TMI Blog2011 (7) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... s have received the gifts of the India Development Bonds, ignoring the evidence on record ? 2. Whether the learned Income-tax Appellate Tribunal was right in law in holding that the assessee is entitled to the immunity under sections 6 and 7 of the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991, even though it was clearly proved that the assessee has not received the India Development Bonds as gifts ? 3. Whether the learned Income-tax Appellate Tribunal was right in law in holding that the assessee in fact has disclosed the receipt of the India Development Bonds during the course of filing of the return of income for the assessment year 1997-98, therefore, the query regarding the possession of the India Development Bonds falls outside the purview of the block assessment especially since this argument was taken for the first time before the learned Tribunal and does not form a part of the order of the Assessing Officer and that of the Commissioner of Income-tax (Appeals) ?" 3. The brief facts of the case are that on August 21, 1998, a search and seizure operation was conducted at the residential and busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no natural love and affection between them. So the said gifts are not genuine. Lastly, he justified the addition made by the Assessing Officer. 5. On the other hand, Sri S. K. Garg, assisted by Sri Amit Shukla, learned counsel for the assessee, relied on the order of the Tribunal as well as of the first appellate authority. To support his argument he relied on the ratio of the law laid down in the following cases : (1) CIT v. J. K. Corporation Ltd. [2011] 331 ITR 303 (Cal) wherein it was observed that (headnote) : ". . . the date of effect of the scheme was the date as mentioned therein. The Tribunal was correct in law in holding that the sanctioned scheme shall be conclusive evidence of fulfilling of requirements regarding consent of the Central Government/CBDT Circular No. 683, dated June 8, 1994. The assessee was exempted from fulfilling the provision of sections 80 and 139 of the 1961 Act, in view of the BIFR's order dated March 17, 1994, and it must be held that the revised return of loss filed by the assessee should be treated to have been validly filed." (2) CIT v. Vinod Dhanchand Ghodawat [2001] 247 ITR 448 (Bom) wherein it was held that (headnote) : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be brought into India under any of the provisions of- (i) the Foreign Exchange Regulation Act, 1973 (46 of 1973) ; or (ii) the Income-tax Act, 1961 (43 of 1961) read with the Foreign Exchange Regulation Act, 1973 (46 of 1973)." 9. The relevant provisions of the Act, as briefly explained above, make it very clear that the Assessing Officers, in any proceedings under the direct tax laws, will not make any enquiry with regard to remittances in foreign exchange received under the Remittances in Foreign Exchange (Immunities) Scheme, 1991, or gift of any India Development Bond from a nonresident Indian/overseas corporates body. There should, therefore, be no apprehension of any prejudice against the persons in receipt of remittances under the scheme or donees of the India Development Bonds. There should also be no fear of any harassment by the tax authorities. 10. From the above, it appears that no inquiry can be made from the bond holder regarding the source. The immunities are absolute. 11 . Apart from the abovementioned immunities, the very intention of the Legislature in which the above referred Act was brought into existence was also clarified by the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he has received such remittance, and (iii) the fact that the recipient has received a remittance will not be taken into account and will be inadmissible as evidence in any proceedings relating to any offence or the imposition of any penalty under any such law. 4. Section 4 of the said Act further provides that any remittance of the nature referred to above will not be taken into account for the purpose of any proceeding under the Income-tax Act, 1961. 5. Similar immunities and exemptions are provided under sections 6 and 7 of the Act in relation to non-resident Indians or overseas corporate bodies owning the foreign exchange bonds and persons resident in India to whom the said bonds have been gifted by nonresident Indians or overseas corporate bodies." 12. Further a Press Note was issued by the Government of India, Ministry of Finance, Department of Economic Affairs on October 1, 1991, and that also was to clear the apprehension and doubts regarding the interpretation of the Act and the two Schemes framed thereunder and Government of India, Ministry of Finance, clarified all such queries made and made it known and question No. 5 and its reply is important (s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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