TMI Blog2020 (6) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... received in India, accrued or arise or is deem to accrue or arise in India and accrues or arises to him outside India during such year. We reiterate that learned lower authorities have assessed these two assessees qua the overseas trust s balance amount to the extent of 1/5th share each u/s 5(1)(c) only. The clinching aspect of the trust deeds nowhere forming part of records that there is no cogent material indicating the assessees as having 1/5th share each in the trusts assets. And also as to whether the trust deeds herein pin-point the trusts as discretionary or specific ones and whether the balance amount therein was to devolve upon them in a vested or contingent manner. We note that once the Assessing Officer has himself not suggested that the impugned sums have been in fact accrued or arisen to them, thus that the department s impugned action adding the trust s balance in these two taxpayers hands does not deserve to be concurred with. The Assessing Officer s re-opening reasons nowhere allege that these assessees had any right to receive the alleged 1/5th shares as well. We wish to make it clear that our foregoing detailed discussion sufficiently proves in absence a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-02, the Ld. AO/ CIT(A) erred in holding that a sum of ₹ 2,30,71,881 is assessable in the hand of the Assessee in Asst. Year 2002-03 apparently u/s 69 of the IT Act. 4. Learned departmental representative has strongly opposed admission of assessee s foregoing additional substantive grounds at this belated stage. His case is that the Assessing Officer as well as CIT(A) have afforded adequate opportunities of hearing during re-assessment and lower appellate proceedings; respectively. Mr. Roy fails to dispute that hon'ble apex court s decision in National Thermal Power Corporation. Ltd. vs. Commissioner of Income-tax (1998) 229 ITR 383 (SC) and All Cargo Global Logistics Ltd. vs. DCIT (2012) 137 ITD 26 (Mum) (SB) hold that this tribunal can very well entertain an additional ground going to root of the matter provided all the relevant facts form part of records. We adopt the very reasoning herein as well to decline Revenue s foregoing technical objection. The assessees twin additional substantive ground(s) stand admitted therefore. 5. Learned counsel next took us to Assessing Officer s re-opening reasons recorded in whilst initiating u/s 148 / 147 proceedings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d another trust namely Marline Management S.A.with former having account balance of US $ 2406604.90 on 31.12.2001; the fact also remains that the re-opening reasons recorded by the Assessing Officer while forming belief of the taxable income having escaped assessment are on altogether different footing than other three cases as follows:- Reasons for the belief that income has escaped assessment: In this case, a Tax Evasion Petition has been received from the CBDT. As per the information contained in the said DTEP, the assessee is a beneficiary of Ambbrunova Trust. The return of income of the assessee for the AY 2002-03 was perused and it is found that the assessee has neither offered any income with reference to the Ambrunova Trust nor any details were disclosed to the effect that the assessee is a beneficiary. The assessee is also a beneficiary in another trust name Marline management S.A. having account in account in LTG Bank. Liechtenstein 2. On going through the copy of bank summary in respect of Ambrunova Trust s account in LTG Bank. Liechtenstein, it is observed that there is a credit balance in the said account of USD 24,06,604 as on 31.12.2001, equivalent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of natural justice inter alia refers to a letter dated 23rd September 2009 and makes the following observations : Even vide letter dated 23/9/2009 the assessing officer showed details (a) information of trust, (b) details of settler of the trust, (c) purpose of creating trust, (d) copy of trust deed, (e) asset and bank accounts held by the trust in India and abroad and A(f) benefit received by the appellant during the financial years relevant to Assessment Year 2002-03 to 2007-08 (page 21) . 1. However, on perusal of the letter dated 23rd September 2009 it is clear that the Assessing Officer did not furnish any details as indicated in the order of the Tribunal, rather it called for details from the Petitioners, and in turn, by letter dated 14th October 2009 the Petitioners pleaded ignorance of the Trust. The Rectification Application filed by the Petitioners sought to rectify the aforesaid error apparent on the face of the order. However, the impugned order does not deal with the aforesaid objection of the Petitioners and the order dated 31st October 2014 of the Tribunal passed under section 254(1) of the Act on the above issue. It is the Petitioners case that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also hold that an Assessing Officer s action forming to belief of any taxable income having escaped assessment is to be based on supportive material only than on a mere suspicious. The very proposition also stand reiterated in Commissioner of Income Tax-II vs. Multiplex Trading and Industrial Co. Ltd. (2015) 63 taxmann.com 170 (Del) as well. 10. We keep in mind the foregoing legal position and decline the Revenue s prayer to treat the instant appeal as squarely covered. We wish to make it clear that we are dealing with validity of re-opening reasons at this stage keeping in mind the material available before the Assessing Officer which is found to be totally different than that in case of other three connected family-members / assessees. Case law Hindustan Leaver Ltd. Vs. R.B. Wadkar (2004) 268 ITR 339 (Bom) and (2010) 189 Taxman 1 Prashant S. Joshi vs. Income Tax Officer, Ward-19(2)(4) Mumbai had that it is only the re-opening reasons recorded by the Assessing Officer which could be considered when formation of belief of a taxable income having escaped assessment is challenged and the same could not be allowed to grow with age and ingenuity by devising new grounds in replies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment records as well as the relevant evidence / materials on the basis of which the Assessing Officer formed his reasons to believe that the assessees taxable income had escaped assessment. We make it clear that no such evidence or material in the nature of trust deeds has seen light of the day even after a time gap of five years since this tribunal s direction to this effect had been issued on 25.05.2015. We observe in this backdrop that the Assessing Officers reopening reasons recorded on the basis of alleged trust deeds of the twin trusts is not based on this relevant material / evidence since the said trust deeds nowhere formed part of records at the threshold stage. That being the case, we quote the settled legal proposition hereinabove (supra) to conclude that the assessing authority herein had not proceeded as per law whilst initiating sec. 148 / 147 proceedings against these two assessees. The impugned re-opening is held not unsustainable in law therefore. 14. Learned departmental representative has taken us the CIT(A) s lower appellate discussion that the Revenue has very well proved that one Shri Sandro Prete had represented the former trust and he signed a decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at these assessees are beneficial owners of the trusts assets to the extent of 1/5th share each as on 31.12.2001 we quote (2014) 363 ITR 300 (All) Mukesh Kumar Gupta vs. Commissioner of Income Tax that such a re-opening initiated beyond a period of four years from the end of the relevant assessment year is not sustainable in absence of the specified amount of taxable income having escaped assessment being recorded in reopening reasons 16. There is further no quarrel that sec. 5(1)(a-c) defines total taxable income in case of a resident that the income which is received or deem to be received in India, accrued or arise or is deem to accrue or arise in India and accrues or arises to him outside India during such year. We reiterate that learned lower authorities have assessed these two assessees qua the overseas trust s balance amount to the extent of 1/5th share each u/s 5(1)(c) only. We take into account the very fact and circumstances; and particularly, the clinching aspect of the trust deeds nowhere forming part of records that there is no cogent material indicating the assessees as having 1/5th share each in the trusts assets. And also as to whether the trust deeds herein ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
