Income-tax Officer, V. Smt. Sangeeta Kotoomal Esrani, Aurangabad

ITA 1565/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7402 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Extension of stay; Corroborative evidences
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1 565 /P U N/20 1 5 / ASSESSMENT YEAR : 20 1 0 - 1 1 THE INCOME TAX OFFICER , WARD 3(2), AURANGABAD . / APPELLANT VS. SMT. SANGEETA KOTOOMAL ESRANI, PLOT NO.65 - B, SINDHI COLONY, AURANGABAD 431003 . / RESPONDENT PAN: A ATPE2783R / APPELLANT BY : SHRI AJAY MODI / RESPONDENT BY : S /S HRI NIKHIL PATHAK AND DEEPAK SHARMA / DATE OF HEARING : 27 .0 7 .2017 / DATE OF PRONOUNCEMENT: 27 .0 9 .2017 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE REVENUE IS AGAINST ORDER OF CIT(A) - 2 , AURANGABAD , DATED 30 . 0 9 .201 5 RELATING TO ASSESSMENT YEAR 20 1 0 - 1 1 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 2 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) - 2 , AURANGABAD HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT O F UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AT RS.2,71,00,000/ - ; 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) - 2 AURANGABAD HAS ERRED IN TAKING THE DECLARATION FILED BY THE ASSESSEE BEFORE THE ITO, WARD - 22(1)(2), MUMBAI AB VALID REGARDING THE CASH BROUGHT TO INDIA AND DEPOSITED IN VARIOUS BANK ACCOUNTS IN AURANGABAD DESPITE KNOWING THE FACT THAT THE JURISDICTION OVER THE ASSESSEE WAS NO T IN MUMBAI AND THEREFORE CIT(A) - 2 HAS ERRED IN TREATING IT AS A ME RE 'VENIAL BREACH' WHEN IT IS A JURISDICTIONAL ISSUE IN LAW; 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A ) - 2 AURANGABAD HAS ERRED IN ACCEPTING THE ASSESSEE'S SAY THAT SHE HA D BROUGHT HUGE CASH TO INDIA BECAUSE THERE ARE NO BANKING CHANNEL BETWEEN INDIA AND PAKISTAN WHEN THE ASSESSEE HAS FAILED TO PRODUCE A NY EVIDENCE WHATSOEVER IN SUPPORT OF THE HUGE CASH WAS BROUGHT TO INDIA; 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) - 2 AURANGABAD HAS ERRED IN ACCEPTING THE ASSESSE E'S SAY THAT SHE HAD SUBSTANTIAL CASH OUT OF SALE PROCEEDS OF PROPERTY IGNORING THE FACT THAT THE INSTRUMENT EXECUTED SHALL BE LIABLE FOR PAYMENT OF STAMP DUTY WHICH IS NOT THE CASE IN SUCH SALE AGREEMENTS AND SALE HAS BEEN EFFECTED MERELY ON A STAMP PAPER OF RS . 100/ - ONLY BY SIMPLY NOTARISING WITH NO SCHEDULE OF PAYMENTS MENTIONED IN SUCH SALE AGREEMENT. 5. THE ORDER OF THE AO BE RESTORED AND THAT OF THE CIT(A) BE VACATED. 3. THE ISSUE RAISED IN THE PRESENT APPEAL FILED BY THE REVENUE IS AGAINST DELETIO N OF ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AT RS.2,71,00,000/ - . ALL THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE IN RELATION TO THE SAID ISSUE. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,85,260/ - . THE ASSESSING OFFICER FROM THE PRELIMINARY INFORMATION FILED BY THE ASSESSEE, NOTED THAT THE ASSESSEE HAD MADE CASH DEPOSIT OF RS.2.50 CRORES IN EIGHT BANK ACCOUNT S, OF WHICH FIVE WERE CURRENT ACCOUNTS. THE ASSESSEE HAD MADE INVESTMENT OF RS.1.57 CRORES IN PURCHASE OF COMMERCIAL PROPERTY BY WITHDRAWING THIS AMOUNT FROM SOME OF SAID BANK ACCOUNTS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF CASH DEPOSITS IN BA NK ACCOUNTS. IN REPLY, THE ASSESSEE EXPLAINED THAT SHE HAD MIGRATED FROM PAKISTAN ON 30.07.2009 WITH A 3 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI VIEW TO PERMANENTLY SETTLE IN INDIA. SHE FURTHER POINTED OUT THAT WHILE COMING TO INDIA, SHE HAD BROUGHT RS.2.71 CRORES IN CASH AND 1387.50 GRM. OF GOL D ORNAMENTS AND JEWEL LE RY VALUING ABOUT RS.22,01,500/ - . IN THIS REGARD, THE ASSESSEE EXPLAINED THAT SHE HAD FILED DECLARATION ABOUT BRINGING THE CASH AND JEWELLERY BOTH BEFORE THE ITO, WARD 22(1)(2), MUMBAI ON 15.09.2009 IN TERMS OF BOARD CIRCULAR F.NO.73 /16/68 - IT(A - II), DATED 03.02.1969. THE ASSESSEE FURTHER CONTENDED THAT HINDUS IN PAKISTAN WERE SUPPRESSED CLASS AND WERE UNDER THE TREMENDOUS RELIGIOUS COMPULSIONS AND INHUMAN TREATMENT WAS GIVEN TO THEM BY THE PAKISTANIS. IN THE CIRCUMSTANCES, THE HINDU S DO NOT DISCLOSE THEIR MIGRATION TO INDIA, BECAUSE THEY FEAR FOR THEIR LIFE, SAFETY AND SECURITY OF THEIR FAMILIES. IT WAS FURTHER POINTED OUT THAT SAFE PASSAGE WAS NOT ALLOWED TO THEM NEITHER BY THE CIVILIANS NOR BY THE PAKISTAN AUTHORITIES. FURTHER, T HERE WAS NO RULE OF LAW SO FAR AS INCOME TAX AND OTHER REVENUE LAWS WERE CONCERNED AND THEY WERE HARDLY ANY OBLIGATIONS TO FILE REGULAR RETURNS, ETC. SINCE THAT LEAD TO DISCLOSING THE FINANCIAL POSITION, WHICH WAS AGAIN EXPLOITED WITH KIDNAPPINGS, EXTORTIONS AND DEATH THREATS. IT WAS POINTED OUT THAT KEEPING THESE ASPECTS IN MIND, THE BOARD HAD INSTRUCTED THE DEPARTMENT THAT THE PERSONS MIGRATING FROM WEST PAKISTAN TO INDIA NEED NO T BE REQUIRED TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR THE TRANSFER OF MONIES AND PERSONAL JEWELLERY BROUGHT BY THEM AND THEIR FAMILY, SUBJECT TO CERTAIN CONDITIONS. THE CIRCULAR FURTHER PROVIDED THAT NO ENQUIRIES COULD BE MADE FROM S UCH MIGRANT ASSESSEES AND THEY WERE NOT REQUIRED TO PRODUCE ANY DOCUMENTARY EVIDENCE FOR THEIR CLAIM OF TRANSFER OF MONIES, ETC. THE ASSESSEE ALSO EXPLAINED THAT THE RE WERE NO BANKING CHANNELS BETWEEN INDIA AND PAKISTAN AND THUS, THERE WAS NO WAY IN WHICH MIGRANTS COULD TRANSFER AND BRING THEIR MONIES AND PERSONAL BELONGINGS TO INDIA. THE ASSESSEE EXPLAINED ABOUT HER FAMILY STATUS AND POINTED OUT THAT SHE CAME FROM A TRADITIONALLY RICH FAMILY AND HER HUSBAND AND OTHER FAMILY MEMBERS WERE IN A VERY 4 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI SOUND F INANCIAL POSITION AND WERE STILL RESIDING IN PAKISTAN. THE SOURCE S OF CASH BROUGHT IN INDIA WERE EXPLAINED TO BE THE AMOUNT RECEIVED ON SALE OF PROPERTY IN SUKKUR BEING 40% SHARE OF ASSESSEE AT RS.2 CRORES AND THE AMOUNT RECEIVED FROM HER HUSBAND ON SALE OF ANOTHER PROPERTY IN DIST. SUKKUR BEING HIS 40% SHARE IN TWO ACRES I.E. RS.1,50,00,000/ - AND AMOUNT RECEIVED FROM THE HUSBAND ON SALE OF HIS FLAT IN KARACHI FOR RS.1,10,00,000/ - , TOTALING RS.4.60 CRORES. THE ASSESSEE ALSO EXPLAINED THAT SHE HAD CASH CRE DIT ACCOUNT WITH MUSLIM COMMERCIAL BANK LTD., WHEREIN SHE HAD BALANCE OF RS.4.39 CRORES AS ON 25.07.2009 AND ALSO A JOINT ACCOUNT WITH BANK ALPLAH LTD. , WHEREIN SHE HAD BALANCE OF RS.2.60 CRORS AS ON 25.07.2007 AND THE SAME WAS TRANSFERRED / BROUGHT WITH H ER WHEN SHE WAS SHIFTING TO INDIA. THE ASSESSEE CLAIMED THAT SHE HAD SUFFICIENT RESOURCES IN PAKISTAN TO WHICH THE MONIES AND THE PERSONAL JEWELLERY BROUGHT IN INDIA COULD BE REASONABLY ATTRIBUTED , THUS, THE CONDITIONS LAID DOWN IN BOARDS CIRCULAR IN THI S REGARD WERE SUITABLY SATISFIED. THE ASSESSEE FURNISHED RELEVANT DETAILS IN RESPECT OF VARIOUS TRANSACTIONS OF SALE OF PROPERTIES. THE ASSESSEE ALSO FILED COPIES OF DECLARATION MADE BEFORE THE ITO, MUMBAI AND THE CERTIFICATE DATED 15.09.2007 ISSUED BY H IM ACCEPTING DECLARATION. THE ASSESSEE IN TURN, RELIED ON VARIOUS DECISIONS IN SUPPORT OF HER PROPOSITION. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE COPIES OF APPLICATIONS FOR GRANT OF LONG TERM VISAS, RESIDENTIAL PERMITS, GRANT OF PERMISSIONS FOR EXTENSION OF STAY, IN HER AS WELL AS HER FAMILY MEMBER CASES ; COPY OF DECLARATION, IF ANY, FILED BY HER BEFORE THE CUSTOMS AUTHORITIES UNDER THE BAGGAGE RULES FOR BRINGING HARD CURRENCY AND JEWELLERY INTO INDIA, ETC. 5. THE ASSESSING OFFICER FROM THE COPY OF DECLARATION MADE NOTED THAT THE ASSESSEE HAD MENTIONED THE ADDRESS OF FLAT AT GHATKOPAR. SHE WAS ASKED TO FURNISH FULL NAME OF THE PERSON WHO OWNS / STAYS IN THE SAID FLAT AND ALSO TO 5 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI EXPLAIN HER RELATIONSHIP WITH HI M AND ALSO TO PRODUCE CERTAIN PROOFS SUCH AS ELECTRICITY BILLS, MUNICIPAL CORPORATION BILLS, ETC. TO SHOW THAT AT THE GIVEN ADDRESS, FLAT REALLY EXISTS. BESIDE S, ANOTHER DISCREPANCY WAS NOTED IN THE COPY OF DECLARATION FILED BEFORE THE ITO, MUMBAI AND CER TIFICATE ISSUED BY HIM. THE CERTIFICATE MENTIONS THAT THE ASSESSEE HAD FILED THE DECLARATION ON 30.07.2009 WHILE THE COPY OF DECLARATION ACKNOWLEDGED BY HIS OFFICE BEARS DATE OF 15.09.2009. THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY IN DATES ALSO. THE ASSESSEE IN THIS REGARD FURNISHED COPIES OF LTVS, RESIDENTIAL PERMITS, ETC. AS FOR THE DECLARATION MADE UNDER THE BAGGAGE RULES, SHE CONTENDED THAT SHE HAD MADE NO SUCH DECLARATION . AS REGARDS THE DATE IN THE MUMBAI ITOS CERTIFICATE, SHE EXPLAINED THAT IT WAS SIMPLY AN INADVERTENT MISTAKE ON THE PART OF ASSESSING OFFICER. THE ASSESSEE HOWEVER, DID NOT FILE ANY EVIDENCE TO SUPPORT THE ACTUAL EXISTENCE OF GHATKOPAR FLAT AND NO MENTION ABOUT HER RELATIONSHIP WITH THE OCCUPANT. THE ASSESSEE BEFORE TH E ASSESSING OFFICER CONTENDED THAT AS PER THE BOARDS INSTRUCTIONS, THE ITO WAS BARRED FROM ENQUIRING AS TO HOW THE MIGRANT ASSESSEE HAD REMITTED THE MONEY AND WOULD NOT BE NECESSARY TO ESTABLISH THAT THE REMITTANCES WERE MADE ONLY THROUGH BANK. THE ITO COULD ONLY MAKE ENQUIRIES WITH REGARD TO ASCERTAINING THE QUANTUM AND SATISFYING HIMSELF WITH AVAILABLE RESOURCES IN THE COUNTRY, ALTHOUGH SAME WERE BROUGHT TO INDIA THROUGH IRREGULAR CHANNELS. WHERE RESOURCES WERE ESTABLISHED TO HAVE BEEN AVAILAB LE IN THE MIGRANTS COUNTRY, THEN THE MANNER IN WHICH THOSE RESOURCES ARE REPATRIATED TO INDIA THOUGH NOT BY RECOGNIZED CHANNEL, SAME WOULD NOT BE QUESTIONED BUT, WOULD BE ACCEPTED. THE HONBLE HIGH COURT OF MADRAS IN S.R. LAKSHMANAN VS. CIT (1990) 186 IT R 453 (MAD) AFTER GOING THROUGH CIRCULAR OF THE BOARD DATED 05.08.1971 ISSUED IN RESPECT OF REPATRIATES FROM CEYLON HAD HELD THAT THE PREDOMINANT IDEA OF ISSUING THE CIRCULAR WAS TO AVOID RESULTING INTO INCONVENIENCE TO REPATRIATES. THE HONBLE HIGH COURT OF MADRAS CONFIRMED THAT IF 6 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI RESOURCES WERE ESTABLISHED TO HAVE BEEN AVAILABLE IN MIGRANTS COUNTRY, THEN THE MANNER IN WHICH THOSE RESOURCES WERE REPATRIATED TO INDIA, THOUGH NOT BY RECOGNIZED CHANNEL, SAME WOULD NOT BE QUESTIONED, BUT WOULD BE ACCEPTED. THE ASSESSEE FURTHER MADE REFERENCE TO THE LETTER OF RESERVE BANK OF INDIA DATED 01.05.1999 ADDRESSED TO THE ASST. DIRECTOR, (FERA) WITH REFERENCE TO LETTER DATED 09.07.2009 , WHEREIN IT IS STATED THAT IT WOULD BE RATHER UNJUST TO INVOKE THE PROVISIONS OF FERA AGAINST INDIAN REPATRIATES FROM PAKISTAN AFTER DEMOLITION OF BABRI MASJID FOR EXCHANGE OF CURRENCY. IT WAS DECIDED IN THIS REGARD THAT FERA AUTHORITIES COULD CONSIDER ADVISING THE MIGRANTS TO OBTAIN POST - FACTO APPROVAL FROM THE BANK. THE ASSESSING O FFICER FURTHER SHOW CAUSED THE ASSESSEE TO ADEQUATELY WITH EVIDENCE SHOWN THAT SHE HAD SUFFICIENT RESOURCES TO COVER SUCH MONEY / JEWELLERY . THE ASSESSEE POINTED OUT THAT THE CIRCULAR WAS ISSUED ON 03.02.1999 AND FURTHER, REFERENCE WAS MADE TO THE VALUE O F RS.50,000/ - IN THE YEAR 2009 AND COMPARED IT WITH ITS WORTH IN 1969. THE ASSESSEE POINTED OUT THAT SHE HAD PRODUCED MORE THAN ADEQUATE EVIDENCE TO REASONABLY SATISFY THAT THE ASSESSEE HAD SUFFICIENT RESOURCES IN PAKISTAN TO COVER THE AMOUNT OF MONEY AND JEWELLERY BROUGHT INTO INDIA. THE ASSESSING OFFICER REFERRED AND REPRODUCED BOARDS CIRCULAR DATED 03.02.1969 AT PAGES 8 AND 9 OF THE ASSESSMENT ORDER AND WAS OF THE VIEW THAT IT DIVIDES MIGRANT ASSESSEES INTO TWO CATEGOR IES VIZ. (I) THOSE WHO BRING INTO INDIA CASH / JEWELLERY UP TO RS.50,000/ - AND (II) THOSE WHO BRING INTO INDIA CASH / JEWELLERY EXCEEDING RS.50,000/ - . FURTHER, THE ASSESSING OFFICER NOTED FROM BOARDS INSTRUCTION THAT THERE WAS NO REQUIREMENT TO PRODUCE D OCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR TRANSFER OF MONEY AND JEWELLERY BROUGHT BY THEM SUBJECT TO TWO CONDITIONS; (A) THAT SHE / HE HAD SUFFICIENT RESOURCES IN WEST PAKISTAN TO WHICH THE MONEY / JEWELLERY BROUGHT INTO INDIA COULD BE REASONABLY A TTRIBUTED AND (B) SHE / HE GIVES INTIMATION ABOUT THE MONEY / JEWELLERY BROUGHT BY HIM/HER AND ALL HIS/HER FAMILY MEMBERS AND ITS 7 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI INTRODUCTION IN THE BOOKS OF ACCOUNT, WITHIN TWO MONTHS FROM HIS / HER ARRIVAL. THE ASSESSING OFFICER WAS OF THE VIEW THAT TH E ASSESSEE HAD TO ESTABLISH EXISTENCE OF SUFFICIENT RESOURCES IN WEST PAKISTAN, TO WHICH MONEY AND JEWELLERY COULD BE REASONABLY ATTRIBUTED. 6. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE FEL L IN THE SECOND CATEGORY AND HENCE, THE ASSESSEE WAS REQUIRED TO PRODUCE ADEQUATE EVIDE NCE TO SUPPORT HER CLAIM. THE ASSESSING OFFICER ALSO QUESTIONED THE DISCLOSURE FILED BEFORE ITO, MUMBAI OR AURANGABAD , SINCE T HE ASSESSEE HAD STARTED DEPOSITING CASH IN BANK ACCOUNTS IN AURANGABAD FROM 04.09.2009 AND RESIDES WITH HER BROTHER EVER SINCE SHE MIGRATED TO INDIA. THE ASSESSEE HAD ADMITTED ALL HER FIVE CHILDREN IN DIFFERENT EDUCATIONAL INSTITUTIONS OF AURANGABAD. SHE HAD PURCHASED COMMERCIAL PROPERTY IN NOVEM BER, 2009. THE ASSESSEES PAN WAS FROM AURANGABAD. THE ASSESSING OFFICER IN THESE CIRCUMSTANCES, WAS OF THE VIEW THAT WHERE THE ASSESSEE DID NOT COMPLY WITH CONDITIONS STIPULATED IN PARA 1 OF CIRCULAR I.E. DECLARATION AND CERTIFICATE ISSUED BY THE ITO, M UMBAI COULD NOT BE RELIED UPON TO DECIDE THE ISSUE OF AVAILABILITY OF RESOURCES. THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE WAS FOUND TO BE FALSE IN THE ABSENCE OF COMPLETE DETAILS. IN RESPECT OF AVAILABILITY OF SOURCES, WHERE THE ASSESSEE HAD ONLY P RODUCED COPIES OF SALE AGREEMENT IN RESPECT OF PROPERTIES CONCERNED, WAS NOT ACCEPTED, IN VIEW OF REASONS , ONE BY ONE MENTIONED IN PARAS 3.1 TO 3.4 OF ASSESSMENT ORDER. FURTHER, THE ASSESSING OFFICER PERUSED THE JOINT BANK ACCOUNT OF ASSESSEE UNDER PARA 1 4 AND NOTED THAT THE ASSESSEE HAD NOT WITHDRAWN ANY CASH FROM BOTH THESE BANK ACCOUNTS PRIOR TO MIGRATION TO INDIA ; IN FACT BOTH THE ACCOUNTS SHOWED THAT THERE WERE MERE INTERNAL TRANSFER OF FUNDS. THE ASSESSING OFFICER THUS, DID NOT BELIEVE THE THEORY OF ASSESSEE IN CARRYING CASH OF RS.2.71 CRORES. ACCORDINGLY, HE WAS OF THE VIEW THAT THE ASSESSEES EXPLANATION ABOUT 8 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI AVAILABILITY OF SUFFICIENT RESOURCES IN WEST PAKISTAN TO COVER THE MONEY BROUGHT INTO INDIA BY HER WAS HELD TO BE NOT PROPER, REASONABLE AN D ACCEPTABLE. THE ASSESSEE HAD FILED THE COPY OF BANK BOOK TO SHOW THAT THE SAID SUM OF RS.2.71 CRORES WAS FOUND TO BE CREDITED. THE ASSESSEE HAD THEN WITHDRAWN THE AMOUNT FOR PURCHASE OF COMMERCIAL PROPERTY AND ALMOST THE ENTIRE BALANCE WAS INVESTED IN BANK DEPOSITS. THE ASSESSING OFFICER TREATED SUM OF RS.2.71 CRORES AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT AND TAXED THE SAME. 7 . THE ASSESSEE BEFORE THE CIT(A) RELIED ON SEVERAL DECISIONS AND POINTED OUT THAT THERE WAS NO MERIT IN THE AFORESAI D ADDITION. THE CIT(A) REMITTED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO VERIFY THE ASSESSEES CONTENTIONS AND CLAIM AND FURNISH HIS REPORT. THE ASSESSING OFFICER VIDE REPORT DATED 28.04.2014 STATED THAT THE ASSESSEE MUST COME O UT WITH TRUTH OF MODUS OPERANDI OF HOW THE HUGE SUMS WERE TRANSFERRED FROM PAKISTAN TO INDIA WHEN THERE WERE NO BANKING CHANNELS BETWEEN INDIA AND PAKISTAN. HE ALSO STATED THAT THE ASSESSEE HAD FAILED TO MAKE ANY EXPLANATION EVEN IN THE APPEAL FILED AND T HE ADDITION MADE UNDER SECTION 68 OF THE ACT DESERVED TO BE CONFIRMED. THE CIT(A) FIRST REFERRED TO THE CIRCULAR WHICH IS REPRODUCED UNDER PARA 8 AT PAGES 9 AND 10 OF THE APPELLATE ORDER AND POINTED OUT THAT THE CIRCULAR WAS ISSUED KEEPING IN MIND THE CON CERNS OF MIGRANT PERSONS WHO WERE MIGRATING FROM PAKISTAN, WHERE THEY LIVE A TROUBLED LIFE. THE CIRCULAR WAS SPECIFICALLY ISSUED FOR SPECIFIC PURPOSE THAT SUCH MIGRANTS NEED NOT REQUIRE TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR TRANSFE R OF MONEY AND PERSONAL JEWELLERY BROUGHT BY THEM AND THEIR FAMILY MEMBERS FROM PAKISTAN. REFERENCE WAS MADE TO UNEQUIVOCAL CONTENTS OF CIRCULAR. THE CIT(A) FURTHER STATED THAT SPIRIT OF SAID INSTRUCTION WAS ENDORSED IN THE CASE OF MIGRANT S FROM SRI LANKA (THEN CALLED CEYLON) BY THE 9 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI HONBLE HIGH COURT OF MADRAS IN S.R. LAXMANAN VS. CIT (SUPRA). THE CIT(A) THUS, HELD AS UNDER: - IT IS EVIDENT FROM THE SAID CIRCULAR NO.73/16/68 - IT(A - II) DT.:03/02/1969, THAT THE MIGRANT ASSESSEES FROM PAKISTAN ARE NOT REQUIRED TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR TRANSFER OF MONEY AND PERSONAL JEWELLERY BROUGHT BY THEM AND THEIR FAMILY FROM PAKISTAN SUBJECT TO THE FOLLOWING CONDITIONS: I ) THE PERSON HAD RESOURCES IN PAKISTAN TO WHICH THE MONEY/JEWELLERY BROUGHT INTO INDIA COULD REASONABLY ATTRIBUTED. II ) THE INTIMATION SHOULD BE GIVEN TO THE CONCERNED ITO WITHIN A PERIOD OF TWO MONTHS OF THE DATE OF HIS OR HER ARRIVAL IN INDIA AND; III ) IN THE CASE OF PERSONS WHO HAVE ALREADY MIGRATED TO INDIA BY 31/03/1969, THE AGGREGATE VALUE OF CASH AND PERSONAL JEWELLERY BROUGHT BY THE MIGRANTS AND HIS FAMILY MEMBERS DOES NOT EXCEEDS RS.50,000/ - . IV ) WHERE THE AMOUNT OF MONEY/VALUE OR JEWELLERY BROUGHT INTO INDIA EXCEEDS RS.50,000/ - HE OR SHE WILL BE REQUIRED TO PRODUCE ADEQUATE EVIDENCE TO REASONABLY JUSTIFY THE ITO THAT HE OR SHE HAD SUFFICIENT RESOURCES IN PAKISTAN TO COVER SUCH MONEY/PERSONAL JEWELLERY. THE CIRCULAR IS VERY CLEAR. AS PER THE CIRCULAR, THE ITO/AO IS BARRED FROM ENQUIRING AS TO HOW THE MIGRANT ASSESSEE HAS REMITTED HIS MONEYS AND IT WOULD NOT BE NECESSARY TO ESTABLISH HIS REMITTANCE ARE MADE ONLY THROUGH BANKS. HOWEVER, THE ITO/AO CAN MAKE ENQUIRIES WITH REGARD TO ASCERTAINING THE QUANTUM AND SATISFYING HIMSELF THAT SUFFICIENT RESOURCES WERE AVAILABLE WITH THE MIGRANTS IN HIS COUNTRY OF ORIGIN TO COVER THE AMOUNT OF CASH OR JEWELLERY BROUGHT IN. 8 . FURTHER, THE CIT(A) REFERRED TO THE LETTER ON THE SUBJECT ISSUED BY THE RESERVE BANK OF INDIA BEARING NO.EC MUMBAI IMD.I/1392/03.01.05/99 , ADDRES SED TO THE ASSISTANT DIRECTOR (FERA) , WHEREIN IT WAS OPINED THAT IT WOULD BE UNJUST TO ENFORCE THE PROVISIONS OF FERA IN RESPECT OF EXCHANGE OF CURRENCIES BY INDIAN REPATRIATES FROM PAKISTAN AFTER DEMOLITION OF BABRI MASJID. THE RESERVE BANK OF INDIA HAD NOTED THAT INCOME TAX DEPARTMENT HAD REGULARIZED THE ISSUE OF ASSESSING THE MONEY / WEALTH BROUGHT INTO INDIA BY THE MIGRANTS. THE SECOND OBJECTION OF ASSESSING OFFICER THAT THE DECLARATION WAS FILED WITH ITO AT MUMBAI AS AGAINST JURISDICTIONAL ASSESSING OFFICER AT AURANGABAD, THE CIT(A) DEALT WITH THE ISSUE IN PARA 10 AND OBSERVED THAT THERE WAS NO MISCHIEF IN THE 10 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI FACT THAT THE ASSESSEE HAD FILED HER DECLARATION BEFORE THE ITO AT MUMBAI , WHERE HE WAS ALSO A FUNCTIONARY OF THE INCOME TAX DEPARTMENT AND WAS COMPETENT TO RECEIVE INFORMATION AND ISSUE CERTIFICATE. THE BELIEF OF ASSESSEE WAS THAT THE SAID DECLARATION COULD NOT BE FILED WITH INCOME TAX DEPARTMENT AT AURANGABAD WAS HELD TO BE TECHNICAL VIOLATION WHICH COULD NOT MAKE THE SAID DECLARATION FILED BE FORE THE ITO, MUMBAI TO BE INVALID, VOID OR BAD IN THE EYES OF LAW . THE SUBSEQUENT ORDER ACCEPTING THE SAID DECLARATION ALSO COULD NOT BE SAID TO BE INVALID, WHERE THE COMPETENT OFFICER MENTIONED IN CIRCULAR MEANS ANY OFFICER OF THE INCOME TAX DEPARTMENT, WHO WAS TECHNICALLY COMPETENT TO RECEIVE SUCH INFORMATION AND PASS ORDERS, WAS THE PROPOSITION LAID DOWN BY THE CIT(A). HE FURTHER HELD THAT IT WAS MERE A VENIAL BREACH WHICH DOES NOT HAVE ADVERSARIAL EFFECT ON THE DECLARATION MADE AND THE SUBSEQUENT ORDER PASSED BY THE ITO, MUMBAI. WITH REGARD TO COMMENTS OF ASSESSING OFFICER ON THE FINANCIAL STATEMENTS FILED BY THE ASSESSEE, IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSING OFFICER NEVER CONVEYED HIS NON - SATISFACTION ABOUT THE FINANCIAL STATEMENT AND OTHER DOCUMENTS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IN FACT, THE ASSESSING OFFICER NEVER ENQUIRED OR ASKED FOR FURTHER SUBMISSIONS OR DOCUMENTS OR EVIDENCE. SHE STATED THAT THERE WERE DOCUMENT S AVAILABLE WITH HER ABOUT BUSINESS ACTIVITY AND CNG STATIONS WERE WORKING AND PRODUCING GOOD REVENUE. BEFORE THE CIT(A), THE ASSESSEE FILED VARIOUS DOCUMENTS IN RESPECT OF SALE AND TRANSFER OF PROPERTY TO THE PROSPECTIVE BUYER ; T HE RUNNING OF PETROL PUMP BY THE ASSESSEE IN PARTNERSHIP AND HER FAMILY MEMBERS AND CNG STATIONS RUN BY HER HUSBAND AND BUSINESS CARRIED ON BY HER AND FAMILY MEMBERS TO ESTABLISH HER FINANCIAL POSITION. THE CIT(A) HAS ELABORATELY REFERRED TO THE SAID DOCUMENTS STARTING FROM PARA 11 AND HAS DISCUSSED EACH SOURCE OF AVAILABILITY OF CASH IN THE HANDS OF ASSESSEE IN PARAS 13 TO 16. THE CONCLUSION OF THE CIT(A) THUS, WAS THAT THE EVIDENCES WERE PROOF 11 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI OF THE FACT THAT ALL THE PROPERTIES FOR WHICH SALE DEEDS WERE ENTERED INTO EITHER BY THE ASSESSEE OR BY HER HUSBAND, STOOD TRANSFERRED IN THE NAMES OF BUYERS. THE FIRST PROPERTY I.E. GNS CNG HAS BEEN TRANSFERRED IN THE NAME OF PURCHASER AS PER REGISTERED SALE DEED DATED 11.11.2009 AND MUTATION HAD BEEN EFFECTED IN THE REVENUE RECORDS. TH E SECOND PROPERTY I.E. BNS CNG STATION WAS TRANSFERRED IN THE NAME OF PURCHASER BY REGISTERED SALE DEED DATED 15.12.2009 AND THE MUTATION WAS EFFECTED IN THE REVENUE RECORDS. THE THIRD PROPERTY I.E. FLAT OF HUSBAND WAS TRANSFERRED IN THE NAME OF PURCHASER IN THE RECORDS OF HOUSING SOCIETY. THE CIT(A) FURTHER OBSERVED THAT IT WAS COMMON KNOWLEDGE THAT THE TRANSFER OF PROPERTY WOULD NOT BE EFFECTED TILL THE SELLER RECEIVES THE ENTIRE SALE CONSIDERATION; THEREFORE, THOUGH THE ASSESSEE HAD NOT PRODUCED THE DE TAILS OF BANK ACCOUNT EFFECTIVELY SHOWING THE ENTRIES OF AMOUNTS RECEIVED FROM BUYERS, IT WAS INCONCEIVABLE TO IMAGINE THAT THE PROPERTIES IN QUESTION STOOD TRANSFERRED IN THE NAMES OF BUYERS WITHOUT CONSIDER ATION HAVING PASSED THROUGH TO THE SELLERS OF TH E PROPERTIES IN QUESTION. THE ASSESSING OFFICER HAD ALSO DOUBTED THE CONSIDERATION FOR WHICH THE TRANSACTION HAD TAKEN PLACE AND THE CONTENTIONS OF ASSESSEE THAT PRICES HAD RISEN FOR CNG STATIONS AS NO NEW LICENCES WERE GIVEN, WAS ACCEPTED BY THE CIT(A) TO BE A PLAUSIBLE EXPLANATION FOR THE INCREASE IN PRICES. ANOTHER DOUBT RAISED BY THE ASSESSING OFFICER WAS THAT THE BANK ACCOUNTS OF ASSESSEE DO NOT REFLECT ANY RECEIPT ON ACCOUNT OF CONSIDERATION AND ALL CREDITS WERE ON ACCOUNT OF INTERNAL TRANSFERS WAS LOOKED INTO BY THE CIT(A) AND THE CONTENTION OF ASSESSING OFFICER WAS FOUND TO BE INCORRECT. THE CIT(A) NOTED THAT BANK ACCOUNTS REVEAL THAT THE ASSESSEE HAD RECEIVED RS.4.38 CRORES OUT OF WHICH, SHE HERSELF HAD WITHDRAWN RS.4.30 CRORES VIDE CHEQUE NO.2995081 DRAWN ON MUSLIM COMMERCIAL BANK , MARICH BAAZAR BRANCH, SUKKUR ON 25.07.2009. THE ASSESSEE ALSO PRODUCED THE CERTIFICATE FROM THE SAID BANK THAT THE AFORESAID WITHDRAWAL WAS CASH WITHDRAWAL. THE CIT(A) HELD THAT IN VIEW OF 12 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI CLINCHING EVIDENCE IN SUPPORT OF ASSESSEES CONTENTION THAT SHE HAD SUFFICIENT RESOURCES TO COVER THE AMOUNT OF RS.2.70 CRORES BROUGHT INTO INDIA AND DECLARE D BEFORE THE ASSESSING OFFICER IN MUMBAI , HENCE THE PLEA OF ASSESSEE IN THIS REGARD WAS ACCEPTED. THE CIT(A) HELD THAT WHERE THE ASSESSEE WAS HAVING SUFFICIENT BANK BALANCE AS ON THE DATE OF WITHDRAWAL AND WHETHER THE CASH WAS DRAWN BY HER OR THROUGH HER AGENT OR THROUGH ANYBODY FOR ACCOMMODATION, AGAINST WHICH SHE RECEIVED CASH, THEN THE SAME IS TO BE ACCEPTED IN THE HANDS OF ASSESSEE, SINCE THE CIRCULAR CLEARLY REQUIRES VERIFICATION OF AVAILABILITY OF RESOURCES IN PAKISTAN AND NOT THE SOURCES OR METHODS O F BRINGING IN INDIA. HOWEVER, IN VIEW OF BANK CERTIFICATE WHICH CLEARLY STATED THAT THE AMOUNT HAD BEEN WITHDRAWN IN CASH, THE AVAILABILITY OF CASH IN THE HANDS OF ASSESSEE THUS, WAS ACCEPTED. ANOTHER POINT NOTED BY THE CIT(A) WAS THE INCOME TAX RETURNS FILED BY THE HUSBAND OF ASSESSEE AND IT WAS HELD THAT THE ASSESSEE AND HER FAMILY WERE FINANCIALLY SOUND AND HAD SUFFICIENT RESOURCES TO COVER THE AMOUNT OF RS.2.71 CRORES BROUGHT INTO INDIA BY UNAUTHORIZED CHANNELS. HE FURTHER HELD THAT THE FACT THAT TH ERE WE RE NO BANKING CHANNELS BETWEEN PAKISTAN AND INDIA HAD FORCED THE ASSESSEE TO TRANSFER THE MONEY THROUGH UNAUTHORIZED CHANNELS. IT IS EVIDEN T THAT THE ASSESSEE HAD SUFFICIENT RESOURCES IN PAKISTAN TO WHICH MONEY BROUGHT INTO INDIA CAN BE REASONABLY A TTRIBUTED. REFERENCE WAS MADE TO VARIOUS DECISIONS ON THIS ISSUE AND THE CIT(A) HELD THAT THE ASSESSEE HAD SUFFICIENT RESOURCES IN PAKISTAN TO COVER THE AMOUNT OF RS.2.71 CRORES BROUGHT INTO INDIA AND CONSEQUENTLY, THE ADDITION MADE WAS DELETED. 9 . THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) AND HAS STRONGLY OBJECTED TO THE DELETION OF AFORESAID ADDITION. 13 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI 10 . THE FIRST OBJECTION IS AGAINST THE ORDER OF CIT(A) IN DELETING THE AFORESAID ADDITION MADE UNDER SECTION 68 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD FILED DECLARATION WITH ITO, MUMBAI REGARDING CASH BROUGHT INTO INDIA AND DEPOSITED IN VARIOUS BANK AC COUNTS IN AURANGABAD, KNOWING FULLY THE FACT THAT THE JURISDICTION OF THE CASE OVER THE ASSESSEE WAS NOT IN MUMBAI, BUT WAS IN AURANGABAD. THE REVENUE IS AGGRIEVED BY THE OBSERVATIONS OF CIT(A) IN TREATING IT AS MERE VENIAL BREACH AS AGAINST THE JURISDICT IONAL ISSUE IN LAW. THE SECOND RELATED ISSUE RAISED IS AGAINST THE ACCEPTANCE OF PLEA OF ASSESSEE OF BRINGING HUGE CASH TO INDIA IN THE ABSENCE OF ANY BANKING CHANNELS WHERE THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE WHATSOEVER IN THIS REGARD. THE R EVENUE IS ALSO AGGRIEVED BY THE ORDER OF CIT(A) IN ACCEPTING THE ASSESSEES CLAIM THAT SHE HAD SUBSTANTIAL CASH OUT OF SALE PROCEEDS OF PROPERTY IGNORING THE FACT THAT SALE HAD BEEN EFFECTED MERELY ON A STAMP PAPER OF RS.100/ - BY SIMPLY NOTARIZING WITH NO SCHEDULE OF PAYMENTS MENTIONED IN SUCH SALE AGREEMENTS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AFTER TAKING US THROUGH FACTUAL ASPECTS OF THE CASE POINTED OUT THAT THE DEPOSITS WERE MADE ON 04.09.2009 IN SARASWAT BANK, AURANGABAD I.E. BEF ORE MAKING ANY DECLARATION. THE DECLARATION WAS FILED BEFORE THE ITO, MUMBAI ON 15.09.2009, COPY OF WHICH IS PLACED AT PAGE 379 OF THE PAPER BOOK AND THE ASSESSING OFFICER ACCEPTS THE DECLARATION , COPY OF WHICH IS PLACED AT PAGE 381 OF THE PAPER BOOK. TH E LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE TOOK US THROUGH THE OBSERVATIONS OF ASSESSING OFFICER AT PAGES 10 AND 11 AND POINTED OUT THAT THE HONBLE HIGH COURT OF MADRAS HAD ALSO DECIDED THE ISSUE ON THE BASIS THAT RESOURCES WERE AVAILABLE IN SR I LANKA. HOWEVER, THE ASSESSEE HAD MISERABLY FAILED TO EXPLAIN THE AVAILABILITY OF SOURCES IN HER HANDS BEFORE THE ASSESSING OFFICER AND HENCE, THE ADDITION IN THE HANDS OF ASSESSEE. 14 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI 1 1 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REPLY, P OINTED OUT THAT THE DECLARATION WAS MADE BEFORE THE ITO, MUMBAI, WHO IN TURN, ISSUED CERTIFICATE, SINCE THE ITO AT AURANGABAD HAD REFUSED TO TAKE HER DECLARATION. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HOWEVER, SUBMITTED THAT THERE WAS NO EVIDENCE IN THIS REGARD. OUR ATTENTION WAS DRAWN TO THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN ITO VS. SHRI HARICHAND N. MATANI IN ITA NO.4108/MUM/1995, RELATING TO ASSESSMENT YEAR 1992 - 93, ORDER DATED 16.08.2000 , WHEREIN THE ASSESSEE WAS RESIDENT OF MUM BAI AND HAD MADE DECLARATION AT PUNE WHICH WAS ACCEPTED AND ALSO THE SOURCES OF CASH IN THE HANDS OF SAID PERSON. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRING TO THE CIRCULAR STATED THAT IT REQUIRES MAKING A DECLARATION BEFORE THE ASSE SSING OFFICER AND PROVING THE AVAILABILITY OF RESOURCES IN PAKISTAN, WHEREIN THE MAIN LIMB WAS TO PROVE THE RESOURCES. HE FURTHER STATES THAT WHERE THE ASSESSEE COULD PROVE THE RESOURCES, NO ADDITION WAS WARRANTED IN THE HANDS OF ASSESSEE. HE STRESSED THAT BASIC SOURCE OF RESOURCES WAS THE BANK STATEMENT OF ASSESSEE, WHEREIN THE BANK BALANCE WAS ABOUT RS.4.34 CRORES. OUR ATTENTION WAS DRAWN TO BANK STATEMENT PLACED AT PAGE 383 OF THE PAPER BOOK. HE STATED THAT THE WORD USED WAS RESOURCE. REFERRING TO THE BANK STATEMENT , THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAD NOT ACCEPTED THE RESOURCES IN THE HANDS OF ASSESSEE BECAUSE OF TRANSACTION BEING INTERNAL TRANSFER. THE LEARNED AUTHORIZED REPRESENT ATIVE FOR THE ASSESSEE IN THIS REGARD REFERRED TO THE CERTIFICATE ISSUED BY THE SAID BANK, WHICH IS PLACED AT PAGE 363 OF THE PAPER BOOK, WHICH CLEARLY CERTIFIED THAT IT WAS CASH WITHDRAWAL. HE FURTHER POINTED OUT THAT EVEN IF MONEY WAS BROUGHT THROUGH CL ANDESTINE MEANS BUT THE ASSESSEE HAD THE RESOURCES AND CHEQUE WAS AN INTERNAL TRANSFER. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER REFERRED TO THE REGISTERED SALE DEED IN THE PROPERTY, WHEREIN THE ASSESSEE HAD 15 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI 40% SHARE TO THE EXTENT O F RS.20 CRORES. OUR ATTENTION WAS DRAWN TO THE COPY OF REVENUE RECORDS PLACED AT PAGE 345 OF THE PAPER BOOK WITH ENGLISH TRANSACTION AT 347 OF THE PAPER BOOK, WHICH CLEARLY SHOWED THE PROPERTY SOLD BY THE ASSESSEE. THE COMMENTS OF ASSESSING OFFICER THAT SALE CONSIDERATION WAS HIGH OR NOT WAS CLAIMED TO BE BEYOND HIS JURISDICTION. IN RESPECT OF SECOND PROPERTY SOLD, THE TRANSFER DEED IS PLACED AT PAGE 355 OF THE PAPER BOOK, WHICH TALKS OF RS.20 MILLIONS IN PAKISTAN. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT ALL THESE DOCUMENTS WERE FORWARDED TO THE ASSESSING OFFICER AND IN THE REMAND REPORT, HE HAS NOT FURTHER COMMENT ED ON THE SAME. HE AGAIN REFERRED TO THE BANK STATEMENT PLACED AT PAGE 383 AND STRESSED THAT SINCE THE ASSESS EE HAD SUFFICIENT AMOUNT IN HER BANK ACCOUNT, RESOURCES HAS BEEN PROVED AND THERE IS NO MERIT IN THE ORDER OF ASSESSING OFFICER. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN ASSESSMENT YEAR 2010 - 11, THE ASSESSEE WAS THOUGH RE SIDENT IN INDIA, BUT WAS NOT AN ORDINARY RESIDENT AND AS PER PROVISO TO SECTION 5 OF THE ACT, ONLY INCOME IN INDIA WAS TAXABLE IN THE HANDS OF ASSESSEE. 12. ANOTHER ASPECT RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THE THEORY O F PROBABILITY, WHEREIN JEWELLERY WHICH WAS BROUGHT INTO INDIA BY THE ASSESSEE HAS BEEN ACCEPTED BUT THE CASH DECLARED HAS NOT BEEN ACCEPTED. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT BOTH THE CASH AND JEWELLERY WAS DECLARED S IMULTANEOUSLY BEFORE THE ITO, MUMBAI, WHO ISSUED A CERTIFICATE IN THIS REGARD. HOWEVER, THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT HAS ONLY QUESTIONED THE CASH AND HAD NOT MADE ANY ADDITION ON ACCOUNT OF JEWELLERY BROUGHT INTO INDIA. THEN REFE RRED TO THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN ITO VS. MR. UDHAVDAS T. LAKHIANI IN ITA NO.1923/MUM/2002, RELATING TO ASSESSMENT YEAR 1998 - 99, ORDER DATED 16 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI 20.12.2005 TO POINT OUT THAT PRAGMATIC VIEW SHOULD BE TAKEN IN THE MATTER. HE FURTHER REFERRED TO THE DECISION OF HONBLE HIGH COURT OF MADRAS IN S.R. LAKSHMANAN VS. CIT (SUPRA). HE FURTHER POINTED OUT THAT THE CONTENTION OF ASSESSING OFFICER THAT THE ASSESSEE HAS NOT PROVED HOW SHE HAD BROUGHT THE MONEY INTO INDIA WAS IRRELEVANT IN VIEW OF THE DECISION OF HONBLE HIGH COURT OF MADRAS IN S.R. LAKSHMANAN VS. CIT (SUPRA) . 1 3 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN REJOINDER POINTED OUT THAT NO EX TRA CORROBORATIVE EVIDENCE WAS BROUGHT ON RECORD IN RESPECT OF DECISION OF TRIBUNAL IN ITO VS. UDHAVDAS T. LAKHIANI (SUPRA) . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT IT WAS A CASE OF WITHDRAWAL FROM BANK ACCOUNT. IN RESPEC T OF DECISION OF HONBLE HIGH COURT OF MADRAS, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT CIRCULAR RELIED UPON WAS DIFFERENT FROM THE CIRCULAR REFERRED TO BY THE ASSESSEE. 1 4 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORD. THE ISSUE WHICH IS RAISED FOR ADJUDICATION BEFORE US IS THE ADDITION MADE ON ACCOUNT OF CASH AVAILABLE IN THE HANDS OF ASSESSEE AND WHETHER SUCH CASH COULD BE HELD TO BE UNEXPLAINED WARRANTING THE ADDITION UNDER SECTION 68 OF THE ACT. THE ASSE SSEE IS AN INDIVIDUAL AND HAD MIGRATED INTO INDIA ON 30.07.2009 I.E. DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS PLACED ON RECORD THE COPY OF PASSPORT WHICH IS AVAILABLE AT PAGE 365 OF THE PAPER BOOK. SHE WAS INITIALLY GIVEN VISA FOR 45 DAYS WH ICH IS PLACED AT PAGE 367 OF THE PAPER BOOK. THE ASSESSEE ENTERED THROUGH MUMBAI ON 30.07.2009. THE ASSESSEE WAS ISSUED RESIDENTIAL PERMIT IN THIS REGARD FOR 45 DAYS, COPY OF WHICH IS PLACED AT PAGES 369 AND 371 OF THE PAPER BOOK. THEREAFTER, THE ASSESS EE APPLIED FOR EXTENSIO N FOR LONG TERM VISA / 17 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI ADDITIONAL VISA WITH REQUEST FOR PERMANENT STAY IN INDIA, COPY OF WHICH IS PLACED AT PAGES 373 TO 377 OF THE PAPER BOOK. UPON HER MIGRATION, AS REQUIRED BY THE CIRCULAR DATED 03.02.1969 , THE ASSESSEE DECLARED THE MONEY AND JEWELLERY BROUGHT FROM PAKISTAN INTO INDIA AND THE ASSESSEE FILED AN APPLICATION ON 15.09.2009 WITH THE ITO, WARD 22(1)(2) AT MUMBAI. IN THE SAID DECLARATION, THE ASSESSEE CLAIMED THAT SHE HAD BROUGHT INTO INDIA SUM OF RS.2.71 CRORES IN CASH AND JEWELLERY WEIGHING 1387.50 GRMS. APPROXIMATELY WORTH RS.22,01,500/ - AT THE TIME OF MIGRATION. THE ASSESSEE EXPLAINED THE RESOURCES FOR THE SA ID CASH BROUGHT INTO INDIA TO BE OUT OF PROPERTY AND BUSINESS SOLD BY THE ASSESSEE AND HER HUSBAND. THE DETAILS OF THE SAME ARE AS UNDER: - (1) AMOUNT RECEIVED ON SALE OF PROPERTY AT R.S. NO.268, DEH OLD SUKKUR, SHIKARPUR ROAD, SUKKUR, REPRESENTING HER 40% SHARE IN THE FIRM OF M/S. G.N.S. CNG STATION RS.2,00,00,000/ - (2) AMOUNT RECEIVED FROM HER HUSBAND SHRI KOTOOMAL ESRANI ON SALE OF PROPERTY BEARING C.S. NO.2088/A, WARD B, AT ROHRI, DIST. SUKKUR, REPRESENTING HIS 4 0% SHARE IN B.N.S. CNG STATION, ROHRI, FOR RS.2,00,00,000/ - RS.1,50,00,000/ - (3) AMOUNT RECEIVED FROM HER HUSBAND SHRI KOTOOMAL ESRANI ON SALE OF HIS FLAT NO.301, IN SELLANI GUARDIAN, SITUATED AT BIHAR MUSLI C.H.S BLOCK NO.3, KARACHI, FOR RS.1,10,00,000/ - RS.1,10,00,000/ - ----------------------- RS.4,60,00,000/ - ----------------------- 15 . THE ASSESSEE POINTED OUT THAT SHE HAD BALANCE OF RS.4.39 CRORES AS ON 25.07.2009 IN MUSLIM COMMERCIAL BANK LTD., MARICH BAAZAR BRANCH, SUKKUR AND FURTHER HAD BALANCE OF RS.2.60 CRORES AS ON 25.07.2009 WITH ALPLAH LTD. , SUKKUR. THE ASSESSEE THUS, FILED EVIDENCES IN RESPECT OF AVAILABILITY OF ABOUT RS.6.99 CRORES IN PAKISTAN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NO TED THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS.2.50 CRORS IN ABOUT EIGHT BANK ACCOUNTS OF AURANGABAD, OUT OF WHICH FIVE WERE CURRENT 18 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI ACCOUNTS AND HAD FURTHER MADE INVESTMENT OF RS.1.57 CRORES IN PURCHASE OF COMMERCIAL PROPERTY AFTER WITHDRAWING THE SAM E FROM SOME OF THE BANK ACCOUNTS. THE EXPLANATION OF ASSESSEE THAT IN VIEW OF CIRCULAR DATED 03.02.1969, THE ASSESSEE HAD TO ONLY EXPLAIN THE RE SOURCES OF CASH AVAILABLE IN PAKISTAN, NO FURTHER QUESTIONS WERE TO BE ASKED BY THE ASSESSING OFFICER WITH REGARD TO MODE OF TRANSFER OF SAID AMOUNT TO INDIA , WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE FIRST OBJECTION TO THE SAME WAS THE DECLARATION MADE BY THE ASSESSING OFFICER BEFORE AN OFFICER WHO WAS NOT THE JURISDICTIONAL OFFICER. THE ASSESSEE HAD OP ENED BANK ACCOUNTS IN AURANGABAD AND HAD DEPOSITED THE CASH IN AURANGABAD. SHE HAD FIVE CHILDREN AND THEY WERE ADMITTED TO EDUCATIONAL INSTITUTIONS IN AURANGABAD AND HENCE, THE JURISDICTION WAS WITH THE ASSESSING OFFICER AT AURANGABAD, BEFORE HIM THE SAID DECLARATION SHOULD HAVE BEEN MADE. 1 6 . THE BOARD VIDE CIRCULAR DATED 03.02.1969 HAD GIVEN CERTAIN INSTRUCTIONS ON CONCESSIONAL TREATMENT TO MIGRANTS FROM PAKISTAN. IT WAS PUT TO THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE DURING THE COURSE O F HEARING WHETHER THE SAID CIRCULAR HAS BEEN WITHDRAWN OR NOT. HOWEVER, NO SUCH DETAILS ARE FILED BY THE REVENUE. ACCORDINGLY, THE CIRCULAR ISSUED IN 1969 IS STILL IN FORCE. THE CONTENTS OF SAID CIRCULAR ARE AS UNDER: - 'IN ORDER TO AVOID INCONVENIENCE T O PERSONS MIGRATING FROM WEST PAKISTAN TO INDIA AFTER 1 ST OCT. 1965 IN THEIR INCOME - TAX ASSESSMENTS IN INDIA, THE CENTRAL BOARD OF DIRECT TAXES HAVE ISSUED INSTRUCTIONS TO THE IT DEPARTMENT THAT SUCH PERSONS NEED NOT BE REQUIRED TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR THE TRANSFER OF MONEY'S AND THE PERSONAL JEWELLERY BROUGHT BY THEM AND BY THEIR FAMILIES FROM WEST PAKISTAN, IF THE FOLLOWING CONDITIONS ARE SATISFIED , VIZ . I ) THAT THE PERSON CONCERNED HAD SUFFICIENT RESOURCES IN WEST PAKISTAN TO WHICH THE MONEYS/PERSONAL JEWELLERY BROUGHT TO INDIA COULD BE REASONABLY ATTRIBUTED; II ) THAT AN INTIMATION ABOUT THE MONEY'S/PERSONAL JEWELLERY BROUGHT OVER BY SUCH PERSON AND ALL HIS FAMILY MEMBERS AND THE DATE(S) OF THEIR INTRODUCTION IN THE B OOKS OF ACCOUNT, HAS BEEN GIVEN TO THE CONCERNED ITO WITHIN TWO MONTHS OF THE DATE OF HIS/HER ARRIVAL IN INDIA, AND IN THE CASE OF PERSONS WHO HAVE ALREADY MIGRATED TO INDIA, BY 31 ST MARCH, 1969; 19 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI III ) THE AGGREGATE VALUE OF THE CASH AND/OR PERSONAL JEWELLERY B ROUGHT BY THE MIGRANT AND THE MEMBERS OF HIS FAMILY DOES NOT EXCEED RS.50 , 000/ - 2. HOWEVER, WHERE THE AMOUNT OF MONEYS/VALUE OF JEWELLERY BROUGHT INTO INDIA, EXCEEDS RS.50,000 OR WHERE THE PERSON HAS SOME SOURCES OF INCOME EITHER IN INDIA OR IN ANY FOREIGN COUNTRY OTHER THAN WEST PAKISTAN, PRIOR TO MIGRATION OR WHERE HE/SHE WAS ASSESSED AS RESIDENT IN INDIA WHETHER FOR THE ASSESSMENT YEAR PRECEDING THE YEAR IN WHICH HE/SHE MIGRATED OR FOR EITHER YEARS, HE/SHE WILL BE REQUIRED TO PRODUCE ADEQUATE EVID ENCE, LIKE ANY OTHER ASSESSE E , TO REASONABLY SATISFY THE ITO THAT HE/SHE HAD SUFFICIENT RESOURCES IN WEST PAKISTAN TO COVER SUCH MONEY/PERSONAL JEWELLERY.' 1 7 . AS PER THE CIRCULAR, IT IS PROVIDED THAT IN ORDER TO AVOID INCONVENIENCE TO THE PERSONS MIGRATI NG FROM WEST PAKISTAN, INSTRUCTIONS WERE ISSUED THAT SUCH PERSONS NEED NOT TO BE REQUIRED TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR THE TRANSFER OF MONEY AND PERSONAL JEWELLERY BROUGHT BY THEM AND THEIR FAMILY MEMBERS FROM WEST PAKISTAN , IN CASE, THEY SATISFY THAT THE PERSONS CONCERN HAD SUFFICIENT RESOURCES IN WEST PAKISTAN TO WHICH THE MONEY OR JEWELLERY BROUGHT TO INDIA COULD BE REASONABLY ATTRIBUTED. FURTHER REQUIREMENT WAS THAT AN INTIMATION ABOUT THE MONEY OR PERSONAL JEWELLERY BR OUGHT OVER BY THE PERSONS AND HIS FAMILY MEMBERS IS TO BE GIVEN TO THE CONCERNED ITO WITHIN TWO MONTHS OF THE DATE OF HIS / HER ARRIVAL IN INDIA , WHERE T HE AGGREGATE VALUE OF THE CASH OR JEWELLERY DOES NOT EXCEED RS.50,000/ - . IT WAS FURTHER PROVIDED IN TH E SAID CIRCULAR ITSELF THAT WHERE THE AMOUNT OF MONEY / VALUE OF JEWELLERY EXCEEDS RS.50,000/ - , THEN THE PERSON WAS REQUIRED TO PRODUCE ADEQUATE EVIDENCE TO REASONABLY SATISFY THE ITO THAT HE / SHE HAD SUFFICIENT RESOURCES IN WEST PAKISTAN TO COVER SUCH MO NEY / PERSONAL JEWELLERY . IT IS REITERATED HEREIN THAT THE SAID CIRCULAR IS STILL IN FORCE, WHICH IS FURTHER PROVED BY THE FACT THAT THE ASSESSEE MADE A DECLARATION BEFORE THE ITO AT MUMBAI, WHICH NOT ONLY WAS ACCEPTED BUT CERTIFICATE HAS BEEN ISSUED BY THE SAID ITO TO ASSESSEE HAVING MADE DECLARATION OF HER CASH AND JEWELLERY . 20 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI 1 8 . ON THIS ISSUE, REFERENCE WAS MADE BY THE CIT(A) TO ANOTHER LETTER ON THE SUBJECT IS SUED BY THE RESERVE BANK OF INDIA, WHICH IS REFERRED IN PARA 9 OF APPELLATE ORDER AND THE SAME READS AS UNDER: - 'INDIAN CURRENCY BROUGHT IN BY MIGRANTS... PAKISTAN DURING BABRI MASJID DEMOLITION PLEASE REFER TO YOUR LETTER NO.T - 3/977/B - 97/MISC - AD III/545/5731 DATED Y JULY 1999 ON THE CAPTIONED SUBJECT. IN THIS CONNECTION, WE ADVISE AS UNDER: I) NO CIRCULAR/GUIDELINES HAVE BEEN ISSUED BY THE BANK IN REGARD TO EXCHANGE OF CURRENCY BY INDIAN REPATRIATES FROM PAKISTAN AFTER DEMOLITION OF BABRI MASJID. II) THE PRESENT CASE IS SIMILAR TO THE FACTS OF THE CASE COVERED IN THE MADRAS HIGH COURT JUDGEMENT DATED 21ST DECEMBER 1984, REFERRED TO BY YOUR OFFICE RELATING TO THE CASE OF C.ARASKUMAR V/S. UNION OF INDIA. IN VIEW OF THIS, WE ARE ALSO OF THE O PINION THAT IT WOULD BE RATHER UNJUST TO ENFORCE AGAINST THE APPELLANT, THE PROVISIONS OF FERA, APPLICABLE AS PER PARAGRAPH 7D4 OF CHAPTER 7 OF ECM (GOVERNMENT OF INDIA'S NOTIFICATION NO.F 1 /107/EC/73,. DATED 1 ST JANUARY 1974, ISSUED UNDER POWERS CONFERRED BY SECTION 13(1) OF FERA 1973). FURTHER, IT IS ALSO A FACT THAT ONE DEPARTMENT OF GOVERNMENT OF INDIA (INCOME TAX DEPARTMENT) HAS ALREADY REGULARIZED THE ISSUE, BY ASSESSING THE MONEY/WEALTH BROUGHT IN BY THE MIGRANTS. IN THE CIRCUMSTANCES, ENFORCEMENT DIRECTORATE MAY CONSIDER ADVISING THE MIGRANTS TO OBTAIN POST - FACTO APPROVAL FROM RESERVE BANK OF INDIA FOR REGULARIZING THE ACTION FROM FERA ANGLE.' 1 9 . NOW, COMING TO THE CIRCULAR ISSUED IN 1969, WHEREIN IT IS CLEARLY PROVIDED THAT INDIANS MIGRATING FROM PAKISTAN WERE NOT REQUIRED TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THEIR CLAIM FOR TRANSFER OF MONEY AND PERSONAL JEWELLERY BUT HAD TO PROVE THE RESOURCES IN PAKISTAN TO WHICH SUCH MONEY OR JEWELLERY COULD BE REASONABLY ATTRIBU TED. IN THIS REGARD, ANOTHER CONDITION WAS TO GIVE AN INTIMATION TO THE CONCERNED ASSESSING OFFICER WITHIN PERIOD OF TWO MONTHS FROM THE DATE OF HIS / HER ARRIVAL AND WHERE THE AMOUNT OF MONEY / JEWELLERY BROUGHT INTO INDIA EXCEEDED RS.50,000 / - , THEN HE / SHE WAS REQUIRED TO PRODUCE ADEQUATE EVIDENCE TO REASONABLY JUSTIFY THAT THEY HAD SUFFICIENT RESOURCES IN PAKISTAN TO COVER MONEY / JEWELLERY . IN OTHER WORDS, IT WAS NOT NECESSARY TO ESTABLISH THAT REMITTANCES WERE MADE ONLY THROUGH BANKS OR RECOGNIZED C HANNELS. THE ROLE OF 21 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI ASSESSING OFFICER WAS TO SATISFY HIMSELF THAT SUFFICIENT RESOURCES WERE AVAILABLE WITH MIGRANTS IN THE COUNTRY OF ORIGIN TO COVER AMOUNT OF CASH OR JEWELLERY BROUGHT INTO INDIA. IN THE FACTS OF THE CASE, THE ASSESSEE HAD MADE A DECLA RATION OF CASH OF RS.2.71 CRORES AND JEWELLERY OF ABOUT RS.22,01,500/ - . THE SAID DECLARATION WAS FILED WITH ITO IN MUMBAI. THE ASSESSEE MIGRATED IN JULY, 2009 AND THE INTIMATION WAS FILED ON 15.09.2009. ADMITTEDLY, AT THAT JUNCTURE, THE ASSESSEE WAS NOT BEING ASSESSED TO TAX. HOWEVER, THE ASSESSEE HAD OPENED BANK ACCOUNTS IN AURANGABAD. THE CASE OF REVENUE IN THIS REGARD IS THAT WHERE THE JURISDICTION OF ASSESSEE FELL WITHIN THE ZONE OF AURANGABAD WHY SUCH A DECLARATION WAS MADE BEFORE THE ITO IN MUMBA I. IT MAY BE CLARIFIED HEREIN ITSELF THAT THE SAID ITO HAD ACCEPTED THE DECLAR ATION IN LINE WITH THE CIRCULAR AND HAD ISSUED CERTIFICATE TO THE ASSESSEE BOTH FOR CASH AND THE JEWELLERY DECLARED. THE FIRST ASPECT OF THE ISSUE IS WHETHER THE DECLARATION SO MADE BEFORE THE ITO, MUMBAI AFFECTS HIS JURISDICTION AND SUCH DECLARATION CANNOT BE ACCEPTED. WE FIND MERIT IN THE ORDER OF CIT(A) IN THIS REGARD IN HOLDING THAT THE INCOME TAX OFFICER AT MUMBAI IS A FUNCTIONARY OF THE INCOME TAX DEPARTMENT. WE HOLD THA T HE IS COMPETENT TO RECEIVE THE SAID DECLARATION AND TO ISSUE CERTIFICATE IN THIS REGARD. EVEN IF THERE IS DEFAULT IN FILING THE SAID DECLARATION BEFORE THE ITO IN MUMBAI BUT THE DEFAULT IS OF VENIAL BREACH IN NATURE AND DOES NOT AFFECT THE DECLARATION S O MADE BY THE ASSESSEE AND THE SUBSEQUENT ORDER PASSED BY THE ITO, MUMBAI , COPY OF WHICH IS PLACED AT PAGE 381 OF THE PAPER BOOK. THE ASSESSING OFFICER VIDE SAID CERTIFICATE AFTER HAVING CONSIDERED ALL THE FACTS OF THE CASE AND ON GOING THROUGH THE DOCUME NTS PRODUCED, STATED THAT THE DECLARATION MADE BY THE ABOVE PERSON IS ACCEPTED. IN THE SAID CERTIFICATE, THE ASSESSING OFFICER REFERRED TO THE CBDT CIRCULAR DATED 03.02.1969 AND ALSO NOTED THAT THE LADY WAS HINDU OF INDIAN ORIGIN AND WAS RESIDING IN PAKIS TAN. FURTHER, SHE CAME TO SETTLE PERMANENTLY IN INDIA AND SHE BROUGHT IN SUM OF RS.2.71 CRORES IN CASH 22 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI AND GOLD ORNAMENTS & JEWELLERY WEIGHING 1387.50 GRMS. IN SUPPORT THEREOF, SHE PRODUCED THE PASSPORT, VISA AND RP NUMBER. 20 . NOW, LET US COME TO THE NEXT STAND OF ASSESSING OFFICER IN NOT ACCEPTING THE DECLARATION MADE BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE DID NOT PROVE THAT IT HAD TRANSFERRED THE ASSETS WHICH IT CLAIMS TO HAVE SOLD BY HER AND HER HUSBAND. THE CASE OF ASSESSING OFFICER WAS ON THE BASIS OF SAID DOCUMENTS BEING NOT REGISTERED AND VARIOUS DOCUMENTS NOT BEING FILED. IN THIS REGARD, AT THE OUTSET, IT MAY BE POINTED OUT THAT THE EXPLANATION OF ASSESSEE BEFORE THE CIT(A) WAS THAT AFTER THE DOCUMENTS WERE FIL ED BEFORE THE ASSESSING OFFICER, NO FURTHER QUERY WAS RAISED AND NO FURTHER EXPLANATION WAS FILED, IN THE ABSENCE OF THE SAME, NO FURTHER DOCUMENTS WERE FILED. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE FILED VARIOUS DOCUMENTS AND EVIDENCES TO PROVE THAT TH E BUSINESS WAS BEING CARRIED OUT IN THE FIRMS AND THE ASSESSEE WAS RUNNING CNG STATIONS WHICH WERE GIVING GOOD RETURNS TO THE ASSESSEE AND ALSO ONE OF THE STATIONS WAS SOLD BY THE ASSESSEE AND ANOTHER BY HER HUSBAND. THE ASSESSEE HAD ALSO FURNISHED THE BA NK STATEMENTS OF DIFFERENT FIRMS IN WHICH TURNOVER ENDING FOR JUNE, 2007 WAS RS.26.14 CRORES, FOR ASSESSMENT YEAR 2007 - 08 WAS RS.35.10 CRORES AND FOR ENDING JUNE, 2012, IT HAD GONE UP TO RS.72.95 CRORES. SIMILARLY, TURNOVER OF BNS GAS FILLING STATION WHIC H WAS ASSESSEES FIRM WAS SHOWN TO RS.1.31 CRORES WHICH HAD INCREASED TO RS.5.25 CRORES AT JUNE, 2009. IN THIS GAS STATION, THERE WAS PLANT AND MACHINERY WORTH RS.2.83 CRORES. THE HUSBAND OF ASSESSEE HAD DECLARED TAXABLE INCOME OF RS.44.60 LAKHS IN JUNE, 2007 , RS.76.07 LAKHS IN JUNE, 2008 AND RS.60.37 LAKHS IN JUNE, 2009. THE OBSERVATIONS OF ASSESSING OFFICER WERE CONTRARY, WHEREIN HE HAD OBSERVED THAT THE BUSINESS OF ASSESSEES HUSBAND WAS NOT FINANCIALLY SOUND. IT MAY BE POINTED OUT HEREIN THAT THE CI T(A) HAS NOT ONLY CONSIDERED THE SAID EVIDENCE FILED BY THE ASSESSEE BUT HAD 23 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI FORWARDED THE SAME TO THE ASSESSING OFFICER, WHO HAS NOT OFFERED ANY COMMENTS IN THIS REGARD. THE CIT(A) VIDE PARAS 13, 14 AND 15 HAD ELABORATELY DISCUSSED THE TRANSACTIONS ENTER ED INTO BY THE ASSESSEE VIS - - VIS SALE OF HER GAS STATIONS AND GAS STATIONS SOLD BY HER HUSBAND, WHEREIN BOTH THE ASSESSEE AND HER HUSBAND HAD 40% SHARE EACH. THE ASSESSEE HAD CLAIMED THAT IT HAD RECEIVED RS.2 CRORES BEING HER SHARE IN THE SAID GAS STATIO N AND HER HUSBAND HAD RECEIVED RS.1.50 CRORES BEING 40% SHARE IN SALE OF SAID GAS STATION. VIDE PARA 15, THE CIT(A) HAS FURTHER RELIED ON THE DOCUMENTATION OF SALE OF PROPERTY FOR RS.1.10 CRORES BY THE HUSBAND OF ASSESSEE. IN RESPECT OF ALL THESE TRANSAC TIONS, THE CIT(A) HAD ALSO TAKEN NOTE OF MUTATIONS IN THE NAME OF PURCHASERS AS PER REGISTERED SALE DEEDS AND VIDE SECOND PART OF PARA 16 HELD AS UNDER: - 16 THESE EVIDENCE S ARE PROOF OF THE FACT THAT ALL THE PROPERTIES, FOR WHICH SALES DEED WERE ENTERED INTO EITHER BY THE APPELLANT OR BY HER HUSBAND, STOOD TRANSFERRED IN THE NAMES OF BUYERS. THE 1 ST PROPERTY GNS CNG STATION HAS BEEN TR ANSFERRED IN THE NAME OF THE PURCHASER AS PER REGISTERED SALE DEED NO.321 DT: 11/11/2009 AND THE MUTATION HAS BEEN EFF ECTED IN THE REVENUE RECORDS. THE 2 ND PROPERTY BNS CNG STATION HAS BEEN TRANSFERRED IN THE NAME OF THE PURCHASER BY REGISTERED SALE DEED REGISTERED AT SR.NO.1926 DATED 15/12/2009 AND THE MUTATION HAS BEEN EFFECTED IN THE REVENUE RECORDS. THE 3 RD PROPERTY HUSBANDS FLAT, AS STATED ABOVE, HAS BEEN TRANSFERRED IN THE NAME OF PURCHASER IN THE RECORDS OF THE HOUSING SOCIETY. IT IS ALSO A COMMON KNOWLEDGE THAT TRANSFER OF PROPERTY WOULD NOT BE EFFECTED TILL THE SELLER RECEIVES THE ENTIRE SALES CONSIDERATION. THEREFORE, THOUGH THE ASSESSEE HAS NOT PRODUCED THE DETAILS OF BANK ACCOUNT EFFECTIVELY SHOWING THE ENTRIES OF AMOUNTS RECEIVED FROM BUYERS, IT WILL BE INCONCEIVABLE TO IMAGINE THAT THE PROPERTIES IN QUESTION STOOD TRANSFERRED IN THE NAMES OF BUYERS WITH OUT CONSIDERATION HAVING PASSED THROUGH TO THE SELLERS OF THE PROPERTIES IN QUESTION. 2 1. THE ASSESSING OFFICER HAD ALSO NOTED THAT THE CREDITS IN THE BANK ACCOUNTS WERE INTERNAL TRANSFERS AND HENCE, DO NOT REFLECT RECEIPTS ON ACCOUNT OF CONSIDERATIONS. IN THIS REGARD, THE CIT(A) REFERRED TO THE BANK STATEMENTS OF MUSLIM COMMERCIAL BANK, MARICH BAZAAR BRANCH, SUKKUR , WHEREIN TRANSACTIONS ON VARIOUS DATES I.E. 15.07.2009, 24.07.2009 AND 25.07.2009 CLEARLY DECLARED THE CREDITS RECEIVED FROM DIFFERENT BANK ACCOUNTS. THE PERUSAL OF BANK STATEMENTS REFLECTS THE ASSESSEE TO HAVE RECEIVED RS.4.38 CRORES OUT OF WHICH SUM OF 24 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI RS.4.30 CRORES WAS WITHDRAWN ON 25.07.2 009 VIDE CHEQUE NO.2995081. IN SUPPORT THEREOF, THE ASSESSEE HAD PRODUCED CERTIFICATE FROM THE SAID BANK WHICH CLEARLY STATES THAT THE SAID WAS THE CASH WITHDRAWAL, COPY OF THE SAID CERTIFICATE IS PLACED AT PAGE 363 OF PAPER BOOK. IN VIEW OF THE ABOVE SA ID SUPPORTING EVIDENCE AVAILABLE WITH THE ASSESSEE, THE ASSESSEE HAVING ESTABLISHED ITS CASE OF AVAILABILITY OF CASH IN ITS HANDS, WHICH IN TURN, WAS WITHDRAWN BY WAY OF CASH WITHDRAWAL, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT HAVE RESOURCES OF CASH, W HICH SHE HAD BROUGHT INTO INDIA. IN VIEW THEREOF, WE FIND NO MERIT IN THE FINDINGS OF ASSESSING OFFICER IN THIS REGARD AND HOLD THAT WHERE THE ASSESSEE HAS SUCCESSFULLY ESTABLISHED THE RESOURCES IN HER HAND, THEN THE PLEA OF ASSESSEE OF HAVING BROUGHT INT O INDIA OF RS.2.70 CRORES CANNOT BE BRUSHED ASIDE. 2 2 . IT MAY ALSO BE POINTED OUT THAT THE BANK STATEMENT OF THE BANK ACCOUNT HELD BY THE ASSESSEE IN PAKISTAN CLEARLY SHOWS A CREDIT IN HER NAME OF RS.4.38 CRORES, WHICH IS THE EVIDENCE OF RESOURCES HELD BY THE ASSESSEE AND THE SAME CANNOT BE BRUSHED ASIDE. THE MANNER IN WHICH THE MONEY WAS TRANSFERRED AND BROUGHT INTO INDIA CANNOT BE LOOKED INTO BY THE ASSESSING OFFICER , IN VIEW OF CLEAR - CUT GUIDELINES ISSUED BY THE CBDT AND ONCE THE ASSESSEE IS HOLDING RE QUISITE AMOUNT OF CASH BALANCE IN HER BANK ACCOUNT, OUT OF WHICH THE ASSESSEE CLAIMS THAT SHE HAD BROUGHT THE MONEY INTO INDIA IN CASH, THEN THE AVAILABILITY OF SUCH CASH STANDS EXPLAINED AND DOES NOT WARRANT ANY ADDITION UNDER SECTION 68 OF THE ACT. 2 3 . THE NEXT QUESTION WHICH ARISES IS WHETHER THE SAID AMOUNT HAS BEEN BROUGHT INTO BY HAWALA TRANSACTION OR HAWALA MEANS OR NOT. ADMITTEDLY, THE TRANSACTIONS THROUGH HAWALA ARE NOT TO BE ACCEPTED AS SUCH BUT IN THE ABSENCE OF ANY DIRECT BANKING FACILITIES BETWEEN INDIA AND PAKISTAN, MODES OTHER THAN THE 25 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI BANKING CHANNELS ARE USED FOR THE TRANSFER OF FUNDS BY THE MIGRANTS FROM PAKISTAN TO INDIA. THE ASSESSEE HA D SOUGHT HER MIGRATION TO INDIA BECAUSE OF COMPELLING CIRCUMSTANCES, WHERE SHE HAS MIGRATED ALONG W ITH HER FIVE CHILDREN. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE CLARIFIED THAT THE HUSBAND OF ASSESSEE IS STILL IN PAKISTAN BUT ON HER MIGRATION FOR HER SETTLEMENT, SHE BROUGHT THE SAID CASH THROUGH UNAUTHORIZED CHANNELS ; BUT IN THE ABSENCE OF BANKING CHANNELS BETWEEN PAKISTAN AND INDIA, THE ASSESSEE WAS FORCED TO DO SO. THE CIRCULAR ISSUED BY CBDT IN THIS REGARD AND THE RESERVE BANK OF INDIA IN ITS LETTER TO THE ASST. DIRECTOR (FERA) HAD INSISTED UPON A LENIENT AND LIBERAL VIEW IN SUCH CIRC UMSTANCES IN RESPECT OF SUCH MONIES BROUGHT INTO INDIA. THE HONBLE HIGH COURT OF MADRAS IN S.R. LAKSHMANAN VS. CIT (SUPRA) HAD HELD THAT IF RESOURCES WERE ESTABLISHED TO HAVE BEEN AVAILABLE IN SRI LANKA, THEN THE MANNER IN WHICH THOSE RESOURCES WERE REPA TRIATED TO INDIA, THOUGH NOT RECOGNIZED AS ONE, WOULD NOT BE QUESTIONED , BUT WOULD BE ACCEPTED. IN THE CASE OF ITO VS. SHRI HARICHAND N. MATANI (SUPRA) , THE ASSESSEE HAD PRODUCED THE PHOTOCOPY OF PASS BOOK OF BANK ACCOUNT IN PAKISTAN AND NO ADDITION WAS M ADE IN THE HANDS OF SAID PERSON. AFTER THE CLOSE OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED ON RECORD CERTAIN MATERIAL FROM THE WEB IN RESPECT OF LACK OF DIRECT BANKING FACILITIES BETWEEN INDIA AND PAKISTAN. IN ANOTHER REPOR T DATED 20.09.2016, WHEREIN IT IS MENTIONED THAT TRADE BETWEEN INDIA AND PAKISTAN HAD INCREASED BUT THERE WAS LACK OF DIRECT BANKING CHANNELS, LIMITED CONNECTIVITY AND HENCE, THE SAME WAS A FFECTING THE TRADE. ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE UNDER SECTION 68 OF THE ACT. 2 4 . BEFORE PARTING, WE MAY REFER TO ONE OF THE OBSERVATIONS OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THOUGH IT IS AN ASPECT OF THE ISSUE WHICH WAS NOT RAISED BY THE ASSESSING OFFICER . T HE LEARNED DEPARTMENTAL 26 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT IN CASE THE ASSETS WERE SOLD IN PAKISTAN AND WHETHER THE ASSESSEE HAD PAID TAXES ON THE SAID INCOME AS SHE WAS RESIDENT IN INDIA. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FAIRLY POINTED OUT THAT THE ASSESSEE IS RESIDENT IN INDIA BUT IN THE YEAR UNDER CONSIDERATION IS NOT ORDINARY RESIDENT AND AS PER PROVISO TO SECTION 5 OF THE ACT, ONLY INCOME ARISING IN INDIA IS TAXABL E IN THE HANDS OF SUCH NON - ORDINARY RESIDENT PERSONS. WE FIND MERIT IN THE PLEA OF ASSESSEE. 2 5 . ANOTHER ISSUE WHICH WAS RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THE THEORY OF PROBABILITY, WHEREIN THE ASSESSEE HAD DECLARED C ASH OF RS.2.71 CRORES AND JEWELLERY WEIGHING 1387.50 GRMS. WORTH RS.22,01,500/ - IN THE DECLARATION MADE BEFORE THE ITO, MUMBAI AS HAVING BEEN BROUGHT FROM PAKISTAN. THE ASSESSING OFFICER HAS ACCEPTED THE DECLARATION OF JEWELLERY AND HAS NOT MADE ANY ADDIT ION IN THIS REGARD. THE SAID JEWELLERY WAS ALSO BROUGHT BY THE ASSESSEE ON HER MIGRATION FROM PAKISTAN TO INDIA AND WAS DECLARED IN THE SAME DECLARATION BEFORE THE SAME ITO, MUMBAI. NO ADVERSE COMMENTS HAVE BEEN RAISED IN RESPECT OF SAID JEWELLERY DECLAR ATION NOR THE SAME HAS BEEN ADDED AS INCOME OF THE ASSESSEE , C ONSEQUENTLY, THE DECLARATION OF CASH MADE BY THE ASSESSEE IN THE SAME DECLARATION MERITS TO BE ACCEPTED. WE FIND NO MERIT IN THE PLEA OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT NO EXTRA CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD. THE ASSESSEE HAS VERY CLEARLY ESTABLISHES ITS CASE OF HAVING TRANSFERRED THE PROPERTIES IN THE NAME OF PERSONS TO WHOM IT CLAIMS TO HAVE SOLD THE SAME AND IT CANNOT BE THE CASE OF REVENUE THAT THE SAID TRANSFERS IN THE NAME OF PURCHASERS WAS MADE WITHOUT TAKING CONSIDERATION DUE FOR THE SAID TRANSFERS. WE FIND NO MERIT IN THE PLEA OF LEARNED DEPARTMENTAL REPRESENTATI VE FOR THE REVENUE IN THIS REGARD AND DISMISS THE SAME. WE UPHOLD THE ORDER OF CIT(A) IN DELETING THE AFORESAID 27 ITA NO. 1565 /PUN/20 15 SMT. SANGEETA KOTOOMAL ESRANI ADDITION UNDER SECTION 68 OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, DISMISSED. 2 6 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF SEPTEMBER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 27 TH SEPTEMBER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 2 , AURANGABAD ; 4. / THE PR. C IT - 2 , AURANGABAD ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE