9911796707
TMI Blog2013 (2) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on has not been authenticated and is not clear from whom the documents were obtained. 5. The Commissioner of Income Tax (Appeals) failed to consider that the authenticity of documents is inadmissible in evidence and it requires to be attested under section 3(2) of the Diplomatic and Consular Office (Fees) Act 1948. 6. The Commissioner of Income Tax (Appeals) ought to have appreciated that even by the documents given by the Assessing Officer, amount was available from March 2000 and hence cannot be added as unexplained income for the AY 2002-03. The assessment proceedings for assessment in AYT 2002-2003 is therefore, barred by limitation. 7. The Appellant further submits that addition cannot be sustained without appellant being given opportunity to examine the veracity of the documents and verifying the same with the bank. 8. The Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer who had failed to appreciate that it cannot be taken that the appellant has agreed for any addition, but only those additions which have the sanction of law and that too when no penalty would be attracted. 9. The appellant craves leave to file add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um to the Foundation's ownership under the signature of the persons managing the Foundation. 6. Information is also on record to show who the beneficiaries under the said Foundation are. The translated portion of the information in German language is as under : Translated portion of the information in German Language : {Reference : imtransalator.com} LGT Bank in Liechtenstein, A Member of Liechtenstein Global Trust. Statement of Beneficial Ownership Ref: LTV/BAL/2664 Account/Securities Account 0163517 Contracting Partner, Webster Foundation, Vaduz The undersigned explains herewith that he/she is himself entitled to the ultimate economic assets. The fact that he is entitled to the economic assets, in the end, economically. 1. Name Mammen Mappillai Surname Kandathil Mammen Date of Birth 28-12-1922 Address No. 28, G.N. Chetty Road, T. Nagar, Chennai-17. Domicile India Nationality Indian 2. Name Mammen Surname Arun Date of Birth 12.11.1964 Address No.28,G.N.Chetty Road, T. Nagar, Chennai-17. Domicile India Nationality Indian 3. Name Mammen Surname Kandathil Mammen Date of Birth 08.2.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment is without merits and therefore, the proceedings may be dropped." 10. The request of the assessee was considered. It is seen from the copy of the letter annexed to the above that in reply to the communication claimed to have been addressed by K.M.Mammen as L/r of Late Mr. K.M. Mammen Mappillai, the bank has stated as under : Due to the Liechtenstein banking act, the bank can disclose information about any possible business relation between a bank client and the bank only to authorized person(s) and none else. We, therefore, regret our inability to give you the information called for by you. 11. The Assessing Officer further observed that the assessee's claim that there is no information of any such trust or the stated beneficiaries in the trust is not correct for the following reasons : 1. The assessee has claimed to have addressed a letter to the LGT Bank in Liechtenstein. In fact, the assessee has no privity of contract with the bank as the bank account stands in the name of the trust. If at all, to prove his honesty, he should have addressed the letter to the Trust and got the confirmation from the Trust. 2. Moreover, the information furnished by the bank o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid trust nor the Declaration of Endowment purported to have been signed by me on 24.3.2000. I submit that I have not signed any such document. Both the documents, the Declaration of Endowment and the letter referred herein below, shown to my authorised representative during the course of income tax proceedings, are unauthenticated and unattested copies and therefore ought not to be relied upon unless their authenticity is proved beyond doubt. Without prejudice to the above, I submit that the sum of Euro 123,000 endowed upon the aforesaid Trust on 24.3.2000 cannot be the subject matter of assessment in Asst. Year 2002-03. I further submit that the sum of CHF 770,796.70 outstanding as at 31.12.2001 as per the letter claimed by the Department to have been issued by the said Bank at the end of calendar year cannot be construed to have been deposited on 31.12.2001 and therefore cannot be the subject matter of assessment in Asst. Year 2002-03. In any case, the said sum of CHF 770,796.70 would include Euro 123,000 referred hereinabove. It is requested that copies of the said documents and all other documents and papers that maybe relied upon by the Department maybe given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter provided that no penal action be initiated against me." 15. Subsequently, the Assessing Officer asked another question, "Do you want to say anything else?" The assessee replied that: "Ans. Once again I reiterate whatever I have stated. To maintain the blemish less track record of the MRF Group in the matter of taxation all along with the Department and to discharge any pious obligation as a son to my deceased father, I have come forward to pay the taxes on the basis of information you reply upon without prejudice with the stand that I have got nothing to do with the said Foundation. I earnestly hope that the Department would reciprocate its gesture by not penalizing me by way of penalty or other punitive measures as a good gesture to the cooperation I have extended to the Department." 16. The Assessing Officer after considering the aforesaid depositions of the assessee observed that : "The signatures found in the documents are that of the assessee and the same exactly tallies with the signature found on the returns of income filed and the sworn statement. Since the assessee is the founder of the trust, and in the declaration of endowment he confirmed that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not established by Assessing Officer, section 69 cannot be invoked and the initial contribution by assessee cannot be assessed in this assessment year….". Insofar as the validity of re-opening is concerned, the CIT(Appeals) for the detailed reasons given in his order, rejected the grounds raised by the assessee and dismissed the appeal. 19. Insofar as the second ground raised by the assessee before the CIT(Appeals) about the "unacceptable evidence and based on conjuctures and surmises", the CIT(Appeals) observed that the information on record showed that on 24.3.2000 the assessee made a declaration of endowment in favour of M/s. Webster Foundation, 9490, Vaduz whereby the Foundation was endowed with the sum of Euro 123,000. The said sum of Euro 123,000 was transferred to the Foundation's account No. 0163517AAA EUR with LGT Bank in Liechtenstein Aktiengesellschaft, Vaduz. In the said declaration it was confirmed that the assessee had lawfully acquired and was entitled to dispose freely of these monies and it was also confirmed that the said declaration of endowment was free from mistakes, threat or compulsion. The said declaration was duly signed by the assessee. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the Department, the assessee was asking the Department to prove his deposits into his bank account. What is known and in the possession of the Department is the summary of bank account as on 31.12.01 on the letter head of LGT Bank in Liechtenstien. This account shows that the assessee had 778,437.80 Swiss Francs and the conversion rate applicable as on the relevant date is one Swiss Franc equal to ₹ 29.0818 INR and applying the same the amount lying in his bank account on 31.12.01 was ₹ 2,26,38,3712/- which pertains to the assessment year 2002-03 relevant to the previous year 2001-02. 23. It is a settled law that if an amount is credited in assessee's account, the onus of proof lies on him to explain the source of the same. To come to the above conclusion, the CIT(Appeals) followed the decision of the Hon'ble Supreme Court in the case of Devi Prasad (72 ITR 194) (SC) wherein it was held that the burden of proof lies on the person whose account is credited to explain the source of the same. He also relied on the decisions of the Hon'ble Supreme Court in the case of Sumati Dayal v. CIT (214 ITR 801), Kale Khan Mohammed Hanif v. CIT (50 ITR 1) (SC) and Sreele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d investment in Webster Foundation, gave copies of the evidences which are going to be used against him, full opportunity to rebut the same was given to him, a detailed sworn statement was recorded from him. Taking into consideration the question No. 22 and the reply given by the assessee and the Assessing Officer's conclusion that the assessee has invested unaccounted money from the evidences collected by the Department as detailed in the assessment order, it is well established that the assessee had made an unaccounted investment in the Bank account mentioned by the Assessing Officer. The CIT(Appeals) further observed that once the assessee agreed for the addition no appeal can be filed. In fact the assessee has agreed before the Assessing Officer and the Assessing Officer thereafter by taking into consideration all the facts and circumstances, the addition was made. The CIT(Appeals) by following the decisions in the cases of CIT v. East Coast Commercial Company Ltd. (63 ITR 449) (SC), Ramanlal Kamdar v. CIT (108 ITR 73) (Mad) and Malwa Texturising P. Ltd. & Ors. V. ACIT (77 TTJ 995) (Indore) confirmed the addition made by the Assessing Officer and dismissed the appeal filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. The said sum of Euro 123,000 was transferred to the Foundation's account No.0163517AAA EUR with LGT Bank in Liechtenstein Aktiengesellschaft, Vaduz. The said Foundation was created by the assessee and was duly signed by the assessee. The declaration of the assessee was also accepted by M/s. Webster Foundation and the same was confirmed by the Foundation's ownership under the signature of the persons managing the Foundation. The information on record shows that the beneficiaries of the Foundation are Mammen Mappillai Kandathil Mammen, Mammen Arun and Mammen Kandanthil Mammen. The information shows that the assessee had 7,78,437.80 Swiss Franc and by applying the conversion rate the amount lying in his bank account as on 31.12.2001 was ₹ 2,26,38,378/- which pertains to the assessment year 2002-03 relevant to the previous year 2001-02. Accordingly, the addition was made in the assessment year 2002-03. The main argument of the learned counsel for the assessee is that the addition made by the Assessing Officer by invoking sec. 69 of the Act was not relating to the assessment year under consideration. We are not agreeing with the submission of the learned counsel for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer has called for the explanation from the assessee and thereafter issued summons u/s 131 of the Act and made detailed enquiry with the assessee with regard to the investment in Webster Foundation. The assessee in response to question No.22 has admitted the following : "Q. No. 22. Do you want to say anything else. Ans. Once again I reiterate whatever I have stated. To maintain the blemishless track record of the MRF Group in the matter of taxation all along with the Department and to discharge any pious obligation as a son to my deceased father, I have come forward to pay the taxes on the basis of information you rely upon without prejudice with the stand that I have got nothing to do with the said Foundation. I earnestly hope that the Department would reciprocate its gesture by not penalising me by way of penalty or other punitive measures as a good gesture to the cooperation I have extended to the Department." 32. From the above it is very clear that the assessee has admitted before the Assessing Officer to pay the taxes. Therefore, after considering the entire material on record, bringing all the material to the notice of the assessee and after detailed que ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
