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2016 (9) TMI 66 - GUJARAT HIGH COURT

2016 (9) TMI 66 - GUJARAT HIGH COURT - TMI - Addition on account of unexplained credit to the capital account of the assessee - Held that:- The sources of receipts are reasonably explained by the assessee. There is no dispute that the money was received, through banking channels, from Dubai and even the source of funds in Dubai has been explained and stands accepted. There is no basis for seeking to tax the same income again in the hands of the assessee. Under these circumstances, we are not inc .....

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already taxed before the Settlement Commission in the declarations made by the group companies. We see no reason to interfere - Decided against revenue - TAX APPEAL NO. 653 of 2016 - Dated:- 30-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : MR PRANAV G DESAI, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 04.01.2016 raising following question for our consideration: W .....

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pted by the Settlement Commission. The Assessing Officer, however, questioned the assessee about such amount being directly introduced in the capital account without routing through P & L account. The Assessing Officer rejected the contentions of the assessee that such amount cannot be taxed in the hands of the assessee either on the basis of accrual or receipt and, in any case, the same having been taxed by the Settlement Commission cannot be taxed again. The Assessing Officer rejected both .....

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her on receipt basis or on accrual basis or on the basis of deeming provisions. As far as the undisclosed income of US $ 80,22,421 available at Dubai is concerned, the same was received/accrued before the date of search as is evident from the entries recorded in page 19 of Annexure A/1 seized during the course of search on 24.09.2002. This undislcosed income was first declared before the Settlement Commission mainly in individual hands by the three brothers including the appellant and on rejecti .....

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the same block period including same regular assessments till A.Y. 2003-04. It is thus evident from the record that the undisclosed income available at Dubai was received/accrued and earned before the date of search. Thus, the amount transferred by the appellant was out of the undisclosed income earned before the date of search. The business concerns had paid most of the due taxes on that undisclosed income during the course of proceedings before the Settlement Commission. The appellant had tran .....

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ome of the appellant on receipt/accrual basis. As far as the deeming provisions are concerned, it can either be seen on the ground of cash credit or on the ground of bank deposit. The cash credits or the bank deposits can be treated as assessee's income if no explanation is offered by the appellant for the nature and source of the cash credits or bank deposits as the case may be or the explanation so offered by the appellant is not found satisfactory in the opinion of Assessing Officer. No s .....

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on 03.01.2005 which belongs to the appellant family. The transferred amount of ₹ 1,76,71,570/- was thus part of the tax paid undisclosed income. Otherwise also, if the income had been taxed on receipt/accrual basis in the hands of the business concerns, the same income cannot be subject to tax on application of income. It amounts to double taxation. Thus, the transferred amount cannot be subject to tax again as income of the appellant. 3.9 Considering the above discussion in para 3.2 to 3. .....

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