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Facts
The assessee had not filed income tax returns since 2001-2002. A search action in 2018 unearthed various transactions and undisclosed foreign bank accounts. The AO passed an order assessing total income at Rs. 2,99,15,070/-, which was upheld by the CIT(A). The appeals before the tribunal concern additions related to estimated notional rent for a house property and unexplained remittances received from a trust claimed as inheritance.
Held
The Tribunal admitted additional evidence provided by the assessee, which included a confirmation from a trust confirming the remittance as inheritance. The issue of inheritance was restored to the AO for fresh verification, allowing the assessee an opportunity to substantiate the claim. The issue of house property income was also restored to the AO for fresh adjudication after considering the municipal rateable value.
Key Issues
Whether the remittance received by the assessee from a trust constitutes inheritance and is thus not taxable? Whether the addition on account of notional rental income from a dilapidated property requires fresh verification by the AO considering the municipal rateable value?
Sections Cited
147, 148, 143(3), 250, 10(3), 4(3), 132, 153A, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWAL
Date of Hearing 22.07.2025 Date of Pronouncement 24.07.2025 आदेश / ORDER PER BENCH: The present appeals have been filed by the assessee challenging the impugned order dt. 14.10.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre / CIT(A), for the A.Ys: 2013-14 to 2019-20. 2 Late Darius Motashaw, Mumbai.
Since all the issues involved in these appeals are common and identical, therefore, they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity. We shall take as lead case and facts narrated therein.
On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 4,20,000/- on account of House Property made by the Assessing Officer by estimating the notional rent.
The Appellant submits that the addition of rental income of Rs. 4,20,000/- be deleted. The Appellant further submits that the ratable value of the residential house be adopted for computing the Income from House Property.
2. On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble Commissioner of Income Tax (Appeals) erred in not accepting the explanation given for and documents submitted in the course of the assessment proceedings to substantiate that Rs. 2,93,51,000 received by the appellant is inheritance money received from his deceased uncle, Dr. Rusi Motashaw by way of share in capital of RGN Trust as a beneficiary of RGN Trust and which is not taxable in India.
The Appellant further submits that the Hon'ble Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 2,93,51,000 being remittance received out of the inheritance money received from his late uncle Rusi Motashaw as unexplained.
The Appellant submits that the addition of Rs.2,93,51,000 made by the learned Assessing Officer is a same addition made in the Order passed u/s 10(3) and the same be deleted.
3 Late Darius Motashaw, Mumbai.
The Appellant submits that since the addition of Rs. 2,93,51,000 was made under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, по separate addition could be made under the Income Tax Act by virtue of Section 4(3) of the Black Money Act.
The Appellant craves leave to reserve to itself the right to add, after, amend or annul any of the grounds of appeal
at or before the time of hearing and to produce such further evidences, documents and papers as may be necessary.
2. The brief facts of the case are that assessee had not filed any return of income since 2001-2002. A search & seizure action u/s 132 of the Act was carried out on 27.06.2018 on the appellant The search action unearthed the evidence that shows that assessee have entered transaction in future and option in substantial quantum, large shares/security sales purchase transactions, earned huge interest income on saving bank accounts, received large credits in the bank accounts and holding undisclosed foreign bank accounts. Notice u/s 153A dt. 02.04.2019 was issued and served on the assessee. In response to Notice u/s 153A, the assessee filed its return of income on 07.12.2020 declaring income at Rs.1,44,070/-. After providing opportunity of hearing an order u/s 153A r.w.s. 143(3) of the Act dt. 11.04.2021, assessing the total income of Rs. 2,99,15,070/- was passed by the AO.
3. Aggrieved by the said order the assessee preferred appeal however the said appeal was dismissed by Ld. CIT(A), thus aggrieved by the said order, the assessee has 4 Late Darius Motashaw, Mumbai. filed the present appeal before us on the grounds mentioned herein above.
4. In all assessee has raised two grounds, however first of all we take up Ground No. 2, as on this ground an application for leading additional evidence has separately been moved by the assessee.
5. This ground No. 2 raised by the assessee relates to challenging the order of Ld. CIT(A) in upholding the additions u/s 69 of the Act made by the AO. In this regard it is submitted by the assessee that during the course of assessment proceedings, the assessee had substantiated his claim by leading evidence to the effect that Rs. 2,93,51,000/- received by assessee is an ‘inheritance’ money received from his deceased uncle Dr.Rusi Motashaw by way of share in capital of RGN Trust ‘as a beneficiary’ of RGN Trust and which is not taxable in India.
6. However, the AO and Ld. CIT(A) concluded that the funds received by the assessee from RGN Trust is not at all inheritance money received, which is claimed as exempt by the assessee. Instead it is final distribution to a beneficiary by a discretionary trust which should have been offered as taxable income in the respective year under consideration.
7. Thus as per revenue the assessee failed to furnish proper documentary evidences and justification in support 5 Late Darius Motashaw, Mumbai. of his claim that he had received an amount of Rs. 2,93,51,000/- as an inheritance received from his deceased uncle for the year under consideration.
Now before us, it was submitted by the assessee that in order to substantiate its claim to the effect that the receipts towards inheritance money received as beneficiary on the death of the assesee’s deceased uncle Dr. Rusi Motishaw, in this regard the details including copies of Trust deed, will of Dr. Rusi Motashaw, proof of remittance from RGN Trust, Copy of Court Order for inheritance of immovable property, Letter from solicitor, Remittance advice for the receipt of share in the sale of immovable property and Death certificate of Dr. Rusi Motashaw were submitted during the assessment proceedings as well as First Appeal Proceedings.
However, still the revenue authorities were not satisfied / convinced on the point as to whether the assessee received the amount from RGN Trust as the beneficiary or not. Therefore now the assessee has received a letter dated: 11-06-2025 received from Zedra Trustees (Jersey) Limited previously known as Barclays Wealth Trustees (Jersey) Limited received confirming that the appellant received money equivalent to GBP 450825.59 plus GBP 100086.52 from RGN TRUST ‘as a beneficiary’ of 6 Late Darius Motashaw, Mumbai.
RGN Trust. Out of this GBP 351953 received in bank accounts in India.
Hence a separate application for additional evidence along with affidavit has been filed to admit the above vital documents as additional evidence. As per assessee, the said document which goes to the roots of the case and would unable to decide the controversy effectively.
On the contrary, Ld. DR contested the said application filed by the assessee for leading additional evidence and requested to dismiss the same.
After having heard the counsels for both the parties at length and without commenting anything on the merits of the claim raised by the assessee, we are of the view that the above document in the shape of i) Affidavit of legal representative of appellant; ii) Confirmation from Zedra Trust company (Jersy) limited dated 11.06.2025 along with name change certificate; 3) RM file note along with covering letter for sharing information, were not before any of the authorities and are important and vital to decide the controversy between the parties and thus goes to the roots of the case therefore the said documents would enable the authority to reach to a logical conclusion for pronouncing the orders effectively.
7 Late Darius Motashaw, Mumbai.
Even otherwise in case the above documents relied upon by the assessee are admitted as additional evidence then no prejudice shall be caused to the rights of the revenue as revenue would get proper chance to verify the said documents.
On the contrary, in case the said documents are not admitted as additional evidence then in the eventuality the rights of the assessee shall be prejudice. Hence considering the above facts as discussed by us above, and taking in to consideration the contents of the documents and affidavit we admit the same as additional evidence by allowing the application of the assessee, it is ordered accordingly.
Since, the additional evidences filed by the assessee have been admitted by us which needs factual verification, therefore we restore this issue to the file of AO for verification regarding the genuineness and veracity of the additional evidences and thereafter to decide the issue afresh keeping in view the additional evidences. Needless to mention after providing due opportunity of hearing to the parties. Consequently this ground raised by the assessee is allowed for statistical purposes.
Ground No. 1 raised by the assessee relates to challenging the upholding of additions on account of house 8 Late Darius Motashaw, Mumbai. property income made by the AO by estimating notional income.
In this regard we have heard the counsels for both the parties, perused the material placed on record and also the orders passed by the revenue authorities. From the records we noticed that assessee owned two residential houses and one of the house was self occupied by himself, the details of which are given herein below:
Sr. No Type of property Address 1. Residential House Property 10A-Jiwan, 11LD, Ruparel Marg, Malbar Hill, Mumbai – 400006 2 Residential House Property 8-C, Somerest Palace, 61D, Bhulabhai Desai Road, Mumbai – 400 006.
Out of the above properties, according to the assessee, the house located at 8C, Somerest Palace, 61D, Bhulabhai Desai Road, Mumbai is in dilapidated condition and the same is neither occupied by the assessee nor could be let out. It was submitted that the municipal rateable value of the said property was requested from the society office, the same is awaited. It was further submitted that as per the amended provisions the property tax is payable on capital value and not the municipal rateable value. Since the rateable value could not have been obtained by the society from the BMC office, therefore the assessee requested to send the matter back to the file of AO.
9 Late Darius Motashaw, Mumbai.
On the contrary, Ld. DR relied upon by the orders passed by the revenue authorities.
Be that as it may, without going into the merits of the issues raised by the assessee we are of the view that since the assessee could not put effective representation before AO by placing the required documents. Therefore one more opportunity be given to the assessee to represent his case before AO. Hence, considering the overall circumstances of the present case, we deem it proper to restore the matter back to the file of AO for deciding the appeal afresh by providing one more opportunity to the assessee to substantiate his claim. The assessee shall not seek any adjournment on frivolous grounds and shall remain cooperative during the course of proceedings.
Before parting, we make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. AO independently in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
10 Late Darius Motashaw, Mumbai. , 6347, 6348, 6349, 6350, 6352/Mum/2024 A.Ys 2014-15 to 2019-20
As the facts and circumstances in these appeal are identical to A.Y 2013-14 (except variance in figures) and the decision rendered in above paragraph would apply mutatis mutandis for these appeals also. Accordingly, the grounds of appeal of the present appeal also stands allowed for statistical purposes.
In the result, All the appeals filed by the assessee stands allowed for statistical purposes.