The Income Tax Appellate Tribunal, Mumbai Bench ordered to pay Tax on Undisclosed Income held in LGT Bank in Liechtenstein. The tribunal held so while dismissing all the appeals filed by the assesses.
These appeals of the four assessee are against the orders by the Commissioner of Income Tax (Appeals), Mumbai, wherein addition regarding deposits in the foreign bank account have been challenged.
The AO had received specific information regarding the undisclosed income of the appellant in the form of bank statement of trust in which appellant is the beneficiary which includes four individuals.
The information received by the AO completely matches with that of Appellant. There is no doubt that the information pertained to the appellant and his family members about they being beneficiaries of Manichi Trust formed on 10/12/1993.
The summary of the bank statement of the said Trust as on 31.12.2001 indicates that the opening balance was US$ 309,154.74 and the accrued interest thereon was US$ 83.82. There is no mention of any debits or credits during the year except for the interest portion. This shows that the account is still active and since the names of the appellant have been mentioned therein, there is no doubt that the amount credited is appellant’s income.
Even if the appellant has denied any knowledge of the trust or has not travelled to that area, the appellant cannot explain how a trust was created wherein he and his family members were made the beneficiaries.
Invoking the section 166 of the act does not debar the department from making direct assessment of the appellant and hence even on this account the argument of the appellant fails and upheld the strand of AO.
Against this order assessee went an appeal before ITAT and the counsel of the assessee submitted that the said information received prior to the previous year i.e. 31.12.2001.the counsel of assessee also added that the only information received by AO was that assessee is a beneficiary of a Trust which has a bank account in LGT Bank, Liechtenstein and they drawn conclusion based on that.
The assessee also pointed that the decision taken by the AO based on the stolen data and the AO is not aware of the currency in the bank account; sometime he mentioned it as euro or US dollars.
On contrary to this counsel of the department submitted that the said information was received from the sovereign government of Germany from the employee of the LGT Bank, Leichtenstein and produced data for the verification by bench.
The bench including Accountant Member Shamim Yahya and Judicial Member Amarjit Singh gone through these documents and found that the that the facts and circumstances as mentioned in the case of Shri Ambrish Manoj Dhupelia and others (supra) are identical to the present case.
The tribunal had upheld the reopening as well as the addition of the amount of deposit in the bank account in the hands of the assessee’s.
Finally the tribunal ordered that the present case, the only distinction is that the assessee’s are beneficiary of Manichi Trust. The ld. CIT (A) in his appellate order has elaborately considered the issue of reopening. His order was well reasoned.
Subscribe Taxscan Premium to view the Judgment
