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Shri Som Datt, C/o. A.S. Gupta & Co. Versus Assistant Commissioner of Income Tax, Circle-27, Kolkata

2015 (6) TMI 604 - ITAT KOLKATA

Remittance from outside India - revenue v/s capital receipt - onus to prove - whether a sum received by the assessee from White Label Trust which was constituted under the laws of the Island of Jersey on 20.07.1993 by making ANZ Grindlays Trust Corporation (Jersey) Limited as Trustee? - Held that:- The decisions of Kale Khan Mohammad Hanif –vs - CIT (1963 (2) TMI 33 - SUPREME Court); CIT –vs.- Devi Prasad Vishwanath Prasad (1968 (8) TMI 5 - SUPREME Court ) and Roshan Di Hatti –vs.- CIT (1977 (3) .....

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cate that the onus is on the revenue that the assessee has received the income cannot be applied to a case where the amount credited by the assessee had been claimed by him from a source situated outside india such as Swizerland etc and to which country the assessisng officer does not have any jurisdiction as the Indian Income Tax Act is applicable to Indian Territory, it cannot be said that the onus is on the assessing officer to prove that the assessee has earned the income outside India. This .....

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OL/2009 - Dated:- 12-6-2015 - P. K. Bansal, AM And Mahavir Singh, JM,JJ. For the Appellant : Shri N K Poddar, Sr. Adv. For the Respondent : Smt Suchismita Palai, CIT ORDER Per P K Bansal : This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-XIV, Kolkata dated 20.07.2009 for the assessment year 2004-05 by taking the following effective grounds of appeal:- . (1) On the facts and under the circumstances of the case and in law, the ld. CIT(A) erred in .....

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and in law, the ld. CIT(A) erred in confirming levy of interest under section 234B. 2. The only issue arising in these grounds of appeal is whether a sum of ₹ 4,55,78,880/- received by the assessee from White Label Trust which was constituted under the laws of the Island of Jersey on 20.07.1993 by making ANZ Grindlays Trust Corporation (Jersey) Limited as Trustee. But subsequently the assessee has taken a plea before the Assessing Officer that the trustee has been changed and now HSBC Tru .....

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s produced a certificate dated 28.11.2003 from the Trustee HSBC Republic Trust Company (BVI) Limited, in which the said company certified as the Trustee of the White Label Trust that they have remitted ten lakh US dollar to Dr. Som Datt to his Bank account with Syndicate Bank, Nehru place Branch, New Delhi and the said money has been sent from the capital account of the Trust and is to be regarded as a capital distribution to Dr. Som Datt. The Assessing Officer subsequently asked for certain mor .....

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Whether the assessee received gift from the Trust in earlier years, (ix) Statement of account of Trust Bank statement. 3.1. In respect of Items No. 3, 6, 7 & 9, the assessee expressed his inability and stated that Trustees of the said Trust are bound by the secrecy laws of their country and, therefore, they are constraint to part with the financial statements of the Trust. Even the Trustees are reluctant to reveal their names due to the secrecy laws. There are no identification criteria for .....

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e establishment of the Trust. HSBC Trust Company (BVI) Limited was appointed as Trustee of the White Label Trust on 08.08.2003. With regard to the administration of the Trust Fund, the Trustee has all the same powers as a natural person acting as the beneficial owner of such property and may exercise its discretion accordingly. On 28.11.2003, the Trustee exercised its discretion in favour of Dr. Som Datt, in his capacity as discretionary beneficiary of the Trust, and made a capital distribution .....

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the Indian Income Tax Act to exempt such receipt. The only situation where the amount may be left out from chargeability arises when an agreement between the Government of India with a Foreign State exists, which is known as Double Tax Avoidance Agreement. It is only applicable when any amount is taxed by the Foreign Government and cannot be taxed again under Indian Income Tax Act. The situation in the present case is not one where Double Tax Avoidance Agreement is applicable. 3.2. The Assessing .....

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ouble Tax Avoidance Agreement is applicable, and, therefore, the said sum is liable to tax under the Indian Income Tax Act.The Assessing Officer asked the assessee to produce the financial statements of the Trust to ascertain the nature of the amount received by the assessee but the assessee did not produce these documents. The Assessing Officer, therefore, observed that in the absence of financial statements being produced by the Trust, which were specifically asked to be produced, it cannot be .....

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, its sources of income, the resolution adopted to benefit this particular assessee, the capacity of the Trust to benefit anybody and the legal status of the Trust in the country where it was incorporated and ultimately he concluded that the facts of the case were different from the facts of the case of Smt. Shantaben M. Patel in ITA No. 5000/Mum./2001 dated 17.02.2006 on which the assessee has relied. The assessee during the course of assessment proceeding contended that the amount received is .....

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ases covered under Double Taxation Avoidance Agreement or money brought into India through nonresident External Account. The overseas discretionary Trust might have disposed the amount out of his past or current income. The Trust has paid no income tax as per Indian Income Tax Act. There is no evidence on record regarding tax payment in the country of its incorporation. The assessee has not paid any tax abroad. The amount received by the assessee in Switzerland during the year and brought into I .....

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ed in 32 ITR 190 (SC), wherein the Hon ble Supreme Court has laid down that if the case was not covered within the four corners of the law, no tax can be levied by inference or by analogy or by trying to probe into the intentions of the legislature. 5. Before the ld. CIT(Appeals), the assessee produced the following documents which were not produced before the Assessing Officer - (i) True copy of settlement deed, (2) Trust Ledger and transaction history report (2 pages); (3) White Label Trust Fi .....

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(Jersey) Limited. The assessee has paid up a sum of 10000 dollar. It was pointed out that as per clause (2) when query was made whether the settlement got registered as per law of the country where it was created that the settlement has been established under the laws of the island of Jersey and subject to any change in the proper Law of the Settlement duly made according to the powers and provisions declared the proper law of the settlement shall be the law of the Island of Jersey and the court .....

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ion was drawn under clause (4) under the head "Trusts of income and capital" and it was contended that the Trustee is empowered during the Trust Period to pay appropriate or apply the whole or such part of the income of the Trust fund as the trustees may in their absolute discretion think fit to or for the maintenance or otherwise for the benefit of all or such one or more exclusive of the other or others of the beneficiaries in such shares and proportions, if more than one and general .....

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ons for maintenance, education or advancement or for accumulation of income whether during minority or otherwise and with such discretionary trust and powers exercisable by such persons as the trustees shall in their like discretion determine. It was further contended by drawing our attention to clause (b) that the trustees were also authorized to accumulate the interest income of the trust fund and add the accumulation to the capital of the trust fund. 6.1. It was pointed out that as per Rule 5 .....

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73, it was pointed out that these papers represent the statement of affairs of White Label Trust as on 31.03.2004, the amount paid to assessee has been shown as withdrawn and as paid to the assessee. Page 72 contains the consolidated capital statement giving the opening balance and the closing balance of the Capital A/c. The funds have been given to the assessee out of the Capital Account. Copy of the Revenue A/c has also been brought to our knowledge, which is available at page 73 of the paper .....

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ranch, New Delhi. This certificate also certified that the said sum has been given out of the capital account of the Trust and is to be regarded as capital distribution to Dr. Som Datt. Our attention was drawn towards a letter dated 18.07.2006, which has been written by HSBC Trust Company (BVI) Limited to Mr. Dilip J. Thakkar clarifying that White Label Trust was established on 20.07.1993 under the laws of the Island of Jersey and is discretionary in nature. Dr. Som Datt has been a discretionary .....

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its discretion accordingly. It was further mentioned in the letter that on 28.11.2003, the Trustee exercised its discretion in favour of Dr. Som Datt, in his capacity as discretionary beneficiary of the Trust, and made a capital distribution to him in the sum of USD 10 lakh million US Dollars. 7. Reliance was placed before us on the decision in the case of The Trustees of the Will of H.K. Brodle (deceased) -vs.- The Commissioners of Inland Revenue (1933) 17 Tax Cases 432 (KB) for the propositio .....

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on the Revenue to prove that the assessee has earned the income. Similarly reliance was placed on the following decisions:- (i) CIT -vs.- Kamal Behari Lal Singha [82 ITR 460 (SC); (ii) Udhavdas Kewalram -vs.- CIT [66 ITR 462, 465 (SC); (iii) CIT -vs.- Infosys Technologies Ltd. [297 ITR 167, 175 (SC); (iv) CIT -vs.- Chrestian Mica Industries Limited [109 ITR 517, 523 (Cal.); (v) Ramakrishnan (S.A.) -vs.- CIT [114 ITR 253, 255 (Mad.); (vi) Dilip Kumar Roy -vs.- CIT [94 ITR 1 (Bom.); (vii) Niyati B .....

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ecoverable from him. The accumulated income cannot be regarded to be part of the income. Thus it was contended that its only income earned during the year which is received for the beneficiaries can be taxed in the hands of the beneficiaries. Any amount received out of the accumulated income cannot be taxed in the hands of the beneficiaries. Our attention was also drawn towards the decision of the Hon ble Supreme Court in the case of Commissioner of Wealth Tax -vs.- Estate of Late HMM Vikramsinh .....

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executed in UK for benefit of persons in India, if the trustees in UK do not distribute income to beneficiaries in the relevant accounting years and trustees are assessed in UK, the income from trusts not assessable in the hands of beneficiaries in India. Thus it was contended that in the case of a Discretionary Trust if the amount has been paid to the beneficiary out of the capital fund, it cannot be assessed in the hands of the beneficiaries until and unless it has arisen as income in the hand .....

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out that the facts involved in this case are similar to the facts in the case of assessee. Our attention was drawn to para 7 for the proposition of the law that if the distribution was made out of the income of earlier years or out of corpus fund of the Trust, the income is not chargeable in the hands of the beneficiaries. 10. Ld. D.R., on the other hand, vehemently contended that the onus is on the assessee to prove that there was a valid descretionary Trust established out of India in accordan .....

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of settlement deed,(2) Trust Ledger and transaction history report (2 pages); (3) White Label Trust Financial results for the period from 01.04.2003 to 31.03.2004 (6 pages). 11. These documents were filed for the firtst time before the CIT(A). The assessing officer did not have any occasion to examine these documents to ascertain the genuinity of the trust deed, genuinity of the trustee as well as the financial statement submitted for the financial year eneded 31st march 2004. Attention was draw .....

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nd. Initially the Trustee is ANZ Grindlays Trust Corporation (Jersey) Limited. Subsequently the assessee has claimed that the Trustee is HSBC Republic Trust Company (BVI) Limited. The onus is on the assessee to prove that he has received the money out of the capital funds. On the basis of the documents filed by the assessee, it cannot be said that the assessee has discharged his onus. 12. So far as the decisions relied on by the ld. A.R. is concerned, it was submitted that in all these decisions .....

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ry is a capital receipt not chargeable to tax in India. We noted that during the impugned assessment year, the assessee has received a sum of ₹ 4,55,78,880/- which is being credited by him in his capital account. When the Assessing Officer asked for the nature of the receipt, the assessee explained that a sum of USD 10,00,000 (one million US Dollars) was received by the assesese from one Trust named M/s. White Label Trust, which is established out of India and in this regard the assessee p .....

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unt of the Trust and is to be regarded as a capital distribution to Dr. Som Datt.Yours sincerely,Sd/- HSBC Republic Trust Company (BVII) Limited" The covering letter along with which the certificate was enclosed reads as under:- "HSBC Republic HSBC Republic Trust Services (Suisse) S.A. Dr. Som Datt, 55, Community Centre, East of Kailash, New Delhi,India110048 Geneva, 28th November, 2003 Dear Dr. Datt,Re.: The White Label Trust Please find enclosed the Certificate confirming that the US .....

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the assessee before the Assessing Officer, the Assessing Officer asked from the assessee vide letter dated 29.05.2003 the following information/documents:- (i) Nature of While Label Trust-founder of the Trust,(ii) No. of years for which the assessee is associated with the Trust,(iii) Duties and obligations as a beneficiary of the Trust,(iv) Purpose for which the Trust was set up,(v) Source of income of the Trust,(vi) Identification particulars of the Trust as per 11 Act of the Nation,(vii) Names .....

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the assessee is Indian citizen and resident during the impugned assessment year and assessee is chargeable to tax on all the income earned or received by him. We were surprised to see such a plea specially when the assessee himself is the settler and he has established the trust himself, such information must be within the domain of the assessee not of the assessing officer. This clearly proves that the assessee wanted to avoid the compliance. He has also taken the plea that Even the Trustees a .....

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s established along with other beneficiaries. The Trust fund built up substantial capital fund since its establishment and M/s. HSBC Trust Company (BVI) Limited was appointed as Trustee of the White Label Trust on 08.08.2003. The Trustee exercised its discretion on 28.11.2003 in favour of the assessee and made a capital distribution to him for a sum of USD 10,00,000 (one million US Dollars). The Assessing Officer added the same in the income of the assessee as the assessee even did not produce t .....

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results for the period from 01.04.2003 to 31.03.2004 (6 pages). 15. Before us also, the assessee has submitted copy of the Settlement deed, Trust Ledger and transaction history report, White Label Trust Financial statement for the period from 01.04.2003 to 31.03.2004. We asked ld. Sr. Advocate during the course of hearing that from the Trust Deed it is apparent that M/s. ANZ Grindlays Trust Corporation (Jersey) Limited is the original trustee. Settlement Deed read in this regard as under:- " .....

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elivered to the Original Trustees or otherwise placed under their control the property specified in the second schedule hereto". The name of the HSBC Trust Company (BVI) Limited is not appearing as trustee. He explained that M/s. HSBC Trust Company (BVI) Limited became the trustee on 08.08.2003 but expressed its inability to file copy of any Resolution or Minutes or deed of appointment which may prove how HSBC Trust Company (BVI) Limited became the trustee of the Trust and from which date. .....

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her there is a restriction on the substitution of the trustee or beneficiary, but none of these documents were filed before us. Clause (2) reads as under:- "This Settlement is established under the laws of the Island of Jersey and subject to any change in the Proper Law of this Settlement duly made according to the powers and provisions hereinafter declared the Proper Law of this Settlement shall be the law of the Island of Jersey and the courts of the said Island shall be the forum for the .....

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the certificate it is not apparent in what capacity a person has signed it mentioning M/s. HSBC Republic Trust Company (BVI) Limited as trustee and what is the lucus standi of m/s hsbc republic trust services (Suisse) S.A. with reference to the impugned trust and how M/s. HSBC Republic Trust Services (Suisse) S.A. has come into picture. The Ld. Senior Advocate also expressed his inability to explain the same. 17. We noted from the Trust Deed that the trustees are empowered to have the accounts a .....

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er". 18. Ld. Sr. Advocate expressed his inability to tell us whether the accounts for the Trust got audited by the Trustee or not and why the copy of the audited accounts duly approved by the Trustees were not filed. 19. We also noted that in the Trust deed, 5th schedule is there, which gives the details of persons for appointment of new or additional trustees which can be appointed to be the trustee in view of the Power of Appointment of New or Additional Trustees given under clause 15(a). .....

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lusions or provisions specified in the said fifth schedule to be a trustee hereof in place of the trustee so deceased dissolved desiring to withdraw and be discharged refusing or becoming unfit to act". 20. From the reading of the said Clause it is apparent that new Trustee can be appointed whether the original, additional or substituted trustee expires or in case of a Company got dissolved and /or if given the notice of desire to withdraw from the trusteeship or had become unfit to act as .....

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red 1-8 in the order stated". From this it is apparent that new or additional trustees can be appointed only out of the beneficiaries numbered 1 to 8 in the same order in which they are stated. We noted that the beneficiaries are stated in the third schedule to the Settlement Deed. This third schedule reads as under:- "THE THIRD SCHEDULE hereinbefore referred to:(the Beneficiaries) 1. Som Datt (2) Usha Dutt (3) Anjali Anand (4) Sadhna Singh (5) Anuradha Datt Munjal (6) Latika Datt Abbo .....

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as under:- "15(f) - On every change in the trusteeship a memorandum shall be endorsed on or permanently annexed to this Settlement stating the names of the Trustees for the time being and shall be signed by the persons so named and any person dealing with the Trust shall be entitled to rely upon such memorandum (or the latest of such memoranda if more than one) as sufficient evidence that the Trustees named therein are the duly constituted Trustees for the time being hereof". "15 .....

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nnexed to the Settlement Deed stating the names of the trustees for the time being and it has to be signed by the persons named as a trustee so that any person dealing with the Trust may rely upon such memorandum. But in this case, we have gone through the Trust Deed, but we do not find the copy of any such memorandum, even the ld. Sr. Advocate could not produce such copy before us. In view of this fact, we are of the view that the assessee has not discharged his onus how M/s. HSBC Republic Trus .....

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aid amount is a capital receipt. It is a case where, in our opinion, the assessee could not prove that the trusteeship of M/s. HSBC Republic Trust Company (BVI) Limited. Therefore, the certificate issued by M/s. HSBC Republic Trust Company (BVI) Limited, in our opinion, does not be accepted as an evidence in this regard and we are of the view that this certificate does not have any legal sanctity. This certificate cannot be relied and on the basis of the certificate it cannot be said that the as .....

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ed in the earlier years out of which the amount has been distributed by the trustee to the assessee as beneficiary of the discretionary trust . The accounts although has not been audited and has not been approved by the trustees except that certified true copy has been signed as a trustee on behalf of M/s. HSBC Trust Company (BVI) Limited. Even we noted that no date has been mentioned on which date these accounts have been signed or approved by the trustees. In our opinion, when assessee makes a .....

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not have any jurisdiction over the source country. We are of the firm view that the general principal that the revenue should prove that the assessee has receipt the money as income cannot be applied in such situation as all the evidences and material is in the domain of the assessing officer. Even we noted that it is a case where a credit of the amount was found in the books of the assessee, therefore , the assessee is bound to prove the nature and source of the credit. Now the question arise .....

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C Trust Company (BVI) Limited. That certificate also we noted is just below the accounts and on a separate sheet. In the absence of approval of the accounts by the trustee in a meeting and also without mentioning the date when these accounts have been approved, we are of the view that these accounts cannot be accepted as an evidence that the assessee has received the funds out of the capital funds. Whether the Trust is a genuine Trust and has complied with all the legal requirements of the count .....

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the Trust Deed, the copy of which is filed before us, the original trustee is M/s. ANZ Grindlays Trust Corporation (Jersey) Limited. Ld. Sr. Advocate appeared before us and vehemently contended but could not adduce any cogent material or evidence how and when the said trustee retired or still continued to be a trustee. Whether the provision of Regulation 15 has been complied with while appointing the new trustee. 25. We have specifically asked the ld. Sr. Advocate in respect of the earlier peri .....

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e as well as the money being withdrawn out of the capital funds is not proved. We also noted that under section 142(1) of the Act, the Assessing Officer is authorized while making an assessment to enquire of from the assessee or ask the assessee to submit the information on such file or matters on which he may desire. The Assessing Officer as has been pointed out by us earlier, has asked the assessee to submit the information and all the information whatever has been asked by the Assessing Offic .....

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d down vide order dated 08.02.1963 that "the onus of proving the source of a sum of money found to have been received by the assesese is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Income Tax Act. In the absence of such proof, the Income Tax Officer is entitled to treat it as taxable income". Since, in our opinion, it is a case where the assessee even th .....

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by the ld. Sr. Advocate. These case laws, in our opinion, will not apply to the facts involved in the impugned case as in those cases the assessee has duly discharged his onus. There is no such finding in those cases that the assesse has not discharged its burden of proof. In the case of Trustees of the Will of H.K. Brodie (deceased) -vs.- The Commissioners of Inland Revenue reported in 17 Tax Cases 432 (KB), we noted that the issue involved does not relate to the discharging of onus in respect .....

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Trust, trustee as well as the fact that the money has been received by him out of the capital funds of the Trust. In the case of Parimisetti Seetharamamma -vs.- CIT 57 ITR 532 (SC), this decision, in our opinion, supports the case of the Revenue for the proposition of the law that where the receipt is of the nature which is not taxable, the burden of proving that it is not taxable lies upon the assessee. In the case of CIT -vs.- Kamal Behari Lal Singha reported in 82 ITR 460 (SC), we noted that .....

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n ble Supreme Court has clearly laid down that Income Tax Appellate Tribunal performs a judicial function under the income Tax Act and it is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law. This decision supports the view that the Tribunal is final facts .....

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ss benefit or receipt made taxable- not taxable as income. This decision also, in our opinion, will not assist the assessee as the issue before us was not disputed that capital receipt is not chargeable to tax until and unless it comes under the definition of the income as given under section 2(24) of the Income Tax Act. In the case before us, the question is whether the assessee has discharged his onus and assessee has proved that the amount received by him is a capital receipt. 27. In the case .....

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the facts on record, we are of the view that the assessee has not proved that the amount received by him is a capital receipt and is a beneficiary of a genuine Trust created outside Indiaand is out of accumulation made in the earlier years. In the case of Ramakrishnan (S.A.) -vs.- CIT reported in 114 ITR 253 (Madras), we noted that the Hon ble Madras High Court followed the decision of Parimisetti Seetharamamma -vs.- CIT reported in 57 ITR 532 (SC), which we have already discussed in the preced .....

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e before us, the assessee has submitted on the basis of the certificate issued by M/s. HSBC Republic Trust Company (BVI) Limited the claim that the other trustees of a Trust, in which the assessee is a beneficiary, have made the payment to the assessee. We have already held that the assessee could not prove before us the appointment of M/s. HSBC Republic Trust Company (BVI) Limited as a trustee, therefore, how this certificate issued by such Trust will assist the assessee. We have already referr .....

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(2004) 4 SOT 941 (Mum.), we noted that the Hon ble Tribunal has held that a plain reading of the provision of section 2(24) makes clear that only such capital gain as may be chargeable to tax under section 45 to be includible in the scope of income and, therefore, the capital receipt will not be chargeable to tax. 29. In the case of Jyotendrasinhji -vs.- Tripathi (S.I.) reported in 201 ITR 611 (SC) we noted that the Hon ble Supreme Court took the view that in case of a Discretionary Trust, Reve .....

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a Discretionary Trust in the following words:- "A discretionary trust is one which gives the beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit.....The beneficiary thus has no more than a hope that the discretion will be exercised in his favour". There is no dispute so far this proposition of law is concerned, we do not dispute the said pro .....

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icer does not have jurisdiction and therefore onus cannot lie on the assessing officer. The creation of the trust, applicability of the law prevailing there, appointment of the trustee as well as the financial accounts are within the domain of the assessee and therefore the assessee has to first prove that the amount credited to his account has arisen to him as capital receipt with the nature and source of such income. 30. In the case of CIT -vs.- Kamalini Khatau reported in 209 ITR 101 (SC), we .....

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ity of the Trust and the genuinity of the appointment of the trustee as well as the financial account of the Trust were not in dispute in that case. This decision, therefore, in our opinion, will not assist the assessee. So far as the decision of Moti Trust -vs.- CIT reported in 236 ITR 37 (SC) is concerned, in our opinion ,this decision is also not applicable to the facts of the case. In this decision, the Hon ble Supreme Court followed the decision of CIT -vs.- Kamalini Khatau reported in 209 .....

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. The Hon ble Supreme Court held that the income from the Trusts not assessable in the hands of the beneficiaries in India. The decision in our opinion will not assist the assessee. This decision will apply to the assessee once the assessee proves that M/s. White Label Trust is a genuine Trust and has been genuinely constituted in accordance with the law prevailing in that country and has duly complied with the laws of the Island of Jersey wherein it has been established, the sum received by the .....

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s involved in the case before us. We do not deny to the proposition of the law that in the case of Discretionary Trust, income of the beneficiaries are not chargeable to tax in case it has come out of income of the earlier years. Thus this case in our opinion is not applicable to the facts before us. 33. In the case of Amitab Bachchan -vs.- DCIT reported in 2 SOT 189 (Mumbai), we noted that there is a clear-cut finding of the Tribunal that "in any case, from the evidence on record, it was f .....

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see has not discharged the burden of prove as lie on the assessee specially the fact the assessing officer cannot have enquiry made in jersey and all the facts were in the knowledge of the assesse. 34. We have also gone through the decision dated 17.02.2006 of JCIT -vs.- Late Smt. Shantaben M. Patel L/H Sri Manubhai K. Patel in ITA No. 5000/Mum./2001 on which ld. Sr. Advocate has vehemently relied and contended that impugned case before us is duly covered by the said decision of the ITAT, Mumbai .....

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s fund of the Trust. As per the section 5 the basis of chargeability is the receipt or accrual of income or not any receipt. As per section 4 of the Income Tax Act, the tax is chargeable in respect of total income of the previous year. As such, the accumulation of the past years income which had accrued in the hands of the Trust in the relevant previous years and it cannot be said to have accrued once again in the hands of the beneficiary in the year of its distribution. The order of the ld. CIT .....

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jurisdiction with the assessisng officer has given clear cut finding about the discretionary trust and the amount has been received by the assessee out of the earlier income accumulated. The question of the genuinety of the trust or trustee has not been in dispute. The Tribunal did not examine the facts as well as the rules and regulations stipulated in the trust deed even though the tribunal is the final fact finding authority. The tribunal simply agreed with the finding of the CIT(A). In the .....

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ed that this decision is also not applicable to the facts of the case involved in our case. In that case, the question before the Hon ble Supreme Court was whether a particular transaction entered into by the assesseecompany in 1946 resulted in capital gains within the meaning of section 12B of the Income Tax Act. The facts involved in that case does not relate to the receipt of the money by the assessee as beneficiary of the Discretionary Trust. This decision, therefore, is not applicable to th .....

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e said amount to the satisfaction of the Assessing Officer in view of the clear mandate of the provisions of section 68. Hon ble Supreme court has also taken the same view even prior to the introduction of section 68 under the Income Tax Act, 1961 in the case of Kale Khan 50 ITR 1(SC) as has been discussed by us in the preceding paragraph. Similar view has been taken by the Hon ble Supreme Court in the case of CIT -vs.- Devi Prasad Vishwanath Prasad reported in 72 ITR 194 (SC), in which the Hon .....

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credit, it is open to the income Tax Officer to hold that it is income of the assessee, and no further burden lies on the Income Tax Officer to show that income is from any particular source. It is for the assessee to prove that, even if the cash credit represents income, it is income from a source which has already been taxed. Decision of the Allahabad High Court in Devi Prasad Vishwanath Prasad -vs.- Commissioner of Income Tax [1963] 50 ITR 641 reversed". Similar view has been taken by t .....

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f, the revenue is entitled to treat it as taxable income. To put it differently, where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that income is from any particular source. Decision of the Delhi High Court in Roshan Di Hatti -vs.- CIT [1972] 85 ITR 370 reversed". 35. In view of our afo .....

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