LATE MR. ARUN KUMAR R. MEHTA (L/H MR. RUSSELL ARUNKUMAR MEHTA (SON), MUMBAI V. DCIT CEN CIR 1, MUMBAI

ITA 7309/MUM/2011

AI Insights

The case involves appeals by the late Mr. Arun Kumar R. Mehta against the additions made to his income and penalties imposed by the Income Tax Department, related to alleged undisclosed income from foreign bank accounts and discretionary trusts. The Tribunal examined the evidence, including affidavits and bank documents, and found that the assessee was not the beneficial owner of the trusts or the funds, which were instead linked to his brother, Mr. Dilip Mehta. The Tribunal's decision was influenced by the lack of direct evidence linking the assessee to the trusts or the funds, and the credible explanations and evidence provided by Mr. Dilip Mehta.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299560 (ITAT-MUMBAI)
• Duration Of Justice: 11 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 20-04-2023
• Assessment Year: 2003-2004
• Appeal Filed On: 31-10-2011
• Other Referred Cases: Shri Harshad Ramaniklal Mehta v. DCIT, Mohan Manoj Dhupelia vs. DCIT, Hasmukh Gandhi vs. DCIT, Deepak B Shah vs. ACIT, Renu T Tharani vs. DCIT, DCIT vs. Hemant Mansuklal Pandya, DCIT vs. Dipendu Bapalal Shah, DCIT vs. Jatinder Mehra
• Laws Referred To: Income-tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained investment; Business income; Income from undisclosed sources; Source of fund; Additional evidence; Set aside
• Section: 131; 148; 271(1)(c); 144; 234B; 69A; 64; 43; 48; 72; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI S RIFAUR RAHMAN, AM आयकरअपीलसं./ I.T.A. No.2743/Mum/2011 (निर्धारणवर्ा / Assessment Year: 2003-04) आयकरअपीलसं./ I.T.A. No.7309/Mum/2011 (निर्धारणवर्ा / Assessment Year: 2003-04) Late Mr. Arun Kumar R. Mehta, L/H of Sh. Rusell Mehta, 1608/09, Prasad Chamber, Opera House, Mumbai-400004 बिधम/ Vs. Dy. CIT, Central Circle-1, Mumbai स्थायीलेखासं./जीआइआरसं./PAN No AABPM3327M (अपीलाथी/Appellant) : (प्रत्यथी / Respondent) अपीलाथी की ओरसे/ Appellant by : Shri. P.P. Bhandari प्रत्यथी की ओरसे/Respondent by : Ms. Surabhi Sharma (CIT-DR) & Shri. Manoj Kumar Sinha (Sr. DR) सुनवाई की तारीख/ Date of Hearing : 21.04.2023 घोषणा की तारीख/ Date of Pronouncement : 09.06.2023 आदेश / O R D E R Per Amit Shukla, Judicial Member: The aforesaid appeals have been filed by the assessee against the impugned appellate order dated 25.02.2011, passed by the Ld. CIT (Appeals)-36 Mumbai, for the quantum of assessment proceedings passed u/s 144 r.w.s. 147 for the AY 2003-04; and order dated 2 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 30.08.2011 in relation to penalty proceedings u/s 271(1)(c) for the same assessment year. 2. The assessee in the grounds of appeal has raised the following grounds: In ITA No.2743/Mum/2011 for AY 2003-04 “1. The learned Commissioner of Income-tax (Appeals) erred in upholding the addition of Rs.5,35,23,181/- as undisclosed income for the year. It is submitted that the no such income as alleged by the learned Assessing Officer has ever accrued or received by the Appellant or can regard as deemed to accrue or be received by the Appellant and as such cannot be treated as undisclosed income for the year. The conclusion arrived at by Commissioner of Income-tax(Appeals) and the learned assessing officer is based on conjecture and surmises and is contrary to the facts. The addition made is bad in law and ought to be deleted. 2. The learned Commissioner of Income-tax (Appeals) erred in relying on the provisions of Section 166 of the Income-tax Act 1961 to sustain the addition in the hands of the Appellant when admitted the trust was a discretionary trust having the status of a non-resident and undisputedly there was no evidence to show that the appellant had received any part of the said income. 3. The Commissioner of Income-tax (Appeals) erred in upholding the order of the learned assessing officer levying interest under section 234B of the Act. It is submitted that the appellant is not liable to pay any interest under section 234B of the Act. Interest levied under section 234B of the Act is bad in law and ought to be cancelled. 4. The appellant reserves the right to add to, alter or amend the rounds of appeal.” In ITA No.7309/Mum/2011 for AY 2003-04 “1. The learned Commissioner of income-tax (Appeals) erred in upholding the order of the Assessing Officer levying a penalty of Rs.3,37,19,602/- under section 271(1)(c) of the Income-tax Act, 1961. 3 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta It is submitted that the appellant had filed his return of income based on the information available. The learned Assessing Officer failed to appreciate the facts and circumstances of the case it is further submitted that addition for which penalty is levied was made on the basis of inferences without any evidence and cannot be construed as concealment of income or furnishing inaccurate particulars of such income. The appellant has neither concealed any particulars of his income nor had furnished any inaccurate particulars of such income and as such no penalty can be levied under section 271(1)(c) of the Act. The penalty order passed by the learned Assessing Officer is hasty and bad in law and ought to be cancelled. In an alternate, it is submitted that the penalty levied by the learned assessing officer is excessive and unreasonable. The appellant reserves the right to add to, alter or amend the grounds of appeal.” 2. In the quantum proceedings, the assessee has challenged the addition of Rs.5,35,23,181/- as undisclosed income on account of certain balance in foreign bank account as beneficiary owner of the discretionary trust. Apart from that, the assessee has also challenged the validity of the reopening u/s 148. 3. The brief facts of the case are that the assessee is an individual and has filed his original return of income on 30.09.2003 for AY 2003-04 and was regularly assessed to tax in India. Information was received that the assessee was one of the beneficiary in „Dryade Stiftung‟, an entity with LGT Treuhand AG, which belongs to the LGT group based in Liechtenstein. The information reflected some credit transaction in the account of the said entity during April, 2002 to the tune of US $ 4 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 4,387,146. Further, it also reflects that certain assets may be held in the account of the said entity as on December, 2001. Accordingly, the assessee‟s case was reopened u/s 147 after recording following „reasons‟. “Information has been received that Shri Arun Ramniklal Mehta, assessed to tax in this-charge, is a beneficiary both in Dryade Stiftung and Dlanese Sfiffung, two entities with LGT Treuhand AG belonging to the LGT group based in Liechtenstein. We have been given to understand that transactions in the account of Dryade Stiftung during April, 2002. were to the tune of US $ 43,87,146,00 Certain assets were being held in the account of both Dryade Stiftung and Dianese Stiftung as in December. 2001. It is understood that Shri Arun Ramniklal Mehta is a beneficiary of the aforesaid transactions. However, there is nothing on our records to show that the amounts received have been offered to taxation by Shri Mehta. Income chargeable to tax has thus escaped assessment for the relevant assessment years. Since this information was not in our possession earlier and has been received only now,-1.am of the opinion that this is a fit case for reopening of assessments .of Shri Arun Ramniklal Mehta for A.Y. 2002-03 and A.Y. 2003-04 u/s.147/148 of the Income-tax Act. Considering that the information received also refers to "assets", of which Shri Mehla was a beneficiary. I believe that the wealth-tax assessments-of Shri Mehta also need to be reopened for the above-mentioned years by issue of notices u/s. 17 of the Wealth-tax Act.” 3.1 Thereafter, the assessee has raised objections before the AO which has been disposed off and in his order disposing objections, he has further stated that activities of LGT Treuhand AG are under the scanner of almost all the countries and it is tax haven and from the Google website, 5 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta he has down loaded certain information which has purely no co- relation with the assessee. The Ld. AO in his assessment order further mentions about his further reasons stating that one of the address given to the LTG Bank as beneficiary was that of assessee in Mumbai India and deposits of the family money. Thereafter, he has proceeded to discuss certain background of the case which is available in public domain on the website. The Ld. AO has observed that there was four beneficiaries in the trust and AO proposed to make the addition of 25% of the amount of Rs.43,87,146.00 US$ 4,387,146 in the hands of the assessee. 3.2 In response thereto, the assessee categorically stated that, firstly, the assessee has not deposited any amount of US$ 4,387,146 in the account of Dryade Stifftung; and secondly; the assessee has not received income from these discretionary trust. In support of his contention, the assessee has filed a letter dated 05.11.2009 from LGT Bank which was subsequently known as Fiduco Treuhand AG which was provided by assessee‟s brother, Mr. Dilip Mehta which confirms that : (a) Assessee had no role play either with the creation or the management of the Foundations. 6 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta (b) Assessee is not the „Founder‟ of the Foundations [under the Lichtenstein Laws, „Founder‟ is the person who makes contribution to the Foundation. (c) Assessee had not received any distribution from the Foundations during relevant period. 4. The Ld. AO, is also gave reference to certain documents stating as under: “1) Verification of the beneficial owner‟s identify signed by Proxy Holder ABNAMRO Trust Company (Suise) SA, which stated that the beneficial owner of the assets deposited with the Bank are:- Dilip Ramniklal Mehta Antwerp, Belgium Arun Ramniklal Mehta Bombay, India Harshad Ramniklal Mehta Bombay, India Amit Bhansali Antwerp, Belgium 2. Background information/profit, Form for existing business relationship with institutional entities prior to January 1, 2001, which shows the origin of the assets deposited in Dryade Stifstung as „ family money‟. This also shows the assets held by the above mentioned entity as follows: i) Snow Drop Company Ltd.- One bearer share (100%) ii) Sundew Company Ltd.- One bearer share (100%) iii) Ruby Enterprises Inc.- 300 bearer share This form also gives profession and business of beneficial owner as “Executive Officers- Own Diamond Trade”. 3. Another Bank summary for the above mentioned Account showing credit of US$ 4,387,146,034.37 on 17.04.2002. 7 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 4. A Bank summary of ABN AMRO Bank in respect of Dryade Stifstung having Account No. IBAN CH70 0864 5000 OG20 4109 C which shows debit of UD $ 4,387,146 on 19.04.2002.” 5. Before the AO, the assessee had been denying that, neither he has deposited any money nor he was the member of the Trust or had any interest in the said account number and he had no role in the above mentioned entity. The Ld. AO rejected the assessee‟s explanation holding that LGT Bank in the Liechtenstein is a “tax heaven” and since assessee was involved Diamond Trade through a company. M/s Rose Blue Ltd., therefore, such assessees‟ have been to take advantage of “tax haven”. Accordingly, based on this premise he held that there is no contrary evidence produce by the assessee and accordingly the deposit made in the bank account trust on 17.04.2002 represents unaccounted Income of the assessee from his business activity. Since, there were four beneficiaries, the assessee‟s share was taken at 25% and considering the conversion rate of USD $ to prevailing in April, 2002 at Rs.48.80, the total deposit works out in INR at Rs.21,40,92,725/- and the assessee share of 25% amounted to Rs.5,35,23,181/- which was added to the income of the assessee. 8 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 6. Before the Ld. CIT (A), the assessee again reiterated the communication received from LGT Bank which read as under: “Dryade Foundation, with legal domicile in Vaduz, was established by them on a fiduciary basis. For your easy reference, please find attached a copy of the document with the title “Memorandum of Foundation” dated 2 nd July, 1986. The object of the Foundation is the economic support of members of certain families as well as, supplementary, of natural and legal persons outside these family circles. In the course of the establishment of the Foundation, the Beneficiaries have been mentioned in the By-Laws. The Advisory Board has determined the names of all the beneficiaries. Mr. Arun Mehta has never been a member of the Advisory Board or a Founder. The first By-Laws have been issued on 31 st July, 1986. New By-Laws were issued on 30 th October 1986 and on 27 th of July 1990. Distributions 1 April 2002- 31 March 2004. To the best our knowledge and according to our records no distribution of income or capital has been made during the above mentioned period to Mr. Arun Mehta.” 6. 1. It was further submitted that no adverse evidence or material has been produce to show that the assessee has any role to play either in the management of the of the Stiftung and this which is evident from the confirmation furnished by the Fiduco Treuhand AG; or the assessee was ever a member of the Foundation Board. Apart from that, it was stated that Foundation Board has never exercised discretion in the favour of the 9 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta assessee and therefore, no income could have said to have been accrued or received by him from said Stiftung which has been brought to tax. Further, it was submited that a beneficiary of a discretionary trust can only be assessed in respect of an amount which is received by him from trust or in respect of an amount which accrues to him as a consequence of a discretion being exercised in his favour, although the actual amount may not be paid over to the concerned beneficiary. Herein in this case no part of US$ 4,387,146.00 has ever been received by the assessee and similarly no such benefit has been granted to him which would result in any part of the said same being treated as part of his income chargeable to tax in India. Merely because assessee was named as a beneficiary in a statement and his address mentioned in such statement, is of a place in India does not leave to inference that any income had accrued or is received by him and would become chargeable to tax in India. 6.2 However, the Ld. CIT (A) has confirmed the addition by observing as under: “16. I have perused the above submissions of the appellant and the order of the AO. The bank documents bear the signature of the trustees and hence the same are genuine. These documents bear the correct name, address and date of birth of the appellant. The document shows that the trust was created on July 02, 1986. 10 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta The account has been mentioned as active. There is a mention of transaction on April 17, 2002 valued at 4,386,034.37 which created the balance of 4.387,146.86. The transaction is related to Rosy Blue Fin SA. It is pertinent to note that the appellant is a director of Rosy Blue (India) Private Limited. The company is engaged in manufacture and export of diamond, which is incidentally also mentioned in the bank documents and the trust. The date of birth and the address of the appellant are correctly mentioned on the bank document. All this clearly proves that the appellant is closely connected to the said bank account and the trust. Even if the appellant has decided any knowledge of the trust or has not travelled to that area, the appellant cannot explain how a trust was created wherein he and his family members were made the beneficiaries. Since, the transaction has taken place in Financial Year 2002-03, the income has been correctly assessed in AY 2003-04. As there are four beneficiaries mentioned, the AO has correctly taken the income of the appellant at the 25% value of the amount mentioned therein.” 7. Before us, the Ld. Counsel for the assessee submitted that the Ld. CIT (A) has made a reference that assessee could not explain how the trust was created wherein he and his “family members” were made the beneficiaries, which was never confronted to the assessee. Accordingly, the assessee filed additional evidence on 30.08.2021 before this Tribunal along with an affidavit dated 10.02.2020 of Shri Dilip Mehta, brother of late assessee, wherein in para 6 & 7 of his affidavit, he has specifically explained about the source of funds, reasons for creation of the foundation and why the assessee was made one of the four beneficiaries. 11 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 7.1 At this point it could be relevant to incorporate the affidavit filed by the Sh. Dilip Mehta. AFFIDAVIT I, Dilip Mehta aged 70 years presently residing at Villa 10, Leaf 12, Al Barari, Dubai, UAE and at present in Mumbai, do hereby state and declare on solemn affirm that: 1. I left India in the year 1973 to start my business in diamonds in Belgium, and have been a non-resident for the last 47 years under the Income Tax Laws in India. In 2001, I renounced my Indian citizenship and opted for Belgian Citizenship currently holding Belgium Passport bearing no. EM986875. 2. Proceedings under the Indian Income tax laws have arisen in relation to Dryade Stiftung and Dianese Stiftung (two "Foundations") holding bank accounts with LGT Treuhand AG; in particular a transaction of US $ 4,387,146 as on 19.04.2002 appearing in the account of the Dryade Sliftung. The '"beneficial owners" of the aforesaid Foundations which are me, my two brothers Shri Arun Ramniklal Mehta and Shri Harshad Ramniklal Mehta (hereinafter collectively "brothers") and a family friend, Shri Amit Bhansali a Belgian citizen & non-resident of India since 1985. 3. A Stiftung is akin to a discretionary trust with absolute and exclusive powers vested in the Foundation Board of the Trust to appoint and/or replace the beneficiaries and to amend the statutes and/or bye laws and to manage the assets of the Stiftung. 4. Based on information received by the Government of India, in relation to the aforesaid Foundations, Income Tax assessment proceeding were initiated in 2009, against Shri Arun Ramniklal Mehta and Shri Harshad Ramnikial Mehta. At an early stage in the proceedings, I provided to my brothers a communication from Fiduco Treuhand AG dated 05-11-2G09 which inter alia States: (i) That my brothers are not the "Founders" of the Foundations. 12 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta (ii) That my brothers had no role to play cither with the creation or the management of the Foundations. (iii) Thai my brothers had received no distribution from the Foundations from the year 2002 to 2004. A copy of the said communication with its annexures is for the sake of convenience attached to this Affidavit. 1 hereby reiterate the contents of the said communication, in relation to my brothel's. A "Founder" under the laws is a person who makes a contribution to the foundation. Relevant extract of the Lichtcnstien Law is annexed. 5. Based on legal advice received, h was the understanding of my brothers that the key issues in respect of them in the Income Tax proceedings was whether they had contributed to the Foundations or received any distribution from (he Foundations. The Fiduco Treuhand AC communication addressed this issue. I am told that the Indian Income Tax Authorities have not controverted die contents of the Fiduco Treuhand AG communication dated 05.11.2009. 6. I am told that an issue has now arisen as to what was the source of the funds in the Foundations. I hereby slate that I transit-red the funds to the said Foundations from my business operations mainly in the Far Easi and Europe in which my brothers had no participation or interest. My businesses were successful. I had the honour of being one amongst very few persons of Indian origin who have been conferred with the title of a "Baron" by the Belgium Government for my integrity and contribution to society. 1 was bestowed the title in 2006. I had sufficient funds of my own to make a contribution to the Foundations. 7. The Foundations were created in 1986 a time when my children were minors, in case of any untoward incident that I may suffer. 1 desired that the persons I most trusted (my brothers) should be able to deal with me funds of the Foundations for the benefit of my family members, their education, health and well-being. This is why the Foundations" documents 13 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta refer to the Foundations* money as "family money" Mr. Amit Bhansali (a non- resident) who is a close family friend was also named a.s a beneficial owner. I state that being my brothers. I had the address and other details which are referred to in the Foundations' documents. 8. I hereby sate: (i) That my brothers had no role to play either with the creation or the management of the Foundations. (ii) That my brother had made no contribution to the Foundation. (iii) That I transferred the funds to the said Foundations from business operations conducted by me in which my brothers had no participation or interest. (iv) As confirmed by Fiduco Treuhand AG, no distribution was made to my brothers from the Foundations. (v) That the transaction for US $ 4,387,146 was in relation to business entities with which my brothers are not connected. 9. This affidavit is executive to bring the facts relating to account with Drayed Stiftung and Dianese Stiftung on record. Whatever stated hereinabove is true and correct to the best of my belief, information and knowledge. Solemnly affirmed on this 10 th day of February, 2022 Sd/- (Dilip Mehta) Respondent” 7.2 From the contents of the aforesaid affidavit, it was stated that, it is very clear that, Sh. Dilip Mehta had; (i) various business outside India enabling him to make contribution to the Foundation; (ii) transferred the 14 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta funds to the said Foundations from the business operations; (iii) created Foundations for benefit of his minor children, their education, health and well-being in case of any untoward incident that he may suffer and therefore, his brothers (Assessee and Mr. Harshad Mehta) whom he most trusted and a close family friend, Mr. Amit Bhansali were made beneficiaries so that they were able to deal with the funds, if required. 7.3 That the said affidavit dated 10.02.202, Sh. Dilip Mehta has also confirmed on oath that: (i) The Assessee had no role to play either with the creation or the management of the Dryade Stiftung and Dianese Stiftung. (ii) The Assessee had made no contribution to the said Discretionary Trusts. (iii) Sh. Dilip Mehta has himself transferred the funds to the Foundations, from the business operations conducted by him in which his brothers (including the Assessee) had no participation or interest. (iv) As confirmed by Fiduco Treuhand AG, no distribution was made to the Assessee from Dryade Stiftung. (v) The transactions for US $ 4,387,146 was in relation to business entities with which his brother (i.e., Assessee and Mr. Harshad Mehta) are not connected. 15 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 7.4 Apart from the affidavit, the assessee had also filed documents from the memorandum of foundation of Dryade Stiftung and also a letter from Fiduco Treuhand AG stating that the assessee has never been a member of the advisory board or a foundation. 8. Since the affidavit of Sh. Dilip Mehta, which has made under oath who has owned the entire source of deposits, therefore, vide order dated 23.06.2022, we had a following interim order directing the AO to examine Shri Dilip Mehta and directed the assessee to produce, Sh. Dilip Mehta in India and directed the AO to examine him, whether he has owned up the source of deposits made in the said bank. The order sheet dated 23.06.2022, is read as under: “1. In the aforesaid matter, the main issue involved is with regard to addition of Rs.5,35,50,181/- which has been made on the basis of information received by the Assessing Officer that assessee was one of the beneficiary in the Dryade Stiftung, Discretionary Trust, an entity with LOT Treuhand AG, which belongs to LGT group based in Liechtenstein. 2. Before the Assessing Officer, in response to the notice u/s. 148 of the Act, objections were raised before the Assessing Officer, wherein, the assessee had, firstly, denied the allegation that he has deposited any sum of $ 43,87,146 in LGT Bank, Liechtenstein; secondly, his brother Shri Dilip Mehta was NRI, since 1973 and he was the settlor of the Trust, way back in 1986. 16 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Lastly, a letter was filed, written by LGT Bank Trust to the lawyer of Shri Dilip Mehta, wherein the Bank has confirmed that, Late Assessee, Shri. Arunkumar R. Mehta was never part of Trust Board as Member of the Trust nor was the founder of the Trust; and secondly, to their knowledge and as per the records there was no distribution of income or capital having been made during the period 01.04.2002 to 31.03.2004 to Shri. Arunkumar R. Mehta. 3. During the course of hearing, Ld. Counsel for the assessee, Shri Rohan Shah had filed an affidavit of Shri Dilip Mehta (brother of the assessee) as additional evidence wherein Shri Dilip Mehta has made averments on oath; > Firstly, his brother Late Shri. Arunkumar R. Mehta had no role in the creation of Discretionary Trust / foundation or the management of the foundation; > Secondly, he had not made any contribution to the funds of the foundation; > Thirdly, he has further affirmed that he alone has transferred the funds from his own business operations and through his own sources; > Fourthly, the Bank has not made any distribution to his brothers; > Lastly, the entire deposits were in relation to the business entities in which his brothers were not connected. 4. Before us, Ld. DR objected for filing of additional evidence and stated that, firstly at no stage either before the Assessing Officer or before First Appellate Authority, any plea was taken that the source of the money which has been deposited in the LOT Bank was through Shri Dilip Mehta who is an NRI. Therefore, this affidavit is clearly an afterthought. She further submitted that 17 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta the contents of the affidavit needs to be verified and examined by the Assessing Officer; Lastly, she submitted that in the case of Shri Harshad Ramaniklal Mehta v. DCIT in ITA.No. 7307/Mum/2011 & 2744/Mum/2011 dated 04.09.2019, this Tribunal had set aside this issue to the file of the Assessing Officer. Therefore, she requested that, in line with the same, the matter can be remanded back to the file of the Assessing Officer. 5. Before us, the Ld. Counsel for the assessee in his counter had stated that, this affidavit is being filed in line of various judgments, some in favour of the assessee and some in favour of the revenue. The courts have made distinction in the cases where assessee was unable to prove the source of the deposits and hence the same were decided against the assessee. It was in light of these facts assessee has filed its additional evidence in the form of the affidavit. 6. Having heard both the parties and on a perusal of the documents which has been placed before us including the additional evidence as well as the order of the Tribunal in the case of Shri Harshad Ramaniklal Mehta v. DCIT (supra), we find that in that case, there was no such plea taken by the Shri Harshad Ramaniklal Mehta that the source of deposits in the said bank account was through Shri Dilip Mehta and only contention raised was that assessee has not contributed nor he has received anything on distribution. Another aspect was that the materials and information which was supplied to the assessee was in German language for which they required English translation. Considering the facts and circumstances of the case the Tribunal set aside the matter to the Assessing Officer to decide afresh. 18 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 7. From the perusal of the affidavit, it is seen that Shri Dilip Mehta, who is a Non-Resident, had explained the facts and has owned up the source of the deposits made in the bank. However, all these averments made in the affidavit needs to be examined and verified and also requires cross examination by the Assessing Officer. Accordingly, we direct the assessee:-  To produce Shri Dilip Mehta within a period of two months, i.e., on or before 31.08.2022 before the Assessing Officer; and  Assessing Officer may cross examine and ask for necessary details to examine the veracity and the correctness of the averments made by Shri Dilip Mehta in his affidavit. Assessing Officer shall submit his remand report along with the proceedings conducted by him of the examination of Shri Dilip Mehta within one month, i.e., on or before 30.09.2022. List this matter for further hearing on 11.10.2022 as part heard. The copy of this order shall be provided to the parties, for compliance.” 9. Mr. Dilip Mehta came to India for his deposition and explaining the entire facts. In his letter dated 29.08.2022 filed before the AO he has submitted as under: “To Deputy Commissioner of Income-tax Central Circle 8(3) Mumbai Dear Sir, Ref: Arun R. Mehta PAN AABPM3327M Remand Report Proceedings pursuant to ITAT Appeal-ITA No.2743/M/2011 --------------------------------------- 19 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Mr. Russel Arunkumar Mehta, legal heir of my brother Shri Arunkuinur Mehta, has forwarded to me your letter bearing DIN & Letter No. ITBA/COM/F/17/2022- 23/1044559416(l) dated 8 lh August 2022 in connection with the above subject matter. 1. The background in which your communication dated 8 l!l August 2022 is written, can usefully be set out as under. 2. in an ongoing proceeding against my brother Shri Arunkumar Mehta (Appeal No. 2743/M/201 1 before the Mumbai ITAT. for Assessment Year 2003-04), I had tendered an affidavit dated 10"' February 2020 inter alia slating the following: (i) I am a non-resident for the last 47 years under the Income Tax Laws in India, (ii) I hold a Belgium passport, (iii) As regards the Dryade SliiUing and Dianese Slifrung (the "Two Foundations") (a) my brother Arun Ramniklal Mchia and Harshad Ramniklal Mehta had made no contributions to the aforesaid Two foundations. Refer confirmation from Fiduco 'Treuhand AG dated 5-11-20U9 on record. (b) that my brothers. have received no distributions from the Two Foundations, (c) that I had transferred funds to the Foundations from business operations conducted by me, in which my brothers had no participation or interest, and, (d) that the transaction for US$ 4.38 million was in relation to business entities which my brothers are not connected. The said affidavit was filed to establish that my brothers had not either contributed to the Two Foundations or received any distribution from the Two Foundations, and that I was the Founder (Settlor) of the said Two Foundations from my business interests conducted outside India as a non-resident. 3. The Hon'ble Tribunal, by its order dated 23 rd June 2022, has noted that I, Dilip Mehta, a non-resident "had explained the facts and had owned up the source of the deposits made in the bank”. The Hon'ble Tribunal was of the view that these averments needed . to be examined and verified. The Hon'ble Tribunal therefore directed as under: 20 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta "Assessing officer may cross examine and ask for necessary details to examine the veracity and the correctness of the averments made by Shri Dilip Mehta in his affidavit. 4. The objective of my aforesaid affidavit was to establish that my brothers (including Mr. Arunkumar Mehta - the current Appellant) has neither contributed to nor received any distributions from the Two Foundations in question. Further, that I had enough business interests and resources outside India and have funded the said Two Foundations. 5. I have had occasion to examine the various points raised in your letter dated 8 ch August 2022. To respond to the queries raised which seeks information as to the events in 2002-03,1 made enquiries with my lawyers Mr. John Shelford of Edwin Coe LLP, London, and with Dr, iur. Hannes Arnold of Gasser Partners at Law, Liechtenstein, whose responses to me are annexed herewith. The communication dated 2 nd August 2022 received from Mr. John Shelford is annexed herewith as Annexure 1. The communication dated 23 rd August 2022 received from Gasser Partners at Law is annexed herewith as Annexure 2. 6. As to various details and documents sought in your letter, from the statements of ray lawyers, it is apparent that: (a) The Dryade Foundation was terminated on 18" 1 May 2004, and the Dianese Foundation was terminated since 27 th August 2003. (b) That under Liechtenstein statutory laws, accounting books and accounting documents are to be archived for a period of 10 years. Consequently, the documents for Dryade Foundation would have been therefore archived till May 2014, and for Dianese Foundation would have been archived till August 2013. In these facts of the matter, various documents or pieces of information as sought by you at this stage would not be available or retrievable. 7. The following facts as they are stated in the communication of John Shelford are relevant: (i) I was a Belgium resident for tax purposes from 1973 to 2011. 21 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta (ii) Under the Belgium laws, there are no capital accounts or exchange control restrictions, (iii) A Belgium resident is able to hold bank accounts, monies and assets outside of the Belgium without limit. (iv) There is no regulatory requirement to file any notifications or disclosure with the Belgium authorities in respect of accounts, monies or assets held outside Belgium. (v) It is also pointed out that records and documentations are required to be maintained in Belgium for 7 years. (vi) I had extensive global business interest, that 1 was honoured with a prestigious title of Baron by the Belgium Government on account of my business status. (vii) In support of my personal resources and ability to settle the amount in question, it is stated that my personal resources globally would have enabled me to make such deposits. Certain articles and other information relating to my business and financial standings are annexed. In view of the above, specific documents as sought would not available under the regulatory system in Belgium. As to the issue of my ability to settle the amount in question in the Two Foundations, I have done the best possible in the circumstances to support and evidence this position. 8. As to the (actor that my brothers {including Mr. Arunkumar Mehta, the present Appellant) neither contributed to nor received a distribution from the Two Foundations, I also refer to a letter from Fiduco Treuhand AG dated 5 th November 2009, which 1 had furnished to my brothers, which clearly slates that Mr. Arunkumar Mchla is not the Founder (Settlor) or Advisory Board Member. It also states that Mr. Arunkumar Mehta has not received any distribution. 9. With a view to undertake the exercise as directed by this Hon'ble Tribunal, kindly lake this letter with its Annexures on record. I will attend before your Honour on 30 th August 2022 to try and further assist in the matter, in the best practical manner possible, Yours faithfully, Sd/- (Dilip Mehta) 22 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 9.1 Thereafter, AO recorded the statement of Sh. Dilip Mehta on 30 th August, 2022 which for the sake of convenience, entire statement are reproduced herein below; “Statement on oath of Shri Ramniklal Mehta, aged 72 years, son of Shri. Ramniklal Mehta residing at Villa 12..10, 600-Nat Al Shiba, Dubai, United Arab Emirates - 340 5O2 recorded u/s. 131 of the Income Taix Act, 1961 on 30.08.2022 pursuant to ongoing ITAT proceedings 1TA No. 2743/M/2011 in the case of Russell Arunkumar Mehta (Legal heir of Late Shri. Arunkumar Mehta} at the Room No. 656, 6th Floor, Aaykar Bhavan, M. k. Road, Mumbai-400020. "I swear in the name of God that, I will speak truth, only truth and nothing but the truth. I further confirm that 1 have been made aware of the consequences of making a false statement under oath.” Before Me Deponent Sd/- Sd/- (Waghe Prasadrao Annasaheb) (Dilip'Ramniklal Mehta) DCIT Central Circle -8(3), Mumbai Q.I Please identify yourself and confirm that oath has been administered to you. Also please confirm that you are made aware of the consequences of false statement on oath. Ans. I am Dilip Ramniklal Mehta, son of Ramniklal Mehta- aged 72 years, residing at Villa 12.10, 600-Nad Al Shiba, Dubai, United Arab Emirates - 340 502. Yes, I confirm that oath has been administered to me and I have been explained the consequences of giving false statement on oath. Q.2 I am drawing your attention to the provisions of Section 276C(2) of the Income Tax Act, 1961 wherein it is provided as under: "If a person willfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than 23 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta three months but it may extend to three years and shall, in the discretion of the court, also be liable to fine. Explanation - For the purposes of this section, a willful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof, shall include a case; where any person - i) has in his possession or control any books of account or other documents (being books of accounts or other documents relevant to any proceedings under this Act) containing a false entry or statement; or ii) makes or causes to be made any false entry or statement in such books of accounts or other documents; or iii) willfully omits or causes to be omitted any relevant entry or statement in such books of accounts or other documents; or iv) causes any other circumstance to exist which will have the effect of enabling such person to evade any tax penalty or interest chargeable or imposable under this Act or the payment thereof." I am also drawing your attention to the provisions of Section 181 of the Indian Penal Code, 1860 which is reproduced hereunder; "181. False statement on oath or affirmation to public servant or person authorized to administer an oath or affirmation Whoever, being legally bound by an oath or affirmation to state the truth on any subject to any public servant or other person authorized by law to administer such oath or affirmation, makes, to such public servant or other person as aforesaid, touching the subject, any statement which is false4, and which he either knows or believes to be false or does not believe to be true, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine." Please confirm having gone through and understood the aforesaid provisions of the statute and the consequences of the same. Ans. Yes, I do confirm having gone through and understood the aforesaid; provisions of law and that I am made aware of the consequences of the same. Q.3 Please confirm whether you are in a fit condition to depose the statement on oath? 24 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Ans. I confirm that I am physically and mentally it to depose statement on oath. Q.4 What is your educational qualification? Ans. I had completed my High School from Mumbai. Q.5 Please confirm that you can read, write and understand English. In which language would you like to give statement? Ans. Yes, I confirm that I can read, write and understand English. I would like my statement to be recorded in English language. Q.6 Please furnish your contact details. Ans. My mobile no is [phone] and my landline number is [phone]. Q.7 Please state in what capacity you are deposing this Statement? Ans. I am giving this statement in Personal Capacity. Q.8 During the course of the ongoing ITAT proceeding ITA No. 2743/M/2O11, wherein appeals have been made against the additions of Rs. 5,35,50,181/- in the case of Me. Arun R Mehta for A.Y. 2003-04, on the basis of information received by the Assessing officer that the assessee was one of the beneficiaries in the Dryade Stiftung, an entity with I-GT Trueband AG .vhich belongs to LGT group based in Liechtenstein, Ld. Council tor the assessee, Shri Rohan Shah had filed an affidavit on the behalf of you as additional evidence wherein you have made following averments; a. Late Shri. Arun R Mehta had no role in the creation of the Trust/foundation or the management of the trust. b. Late Shri. Arun R Mehta had not made any contribution to the funds of the foundation. c. You alone have transferred the funds from your own business operations and through your own sources d. The bank has not made any distributions to the brothers e. The entire deposits were in relation to the bank deposits in which your brothers were not connected, 25 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Accordingly, in this regard, it was requested to convey you to submit/bring along with you the following documents/details in order to substantiate your claim: 1. Statements of each of the bank accounts held by (a) Dryade Stiftung and (b) Dianese Stiftung for the period from 1st April 2O02 to 31st March 2003. 2. To give following details/documents in rosp*ict of Source of fund of each of the credit entries appearing in the above referred ban It account statement/s: (A) If credits are sourced from cash: i. The name of the entity sourcing the cash ii. Your relation with the entity i.e. Self /Director /Shareholder/ Proprietor etc. making such deposit. If the cash deposit is source d by an entity other than yourself, a note explaining as to why the other entity has made payment on behalf of you. iii. Other relevant documents such as copy of balance sheet of the entity highlighting entry against such deposit, copy of P and L account etc. (B) If transferred via any of the banking channel/route- i. The name of the entity transferring the amount ii. Copy of the bank account statement of such entity highlighting the transaction iii. Your relation with the entity i.e. in Self /Director /Shareholder /Proprietor etc and if the transfer of funds is made by an entity other than you, a note explaining as to why the other entity has made payment on behalf of you. iv. Other relevant documents such as copy of balance sheet of the entity highlighting entry against such transfer, copy of P and L account etc. 3. To give following details/documents in respect of each of the debit entries appearing in the above referred bank account statement/s: i. Name of the entities to whom the funds have been transferred and its relationship with you, ii. The treatment of such transfers in the books of accounts of the said entity like loan, income etc. with proof thereof like copy of balance sheet of the entity highlighting entry against such transfer, copy of P and L account. 26 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 4. During the assessment proceedings, a letter dated 13.11.2O09 from Fiduco Treuhand AG (Formerly known as LGT Bank) in respect of Dryade Stiftung and Dianese Stiftung was submitted. In this regard you were required to trail as to how the letter .dated 13.11.2009 was obtained from Fiduco Treuhan dAg with supporting documents. 5. To submit the copies of By-laws and copies of all amendments thereto in respect of the two trusts. 6. In addition to the point no 1 above, statements of each 01 the bank accounts held by (a) Dryade Stiftung and (b) Dianese Stiftung in respect of all or any of the financial years from its formation to its dissolution, to the extent feasible. 7. Copy of account opening form submitted to LGT Bank alongwitli copies of all the documents submitted alongwith the same. 8. Copy of all the documents submitted for formation of trust. 9. Details of financial transactions among the four beneficiaries of the trusts, viz. you, Shri. Arun Mehta, Shri. Harshad Mehta, Shii Amit Bhansali, during the period from 1st April 2002 to 31st March 2003. 10. Documents depicting the details of ultimate Natural Person/s who was/were authorized to take decisions such as investment decisions by the trust and/or to give instruction to the bank regarding execution of various financial transactions such as fund transfers, etc. Accordingly, you are requested to submit the aforementioned documents. Ans. During the Assessment Proceedings of Shri Arunkumar Mehta, a confirmation from Fiduco Treuhand AG Lichtenstein dated 05.11,2009 giving the particulars as required by the assessing officer was submitted. It would be appreciated that now the matter is over 20 years old and both the Stiftungs were dissolved back in the year 20O3-04. I contacted Mr. John Shelford of Edwin Coe LLP, a reputed Law firm of London who in turn was in contact with Fiduco Treuhand, he was unable to connect with Fiduco, hence he reached out to another law firm Gasser Partner who vide their letter dated 23.08.2022 opined that no documents can be made available as the matter has passed statute of limitation for retaining documents. In view of these facts, I am not in a position to furnish any further information as stated hereinabove. A letter from Gasser Partner and Edwin Coe LLP are submitted herewith. (Annexure 1) 27 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Q.9 It can be seen from the account statement of ABM AMRO Bank an amount of USD $ 43,87,047 was credited on 17.04.2002 with narration BONUS INST AA1452197 ROSY BLUE FIN S A. Kindly explain the above credit entry as to why this amount was paid by ROSY BLUE FIN S A. to the trust. Ans. The matter is over 20 years old. Unfortunately, I do not have any statements, records etc. available, hence, I am not in a position to explain the nature of these transactions as referred by you. Q. 10 Immediately, on 19.O4.2002, bank account of ABM AMRO Bank was debited by an amount of USD $ 43,87,146. Kindly state the entity/es to whom this amount was transferred. Ans. As stated earlier that the matter is over 20 years old. Unfortunately, I do not have any statements, records etc. available, hence, " I am not in a position to explain the nature of these transactions as referred by you. Q. 11 Do you know / have association with - any of the following entities at any time? If yes in what capacities ? a. Rosy Blue Fin SA b. Ruby Enterprises- BVI c. Sundew Company Ltd- BVI d. Snow Drop Company ltd. – BVI Ans. I was having significant presence in the International Business and Trade. During that period, as permitted under the law, it was open tor me to establish Special Purpose Vehicles for business/investments in different jurisdictions which were wound-up/closed once the purpose is achieved. It is difficult for me to recollect the name and purpose of such entities. I was Managing Director of Rosy Blue NV. Rosy Blue Fin SA was one of the group companies with independent management. Q.12 Kindly confirm that you have been shown the information/ Profile in respect of Dryade Stiftung. Ans. Yes, I confirm. Q 13 Kindly explain the details/meaning of the contents as appearing under Point No. 5 i.e. 'Participations': 28 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Ans. Unfortunately, I am neither a qualified person nor am able to understand this. Q 14 In your affidavit you have stated that A stiftung is akin to a "discretionary trust", however no evidences in this regard have been submitted by you. Kindly comment. Ans. I am submitting herewith a Legal Opinion of TSCHIKOF, ATGRNEY AT LAW, which confirm that Stiftungs are akin to a Discretionary Trust. This was also confirmed by Fiduco Treuhand AG vide their letter dated 05.11.2009 which was submitted to the department way back in 2009. Q 15 Kindly state why did you choose LGT Rank, Liechtenstein for formation of the trust? Ans. As advised by my lawyers at that time. Q16 Did you have consulted to Late Shri. Arun R Mehta, Shri Harshad Mehta, Shri. Amit Bhansali before making them Beneficial owners of the assets deposited with the bank? Ans. No. Q 17 Please state, what make you take decision of dissolution of tHe Dryade Stiftung and Dianese Stiftung? Ans. I believe that there were no assets left with the Stiftungs. Hence, the trustee would have decided to windup. Q 18 Please state, what happened to the assets upon dissolution of the Dryade Stiftung and Dianese Stiftung? Ans. To the best of my knowledge, there were no assets It ft with these Stiftungs. Q 19 Whether you have declared the deposits made to Dryade Stiftung and Dianese Stiftung and income received/ distribution of assets made upon dissolution or any time before dissolution of Dryade Stiftung and Dianese Stiftung to any of the tax authorities? If yes, please provide details thereof. Ans. There were no such requirements at the relevant period. Q 20 Do you want say anything else? 29 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Ans. I had given all possible documents in the year 2009 during the assessment proceedings of my brothers Shri Arunkumar Mehta and Shri Harshad Mehta. As no further questions were asked it was presumed that the matter is closed. However, as the matter got litigated, I felt that I could clarify further by submitting my affidavit. 1 hope that my affidavit dated 10.02.2020 and all the earlier submissions together with the letter of Mr. John Shelford and Gasser Partner will help close these long pending litigations. Sd/- Sd/- (Waghe Prasadrao Anasaheb) Dilip Ramniklal Mehta) DCIT, Central Circle-8(3), Mumbai 9.2 Based on the aforesaid statements and the documents furnished of Dilip Mehta in the remand proceedings, the AO has filed his remand report which is also reproduced hereunder for the sake of ready reference. “Sub: Remand Report Proceedings pursuant to ITAT Appeal-ITA No.2743/M/2011 & 7309/M/2011, Assessment Year 2003-04-reg. ************ Kindly refer to the above. 2. Pursuant to Hon'ble ITAT's directions dated 23-6-2022 in the above referred mater summons dated 01.08.2022 was issued to Shri Russell Mehta requesting him to produce Shri Dilip Mehta either on 17.08.2022 or 24.08.2022 to examine the veracity of various averments made by him in his affidavit dated 10.2.2020 submitted before the Hon'ble ITAT. In continuation of the aforesaid summons, a summons dated 08.08.2022 was also issued to Shri. Russell Mehta requesting him to convey Shri Dilip Mehta to bring following documents: 1. Statements of each of the bank accounts held by (a) Dryade Stiftung and (b) Dianese Stiftung for the period from 1st April 2002 to 31st March 2003. 2. To give following details/documents in respect of Source of fund of each of the credit entries appearing in the above referred bank account statement/s: 30 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta (A) If credits are sourced from cash: i. The name of the entity sourcing the cash ii. Shri.Dilip Mehta's relation with the entity i.e. Self /Director /Shareholder/ Proprietor etc. making such deposit. If the cash deposit is sourced by an entity other than Shri.Dilip Mehta, a note explaining as to why the other entity has made payment on behalf of Shri.Dilip Mehta. iii. Other relevant documents such as copy of balance sheet of the entity highlighting entry against such deposit, copy of P and L account etc. (B) If transferred via any of the banking channel/route i. The name of the entity transferring the amount ii Copy of the bank account statement of such entity highlighting the transaction iii. Shri. Dilip Mehta's relation with the entity i.e. in Self /Director /Shareholder /Proprietor etc and if the transfer of funds is made by an entity other than Shri.Dilip Mehta, a note explaining as to why the other entity has made payment on behalf of Shri. Dilip Mehta. iv. Other relevant documents such as copy of balance sheet of the entity highlighting entry against such transfer, copy of P and L account etc. 3. To give following details/documents in respect of each of the debit entries appearing in the above referred bank account statement/s: i. Name of the entities to whom the funds have been transferred and its relationship with Shri.Dilip Mehta, ii. The treatment of such transfers in the books of accounts of the said entity like loan, income etc. with proof thereof like copy of balance sheet of the entity highlighting entry against such transfer, copy of P and L account. 4. During the assessment proceedings, a letter dated 13.11.2009 from Fiduco Treuhar.d AG (Formerly known as LGT Bank) in respect of Dryade Stiftung and Dianese Stiftung was submitted. In this regard you were required to trail as to how the letter dated 13.11.2009 was obtained from Fiduco Treuhand AG with supporting documents, 5. To submit the copies of By-laws and copies of all amendments thereto in respect of the two trusts. 31 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 6. In addition to the point no. 1 above, statements of each of the bank accounts held by (a) Dryade Stift.mg and (b) Dianese Stiftung in respect of all or any of the financial years from its formation to its dissolution, to the extent feasible. 7. Copy of account opening form submitted to LGT Bank alongwith copies of all the documents submitted alon 8. Copy of all the documents submitted for formation of trust. 9. Details of financial transactions among the four beneficiaries of the trusts, viz. Shri.Dilip Mehta, Shri. Arun Mehta, Shri. Harshad Mehta, Shri Amit Bhansali, during the period from 1st April 2002 to 32st March 2003. 10. Documents depicting the details of ultimate Natural Person/s who was/were authorized to take decisions such as investment decisions by the trust and/or to give instruction to the bank regarding execution of various financial transactions such as fund transfers, etc. 3. Pursuant to above summons, Shri. Dilip Mehta appeared on 30.08.2022. A summons under section 131 of the Act were served upon Shri Dilip Ramniklal Mehta and his Statement on Oath was recorded u/s. 131 of the Income Tax Act, 1961 on 30.08.2022. Vide Question number 8 of the statement dated 30.08.2022, Shri Dilip Mehta was asked to submit the documents as called for vide summons dated 08.08.2022 wherein he stated that the matter is 20 years old and he has no records available. [A copy of the statement of Shri Dilip Mehta recorded u/s. 131 of the Income Tax Act, 1961 on 30.08.2022 alongwith all the annexures thereto have been attached with this Report as Exhibit-A (Page- --to-----)]. Also, the relevant part of the statement is reproduced below for convenience: "Q. 8 During the course of the ongoing ITAT proceeding ITA No. 2743/M/2011, wherein appeals have been made against the additions of Rs. 5,35,50,181/- in the case of Me. Arun R Mehta for A. Y. 2003-04, on the basis of information received by the Assessing officer that the assessee was one of the beneficiaries in the Dryade Stiftung, an entity with LGT Truehand AG which belongs to LGT group based in Liechtenstein, Ld. Council for the assessee, Shri Rohan Shah had filed an affidavit on the behalf of you as additional evidence wherein you have made following averments; a. Late Shri. Arun R Mehta had no role in the creation of the Trust/foundation or the management of the trust. 32 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta b. Late Shri. Arun R Mehta had not made any contribution to the funds of the foundation. c. You alone have transferred the funds from your own business operations and through your own sources d. The bank has not made any distributions to the brothers e. The entire deposits were in relation to the bank deposits in which your brothers were not connected, Accordingly, in this regard, it was requested to convey you to submit/bring along with you the following documents/details in order to substantiate your claim: 1. Statements of each of the bank accounts held by (a) Dryade Stiftung and (b) Dianese Stiftung for the period from 1st April 2002 to 31st March 2003. 2. To give following details/documents in respect of Source of fund of each of the credit entries appearing in the above referred bank account statement/s: (A) If credits are sourced from cash: i The name of the entity sourcing the cash ii. Your relation with the entity i.e. Self /Director /Shareholder/ Proprietor etc. making such deposit. If the cash deposit is sourced by an entity other than yourself, a note explaining as to why the other entity has made payment on behalf of you. iii. Other relevant documents such as copy of balance sheet of the entity highlighting entry against such deposit, copy of P and L account etc. (B) If transferred via any of the banking channel/route- i. The name of the entity transferring the amount ii. Copy of the bank account statement of such entity highlighting the transaction. iii Your relation with the entity i.e. in Self /Director /Shareholder /Proprietor etc and if the transfer of funds is made by an entity other than you, a note explaining as to why the other entity has made payment on behalf of you. 33 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta iv Other relevant documents such as copy of balance sheet of the entity highlighting entry against such transfer, copy of P and L account etc. 3. To give following details/documents in respect of each of the debit entries appearing in the above referred bank account statement/ s: i. Name of the entities to whom the funds have been transferred and its relationship with you, ii. The treatment of such transfers in the books of accounts of the said entity like loan, income etc. with proof thereof like copy of balance sheet of the entity highlighting entry against such transfer, copy of P and L account 4. During the assessment proceedings, a letter dated 13.11.2009 from Fiduco Treuhand AG (Formerly known as LGT Bank) in respect of Dryade Stiftung and Dianese Stiftung was submitted. In this regard you were required to trail as to hove the letter dated 13.11.2009 was obtained from Fiduco Treuhand AG with supporting documents. 5. To submit the copies of By-laws and copies of all amendments thereto in respect of the two trusts. 6. In addition to the point no. 1 above, statements of each of the bank accounts held by (a) Dryade Stiftimg and (b) Dianese Stijtung in respect of all or any of the financial years from its formation to its dissolution, to the extent feasible. 7. Copy of account opening form submitted to LGT Bank along with copies of all the documents submitted alongwith the same. 8. Copy of all the documents submitted for formation of trust. 9. Details of financial transactions among the four beneficiaries of the trusts, viz. you, Shri. Arun Mehta, Shri. Harshad Mehta, Shri Arnit Bhansaii, during the period from 1st April 2002 to 31st March 2003. 10. Documents depicting the details of ultimate Natural Person/s who was/were authorized to take decisions such as investment decisions by the trust and/or to give instruction to the bank regarding execution of various financial transactions such as fund transfers, etc. Accordingly, you are requested to submit the aforementioned documents. 34 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Ans: During the Assessment Proceedings of Shri Arunkumar Mehta, a confirmation from Fiduco Treuhand AG Lichtenstein dated 05.11.2009 giving the particulars as required by the assessing officer was submitted. It would be appreciated that now the matter is over 20 years old and both the Stiftungs were dissolved back in the year 2003-04, I contacted Mr. John Shelford of Edwin Coe LLP, a reputed Law firm of London who in turn was in contact with Fiduco Treuhand, he was unable to connect with Fiduco, hence he reached out to another law firm Gasser Partner who vide their letter dated 23.08.2022 opined that no documents can be made available as the matter has passed statute of limitation for retaining documents. In view of these facts, I am not in a position to furnish any further information as stated hereinabove. A letter from Gasser Partner and Edwin Coe LLP are submitted herewith. (Annexure 1) " 4. Vide Question number 9 and 10 of the statement dated 30.08.2022, Shri Dilip Mehta was specifically asked regarding the source of deposits/credits in the bank and its utilization, however, he reiterated that the matter is 20 years old and no records are available. The relevant part of the statement of Shri Dilip Mehta is reproduced below: "Q.9 It can be seen from the account statement of ABM AMRO Bank an amount of USD $ 43,67,047 was credited on 17.04.2002 with narration BONUS INSTAA1452197 ROSY BLUE FINS A. Kindly explain the above credit entry as to why this amount was paid by ROSY BLUE FIN S A. to the trust. Ans. The matter is over 20 years old. Unfortunately, I do not have any; statements, records etc. available, hence, I am not in a position to explain ' the nature of these transactions as referred by you. Q.10 Immediately, on 19.04.2002, bank account of ABM AMRO Bank was debited by an amount of USD $ 43,87,146. Kindly state the entity/es to whom this amount was transferred. Ans: As stated earlier that the matter is over 20 years old. Unfortunately, I do not have any statements, records etc. available, hence, I am not in a position to explain the nature of these transactions as referred by you." 5. It can be seen that, through his submission and statement, Shri. Dilip Mehta primarily has made contentions that under Lichtenstein law and Belgium law the documents sought for are not required to be maintained beyond 7 years & 11 35 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta years respectively. Shri. Dilip Mehta stated that the matter is 20 years old and he has no records available. 5.1 However, the contentions made by Shri. Dilip Mehta seems mere excuses for not submitting the documents. It is not acceptable by any stretch of imagination that he had obtained a letter dated OL. 11.2009 favoring his contentions from FIDUCO Treuhand way back in 2009 but at the same time did not feel it necessary to obtain the other relevant documents from the trust, particularly, against the known fact that the matter in this regard is sub-judice with Indian income Tax Authorities, and also being a prudent person & businessman that such documents would certainly help him to fortify his claim without any ambiguity. 6. Mr. Dilip Mehta has also reiterated that he and not his bothers had contributed the amount (of USD $ 43,67,047), and, he had enough financial resources to do so, however he was unable to provide any evidence of whatsoever nature as regard to the source of credit of USD $ 43,67,047 or its subsequent utilization. In supports of his assertions made by Shri. Dilip Mehta, except Shri. Dilip Mehta's communication of 28.08.2022 and the accompanying communications from Lawyers, no further information could be obtained from Mr. Dilip Mehta. 7. In the backdrop of the above, it is considered view that, mere the assertions made by Shri. Dilip Mehta are not sufficient to discharge the assessee from the onus of proving that the addition made is unwarranted anyhow. 8. Further, it is also to be stated that under the same set of facts, in the case of one of the related persons- Shri. Harshad Mehta, Hon^ble ITAT has set aside the proceedings to the file of assessing officer. 8. Submitted for Kind perusal and necessary action please.” Yours faithfully, Sd/- (Waghe Prasadrao Anasaheb) DCIT, Central Circle-8(3), Mumbai 36 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 10. The Ld. Counsel for the assessee after receiving the aforesaid remand report submitted that, it is apparently clear from the statement as well as from the letter filed by Dilip Mehta on 29.08.2022, that assessee has neither contributed nor received any distributions from the said discretionary trust. He has categorically owned the source of the funds and stated that he had enough business interests and resources outside India and he alone funded to the foundation from his own business interest and various business entities outside India as a non- resident. In his statement before the AO had had appeared for cross examination and has reiterated the assertion made in the affidavit, wherein he has categorically stated that the deposit made in the account of the discretionary trust was made by entity, Rosy Blue Fin SA, a South African entity. In so far as remand report filed by Departmental the ld. Counsel submitted that, all the evidences provided by Mr. Dilip Mehta has been disregarded and has even failed to consider the fact that after expiry of limitation period of almost 20 years the documents were not available. However, the core issue which was to be examined, whether the assessee contributed to the trust or received the distribution from the trust, for which there is no counter evidence by the Department 37 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta or has offered any explanation as to why the evidences led cannot be accepted. 11. Before us, the Ld. CIT-DR submitted that one as to keep in mind that Fiduco Treuhand AG (erstwhile LGT Bank, Liechtenstein) is a bank which was put under „Grey List‟ by Organization for Economic Corporation and Development (OECD) since 2007 and activities of the aforesaid bank were under scanner of almost all the countries where the information was received through official channels, which provided verification of the beneficial owner‟s identity signed by Proxy holder ABN Amro Trust Company (Suisse) SA, which was identified the beneficial owners. The bank documents bear the signature of the trustees and hence the same are genuine which bearers the correct name and address and the date of birth of the assessee. The documents clearly show that the Stiftung was created on 2 nd July, 1986 and the bank account has been mentioned as „Active‟. The bank summary of the account shows credit of USD $ 4,386,043.37 on 17.04.2022 and not only that the bank summary of ABN Amro Bank in respect of Dryade Stiftung shows debit of USD 4,386,043.37 on 19.04.2002 to Sundew Company Limited. All the written communications furnished by Fiduco 38 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Truhand AG dated 05.11.2009 cannot be relied upon. She further submitted that contention of the assessee that he has neither contributed nor received any distribution cannot be accepted, because as it is a common knowledge that discretionary trust created for benefit of particular persons and those persons need not necessarily controlling the affairs of the Trust. She has also commented that documents relating the Dryade Foundation filed by assessee. Her relevant submissions as given by her before us are reproduced hereunder for the sake of ready reference. “6.2 Documents relating to Dryade Foundation are at Pages (17) to (20), (22) to (24), page (31) Pages (36) to (39) of the compilation. Pages (17) to (20) are in English and are self-explanatory. Page (21) is compete courant which means transaction account with ABN Amro Bank, Geneva. The currency in which the transaction is maintained is US Dollars of account number G 20 4109. Extrait Journalier means Account statement. The credit entry of USD 43,86,034.37 with balance at the end of the day at USD 43,87,146.86 in the account is of 17.04.2002 with narration "Bonification AA1452197 Rosy Blue FIN SA. "The term "Bonification" as defined in Black's Law Dictionary means the remission of tax, particularly on goods intended for export, being a special advantage extended by government in aid of trade and manufactures, and having the same effect as a bonus or drawback. It is a device resorted to for enabling a commodity affected by taxes to be exported and sold in the foreign market on the same terms as if it had not been taxes". Copy of the definition is already filed with Hon*ble Bench in the course of hearing of the appeal. At Page (23) the same account is debited with USD 43,87,147/- as payment to AA 1454221 with closing balance at USD 0,86. These entries would show that opening balance as on 17.04.2002 was USD 1112.49 in this account with a fresh credit of USD 43,86,034.37 on 17.04.2002. Page (24) is a review of the debit entries which were instant and with narration "we debit to account" and the name of the 39 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta beneficiary of this debit is shown to be Sundew Company Limited. Page (31) indicates the details of the Dryade Foundation as to (1) who are the foundation Board; (2) since when it is active; (3) who are the bankers; (4) various details as to institutional clients; representatives, customers; (5) purpose; (6) investment participation etc. There can be seen various instructions relating to the transactions of the family concerns involving loans of USD 4 million and USD 2 million to Rosy Blue Finance and of debit notes to ABN Amro Bank for the period 06.09.2000 to 14.09.2000 and to keep updated the Rosy Blue Finances and with delivery instructions to Luxembourg. As explained in the course of hearing it was an attempt to understand the nature of these transactions by using the translation platform available on the Google public domain. 6.3. The explanation asked for by learned Assessing Officer was the deposit made on 17.04.2002 in this account. The appellant-assessee instead asserts that neither he was contributory to the foundation and nor he received any benefit by way of distribution. Learned Assessing Officer has held that the appellant did not state a single word regarding the debit/credit entries appearing the account of the Foundation. Since the credit preceded the debit, it was incumbent on the part of the appellant-assessee to explain as to the source of the credit and further debit entries which he failed to explain. Neither the non-resident beneficial owners came forward to explain the credit entries. In absence of any explanation, the learned Assessing Officer was justified in including 25% share of the amount of credit found in the bank account of the Foundation. 6.4. It must be appreciated that the Principality Liechtenstein operates in complete secrecy and through management companies who maintains clients' accounts in complete secrecy. Part of these details from Pages (17) to (31) were communicated to, and received by the Government of India from the Government of Federal Republic of Germany. The other part of the details from Pages (36) to (43) were filed by the appellant-assessee. It is also a fact that an integral part forming the Dryade Foundation and the Dianese Foundation have been withheld by the appellant assessee. It is a fact that the documents submitted by the appellant-assessee are incomplete and thus can be said to have been withheld for reasons best known to the appellant-assessee. From the conduct of the appellant-assessee as can be witnessed from the following fact that the appellant-assessee has not come clean and deliberately withheld vital information. Both foundations are shown as dissolved {kindly refer page (36) and page (40)}. The explanations given by Fiducio Treuhand AG is completely vague. 40 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 6.5. It would be appropriate to consider these facts and circumstances in the context of Section 106, 111 and 114 of the Indian Evidence Act and adverse inference must be drawn against the appellant-assessee to hold that the addition made by learned Assessing Officer was correctly included in his hands. It has been argued for and on behalf of the appellant-assessee that the information culled out from the documents which are in German language and in order to understand the Liechtenstein law, expert evidence must be brought on record as to law relating to foundations wet up in Liechtenstein. In this connection, it is submitted that at first instance, the documents forming the two foundations, namely, Dryade and Dianese Foundations must be furnished by the appellant-assessee along with complete changes effected since 02.07.1986 being the date of formation till the dissolution as seen from letter of 13.11.2009. It may be seen at page (36) of the compilation that Dryade Foundation is shown as dissolved but no date is given. Whereas at page (40) of the compilation the date of dissolution of Dianese Foundation is given as 21 st August, 2003. If these two foundations are dissolved then what was done at the time of dissolution. 7. In view of the above observations it is humbly submitted that the assssee had Shri Dilip Mehta failed to justify the claim of having made contribution to said Dryade Stiftung and Dianese Stiftung. Further, the assessee has failed to submit the return of income, financial statements with any other documentary evidences of Shri Dilip Mehta for the concerned period in support of affirmations made by him in his affidavit dated 10.02.2020. In absence of aforesaid mentioned details relating to financials, the creditworthiness as well as genuiness of transaction as deposited by Shri Dilip Mehta cannot be proved and is not beyond suspicion. Non-submission of financials of Shri Dilip Mehta only strengthen the fact that the affidavit affirmed by Mr. Dilip Mehta is simply an afterthought so as to veil the unaccounted investment of the assessee. The submissions and evidences brought on record by the assessee fail to substantiate the claim of assessee. The assessee was one of the four beneficiaries and was eligible to receive 25% of the corpus of the Dryade Stiftung and Dianese Stiftung. The explanations provided by the assessee are not sufficient to discharge himself from the rigors of taxation, especially in view of the law laid down by the jurisdictional Bench of the Hon'ble Income Tax Appellate Tribunal in case of Shri 41 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Mohan Manoj Dhupelia vs DCITf ITA 3544 Mum 2022 dated 30.10.2014 ) as well as Hasmukh Gandhi vs DCIT (ITA 2795 & 2796 Mum 2011 dated 15.11.2017). The assessee has not been able to demonstrate how his case is different from the facts of the case in case of Mohan Dhupelia (supra) and Hasmukh Gandhi case (supra) and both these being from the jurisdictional bench of the Tribunal are binding on the department. Therefore, it is evident that the deposit made in the bank account of the trust on 17.04.2002 represents unaccounted investment of the assessee. As there are four stated beneficiaries of the trust and as such in the absence of an exact allocation as to their individual shares amongst the four beneficiaries, the assessee's share is assumed at 25%. Considering a conversion rate of USD to INR as prevailing in April 2002( 1 USD= INR 48.80), the assessee's share amounts to INR 5,35,181 ( 25% of USD 43,87,146 * 48.80 ) which is brought to tax as undisclosed investment u/s 69 of Income Tax Act, 1961 in the hands of assessee in the year under consideration. Reliance is placed on the order of the HonTole ITAT in the following cases which are relevant to this case: 1. Mohan Manoj Dhupelia vs. Deputy Commissioner of Income-tax, Central Circle-1, Mumbai. (2014 ) 52 TAXMAN.COM 146 (Mumbai-Trib) 3. Mr. Hasmukh I Gandhi vs.DCIT, Central Circle-1,Mumbai. 4. Mrs. Madhu H.Gandhi vs.DCIT, Central Circle-1, Mumbai. 5. Mr. Chintan H. Gandhi vs. DCIT, Central Circle-1, Mumbai. 6. Mr.Hasmukh I.Gandhi, Legal Heir of Late Mr. Nirav Gandhi vs. DCIT, Central Circle-1, Mumbai.” 11. We have heard both the parties, gone through the material preferred before us and perused the relevant finding given in the impugned order. The only issue is with regard, whether certain balance in the bank account of Dryade Stiftung, an entity with the LGT Treuhand AG in Liechtenstein, can 25% of such balance, be attributed to, and 42 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta taxed in the hands of the assessee on the basis that assessee is shown as one of the four beneficial owners of the Dryade Stiftung (Trust). The issue was also in relation to Dianese Stiftung, since there was no balance in the said Stiftung, no addition has been made from this account. The Department has treated the peak balance of US$ 4,387,146 as on 17.04.2002 in the Bank Account of the Trust, 25% of this balance, i.e., Rs.5,35,50,181/- has been sought to be taxed in the hands of the assessee for the AY 2003-04. We have already incorporated in the above submissions as well as various evidences given during the course of assessment appellate proceedings as well as during the course of hearing before us. 12. The entire premises of the AO was based on some information received that assessee was one of the beneficiary in Dryade Stiftung (Discretionary Trust), an entity with LGT Treuhand AG. From the plain reading of the assessment order it is seen that, once the information was received that assessee was found to be one of the beneficiary in the said trust, then AO has proceeded on the premise, which is by and large based on certain information contained in public domain and certain 43 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta public perception around LGT Bank during that period that how these banks were acting as „tax haven‟ for various persons to park unaccounted money in these accounts. His finding is based on some perception that how the discretionary trust was created for the benefit of particular persons even though they were not controlling the affairs of the trust. The case of the assessee also throughout before the AO as well as the CIT(A) was based on heavy reliance on the letter filed from LGT Bank, i.e., Fiduco Treuhand AG, which confirms that;  firstly, assessee had no role of play either with the creation or the management of the Dryade Stiftung and Dianese Stiftung which was made in the year 1986;  secondly, assessee was not the founder of the trust and he has not made any contribution to the foundation; and  lastly, assessee has not received any distribution from the foundation during the relevant period. The content of the letter has also been noted in the order of the Ld. CIT (A) in para-10 which we have already corroborated above. 44 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 13. Apart from that, the deceased assessee‟s brother, Mr. Dilip Mehta, who is an NRI since 1973 and Citizen of Belgium, had been categorically stating that he alone has contributed to the trust which was created for the benefit of his children and his family and has made contribution to the trust out of his own funds from his business entities carried outside India. He has also explained the reasons why his brothers along with his friend were made beneficiary, only to take care of his family in case something happens to him and his brothers had no role to play either in the creation of the trust or either were member of board of trustee or had contributed to the trust or were real beneficiary. Instead of carrying out any enquiry based on these evidences and explanation, the entire assessment order and CIT (A) order is simply based on certain perception and information which has been received. 14. At the time of hearing, we felt that the affidavit which has been filed by the brother of the deceased assessee, Mr. Dilip Mehta who has owned the entire source of the credit in the said account, has to be cross examined by the AO. It was for this reason the Bench has directed the assessee to produce Shri Dilip Mehta in India who is citizen of Belgium, 45 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta residing outside India. To comply with the said direction, Shri Dilip Mehta came to the India and participated in the remand proceeding and also filed a detailed reply dated 29 th August, 2022, the entire content of the said letter have been already reproduce above. In the said letter, he has categorically admitted and stated that he alone has contributed to the fund of the foundation from his business interest and resources outside India from his business concerns as a non resident and assessee and his other brother had neither contributed nor received any distribution from the discretionary trust. When AO had asked to furnish documents to substantiate, he has filed letters from the lawyers, the gist of which are as under: (a) A letter dated 02.08.2022 from the lawyer Mr. John Shelford of Edwin Coe LLP, London which stated that: (i) Mr. Dilip Mehta has moved to Antwerp, Belgium from India in 1973 (ii) Under Belgium laws, there continue to be no capital accounts or exchange control restriction and therefore, Belgium resident is able to hold bank accounts, monies and assets outside Belgium without any limit, (iii) in respect of bank accounts, monies and assets held outside Belgium, by a Belgium resident, there were no regulatory requirements to file with the Belgium authorities, 46 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta (iv) Records and documentation are required to be maintained in Belgium for 7 years, (v) Mr. Dilip Mehta is one of the leading Diamantaires in the world having extensive global business interest and would have been free and able to deposit many USD millions into a trust in 1986. (vi) In support of financial credibility of Mr. Dilip Mehta, following articles and newspaper clipping were annexed with the letter: • article in Diamond World Magazine dated 08.11.2008, • newspaper clipping of Business Standard newspaper dated 21.01.2013 • article dated 10.12.2016. (b) Letter date 23.08.2022 from the lawyer in Liechtenstein Dr. Iur. Hannes Arnold (Senior Partner at Grasser Partner,) Liechtenstein) which stated that: (i) according to the confirmation of the commercial register Dryade Foundation is terminated since 18.05.2004 and Dianese Foundation is terminated since 27.08.2003. (ii) the applicable retention periods for past documentation of Dryade Foundation and Disnese Foundation amount to 10 years. ” 15. Mr. Dilip Mehta had personally appeared before the AO for cross examination and has reiterated his assertion made in his affidavit. His specific reply to question No.6 & 7 (which have already corroborated above) are very relevant which are again reproduced herein below:- 47 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta "6. I am told that an issue has now arisen as to what was the source of the funds in the Foundations. I hereby state that I transferred the funds to the said Foundations from my business operations mainly in the far East and Europe in which my brothers had no participation or interest My businesses were successful. I had the honour of being one amongst very few persons of Indian origin who has been conferred with the title of a "Baron" by the Belgium Government for my integrity and contribution to society. I was bestowed the title in 2006. I had sufficient funds of my own to make contribution to the Foundations. 7. The Foundations were created in 1986 at the time when my children were minor. In case of any untoward incident that I may suffer, I desired that the persons I most trusted (my brothers) should be able to deal with the funds of the Foundations for the benefit of my family members, their education, health and well-being. This is why the Foundations' documents refer to the Foundations' money as "Family money". Mr. Amit Bhansali (a non-resident) who is a close family friend was also named as a beneficial owner. I state that being my brothers, I had the address and other details which are referred to in the Foundations' documents." From the above, it is evident that Shri Dilip Mehta has categorically owned that transfer of the funds to the said foundation was from his own business operation mainly in Far East and Europe in which his other brothers had no participation or interest. He has also explained that the foundation was created in 1986 when his children were minor and he 48 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta has created this foundation in case on any incident that he may suffer and his brothers whom he trusted should be able to deal with the funds of the foundation for the benefit of his family member, their education health and well being. For this reason the address of his brothers were mentioned in the foundation. This explains as to why the name of the assessee was appearing as beneficiary in the trust. One very important fact which is borne out from his statement that, he was Managing Director of Rosy Blue Fin SA and other companies, which are Diamond Company outside India and he has made contribution from these entities and even the immediate credit in the bank account, for which addition has been made, entries shows that money was received from Rosy Blue Fin SA. In the remand report the Ld. AO has disbelieved the explanation and the statement on the ground that he has not provided certain documents for deposits way back 20 years ago from the bank or the trust, which according to Mr. Dilip Mehta was not required to be maintained beyond the period of 7 years and 11 years under the Liechtenstein and Belgium Laws respectively and the said matter is 20 years old and therefore there is no record available about the credit and debit of the amount in the said bank account. The AO has rejected the 49 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta entire statement that Shri Dilip Mehta has failed to submit the documents. 16. Now here in the case, the Department has information about a Dryade Stiftung, an entity with LGT Treuhand AG based in Liechtenstein, wherein assessee‟s name is appearing as one of the beneficiary with name and address in India. Thus, based on this information alone it has been held that this itself is sufficient to tax the money in the said bank account on a particular date as undisclosed income of the assessee on the premise that it is some unaccounted income of the assessee routed in the said bank account through a discretionary trust. 17. On the other hand, the assessee has brought evidences on record, firstly, by a letter from Fiduco Treuhand AG and Dryade Stiftung filed before AO, stating that the assessee had no role to play either with the creation and management of the foundation and he has not received any distribution from the said foundation during the relevant period. Secondly, this letter has been corroborated by the affidavit of Sh. Dilip Mehta and his letter filed before the AO during the course of remand 50 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta proceedings as directed by us. Apart from that, he was also subjected to cross examine by the AO, and has reiterated the same facts which he has averred in his affidavit, which has been disbelieved that certain old documents have not been filed. 18. Now there is one person owning the contribution of the fund and receipt of the fund and there is the other person (i.e., assessee) against whom no evidence has been brought on record that he has contributed or received the funds, except for presumption. In such a situation, we have to weigh the standard of proof and the evidences on record which have to be evaluated based on “preponderance of probability” and probable factors, whether are in favour of the assessee or revenue. The evidences along with facts and circumstances if weighed, then it can be seen that, herein in this case evidences has been brought on records by way of several letters and statement on oath of Shri Dilip Mehta that assessee had no role either in contribution to the source of the funds or had any role in the discretionary trust or was any way beneficiary of the trust, which can lead to conclusive finding or one can reasonably presume that assessee might have contributed or received the same 51 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta money contributed by him from his unaccounted source. What is require to be seen here is, if the source of deposit in the Bank Account has been owned by Shri Dilip Mehta who has stated on several occasion that, it is out of contribution made by his various business interest outside India and has owned up the entire source of funds. Then without any contrary material brought on record either by way on any information from any agency or enquiry conducted by the revenue, the presumption cannot be made against the assessee. The department is only harping upon the information that assessee was one of the beneficial owner as mentioned in the said discretionary trust which fact has not been denied, albeit has been categorically explained why his name was appearing as beneficiary and why the assessee‟s name was included has already been explained by the creator and founder of the trust (supra). and also assessee has not received any funds or is the beneficiary of the said funds. To reiterate, the explanation of the assessee is corroborated from; letter dated 5.11.2009 from LGT Bank and the Dryade Stiftung (the trust); affidavit of Shri Dilip Mehta dated 10.02.2020; and letter dated 29.08.2022 of Dilip Mehta. The content of the letters as well as the affidavit itself speaks volume that assessee had no role either in the creation of the trust, 52 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta sources of the fund and management of the trust or beneficiary of the fund. One very important thing is to be kept in mind that Shri Dilip Mehta is Citizen and Baron of Belgium since 1973 and one of the leading businessman in diamond industry having lot of business interest and entities all across Far East, Europe and South Africa and in his statement, he has categorically stated these facts. Either department has to bring something on record to rebut his statement or some cogent material to show that the content of his affidavit and his letter are false. There is nothing in the possession of the Department to dislodge except for asking the assessee to prove negative. At least Department should have brought some counter evidence or would offer any rational explanation as to why the evidence lead by the assessee cannot be accepted or the evidences are fabricated. Thus in these circumstances the “preponderance of probability” certainly goes in favour of the assessee. 19. Now one very important fact which clinches the “preponderance of probability” in favour of the assessee, is, flowing from the said very information in possession of the Department, which fact 53 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta has also been stated by the Ld. CIT-DR in her submission, that beneficial owner‟s identity signed by proxy holder, ABN Amro Trust Company (Suisee) SA, which belongs to Dryade Stiftung created in 2 nd July 1986, which had bank account with ABN Amro. In the said bank account on 17.04.2002, there was a credit entry of the US $ 43,86,034.37 with balance at the end of the day at US$ 43,87,146.86 with narration “Bonification AA1452197 Rosy Blue FIN SA”. If the narration against credit entry mentions, Rosy Blue FIN SA, then how the credit entry in the said bank account of the Dryade Stiftung, can be said to pertaining to assessee. Assessee has no role or interest in said entity which belongs to Shri Dilip Mehta and there is no information with the department that assessee has any kind of interest in the said entity. Another important fact is that in the same account there is a debit entry of US$ 4,387,146 as a payment, with the beneficiary of the said amount mentioned as Sundew Company Ltd. This Sundew Company Limited is a company which Mr. Dilip Mehta at some point of time had business interest as mentioned by him in question No.11. No where it has been brought on record that the assessee was in any way connected to Sundew Company Limited. The back ground information and file of Dryade Stiftung which 54 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta is appearing in the PB at page 23 & 24, it is seen that under the column participation, it has shown following entities; Snow Drop Company Ltd. as one bearer share (100%); Sundew Company Limited, one bearer share (100%); and Ruby Enterprises Inc. with 300 bearer shares. Nowhere has it been brought on record the assessee was in any way related to these entity at any point of time. 20. Once in the account, credit entry is in the name of Rosy Blue fin SA and in the debit entry, beneficiary has been shown as Sundew Company Ltd, then we are unable to fathom as to how the assessee has received part of that amount when this company has been stated to be once belonging to Shri Dilip Mehta. Nothing has been brought on record by the Department as to the entity mentioned at the time of the credit and the entity which has been mentioned at the time of debit, how the beneficiary of the fund has been assumed to be that of assessee, when he was neither involved nor part of these entities. Thus, the information itself does not even indicate that assessee had any interest or has received any fund from this bank account. This information in fact itself clinches issues in favour of the assessee. Though this fact has been 55 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta reiterated the Ld. CIT-DR in her submission, but nowhere she has brought on record that these entities relates to the assessee. All this information merely shows that the stated reference to certain entities are outside India and clearly the assessee had no interest nor had any part in such entity and therefore, no presumption cannot be drawn against the assessee, at least nowhere it has been brought on record by the Ld. CIT-DR before us. Herein in this case, it is once reiterated that the assessee through, Sh. Dilip Mehta has clearly explained that the source of money has come from entities belonging to him and further debit entries also belongs to entity once owned by Sh. Dilip Mehta and nowhere it has been brought on record that assessee had any interests in such entities, therefore, it cannot be held that source of the credit and further debit entries is to be taxed in the hands of the assessee. Accordingly, the addition made in the hands of the assessee has no legs to stand and cannot be taxed as unaccounted income of the assessee, because the assessee has neither contributed to such fund or the source of deposits in the bank account pertains to him nor has received any distribution from the trust or from the bank account and therefore, the addition is directed to be deleted. 56 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 21. Before us, although the parties have relied upon various decisions of the Tribunal. One set of the decisions which are in favour of the assessee and one set of the decisions which are against the assessee. Though, we have given our decision purely based on finding of the fact, since both the parties have heavily harped upon the judgments, therefore, we will succinctly discuss the relevant facts and the finding of the judgments and whether they are applicable on the fact of the case of the assessee. One set of the judgment which has been relied upon by the Ld. CIT-DR are summarized as under:- 1. DCIT (International Tax) v. Rahul Rajikanth Prikh 7. During the assessment proceedings, the following queries were raised before the assessee for him to explain the source of the above deposits: (a) Explanation on the credit entries appearing with evidences. (b)Whether the HSBC, Geneva account was disclosed before the US tax authorities (c) Whether his Indian passport was used by him to open an account in HSBC, Geneva. The assessee could only produce the credit advice with regard to the first two deposits in which it is stated that the remittance was made from Habib American Bank. However, no further details were provided to explain the source of the above credits apart from the narration already appearing in the bank statement. The assessee contends that the bank itself could not provide him further details on the deposits even after an attempt was made with the bank. The assessee could not prove 57 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta with documentary evidence that the deposits are not from India. The narration in the bank statement is mentioning Pearl Enterprise LLC and Exim Jewellers LLC, however the assessee has not produced the bills against which these payments were made nor the material sold. As far as the credit of USD 20000 is concerned, there is no explanation as the bank statement itself mentions only "by order of a client'. No further evidence has been brought on record by the assessee to explain this. 10. This shows that the assessee has interests in India. Perusal of his return of income in India shows that the assessee is a partner of a firm in the name of Navinchand NavalchandSt Co. which is a firm having address at Opera House, Mumbai. During the year, the assessee has received Rs. 49,369/- as business income u/s 28(v) of the Act being interest received from this firm. This shows that the assessee's diamond business outside India cannot be independent of that in India. The report of the Indian Express on 10.2.2015 on the topic "Why diamonds are the HSBC list's best friend" reported that: 13. In view of the above, the circumstances are such that the ultimate source of the credits in the HSBC, Geneva account can be deduced to be from India. This presumption is as per the provision of The Indian Evidence Act, 1872. The case of the assessee is even worse than any presumption of certain facts as it is a matter of fact that the said HSBC, Geneva account was never disclosed by the assessee in his returns of income anywhere in the world and hence taxes have never been paid on the credits as mentioned in the account. 25.... In the background of the aforesaid discussion and precedent. we remit the issue to the file of the Assessing Officer. The Assessing Officer is directed to make further investigation into the source of the deposits in the bank accounts. The Assessing Officer is also directed to apportion the amounts in the name of the account holders unless proved otherwise by means of cogent evidence. The assessee 58 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta is also directed to cooperate and he cannot plead ignorance of the source of his own bank deposits. Needless to add, the assessee should be granted adequate opportunity of being heard Roth the counsels agreed to the proposition of the issue being remitted to the file of Assessing Officer for necessary adjudication. 2. Ambrish Manoj Dupelia vs. DCIT 16.... Once it is settled that the assessee is having sums deposited in the foreign bank account, it was incumbent upon the assessee to disclose the interest thereon in subsequent years, unless the assessee produces necessary evidence that the aforesaid deposit has been liquidated. Thus, once the assessing officer has come into possession of information that assessee is beneficial owner of deposits in foreign bank accounts and from the return of income filed by the assessee the assessing officer notices that the interest from the said deposits in accounts have not been disclosed in the return of income, the reopening of the case is duly justified. 17.... In this scenario, the assessee claim that the assessee has no information about the said bank deposit is totally unsustainable. That assessee's name and address, date of birth, passport copy and other particulars were planted in those documents to the prejudice of the assessee by some unknown person is totally an unbelievable story. 18... The assessee is clearly trying to get benefit under this provision and denying the existence of the said bank account. This as per the facts discussed hereinabove is a self serving statement not at all sustainable. In the background of the above discussion, the onus now is clearly on the assessee to prove that the assessee has no beneficial interest in the said bank account or that the said bank account is a fictitious story, which the assessee has failed to discharge. Hence, the impugned addition in the hands of the assessee are justified and I uphold the same. 59 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 3. Mohan Manoj Dhupelia vs. DCIT 3. The crux of argument advanced on behalf of the assessee is that the addition was made by the AO without appreciating the fact that the alleged trust was discretionary trust and neither the amount was accrued/credited nor the name of the assessee appeared as beneficiary of Ambrunova Trust. On the other hand, the Id. Special Counsel brought to our notice certain documents evidencing that the names of all the assessees were appearing, who are beneficiaries of the said trust. 3.2. Still the fact remains that they are the sole beneficiaries of the trust. Thus totality of facts clearly indicate that the deposit made in the bank account of the trust represents unaccounted income of the assessee, as the same was not disclosed by the these assessees in their respective returns in India. consequently. the addition was rightly made by the Assessing Officer and confirmed by the Id. CIT(A). 4. Hasmukh Gandhi v. Dy CIT 17.... The assessee's claim that the said deposits do not belong to the assessee or they have no information about the same has already been decided against the assessee by the tribunal in the order as above. Furthermore, we find that in the present case, from the employee of the said foreign bank, sovereign government of Germany comes into possession of documents relating to the deposit in the said bank. These deposit and detail give the name and address, date of birth, passport copy and all relevant particulars of the assessee. Then the sovereign government of Germany passes on this information to the sovereign government of India. Thereafter, the said document and information comes into the possession of Central Board of Direct Taxes and, thereafter, to the assessing officer. In this scenario, the assessee claim that the assessee has no information about the said bank deposit is totally unsustainable. That assessee's name and address, date of birth, passport copy and 60 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta other particulars were planted in those documents to the prejudice of the assessee by some unknown person is totally an unbelievable story. That some good Samaritan deposited that huge amount for the benefit of the assessee in the said foreign bank account and gave all the names and address and particulars of the assessee without any information to the assessee, is equally an unbelievable story. We do not find any relevance in ld. Counsel of the assessee's submission that the data were stolen by the foreign bank employee and it was not the case of a whistle blower. How this affects the veracity of information has not been spelt out. 18. In our considered opinion, the above evidence is cogent and sufficient.... In the background of the above discussion, the onus now is clearly on the assessee to prove that the assessee has no beneficial interest in the said bank account or that the said bank account is a fictitious story, which the assessee has failed to discharge. Hence, the impugned additions in the hands of the assessee are justified and I uphold the same. 5. Renu T Tharani v. DCIT 42. Interestingly, however, even this trust stands terminated and nothing is now known about the trust. We have noted that the assessee has taken a plea that she has nothing to do with the funds in the HSBC Private Bank (Suisse) SA account, as she was only a beneficiary of the Tharani Family Settlement Trust. The assessee is at least, by her own admission, a beneficiary of the trust but she is not in a position to throw any light about the trust or enlighten anyone about the trust structure. All she has submitted is that GWU Investments Limited is the company that runs the trust and she has no idea as to where the monies came in the possession of GWU Investments Ltd. To put a question to ourselves, is it an explanation which can be accepted by any reasonable person? 61 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 44.... HSBC documents show that she is the beneficial owner, and there is nothing, save and except for self-serving statements of the assessee and contents of some unverified and uncorroborated letter of functionary of HSBC Private Bank- which has been indicted in several parts of the world for colluding with unscrupulous tax evaders and money launderers, to controvert that position. It is also inconceivable that a 200 crore beneficiary in a trust will not know about who has settled that trust. 45. Viewed in the light of factual backdrop of the case, and in the light of the above legal position, no reasonable person can accept the explanation of the assessee. The assessee is not a public personality like Mother Terresa that some unknown person, with complete anonymity, will settle a trust to give her US $4 million ... 22. Another set of judgment relied upon by the assessee are as under: 1. DCIT v. Hemant Mansuklal Pandya 2018 (11) TMI 949- ITAT Mumbai "15. We have heard both the parties, considered the material available on record and gone through the orders of authorities below. 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 that deposit is not having any connection to income derived in India and not sourced from India. The AO has made additions on the basis of a document called 'base note' received from French Government, as per which the assessee is maintaining a bank account in HSBC Bank, Geneva. Except this, the AO has not conducted any independent enquiry or applied his mind before coming to the conclusion that whether the information contained in base note is verified or authenticated.... The AO has shifted the burden on the assessee to prove negative. According to the AO, it is for the assessee to prove that the credits found in HSBC Bank is not sourced out of income derived from India. 62 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 17.... 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 that an amount falls within the taxing ambit is on the department and it is incorrect to place the onus of proving negative on the assessee. This legal proposition is supported by... Therefore, we are of the considered view that when the AO found that the assessee is a non resident Indian, was incorrect in making addition towards deposits found in foreign bank account maintained with HSBC Bank, Geneva without establishing the fact that the said deposit is sourced out of income derived in India, when the assessee has filed 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 that the same have been acquired / sourced out of foreign income which has not accrued / arisen in India. 18.... The suspicion, howsoever strong, cannot take place of proof and no addition could be made on presumption and assumption. 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." 2. DCIT v. Dipendu Bapalal Shah "6. By the impugned order CIT(A) deleted the addition after observing as under:- 24. The Appellant in his affidavit dated 13 October 2011 has clearly stated that he was a settlor of a trust outside India which he had created for the benefit of his family members with his initial contribution. Further, he has also stated that none of the discretionary beneficiaries have contributed any funds to the said trust. 63 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 14.... Further, he has also stated that none of the discretionary beneficiaries have contributed any funds to the said trust. However, the content of this affidavit was nowhere declined by the AO nor was held to be not true. 16. The CIT(A) also observe that a circumstantial evidence whenever used has to be conclusive in nature. Thus, the circumstantial evidences 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 nowhere proved by the four instances relied on by the AO being termed as circumstantial evidence." 3. Deepak B Shah and Kanal N Shah v. ACIT 12.... During the course of the assessment proceedings Mr. Dipendu Bapalal Shah and both the appellants in their respective assessment proceedings filed their sworn in affidavits. The affidavit of Mr. Dipendu Bapalal Shah was sworn in before the UAE authority stating on oath as under: i) He had settled an offshore discretionary trust with his initial contribution ii) None of the discretionary beneficiaries have contributed any funds to the trust iii) None of the beneficiaries have received any distribution from the trust. 13. The appellants also filed sworn affidavit dated 5/11/2011 stating that they were not aware of the existence of any of the accounts in HSBC, Geneva. They further stated that they never carried out any transactions in relation to the said account with HSBC Bank, Geneva nor received any benefit from the said account. It is also found that they have not signed any documents nor operated the said bank account. It is also true that both the appellants also filed a clarificatory letter from HSBC Bank, Geneva stating that both the appellants have neither visited nor opened or operated the bank accounts and that no payments have been received from them or made to them in relation to the said account. ... 64 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 17. In the present case, undisputedly Mr. Dipendu Bapalal Shah is owner of HSBC Bank account, Geneva and the appellants are discretionary beneficiaries which leads to positive inference that the appellants are not the owners of the said bank account and hence the additions under Section 69A cannot be sustained. In the present case before us, admittedly both the appellants namely Deepak B. Shah and Kunal N. Shah are discretionary beneficiaries of the "Balsun trust" created by Mr. Dipendu Bapalal Shah and the two appellants have not made any contribution nor done any transaction with said trust at all. In our opinion in the case of discretionary trust, the income of the trust could not only be added in the hand of beneficiary but the trustees are the representative assessees who are liable to be taxed for the income of the trust. If the discretionary trust has made some distribution of income during the year in favour of the discretionary beneficiaries only then the distributed income is taxable in the hands of the beneficiaries but nothing of the sort has happened nor two appellants have received any money as distribution of income by the discretionary trust. So long as the money is not distributed by the discretionary trust, the same cannot taxed be in the hands of the beneficiaries. Similarly, the present case for us, the deposits held in HSBC, Geneva account cannot be taxed in the hand of beneficiaries/ appellants at all. 4. Late Shri Bhushal Lal Sawhney v. DCIT 8.... There is no material available on record that assessee made deposits in HSBC Bank A/c in A.Y. 2006-2007 or thereafter earned any interest in remaining assessment years under appeals. 8.1. Considering the totality of the facts and circumstances of the case above, it is also clear that during the course of search no incriminating material was found against the assessee for maintaining any such bank accounts with HSBC, Geneva, Switzerland. 65 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 8.2.1. The above Judgment is confirmed by the Hon'ble Supreme Court by dismissing the SLP of the Department. Therefore, on this reason alone no addition could be made of any unexplained bank deposits or interest earned thereon in any of the assessment years. 4. ACIT v. Jatinder Mehra 40. With respect to the mention of the name of the assessee in the account opening form as beneficial owner, assessee has relied upon the decision of the coordinate bench in case of Mr. Kamal Galani V ACIT in ITA number 138/Mum/2019 dated 10 September 2020 wherein in para number 13 onwards the coordinate bench has held that merely mentioning the name of the assessee in the account opening form which is rebutted by the assessee by filing an affidavit and complete details of the ownership of the bank account, the assessee cannot be held the beneficial owner of such sum. Therefore, such solitary fact cannot lead to addition in the hence of the assessee where there is no other evidence available with respect to the ownership or beneficial ownership over such bank account. In view of this it is apparent that the mere account opening form where the assessee is mentioned as the beneficial owner of the account mentioning is details of his passport as an identification document, does not necessarily, in absence of any other corroborative evidence of the beneficial ownership of the assessee over that for an asset cannot lead to taxability in the hands of the assessee Under the Black Money Act. 6. DCIT v. Ganpat Singhvi 8. ... The Id CIT(A) observed that the department has failed to bring any evidences on record to show that the respondent is having any beneficial interest in the company i.e. Blueridge Investment Corporation or the bank account held by the company with HSBC Geneva. On the contrary the respondent filed three independent/third party evidences to show that he has no beneficial interest either direct or indirect in the company namely Blueridge Investment Corporation with HSBC Geneva. The assessee filed the following evidences: 66 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta iv. Letter dated 04/12/2014 of Blueridge Investment Corporation addressed to the Income Tax Department (Pg 205) v. Letters dated 22/04/2015 and 10/02/2016 of HSBC Geneva addressed to the Company Secretary of Blueridge Investment Corporation (Pg 257-258) vi. Letter dated 22/04/2015 of Blueridge Investment Corporation addressed to the Income Tax Department enclosing the certificate of election and incumbency of directors and officers by the LISCR Trust Company, the appointed registered agent of Blueridge Investment Corporation duly apostilled/notorized by Special Agents of Liberia Maritime Authority (Pg 259-268). 9. The source of the funds transferred from HSBC Abu Dhabi, UAE were stated to be out of the income earned in Abu Dhabi and savings made by the respondent assessee during his stay in Abu Dhabi, UAE as a non-resident Indian since 1976.After considering the facts of the case are in full agreement with the conclusion drawn by the Id CIT(A) that the assessee is not beneficial owner of the bank account held by Blueridge Investment Corporation with HSBC Geneva. Similarly, as regards the joint account for the assessee with his brother in HSBC Geneva, the Id CIT(A) recorded a finding on the basis of evidences that money was transferred in the bank account out of the income earned in Abu Dhabi and savings made by the respondent assessee during his stay in Abu Dhabi, UAE as a non-resident Indian since 1976. Considering all these facts, we are inclined to uphold the order of ld CIT(A) by dismissing the appeal of the revenue. 10. In the result the appeal of the Revenue is dismissed. 23. Thus, it can be seen that main distinction in these judgments are that when the Department has failed to bring out of any material on 67 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta record and assessee has able to give explanation along with evidences, the additions have been deleted and where assessee has failed to rebut the specific and categorical information and enquiry, then the additions have been sustained. Herein in this case, no credible evidence has been nor any material evidence has been brought on record by the Department to rebut the evidence and explanation filed by the assessee; and moreover, the assessee has duly explained the source of the funds in the bank account which is by the brother of the assessee, Shri Dilip Mehta and also the money has also not received by the assessee which fact is also part of the record. In these facts and circumstances, the judgments relied upon by the Ld. CIT DR is not applicable. 24. Other arguments that in case of discretionary trust till income has been distributed and received by the beneficiary cannot be taxed, we are not going into these submissions, because we have already deleted the addition on merits purely based on material on record and also we are not going into the issues of validity of the reopening u/s 148. Accordingly the appeal of the assessee is allowed. 68 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta 25. Before us, it has been brought on record that in case of assessee‟s brother, Shri Harshad Pal Mehta, in I.T.A No. 7307 and 2744/Mum/2011, the Tribunal has set aside the matter to the file of the AO. We find that Tribunal has noted at the relevant fact has not been brought on record by both the parties and various translations of German documents has not been given to the assessee. The Tribunal has given opportunity to assessee to file further evidence. Herein in this case, we have already taken note of the various evidences filed during the course of proceedings before us as well as remand report of the AO and therefore, our finding is based on material which was part of the assessment and the proceedings before us, therefore, our decision is based on facts of the present case. 26. ITA No.7309/Mum/2011; This appeal is against the penalty proceedings u/s 271(1)(c), penalty has been levied Rs.3,37,19,602/- on the same quantum of addition. Since, we have already deleted, therefore, the penalty levied u/s 271(1) (c) is also directed to delete. 27 In the result, both the appeals of the assessee is allowed. 69 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta Orders pronounced in the open court on 9 th June, 2023. [ Sd/- Sd/- (S Rifaur Rahman) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 09.06.2023 PK/sps आदेश की प्रदतदलदप अग्रेदषत/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. विभागीयप्रतितिधि, आयकरअपीऱीयअधिकरण, म ुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशाि सार/ BY ORDER, उप/सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीऱीयअधिकरण, म ुंबई/ ITAT, Mumbai 70 I.T.A. No. 2743/Mum/2011 & 7309/Mum/2011 Late Mr. Arun Kumar R Mehta