The Dy. Commissioner of Income Tax, Central Circle-1(4), Ahmedabad V. Smt. Naliniben Narendra Patel, Ahmedabad

ITSSA 263/AHD/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0489 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 07-09-2016
• Court: TRIBUNAL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER IT(SS)A NO. 263/AHD/2016 / ASSESSMENT YEAR : 2008-09 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), AHMEDABAD VS SMT. NALINIBEN NARENDRA PATEL, 3- 4, VITHALBHAI BHAWAN, NR.SARDAR PATEL COLONY, RAILWAY CROSSING, AHMEDABAD-380013 PAN : ARFPP 1103 M / (APPELLANT) / (RESPONDENT) REVENUE BY : SMT. APARNA M AGARWAL, CIT-DR ASSESSEE BY : SHRI JIGAR PATEL, AR / DATE OF HEARING : 15/11/2018 / DATE OF PRONOUNCEMENT: 29/11/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-11, AH MEDABAD DATED 14.06.2016 FOR AY 2008-09. 2. THE SOLITARY GROUND RAISED BY THE REVENUE IS AS FOLLOWS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELETING THE AD DITION OF UNEXPLAINED INVESTMENT IN BANK ACCOUNT U/S 69 OF THE ACT OF RS. 75,59,668/-. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A NON-RESIDENT INDIAN, A KENYAN NATIONAL. DURING THE ASSESSMENT Y EAR UNDER CONSIDERATION, SHE WAS RUNNING AND OPERATING AN ACC OUNT BEARING NO. 03410100007437 WITH BANK OF BARODA, SP COLONY BRANC H, AHMEDABAD. ON PERUSAL OF THE SAID ACCOUNT, THE ASSESSING OFFICER NOTICED THAT A SUM OF RS.75,59,668/- HAS BEEN CREDITED INTO THE ACCOUNT O N 09.04.2007 WITH THE NARRATION BILL ID 0849IRTT0062607. SHE WAS, THERE FORE, CALLED UPON BY THE IT(SS)A NO. 263/AHD/2016 DCIT VS. SMT NALINIBEN NARENDRA PATEL AY : 2008-09 2 ASSESSING OFFICER TO SUBSTANTIATE THE TRANSACTION O F CREDIT ENTRY OF RS.75,59,668/-. THE ASSESSEE SUBMITTED HER REPLY V IDE LETTER DATED 13.03.2014 WHICH WAS FOUND NOT SATISFACTORY BY THE ASSESSING OFFICER. THE ASSESSING OFFICER THUS MADE THE IMPUGNED ADDITION O F RS.75,59,668/- U/S. 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BANK ACCOUNT. AGGRIEVED BY THE ADDITION SO MADE BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A), BY RELYING ON THE JUDGMENT OF THIS TRIBUNAL IN THE CAS E OF SMT. SUSILA RAMASAMY VS. ACIT, (2010) 37 SOT 146 (CHENNAI), DEL ETED THE ADDITION MADE BY THE ASSESSING OFFICER AND GRANTED RELIEF TO THE ASSESSEE. THE REVENUE IS AGGRIEVED BY THE RELIEF SO GRANTED BY TH E LD. CIT(A) AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE TIME OF HEARING BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE WAS CONSI DERED BY THIS TRIBUNAL IN THE CASE OF ASSESSEES SISTER, I.E. SMT. PRATIBHA P ANKAJ PATEL, IN IT(SS)A NO. 278/AHD/2016, FOR ASSESSMENT YEAR 2008-09, WHEREIN THE TRIBUNAL VIDE ITS ORDER DATED 18.10.2018 PASSED IN IT(SS)A NO.278/AHD /2016 DISMISSED THE APPEAL OF THE REVENUE BY HOLDING AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 7. IT IS ONLY ELEMENTARY THAT SO FAR AS SECTION 69 IS CONCERNED IT CAN COME INTO PLAY ONLY WHEN THE ASSESSEE DOES NOT OFFER AN EXPLANATION ABOUT THE NATURE AND SOURCE AN INVESTMENT MADE BY HIM OR IF T HE EXPLANATION OFFERED BY HIM, IN THE OPINION OF THE ASSESSING OFFICER, I S NOT SATISFACTORY. WE HAVE NOTED THAT BARCLAYS BANK, VIDE LETTER DATED 8TH APR IL 2014, HAS CONFIRMED THAT A REMITTANCE OF GBP 90,000 WAS SENT BY WIRE T RANSFER TO YOUR NRE ACCOUNT NO. 0341010007438 WITH BANK OF BARODA, SP C OLONY BRANCH, AHMEDABAD, WHICH WAS ROUTED THROUGH BANK OF BARODA MUMBAI BRANCH ON 5TH APRIL 2007, AND THAT WE FURTHER WISH TO CON FIRM THAT THE REMITTANCE IT(SS)A NO. 263/AHD/2016 DCIT VS. SMT NALINIBEN NARENDRA PATEL AY : 2008-09 3 REPRESENTED A DISTRIBUTION MADE TO YOU AS A BENEFIC IARY OF THE KANISA FAMILY TRUST SETTLED BY YOUR FATHER LATE DR CHATURBHAI ASH ABHAI PATEL ON 18TH OCTOBER 1974. A COPY OF THIS LETTER WAS PLACED BEF ORE US AT PAGE 27 OF THE PAPER BOOK AND THE ASSESSING OFFICER HAS DULY BEEN CONFRONTED WITH THIS LETTER. HERE IS THUS A CASE IN WHICH THERE IS A CRE DIT IN THE BANK ACCOUNT OF THE ASSESSEE, WHICH IS ON ACCOUNT OF A REMITTANCE FROM A FOREIGN BANK, ON ACCOUNT OF DISBURSEMENTS FROM A FAMILY TRUST, AND THERE IS NO DISPUTE ABOUT THESE FACTUAL ASPECT. THE INVESTMENT IS THUS REASONABLY E XPLAINED AND THE APPLICATION OF SECTION 69 IS OUT OF QUESTION. WE, THEREFORE, APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) FOR THIS SHORT REASON ALONE. 8. WE MAY, HOWEVER, ADD THAT THIS CASE SHOULD NOT B E TREATED AS AN AUTHORITY FOR CONCLUDING THAT A DISBURSEMENT FROM O VERSEAS TRUST, PARTICULARLY WHEN IT HAS INCOME COMPONENT, WILL NOT BE TAXABLE WHEN RECEIVED IN INDIA. THAT QUESTION REMAINS OPEN FOR A DJUDICATION IN AN APPROPRIATE CASE. THE FACTS IN THIS CASE ARE RATHE R PECULIAR. THE TAXABILITY OF DISBURSEMENT PER SE WAS NOT AT ALL EXAMINED BY THE AUTHORITIES BELOW, NOR WAS SUCH A DISBURSEMENT SOUGHT TO BE BROUGHT TO TAX . IT IS BEYOND CONTROVERSY THAT, IN TERMS OF THE PROVISIONS OF SEC TION 5(2), EVEN IN THE HANDS OF A NON-RESIDENT AN INCOME WHICH ACCRUES IN, OR IS RECEIVED IN, INDIA WILL BE TAXABLE IN INDIA, AND THERE IS ALSO NO DISPUTE ABOU T THE FACTUAL ASPECT THAT THE DISBURSEMENT FROM HIS FAMILY TRUST WAS RECEIVED, BY THE NON-RESIDENT BENEFICIARY, IN INDIA. THE TRUST WAS SETTLED IN 19 74 AND THE DISTRIBUTION IS MADE IN 2007. ON THESE FACTS, IT ALSO APPEARS THAT ENTIRE AMOUNT OF GBP 90,000 MAY NOT BE THE PRINCIPAL AMOUNT AND A PART O F THIS MAY BE ATTRIBUTABLE TO ACCRETION TO THE CORPUS OF THE TRUS T, AS THE TRUST MONIES WERE HELD BY THE BARCLAYS BANK FOR OVER THREE DECADES. ALL THESE DETAILS ABOUT THE NATURE AND BACKDROP OF RECEIPT, I.E. DISBURSEMENT F ROM A FAMILY TRUST, WERE BEFORE THE ASSESSING OFFICER, AND YET THE ASSESSING OFFICER DID NOT EXAMINE THE TAXABILITY OF INCOME COMPONENT, EVEN IF ANY, IN THE DISBURSEMENT, WHICH IS ADMITTEDLY RECEIVED IN INDIA, NOR A CASE WAS MAD E OUT FOR TAXABILITY OF, IN PART OR IN ENTIRETY, DISBURSEMENT FROM THE FAMILY T RUST. THAT ASPECT OF THE MATTER THUS REMAINS UNEXAMINED. BE THAT AS IT MAY, THIS DECISION CANNOT BE AN AUTHORITY FOR WHAT HAS NOT BEEN DECIDED IN THIS CASE AND WE CANNOT IMPROVE THE CASE OF THE ASSESSING OFFICER AT THIS S TAGE EITHER. IN ANY CASE, NO SPECIFIC PLEA TO THIS EFFECT WAS TAKEN BEFORE US BY THE APPELLANT-REVENUE. WE LEAVE IT AT THAT. 5. WE FIND THAT THE FACTS AND THE ISSUES RAISED IN THIS APPEAL ARE IDENTICAL TO THAT OF IT(SS)A NO.278/AHD/2016 IN THE CASE OF A SSESSEES SISTER (PRATIBHA PANKAJ PATEL) FOR ASSESSMENT YEAR 2008-09 (SUPRA). WE, THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL DA TED 18.10.2018 IN IT(SS)A IT(SS)A NO. 263/AHD/2016 DCIT VS. SMT NALINIBEN NARENDRA PATEL AY : 2008-09 4 NO.278/AHD/2016 FOR ASSESSMENT YEAR 2008-09 (SUPRA) , APPROVE THE WELL REASONED CONCLUSIONS ARRIVED AT BY THE LEARNED CIT( A) AND DECLINE TO INTERFERE IN THE MATTER. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 29 TH NOVEMBER, 2018 AT AHMEDABAD. SD/- SD/- WASEEM AHMED (ACCOUNTANT MEMBER) MAHAVIR PRASAD (JUDICIAL MEMBER) AHMEDABAD; DATED 29/11/2018 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD