TMI Blog2017 (11) TMI 1850X X X X Extracts X X X X X X X X Extracts X X X X ..... ticulars were planted in those documents to the prejudice of the assessee by some unknown person is totally an unbelievable story. That some good Samaritan deposited that huge amount for the benefit of the assessee in the said foreign bank account and gave all the names and address and particulars of the assessee without any information to the assessee, is equally an unbelievable story. We do not find any relevance in ld. Counsel of the assessee s submission that the data were stolen by the foreign bank employee and it was not the case of a whistle blower. How this affects the veracity of information has not been spelt out. The above evidence is cogent and sufficient. Furthermore, we note that in terms of the extant secrecy provisions of liechestein, no further information from the said bank can be obtained by the A.O. The assessee is clearly trying to get benefit under this provision and denying the existence of the said bank account. This as per the facts discussed hereinabove is a self serving statement not at all sustainable. In the background of the above discussion, the onus now is clearly on the assessee to prove that the assessee has no beneficial interest in the said ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -03, wherein reopening as well as merits of the addition regarding deposits in the foreign bank account have been challenged. The grounds are common except for the change in amounts involved. For the sake of reference, the grounds of appeal from ITA No. 2795/Mum/2011 are being referred as under: 1. The learned CIT (Appeal) has erred in law and on sustaining the order of the A. O. reopening the assessment u/s. 147 of the Income Tax Act. 2. The learned CIT (Appeal) has erred in law and on the facts or sustaining the addition of ₹ 37,67,807/- without appreciating the fact that the A. O. had no authentic material before him relating to the trust, trustee, settlor, beneficiaries, whether the trust is specific or discretionary and dates of deposit in the bank account. 3. Without prejudice to Ground No. 2, (a) The learned CIT (Appeal) has erred in law and on the facts of the case in sustaining the addition of ₹ 37,67,807/- as income of the assessee without appreciating the fact that having relied on unauthenticated documents, the trust was not created during the year and that there were no deposits or withdrawals in the bank ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Year 2002-03) 5. These appeals relate to foreign bank account found in LGT Bank, Liechtenstein in the name of Manichi Trust. Brief facts of the case are that the Assessing Officer received information that the assessee was beneficiary of Marnichi Trust, having account in LGT Bank, Liechestien. The information received also gave summary of the Bank statement of the said Trust as on 31.12.2001 in which the opening balance was US $ 309,154.74 and the accrued interest thereon was US $ 83.82. Since this information was not disclosed by the assessee in his Income-tax Return, the assessment was re-opened by issue of notice u/s. 148 on 30.03.2009 and was served on the assessee on 31.03.2009. 6. The assessee in response denied knowledge of any such trust. Subsequently, the Assessing Officer issued following show cause notice: The Income Tax Department had received information that you are a beneficiary of the bank account opened in the name of Marnichi Trust Vaduz in LTG Bank, Liechtenstien. The amount deposited in the bank or the benefits derived out of the interest accrued or otherwise on such deposit was no where reflected in your returns of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the assets will be returned to the owner. Furthermore, such trusts as well as their maintaining shell entities are only charged 0.1% (minimum 1,000 Swiss francs) annually. Liechtenstein thus is known to be a tax haven. Investigations Germany According to the lead prosecuting office responsible for economic crime in Bochum, which is supported by prosecuting offices in other towns as well as the criminal police, currently about 600 to 700 individual are suspected in the investigations. In addition, search warrants have been issued. An official confirmation about the total number of suspects and amount of money involved has not yet been issued. According to the prosecutors, current investigations provide a very high level of evidence. The affair became known on February 14, 2008, when a raid was conducted against Klaus Zumwinkel, the chief executive of Deutsche Post AG, under the suspicion that he evaded about 1 million ($1.46 million) in taxes. Pressured by the government, Zumwinkel resigned from his position. Similarly a number of other individuals have been under investigation for months, and the appearance that the well to do have wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a number of steps including tighter regulations for financial institutions. Other Countries On February 24, 2008, it became apparent that secret bank information had also been sold to the British tax authorities and that about 100 individuals in the UK are at risk for investigations for tax evasion. The information also provided the governments of Australia, Canada and France with data. On February 26 it became known that the German Government was willing to share relevant data of the about 4,500 accounts with other governments; two third of these accounts belong to accounts of non-German individuals or entities, Fiscal authorities in Ireland, Finland, Italy, the Netherlands, Norway, Greece and Sweden indicated interest, and while the Danish government initially declined - it considered the material to have been stolen - it appears to have reversed its position. The governments of the Czech Republic and Spain have also announced investigations derived from Germany's list. India, however, has thus far not considered Germany's offer despite reports that many wealthy Indian citizens might have accounts in the bank. The above activities of the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the merits of the case. As regards the reopening, the ld. CIT(A) confirmed the reopening by holding as under: The first ground of appeal is against the reopening of the assessment by invoking the provisions of section 147 of the Income Tax Act, 1961. The appellant had not made any specific submissions on this issue except of relying on the decision of the Hon'ble Supreme Court of India in the case of Coca-Cola Export Corporation vs. ITO reported in 231 ITR 200 wherein it has been held that letters issued by Government of India limiting dollars remittances under provisions of Foreign Exchange Regulation Act, Income Tax Act and Foreign Exchange Regulation Act operates in different fields. And letters are not information in possession of ITO for purposes of reopening income tax assessments. The AO had reopened assessment for AY 2002-03 on March 30, 2009. This means that the assessment has been reopened within the time limit of 6 years from the end of the assessment year. The AO was in possession of fresh information which was very specific and hence the reopening of the assessment is upheld. The appellant has relied on the case of Coca-Cola Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant were specific and therefore, the AO was correct in reopening the assessment u/s 147. 9. As regards the merits of the addition, the ld. CIT(A) confirmed the same also. The ld. CIT(A) wherein observed as under: 9. The AO had received specific information regarding the undisclosed income of the appellant in the form of the summary of the bank statement of the Trust in which the appellant is the beneficiary. The bank summary stated that the name of the trust is Manichi Trust. The beneficiaries are four individuals viz., Hasmukh Gandhi Madhu Gandhi Nirav Gandhi Chintan Gandhi All the above four individuals are residing at 802, Citadel, 18-B, L D Ruparel Marg, Malabar Hill, Mumbai - 400 006. This information received by the AO matches completely with that of the appellant. The date of forming the trust was 10/12/93. The status of the account is 'active'. The bank account no of the Trust is 0145733. The entire information available with the AO was provided to the appellant. The AO made the addition since the appellant has not produced any documentary evidence to the contrary. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation received in this case is as on 31.12.2001 which falls prior to the previous year involved. The only information Assessing Officer has is that the assessee is a beneficiary of a Trust which has a bank account in LGT Bank, Liechtenstein. Merely on this information, the Assessing Officer has jumped and concluded that the beneficiary has contributed in the said bank account. The ld. Counsel of the assessee submitted that the time limit of section 149(1)(b) for reopening where only addition for interest is involved, is violated. The ld. Counsel referred to the case laws for the proposition that the reopening should be based upon the reason to believe and not reason to suspect. The ld. Counsel of the assessee further submitted that it is the discretionary trust and not a specified trust. In this regard, he referred to the Hon ble Supreme Court decision in the case of ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437 (SC). The ld. Counsel of the assessee submitted that any liability in this regard should be fastened on the settler and not the assessee. The ld. Counsel referred to the Hon'ble Bombay High Court decision in the case of Joshi Dattaram Shridhar Bhosale Vs. ITO An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stage of reopening, the Assessing Officer need not conclusively prove that there has been concealment on the part of the assessee. He submitted that the Assessing Officer only needs to have a reason to believe. In this case, data were obtained from the sovereign government of Germany from the employee of the LGT Bank, Leichtenstein. This information was passed on to the sovereign government of India. Thereafter, the said information comes into the possession of Central Board of Direct Taxes and, thereafter, to the assessing officer. In this regard, the ld. Counsel of the department submitted that the confidential report containing confidential documents are available. He produced the same for the verification of the Bench. We have gone through these documents. The ld. Counsel of the assessee took objection that the Bench cannot rely on any document which is not confronted to the assessee. However, on going through the records, we find that the copy of the relevant documents have already been provided to the assessee. Hence, this objection of the assessee is not sustainable. The ld. Counsel for the Department submitted that identical issue was considered in the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. The confidential folder provided to us by the ld. Counsel for the Department also contained in the documents assessee s names as well assessee s in the case of Shri Ambrish Manoj Dhupelia and (supra). The distinction sought by ld. Counsel of the assessee being in the present case and the case of Dhupelia group is not sustainable as documents are similar. In the said decision of the tribunal in ITA Nos.3544, 3545 3546/Mum/2011 for assessment year 2002-03 vide order dated 31.10.2014, the tribunal had upheld the reopening as well as the addition of the amount of deposit in the bank account in the hands of the assessee s. The relevant portion of the order may be gainfully referred as under: 2.2. We have considered the rival submissions and perused the material available on record. Since identical facts/issues are involved and all the assessees are relatives, therefore, these appeals are being disposed of by this common and consolidated order. In the case of Shri Mohan Manoj Dhupelia the facts in brief are that the assessee filed return of income u/s 139(1) of the Act on 1st August 2002 showing total income of ₹ 1,97,650/-. Subsequently, information was recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Counsel. We are reproducing hereunder the exhibit list (Hearing) on Taxhaven Bank and US tax Compliance (July 17 and 25, 2008) for ready reference and proper conclusion. United States Senate PERMANENT SUB COMMITTEE ON INVESTIGA TIONS Committee on Homeland Security and Governmental Affairs Carl Levin, Chairman Norm Coleman, Ranking Minority Member EXHIBIT LIST Hearing On TAX HAVEN BANKS AND U. S. TAX COMPLIANCE July 17 and 25, 2008 1. Marsh Foundations, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 2. Wu Foundation, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 3. Greenfield Foundation, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 4. Laity Foundation, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. 5. a. Statement of former LGT Treuhand employee, formerly known as Henrich Kieber. b. Liechtenstein warrant for the arrest of Henrich Richer. DOCUMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndum by Kim Choy regarding JCMA Foundation, dated June 26, 2002. 23. Documents regarding withdrawal of$1 00,000 by JCMA Foundation/william Wu from LGT through HSBC Hong Kong and Shanghai Banking Corp. Hong Kong, June 2002. 24. Excerpt from Resolution, The Foundation Board of JCMA Foundation, indicating statement of assets asper3l December2001 in the total amount of USD 4.283,4 73 .49. dated February 7, 2002. 25. Excerpt from Resolution, The Foundation Board of JCMA Foundation, indicating inventory of assets and liabilities at 31 December 2003 showing a total of USD 2.1 7Z145.9 7, dated March 10, 2004. 26. Excerpt from Resolution of the Foundation Board of JCMA Foundation, showing assets as per 31 December2004 amount to USD 1,202,636.25, dated February 13, 2006. 27. Excerpt from Resolution of the Foundation Board of JCMA Foundation, showing assets as per 31 December2005 amount to USD 1,188,957.64, dated March 30, 2006. 28. Excerpt from Resolution of the Foundation Board of JCMA Foundation, showing assets as per 31 December2006 amount to USD 422,249.10, dated April 18,2007. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary 28,1998, meeting in Bendern with Peter Widmer regarding Luperla Foundation, Vaduz ( Luperla ). 46. Memorandum for the File, dated June 26, 2001, regarding Luperla Foundation. 47. Memorandum for the File, dated July 16, 2001, regarding Luperla Foundation, Valuz. 48. Memorandum for the File, dated December 17, 2001, regarding Luperla Foundation, Valuz. 49. Memorandum for the File, dated December 18, 2001, regarding Luperla Foundation, Valuz. 50. Memorandum for the File, dated December 20,2001, regarding Luperla Foundation, Valuz. 51. Documents regarding Beverly Park Corporation. 52. IRS Information Document Requests (IDR) regarding Beverly Park Corporation. 53. State of Delaware, Division of Corporations, Entity Details for Beverly Park Corp., listing Incorporation Dates of December 17, 1991, and January 3, 1997. DOCUMENTS RELATING TO GREENFIELD ACCOUNTS: 54. LGT Memorandum for the Record, dated March 27, 2001, memorializing a March 23, 2001 meeting regarding Maverick Foundation between LGT and Harvey and Steven David Greenfield. 55. WI Summary of Maverick Foundation as of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion related to LGT and the Qualified Intermediary (QI) Program. 83. Documents related to LRAB Foundation. DOCUMENTS RELATED TO UBS: 84. Wealth Management and Business Banking, Client Advisor s Guidelines For Implementation and Management Of Discretionary Asset Management Relationship With U.S. Clients (2002). 85. Cross-Border Ban king Activities into the United States (version November2004) 86. Restrictions on Cross-Border Banking and Financial Services Activities. Country Paper USA (Effective Date June 1, 2007), prepared by UBS. 87. Excerpt of Key Clients in NAM, Business Case 2003-2005. 88. Correspondence of UBS to Clients dated November 4,2002, We are writing to reassure you that your fear is unjustified and wish to outline only some of the reason why the protect ion of client data cannot possibly be compromised .... UBS s entire compliance with its QI obligations does not create the risk that his/her identity be shared with U.S. authorities. 89. Martin Liechti (Head of UBS Wealth Management Americas) email, January2007, regarding net new money goal and Year of the Pig. 90. Referral Campa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Park Avenue Corporation to Beverly Park Corporation, March 1997. b. Beverly Park Corporation Guest Log, Beverly Hills House and New York Condo, July 1999-May 2000. 114. Hidden Money Trail, chart prepared by the U. S. Senate Permanent Subcommittee on Investigations. Tax Haven Bank Secrecy Tricks Code Names for Clients Pay Phones, not Business Phones . Foreign Area Codes Undeclared Accounts Encrypted Computers Transfer Companies to Cover Tracks Foreign Shell Companies Fake Charitable Trusts Straw Man Settlors Captive Trustees Anonymous Wire Transfers Disguised Business Trips Counter-Surveillance Training Foreign Credit Cards Hold Mail Shred Files Liechtenstein Secrecy Laws Article 14 of the Banking Act: The members of the organs of banks and their employees as well as other persons acting on behalf of such banks shall be obliged to maintain the secrecy of facts that they have been entrusted to or have been made available to them pursuant to their business r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat are reserved to an authority or an official, whoever performs such acts for a foreign party or another foreign organization, whoever aids and abets such acts, shall be punished with Imprisonment up to three years or a fine, in serious cases with imprisonment of no less than one year. Economic Intelligence Service (Art. 273 SPC): Whoever seeks out a manufacturing or business secret in order to make it accessible to a foreign official agency, a foreign organization, a private enterprise, or their agents, whoever makes a manufacturing or business secret accessible to a foreign official agency, a foreign organization, a private enterprise, or their agents, shall be punished with imprisonment upto three years or a fine, in serious cases with imprisonment of no less than one year. Imprisonment and fine can be combined. 6. The scope and impact of the LGT tax Investigation and any lessons learned Tax Office Strategy The ATO is investigating the use of Liechtenstein entities and bank accounts in collaboration with other revenue agencies. In Australia, we are conducting 20 tax audits which are likely to raise tax liabilities In exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eficiaries. LGT allegedly designs client structures so that the client or beneficial owner, is unable to be connected to the Liechtenstein entity, whether that entity te a foundation, trust or anstalt. The services provided by LGT - on the banking and secrecy laws operating hi Liechtenstein to prevent disclosure of the client s identity or information. LGT will also arrange to open and operate a bank account for the foundation or trust It has established for its client The bank accounts are typically held hi the name of the entity, to avoid any connection with the instructing chant, and to meet the bank s anti-money laundering obligations. Assets administered by LGT may be invested In a diverse range of managed funds and currencies. Further, safety deposit facilities can be arranged for clients to secure other valuable items such as art and jewellery which may also form part of the Investment portfolio. Funds owned by entities that are establish d by LGT for its clients are commonly Invested with its own bank or funds management entities: LGT Bank in Liechtenstein; LGT Capital Invest Limited Grand Cayman; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th It and clients are provided with codes and passwords to maintain confidentiality and secrecy. Intelligence held by the ATO Indicates that at July 2006 there were 14 banks operating hi Liechtenstein with funds under control-of approximately 255 billion Swiss francs. Also operating in Liechtenstein was numerous Treuhand (Trust Service Companies). Further intelligence indicates that as at November 2006 approximately 127,000 entities were registered with the public company registry (the population of Liechtenstein Is approximately 35,000). The ATO has employed several compliance strategies - audits, Issuing Information production notices (both domestically and off-shore), conducting formal and informal interviews, accessing premises (with or without notice) to copy documents, and exchanging information with our Tax Treaty partners. More importantly, the sharing of intelligence between International tax agencies has provided a unique understanding of Liechtenstein financial services and entitles end will provide an opportunity to engage with Liechtenstein to achieve greater transparency and exchange of Information. The ATO welcomes news th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to establish It 11 them - based on legal expertise - companies or trusts in Liechtenstein to enhance profits. The Liechtenstein jurisdiction qualifies as an offshore financial centre. Foreign investors have the opportunity to establish companies or trusts ill the Principality of Liechtenstein to enjoy the advantages of our offshore financial centre due to: A very modest tax regime with special advantages for private asset structures i.e. legal entities and trusts which do not pursue any economic activity; A company law which offers next to the ordinary kind of companies like the company limited by shares ( Aktiengesellschaf/AG) those specifically designed to serve the needs coming along with holding of assets, namely the foundation (Stiftung) and the establishment (Anstalt); The institute of trusts shaped according to the English law trust; A high standard of secrecy laws. Key Figures - Foundation: 1719 AD - Government: constitutional hereditary monarchy - Economy (GNP): CHF 5.2 Billion (2009) - Currency: Swiss Franc (CHF) (Possible to invest in any currency) - Siz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appointed. In this case the annual accounts approved by the auditor must be submitted to the Liechtenstein tax administration. - In case of losses or liabilities only the assets of the establishment have to be used to cover them. - The minimum capital to constitute an establishment is CHF 30'000. Trust Reg (Trust Enterprise) The trust-reg. can be structured like a company limited by shares or foundation as an instrument for commercial activities or for the administration of assets. - The trust reg. qualifying as private asset structure pays an annual tax of CHF 1 '200 only. - Distribution to the beneficiaries as well as profits earned are not subject to any further tax. - The supreme authority is vested in the settlor and is transferable. - The beneficial interests may be assigned to persons other than the settlor. - The administration is taken care by the board of trustees. - If commercial activities are pursued or the articles make provision for such activities an auditor must be appointed. In this case the annual accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urator or a collator can be appointed. - The keeping of annual accounts is not obligatory. - Trusts according to foreign law can be formed in Liechtenstein. - The assets held by the trust qualifying as private asset structure are subject to an annual tax of CHF 1 '200 only. - The distributions to the beneficiaries as well as the profits earned are not subject to any further tax. Reasons for establishing Liechtenstein Companies The holding of assets Assets of holding companies can be invested in any kind of property; e. g. bank accounts, publicly traded or not traded shares, participations in other companies, real estate property, art and so on. The earnings stemming from the assets held by a holding company, be it interest on bank accounts, dividend payments from shares, earnings from participations in other companies, proceeds of sales or royalties qualify as income of the holding company which are in case of a private asset structure subject to an annual tax of CHF 1 '200 only. - The pursuit of business Profits stemming from business transactions of companies c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an hourly fee rate. The fee rate normally varies between CHF 100 for administrative work to CHF 500 for management and legal work and depends on the level of sophistication involved, the assets concerned as well as on what the parties have agreed. - All fees are subject to 8 % V A T and are charged against the company/trust and may be deducted from the assets held by the same. Conclusions The Liechtenstein jurisdiction qualifies as an offshore financial centre due to: - A very modest tax regime; - A company law which offers next to the ordinary kind of companies like the company limited by shares (AG) those specifically designed to serve the needs coming along with holding of assets, namely the foundation (Stiftung), the establishment (Anstalt) and the trust reg; -The institute of trusts; -A high standard of secrecy laws. Foreign investors have the opportunity to establish companies or trusts with HOST trust reg. in the Principality of Liechtenstein to enjoy the advantages of our offshore financial centre. Contact Details Gerhard R. Holzhacker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulled down the wall of secrecy and will allow partner nations like India to seek information about suspect individuals and entities and provide for obtaining banking information about such people. The multilateral convention of the 0 ECD provides for all forms of mutual assistance like exchange on request, spontaneous exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection while protecting taxpayers' rights. It also provides the option to undertake automatic exchange, requiring an agreement between the parties interested in adopting this form of assistance. 2.4. So far as, the contention of the ld. Counsel for the assessee that there is violation of principal of natural justice and reasonable opportunity was not provided to the assessee by the Assessing Officer, are concerned, we are not in agreement with this assertion of the ld. Counsel because the assessee was duly provided with the reasons of reopening of assessment and English translated copy of the documents. 2.4.1 In view of the above, we find no substance in the assertion of the assessee that the reopening of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee deposited the said amount in the name of the said trust during the year (pg-35 para-1). The Assessing Officer was again requested to furnish the evidence of such deposit by the assessee and the person who deposited the amount (pg-36). Vide para-13 of the said letter it was claimed that she had not received any benefit from the said trust (pg-39). Identical plea was raised before the ld. CIT(A) also regarding non-supply of material or opportunity to the assessee which has been dealt with by the ld. CIT(A) as under which is worth quoting (page-15) which reads as under :- The appellant has wrongly alleged that complete material was neither given nor opportunity to cross examine was given. The Assessing Officer has handed over complete set of documents received by him to the appellant during the course of assessment proceedings. Further, as a part of the remand report, the Assessing Officer had called the appellant and opportunity to cross examine the Assessing Officer himself was available to the appellant, however, the appellant chose not to appear and hence cannot raise the bogey of cross examination here. Further, the right to cross examine is avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion in October, 2013. The ld. Spl. Counsel showed the bench a confidential list containing the names of the present assessee as trustee/beneficiaries of the trust. It was requested that since the investigation is in progress, therefore, at this stage it will hamper the investigation if the document is made public as the same list is containing the names of other beneficiaries also. On going through the bank summary in respect of Ambrunova s trust account in LTG Bank Liechtenstein, we find that there is a credit balance of USD 24,06,605 (equivalent to ₹ 11,60,99,390/-).It is worth mentioning the observation/conclusion made/drawn by Hon ble Justice Krishna Iyer, (the Hon ble Apex Court) in the case of Chairman Board of Mining Examination Ors. Vs Ramjee (1977 AIR 1965) (SC) order dated 3rd February 1977. HELD (1 ) Law is meant to serve the living and does no beat its abstract wings in the jural void. Its functional fulfillment as 'social engineering' depends on its scrutinized response to situation, subject-matter and the complex of realities which require ordered control. A holistic understanding is simple justice to the meaning of all legislations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able opportunity the Court will decline to be punctilious or fanatical as if the rules of natural justice were sacred scriptures. In the instant case, the Board cannot be anath-ematised as condemning the man without being heard. The respondent has, in the form of an appeal against the report of the Regional Inspector, sent his explanation to the Chairman of the Board. He has thus been heard dad compliance with Regulation 26 in the circumstances is complete. [909G-H, 910A-G] Tereaesai's case [1970] 1 S.C.R 251; Management of DTU[1973] 2 S.C.R. 114: Tandon's case [1974] 4 SCC 374 referred to. Observations: Sensitive occupations demand stern juristic principles to reach at scapegraces, high and low, and not mere long drawn-out commissions whose verdicts often provedilatory 'shelter' for the men in whom Parliament his entrusted plenary management. Any sensitive jurisprudence of colliery management must make it cardinal to pt nish the Board vicariously for any major violations and dreadful disasters, on macro considerations of responsibility to the community. The Board must quit, as a legal pendry, if any dreadful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or stash funds and it was only possible when India became signatory to a world-wide convention formulated by OECD an international policy advisory body which formulated global tax standards to fight tax evasion and concealment of illicit funds. It also provided option to undertake automatic exchange of information. It is a common knowledge that discretionary trusts are created for the benefit of particular persons and those persons need not necessarily control the affairs of the trust. Still the fact remains that they are the sole beneficiaries of the trust. Thus totality of facts clearly indicate that the deposit made in the bank account of the trust represents unaccounted income of the assessee, as the same was not disclosed by the these assessees in their respective returns in India, consequently, the addition was rightly made by the Assessing Officer and confirmed by the ld. CIT(A). 4. Finally, the all the appeals of the assessee stand dismissed. 16. From the above, we find that in the tribunal s order, it has been held that the assessee is a beneficiary of Ambrunova Trust. In the present case, the only distinction is that the assessee s are benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the employee of the said foreign bank, sovereign government of Germany comes into possession of documents relating to the deposit in the said bank. These deposit and detail give the name and address, date of birth, passport copy and all relevant particulars of the assessee. Then the sovereign government of Germany passes on this information to the sovereign government of India. Thereafter, the said document and information comes into the possession of Central Board of Direct Taxes and, thereafter, to the assessing officer. In this scenario, the assessee claim that the assessee has no information about the said bank deposit is totally unsustainable. That assessee s name and address, date of birth, passport copy and other particulars were planted in those documents to the prejudice of the assessee by some unknown person is totally an unbelievable story. That some good Samaritan deposited that huge amount for the benefit of the assessee in the said foreign bank account and gave all the names and address and particulars of the assessee without any information to the assessee, is equally an unbelievable story. We do not find any relevance in ld. Counsel of the assessee s submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account are under challenge. For the sake of convenience, we refer to the facts and figures from ITA No. 5003/Mum/2014. 23. Brief facts of the case are as under: Information was received by CBDT from German Authorities about bank account held by a trust named as Manichi Trust where economically beneficial ownership of the assets is of the appellant and his family members. Specific details such as date of birth, residential address, nationality, domicile etc., were available with the bank authorities. The summary of account as on 31.12.2001 also showed that the interest income had accrued on the deposits made in the said bank account. All these information was duly provided to the assessee during the course of assessment proceedings for assessment year 2002-03 by the Assessing Officer. 24. On these facts, the assessment was reopened and the Assessing Officer made addition for the interest accrued on those bank deposits. In appeal before the ld. Commissioner of Income Tax (Appeals), the assessee challenged both the reopening as well as merits of the addition. The ld. Commissioner of Income Tax (Appeals) affirmed both the action of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that it is his name and details mentioned in the list of beneficiaries. The evidence is therefore, direct, reliable and demonstrative proof of the appellant having stashed unaccounted money, in the name of trust, abroad. Although the appellant has simply denied knowledge of any such trust or bank account, he has no explanation as to how his correct name, address, date of birth, nationality could be available to a 'person creating trust in a far off place like Vaduz. Thus, it was held that this trust is created for the sole benefit of the appellant and his family members. The knowledge of the trust and its other related details which is sought by the appellant are information which are in the exclusive knowledge of the appellant and the appellant has no option to remain selective, elusive, evasive or restrained in disclosure. It has been held in the above cited judgement of Hersh Win Chadha that The assessee has to give proper explanation and disclose facts which are in his exclusive knowledge. The assessee lias no option to remain selective, elusive, evasive or restrained in disclosure. Further, it has been held that it is the duty of the revenue authorities to be mindful o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y specific details provided by the appellant during the course of assessment proceedings of such benefits, the following method of calculation of interest was adopted as reasonable method by me A.O. Therefore, the same is quoted below verbatim 6.8 an average rate of interest @ 3.8225% on US $ (U.S. Department of the Treasury interest rates as on 31.3.2005 on deposits for 1 year; 3.35%, 2 years :3.8%, 3 years : 3.96% and for 5 years 4.18%), the interest accrued during the F.Y.2004-05 on the deposited amount of US $3,09,154.74 is worked out to US $ 11,817.44. Considering the conversion rate of US $ to INK as on 31.3.2005 at ₹ 43.74/-, the total accrued interest / benefit derived out of deposit / asset in LGT Bank in the name of Manichi Trust, Vaduz, Liechenstein is worked out in INK at ₹ 5,16,895/-. The appellant's share @ 25% amounts to ₹ 1,29,224/- (₹ 5,16,895/- * 25%) which is taxed as his concealed income for the assessment year under consideration. 6.9 I have carefully perused the assessment order, the grounds of appeal, the statement of facts and the authorized representatives written submissions. The appellant's AR has ref ..... 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