NARAINDAS GULABRAI TULSIANI,DELHI vs. ACIT, INT. TAX CIRCLE 4(2)(1), MUMBAI

(AY. 2007-08), the assessee has taken the following grounds of appeal: 1.The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I.T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014. 2.The assessment is barred by limitation as the provisions of Section 149(1)(c) of the I.T.Act 1961 would be applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

3. The action of the A.O. in rejecting the genuineness of bank statements provided by HSBC Switzerland inspite of Fresh Consent Waiver Forms submitted in the desired format and his failure to obtain the information from Swiss or UK tax authorities directly through proper channel and inspite full cooperation extended by the assessee, is illegal, arbitrary and against the facts and circumstances of the case.

4. The learned A.O. erred on the facts and in law in making an addition of Rs. 1,64,76,028/-on account of difference between the peak bank balance as on December 2006 and the opening bank balance in the base note as on March 2006 of the appellant's HSBC account, being a non-resident British

4 Pratab Gulabrai Tulsiani and group National non-citizen of India was neither earned in India nor accrued or arise in India and much less received in India. 5. The Action of the A.O. in charging interest under Section 234A and 2348 of the L. T. Act 1961 of Rs. 1,14,73,533/- and Rs. 1,16,93,122/- respectively is unjust, illegal, arbitrary and against the facts and circumstance of the case.

(AY. 2006-07), the assessee has taken the following grounds of appeal:

1. The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I.T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014.

2. The assessment is barred by limitation as the provisions of Section 149(1)(c) of the L. T. Act 1961 would he applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

3. The action of the A.O. in rejecting the genuineness of bank statements provided by HSBC Switzerland inspite of Fresh Consent Waiver Forms submitted in the desired format and his failure to obtain the information from Swiss or UK tax authorities directly through proper channel and inspite full cooperation extended by the assessee, is illegal, arbitrary and against the facts and circumstances of the case.

4. The learned A.O. erred on the facts and in law in making an addition of Rs. 10,93,68,607/- of peak amount appearing in the Base Note of the appellant, being a non-resident British National non-citizen of India was neither earned in India nor accrued or arise in India and much less received in India

5. Without prejudice to the above, the learned A.O. erred in making addition even of the opening balance as on 01.04.2005 in the HSBC account of US $ 23,46,601/- which translates @ 44.07 to Rs. 10,34,14,723/-is unjust, illegal, arbitrary and against the facts and circumstance of the case.

6. The Action of the A.O. in charging interest under Section 234A and 234B of the I. T. Act 1961 of Rs. 8,12,33,792/-and Rs. 8,27,04,087/- respectively is unjust, illegal, arbitrary and against the facts and circumstance of the case.

5 Pratab Gulabrai Tulsiani and group 5. In (AY. 2007-08), the assessee has taken the following grounds of appeal:

1. The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I. T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014

2. The assessment is barred by limitation as the provisions of Section 149(1)(c) of the L. T. Act 1961 would be applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

3. The action of the A.O. in rejecting the genuineness of bank statements provided by HSBC Switzerland inspite of Fresh Consent Waiver Forms submitted in the desired format and his failure to obtain the information from Swiss or UK tax authorities directly through proper channel and inspite full cooperation extended by the assessee, is illegal, arbitrary and against the facts and circumstances of the case.

4. The learned A.O. erred on the facts and in law in making an addition of Rs. 1,62,57,665/- on account of difference between the peak bank balance as on December 2006 and the opening bank balance in the base note as on March 2006 of the appellant's HSBC account, being a non-resident British National non-citizen of India was neither earned in India nor accrued or arise in India and much less received in India.

5. The Action of the A,O. in charging interest under Section 234A and 234B of the I. T. Act 1961 of Rs. 1,13,19,920/ and Rs. 1,15,36,570/- respectively is unjust, illegal, arbitrary and against the facts and circumstance of the case.

(AY. 2006-07), the assessee has taken the following grounds of appeal:

1. The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I. T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014.

2. The assessment is barred by limitation as the provisions of Section 149(1)(c) of the I. T. Act 1961 would be applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 6 Pratab Gulabrai Tulsiani and group dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

4. The learned A.O. erred on the facts and in law in making an addition of Rs. 11,95,05,368/- of peak amount appearing in the Base Note of the appellant, being a non-resident British National non-citizen of India was neither earned in India nor accrued or arise in India and much less received in India.

5. Without prejudice to the above, the learned A.O. erred in making addition even of the opening balance as on 01.04.2005 in the HSBC account of US $ 25,07,735 which translates @ 44.07 to Rs. 11,05,15,8751/-is unjust, illegal, arbitrary and against the facts and circumstance of the case.

1. The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I. T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014.

2. The assessment is barred by limitation as the provisions of Section 149(1)(c) of the I. T. Act 1961 would be applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

3. The action of the A.O. in rejecting the genuineness of bank statements provided by HSBC Switzerland inspite of Fresh Consent Waiver Forms 7 Pratab Gulabrai Tulsiani and group submitted in the desired format and his failure to obtain the information from Swiss or UK tax authorities directly through proper channel and inspite full cooperation extended by the assessee, is illegal, arbitrary and against the facts and circumstances of the case.

5. The Action of the A.O. in charging interest under Section 234A and 2348 of the I. T. Act 1961 of Rs. 1,16,71,523/- and Rs. 1,18,94,901/- respectively is unjust, illegal, arbitrary and against the facts and circumstances of the case.

(AY. 2006-07), the assessee has taken the following grounds of appeal:

1. The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I. T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014.

2. The assessment is barred by limitation as the provisions of Section 149(1)(c) of the I. T. Act 1961 would be applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

3. The action of the A.O. in rejecting the genuineness of bank statements provided by HSBC Switzerland inspite of Fresh Consent Waiver Forms submitted in the desired format and his failure to obtain the information from Swiss or UK tax authorities directly through proper channel and inspite full cooperation extended by the assessee, is illegal, arbitrary and against the facts and circumstances of the case.

4. The learned A.O. erred on the facts and in law in making an addition of Rs. 14,12,08,589/-of peak amount appearing in the Base Note of the appellant, being a non-resident British National non-citizen of India was neither earned in India nor accrued or arise in India and much less received in India.

8 Pratab Gulabrai Tulsiani and group 5. Without prejudice to the above, the learned A.O. erred in making addition even of the opening balance as on 01.04.2005 in the HSBC account is unjust, illegal, arbitrary and against the facts and circumstance of the case. 6. The Action of the A.O. in charging interest under Section 234A and 234B of the I. T. Act 1961 of Rs. 10,49,19,107/-and Rs. 10,68,18,095/- respectively is unjust, illegal, arbitrary and against the facts and circumstance of the case.

(AY. 2007-08), the assessee has taken the following grounds of appeal:

1. The learned Assessing Officer erred on facts and in law in reopening the assessment u/s 147 of I. T. Act 1961 inspite of his satisfaction that the proceedings are liable to be dropped and the communication thereof made vide Email dated 25.11.2014.

2. The assessment is barred by limitation as the provisions of Section 149(1)(c) of the I. T. Act 1961 would be applicable for reopening of the assessment of resident Indians as per the CBDT Circular No. 3 of 2012 dated 12.06.2012 and the base note having mentioned that the appellant was a British National and the HSBC account was opened on 16.02.1994, there could be no reason to believe that the income of the appellant had escaped assessment.

3. The action of the A.O. in rejecting the genuineness of bank statements provided by HSBC Switzerland inspite of Fresh Consent Waiver Forms submitted in the desired format and his failure to obtain the information from Swiss or UK tax authorities directly through proper channel and inspite fall cooperation extended by the assessee, is illegal, arbitrary and against the facts and circumstances of the case.

4. The learned A.O. erred on the facts and in law in making an addition of Rs. 2,74,61,100/-on account of difference between the peak bank balance as on December 2006 and the opening bank balance in the base note as on March 2006 of the appellant's HSBC account, being a non-resident British National non-citizen of India was neither earned in India nor accrued or arise in India and much less received in India

5. The Action of the A.O. in charging interest under Section 234A and 234B of the I. T. Act 1961 of Rs. 1,92,01,470/-and Rs. 1,95,68,962/- respectively is unjust, illegal, arbitrary and against the facts and circumstance of the case.

9 Pratab Gulabrai Tulsiani and group 10. With the consent of both the parties, the case of the assessee, Partab Gulabrai Tulsiani, in pertaining to Assessment Year 2006-07 was taken up as the lead case during the course of hearing and for the purposes of present discussion.

10 Pratab Gulabrai Tulsiani and group 12. The assessee thereafter carried the matter in appeal before the Ld CIT (A), however, without any success and the appeal was dismissed by CIT(A) vide order No. CIT(A)-58/10267/2015-16, dated 13-03-2019. The assessee thereafter challenged the said order and filed appeal before the Tribunal. The Co-ordinate Bench vide its order (in dated 30-09-2022 has set aside the assessment for de novo adjudication by the AO and findings of the Co-ordinate Bench read as under: "In view of the above position, and in view of the fact that the Assessing Officer is still in the process of requisitioning information, from the bank, we deem it fit and proper to remit the matter to the file of the Assessing officer for adjudication de novo after obtaining necessary information from the banks concerned, subject to the condition that the assessee will furnish fresh consent waiver form in such format as the Assessing Officer may specify, and fully co-operate with the Assessing Officer by furnishing such permissions, declarations and authorizations etc. to collect the information, as the Assessing officer may requisition. The assessee will fully co-operate with the Assessing Officer in the remanded proceeding"

13. During the course of fresh round of assessment proceedings, the assessee was asked to furnish the consent waiver forms, which were submitted before the A.O. in the format desired by him on 22-05-2023, which were thereafter sent by AO to CBDT for onward transmission / forwarding to HSBC Geneva for furnishing the necessary documents. The HSBC Geneva however expressed its inability to furnish the bank statements citing Swiss laws, at the same time, it suggested the AO to consider proceeding through DTT channels. There is nothing further on record as to whether the AO proceeded to approach the HSBC Bank through DTT channels or not and if yes, the outcome thereof. The assessee was however asked to submit the authenticated HSBC bank statements. As per the AO, the assessee has not furnished authenticated bank statements, whereas the claim of the assessee is that the HSBC Bank provided these statements to the assessee in a Pen Drive and these were thereafter forwarded to the AO which are included as part of 11 Pratab Gulabrai Tulsiani and group assessee‟s paper books at Pages 239 to 896 and were not considered by the A.O. in the present proceedings. The AO thereafter considering the appellant's submissions, passed the draft assessment order u/s 144C(1) of I.T.Act 1961 dated 31-03-2024 determined taxable income of Rs. 11,28,15,433/-. The assessee raised the objection against the draft assessment order before the Dispute Resolution Panel-2, Mumbai (DRP) and the DRP has issued directions u/s 144C(5) of I.T. Act 1961 dated 29- 11-2024 dismissing the objections so raised and pursuant thereto in conformity with the directions of the DRP, the AO passed the impugned assessment order u/s 143(3) r/w 147 r/w 254 r/w 144(13) dated 23-12- 2024 against which the assessee is in appeal before us.

14. Before we proceed further and consider the contentions advanced by both the parties, it would be appropriate to refer to the findings of the AO and the same read as under: “8. From the perusal of the submission, it can be seen that the details submitted by the assessee is a just a reiteration of its earlier submission. As per the submission of the assessee, his father had expired in the year 1967. The assessee has not given any evidence with respect to the manner in which the alleged amount was maintained from the period 1967 to 1994 and eventually transferred in 1994 only. Thus, the claim of the assessee that the receipt of an amount of approximately 700k GBP was on account of inheritance from his father is not an admissible evidence, in the absence of his father‟s will or any other supporting documentary evidence. There is no clarity on what are the assets of the father so distributed; the assessee along with his brothers has connection with India. They have their ancestral property in Mumbai which is the property in Seaface House. Worli. It is likely that his father may have properties and assets in India. Without documents pertaining to the distribution of estates, the assessee has not shown that the money received by him from his father is not from any source in India. Further assessee had submitted credit advice dated 17.2.1994 during appellate proceeding stage before CIT(A) to support his claim that initial deposit of GBP 6,68.624.73 was w.r.t. inheritance received from his father. The advice was neither signed/ digitally signed nor stamped and the authenticity of the document remains to be established. Without prejudice to the same, the credit advice was examined. It is seen that the advice same is for Republic National Bank of New York, Suisse, SA (this company was 12 Pratab Gulabrai Tulsiani and group subsequently acquired by HSBC Bank, USA in 1999). This credit advice is for an account number 1035769 which is a current account of the assessee in HSBC Bank, Geneva. Thus, It is seen that even from this detail, the source of this sum of GBP 6,68,624.73 is not established.

10. The assessee during the course of reassessment had submitted that these funds were received by him from his elder brother as legacy from his father. If that is so, then bank statement of his elder brother evidencing the said transaction or the manner in which such funds were received by the assessee could have been submitted, which has not been done. 10.1. Moreover, and more importantly, even if the nature and source of such credit is established, a statement, that this sum credited more than a decade ago is the sole source of transactions during the year and that such transactions are not taxable in the hands of the assessee in India, as per section 9 of the Act, remains unsubstantiated, in the absence of details of transactions in the intervening years.

11. The assessee has furnished a copy of his passport to show that he is a British citizen and a non-resident. However, the issue of examination is whether the deposits in the HSBC bank accounts are from an Indian source and not his residential status. Even when the assessee is an NRI, income sourced from India needs to be offered for taxation. Therefore, this document filed by the assessee has no merit w.r.t. the issue under Consideration.

14. It is important to note that the assessee cannot state that the funds transferred from one account to another bank account is the source of deposits in the second bank account. The assessee needs to furnish details of the source of funds appearing in the specified bank accounts, in his hands which have not been done in this case. All the bank accounts need to be seen cumulatively, and the assessee has to explain the source of inward transfers in his bank accounts as a whole and not explain inward transfer in one account through a transfer in from another account which only gives a vague, disconnected picture and does not explain the core issue of whether the deposits in assessee‟s account are taxable in India 15. It is clear from the above discussion, that even by way of furnishing the bank statements, the assessee has merely reiterated his stand taken during the assessment proceedings without backing it by relevant evidence. The assessee during the assessment proceedings was not forthcoming about supporting documents, holding that being non-resident such details are not pertinent. However, being a non-resident, does not absolve the assessee from paying taxes on the amounts in the foreign account as per Section 9(1) of the Act, especially in view of assessee‟s Indian connection. Neither at the reassessment stage nor at the appellate stage, has the assessee been able to produce satisfactory details sufficiency of assessee‟s additional evidence filed during appellate proceedings, adds weight to the specific findings given and lacunae pointed out in para supra due to which the peak credit in these accounts was held as taxable in India. In view of the above discussion the following findings are evident: -

1. 1. The bank a/c with HSBC Geneva or fund lying therein was never disclosed to Income Tax by the assessee. The base note has an Indian address and it clearly mentions that the Indian address is the legal address of the assessee.

2. Assessee has not been able to substantiate the source of fund appearing the bank a/c in HSBC Geneva. The bank statement furnished by the assessee was not authenticated by the bank authorities 3. Assessee has not been able to explain along with documentary evidence the nature of entries appearing in the bank account and the source of such amount 14 Pratab Gulabrai Tulsiani and group 4. Assessee has not been able to substantiate along with documentary evidence whether the funds appearing the bank accounts were from source outside India 5. The said income is not taxable in UK as per assessee‟s own contention. Thus, it is clear that no tax has ever been paid on the amounts in the HSBC, Geneva account held by the assessee.

6. Assessee‟s explanation that source is out of inheritance from father suffers from very serious inconsistencies like lack of will, explanation of intervening years where the money was kept confirmation from relatives, non-furnishing the bank statement of relatives, lack of evidence to show that the proceeds was not out of sale of assets located in India etc 16. In this case, the source of money deposited in the HSBC, Geneva Account has not been explained with material evidences, then in absence of anything contrary shown by assessee the only logical conclusion that can be inferred is that that the amounts deposited are unaccounted deposits sourced from India and therefore taxable in India. This presumption is as per the provisions of Section 114 of The Indian Evidence Act. 1872 which reads as follows “Section 114 Court may presume existence of certain facts- The Court may presume the existence of any fact which it thinks likely to have happened regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. The Court may presume- ……(g) That evidence which could be and is not produced would, if produced be unfavourable to the person who withholds it...... Section 114(g) of The Indian Evidence Act, 1872, thus clearly says that the Courts can presume existence of certain facts if the person liable to produce evidence which could be and is not produced, which if produced would have been unfavourable to the person who withholds it 16.1 As the assessee has not produced the details of his HSBC bank accounts and the source of deposits thereof, even though he could have been obtained all the details/evidences for the same, the only corollary that could be drawn is that the assessee has decided to withhold the information as if producing it would have gone against him. Thus, as per the provisions of Section 114 of The Indian Evidence Act, 1872 aiso, it needs to be held at this stage that the information/details not furnished were unfavourable to the assessee and that the source of the money deposited in the HSBC account is undisclosed and sourced from India In Nova Promoters and Finlease (P)Ltd. 342 ITR 169(Del), highlighting the legal effect of section 68 of the Act, the Division Bench has observed in paral 32 that “The Tribunal also erred in law 15 Pratab Gulabrai Tulsiani and group in holding Assessing Officer ought to have proved that the monies emanated from the coffers of the assessee company and came back as share capital Section 68 per units the Assessing Officer to add the credit appearing in the books of account of the assessee if the latter of offers no explanation regarding the nature and source of the creditor the explanation offered is not satisfactory if places no duty upon him to point to the source from which the money was received by the assessee. The Hon‟ble Supreme Court in the case of Sumati Dayal Vs. Commissioner of Income Tax (1995) 214 ITR 801 (SC) held that income tax proceedings are civil proceedings and the degree of proof required is to be judged by preponderance of probabilities. The Hon‟ble Supreme Court, in the case of CIT v Durga Prasad More [1971] 82 ITR 540 (SC). Has held that “the taxing authorities were not required to put on blinkers while looking at the documents produced before them they were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents.... The apparent must be considered as real only it is shown that there are reasons to believe that the apparent is not the real and that too taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probability.... Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and tribunals have to judge the evidence before them by applying the test of human probabilities. The Hon‟ble Punjab and Haryana High Court, in the case of Som Nath Maini v CIT [2008] 306 ITR 414 (Punj. & Har.), has held that “the assessing officer is to apply the test of human probabilities for deciding genuineness or otherwise of a Mere particular transaction leading of the evidence that the transaction was genuine, cannot be conclusive. Any such evidence is required to be assessed by the assessing officer in a reasonable way genuineness of the transaction can be rejected in case the assessee not needs evidence, which is trustworthy. And the Department does not need any evidence on such an issue. In case of Smt. Vasantibai Shah 213 ITR 805 (Bom) the court observed that The Income tax Officer is entitled to take into consideration the totality of the facts and circumstances of the case Mumbai and to draw his own inference on the basis thereof. Circumstantial evidence in such cases 1s not impermissible. In cases like this it is only the circumstantial evidence which will be available. No direct evidence can be expected... In case of JS Parker 94 ITR 616 (Bom) it was held that “the tax liability under the Income tax Act is of civil nature. To fasten a tax payer within such a liability it is not necessary that the evidence should be in the nature of “beyond doubt” as is required to fix a criminal liability. Tax liability can be fastened on the basis of preponderance of probabilities”

17. In view of the above, the peak amount as appearing in the Base Note of the assessee‟s HSBC account in AY. 2006-07 being USD 2528927 as on March, 2006 which translates to Rs. 11,28,15,433/- (@Rs. 44.61 per USD) is hereby added to the total income of the assessee as income which is 16 Pratab Gulabrai Tulsiani and group received or is deemed to be received in India in this year by the assessee on his behalf or accrues or arises or is deemed to accrue or arise to him in India during this year.” 15. Further, we refer to relevant discussions by the DRP and directions of the DRP disposing off assessee‟s objections against the draft assessment order, which read as under:

“6.2. Discussion of the DRP: The ensuing Objection No.s 1 to 8 pertain to the issue of taxability in India of sums credited into HSBC Geneva Account of the Applicant assessee. The crux of the issues being the same, it is logical to consider the objections under one unified framework. Therefore, these grounds are considered and decided upon as such. This is a set aside matter. The Hon'ble Income Tax Appellate Tribunal vide has set aside the case to the Assessing Officer with the followingdirections: 3. In view of the above position, and in view of the fact that the Assessing Officer is still in the process of requisitioning information, from the bank, we deem it fit and proper to remit the matter to the file of the Assessing Officer for adjudication de novo after obtaining necessary information from the banks concerned, subject to the condition that the assessee will furnish fresh consent wavier form in such format as the Assessing Officer may specify, and fully co- operate with the Assessing Officer by furnishing such permissions, declarations and authorizations etc to collect the information, as the Assessing Officer may requisition. The assessee will fully co-operate with the Assessing Officer in the remanded proceedings." Facts: The Ld. A.O. has re-examined the case. Despite consent waiver from the applicant, HSBC Bank has declined to share information with the Department, for reasons best known to the Bank. In absence of verified information regarding the account being not sources from India, the Assessing Officer has proceeded with assessment of income in hands of the applicant assessee. The applicant assessee has argued that he is a UK citizen, a non-resident of India, and the income has no business connection to India. Hence, the sums are not assessable in India as per section 5 of the Income Tax Act, 1961. Panel has examined the Applicant's assertion that there is no business connection to India, and the income in HSBC Geneva does not have any link to India. This simplistic explanation is not acceptable, particularly in light of 17 Pratab Gulabrai Tulsiani and group evidence received through the Geneva HSBC leak, which indicated significant unreported investments by the Applicant in an HSBC account outside India and the self-tendered address of the applicant being India. Despite the Applicant's assertions, several factors undermine the credibility of this claim, including absence of documented information from HSBC records and the presence of an Indian address on HSBC Account. Assertions of the Ld. A.O.: The Assessing Officer has held the following in respect of taxability of the applicant assessee: (i) Non-Reporting of Asset and Income Across Jurisdictions: The Assessee has not disclosed the asset and related income in any of the tax jurisdictions where they hold tax residency or connections, specifically in India, the UK, and Switzerland. This non-disclosure in all relevant jurisdictions raises questions about the Assessee's compliance with international tax reporting requirements. (ii) Unsubstantiated Source of Deposits (February 1994). The source of the substantial deposits made in February 1994 remains unexplained with no credible documentation showing that these deposits originated from a legitimate source outside India. The Assessee has failed to provide adequate proof that these funds were not sourced from within India, leading to doubts about their origin. (iii) Absence of Statements for Intervening Years: The Assessee has not furnished account statements for the years between 1994 and the current period. This omission hinders verification that no additional deposits were made during the intervening years, making it challenging to assess the account's activity and whether any unreported deposits occurred in those years. (iv) Lack of Evidence on Source and Deposit Details: There is an absence of documentation or evidence detailing the origins of the deposits or the nature of transactions within the accounts. The lack of such information obscures the account's funding source and makes it difficult to ascertain whether the deposits have been appropriately reported or are of legitimate origin. (v) Non-Domiciled Status in the UK Despite 50-Year Residency Although the Assessee has been a resident of the UK for over 50 years, their status remains that of a non-domiciled resident, which may impact tax 18 Pratab Gulabrai Tulsiani and group liabilities and reporting obligations in the UK. This status complicates the clarity of tax obligations regarding global income, including any income potentially linked to Indian sources. (vi) Indian Address on Base Note Indicates Direct Tax Liability: The bank's "Base Note" shows the Assessee's address in India, suggesting a direct nexus between the account and the Indian tax jurisdiction. This connection indicates that transactions in this account could be directly taxable in India, necessitating reporting and tax obligations in India. (vii) Investment in HSBC Geneva in FY 2005-06 Not Linked to Opening Balance. The Assessee has not proven that funds used for investments in FY 2005-06 in HSBC Geneva accounts stem from an existing opening balance rather than new deposits. Furthermore, the Assessee has not clarified whether income derived from these investments was reported in any tax jurisdiction, further raising concerns about unreported income and compliance. The Assessing Officer has carved out a case that the income of the applicant is taxable in India. Indian Address as Essential Evidence of Connection to India: The Applicant's principal argument hinges on his status as a non-resident with minimal time spent in India a total of only 22 days during the 2005-06 fiscal year However, Assessee had given Indian address to HSBC and that address of India was found in the base note of the HSBC bank record associated with the Applicant, which the Applicant has not been able to justify satisfactorily. Mere denial and claim of absence of awareness is not proof. This Indian address, even in the absence of direct evidence of business activity, is an essential proof that potentially ties the Applicant to India and negates the Applicant's claim of no connection. The Panel notes that, in cases where primary evidence may be lacking. circumstantial indicators, such as a documented address in India, assume critical importance. The Applicant's inability to explain this address raises suspicion regarding their claim of no business affiliations in India. Therefore, this address serves as a material factor in substantiating the Ld. A.O.'s stance that the Applicant has a business connection within India. Hon'ble ITAT's Remand for Requisition of Information and Assessee's Obligation to Cooperate: The Hon'ble ITAT has remanded the case to the Assessing Officer for further investigation, directing the AO to requisition the necessary information from HSBC As per the ITAT's directive, the matter was returned to the AO's file for a 19 Pratab Gulabrai Tulsiani and group de novo adjudication. It was emphasized that the Applicant was required to provide a fresh consent waiver form and cooperate fully by submitting all permissions, declarations, and authorizations needed to obtain the requisite banking information Panel notes that the absence of Business Connection to India is the sole argument of the applicant assessee. The Hon'ble ITAT has not taken cognizance of argument of absence of business connection. This Existence / absence of Business Connection goes into the root of the matter. In its order vide the Hon'ble ITAT has not ruled against Business Connection to India. No co-operation from HSBC: However, despite the consent waiver, HSBC has reportedly withheld direct statements and banking documents from the Revenue. The Applicant claims HSBC provided this information solely to them and not to the Assessing Officer. This lack of direct information has impacted the AO's ability to verify the Applicant's submissions fully, as the evidence furnished by the Applicant alone lacks third-party confirmation Thus, the incomplete cooperation from HSBC further complicates the Applicant's denial of a business connection. Discrepancies in Documentation and Reliability of Applicant's Claims: The Applicant asserts that the investments indicated in the HSBC Geneva leak records are correct, yet denies any business connection to India. The Applicant claims that the HSBC information was provided directly to them rather than to the Revenue, with HSBC withholding original statements and records despite the consent waiver. The AO has reasonably questioned the accuracy and completeness of the information submitted by the Applicant, given that the primary records from HSBC have not been furnished directly to the Revenue. Such reliance on Applicant-submitted information, without validation by HSBC, casts doubt on the reliability and completeness of the data presented, further justifying the Assessing Officer's reservations and assessment actions. Applicant's Minimal Physical Presence in India Does Not Negate Business Connection: The Applicant has stressed their limited stay in India and claims they have no family or business connection in the country. As a British citizen with only 22 cumulative days in India in FY 2005-06 and no prolonged presence, the Applicant maintains that no business activities could feasibly be conducted within India. However, business connections are not necessarily dependent on physical presence or residency duration, especially in financial matters where indirect links, such as documented Indian addresses in overseas banking records, suggest potential connections.

20 Pratab Gulabrai Tulsiani and group Additionally, the Applicant's background indicates involvement in the audio products business in the UK and Yemen, yet their Indian address remains unexplained. The stated reasons that Applicant's mother's birthplace in undivided India is insufficient to justify or negate business connections today Non-Cooperation from HSBC and Impact on Evidence Authenticity: The Panel acknowledges that, despite the consent waiver, HSBC has not released the original bank statements directly to the Assessing Officer. This lack of cooperation from HSBC works against the authenticity and accuracy of the information provided by the Applicant, especially when the information is not audited. Without HSBC's verification, the AO‟s non-acceptable of data submitted by the Applicant is approved. Findings of the Ld. CIT(A) in First Round: Panel also alludes to the findings of the Ld. CIT(A) during the first round of litigation as referred to by the applicant assessee himself: “………A. i.It is evident from the perusal of base note that the assessee is domiciled in India. Thus, it is clear that only to prevent tax liability in Britain the assessee submitted Indian address to HSBC Bank Geneva and claimed Indian domicile status. ii. It is important to note that the assessee is holding British passport and he is a British resident residing there for the past 50 years yet his status is that of a non-domiciled resident. iii. The income/ asset is to be reported in UK (where he is a citizen and resident or Switzerland (where the asset is located and income originates) or India (the address identity of asset or income). It cannot be that in none of the three tax jurisdictions the asset and income is not reported. Since French Government has provided information to Indian Tax Authorities, it is the duty of Indian Tax Authorities to decide the matter. iv. It is not proven that the investments in FY 05-06 in HSBC Geneva are out of opening balance and not proven where the income is reported. C. The rational that a deposit made over a decade ago is the source of present transactions is far-fetched as there are constant deposits and withdrawals in the bank account. Assessee has not furnished statement of intervening years to establish that no deposits were made in the intervening years in these accounts Hence reliance of the assessee on above portfolio statements is incorrect. The findings of the Ld. CIT(A) in Round 1 buttresses the assessment of the Ld. Α.Ο.

21 Pratab Gulabrai Tulsiani and group Findings of the Panel: (i) Applicant's argument based on denial of business connection, minimal physical presence in India, and absence of direct business activities-is insufficient to dismiss the HSBC evidence indicating a link to India. (ii) The Indian address documented in HSBC's records is substantial evidence of a business connection, which the Applicant has failed to satisfactorily explain. (iii) Furthermore, the non-cooperation from HSBC and reliance on unverified Applicant-furnished data weaken the Applicant's claims. The address on the Account is the material evidence that income has accrued in India. (iv) In absence of cooperation by HSBC, the credits are not verifiable by theAssessing Officer. (v) As per sub-section 5(2), the sums are liable to be treated as having accrued/arisen in India. (vi) The onus on the applicant lied in terms of explanation of the income being offered to tax in U.K., if not in India. The applicant has shifted the onus to the Assessing Officer, without discharging the primary burden of explanation of accounted nature of the income that lied on him. The burden for establish of accounted nature of the impugned income rested on the applicant assessee, which he has not been able to discharge. Mere assertions by the Applicant do not absolve him from substantiating their claim and the Panel finds that the denial of business connection is not acceptable. The Indian address in the banking records, coupled with the incomplete cooperation from HSBC, establishes Business Connection to India, and the Panel affirms the assessment made by the Assessing Officer.”

16. Now, coming to contentions advanced by the Ld.AR on behalf of the assessee. It was submitted that in this case, initially, summons u/s. 131 was issued by ADIT Investigation, Unit IV (2)-Mumbai on 21-12-2011 when Mr. Partab Tulsiani, the assessee appeared before the Investigation Wing Mumbai and his statement was recorded on 29-12-2011. He has stated that he is a non-resident and provided copies of his passport. It was submitted that from the initial stages itself the Department has evidence on record that the assessee is a British National, non-resident in India, who had been staying in the UK for more than 45 years i.e. from 22 Pratab Gulabrai Tulsiani and group 1966-1967 onwards and a copy of the statement recorded has also been filed during the course of hearing before us. It was submitted that similarly, it has been accepted that other brothers of the assesse, Jawaharlal Tulsiani, Sham Tulsyani and Naraindas Tulsiani (the 'Tulsiani Brothers') are also non-resident, UK Citizen. It was submitted that the date of birth and place of birth of Tulsiani Brothers are as under:

17. It was submitted that Sham Tulsyani and Partab Tulsiani were born in Sindh, Pakistan (Undivided India) and Jawaharlal Tulsiani and Naraindas Tulsiani were born in Aden. Since they were Hindus living in Sindh Pakistan, due to partition they left for Aden, Yemen (a British colony) in 1947. After Aden (now in Yemen) was granted independence from British Rule, the Tulsiani family went and settled in United Kingdom in 1967. It has been accepted that the Tulsyani Brothers are U.K. Citizens and Non Residents.

18. It was submitted that the Swiss bank accounts in HSBC Private Bank Geneva were opened on 16-02-1994 when the appellant was a British Citizen, resident in the UK and the primary address as mentioned in the account opening form was 217-218, Tottenham Court Road, United Kingdom WIP 9AF. (Page No. 239 of PB). The Swiss Bank account opening form is part of the assessment records and clearly mentions that the assessee is UK citizen, has a UK passport and a UK address.

19. It was submitted that the assessee has already placed on record the relevant documents to show that the Swiss Bank Account have been 23 Pratab Gulabrai Tulsiani and group declared before the HMRC (Her Majesty's Revenue and Customs) (Revenue authorities in UK) and have paid the relevant tax due as applicable and demanded in the UK. It was submitted that these documents were placed before the A.O. and before the CIT (Appeals)-58, Mumbai, in the first proceedings which have been duly noted in Para 18 of the order dated 13-03-2019, a copy of which has been placed on record. It was submitted that these documents show that whatever the taxes were due, in accordance with U.K. Tax Laws were paid and a certificate of full disclosure was issued by HMRC as above. In any case it was not the function of the AO to find out whether a person who is assessed as a Non- Resident, has paid due taxes in the country where he is resident or domiciled as per its tax laws and if there is a non-compliance of a foreign law, the law of that country would take care of the same.

20. It was further submitted and reference was drawn to an email communication dated 25-11-2014 received from Dy. Director of Income tax Int. Tax)-1(1), Mumbai who was then the Assessing Officer, a copy which has been placed on record at Page No. 909 of PB, which reads as under: - “Your case has been discussed and the fact that you are a British citizen makes your case liable to be dropped. I will be able to give you more concrete information and our requirements from you in order to drop the proceedings by tomorrow. I would also request you to kindly inform your brother of the details that are required (The details of which I will give by tomorrow).”

21. It was submitted that as can be seen from aforesaid communication, the Assessing officer who had passed the original assessment order was satisfied that the appellant was non-resident, British Citizen and not liable to be taxed in respect of the foreign income.

25 Pratab Gulabrai Tulsiani and group 24. It was submitted that the appellant's parents were born in Undivided India. His mother had a Flat at 20 Worli, Mumbai, Maharashtra, which was transferred to assessee's name after the demise of his mother on 13- 11-1994. The link to India would not give a right to assessing officer to assess his foreign assets as income. The assessment is required to be made in accordance with Indian Tax laws, i.e. Income Tax Act, 1961, which prohibits taxation of foreign income for a non resident. The assessee's stay in India was only for 22 days in AY. 2006-07 and 30 days in AY. 2007-08, as under: - It was submitted that in none of the years, the assessee's stay exceeded 60 days.

30 Pratab Gulabrai Tulsiani and group 34. It was submitted that the AO has assumed that the funds held in HSBC foreign bank account were sourced from India without any iota of evidence at all, basically on surmises and conjectures and as such interest accrued is taxable in India. It is submitted that the AO has misread the provisions of Section 9(1) of the Act. The assessee was not carrying on any business, there was no income from any property in India. There was no income from any asset held in India. There was no source of income in India. The funds were held abroad and as such the interest/investment income was not in India. There was no transfer of asset or funds in India.

31 Pratab Gulabrai Tulsiani and group 37. Further, reliance was placed on the decision of the Coordinate Bench in case of Amrita Jhaveri vs DCIT (ITA No.6095/Mum/2016&ITA No.6096/Mum/2016) and relevant findings therein read as under: “13. We have heard both the parties at length, carefully considered the findings given in the impugned orders as incorporated above and also various materials referred to before us at the time of hearing. The entire edifice for reopening is based on some “Base Note” received by Government of India under Article 28 of DTAA from the French authorities, on the basis of which, belief has been entertained that assessee holds a bank account with HSBC Bank, Geneva and thus, the balance lying in the said bank accounts is taxable in India and therefore, income chargeable to tax has escaped assessment. As noted above, prior to the recording of the reasons, the investigation wing had issued notices u/s. 131 and asked for all the requisite details of the bank statements, accounts and the relevant information which was placed before the Investigation wing, as well as before the Assessing Officer also prior to the issuance of notice u/s.148. From the bare perusal of the „reasons‟ recorded, it is seen that nowhere these documents have been mentioned nor the bank statements as was supplied by the assessee to the Income Tax department. These bank accounts have been provided to the ADIT way back in the year 2011, then again to ACIT in the year 2013 and at no point of time they asked any clarification with regard to various entries appearing in the said bank statement. The reasons recorded are so general in nature which only mentioned about information received by the Government of India and how Investigation wing of the Income Tax department after conducting enquiries, found large number of assessee have admitted of holding accounts in HSBC bank and certain assessees have denied. Whether the balance shown in the bank account of the assessee with HSBC Geneva, leads to reason to believe that income is chargeable to tax in India and how it is income taxable in India or not has not even mentioned.

14. One very important fact which is relevant here in this case is that, assessee is a non-resident and from last several years she has been staying in London and earning income from various activities carried outside India. Whatever income, which has been accrued in India in the form of capital gain or interest or dividend has always been disclosed in the return of income filed in India. Fourth proviso to Section 139(1) of the Act requires that a person who is resident of India to disclose the details of foreign assets in the return of income and is not applicable to the assessees who are not ordinarily resident or non-resident. Before us, ld. Counsel has filed a copy of return and had drew our attention to Schedule FA forming part of the return of income which requires assessee to give information with respect to assets held outside India, but the same is applicable for residents and not for the non-resident. The notes forming part of Schedule FA of the Return mentions as under:- Schedule FA:-

32 Pratab Gulabrai Tulsiani and group This schedule needs to be filled up by a resident assessee. Mention the details of foreign bank accounts, financial interest in any entity, details of immovable property or other assets located outside India. This should also include details of any account located outside India in which the assessee has signing authority. Even the Schedule FA of 2015 explains object behind various amendments made by the Finance Act 2012 in Section 139(1) which only refers to the cases of resident assessees. Thus, the assessee being a non-resident was not required to disclose any asset held outside India in the return of income to be filed in India. This basic tenet has been missed by the Assessing Officer while recording the reasons as well as in the assessment order.

15. The department before us seeks to rely upon Section 149(1)(c) to justify the availability of extended time period of 16 years within which the notice can be issued would be available, provided the income in relation to any asset is located outside India which is chargeable to tax has escaped assessment. However, section 149(1)(c) and the period of 16 years is only applicable for reopening the assessment of the persons who are residents and are required to disclose the assets outside India. The asset can be said to be “found” when an assessee who is resident is required to disclose the said asset in the return of income within the provisions of the Income Tax Act. For a nonresident there is no obligation to disclose any foreign asset / account in its return of income in India as per section 139 itself, nor there is any column in the return of income as noted above in the foregoing para. It is reiterated that, even the ld. CIT (A) has not disputed that assessee was non-resident and more so the assessment passed by the ld. AO is in the status of non-resident. The ld. CIT(A) had also not denied this fact that assessee in terms of Section 6 of the Income Tax Act was never a resident of India. Thus, extended time limit provided u/s. 149(1)(c) will not be applicable in the case of the present assessee.

16. The ld. AO while recording the reasons has not disputed that assessee is a non-resident and even her return of income filed for the A.Y.2006-07 and 2007-08 showed the status of nonresident and nowhere the ld. AO has held that assessee has no longer the status of non-resident. Once the Assessing Officer while recording the reasons has accepted that assessee is a nonresident, then how balance in the bank account with HSBC bank, Geneva represents income which is accrued or arising or is deemed to accrue or arise in India so as to come within the scope of total income in terms of Section 5 of the Act. At least, the ld. AO should have mentioned it in the reasons recorded before acquiring jurisdiction to reopen an assessment for an extended period of 16 years that, firstly, assessee is a resident in terms of Section 6; and if not then secondly, the balance lying in the foreign bank account represents income which has accrued or arisen or deemed to accrue or arise in India u/s.

17. The reasons recorded by the AO are not only vague and general but without any application of mind on the records and the material which was filed by the assessee before the Income Tax department right from the year 2011 to 2014, till the issuance of notice u/s.148. The reasons have been recorded in a very mechanical manner without even ascertaining the facts and material available on record.

19. The ld. CIT (A) has tried to justify the reopening that assessee was required to decline the income accrued and arisen in India u/s.9 which has not been done by her. First of all, there has to be some material on record that any amount deposited in HSBC bank account, Geneva is the income which has accrued and arisen in India and has been routed back in the said bank account. Nothing can be presumed on some hypothesis or surmise that assessee might have earned income from India which has been transferred or deposited in HSBC Bank, Geneva. On the contrary right from beginning assessee has been stating and claiming that she has opened three bank accounts in HSBC Geneva and all the deposits are from her income earned outside India in the form of her salary or sale of panting etc. Not a single entry in the said bank statement refers to any remittance from India or through some indirect channel where money can be said to have been transferred from India and found its final destination in the said bank accounts. Assessee all throughout has been claiming that money deposited in these are from sources earned outside India from various activities carried outside India.

20. At the time of hearing, we had also called for the entire statement of bank accounts from the period 17/08/2005 to 31/03/2006 for all the three bank accounts which was in US currency, Euro currency and GBP currency and all of the entries are by way of clearance and nowhere it can be inferred that any amount has been deposited from Income earned from India. The entries of these bank statements have already been incorporated in the ld. CIT (A)‟s order also and nowhere any finding has been given that any credit in the said bank account pertains to any income earned from India even in terms of Section 9. While confirming the order of the ld. AO, ld. CIT (A) has narrated various facts from Google search in order to draw presumption that; there might have some income earned from import of paintings, which might have deposited in these accounts and therefore, income might have deemed to accrue and arise in India. All these findings are based on certain hypothesis on which he has come to a conclusion. Even certain observations that Amaya Ltd was in fact belong to the assessee and assets owned by said entity is an 34 Pratab Gulabrai Tulsiani and group asset of the assessee, but that does not lead to inference that assessee has evaded tax from India, because the said entity has neither been incorporated nor has any connection in India nor has any business connection or any place of effective management is situated in India. Further, nothing has been brought on record in „reasons recorded‟ or there is any material on record that assessee has any business connection in India and therefore amount deposited in said foreign bank account is income arisen or accrued or deemed to have arisen or deemed to have accrued in India. If at all there is some doubt about the said entity and deposits made therein, then, it is the UK Tax authorities which have to examine this issue.

18. Having said so, let us examine whether the government / legislature intended to tax foreign accounts of non residents. The Minister of State for Finance has clarified on the floor of the Loksabha on 02-12-2011 that mere holding of an account outside India does not have led to the conclusion that the amount is tax evaded. Further, the white paper on black money introduced by the Government states that if information is received about 100 Indians having bank accounts abroad, it does not automatically prove that all those 100 accounts represent black money of Indian citizens stashed abroad. There may be cases where the account holder may be an NRI who is not assessed to tax in India or the sum deposited may already have been disclosed to the Income-tax department. It is only after enquiry and completion of assessment one can know whether the amount deposited in the foreign account represents 38 Pratab Gulabrai Tulsiani and group black money of an Indian citizen. Similarly, in the statement dated 04-04-2016 issued by the Minister of Finance published by Press Information Bureau, it was clarified that non residents found having foreign bank accounts were non actionable. Thus, it is very clear from the clarifications issued by the Government itself that the legislature does not wish to take any action in respect of non residents holding foreign bank accounts. Further, even in the excel utility of return of income in the income-tax department website, the moment a person fills his residential status as non resident, the excel utility prevents filling of columns pertaining to foreign assets. Even, the Hon‟ble Finance Minister has clarified that all accounts in foreign bank may not be illegal as they may belong to NRI. Thus, even the government has acknowledged the fact that an NRI foreign bank account is not illegal. We further notice that provisions of black money (undisclosed foreign income and assets) and imposition of tax Act, 2015 is applicable only to residence. As per section 2((2) of the said Act, an assessee means a person being a resident other than not ordinarily resident in India within the meaning of sub section (6) of section 6 of the Income-tax Act ,by whom tax in respect of undisclosed foreign income and assets or any other sum of money is payable under this Act and includes, every person who is deemed to be an assessee in default under this Act. Even, the FAQs to the black money (undisclosed foreign income and assets) and imposition of tax Act, 2015 reiterates the above position in questions No.24 & 32 where it was clarified that if a person, while he was a non-resident acquired or made a foreign asset out of income which is not chargeable to tax in India, such asset shall not be an undisclosed asset under the Act. The AO, without understanding these facts and also without answering the jurisdictional issue of whether the non resident assessee was liable to pay tax in India in respect of deposits in his foreign bank account, when he had proved that the source of deposit was not from India, went on to make addition on wrong footing only on the basis of information in the form of base note which is unverified and unauthenticated. On the other hand, the assessee has filed complete details in respect of his residential status which undoubtedly proves that he is a non resident in India since 1990 and the said bank account had been opened when he was a non resident in India. The assessee went abroad on business visa and started business in 1990 and was earning income in Japan since then. He got permanent residency certificate in the year 2001. The AO, without appreciating these facts, made addition on wrong presumption that before 2001 it was unknown that the assessee was a non resident Indian and he has earned any income outside India which is not taxable in India. Further, the AO has taken the information of foreign bank accounts of Indians to come to the conclusion that the said information is even applicable to non residents without appreciating the fact that even the government‟s intention is not to tax NRIs in respect of foreign bank account and assets. No material was brought on record to show that the funds were diverted by the assessee from India to source the deposits found in foreign bank account. The suspicion, howsoever strong, cannot take place of proof and no addition could be made on presumption and assumption. The AO has not proved that impugned addition could be made within the ambit of section 5(2) r.w.s. 68 / 69 of the Income-tax Act, 1961.

39 Pratab Gulabrai Tulsiani and group

40 Pratab Gulabrai Tulsiani and group

11. Without prejudice to the above, he submitted that the peak balance appearing in the bank statement of this foreign bank account has already been added to the computation of income and subjected to tax in the hands of Deepak Shah and Kunal Shah in their respective assessments for AY 2006-07 and AY 2007-08. A copy of the order passed by Assistant Commissioner of Income-tax -16(2) and by Commissioner of Income-tax (Appeals)-27 ('CIT(A)-27') in their respective cases was submitted to the AO for his consideration.

12. Further, both these assessees - Deepak Shah and Kunal Shah have paid taxes on the amount of addition to their respective computation of income. A summary of the taxes paid by them was also submitted to the AO for his consideration. However, AO did not agree with the assessee‟s contention and added peak credit in the account of HSBC Geneva in assessee‟s income. The AO has made additions in the case of assessee. 11. Without prejudice to the above, he submitted that the peak balance appearing in the bank statement of this foreign bank account has already been added to the computation of income and subjected to tax in the hands of Deepak Shah and Kunal Shah in their respective assessments for AY 2006-07 and AY 2007-08. A copy of the order passed by Assistant Commissioner of Income-tax -16(2) and by Commissioner of Income-tax (Appeals)-27 ('CIT(A)-27') in their respective cases was submitted to the AO for his consideration. 12. Further, both these assessees - Deepak Shah and Kunal Shah have paid taxes on the amount of addition to their respective computation of income. A summary of the taxes paid by them was also submitted to the AO for his consideration. However, AO did not agree with the assessee‟s contention and added peak credit in the account of HSBC Geneva in assessee‟s income. The AO has made additions in the case of assessee. 12. Further, both these assessees - Deepak Shah and Kunal Shah have paid taxes on the amount of addition to their respective computation of income. A summary of the taxes paid by them was also submitted to the AO for his consideration. However, AO did not agree with the assessee‟s contention and added peak credit in the account of HSBC Geneva in assessee‟s income. The AO has made additions in the case of assessee after taking cognizance of the fact that an addition of the same amount was made in the cases of Mr. Deepak Shah and Mr. Kunal Shah in their respective assessments by the Addl. Commissioner of Income Tax-16(2), Mumbai. 13. By the impugned order, CIT(A) deleted the addition by observing that assessee is indeed a non-resident u/s.6 of the Act and this fact has not been 41 Pratab Gulabrai Tulsiani and group disputed by the AO. As per our considered view under the provisions of the Act, taxability of a non-resident is determined with reference to the provisions of section 5(2) read with section 9 of the Act. In the instant case undisputedly the assessee is a non-resident since 1979, as per the provisions of Section 6 of the IT Act. The scope of income in case of a non-resident is defined under the provisions of subsection (2) of section 5 of the Act. As per this section, a person who is a 'non-resident' has to pay tax only on that income which is either received or is deemed to be received by him in India, or accrues or arises or deemed to accrue or arise to him in India, during the year, therefore assessee will be liable to tax only in respect of income received or accrued to him in India. Further, section 9 of the Act, lays down the provisions relating to income which is deemed to accrue or arise in India. As the assessee Mr. Dipendu Shah was not having any of his business operations in India during AY 2006- 07 and AY 2007-08, there is no income which has either deemed to accrue or arise in India under section 9 of the Act, Thus, the initial contribution or even other amounts in the foreign bank account mentioned by AO in the notice does not fall under the purview of section 5(2) read with section 9 of the Act'. Accordingly, assessee is required to be pass through aforesaid test of taxability of nonresident. It is a well settled position in law that a 'non- resident', having money in a foreign country cannot be taxed in India if such money has neither been received or deemed to be received, nor has it accrued or arisen to him or deemed to accrue or arise to him in India.

16. The CIT(A) also observe that a circumstantial evidence whenever used has to be conclusive in nature. Thus, the circumstantial evidences relied on by the learned AO nowhere lead to the 42 Pratab Gulabrai Tulsiani and group conclusion that the amounts in the alleged foreign bank account are sourced from India. The CIT(A) also recorded a finding to the effect that the source of deposits is no where proved by the four instances relied on by the AO being termed as circumstantial evidence. The learned AO has himself observed based on the survey report dated 18 November 2011 that the assessee had retired from partnership of M/s Kanubhai B. Shah & Co. since October 1978. Also, the learned AO observed in the next para that the assessee became a non-resident as per section 6 of the Act since 1979 which is the year after which he retired from being the partner in the firm. Thus, the addition of undisclosed income of the firm M/s Kanubhai B. Shah &: Co. during the FY 2011-12 has no connection with the assessee, as he was not a partner during this period. In the instant case, even it is seen that the bank account with HSBC Bank, Geneva was opened during the year 1997. Hence, the circumstantial evidences discussed above including the report of Indian express of 10 February 2015, relied by the learned AO nowhere conclusively establishes that the source of the deposits, since the inception, in the bank account was from India. In view of the above discussion, we do not find any infirmity in the order of CIT(A) for deleting the addition made in respect of deposits in HSBC Account, Geneva in the hands of non-resident assessee. Facts and circumstances in both the years are same. 32 Hemant Mansukhalal Pandya 16. The CIT(A) also observe that a circumstantial evidence whenever used has to be conclusive in nature. Thus, the circumstantial evidences relied on by the learned AO nowhere lead to the conclusion that the amounts in the alleged foreign bank account are sourced from India. The CIT(A) also recorded a finding to the effect that the source of deposits is no where proved by the four instances relied on by the AO being termed as circumstantial evidence. The learned AO has himself observed based on the survey report dated 18 November 2011 that the assessee had retired from partnership of M/s Kanubhai B. Shah & Co. since October 1978. Also, the learned AO observed in the next para that the assessee became a non-resident as per section 6 of the Act since 1979 which is the year after which he retired from being the partner in the firm. Thus, the addition of undisclosed income of the firm M/s Kanubhai B. Shah &: Co. during the FY 2011-12 has no connection with the assessee, as he was not a partner during this period. In the instant case, even it is seen that the bank account with HSBC Bank, Geneva was opened during the year 1997. Hence, the circumstantial evidences discussed above including the report of Indian express of 10 February 2015, relied by the learned AO nowhere conclusively establishes that the source of the deposits, since the inception, in the bank account was from India. In view of the above discussion, we do not find any infirmity in the order of the CIT(A) for deleting the addition made in respect of deposits in HSBC Account, Genera in the hands of non-resident assessee. Facts and circumstances in both the years are same.

16. The CIT(A) also observe that a circumstantial evidence whenever used has to be conclusive in nature. Thus, the circumstantial evidences relied on by the learned AO nowhere lead to the conclusion that the amounts in the alleged foreign bank account are sourced from India. The CIT(A) also recorded a 43 Pratab Gulabrai Tulsiani and group finding to the effect that the source of deposits is no where proved by the four instances relied on by the AO being termed as circumstantial evidence. The learned AO has himself observed based on the survey report dated 18 November 2011 that the assessee had retired from partnership of M/s Kanubhai B. Shah & Co. since October 1978. Also, the learned AO observed in the next para that the assessee became a non-resident as per section 6 of the Act since 1979 which is the year after which he retired from being the partner in the firm. Thus, the addition of undisclosed income of the firm M/s Kanubhai B. Shah &: Co. during the FY 2011-12 has no connection with the assessee, as he was not a partner during this period. In the instant case, even it is seen that the bank account with HSBC Bank, Geneva was opened during the year 1997. Hence, the circumstantial evidences discussed above including the report of Indian express of 10 February 2015, relied by the learned AO nowhere conclusively establishes that the source of the deposits, since the inception, in the bank account was from India. In view of the above discussion, we do not find any infirmity in the order of CIT(A) for deleting the addition made in respect of deposits in HSBC Account, Geneva in the hands of non- resident assessee. Facts and circumstances in both the years are same.”

21. In this view of the matter and considering the ratios of the case laws discussed above, we are of the considered view that the AO was erred in making addition towards deposits found in HSBC Bank account, Geneva u/s 69 of the Act. The Ld.CIT(A), after considering relevant facts, has rightly deleted addition made by the AO. We do not find any error or infirmity in the order of Ld.CIT(A). Hence, we are inclined to uphold the findings of Ld.CIT(A) and dismiss the appeal filed by the revenue.”