The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) deletes addition on account of Black Money in Foreign bank accounts with HSBC as the assessee has no beneficial interest in the company.
The Respondent, Mr. Ganpat Singhvi is an individual residing in Abu Dhabi, UAE since 1976. The Respondent is a Chartered Accountant, working with Al Nasser Holdings as Group Advisor & Director (formerly as Managing Director). During FY 2005-06 (AY 2006-07), the respondent resided in India for a period of 45 days which does not exceed the maximum threshold limit specified in Section 6 of the Income-tax Act, 1961and accordingly, the respondent was non-resident for AY 2006-07.
The revenue raised the contention against the deletion of the addition of Rs.5,30,92,953/- by CIT(A) as made by the AO on account of peak balance during the year in two bank accounts with HSBC Private Bank(Suisse) SA, Geneva.
The CIT (A) after appreciating the facts including the additional evidence held that the respondent has no beneficial interest in the company Blueridge Investment Corporation and the sources of credit in his bank account with HSBC Geneva are from his bank account with HSBC Abu Dhabi and thus deleted the additions made by the AO in respect of assets lying in the name of Blueridge Investment Corporation and the respondent-assessee with HSBC Geneva and thus allowed the appeal.
The revenue submitted that had the assessee signed the consent waiver form, the Revenue Authority could have found out the truth behind the curtain. The whole modus operandi which is adopted by the assessee to park the black money is so complex and intricate and also the fact that the assets are in a foreign country, it is very difficult for the Revenue Authority to conduct the inquiry and dig out the truth. The ld DR finally argued that the taking into account the circumstantial evidences, it is quite clear that the money belonged to the assessee and therefore prayed that the order of ld. CIT(A) may be set aside and that of AO may be restored.
The Coram of Judicial Member, Ravish Sood and Accountant Member, Rajesh Kumar while upholding the order of CIT(A) held that the assessee is not the beneficial owner of the bank account held by Blueridge Investment Corporation with HSBC Geneva. Similarly, as regards the joint account fo the assessee with his brother in HSBC Geneva, the CIT(A) recorded a finding on the basis of evidence that money was transferred in the bank account out of the income earned in Abu Dhabi and savings made by the respondent-assessee during his stay in Abu Dhabi, UAE as a non-resident Indian since 1976.
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