TMI Blog2016 (12) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... mount which was attributed to the deceased assessee, i.e. UK £2 million in fact belonged to him. In fact, the materials show that these amounts were brought to tax in the hands of Sh. Kumar. Rather than accepting what ought to be the correct standard, this Court is of the opinion that the tax authorities did not do what they could have and had not done what they should have when they did get information in September 1989 and woke-up far too late. For these reasons, we are of the opinion that the question of law framed should be answered against the revenue and in favor of the assessee. - ITA 613/2004 - - - Dated:- 15-12-2016 - S. Ravindra Bhat And Najmi Waziri, JJ. For the Appellant : Sh. Ashok. K. Manchanda, Sr. Standing Counsel with Ms. Sherry Goyal, Advocates For the Respondent : Sh. Salil Kapoor, Ms. Ananya Kapoor, Sh. Sanat Kapoor and Sh. Sumit Lal Chandani, Advocates ORDER Mr. Justice S. Ravindra Bhat (Open Court) 1. The question of law framed in this case is as follows: Whether the order of the Tribunal deleting additions made by the Assessing Officer and confirmed by the CIT(A) relating to interest on bank accounts in UK and loan given by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 25 in ten years 1981 2 or 3 times, book at passport. A reading to the above answers makes clear that the assessee is having transport business in India, and money deposits in Banks in U.K. He visited U.K. frequently, about 2-3 times in a year. It was gathered from the investigation by the U.K. Tax Authority in the case of Kumar Bros., under their company name of Rajan Trading Co. Ltd. and during the interrogation, the deceased assessee deposed before the U.K. Tax Authority that he had bank deposits to the tune of 2 Million in U.K. The U.K. Revenue authority stated that Mr. Bijli, the assessee, came to the U.K. in June, 83 in an attempt to explain the presence of that money and when interviewed, claimed that the monies contained within the accounts belong to the assessee. The assessee was asked to explain that in view of above facts, and his statement before the U.K. Tax Authority, why the amount of ₹ 2,40,00,000/- equivalent to 2 million lying in U.K. Banks, be not treated his income. The assessee merely stated that the above accounts/allegations, are wholly baseless that there is no material to allege that the assessee had various accounts. The above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriods for which the interest arose is not available. The third category was for accounts, the interest on which was assessed on the Kumars treated as agents for unnamed foreign parties, this interest being Pound 558590. This information has been provided under the terms and conditions of Article XXV of our Double Taxation Conventions. 7. The ITAT carried out an analysis of the queries put to Sh. Kumar and the materials considered, including the bank account statements in relation to Sh. Kumar as well as Sh. Chhabra. It thereafter was of the opinion that since UK revenue authorities did not accept the assessee s explanation, particularly, that the amounts deposited belonged to him, there could be no question of assessing him since such amounts have been brought to tax in the UK. The ITAT, based its conclusions on the following observations: 16. We may refer to another important aspect having a bearing on the evidentiary value of the interview notes communicated by the British Tax Authorities. Interviews with the assessee were conducted by the tax officials of Inland revenue UK at the office of Rothburn Burton Partners, who were Tax Advisors of Shri K.K. Kumar. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1980 or 1983. Thus, the date of the loan in question as falling during the year under reference or being out of undisclosed funds generated during the year under question is not established. Even otherwise, from the interview it is clear that the assessee has been having deposits right since 1974 in the bank and therefore, any addition merely on the basis of answer to question no.36 would not be justified. Thus, even on merits of the two additions, proceeding on the basis of the bank accounts as per the interview recorded by the tax officials, we feel that the impugned additions deserve to be deleted. 8. It is urged by the Revenue that the ITAT s observations with regard to the probative value of the statements made are erroneous. Highlighting the compulsions of the Indian authorities who were concerned by the information flow as well as the nature of the revenue proceedings in UK, it was contended that the best evidence was in fact available with the assessee who did not reveal anything before the Indian tax authorities or even for that matter, the UK authorities. Sh. Ashok. K. Manchanda, learned counsel emphasized that adverse inference ought to have been drawn and was in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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