TMI Blog2020 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... hese concerns. The sole reliance upon the FIRC which is only a certificate of remittance from abroad in absence of the overwhelming surrounding circumstances by the learned CIT appeals not at all sustainable. Order of learned CIT(A) is to set aside the order of the assessing officer is to be restored. Accordingly we set aside order of learned CIT(appeals) and restore that on the assessing officer on the issue of credits in the bank account. As regards the investment in shares out of the said bank account the same cannot be added again as unexplained investment. It is settled law that assessee cannot be subject to double jeopardy. Hence qua the unexplained investment in shares the order of CIT(A) is upheld. - Revenues appeal stands partly allowed. - I.T.A. No. 677/Mum/2018 - - - Dated:- 19-2-2020 - Shri Shamim Yahya (AM) Shri Ramlal Negi (JM) Assessee by: Shri Rishabh Shah Department by: Smt. N.V. Nadkarni O R D E R Per Shamim Yahya (AM) :- This appeal by the Revenue is directed against the order of learned CIT(A) dated 17.11.2017 and pertains to A.Y. 2008-09. 2. Grounds of appeal read as under :- 1. On the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer opined that the money received by Mr. Rangachari through his fully owned companies, is taxable in India. Further during the course of search action it was also found that during F.Y. 2007-08, assessee made investment worth of ₹ 2, 57,970/ - in the following concerns. Company Name Date of payment Amt. Paid Total (Rs.) Valuable Technologies Ltd. 29.02.2008 1,21,560 (2,770) 1,64,870 Arun Rangachari 20.03.2008 1,18,790 V2 Media Pvt. Ltd. (Merged with VTL) 29.02.2008 46,080 Impect Media 29.02.2008 56,240 56,240 Spadeworx 27.03.2008 25,200 25,200 Dusane 08.03.2008 11,660 11,660 Total 2,57,970 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Act, 1961 in the case of M/s. Dar Media Pvt. Ltd. on 10.04 2013 and consequent to the search the statement of Shri Arun Rangachari was recorded in the capacity of Director of this entity. In the statement Shri Rangachari claimed to have rendered consultancy services to Gulf Finance House (GFH) Khaleej Bank of Commerce (KBHC) which were executing certain projects in association with the Valuable Group). From the email found during the search action it is confirmed that Shn Arun Rangachari's 100% owned entities in Mauritius i.e. Dar Capita! Ltd. and Thurles International Ltd. had received ₹ 465 crores, equal to USD 93 . These two entities are owned 100 percent by Shn Rangachari, by his own admission in his statement recorded on 13.04.2013 Services have been rendered by Mr. Rangachari in India and invoices have been raised to both these entities, as mentioned by him in his statement, in lieu of which payments have been made by GFH, as mentioned in email. Therefore, the money received by Mr. Rangachari through his fully owned companies, is taxable in India in his hands. During the course of assessment proceedings, it is submitted that Thurles International Limited w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor of the above company his statement was recorded. From the emails found and statement recorded and details available on record as part of the seized material it was found necessary to reopen the case u/s. 147 of the IT Act, 1961. Hence I find that AO had sufficient material on record and so reopening is neither erroneous nor against the law. The AO had provided the reasons recorded for reopening the assessment to the appellant as requested. So this ground of appellant is rejected and appeal is decided on merit. 8. As regards issue of merit learned CIT(A) accepted the assessee s contention that FIRC certificate is sufficient and section 68 in such circumstances will not be applicable. He referred to section 68 and concluded as under :- From the plain reading of section it is clear that the appellant's case nowhere comes under the provisions of section 68. The amount so transferred is through banking channel and the above money is very much explained. The appellant has submitted that Board circular No. 5 dated 20.02.1969 which is relevant. The Board has very categorically said that it is only in case where money is claimed to have been brought from outside otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projects in association with the Valuable Group. Further, Shri Arun Rangachari in his statement recorded during the course of search proceedings also confirmed that M/s. DAR Capital Limited and M/s. Thurles International Limited are owned 100 percent by him. That the email from Gulf Finance House addressed to Shri Arun Rangachari was found which stated that please note that GFH over the years, has for certain of its projects made payments amounting to USD 51.5m to DAR Capital Limited and USD 41.5m to Thurles International Limited . That during the course of search, it was also observed that assessee has made investment in shares in Indian entities, the source of which is not only from his personal account but also from DAR Capital. That from the email found during the course of search action, it was also confirmed that the Shri Arun Rangachari s 100% owned entities in Mauritius i.e. Dar Capital Ltd. and Thurles International Ltd. had received ₹ 465 crores equal to USD 93 on account of service rendered in India and the proceeds from the same have been used to make investments in India. 13. That during the year ₹ 1.568 crores credited in assessee s NRE account Chenna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion it can be submitted that section 68 is not applicable in the case where the persons of India origin residing abroad but intending to return to India and settle here permanently, the money brought in or remitted from abroad by such persons through banking channels, no question at all to be asked by the Department as to the origin of the money. Furthermore, she submitted that in the instant case, the assessee is not a person who intending to return to India and settle here permanently. Hence, she submitted that Circular relied upon by learned CIT(A) is not correct. 15. Upon Careful consideration we find in a search and seizure action assessee has accepted he has rendered services in India to Gulf finance house (GFH) Bahrain which was executing certain projects in association with the Valuable group. During the search itself email from Gulf Finance House addressed to the assessee was found wherein it was mentioned that GFH over the years has made payments to US 51.5 million to DAR Capital ltd and US dollar 41.5 million to Thurles International Ltd Mauritios. These two companies were hundred percent owned by the assessee. In these circumstances the money found credited in assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. The facts of the case prima facie indicate that assessee has received sums abroad from foreign concern on account of services rendered in India. In these circumstances it was incumbent upon the assessee to cogently rebut that assessee has not received any sums abroad for services rendered in India which could have been transferred from abroad in his Indian account through these concerns. The sole reliance upon the FIRC which is only a certificate of remittance from abroad in absence of the overwhelming surrounding circumstances by the learned CIT appeals not at all sustainable. 17. Accordingly in the background of aforesaid discussion in our considered opinion the order of learned CIT(A) is to set aside the order of the assessing officer is to be restored. Accordingly we set aside order of learned CIT(appeals) and restore that on the assessing officer on the issue of credits in the bank account. 18. As regards the investment in shares out of the said bank account the same cannot be added again as unexplained investment. It is settled law that assessee cannot be subject to double jeopardy. Hence qua the unexplained investment in shares the order of CIT(A) is uphe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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