TMI Blog2022 (4) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Fedrigoni or CMF has given any money for their India operation for supply of currency notes to Assessee. This finding of ld. CIT (A) without any rebuttal or material information on record cannot be tinkered with. Accordingly, the finding of the ld. CIT (A) that after the assessee had become NRI, no income has arisen or accrued in India, i.e. after 01.04.2015 and, therefore, even in terms of section 9(1)(i) no income is taxable in the hands of the assessee is upheld. CIT (A) has held that post 31.12.2012, the assumption made by the AO after the period 01.01.2013 is purely based on presumption that there might be continuation of terms and conditions of this agreement which was without any basis or evidences albeit on conjectures and surmises. The alleged money received by the assessee through various dubious entities during FYs 2015-16 2016-17 as alleged by the AO that assessee might have received money on account of share of profit from CMF in connection of its Indian activities is wholly erroneous and none of these informations or material found which he has been referred to by the ld. CIT DR or by the AO even remotely point out that through these dubious entities, ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, which goes to prove that his assessment of income was purely based on surmises and presumptions as noted above. Thus, not only the finding of the ld. CIT (A) is confirmed but the information supplied by the CIT DR has no correlation or effect so as to reverse the finding of the ld. CIT (A). Accordingly, the submissions of the ld. CIT DR are rejected and the order of the ld. CIT (A) is affirmed. - Decided in favour of assessee. - ITA Nos.1277 to 1281/Del./2021 And ITA Nos.723 & 724/Del./2021 And CO Nos.55 to 58/Del/2021 (in ITA Nos.1278 to 1281/Del./2021 - - - Dated:- 9-3-2022 - Shri N.K. Billaiya, Accountant Member And Shri Amit Shukla, Judicial Member For the Assessee : Shri Gaurav Jain, Advocate, Shri Shyam Sundar, Advocate For the Revenue : Shri H.K. Chaudhary, CIT DR ORDER PER AMIT SHUKLA, JM : The aforesaid appeals have been filed by the assessee for the Assessment Years 2012-13 2013-14; and by the Revenue for the AYs 2013-14 to 2017-18; and cross objections have been filed by the assessee for the AYs 2014-15 to 2017-18, against the consolidated impugned order dated 22.04.2021 passed by the ld. CIT(A)-27, New Delhi for the qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had not received any amount of profits or any payment as per the agreement from CMF from FY 2011-12 onwards which is also evident from return of income for AYs 2012-13 to 2016- 17, and also the observations made by the Assessing Officer in his assessment order. 5. Assessing Officer has noted the details of the turnover, net profit and exemption claimed for AYs 2008-09 to 2016-17 , for the sake of ready reference, is reproduced as under :- A.Y. Turnover (Rs.) Net Profit (Rs.) Exemption claimed (Rs.) Returned Income (Rs.) 2008-09 23,97,27,764 23,19,14,203 23,42,20,336 11,852 2009-10 N/A N/A N/A N/A 2010-11 12,91,51,125 8,04,71,209 8,04,71,209 - 2011-12 15,95,32,863 19,06,06,942 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has made very important observation that during the course of search, it was found that Fedrigoni does not have any agent, representative or associate for providing them services like that of assessee. He also found that Fedrigoni was still supplying bank paper notes to RBI (and all other subsidiaries) and Fedrigoni continued to receive the payments from these entities. However, there was no iota of material found to indicate that any such payment was ever received by the assessee from Fedrigoni as commission nor it was reflected in the books of account of the assessee or was credited to any Indian bank account of the assessee. Assessing Officer has accepted this fact. However, later on, post search enquiry, certain information were received from FTTR division of CBDT and it was found that assessee had received payment from Fedrigoni outside India in foreign accounts of various entities alleged to have controlled by assessee. From this, AO tried to deduce that there was likelihood that payments received by the assessee in his foreign bank accounts were not disclosed to the Income-tax Department which might have been connection with supply of currency papers in India. But, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.57 Crs. 2015-16 45.12 Crs. 2016-17 20.19 Crs. 2017-18 25.30 Crs. Total 141.62 Crs. 9. From the perusal of the assessment order, it is seen that final conclusion in the assessment order has two limbs: (i) There was accrual /arising of receipts to the appellant from M/s CMF as per agreement dated 2006, in the period 1.4,2011 to 31.3.2017 in India. The main reason for this conclusion by the AO was that M/s CMF had supplied paper to RBI during this period did not have any other agent in India and the agreement with the appellant for sharing of profit on such activities of M/s CMF had not been closed. (ii) The appellant had acquired the status of NRI w.e.f. 1,4.2015 and the accrued amounts of its share of profit wit M/s CMF for all these years have been received by the appellant in FY 2015-16 2016-17 in various dubious foreign entities controlled by it either directly from M/s Fedrigoni or touted through dubious tax heaven entities. 10. Ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the bank, both Sh. S.P. Gupta and Sh. Tarun Maheshwari are shown as partners. In the bank account opening forms, Sh. S.P.Gupta is the sole authorised signatory of the account. SJTL received in its foreign bank account between the period from September 2016 to March 2017, around 2,5 Million Euros from Wenrtgen General Trading LLC and around 4,8 Million Euros from Fedrigoni. 12.1.2 As per the assessment order, the facts mentioned are: 12.1.2.1 During the search (i) The appellant In his statement u/s 132(4) had stated that, as the CEO of St. James Technologies, the appellant had developed a colour shifting security thread for M/s Fedrigoni S.p.A. and the payments to St. James Technologies were in the nature of royalty on 20% sales price. However, when asked further about where the assessee had filed the patent, the assessee stated that the application for patent had actually been filed by M/s Fedrigoni and that there was agreement to pay him a percentage of royalty on the invoice value of the product produced and sold all over the world. (ii) Further evidence related to St. James Technologies Limited was found in appellant's email ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... St. James Technologies Limited and that you have not received any money from M/s St, James Technologies Limited. Please state whether you have any agreement with M/s St, James Technologies Limited to get money for the patent that you had developed and for which M/s St, James Technologies Limited is getting, the money from M/s Fedrigoni S.p.A. Ans. There is no agreement with M/S St James Technologies Limited. This will be mutually decided between me and Shri Tarun Maheshwari after the completion of year. 12.1.2.2 During the course of assessment proceedings,, the appellant had filed a letter of nomination dated 21.06.2019 addressed to St. James Technologies (SJTL), wherein it has been mentioned that under the license agreement dated 01,01.2016 with M/s Fedrigoni S.p.A and M/s St. James Technologies, M/s Nextgen Trading LLC (NGTL) have 50% shares of royalty and the rest 50% of royalty is invested in assessee. 12.1.2.3The appellant had filed affidavit dated 4,9.2019 of Sh Tarun Maheshwari duly notarised by Consulate General of Dubai, regarding his NRI status, his minority shareholding in M/s Next Gen Trading LLC (NGTL) since 2012, his 100% ownership of M/s SJTL an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B 616) filed, Letter dated 17.3 2.2018 from M/s Fedrigoni to St James Technologies Ltd, for payment of royalty after deduction of 10% of withholding tax. (PB 622 625}. Copy of Email from Fedrigoni dated 27.3 2.2019 (PB 627}. Seized copy of letter dated G. 12.2016 by Fedrigoni confirming agreement between M/s Fadrigonl and M/s SJTL. Seized copies of invoices dated 25/7/2016 raised by M/s SJTL for services rendered to M/s Fedrigoni. These. Invoices refer to the agreement dated 01.01.2016 12.1.6 It Is observed that (i) The agreement dated 17.5.2015 submitted by the appellant. is on a plain paper Signed between appellant Sh. Tarun Maheshwari as representative of M/s Next Gen Trading (NGT), as first party, and Mr EligioBalabio, Director M/s Fedrigoni S.P.A, Italy, as second party, for development of Colour Shifting Security Thread for the second party. The rear e signatures of even one witness on this agreement without specifying his name on the agreement. As per clause 9, the agreement is on ad-hoc basis for 1 year and will be modified as per mutual terms 6. conditions. The M/s NGT will provide capital andM/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had submitted part of the statement of the appellant u/s 132(4), apart from the part reproduced In the assessment order, which is reproduced as under: Q.49 Please state how much remuneration is received by you from M/s NextGen General Trading ILC. Ans. I receive AED 20,000 per month from M/s NextGen General Trading LLC. I receive business incentive from M/s NextGen General Trading LLC, M/s Si, James Technologies Limited and M/s Green Peas Business Solutions Limited, My trave1 expenses are also reimbursed by M/s Next Gen General Trading LLC. Q.50 Please state where you receive this remuneration. Ans. I receive my remuneration in my bank account in NBD Emirates Bank. Q.51 Please state whether you have any other contracts, or agreements with M/s NextGen General Trading LLC. If so, please provide details of the same. Ans. No Q.52 Please elaborate the features of the security thread developed by you alongwith M/S St, James Technologies, for M/s Fedrigoni S.p. A. Ans. I have developed d colour shifting security thread with very unique features containing specific colour shifting,, magnetic signals, fluorescent material, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money directly to St. Jamti Technologies, I have stiff not got any money from St. James. St. James has got 2.8 million Euros from M/S Fedrigoni S.p.A in October November, 2016 in their bank account in FGB. I will provide the bank account details and the bank statement in a week. Q.72 Has M/s Fedrigoni S.p.A supplied the security thread to any party before May 2015? Ans. As per my knowledge, M/s Fedrigoni S.p.A has not supplied the security thread to any party before May 2015. Q.73 What is the nature of payments received by M/s St. James Technologies from M/a Fedrigoni S.p.A.? Ans. It is received as Royalty. Q.74 Do they deduct any TDS on this payment? Ans. Yes, they deduct 10% TDS. Q.75 Please state, whether you file your return in Italy. Ans. No. I will file the return in Italy if applicable in future. Q.76 Kindly refer to your answers to Q.46 and Q71 where you have said that Shri Tarun Maheshwori is the owner of M/s St. James Technologies Limited and that you have not received any money from M/s St. James Technologies Limited. Please state whether you have any agreement with M/s St. James Technologies Limited to got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is entitled for his share of Royalty from these receipts of M/s SJTL, but no payments had been received by him as per the statement recorded u/s 132(4). (c) Further the AO had contended that M/s SJTL is a front company of the appellant as there were certain documents filed later by the appellant, which were not stated in the statement u/s 132(4). The appellant had submitted that there is difference in agreement S. nomination letter and in this context the appellant had denied any agreement. It is clarified that the royalty agreement is in between M/s Fedrigoni as first party and the appellant M/s Nexgen, as second party. M/s SJTL has no agreement with M/s Fedrigoni, but had got assignment rights from M/s Next Gen. Although M/s SJTL had got assignment rights from M/s NEXT Gen only, it is raising the invoices and receiving the amounts from M/s Fedrigoni for the amounts pertaining to appellant also. As per the account opening form, various agreements submitted and notorised affidavit of Mr Maheshwari, the appellant does not have any ownership in M/s SJTL. (d) The appellant had stated in the statement recorded u/s 132(4) and reproduced above that M/s STTL M/s Green pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of royalty In M/s NextGen. In normal circumstances, real majority shareholder will not allow the money receivable in lieu for providing financial assistance to be assigned to another entity without any consideration. There is nothing on record, what was the proposed financial support and actually given support by M/s NGTL. The reasons for such assignment are not emerging from the available data. M/s SJTL's financials are controlled by the appellant as he is the only authorised signatory of bank accounts of M/s SJTL, however the ownership structure of It shows Sh. Tarun Maheshwari as 100% shareholder. M/s SJTL is invoicing receiving the whole royalty including that of the appellant M/s Fedrigoni, even without any assignment by the appellant. The appellant had not received any amount from M/s SJTL till the data of search as per his statement, It is pertinent to note that M/s SJTL had not received any payments of Royalty from M/s Fedrigoni after FY 2016-17 as per available records, whereas the agreement of receipt of Royalty was up to the year 2020. As per affidavit of 5h. Tarun Maheshwari, he had left M/s SJTL on 31.12.2017, so what Is the fate of money pertaining to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the AO. The statement of the appellant u/s 132(4) on related seized documents Is reproduced under: Q.124I am showing few Pages 2 to 3 and 50 -54 and of Annexure A6. Kindly comment on the contents of these pages. Ans. These pages are the invoices raised by M/s Green Peas Business Solutions Limited (Pages 2 -3) and M/s St. James Technologies Limited (Pages 50-54) against M/s Fedrigoni S.P.A. Part payment against these invoices has been received. Thus, there were invoices raised by this company to M/s Fedrigoni for its services, seized during the search, which prima facie indicate that this company had done work for M/s Fedrigoni. The appellant had explained the nature of services rendered and amounts received in the statement of the appellant u/s 132(4). Further the appellant had fled copy of letter dated 6.12.2016 issued on the letterhead of M/s Fabriano and signed by Mr EligioBalablo, Director Commercial, Fedrigoni, which is claimed to have been seized. The contents of this letter are reproduced as under: Sub: 1 Confirmation of execution of advisory agreement between Fedrigont Spa- Italy and Green Peas Business Solutions Ltd. UAE. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except the fact the appellant has all financial control, being the only bank account signatory. As per the available records, Mr Tarun Maheshwari did not had any business connection with M/s Fedrigoni, prior to the appellant being employed by him in M/s NextGen. There Is no other data submitted to prove the credentials of these transactions. Why appellant will use his personal skills for an entity which is not giving anything in return to him, unless he is controlling that entity. Further there is no enforceable agreement of services provided by the appellant and remuneration of the appellant decided in the agreement. There is nothing on record to prove that actually the services have been provided and the remuneration received in M/s GBPL is consummate with such services on predefined principles as per any agreement. In the absence of which all this appears to be done on ad-hoc basis as per the mutual convenience of M/s Fedrigoni and the appellant. The exact facts cannot be ascertained as appellant is NRT the entities Involved are in jurisdiction outside India. In view of these facts circumstances, the observation of the AO that M/s GPBS is front company of the appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission was derived from the profit earned by the foreign client by safe of currency paper to an Indian entity, i.e. BRBNMPL (a subsidiary of Reserve Bank of India) therefore making in an income accruing or arising indirectly through or from a business connection in Indio. Therefore, although the assessee Sh. Satya Prakash Gupta is a non-resident as on date, the source of his undisclosed income is his business curried out in India on the behalf of M/s Fedrigoni with a business connection in India and therefore this income is taxable in India. In view of the above discussions vide notice u/s 142(1) of the IT Act, 1961 along with questionnaire dated 27.12.2019, the assessee was show-caused as to why the total amount received from Fedrigoni S.p. A should not ha treated as income of the assesses for the year under consideration as undisclosed income. 12.3.2 The assessee submitted his reply on 27.12.2019 at 09:45 PM, submitted as under: as regards your query with respect to the amount of 1. 05 million euro received by M/s Sterling Global Partner Ltd. (SGPL, in short) from M/s Fedrigoni SpA it is submitted that the said payment has no relation of any nature or kin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder, director secretary of this company. However as per the part 3 of Barclay account application form received from foreign authorities, the appellant had been shown as 100% beneficial owner. The facts stated by the AO are correct as far as information of dubious kind of promoter Ms Lisa, 100% beneficial ownership of the appellant, the payments received from M/s Fedrigoni and even some gaps in the statement of the appellant u/s 132(4) on it are concerned. (b) This company had been set up abroad on 3.9.2015, after the appellant acquired the NRI status w.e.f. 1.4.2015. (c) It is observed that these travelling expenses relate to the travel of the appellant even from Delhi to Delhi or Delhi as part of his Itinerary from the months of May 2015 onwards, just within 2 months of his becoming NRI on 1.4.2015. Some of the invoices mentioned the tender fees for security thread BRBNMPL. Thus, it is evident that the appellant was involved in the Indian business affairs of M/s Fedrigoni even after becoming NRI, otherwise why M/s Fedrigoni will reimburse his travelling expenses from Delhi to Delhi without any contract with him. Why the appellant will collect the tender do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Panama Papers as dubious entities of Mossack Fonseca. 12.4.1.2 The appellant previously in his submission dated 18.04.2016 stated that he had no connection with Anglo Manx. During the search on 26.12.2016, he was again asked about his association with Anglo Manx to which he replied, Q.57Please state whether you have any association with M/s Anglo Manx Trust? Ans. M/s Next Gen General Trading LLC has organized a temporary funding around Eleven million Euros from M/s Anglo Manx Trust to me to setup a project for petroleum products in India. Q.58 Please provide the copy of loan agreement and confirmation of loan as well as bank statement of reflecting the receipt of the same. Ans. The copy of the same shall be provided as soon as possible. Q.59 Please state when the loan was received and how the loan has been used? Ans. The loan was received around January, 2016 and could not be used and therefore, it was returned around three month back in account of M/s Next Gen General Trading LLC On being asked about the contradiction with his earlier submission wherein he had said that he had no connection with Anglo Manx, the assessee sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia. Further 2 million Euros were transferred from his Citibank account in Singapore. A further amount of 0.4 million Euros was received from Nextgen General Trading LLC in the same period. 12.4.1.4 The Panama Papers Leak announcement was made on 3rd April 2016. At this point of time, the funds of around 11 million Euros were in his bank accounts in India. A fresh bank account was opened in the appellant's name in First Global Bank, Abu Dhabi. On 26th April 2016, a survey action was carried out at the business premise of Sterling Security System. On 19th May 2016, he closed down his Bank of Baroda Dubai account from where bulk of the 11 million Euros had been transferred and then between 24th to 26th May 2016, he transferred 11 million Euros from his Indian bank accounts to the new account in First Global Bank, Abu Dhabi. The same amount of 11 million Euros was then transferred to the accounts of Nextgen General Trading LLC, Dubai in August 2016. 12.4.1.5 During the search proceedings, the appellant had stated that Nextgen General Trading LLC had organized a temporary funding around 11 million Euros from M/s Anglo Manx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convenient to him. Your kind support in this matter shall be highly appreciated. Further correspondence between Sruthi Anvas of Nextgen General Trading LLC and Claire Cain and Ewan Heap of Anglo Manx (Isle of Man) indicated that they were attempting to redraft the agreement between Ballenta Incorporated and Nextgen wherein Ballenta was paying Nextgen an amount of 1 million Euros for certain services in the period 1st April 2015 to 30th March 2016. It showed that not only were Anglo Manx and Ballenta related concerns, but that there was no agreement made before and it was being made now because the bank had blocked the receipt to Nextgen's account in lieu of more supporting documents after the name of Ballenta featured in the Panama Papers. It therefore emanates that the assessee through his entity Nextgen attempted to obtain a backdated agreement between Ballenta Nextgen though there was no such agreement before and the arrangement of loan funds from Ballenta to his account was a sham. On being confronted with the copy of email correspondence, the assessee claimed no knowledge stating that they took place under the directions of Tarun Maheshwari. 12.4.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vineet Garg with draft letters from Nextgen to Anglo Manx (dated 20th December 2015) and Ballenta (dated 1st February 2016) confirming that Sh. S.P. Gupta is its full time employee and loan may be granted to him on the basis of security from Nextgen. On being confronted, the assessee replied: These attachments are internal communication between Mr. Vineet Garg and Mr. Vinay Mangla. These are unsigned and have never been used and have never been exposed either to me or to Nextgen General Trading LLC and is just between the above people for no reason whatsoever. The explanation provided by the assessee on the communication between Vineet Garg and Vinay Mangla appear to be contrary to their statements recorded during the search. Vinay Mangla was asked to explain the nature of the loan agreements and assignment agreements belonging to the assessee to which he replied, ... Sh SP Gupta had NRE account in India in which funds were invested from outside India. On being asked by us about source of funds into this NRE account for the purpose of submission to the income tax department, he informed to us (me and Sh Vineet Garg, his Authorised Representative in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Sh S.P. Gupta. On the same basis and format, Sh S.P Gupta asked to create assignment agreement with M/s NextGen. I cannot vouch for authenticity of information/ documents or parties involved. We relied on the information provided by Sh. S.P. Gupta. It is clear from the above that the communication between Vinay Mangla and Vineet Garg was at the behest of the assessee and not any internal discussion without knowledge of the assessee as claimed by him. It is also clear from the above that the communication between Vinay Mangla and Vineet Garg was for the drafting and back-dating of loan assignment agreements to provide legitimacy to the transactions. 12.4.1.8 It is on record that funds amounting to 11 million Euros were received by the assessee from off-shore entities in Isle of Man and Samoa, (linked to Mossack-Fonseca) in his personal accounts in Dubai and Singapore, which were transferred to his personal bank accounts in India, and when this information about the offshore entities came to the knowledge of the Income Tax Department, he transferred the amount back to his personal bank account in Abu Dhabi and finally it was transferred to Nextgen General Trading L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not acceptable. From the above discussion, it is clear that the assessee's own unaccounted money was routed back to his personal account in the form of loans. It is clear from the mail communication between Vinay Mangla and Vineet Garg that the communication between them was for the drafting and back-dating of loan assignment agreements to provide legitimacy after exposure of assessee's name in panama papers. Further, the assessee has failed to prove that the amount received by him from Anglo Manx Trust and Ballenta was actually a loan arranged by Nextgen General Trading LLC. The assessee alleged that the loan was for starting a new petroleum project without showing that he took any step towards any such project. From the above discussion, it is clear that the loan received by assessee from Anglo Manx Trust and Ballenta through Nextgen General Trading LLC is a sham and the original source of the money of 11 million Euros is the commission income received by the assessee from Fedrigoni which he did not declare to tax authorities and instead tried to route through off-shore entities in tax havens. 12.4.2 Following observations are made from the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these tax heaven entities figuring in panama leaks, the appellant had routed this amount back to his account in Dubai and later allegedly to its front entity M/s NGTL. Thus, the appellant had control of this money, which had been routed his account from these dubious entities. 12.5 As per the assessment order, in the light of the discussion made in the assessment order on the above issues, the following points were collated by the AD before concluding the assessment: 12.5.1 The assessee was running his proprietorship concern M/s Sterling Exports and was into business related to security papers. Later, on 13.09.2006 the assessee formed a new concern namely M/s Sterling Security System in Noida SEZ. Soon after that the assessee got into an agreement with Cartiere Milani Fabriano (CMF) as an agent for its contract with BRBNMPL (a subsidiary of Reserve Bank of India) and Security Printing and Minting Corporation of India Limited (SPMCIL) for supply of currency paper. As per the agreement, the assessee was to receive a percentage of the net margin paid to CMF by the concerned buyer. Such percentage of the net margin would be equivalent to 41% or a guaranteed 14% of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Partners Ltd. 12.5.5 It is also seen from the Memorandum of Association of St. James Technologies Ltd. and Green Peas Business Solution that though the activities of the companies as mentioned as General Trading, Investments etc, however these entities are associated with Fedrigoni in a highly specialized field of Security thread, Currency papers etc. Has M/s NextGen General Trading LLC ever received any money from M/s Fedrigoni S.p.A? The assessee replied as following: No, M/s NextGen General Trading LLC has never received any money from M/s Fedrigoni S.p.A. The profit to M/s NextGen General Trading LLC comes from M/s St. James Technologies Limited and M/s Green Peas Business Solution Limited as per the direction of Sh. Tarun Maheshwari. From the above statement it is revealed that the so called employer of the assessee is getting its receipts from Fedrigoni only, though not directly, through two entities M/s St. James Technologies Limited and Mis Green Peas Business Solution Limited. In sum, Nextgen General Trading LLC, Mis Green Peas Business Solutions Ltd., M/s St. James Technologies Ltd., M/s Sterling Global Partners Ltd are fronts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017-18 is estimated as under: (A) AY (B) Amount paid by RBI to Fedrigoni (Rs. in crores) (C) Estimated revenue of Sh. S.P. Gupta 9.72% of (B) (Rs. in crores) 2012-13 226.68 22.03 2013-14 53.33 5.18 2014-15 304.32 29.58 2015-16 517.48 50.23 2016-17 231.18 22.47 2017-18 289.71 28.16 Total 157.65 12.5.11 On the basis of amount received by Fedrigoni S.p.A from BRBNMPL, the total undisclosed income of the assessee has been estimated to be ₹ 1S7.65 Crores as mentioned in above table. However, on the examination of various issues, it has been found that the total undisclosed receipts of the assessee, which accrued to assessee between AY 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any was any way associated with the supply of currency note by CMF to RBI; thirdly, there is no evidence on record that any amount has been received by the assessee in India or abroad during the AYs 2012-13 to 2015-16 from CMF on any account including the share of profit as per the agreement of year 2006; and fourthly, the AO has completely erred on facts in holding that the amount has accrued even for this period having been received by the assessee when he became an NRI in FYs 2015-16 2016-17 from various so-called dubious entities allegedly controlled by him after becoming NRI. Ld. CIT (A) also discussed the contents of the letter dated 04.01.2018 as received from CMF, available at pages 161 162 of his order. On the basis of these facts, ld. CIT (A) has concluded as under:- 11.2.4 In view these facts circumstances of the case, it is held that (i) There is nothing on record to prove o r even indicate that agreement of the appellant with M/s CMF signed in 2006 (modified in 2007 for only sharing of profits) was extended or renewed after 31.12,2012. There is neither any statement of any person u/s 132 (4) /133A/131 of the I T Act 1961 nor any material seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.3.2011. (b) The claim of loss after 31.3.2011 on Indian operations, by M/s CMF as well appellant is not backed by any financial statements or working papers. There is no financial working given by M/s CMF or the appellant, considering the Indian operations of M/s CMF as standalone profit centre. Without any such comparative financials, of profit making in the earlier years before 31.3.2011 and claimed loss making in the later years after 31.3.2011 , the pleadings made by M/s CMF or the appellant that there was no sharable profit to M/s CMF after 31.3.2011, are not verifiable, It is not a normal proposition that the appellant would have accepted the verbal version of M/s CMF without obtaining the financial working of such losses and verifying it. (c) There appear to be no extraordinary reasons to incur losses by M/s CMF after 31.3.2011. M/s CMF had stated certain reasons in its letter dated 4.1,2018, which are not backed by any credible documentary evidence. As discussed in above para, the documentary evidences submitted by the appellant prima facie do not have any impact on profits of M/s CMF at least for AYs 2011-12 to 2014-15. Without analysis of complete comparat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its Indian activities as per the agreement of 2006. It is observed that amounts received in the foreign entities controlled by the appellant are from M/s Fedrigoni and other dubious entities (₹ 43.64 Cr from M/s Fedrigoni, ₹ 14.97 Cr from M/s Next Gen and ₹ 83.01 Cr from M/s Ballenta M/s Anglo Maxn Trust). The source year of amounts in these dubious foreign entities, other than M/s Fedrigoni in, is not known, however these amount came in the foreign entities controlled by the appellant in FY 2015-16 2016- 17. Even the amounts received from M/s Fedrigoni are actually for the so-called services and their consummation with services is not verifiable. The comments on the transactions in various foreign entities have been made in the respective para above (12.1. 7.1, 12.17.1, 12.1.6, 12.2.5.1, 12.3.6, 12.3.7.1, 12.4.2 12.4.2.1) while analysing the transactions in these entities, which raises doubts on veracity of such transactions. It is observed that the appellant had no substantial business receipts in India from 1.4.2011 to 31.3.2015 and suddenly within 2 years of acquiring the NRI status, was flushed with work of developing patent for M/s Fedrigoni, beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money brought in control of the appellant in these foreign entities, just within 2 years of acquiring the NRI status, but the doubt had not been replaced by the evidence on the basis of information collected so far. Thus, the amounts received by the appellant in various dubious foreign entities controlled by it, as NRI cannot be taxed in India unless it is established that the these represent the income corresponding to these amounts had accrued/arisen in India . Alternatively, the receipts of money should pertain to the period of residency of the appellant in India i.e before 1.4.2015. Till date, the source of any receipts prior to 1.4.2015 had not been brought on record by the AD and as par available records, these receipts in foreign accounts pertain to period after 1.4.2015, which cannot be taxed in India without establishing that these receipts have accrual/arisen from any activities /connection in India. 15.3 The appellant had filed certain documents from M/s CMF, wherein the claim, that there were no sharable profits after 1.4.2011, had been made. The claim had been analysed above and lacks credibility as per the discussion in para 11.2.3, 11.2.4 para 14.3 above. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the AO: (a) For AY 2012-13 is enhanced from ₹ 19.79 Cr to ₹ 22.03 Cr (b) For AY 2013-14, it is enhanced from ₹ 4.65 Cr to ₹ 5.18 Cr. However, in the absence of complete data, the income up to 31.12.2012 is estimated on pro-rata basis at ₹ 3.885Cr. (5.18*3/4). Thus, in totality, the addition for this assessment year is restricted to ₹ 3.885 Cr. (c) For the AYs 2014-15 to 2017-18 is hereby deleted. I am satisfied that the appellant had concealed the particulars of his income for AY 2012-13 2013-14. Accordingly, penalty proceedings u/s 271(1)(c) are separately initiated on enhanced income for AYs 2012-13 2013-14 for concealment of income. 15. In view of the aforesaid findings, both the assessee and Revenue are in appeal before us challenging the various additions confirmed and disallowances/enhancement by the ld. CIT (A). 16. Before us, ld. counsel for the assessee, Shri Gaurav Jain reiterating the entire facts and background of the case (as discussed herein above) submitted that all the additions in the present assessments have been made in pursuance of search seizure action u/s 153A. On the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 20.12.2007. The aforesaid assessment order for AY 2010-11 is attached at Page 1175 to 1182 of Paper Book in Volume IV; the relevant extract thereof is reproduced herein for ready reference: As regards, the claim for deductions u/s 10AA of I.T. Act, the assessee filed information from time to time. The assessee is claiming that services being provided by him come under the category Other business services of Rule 76 of SEZ. The assessee has filed following documents and clarifications to prove that services under the agreement were rendered to M/s. Cartiere Milani Fabriano SPA, Italy. 1. Copy of agreement dated 25.09.2006 with M/s. Cartiere Milani Fabriano SPA, Italy, 2. Copy of letter dated 20.12.2007 regarding modification of agreement. 3. Copy of E-mail dated 14.02.2013 from Bhartiya Reserve Bank Note Mudran (P) Limited (BRBNML) confirming that Sh. S.P. Gupta, Sterling Security System, was authorised to present M/s. Fedrigoni SPA Italy. (hereinafter referred to as ( Overseas Enterprises ) in tendering process. 4. Copy of Email dated 04.02.2013 from the overseas enterprise confirming that they have issued dated 04.01.2012 to the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of search suggesting rendering of any service by the assessee and/or right to receive any income from Fedrigoni. The amount of accrued income was determined only on the basis of assumption of (i) service being rendered by the assessee to Fedrigoni in relation to supply of currency paper to RBI for the relevant period; (ii) percentage of commission income of alleged profits accruing to Fedrigoni; (iii) claim of recovery for that income by the assessee upon Fedrigoni, inspite of clear admission of no such claim on the part of the assessee as well as Fedrigoni. Thus, CIT(A) erred in enhancing/modifiying the addition on the aforesaid basis and not deleting the entire addition on the ground that the same was outside the scope of assessment under section 153A of the Act. II. St. James Technologies Limited ( SJTL ) [Refer Pages 16-20 of the assessment order] 17.8 During the course of search, the Revenue found that the assessee was an employee / associate in a foreign company, viz., St. James Technologies Limited (SJTL) incorporated in UAE, which had received some income in its bank account outside India, including from Fedrigoni. No evidence/document suggesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in security thread supplied in Europeon Countries, which was even confirmed by Fedrigoni vide confirmation dated 17.12.2018, attached at Page no. 962 to 965 of Volume III of Paper Book;. 17.13 Considering that the aforesaid royalty was in relation to royalty accrued outside India, the same was not taxable in India, leave alone in the hands of assessee, who was non-resident in that period, and nonetheless no incriminating material/document was found that the aforesaid receipts by SJTL were in relation to alleged commission income relating to India. 17.14 The allegation of linking receipts by SJTL with commission income in India was purely made on the basis of assumptions, surmises and conjectures, dehors any incriminating material found in the course of search, suggesting/proving the same. Thus, the CIT(A) has rightly deleted additions made on the basis of allegations made in the assessment order qua the transactions of said foreign company, outside India. III. Green Peas Business Solution Limited [ Green Peas ] [@ Pg 20-23 of AO] 17.15 Similarly during the course of search, the Revenue found certain documents relating to foreign company, viz., Green ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using the services of inter alia M/s. Mossack Fonseca. 17.21 On the basis of aforesaid information, a survey was conducted, pursuant to which the assessee solicited incorporation document of Sterling Global Partners from UAE authorities, confirming no nexus with the assessee. [Refer Pages 1026-1030 of PB Vol III] 17.22 The Revenue Authorities made foreign reference through FTTR Division, as per which the assessee was named beneficial owner in the bank account opening form. Further in the bank account of Sterling Global, an amount of 1 million Euros was found credited from Fedrigoni in financial year 2015-16 i.e. when the assessee had become non-resident, on the basis of which adverse inferences were drawn to link the aforesaid receipt with alleged commission income earned by the assessee in India. 17.23 The assessee had, in fact, requested Fedrigoni to clarify the reason for payment to Sterling Global, whereby Fedrigoni vide email dated 26.12.2019 attached at Page No.1032 of Volume-III of Paper Book confirmed that the assessee was never involved with respect to independent transaction between Fedrigoni and Sterling Global. 17.24 In the aforesaid facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of investigation proceedings, on the basis of information received from FTTR Division, the assessing officer found that the assessee had received an amount of ₹ 11,97,909/- and ₹ 18,97,742/- in assessment years 2016-17 and 2017-18 from Fedrigoni in Emirates NBD bank account held by the assessee in UAE. 17.29 It was submitted by the assessee that the aforesaid receipt represented reimbursement of travelling expenses for various travel undertaken by the assessee in relation to aforementioned various business activities carried outside India, which had no nexus with tax liability in India. Even otherwise, since the aforesaid receipt were pure reimbursement, the same was not income to be brought to tax. [Refer: CIT v. Tejaji Farasram Kharawalla Ltd.: 67 ITR 95 (SC); DIT v. A.P. Moller Maersk A S: 392 ITR 186 (SC); CIT vs. Fortis Healthcare Ltd: 181 Taxman 257 (Del)] 17.30 On perusal of the above, it would be appreciated that the Revenue did not find any material, leave alone incriminating material suggesting accrual of alleged commission income and nexus of aforesaid receipt with that income. The allegation of the aforesaid receipt to be in lieu of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pages 36 to 39 of the assessment order. It is submitted that the aforesaid emails do not prove accrual/earning of any income by the assessee in India or nexus of any amount with such income or alleged undisclosed commission income for supply of currency paper to RBI. The aforesaid emails only corroborate the stand of the assessee that the amount of 11 million Euros was in lieu of loan granted by Anglo Manx or Ballenta. 17.36 The assessing officer in the assessment order has only drawn adverse inferences on the basis of assumption and presumption, on partial reading of said emails/documents doubting veracity of the loan and alleged the same to have nexus with income accruing or arising from India, de hors any incriminating material found in the course of search suggesting accrual of income in India or income having any link with alleged undisclosed commission income. Thus, the CIT(A) has rightly deleted additions made on the basis of allegations made in the assessment order qua the aforesaid receipts out of India, between the foreign entities. Conclusion 17.37 In view of the above, it is submitted that the entire impugned additions made by drawing nexus of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2016-17 and 2017-18, after a long gap of 4 years. It was only when the assessee started exploring new business opportunities outside India and became non-resident, that income accrued and arose outside India and that, too, in foreign companies in the manner explained above. Thus, the overseas receipts had no nexus with India nor could be considered as accruing or arising in India to be brought to tax in India, more so when the assessee was nonresident in that period. Furthermore, out of total receipts of 22.3 million Euros by foreign entities (₹ 3.5 + 4.8 {SJTL}, 2 {Green Peas}, 1 {Sterling Global} and 11 {Loan from Anglo Manx}), 14.5 million Euros (3.5 million in SJTL from Nextgen and 11 million loan from Anglo Manx), i.e. more than 50% were not receipts from Fedrigoni, to be related with commission income in relation to supplies by Fedrigoni to RBI. 17.41 The onus, it is submitted, was on the Revenue to bring evidence on record, both in case of assessment under section 153A as also 143(3), suggesting that foreign sourced income, had nexus with India or had accrued or arisen in India, which has remain undischarged in the present case. As pointed supra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission whatsoever has been received by the assessee nor any material evidence or information found during the course of search that the assessee had received any income from CUF; and secondly, no incriminating material or document has been found to estimate such accrual of income for the AYs 2012-13 as done by the ld. CIT (A) and, therefore, on this ground, the entire addition/enhancement made by the ld. CIT (A) in AYs 2012-13 and 2013-14 is liable to be deleted. 21. Insofar as the assessments which had abated i.e. AY 2016-17 and in the year of search i.e. AY 2017-18, Mr. Jain submitted that it is an undisputed fact that assessee had become NRI w.e.f. 01.04.2015 and nowhere it is found that assessee carried out any business operation or had any business connection in India once he became NRI. In fact, all the documentary evidence and the information which have been received through FTTR, nowhere there is any information or material to allege that assessee had received any income from India operation for supply of currency paper by the CMF to RBI nor he was found to be active in any manner as agent or as an mediator. In support of his contention, he strongly relied upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolvement of assessee and the RBI denying any middleman to supply, that does not mean that assessee was not involved and now, the entire payment has been routed through different foreign entities abroad. All these facts show that there is strong indication that certain income of assessee is taxable in India which has not been disclosed. He has referred to certain statements recorded in page 18 of the AO which are duly incorporated herein above while reproducing the findings of the AO and ld. CIT (A). 23. As regards the contention of the ld. counsel for the assessee that no incriminating document was found during the course of search, ld. CIT DR submitted that agreement of dated 20.12.2007 which was found during the course of search is the supporting document and coupled with other certain emails which have been referred to by the AO, can be treated as incriminating material found during the course of search. He thereafter referred to material referred to by FTTR and submitted his detailed report and submissions. In his written submissions he has given information received through FTTR which was not even before the Assessing Officer, which is reproduced here under :- T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In reply during statement u/ s 132(4) the assessee explained that royalty is on account of security thread technology developed by him and Nextagen General Trading LLC and Fedrigoni (Pages 18 19 of the AO). During statement u/s 132(4) , the assessee has accepted that 50% shares of royalty will be given to assessee. b. Green Peas Business Solutions Ltd. This company is incorporated in 2016 in Dubai. Fedrigoni SPA has paid around 2 Million Euro for advisory services given to Fedrigoni (Statement u/s 132(4) page 20 of A.O.) assessee is shown partner in bank record. c. Sterling Global Partners Ltd. This is the company incorporated in DAB. The assessee has denied any ownership in this company. From the information received from Foreign Tax Authority, it revealed that the assessee is the beneficial owner (Page 23 24 of A.O.). Further, there is a credit of 1,05,0000 Euro from Fedrigoni SPA on 08.03.2016 in A/ c # 78187588. Further, Foreign Tax Authority has confirmed assessee's bank account in Emirates NBD, Bank street Branch account #0315067643902 where there is a credit from Fedrigoni (page 27 of AO). During the search thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in the AO. 5. As per requests provided by Italy authority, Sh. S.P. Gupta has acted through companies directly related to him without formality such as: i. Sterling Export and Sterling Security System ii. London Security Solution Ltd. iii. Green Peas Business Solution Ltd. iv. St. James Technology Ltd. v. Khidmaty Technolgoes FZE 6. Fedrigoni has supplied copy of agreement dated 01.01.2012 related to the possible supply of papers in respect in favour of Bank of India, stipulated between Fedrigoni SPA London Security Solutions Ltd. which show that Sh. S.P. Gupta was involved in providing services to Fedrigoni SPA for supply of currency papers. 7. Letter dated 01.02.2012 of London Security Solution Ltd. relating to determination of percentage of commission with Fedrigoni shows continuance of Sh. S.P. Gupta's service to Fedrigoni. 8. The Italian company provided various debt vide dated 12.09.2012, 16.10.2012, 26.11.2012, 09.12.2012, 20.05.2013, 15.05.2013 issued by Sterling Security paper for reimbursement of expenses by Sh. S.P. Gupta, which proved the continuance of service by Sh. S.P. Gupta to Fedrigoni from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of his employer Next General Trading LLC. g. Regarding the united Arab Emirates company ST. James Technologies Limited, the Indian tax authorities reported that this company received, between September 2016 and March 2017, approximately 3.5 million euros from the Emirates company Next General Trading LLC and approximately 4.8 million euros from the Italian Company Fedrigoni SPA. Italian Authority has given point wise reply in page 538A to 543A of Paper Book which is reproduced as under.- Request Number-1 Fedrigoni SPA exhibited a letter made up of 6 pages undersigned by Mr. Vittorio SFLIGIOTTI in his capacity of Fedrigoni SPA proxy, with which it has described the relationships and the contractual dynamics occurred with GUPTA and his related companies. The company also specified that- pursuant to the Italian Legislation-documentation it gathered was principally related to the years from 2010 to 2020, that is the documentation the company itself was obliged to keep. From information acquired during the control activities, it arose that Mr. Gupta acted through companies directly related to him or through companies with which he operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notary office- between Cartiere Miliani Fabriano and Sterling Security Systems, plus further 5 pages attached. 4. Agreement of Association in joint account dated 16.04.2012 between Fedrigoni SPA and Sterling Security Systems, undersigned by Alfonsi Claudio and Satya Parkash Gupta, along with further 9 pages attached. 5. Agreement between Cartiere Miliani Fabriano SPA and Red Rose Imex Limited, in the process of changing its name to London Security Solutions Ltd, dated 06.06.200S and undersigned by Cristopher Stephen Smith and Claudio Alfonsi, plus one page attached. 6. Agreement related to the possible supplies of papers in favour of the Bank of India, stipulated between Fedrigoni SPA and London Security Solutions Ltd, dated 01.01.2012 and undersigned by Cristopher Stephen Smith and Claudio Alfonsi. 7. Letter dated 01.02.2012 of London Security Solutions Ltd. towards Cartiere Miliani Fabriano SPA, undersigned by Cristopher Stephen Smith, relating to the agreed Remuneration percentage. 8. Reply dated 05.02.2012 of Fedrigoni SPA to the proceeding letter, undersigned by Claudio Alfonsi. 9. Letter dated 15.01.2010 sent by Cartiere Millia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd.(please, see the subsequent item) replaced the above said invoices 1/5 and 2/15. 4. Invoices issued by Green Peas Business Solutions Ltd. in 2016, along with the relevant bank transfers, banking documentation and ledger (please, see also the preceding item). 5 Invoices issued by St. James Technologies Ltd. from 2016 to 2019, along with the relevant bank transfers (net of the 10% withholding tax provided for by the Italy/United Arab Emirates Convention for the avoidance of double taxation) and Tax Residence Certificate issued by the United Arab Emirates tax administration. The gathered invoices refer to costs pertaining to the years 2016 and 2017; in connection to the payment of the invoice SJ/2019/102 dated 25th July 2019 for an amount of 2,000,000,00 Euros . The company Fedrigoni SPA exhibited only a bank transfer for a down payment of 900,000,00 Euros Fedrigoni SPA stated that the said invoice still remains to be paid. Furthermore, fro he charts gathered (please, see subsequent point request number 7). It arose that royalties have been calculated also for the years 2018 and 2019, and duly recorded by Fedrigoni SPA. Moreover, for the tax year 2018 the royaltie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Systems stipulated on 27.07.2006, along with the relevant payments and connection charts. Among the documents there are also the dibit notes of 12.09.2012, 16.10.2012, 26.11.2012, 09.12.2012, 20.05.2013, 25.02.2013 and 15.04.2013 issued by Sterling Security Systems for reimbursement of expenses to Satypa Prakash Gupta, they are paid together with the 'statements of account'. Request Number 5 The Italian company exhibited the invoices (debit notes) issued by Sterling Security Systems from 2012 to 2015 relating to reimbursement of expenses for travels - according to the Italian company carried out Satya Parkash Gupta, furnished with the relevant banking documentation and charts of connection with the payments. The payments of 350,000,00 Euros (currency date: 17.01.2013), 356,000,00 Euros (currency date: 12.04.2013) and 351,676,14 (execution date: 23.05.2013) include, in addition to the payment of the debit notes, also the payment of the commissions accrued with the agreement of association in joint account, as shown in the attached accounting sheet. The company did not provided documentation in order to attest the indicated travels (airline tickets, food an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions accrued on the amount of paper sales, equal to 4.115.894,00 Euros , whose advances (7%) had already been settled with invoices 16/13 and 7/14. - Invoice 19/14 was issued in balance (6 %) of the commissions accrued on the amount of paper sales, equal to 4,074,502,00 Euros , whose advances (7%) had already been settled with invoices 8/14. As for the purpose of the payments made to Sterling Global Partners Ltd. and Green Peas Business Solutions Ltd, please refer to the respective advisory agreements. As for the payments made in favor of St. James Technologies Ltd, Fedrigoni SP A provided charts of calculation of royalties accrued from 2016 to 2019. As already mentioned in the previous point 3, Request Number 3, also in the years 2018 and 2019 the royalties were duly accounted for by Fedrigoni SPA and were attributed: (i) for the tax year 2018 to St. James Technologies Ltd. , (ii) for the year 2019 to Khidmaty Technologies FZE on the basis of the license agreement stipulated on 11.12.2018. The Italian company has also specified that in relation to the royalties recorded in 2018 and 2019, it has been received any invoices and has not paid any amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee that the aforesaid companies were incorporated after 01.04.2015, when the assessee had become non-resident and receipts by the aforesaid companies, including from Fedrigoni, were in respect of independent services rendered by the aforesaid companies, which had no nexus with supply of bank note paper by Fedrigoni to RBI. No incriminating material was found in the course of search to establish nexus of aforesaid receipt by foreign companies. Accordingly, it is submitted, that corporate veil of such companies could not have been lifted to tax receipt of said companies in the hands of the assessee /individual. The allegation made by the assessing officer in the assessment order that the receipts by foreign companies were in lieu of alleged services that may have been rendered by assessee to Fedrigoni in relation to supply of bank note paper to RBI was purely based on assumptions and presumptions. 5. Consequently, the foreign references made to verify the same was also in furtherance of such assumptions and presumptions, dehors any incriminating material found in the course of search supporting the aforesaid assumptions. 6. In the present report, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years under consideration), vindicating the allegations made in the assessment order made on the basis of assumptions/presumptions, nor the same have been pointed out by the Ld. DR in his submissions. 10. The Ld. DR has only pointed out the factum of receipts in the bank account of assessee in the year 2012 to 2013 (Refer para 8 at Page 4 of the Submissions of Ld. DR) and in 2015-16 (refer request no. 5 at Page 9 of the Submissions of DR) which were in connection with reimbursement of travel expenses for various travels undertaken by the assessee in relation to either scouting work from Fedrigoni or in relation to reimbursement for travels undertaken as representative of foreign companies. The receipts during the period, when the assessee was resident was duly accounted and disclosed in the return of Income filed for those years. As regards, the reimbursement of expenses for the period when assessee was non-resident, the same was not taxable in India since it did not had any connection with India. Further, same being pure reimbursement, was not in the nature of income to be exigible to tax. Reference in this regard, can be made to submissions at Para 17.28 and 17.29 of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to before us during the course of hearing. We have already discussed the facts and material herein above, however in a succinct manner the facts and issues relevant for adjudication of additions made in the present appeals are that the assessee had entered into an agreement with a foreign entity, CMF on 25.03.2006 for rendering services for participation in the possible tenders for supplying currency notes to RBI and its subsidiaries. This agreement was valid up to 31.12.2007. Thereafter it was extended upto 31.12.2012. Till AY 2011-12, the assessee had shown its commission income received from Fedrigoni for carrying out operations in India, i.e. assisting CMF for supply of currency notes to RBI and its subsidiaries. The relevant figures of income shown by the assessee in various years starting from AYs 2008-09 to 2011-12 has already been incorporated above. From AY 2012-13, no income has been shown by the assessee for such activities. Admittedly, there was no agreement post 31.12.2012 and secondly, even after 01.04.2011 as discussed herein fore that there was no iota of evidence or any material information which could remotely prove that assessee received any money from CMF for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purely based on presumption that there might be continuation of terms and conditions of this agreement which was without any basis or evidences albeit on conjectures and surmises. The alleged money received by the assessee through various dubious entities during FYs 2015-16 2016-17 as alleged by the AO that assessee might have received money on account of share of profit from CMF in connection of its Indian activities is wholly erroneous and none of these informations or material found which he has been referred to by the ld. CIT DR or by the AO even remotely point out that through these dubious entities, assessee had carried out any activities in India and accordingly, independently also, we find that no income has been taxed in India from AYs 2013-14 to 2017-18. 27. Now, coming to the additions sustained or enhanced by the ld.CIT (A) in AY 2012-13, first of all, even though ld. CIT (A) had admitted that there is no incriminating material or document or any evidence either found during the course of search or even after the post search in the year that post 2012, any payment received by the assessee from CMF or any of its entities. Once it is an admitted fact then in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Undisclosed income (C*141.62/157.65) 2012-13 19.79 Crs. 2013-14 4.65 Crs. 2014-15 26.57 Crs. 2015-16 45.12 Crs. 2016-17 20.19 Crs. 2017-18 25.30 Crs. Total 141.62 Crs. 30. In the result, the appeals of the Revenue are dismissed as well as the appeals of the assessee are allowed. 30. Insofar as the grounds raised in the cross objections on the enhancement part, the same has already been allowed in favour of the assessee as same has been deleted. However, there are various other legal issues which have been raised in the cross objections, the same are not being discussed as no arguments have been made before us and same are dismissed as infructuous and are purely academic. 31. Assessee had also filed a petition for additional ground that in all the years, assessment years dated 31.12.2019 is bad in law, because the approval granted u/s 153D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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