ITO, New Delhi V. Sh. Nikolai Valchev, New Delhi

ITA 4116/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53161 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-11-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: M K AGGRAWAL
• Keywords: Additional evidence
• Section: 68

Judgement Text

ITA NO. 4116/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4116/DEL/2011 A.Y. : 2008-09 INCOME TAX OFFICER WARD-48(1), ROOM NO. 406, MAYUR BHAVAN, NEW DELHI 110 001 VS. SH. NIKOLAI VALCHEV, E-23, 2 ND FLOOR, LAJPAT NAGAR-III, NEW DELHI (PAN: (PAN: (PAN: (PAN: ACPPV2094J) ACPPV2094J) ACPPV2094J) ACPPV2094J) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. M.K. AGGRAWAL, CA DEPARTMENT BY : SH. R.S. NEGI, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM PER SHAMIM PER SHAMIM PER SHAMIM YAHYA: AM YAHYA: AM YAHYA: AM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 14.6.2 011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN : DELETING THE ADDITION OF ` 14,54,716/- OUT OF TOTAL ADDITION OF ` 15,35,995/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CREDIT OF FOREIGN CURRENCY IN THE BANK ACCOUNT OF THE ASSESSEE. ITA NO. 4116/DEL/2011 2 ALLOWING THE ASSESSEE TO PRODUCE ANY ADDITIONAL EVIDENCE BEFORE HIM WITHOUT PROVIDING AN OPPORTUNIT Y TO THE ASSESSING OFFICER WHICH IS VIOLATION OF RUL E 46A(1) OF THE IT RULES, 1962. NOT CONSIDERING THE FACTS THAT DURING THE ASSESSME NT PROCEEDINGS THE ASSESSEE WAS PROVIDED MORE THAN ENOUGH OPPORTUNITIES TO SUBSTANTIATE THE QUERIES RAISED BY THE ASSESSING OFFICER IN RESPECT OF FORE IGN CURRENCY CREDITED IN HIS ACCOUNT, BUT THE ASSESSEE DID NOT AVAIL OF THESE OPPORTUNITIES FOR THE REASONS BE ST KNOWN TO HIM. TREATING THE ASSESSEE AS NON-RESIDENT, WHEREAS HE IS FILING ITS RETURN OF INCOME REGULARLY WITH ITO WARD 48(1), NEW DELHI AND THEREFORE THE AFFIDAVIT FILED BY THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT CORRECT AS PER LAW. NOT CONSIDERING THE FACT THAT IF THESE ARE REMITTAN CES FROM OUTSIDE THEN THE DETAILS OF THE SAME WERE TO BE FILED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE WHICH HAS NOT BEEN DONE. IT WAS THE DUTY OF THE ASSESSEE TO PROVIDE FRCC AS HE HAS RECEIVED THE FOREIGN REMITTANCE. THE APPELLANT CRAVES THE RIGHT TO ALTER, AMEND, ADD OR SUBSTITUTE THE GROUNDS OF APPEAL. 3. IN THIS CASE ASSESSING OFFICER NOTICED THAT THE RE WAS A DEPOSIT OF ` 14,54,716/- IN THE SAVINGS BANK ACCOUNT OF THE AS SESSEE FOR THE ITA NO. 4116/DEL/2011 3 PERIOD 1.4.2007 TO 31.3.2008 ON VARIOUS DATES WHICH WAS RECEIVED IN THE FOREIGN CURRENCY. ASSESSEE WAS ASKED TO GIVE EXPLANATION FOR THE SAME ALONGWITH BANK CERTIFICATE. NO EXPLANATION WHATSOEVER WAS PROVIDED TO THE ASSESSING OFFICER. ASSESSING OFFICE R PROCEEDED TO MAKE THE ADDITION OF ` 14,54,716/- IN THE HANDS OF THE ASSESSEE ON THIS ACCOUNT. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE SUBMITTED VARIOUS ADDITIONAL DOCUMENTS. IT WAS SUBMIT TED THAT THE ASSESSEE WAS A NON-RESIDENT AND WAS A RESIDENT OF B ULGARIA AND PERMANENT RESIDENT OF BULGARIA. HE ALSO FILED THE C OPY OF HIS PASSPORT BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT WAS FURTHER SUBMITTED THAT REMITTANCES FROM ABROAD IN FOREIGN C ONVERTIBLE CURRENCIES AND THE SAME WERE RECEIVED BY HIM FROM H IS SISTER. TO ESTABLISH THE IDENTITY OF THE REMITTER, ASSESSEE HA S ALSO SUBMITTED IDENTITY CARD ISSUED BY THE BULGARIAN AUTHORITIES. ASSESSEE ALSO FILED COPY OF BANK STATEMENT FROM HDFC BANK ISSUED ON 26.2.2 011 CONFIRMING THAT THE MONEY TRANSFERS AND REMITTANCES H AVE BEEN RECEIVED IN THEIR ACCOUNT IN FOREIGN CURRENCY IN T HE FINANCIAL YEAR 2007-08 FROM OUTSIDE INDIA. CONSIDERING THE SUBMISSI ONS LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER:- I HAVE CAREFULLY GONE IN TO THE ABOVE SUBMISSIONS A ND HOLD THAT THE ASSESSING OFFICER WAS NOT CORRECT TO MAKE ADDITIONS TO THE RETURNED INCOME WITHOUT ANY INVESTIGATION WH EN THE ASSESSING OFFICER WAS HAVING INFORMATION THAT THE A MOUNT HAS BEEN RECEIVED FROM ABROAD AND SIMPLY BECAUSE CONFIRMATION FROM THE HDFC BANK WAS NOT FILED COULD N OT BE THE SOLE BASIS FOR MAKING ADDITIONS. ALSO IN VIEW OF THE ITA NO. 4116/DEL/2011 4 JUDICIAL PRONOUNCEMENTS, I AM OF THE VIEW THAT THE REMITTANCES RECEIVED FROM ABROAD IS NOT TAXABLE IN I NDIA AS THE SAME HAS BEEN PROVED BEYOND DOUBT THAT THE AMOUN T HAS BEEN RECEIVED FROM HIS SISTER WHO IS ALSO A NON- RESIDENT FOREIGN CITIZEN. THE REMITTANCES RECEIVED FROM FOREIGN COUNTRY ARE NOT TAXABLE IN INDIA U/S. 5 OF THE INCOME TAX ACT AND THE SECTION 68 DOES NOT APPLY TO THE FACTS OF THE CASE EXPLAINED BEFORE ME AND THE DOCUMEN TS FILED BY THE A.R. OF THE ASSESSEE+ IN THE PAPER BOO K FILED BEFORE ME. THE ASSESSING OFFICER SHOULD HAVE ENSU RED FURTHER ABOUT ACTIVITIES OF APPELLANT NON-RESIDENT IN INDIA. THE NON-RESIDENT APPELLANTS WIFE IS MRS. INDIA ATRI (INDIA). HIS CHILDREN ARE HERE IN INDIA. BUT IS HE HAVING ANY OTHER BUSINESS ACTIVITY IN INDIA OR NOT, IS NOT KNOWN IN RECORD. THE ASSESSING OFFICER SHOULD SEE SUCH CASES UNDER LENS, TO BRING IT TO KNOWLEDGE OF HIGHER AUTHORITIES. THERE SHOULD NOT BE ANY PAN ISSUED TO ASSESSEE ALSO/ON THE ABOVE FACTS, I AM THEREFORE, INCLINED TO ACCEPT THE ARGUMENT OF TH E A.R. AND THE ADDITIONS OF ` 14,54,617/- STANDS DELETED. 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEA L BEFORE US. 6. AT THE OUTSET, LD. DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THERE WAS A VIOLATION OF RULE 46A IN THIS CASE AS L D. COMMISSIONER OF INCOME TAX (APPEALS) HAS ADMITTED THE ADDITIONAL EVI DENCES WITHOUT GIVING THE ASSESSING OFFICER AN OPPORTUNITY TO GO THROUGH THEM. 6.1 LD. COUNSEL OF THE ASSESSEE ON THE OTHER HAND CONTENDED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS WELL WITH IN HIS POWERS TO ADMIT THE ADDITIONAL EVIDENCES AND EXAMINE THE SAM E AND GIVE A ITA NO. 4116/DEL/2011 5 FINDING. HOWEVER, LD. COUNSEL OF THE ASSESSEE AGR EED THAT THE MATTER CAN BE SENT BACK TO THE FILE OF THE ASSESSING OFFIC ER TO CONSIDER THE ISSUE AFRESH, IN LIGHT OF THE SUBMISSIONS AND ADDIT IONAL EVIDENCES PRODUCED BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS). ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT TH IS ISSUE TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH, IN LIGHT OF THE SUBMISSIONS AND ADDITIONAL EVIDENCES SUBMITTED BY TH E ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15/11/2011, U PON CONCLUSION OF HEARING. SD/- SD/- [ [[ [A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 15/11/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES