF INDIA IN 20L2(SUPREME COURT) CITED SUPRA, I AM UNABLE TO SUBSCRIBE TO THE VIEW TAKEN BY THE AO. CONSIDERING THE FACTS I AM INCLINED TO ACCEPT THE ARGUMENTS OF THE APPELLANT AND ACCORDING LY THE ADDITION OF RS. 4,28,95,304/- MADE IN THIS CASE IS HEREBY DELETED A ND THE GROUND NOS. II (SUB- GROUNDS 3 TO 5), III (SUB-GROUNDS 6 TO 11) ARE ALLO WED IN FAVOUR OF THE APPELLANT. 12. THE LD.DR SUBMITTED THAT THE LD.CIT(A) WAS ERR ED IN HOLDING THAT THE AO HAS MADE ADDITION ON THE BASIS OF FABRICATED / MANU FACTURED DATA WITH SOME MALA FIDE INTENTION WITHOUT APPRECIATING THE FACT T HAT THE INFORMATION HAS BEEN EXCHANGED BETWEEN TWO SOVEREIGN COUNTRIES AS PER WH ICH SOME INDIAN NATIONALS AND RESIDENTS HAVE MAINTAINED BANK ACCOUN T IN HSBC BANK, GENEVA AND SAID BANK ACCOUNTS ARE NOT DISCLOSED TO INDIAN INCOME-TAX AUTHORITIES. THE LD.DR FURTHER SUBMITTED THAT THE LD.CIT(A) WAS ERRE D IN IGNORING THE FACT THAT THE ASSESSEE DID NOT SIGN CONSENT WAIVER FORM FOR C ARRYING OUT ANY FURTHER ENQUIRY FROM HSHC BANK, GENEVA WHICH COULD HAVE PRO VIDED ALL RELEVANT INFORMATION. THE LD.CIT(A) HAS IGNORED THIS VITAL FACT AND DELETED ADDITION ON 17 HEMANT MANSUKHALAL PANDYA THE PREMISES THAT THE AO SHOULD HAVE PROVED RELIABL E AND AUTHENTIC EVIDENCES WHEREAS THE ASSESSEE HIMSELF BLOCKED / THWARTED SUC H ATTEMPT. THE ASSESSEE NEITHER DENIED OF HAVING MAINTAINED ACCOUNT IN HSHC BANK, GENEVA NOR FILED ANY DETAILS TO PROVE THAT THE SAID BANK ACCOUNT DOE S NOT HAVE ANY LINK TO INCOME DERIVED OR SOURCED FROM INDIA. IN ABSENCE O F ANY EVIDENCES FILED BY THE ASSESSEE, THE AO HAS TAKEN THE INFORMATION RECEIVED FROM THE FRENCH GOVERNMENT TO HOLD THAT THE SAID DEPOSIT IS SOURCED FROM INCOME GENERATED IN INDIA AND ACCORDINGLY MADE ADDITION. THE LD.DR FUR THER SUBMITTED THAT ALTHOUGH THE ASSESSEE IS MAINTAINING THE BANK ACCOU NT, THE DETAILS OF SUCH BANK ACCOUNT WERE NEVER BEFORE THE INDIAN INCOME-TAX AUT HORITIES AND ALSO WHEN SPECIFICALLY ASKED TO PROVE THE NATURE AND SOURCE O F CREDIT, THE ASSESSEE CHOSE NOT TO FILE ANY EVIDENCE. THE LD.CIT(A), WITHOUT A PPRECIATING THESE FACTS DELETED ADDITION MADE BY THE AO BY SHIFTING THE ONU S TO THE DEPARTMENT IGNORING THE FACT THAT WHEN A CREDIT IS FOUND, IT I S FOR THE ASSESSEE TO PROVE THE SAID CREDIT TO THE SATISFACTION OF THE AO. 13. THE LD.AR FOR THE ASSESSEE, ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT WHEN THE LOWER AUTHORITIES NEVER DISPUTED FACT THAT THE ASSESSEE IS A NON RESIDENT S INCE 1990, IGNORED THE LAW, WHICH CLEARLY STATES THAT NON RESIDENTS ARE NOT REQ UIRED TO DECLARE THEIR FOREIGN BANK ACCOUNTS AND ASSETS TO THE INDIAN INCOME-TAX A UTHORITIES. THE LD.AR 18 HEMANT MANSUKHALAL PANDYA FURTHER SUBMITTED THAT THE ASSESSEE HAS EXPLAINED T HE POSITION BEFORE THE AO BUT THE AO, IGNORED ALL EVIDENCES FILED ON THE BASI S OF UNAUTHENTICATED BASE NOTE RECEIVED FROM FRENCH GOVERNMENT TO MAKE ADDITI ON TOWARDS CREDITS FOUND IN HSBC BANK, GENEVA WITHOUT ESTABLISHING THE FACT THAT SUCH CREDIT IS SOURCED FROM INCOME DERIVED IN INDIA. THE ASSESSEE HAS FILED AN AFFIDAVIT AND STATED THAT HE DOES NOT HAVE ANY BUSINESS CONNECTIO N IN INDIA OR EMPLOYED IN ANY INDIAN COMPANY. HE HAS FILED HIS INCOME-TAX RE TURN IN INDIA IN THE STATUS OF NON-RESIDENT DISCLOSING INCOME RECEIVED AND DEEME D TO ACCRUE OR ARISE IN INDIA AND SUCH RETURNS HAVE BEEN ACCEPTED BY THE DE PARTMENT. THE ASSESSEE ALSO FILED BANK STATEMENTS OF HIS INDIAN BANK ACCOU NT MAINTAINED IN DENA BANK FROM 1998 ONWARDS TO PROVE THAT THERE IS NO SIGNIFI CANT DEBITS WHICH CAN BE LINKED TO DEPOSITS FOUND IN HSBC BANK, GENEVA. THE BANK ACCOUNT MAINTAINED IN INDIA IS CREDITED WITH INCOME DERIVED FROM INDIA FROM HIS PORTFOLIO INVESTMENT AND THE SAID INCOME HAS ALREADY BEEN OFF ERED TO TAX IN INDIA. THE AO, WITHOUT CARRYING OUT ANY INDEPENDENT ENQUIRY TO ASCERTAIN THE FACT THAT THE DEPOSITS IN HSBC BANK, GENEVA IS HAVING NEXUS T O INDIAN INCOME, MADE ADDITION ONLY ON THE BASIS OF BASE NOTE WHICH IS UN VERIFIED AND UNAUTHENTICATED. THE ASSESSEE BEING A NON RESIDENT IS UNDER NO OBLIGATION TO DISCLOSE HIS FOREIGN ACCOUNTS AND ASSETS AND ACCORD INGLY HE NEVER DISCLOSED HIS BANK ACCOUNT MAINTAINED IN HSBC BANK, GENEVA TO TH E INDIAN INCOME-TAX 19 HEMANT MANSUKHALAL PANDYA AUTHORITIES. 14. THE LD.AR, FURTHER REFERRING TO ITR FORM PRESCR IBED FOR FILING OF RETURN OF INCOME BY THE INDIVIDUALS, SUBMITTED THAT THE MOMEN T A PERSON CHOOSES HIS STATUS AS NON RESIDENT, THE COLUMNS PROVIDED FOR FILLING FOREIGN BANK ACCOUNTS AND ASSETS DETAILS DO NOT APPEARS IN THE RETURN OF NON RESIDENTS AND HENCE, THE QUESTION OF DISCLOSING SAID INFORMATION TO THE INDI AN INCOME-TAX AUTHORITIES DOES NOT ARISE. THE LD.AR FURTHER REFERRING TO THE STATEMENT OF THE MINISTER OF STATE FOR FINANCE, HAS CLARIFIED ON THE FLOOR OF TH E LOK SABHA ON 02-12-2011 THAT MERE HOLDING OF AN ACCOUNT OUTSIDE INDIA DOES NOT LEAD TO THE CONCLUSION THAT THE AMOUNT IS NOT TAXED IN INDIA. HE ALSO REF ERRED TO WHITE PAPER ON BLACK MONEY INTRODUCED BY GOVERNMENT TO CLARIFY THAT THER E MAY BE CASES WHERE THE ACCOUNT HOLDERS MAY BE NRIS, IS NOT ASSESSED TO TAX IN INDIA WITH RESPECT TO THOSE SUMS OR THE SUMS DEPOSITED MAY ALREADY HAVE B EEN DISCLOSED TO THE INCOME-TAX DEPARTMENT. HE ALSO REFERRED THE STATEM ENT OF MINISTER OF FINANCE PUBLISHED BY PRESS INFORMATION BUREAU ON 04-04-2016 TO CLARIFY THE POSITION OF NON RESIDENTS IN RESPECT OF BANK ACCOUNTS FOUND IN HSBC BANK, GENEVA, AS PER WHICH, THE GOVERNMENT ITSELF DOES NOT WISH TO TAKE ANY ACTION IN RESPECT OF NON RESIDENTS HOLDING FOREIGN BANK ACCOUNTS. EVEN THE PROVISIONS OF BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND I MPOSITION OF TAX ACT, 2015 APPLICABLE ONLY TO RESIDENTS. EVEN THE FAQS TO THE BLCK MONEY UNDISCLOSED 20 HEMANT MANSUKHALAL PANDYA FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX AC T, 2015, QUESTIONS 22 & 32 CLARIFIED THAT NON RESIDENTS ARE NOT REQUIRED TO DI SCLOSE FOREIGN BANK ACCOUNTS AND ASSETS TO INDIAN INCOME-TAX AUTHORITIES. THE L D.AR FURTHER SUBMITTED THAT TO DETERMINE WHETHER A PARTICULAR DEPOSIT IN FOREIG N BANK ACCOUNT IS SOURCED IN INDIA WHAT NEEDS TO BE CONSIDERED IS THE WITHDRAWAL S FROM THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED IN INDIA. IF ONE CONSIDERS THE WITHDRAWALS OF THE ASSESSEE FROM HIS BANK ACCOUNT MAINTAINED IN DENA B ANK WHICH IS APPROXIMATELY RS.9.25 LAKHS, WHICH COULD NOT HAVE F UNDED AN AMOUNT OF RS.4.28 CRORES IN THE FOREIGN BANK ACCOUNT. THE AO , WITHOUT BRINGING ON RECORD ANY EVIDENCE TO SUPPORT THE BASE NOTE TO PROVE THAT THE CREDITS FOUND IN HSBC BANK, GENEVA IS SOURCED FROM INCOME GENERATED IN IN DIA, ASKED THE ASSESSEE TO PROVE NEGATIVE WITHOUT ANY BASIS. ON THE OTHER HAN D, ASSESSEE HAS FILED COMPLETE DETAILS TO PROVE THAT THE SAID DEPOSITS IS HAVING NO CONNECTION, WHATSOEVER TO INDIAN INCOME. THE LD.CIT(A), AFTER APPRISING ALL THESE FACTS, HAS RIGHTLY DELETED ADDITION MADE BY THE AO. IN THIS R EGARD HE RELIED UPON THE DECISION OF ITAT, DELHI IN THE CASE OF DCIT VS FINL AY CORPORATION LTD (2003) 86 ITD 626 (DEL); DELHI HIGH COURT IN THE CASE OF CIT VS SURESH NANDA (2013) 352 ITR 611 (DEL); AND ITAT, CHENNAI IN THE CASE OF SMT . SUSILA RAMASWAMY VS ACIT (2010) 37 SOT 146 (CHEN). 15. WE HAVE HEARD BOTH THE PARTIES, CONSIDERED THE MATERIAL AVAILABLE ON 21 HEMANT MANSUKHALAL PANDYA RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. WE HAVE ALSO CONSIDERED THE CASE LAWS CITED BY EITHER PARTIES. THE AO MADE ADDITION TOWARDS AMOUNT FOUND CREDITED IN HSBC BANK ACCOUNT, GENEVA ON THE GROUND THAT THE ASSESSEE HAS FAILED TO EXPLAIN AND PROVE T HAT DEPOSIT IS NOT HAVING ANY CONNECTION TO INCOME DERIVED IN INDIA AND NOT SOURC ED FROM INDIA. THE AO HAS MADE ADDITIONS ON THE BASIS OF A DOCUMENT CALLED B ASE NOTE RECEIVED FROM FRENCH GOVERNMENT, AS PER WHICH THE ASSESSEE IS MAI NTAINING A BANK ACCOUNT IN HSBC BANK, GENEVA. THE AO HAS ANALYSED THE CONT ENTS OF BASE NOTE TO THE DETAILS FILED BY THE ASSESSEE IN HIS INCOME-TAX RET URN TO COME TO THE CONCLUSION THAT THE INFORMATION CONTAINED IN THE BASE NOTE IS MATCHING WITH THE DETAILS OF THE ASSESSEE AND ACCORDINGLY OPINED THAT THE SAID B ANK ACCOUNT IS BELONGING TO THE ASSESSEE. EXCEPT THIS, THE AO HAS NOT CONDUCTE D ANY INDEPENDENT ENQUIRY OR APPLIED HIS MIND BEFORE COMING TO THE CONCLUSION THAT WHETHER THE INFORMATION CONTAINED IN BASE NOTE IS VERIFIED OR A UTHENTICATED. THE AO NEVER DISPUTED THE FACT THAT THE ASSESSEE IS A NON RESIDE NT. THE LOWER AUTHORITIES HAVE ACCEPTED THE FACT THAT THE ASSESSEE IS A NON R ESIDENT SINCE 2001. THE AO ALSO ACCEPTED THE FACT THAT THE NON RESIDENTS ARE N OT REQUIRED TO DISCLOSE THEIR FOREIGN BANK ACCOUNTS AND ASSETS TO THE INDIAN INCO ME-TAX AUTHORITIES. BUT, THE AO HAS MADE ADDITION ON THE GROUND THAT BEFORE 2001 IT WAS NOT CLEAR AS TO WHETHER THE ASSESSEE, IS A RESIDENT OR NON RESID ENT AND THE ASSESSEE ALSO 22 HEMANT MANSUKHALAL PANDYA NOT FILED ANY DOCUMENTARY EVIDENCE TO PROVE THAT HE IS HAVING BUSINESS VISA IN JAPAN AND EARNED INCOME THEREFROM. THE AO HAS SHIF TED THE BURDEN ON THE ASSESSEE TO PROVE NEGATIVE. ACCORDING TO THE AO, I T IS FOR THE ASSESSEE TO PROVE THAT THE CREDITS FOUND IN HSBC BANK IS NOT SOURCED OUT OF INCOME DERIVED FROM INDIA. 16. THE PROVISIONS OF SECTION 5 OF THE ACT HAS DEFI NED THE SCOPE OF TOTAL INCOME IN THE INDIAN INCOME-TAX ACT. AS PER PROVI SIONS OF SECTION 5(2), THE TOTAL INCOME OF ANY PREVIOUS YEAR OF THE PERSON, WH O IS A NON RESIDENT INCLUDES ALL INCOME FROM WHATEVER SOURCE DERIVED WHICH RECEI VED OR IS DEEMED TO RECEIVED IN INDIA IN SUCH YEAR BY OR ON BEHALF OF S UCH PERSON OR ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISES TO HIM IN I NDIA DURING SUCH YEAR. EXPLANATION 1 PROVIDED TO SECTION 5 CLARIFIES THAT INCOME ACCRUING OR ARISING OUTSIDE INDIA SHALL NOT BE DEEMED TO RECEIVE IN IND IA WITHIN THE MEANING OF THIS SECTION BY REASON ONLY OF THE FACT THAT IT IS TAKEN INTO ACCOUNT IN A BALANCE- SHEET PREPARED IN INDIA. THEREFORE, AS PER THE PRO VISIONS OF SECTION 5(2) OF THE INCOME-TAX ACT, 1961, ONLY INCOME THAT ACCRUES / AR ISES IN INDIA OR IS DEEMED TO ACCRUE OR ARISE IN INDIA IS TAXABLE IN INDIA IN CASE OF NON RESIDENTS. UNDER THIS LEGAL BACKGROUND, WHEN WE EXAMINE THE FACT OF THE CASE OF THE ASSESSEE, WHETHER CREDITS FOUND IN BANK ACCOUNT MAINTAINED BY THE ASSESSEE IN HSBC BANK GENEVA IS ACCRUED / ARISEN IN INDIA OR IS DEEM ED TO ACCRUE OR ARISEN IN 23 HEMANT MANSUKHALAL PANDYA INDIA AND IS TAXABLE IN INDIA IN THE HANDS OF NON R ESIDENTS HAS TO BE EXAMINED. INSOFAR AS THE RESIDENTIAL STATUS OF THE ASSESSEE, THERE IS NO DISPUTE. THE AO HAS ACCEPTED THE FACT THAT THE ASSESSEE IS A NON RE SIDENT. IN FACT, THE ASSESSEE HAS FILED HIS PASSPORT DETAILS RIGHT FROM AYS 1995- 96 TO 2011-12 AS PER WHICH, THE ASSESSEE WAS IN INDIA FOR LESS THAN 60 DAYS IN ALL THESE YEARS. THE ASSESSEE ALSO FILED AN AFFIDAVIT STATING THAT HE DOES NOT HA VE ANY BUSINESS CONNECTION IN INDIA EITHER THROUGH A PROPRIETORY / PARTNERSHIP CO NCERN OR HOLDING DIRECTORSHIP IN ANY OF INDIAN COMPANIES. THE ASSES SEE FURTHER STATED THAT HE IS NEITHER IN EMPLOYMENT IN INDIA NOR IN BUSINESS ACTI VITY IN INDIA. THE ASSESSEE ALSO FILED DETAILS TO PROVE THAT HE IS REGULARLY FI LING HIS INCOME-TAX RETURN IN INDIA IN THE STATUS OF NON RESIDENT DISCLOSING INCO ME ACCRUED OR AROSE IN INDIA DURING THE RELEVANT FINANCIAL YEARS. THE RETURN FI LED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE DEPARTMENT FOR ALL THESE YEARS. AL L THESE FACTS HAVE NOT BEEN DISPUTED BY THE LOWER AUTHORITIES. 17. HAVING SAID, LET US EXAMINE, NON RESIDENTS ARE REQUIRED TO FURNISH DETAILS OF HIS FOREIGN BANK ACCOUNTS AND ASSETS IN INDIA OR NOT. THE ASSESSEE HAS MAINTAINED ONLY ONE BANK ACCOUNT IN INDIA IN DENA B ANK WHICH IS AN NRO ACCOUNT. THE SAID BANK ACCOUNT HAS BEEN REFLECTED IN AIR INFORMATION. IN ORDER TO PROVE THAT THE AMOUNT IN FOREIGN BANK ACCO UNT IS NOT SOURCED FROM INDIA, THE ASSESSEE FILED THE BANK STATEMENT OF HIS ONLY BANK ACCOUNT IN INDIA 24 HEMANT MANSUKHALAL PANDYA FROM THE FINANCIAL YEARS 1998 TO 2008. ON PERUSAL OF THE BANK ACCOUNT FILED BY THE ASSESSEE, IT WAS NOTICED THAT THERE ARE NO DEBI TS IN THE BANK ACCOUNT WHICH COULD HAVE GONE TO THE FOREIGN BANK ACCOUNT. THUS, IT CAN BE SEEN THAT NO AMOUNTS HAVE BEEN TRANSFERRED FROM HIS DENA BANK AC COUNT IN INDIA TO ANY OF THE BANK ACCOUNTS MAINTAINED INCLUDING HSBC, GENEVA . IN FACT, THE BALANCE IN THE ACCOUNT MAINTAINED IN DENA BANK IS SO LESS THAT IT CANNOT FUND AN AMOUNT OF RS.4.28 CRORES WHICH HAS BEEN ADDED BY THE AO AS ASSESSEES INCOME. DESPITE THIS, THE AO SOUGHT TO PUT THE ONUS OF PROV ING A NEGATIVE THAT THE DEPOSITS IN FOREIGN BANK ACCOUNT ARE NOT SOURCED FR OM INDIA, ON THE ASSESSEE. IN OUR CONSIDERED VIEW, THE AO IS NOT JUSTIFIED IN PLACING THE ONUS OF PROVING A NEGATIVE ON THE ASSESSEE. IN FACT, ONLY A POSITIVE ASSERTION CAN BE PROVED, BUT NOT A NEGATIVE. FURTHERMORE, THE ONUS OF PROVING T HAT AN AMOUNT FALLS WITHIN THE TAXING AMBIT IS ON THE DEPARTMENT AND IT IS INC ORRECT TO PLACE THE ONUS OF PROVING NEGATIVE ON THE ASSESSEE. THIS LEGAL PROPO SITION IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF PA RIMISETTY SEETHARAMAN VS CIT (1965) 57 ITR 532 (SC) WHERE IT WAS CATEGORICAL LY HELD THAT THE BURDEN LIES UPON THE DEPARTMENT TO PROVE THAT A PARTICULAR ASSE T IS WITHIN THE TAXING PROVISIONS. THEREFORE, WE ARE OF THE CONSIDERED VI EW THAT WHEN THE AO FOUND THAT THE ASSESSEE IS A NON RESIDENT INDIAN, WAS INC ORRECT IN MAKING ADDITION TOWARDS DEPOSITS FOUND IN FOREIGN BANK ACCOUNT MAIN TAINED WITH HSBC BANK, 25 HEMANT MANSUKHALAL PANDYA GENEVA WITHOUT ESTABLISHING THE FACT THAT THE SAID DEPOSIT IS SOURCED OUT OF INCOME DERIVED IN INDIA, WHEN THE ASSESSEE HAS FILE D NECESSARY EVIDENCES TO PROVE THAT HE IS A NON RESIDENT SINCE 25 YEARS AND HIS FOREIGN BANK ACCOUNT AND ASSETS DID NOT HAVE ANY CONNECTION WITH INDIA AND T HAT THE SAME HAVE BEEN ACQUIRED / SOURCED OUT OF FOREIGN INCOME WHICH HAS NOT ACCRUED / ARISEN IN INDIA. 18. HAVING SAID SO, LET US EXAMINE WHETHER THE GOVE RNMENT / LEGISLATURE INTENDED TO TAX FOREIGN ACCOUNTS OF NON RESIDENTS. THE MINISTER OF STATE FOR FINANCE HAS CLARIFIED ON THE FLOOR OF THE LOKSABHA ON 02-12-2011 THAT MERE HOLDING OF AN ACCOUNT OUTSIDE INDIA DOES NOT HAVE L ED TO THE CONCLUSION THAT THE AMOUNT IS TAX EVADED. FURTHER, THE WHITE PAPER ON BLACK MONEY INTRODUCED BY THE GOVERNMENT STATES THAT IF INFORMA TION IS RECEIVED ABOUT 100 INDIANS HAVING BANK ACCOUNTS ABROAD, IT DOES NOT AU TOMATICALLY PROVE THAT ALL THOSE 100 ACCOUNTS REPRESENT BLACK MONEY OF INDIAN CITIZENS STASHED ABROAD. THERE MAY BE CASES WHERE THE ACCOUNT HOLDER MAY BE AN NRI WHO IS NOT ASSESSED TO TAX IN INDIA OR THE SUM DEPOSITED MAY A LREADY HAVE BEEN DISCLOSED TO THE INCOME-TAX DEPARTMENT. IT IS ONLY AFTER ENQ UIRY AND COMPLETION OF ASSESSMENT ONE CAN KNOW WHETHER THE AMOUNT DEPOSITE D IN THE FOREIGN ACCOUNT REPRESENTS BLACK MONEY OF AN INDIAN CITIZEN . SIMILARLY, IN THE STATEMENT DATED 04-04-2016 ISSUED BY THE MINISTER O F FINANCE PUBLISHED BY 26 HEMANT MANSUKHALAL PANDYA PRESS INFORMATION BUREAU, IT WAS CLARIFIED THAT NON RESIDENTS FOUND HAVING FOREIGN BANK ACCOUNTS WERE NON ACTIONABLE. THUS, I T IS VERY CLEAR FROM THE CLARIFICATIONS ISSUED BY THE GOVERNMENT ITSELF THAT THE LEGISLATURE DOES NOT WISH TO TAKE ANY ACTION IN RESPECT OF NON RESIDENTS HOLD ING FOREIGN BANK ACCOUNTS. FURTHER, EVEN IN THE EXCEL UTILITY OF RETURN OF INC OME IN THE INCOME-TAX DEPARTMENT WEBSITE, THE MOMENT A PERSON FILLS HIS R ESIDENTIAL STATUS AS NON RESIDENT, THE EXCEL UTILITY PREVENTS FILLING OF COL UMNS PERTAINING TO FOREIGN ASSETS. EVEN, THE HONBLE FINANCE MINISTER HAS CLA RIFIED THAT ALL ACCOUNTS IN FOREIGN BANK MAY NOT BE ILLEGAL AS THEY MAY BELONG TO NRI. THUS, EVEN THE GOVERNMENT HAS ACKNOWLEDGED THE FACT THAT AN NRI FO REIGN BANK ACCOUNT IS NOT ILLEGAL. WE FURTHER NOTICE THAT PROVISIONS OF BLAC K MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015 IS APPLICABLE ONLY TO RESIDENCE. AS PER SECTION 2((2) OF THE SAID ACT, A N ASSESSEE MEANS A PERSON BEING A RESIDENT OTHER THAN NOT ORDINARILY RESIDENT IN INDIA WITHIN THE MEANING OF SUB SECTION (6) OF SECTION 6 OF THE INCOME-TAX A CT ,BY WHOM TAX IN RESPECT OF UNDISCLOSED FOREIGN INCOME AND ASSETS OR ANY OTHER SUM OF MONEY IS PAYABLE UNDER THIS ACT AND INCLUDES, EVERY PERSON WHO IS DE EMED TO BE AN ASSESSEE IN DEFAULT UNDER THIS ACT. EVEN, THE FAQS TO THE BLAC K MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015 REITERATES THE ABOVE POSITION IN QUESTIONS NO.24 & 32 WHERE IT WAS CLARI FIED THAT IF A PERSON, WHILE 27 HEMANT MANSUKHALAL PANDYA HE WAS A NON-RESIDENT ACQUIRED OR MADE A FOREIGN AS SET OUT OF INCOME WHICH IS NOT CHARGEABLE TO TAX IN INDIA, SUCH ASSET SHALL NO T BE AN UNDISCLOSED ASSET UNDER THE ACT. THE AO, WITHOUT UNDERSTANDING THESE FACTS AND ALSO WITHOUT ANSWERING THE JURISDICTIONAL ISSUE OF WHETHER THE N ON RESIDENT ASSESSEE WAS LIABLE TO PAY TAX IN INDIA IN RESPECT OF DEPOSITS I N HIS FOREIGN BANK ACCOUNT, WHEN HE HAD PROVED THAT THE SOURCE OF DEPOSIT WAS N OT FROM INDIA, WENT ON TO MAKE ADDITION ON WRONG FOOTING ONLY ON THE BASIS OF INFORMATION IN THE FORM OF BASE NOTE WHICH IS UNVERIFIED AND UNAUTHENTICATED. ON THE OTHER HAND, THE ASSESSEE HAS FILED COMPLETE DETAILS IN RESPECT OF H IS RESIDENTIAL STATUS WHICH UNDOUBTEDLY PROVES THAT HE IS A NON RESIDENT IN IN DIA SINCE 1990 AND THE SAID BANK ACCOUNT HAD BEEN OPENED WHEN HE WAS A NON RESI DENT IN INDIA. THE ASSESSEE WENT ABROAD ON BUSINESS VISA AND STARTED B USINESS IN 1990 AND WAS EARNING INCOME IN JAPAN SINCE THEN. HE GOT PERMANE NT RESIDENCY CERTIFICATE IN THE YEAR 2001. THE AO, WITHOUT APPRECIATING THESE FACTS, MADE ADDITION ON WRONG PRESUMPTION THAT BEFORE 2001 IT WAS UNKNOWN T HAT THE ASSESSEE WAS A NON RESIDENT INDIAN AND HE HAS EARNED ANY INCOME OU TSIDE INDIA WHICH IS NOT TAXABLE IN INDIA. FURTHER, THE AO HAS TAKEN THE IN FORMATION OF FOREIGN BANK ACCOUNTS OF INDIANS TO COME TO THE CONCLUSION THAT THE SAID INFORMATION IS EVEN APPLICABLE TO NON RESIDENTS WITHOUT APPRECIATING TH E FACT THAT EVEN THE GOVERNMENTS INTENTION IS NOT TO TAX NRIS IN RESPEC T OF FOREIGN BANK ACCOUNT 28 HEMANT MANSUKHALAL PANDYA AND ASSETS. NO MATERIAL WAS BROUGHT ON RECORD TO S HOW THAT THE FUNDS WERE DIVERTED BY THE ASSESSEE FROM INDIA TO SOURCE THE D EPOSITS FOUND IN FOREIGN BANK ACCOUNT. THE SUSPICION, HOWSOEVER STRONG, CAN NOT TAKE PLACE OF PROOF AND NO ADDITION COULD BE MADE ON PRESUMPTION AND AS SUMPTION. THE AO HAS NOT PROVED THAT IMPUGNED ADDITION COULD BE MADE WIT HIN THE AMBIT OF SECTION 5(2) R.W.S. 68 / 69 OF THE INCOME-TAX ACT, 1961. 19. COMING TO THE CASE LAWS RELIED UPON BY THE ASSE SSEE. THE ASSESSEE HAS RELIED UPON THE DECISION OF ITAT, MUMBAI BENCH IN T HE CASE OF DCIT VS DIPENDU BAPALAL SHAH IN ITA NO.4751-4752/MUM/2016. WE FIND THAT THE CO-ORDINATE BENCH OF ITAT HAS DECIDED AN IDENTICAL ISSUE IN RES PECT OF FOREIGN BANK ACCOUNTS OF NON RESIDENTS AND HELD THAT WHEN THE AO FAILED TO PROVE NEXUS BETWEEN DEPOSITS FOUND IN FOREIGN BANK ACCOUNT AND SOURCE OF INCOME DERIVED FROM INDIA, ERRED IN MAKING ADDITION TOWARDS DEPOSI T U/S 68 / 69 OF THE I.T. ACT, 1961. IN THE SAID CASE, THE ASSESSEE IS A NON RESI DENT IN INDIA SINCE 1990 AND HAVE NO BUSINESS CONNECTION IN INDIA DURING THAT PE RIOD. UNDER THOSE FACTS, THE TRIBUNAL CAME TO THE CONCLUSION THAT IN THE ABS ENCE OF ANY NEXUS BETWEEN DEPOSITS FOUND IN FOREIGN BANK ACCOUNT AND SOURCE O F INCOME DERIVED IN INDIA, NO ADDITION COULD BE MADE TOWARDS CASH DEPOSITS U/S 68 / 69 OF THE I.T. ACT, 1961. THE RELEVANT PORTION OF THE ORDER IS EXTRACT ED BELOW:- 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAD ALSO DELIBE RATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY LOWER AUTHORITIES IN THE IR RESPECTIVE ORDERS AS 29 HEMANT MANSUKHALAL PANDYA WELL AS CITED BY LEARNED AR AND DR DURING THE COURS E OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. FROM THE RECORD WE FOUND THAT ASSESSEE IS A NON-RESIDENT SINCE 1979, AS PER SECTI ON 6 OF THE IT ACT. ASSESSMENT OF THE ASSESSEE WAS REOPENED ON THE BASI S OF INFORMATION (CALLED AS 'BASE NOTE') WHICH WAS RECEIVED IN RESPE CT OF THE ASSESSEE FROM THE OFFICE OF DIT(INV.)-II, MUMBAI PERTAINING TO A BANK ACCOUNT WITH HSBC BANK, GENEVA, SWITZERLAND. IT WAS SUBMITTED BY ASSE SSEE BEFORE AO THAT HE IS A NON-RESIDENT AS PER SECTION 6 OF THE ACT SI NCE 1979. COPIES OF HIS PASSPORT WERE ALSO SUBMITTED TO THE AO IN ORDER TO SUBSTANTIATE HIS CLAIM OF BEING A NON-RESIDENT UNDER THE ACT. SINCE, HE IS A NONRESIDENT, HE SUBMITTED THAT HIS NON-INDIAN BANK ACCOUNT DOES NOT FALL WITHIN THE PURVIEW OF THE ACT. IN SUPPORT OF HIS CLAIM, HE ALSO SUBMIT TED A DULY NOTARIZED AFFIDAVIT STATING THAT HE IS A NON-RESIDENT AS PER SECTION 6 OF THE INCOM E-TAX ACT, 1961 SINCE 1979. HE HOLDS A BELGIAN PASSPORT AND HIS CURRENT PASSPO RT NUMBER IS EL 721068. HIS PAN IS BNBPS0099E. NO INCOME HAS EITHER BEEN RECEIVED OR ACCRUED TO H IM IN INDIA WHICH WAS LIABLE TO TAX UNDER THE PROVISIONS OF THE INCOME-TAX ACT, 1961 DURING THE ASSESSMENT YEAR 2006-07 AND 2007-08 . THE INDIAN FUNDS ARE NOT THE SOURCE OF AMOUNTS DEP OSITED IN BANK ACCOUNTS HELD BY HIM OUTSIDE INDIA. 9. FURTHER, IT WAS SUBMITTED THAT THE SCOPE OF INCO ME IN CASE OF A NONRESIDENT IS DEFINED UNDER THE PROVISIONS OF SUB- SECTION (2) OF SECTION 5 OF THE ACT. AS PER THIS SECTION, A PERSON WHO IS A 'NON-RESIDENT' HAS TO PAY TAX ONLY ON THAT INCOME WHICH IS EITHER RECEIVED OR IS DEEMED TO BE RECEIVED BY HIM IN INDIA, OR ACCRUES OR ARISES OR D EEMED TO ACCRUE OR ARISE TO HIM IN INDIA, DURING THE YEAR. THUS, HE WILL BE LIABLE TO TAX ONLY IN RESPECT OF INCOME RECEIVED OR ACCRUED TO HIM IN INDIA. 10. THE ASSESSEE ALSO SUBMITTED THAT HE WAS NOT HAV ING ANY OF HIS BUSINESS OPERATIONS IN INDIA DURING AY 2006-07 HENC E, THERE IS NO INCOME WHICH HAS EITHER DEEMED TO ACCRUE OR ARISE IN INDIA UNDER SECTION 9 OF THE ACT. THUS, THE INITIAL CONTRIBUTION OR EVEN OTHER A MOUNTS IN THE FOREIGN BANK ACCOUNT DOES NOT FALL UNDER THE PURVIEW - OF SECTIO N 9 OF THE ACT. THUS, THE PEAK BALANCE APPEARING IN THE BANK STATEMENT OF THE FOREIGN BANK ACCOUNT SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSE SSEE. 11. WITHOUT PREJUDICE TO THE ABOVE, HE SUBMITTED THAT THE PEAK BALANCE APPEARING IN THE BANK STATEMENT OF THIS FOREIGN BANK ACCOUNT HAS ALREADY BEEN ADDED TO THE COMPUTATION OF INCOME AND SUBJECTED TO TAX I N THE HANDS OF DEEPAK SHAH AND KUNAL SHAH IN THEIR RESPECTIVE ASSESSMENTS FOR AY 2006-07 AND AY 2007-08. A COPY OF THE ORDER PASSED BY ASSISTANT COMMISSIONER OF INCOME-TAX -16(2) AND BY COMMISSIONER OF INCOME-TAX (APPEALS)-27 ('CIT(A)-27') IN THEIR RESPECTIVE CASES WAS SUBMITT ED TO THE AO FOR HIS CONSIDERATION. 12. FURTHER, BOTH THESE ASSESSEES - DEEPAK SHAH AND KUNAL SHAH HAVE PAID TAXES ON THE AMOUNT OF ADDITIO N TO THEIR RESPECTIVE COMPUTATION OF INCOME. A SUMMARY OF THE TAXES PAID BY THEM WAS ALSO 30 HEMANT MANSUKHALAL PANDYA SUBMITTED TO THE AO FOR HIS CONSIDERATION. HOWEVER, AO DID NOT AGREE WITH THE ASSESSEES CONTENTION AND ADDED PEAK CREDIT IN THE ACCOUNT OF HSBC GENEVA IN ASSESSEES INCOME. THE AO HAS MADE ADDITI ONS IN THE CASE OF ASSESSEE. 11. WITHOUT PREJUDICE TO THE ABOVE, HE SUBMITTED TH AT THE PEAK BALANCE APPEARING IN THE BANK STATEMENT OF THIS FOREIGN BAN K ACCOUNT HAS ALREADY BEEN ADDED TO THE COMPUTATION OF INCOME AND SUBJECT ED TO TAX IN THE HANDS OF DEEPAK SHAH AND KUNAL SHAH IN THEIR RESPEC TIVE ASSESSMENTS FOR AY 2006-07 AND AY 2007-08. A COPY OF THE ORDER PASSED BY ASSISTANT COMMISSIONER OF INCOME-TAX -16(2) AND BY COMMISSION ER OF INCOME-TAX (APPEALS)-27 ('CIT(A)-27') IN THEIR RESPECTIVE CASE S WAS SUBMITTED TO THE AO FOR HIS CONSIDERATION. 12. FURTHER, BOTH THESE A SSESSEES - DEEPAK SHAH AND KUNAL SHAH HAVE PAID TAXES ON THE AMOUNT O F ADDITION TO THEIR RESPECTIVE COMPUTATION OF INCOME. A SUMMARY OF THE TAXES PAID BY THEM WAS ALSO SUBMITTED TO THE AO FOR HIS CONSIDERATION. HOWEVER, AO DID NOT AGREE WITH THE ASSESSEES CONTENTION AND ADDED PEAK CREDIT IN THE ACCOUNT OF HSBC GENEVA IN ASSESSEES INCOME. THE AO HAS MADE ADDITIONS IN THE CASE OF ASSESSEE. 12. FURTHER, BOTH THESE ASSESSEES - DEEPAK SHAH AND KUNAL SHAH HAVE PAID TAXES ON THE AMOUNT OF ADDITION TO THEIR RESPE CTIVE COMPUTATION OF INCOME. A SUMMARY OF THE TAXES PAID BY THEM WAS ALS O SUBMITTED TO THE AO FOR HIS CONSIDERATION. HOWEVER, AO DID NOT AGREE WITH THE ASSESSEES CONTENTION AND ADDED PEAK CREDIT IN THE ACCOUNT OF HSBC GENEVA IN ASSESSEES INCOME. THE AO HAS MADE ADDITIONS IN THE CASE OF ASSESSEE AFTER TAKING COGNIZANCE OF THE FACT THAT AN ADDITIO N OF THE SAME AMOUNT WAS MADE IN THE CASES OF MR. DEEPAK SHAH AND MR. KU NAL SHAH IN THEIR RESPECTIVE ASSESSMENTS BY THE ADDL. COMMISSIONER OF INCOME TAX-16(2), MUMBAI. 13. BY THE IMPUGNED ORDER, CIT(A) DELETED THE ADDIT ION BY OBSERVING THAT ASSESSEE IS INDEED A NON-RESIDENT U/S.6 OF THE ACT AND THIS FACT HAS NOT BEEN DISPUTED BY THE AO. AS PER OUR CONSIDERED VIEW UNDER THE PROVISIONS OF THE ACT, TAXABILITY OF A NON-RESIDENT IS DETERMI NED WITH REFERENCE TO THE PROVISIONS OF SECTION 5(2) READ WITH SECTION 9 OF T HE ACT. IN THE INSTANT CASE UNDISPUTEDLY THE ASSESSEE IS A NON-RESIDENT SINCE 1 979, AS PER THE PROVISIONS OF SECTION 6 OF THE IT ACT. THE SCOPE OF INCOME IN CASE OF A NON-RESIDENT IS DEFINED UNDER THE PROVISIONS OF SUB SECTION (2) OF SECTION 5 OF THE ACT. AS PER THIS SECTION, A PERSON WHO IS A 'NON-RESIDENT' HAS TO PAY TAX ONLY ON THAT INCOME WHICH IS EITHER RECEIVED OR IS DEEMED TO BE RECEIVED BY HIM IN INDIA, OR ACCRUES OR ARISES OR D EEMED TO ACCRUE OR ARISE TO HIM IN INDIA, DURING THE YEAR, THEREFORE ASSESSE E WILL BE LIABLE TO TAX ONLY IN RESPECT OF INCOME RECEIVED OR ACCRUED TO HIM IN INDIA. FURTHER, SECTION 9 OF THE ACT, LAYS DOWN THE PROVISIONS RELATING TO IN COME WHICH IS DEEMED TO ACCRUE OR ARISE IN INDIA. AS THE ASSESSEE MR. DIPEN DU SHAH WAS NOT HAVING ANY OF HIS BUSINESS OPERATIONS IN INDIA DURI NG AY 2006-07 AND AY 2007-08, THERE IS NO INCOME WHICH HAS EITHER DEEMED TO ACCRUE OR ARISE IN INDIA UNDER SECTION 9 OF THE ACT, THUS, THE INITIAL CONTRIBUTION OR EVEN OTHER AMOUNTS IN THE FOREIGN BANK ACCOUNT MENTIONED BY AO IN THE NOTICE DOES NOT FALL UNDER THE PURVIEW OF SECTION 5(2) READ WIT H SECTION 9 OF THE ACT'. ACCORDINGLY, ASSESSEE IS REQUIRED TO BE PASS THROUG H AFORESAID TEST OF TAXABILITY OF NONRESIDENT. IT IS A WELL SETTLED POS ITION IN LAW THAT A 'NON- 31 HEMANT MANSUKHALAL PANDYA RESIDENT', HAVING MONEY IN A FOREIGN COUNTRY CANNOT BE TAXED IN INDIA IF SUCH MONEY HAS NEITHER BEEN RECEIVED OR DEEMED TO B E RECEIVED, NOR HAS IT ACCRUED OR ARISEN TO HIM OR DEEMED TO ACCRUE OR ARISE TO HIM IN INDIA. 14. UNDER SECTION 5(2) THE INCOME ACCRUING OR ARISI NG OUTSIDE INDIA IS NOT TAXABLE UNLESS IT IS RECEIVED IN INDIA. SIMILARLY, IF ANY INCOME IS ALREADY RECEIVED OUTSIDE INDIA, THE SAME CANNOT BE TAXED IN INDIA MERELY ON THE GROUND THAT IT IS BROUGHT IN INDIA BY WAY OF REMITT ANCES. WE ALSO FOUND THAT THE ASSESSEE IN HIS AFFIDAVIT DATED 13 OCTOBER 2011 HAS CLEARLY STATED THAT THE HE WAS A SETTLOR OF A TRUST OUTSIDE INDIA WHICH HE HAD CREATED FOR THE BENEFIT OF HIS FAMILY MEMBERS WITH HIS INITIAL CONT RIBUTION. FURTHER, HE HAS ALSO STATED THAT NONE OF THE DISCRETIONARY BENEFICI ARIES HAVE CONTRIBUTED ANY FUNDS TO THE SAID TRUST. HOWEVER, THE CONTENT O F THIS AFFIDAVIT WAS NOWHERE DECLINED BY THE AO NOR WAS HELD TO BE NOT T RUE. IN VIEW OF THE ABOVE, THE ASSESSEE BEING A NON-RESIDENT, HAVING MO NEY IN A FOREIGN COUNTRY CANNOT BE CALLED UPON TO PAY INCOME TAX ON THAT MONEY IN INDIA UNLESS IT SATISFIES THE TESTS OF TAXABILITY OF NON- RESIDENT UNDER THE PROVISIONS OF THE ACT, WHICH IN THE INSTANT CASE IS NOT GETTING SATISFIED IN THE CASE OF THE ASSESSEE. THUS, THE BANK ACCOUNT OF HSB C BANK, GENEVA IS OUTSIDE THE PREVIEW OF THIS ACT. 15. WE FOUND THAT CIT(A) AS DEALT WITH THE ISSUE TH READBARE AND AFTER APPLYING JUDICIAL PRONOUNCEMENTS LAID DOWN BY HIGH COURT AND SUPREME COURT REACHED TO THE CONCLUSION THAT ASSESSEE BEING NON-RESIDENT IS NOT LIABLE TO TAX IN RESPECT OF MONEY LYING IN THE FORE IGN COUNTRY UNLESS AO BRING SOMETHING ON RECORD TO SHOW THAT ASSESSEE HAS NOT FULFILLED THE TEST OF TAXABILITY OF NON-RESIDENT UNDER THE PROVISIONS OF THE ACT. THE DETAILED FINDING SO RECORDED BY CIT(A) ARE AS PER MATERIAL O N RECORD AND DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. 16. THE CIT(A ) ALSO OBSERVE THAT A CIRCUMSTANTIAL EVIDENCE WHENEVER USED HAS TO BE CON CLUSIVE IN NATURE. THUS, THE CIRCUMSTANTIAL EVIDENCES RELIED ON BY THE LEARNED AO NOWHERE LEAD TO THE CONCLUSION THAT THE AMOUNTS IN THE ALLE GED FOREIGN BANK ACCOUNT ARE SOURCED FROM INDIA. THE CIT(A) ALSO REC ORDED A FINDING TO THE EFFECT THAT THE SOURCE OF DEPOSITS IS NO WHERE PROV ED BY THE FOUR INSTANCES RELIED ON BY THE AO BEING TERMED AS CIRCUMSTANTIAL EVIDENCE. THE LEARNED AO HAS HIMSELF OBSERVED BASED ON THE SURVEY REPORT DATED 18 NOVEMBER 2011 THAT THE ASSESSEE HAD RETIRED FROM PARTNERSHIP OF M/S KANUBHAI B. SHAH & CO. SINCE OCTOBER 1978. ALSO, THE LEARNED AO OBSERVED IN THE NEXT PARA THAT THE ASSESSEE BECAME A NON-RESIDENT A S PER SECTION 6 OF THE ACT SINCE 1979 WHICH IS THE YEAR AFTER WHICH HE RET IRED FROM BEING THE PARTNER IN THE FIRM. THUS, THE ADDITION OF UNDISCLO SED INCOME OF THE FIRM M/S KANUBHAI B. SHAH &: CO. DURING THE FY 2011-12 H AS NO CONNECTION WITH THE ASSESSEE, AS HE WAS NOT A PARTNER DURING T HIS PERIOD. IN THE INSTANT CASE, EVEN IT IS SEEN THAT THE BANK ACCOUNT WITH HSBC BANK, GENEVA WAS OPENED DURING THE YEAR 1997. HENCE, THE CIRCUMSTANTIAL EVIDENCES DISCUSSED ABOVE INCLUDING THE REPORT OF I NDIAN EXPRESS OF 10 FEBRUARY 2015, RELIED BY THE LEARNED AO NOWHERE CON CLUSIVELY ESTABLISHES THAT THE SOURCE OF THE DEPOSITS, SINCE THE INCEPTIO N, IN THE BANK ACCOUNT WAS FROM INDIA. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE A DDITION MADE IN RESPECT OF DEPOSITS IN HSBC ACCOUNT, GENEVA IN THE HANDS OF NO N-RESIDENT ASSESSEE. FACTS AND CIRCUMSTANCES IN BOTH THE YEARS ARE SAME. 32 HEMANT MANSUKHALAL PANDYA 16. THE CIT(A) ALSO OBSERVE THAT A CIRCUMSTANTIAL E VIDENCE WHENEVER USED HAS TO BE CONCLUSIVE IN NATURE. THUS, THE CIRCUMSTA NTIAL EVIDENCES RELIED ON BY THE LEARNED AO NOWHERE LEAD TO THE CONCLUSION THAT THE AMOUNTS IN THE ALLEGED FOREIGN BANK ACCOUNT ARE SOURCED FROM I NDIA. THE CIT(A) ALSO RECORDED A FINDING TO THE EFFECT THAT THE SOURCE OF DEPOSITS IS NO WHERE PROVED BY THE FOUR INSTANCES RELIED ON BY THE AO BE ING TERMED AS CIRCUMSTANTIAL EVIDENCE. THE LEARNED AO HAS HIMSELF OBSERVED BASED ON THE SURVEY REPORT DATED 18 NOVEMBER 2011 THAT THE A SSESSEE HAD RETIRED FROM PARTNERSHIP OF M/S KANUBHAI B. SHAH & CO. SINC E OCTOBER 1978. ALSO, THE LEARNED AO OBSERVED IN THE NEXT PARA THAT THE ASSESSEE BECAME A NON-RESIDENT AS PER SECTION 6 OF THE ACT SINCE 19 79 WHICH IS THE YEAR AFTER WHICH HE RETIRED FROM BEING THE PARTNER IN TH E FIRM. THUS, THE ADDITION OF UNDISCLOSED INCOME OF THE FIRM M/S KANUBHAI B. S HAH &: CO. DURING THE FY 2011-12 HAS NO CONNECTION WITH THE ASSESSEE, AS HE WAS NOT A PARTNER DURING THIS PERIOD. IN THE INSTANT CASE, EVEN IT IS SEEN THAT 16. THE CIT(A) ALSO OBSERVE THAT A CIRCUMSTANTIAL EVIDENCE WHENEVE R USED HAS TO BE CONCLUSIVE IN NATURE. THUS, THE CIRCUMSTANTIAL EVID ENCES RELIED ON BY THE LEARNED AO NOWHERE LEAD TO THE CONCLUSION THAT THE AMOUNTS IN THE ALLEGED FOREIGN BANK ACCOUNT ARE SOURCED FROM INDIA . THE CIT(A) ALSO RECORDED A FINDING TO THE EFFECT THAT THE SOURCE OF DEPOSITS IS NO WHERE PROVED BY THE FOUR INSTANCES RELIED ON BY THE AO BE ING TERMED AS CIRCUMSTANTIAL EVIDENCE. THE LEARNED AO HAS HIMSELF OBSERVED BASED ON THE SURVEY REPORT DATED 18 NOVEMBER 2011 THAT THE A SSESSEE HAD RETIRED FROM PARTNERSHIP OF M/S KANUBHAI B. SHAH & CO. SINC E OCTOBER 1978. ALSO, THE LEARNED AO OBSERVED IN THE NEXT PARA THAT THE ASSESSEE BECAME A NON-RESIDENT AS PER SECTION 6 OF THE ACT SINCE 19 79 WHICH IS THE YEAR AFTER WHICH HE RETIRED FROM BEING THE PARTNER IN TH E FIRM. THUS, THE ADDITION OF UNDISCLOSED INCOME OF THE FIRM M/S KANUBHAI B. S HAH &: CO. DURING THE FY 2011-12 HAS NO CONNECTION WITH THE ASSESSEE, AS HE WAS NOT A PARTNER DURING THIS PERIOD. IN THE INSTANT CASE, EVEN IT IS SEEN THAT THE BANK ACCOUNT WITH HSBC BANK, GENEVA WAS OPENED DURING TH E YEAR 1997. HENCE, THE CIRCUMSTANTIAL EVIDENCES DISCUSSED ABOVE INCLUDING THE REPORT OF INDIAN EXPRESS OF 10 FEBRUARY 2015, RELIED BY TH E LEARNED AO NOWHERE CONCLUSIVELY ESTABLISHES THAT THE SOURCE OF THE DEP OSITS, SINCE THE INCEPTION, IN THE BANK ACCOUNT WAS FROM INDIA. IN V IEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF CIT(A) FOR DELETING THE ADDITION MADE IN RESPECT OF DEPOSITS IN HSBC AC COUNT, GENEVA IN THE HANDS OF NON-RESIDENT ASSESSEE. FACTS AND CIRCUMSTA NCES IN BOTH THE YEARS ARE SAME. 20. COMING TO THE CASE LAWS RELIED UPON BY THE REVE NUE. THE LD.DR HAS RELIED UPON THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF RAHUL RAJNIKANT PARIKH IN ITA NO.5889/MUM/2016. WE FIND THAT THE CASE LAW RELIED UPON BY THE REVENUE HAS NO APPLICATION TO THE FACTS OF THE ASSE SSEES CASE, AS IN THE SAID 33 HEMANT MANSUKHALAL PANDYA CASE, THE TRIBUNAL HAS NOT LAID DOWN ANY RATIO. TH E MATTER WAS SET ASIDE TO THE FILE OF THE AO BY CONSENT OF BOTH THE PARTIES. IT IS A SETTLED LAW THAT A JUDGEMENT / ORDER DELIVERED BY CONSENT HAS NO PRECE DENTIAL VALUE. EVEN OTHERWISE, THE TAXPAYER IN THE SAID CASE HAD BUSINE SS CONNECTIONS IN INDIA BY WAY OF BEING A PARTNER IN PARTNERSHIP FIRMS. UNDER THOSE FACTS, THE TRIBUNAL HAS SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR F URTHER EXAMINATIONS ON THE REQUEST OF BOTH THE PARTIES. ADMITTEDLY, IN THIS C ASE, THE ASSESSEE IS A NON RESIDENT AND HE DOES NOT HAVE ANY BUSINESS CONNECTI ON / INTEREST IN INDIA. THEREFORE, THE CASE LAW RELIED UPON BY THE LD.DR CA NNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. 21. IN THIS VIEW OF THE MATTER AND CONSIDERING THE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN MAKING ADDITION TOWARDS DEPOSITS FOUND IN HSBC BANK ACCOUNT, GENEVA U/S 69 OF THE ACT. THE LD.CIT(A), AFTER CONSIDERING RELEV ANT FACTS, HAS RIGHTLY DELETED ADDITION MADE BY THE AO. WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE ORDER OF LD.CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE FI NDINGS OF LD.CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 22. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO.4680/MUM/2016 2007-08 23. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL AR E IDENTICAL TO THE FACTS AND 34 HEMANT MANSUKHALAL PANDYA ISSUES WHICH WE HAVE ALREADY CONSIDERED IN ITA NO.4 679/MUM/2016. THE REASONS GIVEN BY US IN PRECEDING PARAGRAPHS SHALL M UTATIS MUTANDIS APPLY TO THIS APPEAL ALSO. THEREFORE, FOR THE DETAILS REASO NS GIVEN THEREIN IN ITA NO.4679/MUM/2016, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 24. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. COS NO.58 & 59/MUM/2018 25. THE ASSESSEE HAS TAKEN A LEGAL GROUND IN ITS CR OSS OBJECTIONS ON THE ISSUE OF VALIDITY OF REOPENING OF ASSESSMENTS FOR BOTH TH E ASSESSMENT YEARS. SINCE WE HAVE ALREADY DECIDED THE ISSUE ON MERITS IN FAVO UR OF THE ASSESSEE AND AGAINST THE REVENUE, THE CROSS OBJECTIONS FILED BY THE ASSESSEE CHALLENGING VALIDITY OF REOPENING OF ASSESSMENTS BECOMES ACADEM IC IN NATURE. THEREFORE, THE SAME ARE DISMISSED, AS INFRUCTUOUS. 26. AS A RESULT, BOTH THE APPEALS FILED BY THE REVE NUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2018. SD/- SD/- (PAWAN SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 16 TH NOVEMBER, 2018 PK/- COPY TO : 35 HEMANT MANSUKHALAL PANDYA 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI