The Punjab and Haryana High Court quashed income tax addition under Section 69 of the Income Tax Act, 1961 as sufficient explanation on source of investments given on HSBC Geneva Deposits.
The present appeals filed under Section 260A of the Income Tax Act, 1961 have been directed against the order of the Income Tax Appellate Tribunal, Amritsar dated 13.06.2022 for the Assessment Years 2006-2007 & 2007-2008.
The addition made by the Assessing Officer and confirmed by the Commissioner Income Tax, Jalandhar was held to be not justified as there was no corroborative cogent and concrete evidence to establish either the ownership of the alleged bank account or the alleged disputed deposits in those accounts to be belonging to the assessee and, thus, it was held that there was no violation of the Double Tax Avoidance Convention (DTAC).
It was also recorded that nephew had paid all the taxes on the outstanding amount in the impugned bank account to the revenue authority of U.K under specific disclosure facility of all the irregularities in U.K as per the certificate of C.A i.e. M/s Stonegate Trinity LLP. The certificate had further been verified and confirmed by HM Revenue & Customs (HMRC) Authority of U.K. Resultantly, addition made by the relevant Assessing Officer and confirmed by the Commissioner of Income Tax was deleted while allowing the appeals.
The claim of the assessee regarding closure of the profile w.e.f. 11.06.2004 was rejected on the ground that closure of profile does not mean closure of bank account, since the said modification was made on 31.07.2004 and therefore, the contention that account having been closed on 11.06.2004 was held to be incorrect. The onus lay upon the appellant under the provisions of Section 69/69A of the Income Tax Act, which apparently had not been discharged even in the course of appellate proceedings.
It was also noticed that cash and investments were transferred through Sauvingnon Holdings Ltd. to the India Trust whose settler is again the assessee. Therefore, transactions in Account No.11276695 having not been confirmed was held to be the amounts belonging to the assessee and he had failed to discharge the onus both at the stage of assessment as well as in the course of present proceedings.
Quashing the income tax addition a Division Bench of Justices GS Sandhawalia and Harpreet Kaur Jeewan observed that “Sufficient explanation has been given regarding this fact by filing an affidavit, which has not been taken into consideration by the Assessing Officer or by the Commissioner of Income Tax. The assessee being an agriculturist and only having a small holding of land apparently could not be in possession of such huge amounts, which were also in foreign currency. Nothing as such was produced on record that the same was transferred from India where he was doing some business.”
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