9911796707
TMI Blog2025 (5) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... DR ORDER PER ANUBHAV SHARMA, JM: These are appeals preferred by both the Revenue as well as the Assessee against the orders of the Ld. First Appellate Authority in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short). Further details of the orders of the lower authorities are as under:- ITA No./BMA & Assessment Year CIT(A) who passed the order Appeal No. & Date of order of the CIT(A) AO who passed the assessment order & Date of order Section of the IT Act/BMA under which the AO passed the order ITAs No.405 to 411/Del/2021 AYs: 2011-12 to 2017-18 CIT(A)-24, New Delhi CIT(A), Delhi - 24/10270/2018-19 to CIT(A), Delhi - 24/10273/2018-19, CIT(A), Delhi - 24/10096/2019-20, CIT(A), Delhi - 24/10275/2018-19 & CIT(A), Delhi - 24/10276/2018-19, dated 26.02.2021 ACIT, Central Circle-5, New Delhi, date: 31.12.2018 153A ITAs No. 153/Del/2022, 716/Del/2021 & 165/Del/2022 AYs.2015-16 to 2017-18 - CIT(A), Delhi - 24/10096/2019-20, CIT(A), Delhi - 24/10275/2018-19 & CIT(A), Delhi - 24/10276/2018-19, dated 26.02.2021 ACIT, Central Circle-5, New Delhi, date: 25.02.2019, 31.12.2018 & 25.02.2019 154 r.w.s. 153A/14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g and got abated due to the time to issue the notice u/s 143(2) of the Act had not expired as on the date of search. 4. The case of revenue is that as per the information available with the revenue before the date of search on 02/03/2017, Shri Pradeep Wig, Ms. Neera Wig, Ms. Sonu Wig, Ms. Neela Kothari and Ms. Gauri Wig were shareholders of Carmichael Capital Limited (hereinafter referred to as CCL), a British Virgin Island (BVI) registered on 09/03/2005, as per certificate of its incorporation placed at PB page no. 1 Vol. No. 1. The assessee Pradeep Wig and Mrs. Neera Wig, and their 3 daughters including assessee Ms. Sonu Wig, held equal shares of 20% each in CCL. The entire investment was made from the declared and assessed sources remitted from India under the permitted Liberalized Remittance Scheme (LRS) of the Reserve Bank of India from time to time from 04/11/2005 to 31/03/2016. This is an admitted fact by the revenue also as no adverse cognizance of the same in any manner in any of the appellants/assessee has been taken in their respective assessment proceedings under the both the Income Tax Act 1961 or Black Money (Undisclosed Foreign Income and Assets) and Imposition of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding, it was NIL but assessed on deemed basis by the AO). It is also an undisputed fact the flat no. 61 belonged to a subsidiary Eaton House of CCL and was never let out. 9. The corresponding details of these transactions are made available on PB and same are not disputed by the Revenue. 10. Thus, as per the appellants/assessee, the said company CCL was not incorporated to acquire the properties as for the almost initial three years the company was only engaged in investment activities of the funds remitted under the permitted LRS from India and which source has been accepted by the revenue as no addition has been made for it. Then as per the case of assessee no dividend was ever declared by those companies to its share holders nor any money otherwise was given to the appellants/ shareholders by the said companies in any manner. 11. Thus, all the above Income-tax appeals and the BMA appeals involve common grounds of appeal, and the first issue for consideration is whether the corporate veil of an overseas BVI company in which the assessee and his family members were the only shareholders which company had purchased 2 flats in the UK could be lifted to assess the income of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el submitted that it is not the concern of assessee as investor, as to what the said company did with the amount received by it from the assessee after allotting shares to the assessee, which shares are the only asset in their hands and the assets of the company, is beyond the scope of this provision. 14. Further, ld. Counsel submits that as per the Explanation 5 u/s 139(1), a beneficiary of an asset can only be an individual who derives benefit from the asset during the previous year, the consideration for which was provided by a person other than such beneficiary. Thus, here the use of word 'and', repeat 'and', in the respective limbs clearly means, the consideration for such asset has to be provided by someone else other than the beneficiary. Since, here the consideration was provided by the assessee only, he could not at all be termed as a beneficiary and on the same analogy, the assessee can also not be considered as a beneficial owner of the asset registered in the name of the company to stretch him in the fold of the beneficial owner of the company considering disclosure of this very fact in the income-tax return form for the AY 2016-17, copy placed in PB page no. 116-178. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income from the same in the hand of the appellants/assessee is that during the income-tax search conducted on 02/03/2017 on the appellants/assessee, the revenue came across a calendar events date sheet from the mobile phone of Mr Pradeep Wig as is copied in the assessment orders, showing that Mr Pradeep Wig was indulging in maintaining the activities of the properties including using one of the said properties for own residential use in London besides his daughter Ms. Sonu Wig, who is a British citizen, was also living therein. The revenue has contended that the BVI company was incorporated to acquire properties overseas with the sole intention to bypass taxability of income of those London properties in their hands in India. 19. This is rebutted by the Ld. Counsel by reiterating his submission that it is also an admitted fact and as has been mentioned by the AO also that the income-tax department had the information of those properties owned by the overseas companies before the date of search on the appellants/assessee on 02/03/2017. He submitted that a company is an artificial entity so obviously, the activities of the companies are conducted by living persons, whether shareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough the impugned orders, it can be appreciated from the impugned order of ld. CIT(A) that aforesaid submissions were not found sustainable for following reasons:- 1.1.4 "I have considered facts of the case as well as written submissions of the appellant. From perusal of the assessment order, it is observed that the Assessing Officer has relied upon following seized material: (i) Seized data titled 'Carmichael Banc Alliance Invoice june 2005.pdf' which is an invoice raised by BANC Alliance to Sh. Pradeep Wig for incorporation of CCL (ii) Calendar events of the appellant from which it is seen that purchase, sale, renovation, leasing, furnishing, loan arrangements, meeting with brokers / estate managers in connection with purchase / sale of flats 53, 63 & 61, Eaton Estate has active involvement of the appellant (iii) Seized documents 'WORKERS [2210] xls', WORKERS [11585] xls', WORKERS [13180] xls', WORKERS.xls' as per which the appellant has employed various staff at his residence. 1.1.5 The above seized material is incriminating in nature and has been duly relied upon by the Assessing Officer to make additions in the hands of the appellant. Hence, it is held that above de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... courage or entertain the belief that it is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 4.4.18 The appellant and his family members remitted USD 51,63,720 (Rs 24,74,96,571) to BVI under Liberalised Remittance Scheme from the FY 2004-05 to 31/03/2016. Copy of relevant bank accounts was submitted during appeal proceedings. The appellant made investments in CCL out of above remittance. A comparative balance sheet of CCL from 31.03.2008 to 31.03.2016 is reproduced below: CARMICHAELCAPITAL LTD. PORTCULLIS TRUSTNET CHAMERS. P.O 3444, RED TOWN, TORTOLA COMPARATIVE BALANCE SHEET AS ON31/03/2008 TO 31/03/2016 ASSETS 31/03/2008 31/03/2009 31/03/2010 31/03/2011 31/03/2012 31/03/2013 31/03/2014 31/03/2015 [AMT IN USD $) 31/03/2016 I Tangible Assets - Leasehold Property 37,41,765 37,41,504 60,19,269 68,85,537 68,85,537 68,85,537 92,74,144 50,72,123 50,72,123 - Unquoted Investments - - - 2 2 2 2 2 2 a) 2 ordinary share of 1 US$ ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Others Reserves a) Share Application Money(Pending Allotment) 3,69,430 28,391 28,391 28,393 28,393 28,393 28,393 28,393 28,393 b) Revaluation reserve - - - - - - 23,88,607 16,29,355 16,29,354 - Retained Profit 96,844 2,33,132 54,485 (1,27,288) (3,28,393) (4,42,228) (9,49,969) (1,10,779) (2,83,300) SHAREHOLDER'S FUNDS 22,16,274 32,61,523 40,82,876 39,01,105 37,00,000 35,86,165 54,67,031 60,96,969 63,70,447 4.4.19 From facts available on record, it is observed that remittances sent from India by the appellant and his family members were invested as share capital in CCL. From the remittances, the appellant invested GBP 17,87,197 for purchase of Flat No. 63, Eaton House, UK in FY 2007-08. Investment of GBP 19,86,584 was made in FY 2010-11 for purchase of Flat No. 53, Eaton House, UK. Some loan was taken from banks for purchase of these properties. EEL was incorporated on 29.10.2009 as 100% subsidiary of CCL and Flat No. 61, Eaton House, UK was purchased for GBP 58,50,000 in FY 2014-15. 4.4.20 CCL has not done any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as business prudence and deduction claimed by assessee on account of interest paid to bank and also to its creditors was not allowable under section 36(1)(iii). The operative part of the judgment is reproduced below: "6. ......The Commissioner of Income-tax (Appeals) has upheld the aforesaid finding and has held that the assessee has tried to give the whole arrangement a colour of business expediency falling within the purpose and nexus to business. But on a close scrutiny, it is evident that it is nothing but shouldering the interest burden on itself thereby diverting the benefit in favour of the sister concern. It has further been held that where the borrowing is illusory or colourable, the interest paid on such borrowings is not allowable. Reference has been made to the decision of the Supreme Court in the case of MC-Dowell & Co. Ltd. Commercial Tax Officer [1985] 22 Тaxman 11/154 ITR I48. The Tribunal, by the impugned order, in paragraph 6.2 has held that the assessee firm has supplied its finished products to its sister concern for which it has not insisted for the sale proceeds and has availed letter of credit against the bills and paid interest. This arrangement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able property may be taxed in the Contracting State in which such property is situated. Article 14 CAPITAL GAINS Except as provided in Articles & (Air transport) und 9 (Shipping) of this Convention, each Contracting State may tax capital gains in accordance with the provisions of its domestic law." 4.4.24 The term 'may be taxed' has neither been defined in the Act nor in the treaty. Section 90(3) of the Act provides that - "Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Actor the agreement. have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf." 4.4.25 The Assessing Officer has rightly considered Articles 6, 14 and 24 of Indo-UK DTAA as well as section 90 of Income Tax Act to conclude that income of Indian resident shall include his income from assets located outside India and country of residence also has right of taxation. ...... 4.5.4 I have considered facts of the case as well as written submissions of the appellant. As per details av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coordinate bench has held as follows:- "34. We have carefully considered the rival contentions and perused the material placed on record and the orders of the lower authorities as well as the several judicial precedents relied upon before us. From the record, we noticed that the assessee is an Individual and is engaged in the business of manufacturing and trading of master batch, polymers etc. and for the assessment year under consideration, return of income under section 139(1) of the I.T. Act, 1961 was filed by the assessee for the assessment year 2019-20 on 23-8-2019 declaring total income of Rs. 1,20,17,790/-. As per the revenue, the credible intelligence was received in the month of May, 2018 that the assessee had interests in financial assets held outside India, and also that he is signatory in financial assets held by him outside India. On verification of record, it was seen that the assessee had filed his Indian Income-tax Return u/s 139(1) for the A.Y. 2016-17 and A.Y. 2017-18 in which the assessee had categorically stated that he did not hold, as beneficiary or otherwise, any asset (including financial interest in any entity) located outside India, and also that he did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. For ready reference reliance is placed on the following judicial precedents as under: MRS. BACHA F. GUZDAR v. CIT (1955) 27 ITR 0001 (SC) Agricultural income-Dividend from tea companies- Assessee, a shareholder in a company engaged in manufacture of tea whose income was exempt to the extent of 60 per cent, receiving dividends from such company-Dividends arose to the shareholder due to investment in the company-Shareholder has no direct relationship with land as the same belongs only to the company, nor to its shareholders, nor directors BHARAT HARI SINGHANIA v. CWT [1994] 73 TAXMAN 3/207 ITR 0001 (SC) Held : Wealth being assessed is that of the shareholder and not of the company. The company may own agricultural assets and if company were to be liable to wealth tax, the said assets may be excludible in its hands. But that has no relevance to the case of a shareholder. The shareholder does not own and cannot claim any portion of the property held by the company of which he is a shareholder. The company is an independent juristic entity. An assessee holding shares in a company whose assets comprise wholly or partly of agricultural land, is not entitled to exclude such shares fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghts of the incorporated body must be judged on that footing and cannot be judged on the assumption that they are the rights attributed to the business of individual citizens. 38.8 Therefore, considering the facts and circumstances discussed above and various evidences produced by the assessee and respectfully following the case laws cited by the assessee, we are of the view that the non-resident foreign company M/s. Agrasen Polymers FZE based at UAE is a separate legal entity and all the funds/investments etc. belong to the company and no tax liability can be fastened on the assessee. Thus, we allow this ground No. 9 of the assessee. GROUND NO. 14 - THE ASSESSEE MADE DUE DISCLOSURES AS ALLOWABLE IN LAW, THAT TOO PRIOR TO THE ISSUANCE OF NOTICES UNDER THE BLACK MONEY (UFIA) & IMPOSITION OF TAX ACT, 2015, PROVING THAT THE ENTIRE CASE IS BASED ON A PRE-CONCEIVED NOTION." 24. Then we find that the AO has categorically mentioned in para 5.2 page 10 of the assessment order for the AY 2011-12 that in the statement of the assessee, Mr Pradeep Wig recorded by the department on 02/12/2015 i.e. much before the date of search on 02/03/2017, questions were put to him regarding ownership of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that there was no basis for lifting of corporate veil by the Assessing officer as there is no allegation of introduction of any tainted money through any of the transaction unearthed during the search. Merely because it is a case of closely held company and shares, there cannot be any presumption that company is shell or bogus entity. Hon'ble Gujrat High Court in the case of Ajay Surendra Patel V/s Dy. CIT, (2017) 394 ITR 321 (Guj), while examining the issue of piercing of veil for imposing tax liability has extensively examined the issue as to under what circumstances piercing the corporate veil in tax matter is permissible and it will be beneficial to reproduce certain parts from para 15 to 18 herein below; "15. The concept of lift or piercing of corporate veil, as sometimes referred to as cracking the corporate shell, is applied by the Courts sparingly. However, it is recognized that boundaries of such principle have not yet been defined and areas where such principle may have to be applied may expand. However, principally, the concept of corporate body being an independent entity enjoying existence independent of its directors, is a well known principle. However, with ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly, the corporate veil can be lifted if it is found that the company is acting as an agent of shareholders though it has got legal entity. In a well known case of Re F.G.Filims Ltd., a British company which was formed with 90% of shares held by American director. The said British company and an American company arranged to produce a films in the name of the British company. The Board of Trade of Great Britain refused to register the firm as British firm by upholding that English company acted as the nominee or agent of the American company and this has taken place upon lifting of corporate veil. Therefore, this is also relevant case law for the subject on hand as the petitioner upon induction has brought share capital to the extent of 98.33% and the certificate of commencement of business was obtained after induction of the petitioner. Therefore, practically the company was to be used as lever to transact a business which is de-hors the Memorandum of Association. Therefore, these are the relevant circumstances in which it can safely be stated that authority has rightly exercised statutory powers to lift the corporate veil to examine behind it and fix the liability for protection o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidential properties (dwellings) are owned directly by individuals. But in some cases, a dwelling may be owned by a company (or other collective investment vehicle). In these circumstances, the dwelling is said to be 'enveloped' because the ownership sits within a corporate 'wrapper' or 'envelope'. ATED will not apply where an individual alone, or with other individuals, owns a residential property. A property is an enveloped dwelling for ATED purposes if it is used or can be used as a residence (for example, a house or flat) and owned by a 'nonnatural person' (NNP). A non-natural person is a corporate entity, such as a company, limited liability partnership, trust or investment scheme. To be classed as a dwelling, the property must be: * Used exclusively or in part as a residence * In the process of being adapted or constructed as a residence If the property has partial residential use, the ATED only applies to the value of that part of the property. For example, a self-contained flat within a mixed-use property would be a separate dwelling for ATED purposes, as would any garden or grounds it includes. Some properties that qualify as dwellings are eligible for ATED relief. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, who is not required to furnish a return under this sub-section and who at any time during the previous year, - (a) holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or (b) is a beneficiary of any asset (including any financial interest in ar4ny entity) located outside India, shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed:" 31.1 It can be further seen that before the said insertion, the said 4th proviso inserted by the Finance Act, 2012 w.e.f. A.Y. 2012-13 was as below: "Provided also that a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6, who is not required to furnish a return under this sub-section and who during the previous year has any asset (including any financial interest in any entity) located outside India or signing authority in any account located outside India, shall furnish, on or before the due dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be included in the total undisclosed foreign income. (3) The income included in the total undisclosed foreign income and asset under this Act shall not form part of the total income under the Income-tax Act. 32. Thus, the income from the overseas sources in terms of the clauses (a) and (b) u/s 4(1) of the BMA has to be understood with reference to the provisions under section 139 of the Income-tax Act. 33. Section 2(15) of the BMA specifies that all other words and expressions used in the BMA if not defined in the BMA, shall have the meaning as assigned to those words in the Income-tax Act, 1961. 34. Undisclosed assets located outside India has been defined u/s 2(11) of the BMA as below: "undisclosed asset located outside India" means an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no explanation about the source of investment in such asset or the explanation given by him is in the opinion of the Assessing Officer unsatisfactory; 35. Undisclosed foreign income and asset as per the BMA has been defined u/s 2(12) as below: "undisclosed foreign incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examining the factor of 'beneficial interest' or 'beneficiary' for the purpose of the Act or BMA, what should be material is how the country where the impugned property is located abroad, treats the property or interests in such property for the purpose of estate and taxation. Thus where the law of UK levies Annual Tax on Enveloped Dwellings (ATED), as an annual charge on UK dwellings held by a Non-Natural Person (NNP) e.g. a company and admittedly such levy was paid for the impugned properties by CCL then, there was no legal sanctity with the Indian authorities to hold that assessee had any beneficial interest or were beneficiary for the purposes of aforesaid provision under the Act or BMA. There is no presumption against the assessee which assessee is supposed to rebut by virtue of being a share holder in a company to allege that property held by a company is giving some advantage, profit, or privilege exclusively to the assessee but the revenue is supposed to establish the beneficial interest of an assessee or assessee being beneficiary by some sort of direct evidences of the advantage, profit, or privilege derived by the assessee from something, often a contract or agreement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held and owned by the company. No shareholder has a right to claim any part of the sale proceeds of the assets of the company nor has any right at all in any legal manner to seek its division or alienation or appropriation in his favour. A shareholder has only a right to sell his shareholding to another person but has no right to sell the assets of the company which only the company can sell. Therefore, there is no access on the assets of the company to any shareholder. 39A Then the AO has also mentioned in para 5.2.1 on the page nos. 13-14 of the assessment order that information received from Barclays Bank Singapore in respect of the bank account no. 913748000 of CCL reveals that Ultimate Beneficial Owners of CCL were Mr Pradeep Wig, Ms. Neera Wig and Ms. Sonu Wig. In response to the same the ld. counsel has stated that the concept of Ultimate Beneficial Owners (UBO) is not parallel to holding assets beneficially as mentioned in the definition given u/s 139(1) of the Act. We are of considered view that this itself distinguishes the two entities altogether as in respect of a company, the Ultimate Beneficial Owners of the said company are its shareholders only but that by itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that where an agreement entered into by the Central Government with the Government of any country outside India for granting relief of tax or as the case may be, avoidance of double taxation, provides that any income of a resident of India "may be taxed" in the other country, such income shall be included in his total income chargeable to tax in India in accordance with the provisions of the Income-tax Act, 1961 (43 of 1961), and relief shall be granted in accordance with the method for elimination or avoidance of double taxation provided in such agreement. 43. To challenge the said action, the assessee relies on the decision of the Coordinate Bench in the case of Natasha Chopra vs DCIT in ITA No. 6121- 6122/Del/2018 dated 12/05/2022 where the facts were identical as of the assessee as therein also the property was held in UK. The said decision holds as below: "9. Thus, we find that in the absence of an express provision, the right of the resident country to tax its residents cannot be taken away under the DTAA. Therefore, the expression "may be taxed" cannot be construed to mean "shall be taxable only in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ann.com 399 (SC) dated 24/04/2023. The evidence relied by the Revenue by way of date sheet does not show the calendar events as mentioned in the assessment order do not contain any incriminating information to sustain additions because the calendar events just explain as to what the assessee did there or wished to be done there with no financial implications corroborated from any material found otherwise in search or post search enquiry. We find no substance in drawing a inference of incriminating material for the reasons assessee family was living for a few days in the property of the company. Rather the ATED paid by the company is only for the reasons of keeping the dwelling vacant. Thus, in no manner the same can be considered as incriminating so as to initiate action against the directions of the Hon'ble Supreme Court in the case of Abhisar Buildwell (supra). 46. There is substance also in the contention of appellants/assessee that the Revenue did not find any single amount having being invested in those companies by anyone from undisclosed sources much less by the appellants/assessee. Thus, there was no purpose to impugn that the company was incorporated with an intention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m any of the properties / bank accounts of and from the company are deleted in the hands of the assessee and his spouse as they are held to be not the beneficial owner of the assets of the company CCL at all. In conclusion, this issue no. 1 is decided in favour of appellants/assessee and all the grounds of appeal of the assessee in this regard are allowed and all the grounds of appeal of the Department in this regard are dismissed. 49. The second issue is specific in the case of Ms Neera Wig for AY 2012-13, the grounds of appeal No.12 to 15 read as under:- "12. Without prejudice to the above grounds, if the rental income of the said properties is to be assessed in the hands of the assessee under the Income-tax Act, then the benefit u/s 23(1)(b) of the Act i.e. one self-occupied residential property should be allowed to the assessee who does not have any other residential property. Thus, necessary directions should be issued in this regard. 13. The CIT(A) has erred in law and on facts in confirming the addition of Rs. 43,90,240/- as income from other sources ignoring the fact that the amount received as advance for sale of the property at Green Field Colony Faridabad Haryana wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to assess the said amount as income u/s 51 of the Act, the same could have been done in the period relevant to the AY 2013-14 and where the assessee had herself declared the same and offered capital gains tax as has also been admitted by the AO in the assessment order for the AY 2013-14. Therefore, in terms of the facts and the law as above, no addition could have been made for any amount in the period relevant to the AY 2012-13 and thus sustaining these grounds addition is deleted. 52. The third issue is in the appeal of Ms Neera Wig for AY 2013-14 and the relevant grounds No.13 and 14 read as under:- "13. The CIT(A) erred in law and on facts in confirming the addition of Rs. 8,01,510/- by applying the provisions of the section 50C of the Act on the sale of Greenfield plot ignoring the objection of the assessee that the fair market value of the said property was lower than the prevalent circle rate at the time of sale and request to refer the same for valuation. Thus, the addition so made without complying-with the provisions of the Act should be deleted. 14. The CIT(A) erred in law and on facts in applying the provisions of the section 50C of the Act on the sale of Greenfiel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this, we deem it fit to restore this issue to file of AO with a direction to refer the matter to DVO and decide in accordance with provisions of section 50C(2) of the Act. This issue is allowed for statistical purposes. 56. Fourth issue arises out of estimated disallowance of the expenses in the revenue's appeal in the hands of Mr Pradeep Wig. The Revenue has also challenged disallowance of 20% on estimated basis of some expenses duly recorded in the books of account of the two firms in CCL and EEL where the assessee Mr. Pradeep Wig was a partner alleging those to be personal expenses. The CIT (DR) relied on the assessment order to support the disallowance. However, we find that in the assessment proceedings u/s 153A of the Act, no addition can be made on estimated basis particularly when 80% of the said amount has been accepted as allowable. Moreover, if any disallowance was to be made it could be made in the hands of the firms being LLP. No amount can be assessed in the hands of the assessee as no benefit ever accrued to the assessee from the said amounts. Thus we uphold the deletion made by the CIT(A) by a reasoned order, the findings in which we are inclined to follow. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn asset includes a foreign asset "held by the assessee". Since the said bank account is held in the names of 5 Wig family members, the addition in the hands of the assessee is restricted to Rs 86,331/- being 1/5th of the above amount. Ground no. 15 is partly allowed." 61. In respect of interest received by the overseas company in its bank accounts on the deposits with the banks, the ld. Counsel submitted that appellants/assessee those amounts were not considered as income under the Income-tax Act but have been assessed in the assessment order under the BMA and that one of the companies and only the companies could be assessed for the said amounts in UK as per prevalent law. Deeming provisions do not apply in respect of such income as interest income. The sources of deposits in those bank accounts were duly disclosed and therefore, para materia the interest income and deposits with the bank also should disclosed there in the hands of the company warranting no addition here in India. The assessee also relies on the submissions made in respect of assessment of rental income on deeming provisions, requesting for deletion of the addition. Since, we have held hereinabove that no amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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