JAY KETAN PARIKH,MUMBAI vs. THE DY CIT CENTRAL CIRCLE-1(2), MUMBAI

The present appeals have been preferred by the different assessees against the orders dated 19.10.2020 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2006-07 & 2007- 08.Since all the appeals, though of different asssessees, have common issues with difference in amounts only, therefore all these are decided and disposed off together for sake of convenience. We would take up for adjudication the appeal filed Mr. Jay Ketan Parikh for assessment year 2006-07.

The issue raised in 1st ground of appeal is a jurisdictional issue challenging the jurisdiction of the AO to make the addition in the unabated assessment proceedings despite there being no incriminating material found during the course of search.

The facts in brief are that the assessee filed the return of income on 16.10.2006 declaring an income of Rs.2,23,167/-. Thereafter a search and seizure action under section 132 of the Act was conducted in the case of M/s. Mahendra Brothers Exports Pvt. Ltd. & other group concerns including directors and other related persons including the assessee on 08.08.2011 after receipt of information by the revenue of undisclosed overseas HSBC accounts. The assessee is a director in M/s. Mahendra Brothers Exports Pvt. Ltd. and also partner in M/s. Ketan Brothers Exports and was also having proprietary business in his name. During the year, he disclosed income by way of short term capital gains, business income and income from other sources. The AO in para No.5 of the assessment order noted that information was received by the Government of India from French Sovereign Government under DTAA in exercise of its sovereign powers that some Indian nationals and residents have foreign bank accounts in HSBC Bank (Suisse) SA Geneva which were not disclosed to the Indian Tax Authorities. The said information was received in the form of document called base note containing various details of the account holders such as name, date of birth, place of birth, sex, residential address, profession, nationality along with date of opening of account in 4 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors HSBC Bank (Suisse) SA Geneva besides mentioning account balances in some years. In the case of the assessee also a base note was received wherein it is stated that he is a beneficiary/beneficial owner of bank accounts in HSBC Bank (Suisse) SA Geneva containing all personal details of the assessee as stated hereinabove besides mentioning the balances in two years. Therefore, in order to investigate these facts further, a search and seizure action under section 132 of the Act was conducted by DDIT (Inv.), Mumbai on 08.08.2011 on M/s. Mahendra Brothers Exports Pvt. Ltd. and its directors including the following 4 individuals who are appellant before us. i) Mr. Milan Kavinchandra Parikh (PAN AADPP0814G) ii) Mr. Shaunak Jitendra Parikh (PAN AADPP0826C) iii) Mr. Raj Hiten Parikh (PAN AGFPP6664E) iv) Mr. Jay Ketan Parikh (PAN AAIPP6681J)

It is noteworthy to mention that the assessee denied to have any bank account in HSBC Bank (Suisse) SA Geneva or being beneficial owner of any such accounts during recording of statement u/s 132(4) of the Act. However, on the basis of base note, the AO came to the conclusion that assessee was one of the beneficiaries of the following four bank accounts held by the companies in the HSBC Bank (Suisse) SA Geneva: S.No. Name Account Number/Code Profile client 1. Sulay Trading Ltd. 5091320491 2. Laptis Trading Ltd. 5091316222 3. Olga Ltd. 5091255754 4. Blackberry International Ltd. 5091255711 The assessee, in order to prove his averments, produced a letter from HSBC Bank (Suisse) SA Geneva stating that the assessee had no bank account in HSBC Bank (Suisse) SA Geneva nor had 5 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors any transactions with HSBC Bank (Suisse) SA Geneva. Thereafter, Additional DIT (Inv.), Mumbai wrote a letter to HSBC Bank (Suisse) SA Geneva to verify whether HSBC Bank (Suisse) SA Geneva had issued letter furnished by the assessee before the AO. Besides the department also sought information from HSBC Bank (Suisse) SA Geneva about the assessee being beneficial owner in respect of 4 accounts held by the companies as stated hereinabove. In response to inquiries by the revenue, HSBC Bank (Suisse) SA Geneva confirmed the letter as having been issued by it which was furnished by the assessee before the AO, however, HSBC Bank (Suisse) SA Geneva refused to divulge and disclose any information about these four companies and also whether the assessee being beneficial owner of such accounts citing Swiss secrecy laws. It is pertinent to mention that the bank statements of four companies attached with the base note showed the following information with respect to the assessee: “A. Shri Jay Ketan Parikh (i) In case of Bank account of SulayTrading Limited i.e. IBAN CH 13 0868 9050 9110 8762 0, Shri Jay ketan Parikh is a beneficial owner and the bank account showed a peak credit of US$ of 2,45,764/- (equivalent to Rs. 1,10,59,380/-). (ii) Similarly Shri Jay Ketan is a 25% beneficial owner of bank account i.e. IBAN CH 81 08'68 9050 9110 7398 0 held in name of Laptis Trading Limited. It showed a peak credit of US $ of 2,98,9l,844/- ( equivalent to Rs. 134,51,_32,980/-, (iii) With respect to the account held in the name of Olga Limited and Blackberry International Limited, account balance is shown as 'NIL'.

During the course of assessment proceedings, the assessee was examined on oath by the AO under section 131 of the Act on three occasions and confronted with the information contained in the base note about foreign bank accounts and assessee’s beneficial ownership therein. Besides, the assessee was asked to sign the consent waiver form so that the further information from HSBC Bank (Suisse) SA Geneva could be 6 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors obtained but the assessee refused to sign the same. The Additional DIT also wrote to FT&TR Division of the CBDT for further enquiries from foreign tax authorities, however the report of FT&TR was not received till date of completion of the assessment. The AO added the entire peak balance of USD 2,43,132.65 as appearing in the month of January 2006 in the bank account of Sulay Trading Ltd. and USD 60,35,211.5 being 25% of peak balance of USD 2,41,40,846/- as appearing in the month of March 2006 in the bank account of Laptis Trading Company Ltd. with HSBC Bank (Suisse) SA Geneva. In other words, the entire amount has been added in the hands of the assessee as appearing in the bank statement of Sulay Trading Ltd. whereas 25% of the peak balance has been added as appearing in the bank statement of Laptis Trading Company Ltd. thereby making an aggregate addition of Rs.27,99,45,729/- as unexplained money under section 69 of the Act based on the information contained in the base note by framing assessment under section 143(3) read with section 153A of the Act dated 27.03.2015.

The aggrieved assessee challenged the said order passed by AO before the Ld. CIT(A) on jurisdictional issue as well as on merit. The assessee agitated before the Ld. CIT(A) that no addition could have been made in the case of assessee for the impugned year as the assessment year under consideration has not abated on the date of search as the assessment has attained finality. It was pleaded before the Ld. CIT(A) that the said addition could not have been made as no incriminating material was found during the course of search. However, the Ld. CIT(A) not finding any merit in the contentions of the assessee 7 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors dismissed the appeal on this issue by observing and holding as under: “5.2 I have considered the facts of the case, submissions and contentions of the assessee as also the order of the AO. In the case of the assessee, specific information was received from the French Government under DTAA( Double Taxation Avoidance Agreement) in the form of a "Base Note", wherein, it was mentioned that the assessee was beneficial owner of bank accounts in the names of various entities like; Sulay Trading Ltd, Laptis trading Ltd., Olga Ltd., Blackberry International Ltd and Fiduciary Equity Trust AG and it contained various personal details of the assessee, like name, address, date of birth, profession, passport number along with the date of opening of the bank account in HSBC bank Geneva. Further the bank balance in dollars in the years 2005-06 and 2006-07 were mentioned in respect of Sulay Trading Ltd and Laptis trading Ltd., while no balance was appearing in the names of other three entities namely, Olga Ltd., Blackberry International Ltd and Equity Trust.

The Ld. A.R. submits that a search action u/s 132(1) of the Act was carried out in the case of the assessee on 08.08.2011 and return of income u/s 139(1) of the Act was filed on 16.10.2006. The ld AR submits that the time limit for issue of notice u/s 143(2) of the Act expired on 31.10.2007 meaning thereby that no assessment was pending for the instant assessment year as on the date of search. The ld AR vehemently submits that the impugned year, being a non-abated assessment year, addition in the instant year could be made 9 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors only if any incriminating material is found during the course of search. The ld AR reiterated that no incriminating material was found during the course of search and hence no addition could be made by the Assessing Officer in absence of incriminating material. The ld AR, referring to the order of ld. CIT(A), submits that at Para 5.4 of his order, the ld CIT(A) has rejected this contention of the assessee by holding that even the base note as received from French authorities, statement of the assessee recorded u/s 132(4) of the Act at the time of search on 08.08.2011 and material gathered in post search proceedings like HSBC Bank (Suisse) SA Geneva’s letter and the Addl. DIT (Inv.) Mumbai’s letter to HSBC Bank (Suisse) SA Geneva constitute incriminating materials to make addition in the hands of the assessee. The ld AR submits that accordingly ld. CIT(A) held that the addition is based on incriminating documents found during the course of search and deserved to be upheld.

Arguing on the third finding of the ld CIT(A) that material gathered in post search proceedings also constitute incriminating material, the ld. AR submits that that material gathered in post search proceedings like HSBC Bank (Suisse) SA Geneva’s letter, which was furnished suo mottu by the assessee and the Addl. DIT (Inv.) Mumbai’s letter to HSBC Bank (Suisse) SA Geneva seeking information, cannot be construed as incriminating material found during the course of search for making addition. In defense of his arguments, the ld

Finally the ld AR summing up his arguments submits that, in the present case, no incriminating material/evidence is found during the course of search and therefore no addition can be made in absence of any incriminating materials in the unabated assessment year. In defense of his arguments the ld counsel of the assessee relied on the decision of Hon’ble Bombay high court in the case of CIT v. All Cargo Global Logistics Ltd (374 ITR 645) wherein it has been held that, in respect of unabated years, no addition can be made if no incriminating material is found during the course of search. The ld AR prays that in view of the above, the addition made by the Assessing Officer and upheld by CIT(A) in respect of the impugned year which is a unabated year is bad in law and may be deleted since it is not based on any incriminating material

Per Contra, the Ld. D.R. strongly opposes the contentions and arguments made by the Ld. A.R. on the jurisdictional issue by submitting that the various decisions relied upon by the Ld. A.R. in support of his averments and arguments are not applicable to the facts of the case and are clearly distinguishable on facts. The Ld. D.R. submits that the decisions rendered by the High Courts were distinguishable on facts as the issue of undisclosed deposits in HSBC Swiss bank accounts were not before the Hon’ble High Courts. As regards the other decisions of the tribunal relied by the Ld. A.R. in support of his arguments, the Ld. D.R. submits that the same are not accepted by the Revenue and have been challenged before the higher judicial forums and have also not attained finality so far. As regards the decision of Maxopp Investment Ltd. Vs CIT (2018) 402 ITR 640 (SC), the Ld. D.R. submits that several propositions by tribunal and the Hon’ble High Court were changed by the Apex Court and therefore the decisions by the tribunals and High Courts are amenable to change. The Ld. D.R. submits that there is no definition of incriminating material in the Act and while framing assessment under section 153A of the Act, there is no implicit or explicit requirement of any incriminating seized material during the course of search. The ld DR argues that the provisions of section 153A of the Act contemplates the assessment of total income including the income if any from incriminating material which can not be construed to mean that the undisclosed income discovered during post search operation can not be brought to tax in the unabated assessment years. The Ld. D.R. submits that it appears to be illogical conclusion 14 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors that no addition can be made in the assessment framed under section 153A of the Act without any incriminating or seized material even if during the post search or during assessment proceedings, some incriminating materials have come to the notice of the AO. The Ld. D.R. further submits that section 153A of the Act starts with non obstante clause and is a complete code in itself and therefore the notice under section 153A of the Act has to be issued in any case even to the unabated assessment year , if the search is conducted. The Ld. D.R. submits that in view of these facts the contentions of the Ld. A.R. that no incriminating material was found during the search is devoid of truth and merit. The Ld. D.R. in defence of his arguments relied on the decision of B. Kishore Kumar vs. DCIT 62 taxman.com 250(Mad) wherein it has been held that a statement recorded during search also constitutes a material for making addition. The Ld. D.R. submits that the department was in a possession of base note, the contents whereof were corroborated during the course of search. The Ld. D.R. submits that assessee denied the information in the base note but all the particulars of the assessee were matching with the base note such as name, date of birth, place of birth, sex, residential address, profession, nationality along with date of opening of account in HSBC Bank (Suisse) SA Geneva. The Ld. D.R. submits that at the time of search the assessee was fully aware of these facts viz. the bank statements and trust, however, deliberately denied these facts. The Ld. D.R. stresses the point that assessee refused to sign the consent waiver form and it became impossible for the revenue authorities to investigate the matter further. The Ld. D.R. submits that by refusing to sign 15 ITA Nos.1955 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors the consent waiver form it is proved unequivocally that assessee was hoarding its black money in the Swiss Bank accounts which were beyond the reach of the tax authorities even though during the course of recording of statement under section 132(4) of the Act, the assessee denied all these facts and information of HSBC bank accounts in which he was a beneficial owner. The Ld. D.R. submits that the base note contained the correct particular of assessee’s assets that are held abroad in the Swiss Bank as all the information contained therein were correct and exactly matching. The Ld. D.R. finally submits that the order of Ld. CIT(A) may kindly be affirmed on this issue by upholding assessment framed under section 153A of the Act on a proper and valid incriminating material gathered by the authorities during as well as post search.

We have heard the rival submissions of both the parties and perused the material on record including the orders of authorities below and various decisions cited by both the sides. We note that the department has received information in the form of base note from French government under DTAA containing information that assessee is beneficiary of foreign bank accounts in HSBC Bank (Suisse) SA Geneva, Switzerland. It is undisputed that during the course of search proceedings on the assessee no incriminating materials in respect of assessee being a beneficial owner of bank accounts in HSBC Bank (Suisse) SA Geneva, Switzerland were found. The assessee also denied in the statement recorded under section 132(4) of the Act that he was beneficial owner of the foreign bank accounts held in HSBC Bank by 4 companies as mentioned elsewhere in this order. In the instant case, the assessee filed the return of 16 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors income under section 139(1) of the Act on 16.10.2006 whereas the search was conducted under section 132(1) of the Act on 08.08.2011. Thus the time limit for issue of notice under section 143(2) of the Act expired on 31.10.2007 meaning thereby that no assessment was pending for the instant year on the date of search and therefore the present assessment year has not abated. It is also a settled position of law that any addition in a non abated assessment year can only be made on the basis of incriminating material found during the course of search and not otherwise. We find that during the course of search no such incriminating material was found by the search team. We have also perused the order of Ld. CIT(A) wherein Ld. CIT(A) has noted that the addition made by the AO was based upon incriminating documents in the form of base note as received from French authorities under DTAA, statement of assessee recorded under section 132(4) of the Act during search and material gathered in post search proceedings like HSBC Bank (Suisse) SA Geneva letter and Additional DIT(Inv.) Mumbai’s letter to HSBC Bank (Suisse) SA Geneva etc. Now the issue before us whether the base note or statement recorded during search u/s 132(4) of the Act or material gathered during post search proceedings constitute incriminating materials found during search or not. We have perused the facts on records and after analyzing them in the light of various decisions of tribunal and Hon’ble High Courts we opine that such materials/evidences can not be said to found during the course of search. We further find merits in the contentions of the assessee that materials has to be found during search and it has to be incriminating which was not the case before us. Therefore, 17 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors we are not in agreement with the conclusion drawn by the Ld. CIT(A) on this issue. We note that base note was available with the revenue authorities before the date of search and search was, in fact, carried out on the basis of said base note and therefore same can not be construed or considered as incriminating evidence found during the course of search in order to make the addition in an unabated assessment year. The case of the assessee is supported by the following three decisions of the coordinate benches of the tribunal: • In the case of DCIT vs. Arunkumar Mehta (supra) wherein the co-ordinate bench of the Tribunal has held as under:

Keeping in view the discussion made above, we hold that the additions as finally made to the total income of the assessee on account of transactions reflected in the Bank account of the assessee with HSBC Bank (Suisse) SA Geneva, Switzerland and income relating thereto for both the years under consideration are beyond the scope of section 153A as the assessments for the said years had become final prior to the date of search and there was no incriminating material found during the course of search to support and substantiate the said addition. The said additions made for both the years under consideration are, therefore, deleted allowing the relevant grounds of the assessee’s appeals” • In the case of Yamini Agarwal vs. DCIT (supra) the co- ordinate bench of the Tribunal has also held that specific information received from HSBC from French Government with regard to HSBC account at Geneva, Switzerland can not be considered incriminating material found at the time of search. The operative part is as under: “23. It is not in dispute before us that with respect to the additions made during the course of assessment proceedings u/s.153A of the Act, there was no incriminating material found at the time of search and that the AO while concluding the assessment u/s.153A of the Act dealt with the HSBC Bank Account at Geneva, Switzerland on receipt of specific information from sources, which are not disclosed but admittedly not found or discovered as a result of search conducted u/s.132 of the Act on the Assessee……………… 24. We are of the view that the proposition canvassed by the learned counsel for the Assessee finds support from the various decisions cited by him………………………….…….We are of the view that the view expressed by the Hon’ble Bombay High Court and the Hon’ble Delhi High Court has to be followed being views in favour of the Assessee, in the facts and circumstances of the present case.

We also note that Ld. CIT(A) has held that the statement recorded of the assessee under section 132(4) of the Act during the search on 08.08.2011 constituted the incriminating material. In our considered opinion, the findings of the ld CIT(A) that statement recorded during search constitutes incriminating material is also not correct as the same can not be said to be found during the course of search but is recorded to elicit more information/explanation of the searched person on the incriminating documents/gold/jewellery found during search. Therefore after perusing the material on record and considering rival contentions and also the decisions cited before us, we are of the considered view that a statement recorded during the course of search can not be considered an incriminating material in order to make addition in an unabated assessment year. The case of the assessee is supported by the decision of the co-ordinate bench of the Tribunal in the case of DCIT vs. Shivali Mahajan & others (supra). The relevant paras are reproduced below: “3……. During the course of search, statement of Shri Lalit Mahajan i.e., the assessee in appeal No.5590/Del/2015 was recorded, in which, he admitted of cash investment by him and other family members in respect of booking of space in Indirapuram Habitat Centre…… 4. ……..

We have carefully considered the arguments of both the sides and perused the material placed before us. After considering the facts of the case and the rival submissions, we find that in these appeals, following two questions arise for our consideration : (i) Whether any material found in the search of any other person than the assessee in appeal can be considered in the assessment under Section 153A of the assessee. (ii) Whether the addition can be made only on the basis of statement given by the assessee during the course of search. ……………. 16 Now, coming to question No.2, we find that this issue is also covered by the decision of Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra) and Best Infrastructure (India) (P.) Ltd. (supra). In the case of Harjeev Aggarwal (supra), Hon'ble Jurisdictional High Court considered the evidentiary value of the statement recorded during the course of search. The relevant portion is paragraph 19, 20 & 24, which are reproduced below for ready reference :-………..

Thus, Hon'ble Jurisdictional High Court has held “The words “evidence found as a result of search” would not take within its sweep statements recorded during search and seizure operations”. Their Lordships further observed “However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the assessee during search operation”. In paragraph 24, their Lordships have mentioned about the prevailing practice of extracting statement by exerting undue influence or coercion by the search party. Though the above decision in the case of Harjeev Aggarwal is with reference to the meaning of undisclosed income u/s 158BB of the Income-tax Act, however, in our opinion, the above observation of Hon'ble Jurisdictional High Court would be squarely applicable while considering the evidentiary value of the statement while making the assessment u/s 153A

In the case of Best Infrastructure (India) (P.) Ltd. (supra), Hon'ble Jurisdictional High Court reiterated in paragraph 38 “Fifthly, statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal”. 16. Therefore, on this count also, we are not in agreement with the conclusion drawn by the Ld. CIT(A). In our considered view the statement recorded under section 132(4) of the Act

The facts qua the addition on merit as raised by the assessee in this ground of appeal have already been discussed hereinabove while dealing with the jurisdictional issue. However, the same are briefly discussed for the sake of convenience and ready reference. The AO made the addition on the basis of peak balance during the year in the HSBC foreign bank account of M/s. Sulay Trading Ltd. of USD 2,43,134.65 and M/s. Laptis Trading Ltd. of USD 2,41,40,846. The AO has added the entire peak in the case of M/s. Sulay Trading Ltd. which worked out to Rs.1,07,14,944/- whereas only 25% of the peak in the case of M/s. Laptis Trading Ltd. was added to the income of the assessee by the AO which worked out to 24 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors Rs.26,92,30,785/- thereby making an aggregate addition of Rs. 27,99,45,729/-. These additions have been made by the AO under section 69A of the Act on the ground that assessee is a beneficiary/beneficial owner of the bank accounts held in HSBC Bank (Suisse) SA Geneva, Switzerland by these two Pvt. Ltd. Companies. In order to make the addition, the AO has primarily relied on the information shared by French Sovereign Government in the form of base note and also the non singing of consent waiver form which deprived the revenue to get the requisite information from HSBC Bank (Suisse) SA Geneva in respect of the assessee assets.

The assessee states that she is neither a shareholder nor a director in GWU Investments Ltd. That's not even in dispute. GWU Investments Ltd is a Cayman Islands entity, and it needs no special knowledge to know that, more as a rule rather than as an exception, the Cayman Island entities are owned by nominees of the beneficial owners. The operations carried out by these entities, are mainly to facilitate financial manoeuvring for the benefit of its clients, or, with that predominant underlying objective, to give the colour of genuineness to these entities. These offshore entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities. Nothing, therefore, really turns on the assessee not being a director or shareholder of the GWU Investments Ltd. The relevant question is whether she is beneficial owner of the said company or not. HSBC documents show that she is the beneficial owner, and there is nothing, save and except for self-serving statements of the assessee and contents of some unverified and uncorroborated letter of functionary of HSBC Private Bank- which has been indicted in several parts of the world for colluding with unscrupulous tax evaders and money launderers, to controvert that position. It is also inconceivable that a Rs 200 crore beneficiary in a trust will not know about who has settled that trust. Similarly, while dealing with Cayman Island entities, living in denial about beneficial ownerships, and confining to legal ownerships, is preposterous. The claim of the assessee, about a thing which is not in the knowledge of the Assessing Officer and further investigations about which are stalled by the assessee, is to be examined in the light of real life probabilities and the very act of the assessee, in stalling the further probe, works against the assessee. The assessee may have something to say and some evidences to file. These evidences and statements cannot always be accepted at the face value without application of mind about their reliability. A conscious call is to be taken, in a fair and objective but a realistic, manner about reliability of such evidence. As observed by Hon"ble Supreme Court, in the case of CIT Vs Durga Prasad More [(1971) 82ITR 540 (SC)], "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". As Hon'ble Supreme Court has observed, in this case, ".At is true that an apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recitals, otherwise it will be very easy to make selfserving statements in documents either 33 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. 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". As a final fact finding authority, this Tribunal cannot be superficial in its assessment of genuineness of a transaction, and our call is to be taken not only in the light of the face value of the documents sighted by the assessee but also in the light of all the surrounding circumstances, preponderance of human probabilities and ground realties. There may be difference in subjective perception on such issues, on the same set of facts, but that cannot be a reason enough for the fact finding authorities to avoid taking subjective calls on these aspects, and remain confined to the findings on the basis of irrefutable evidences. Hon'ble Supreme Court has, in the case of Durga Prasad More (supra), observed that "human minds may differ as to the reliability of a piece of evidence but in that sphere the decision of the final fact finding authority is made conclusive by law". This faith in the Tribunal by Hon'ble Courts above makes the job of the Tribunal even more onerous and demanding and, in our considered view, it does require the Tribunal to take a holistic view of the matter, in the light of surrounding circumstances, preponderance of probabilities and ground realities, rather than being swayed by the not so convincing, but apparently in order, statements and letters and examining them, in a pedantic manner, with the blinkers on. The same has been the approach adopted by Hon"ble Supreme Court, in the case of SumatiDayal Vs CIT[(1995) 214 ITR 801 (SC)], wherein Their Lordships have, inter alia, disapproved acceptance of a claim of winning the appellant claims to have won in horse races a total amount ofRs. 3,11,831 on 13 occasions out of which 10 winnings were from Jackpots and 3 were from Treble events by Chairman of the Income Tax Settlement Commission, and observed that "This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities". Their Lordships further observed that "Similarly the observation by the Chairman that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available. An inference about such a purchase has to be drawn on the basis of the circumstances available on the record. Having regard to the conduct of the appellant as disclosed in her sworn statement as well as other material on the record an inference could reasonably be drawn that the winning tickets were purchased by the appellant after the event. We are, therefore, unable to agree with 34 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors the view of the Chairman in his dissenting opinion. In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably and that the finding that the said amounts are income of the appellant from other sources is not based on evidence".

Viewed in the light of factual backdrop of the case, and in the light of the above legal position, no reasonable person can accept the explanation of the assessee. The assessee is not a public personality like Mother Terresa that some unknown person, with complete anonymity, will settle a trust to give her US S 4 million, and in any case, Cayman Islands is not known for philanthropists operating from there; if Cayman Islands is known for anything relevant, it is known for an atmosphere conducive to hiding unaccounted wealth and money laundering, and that does not advance the case of the assessee. This is a jurisdiction which has double the number of companies than resident, most of which remain only on paper, and it will be no naive to believe that these companies are located here, in a country with around 65,000 residents, for bonafide core activities, rather than the benefits of anonymity, secrecy and liberal tax laws. Cayman Island is one of the few jurisdictions in the world where public records of the beneficiaries of firms and companies, like GWU Investments Ltd, are not maintained, and it is only with effect from 2023, that is if the promises made by the Government of Cayman Islands can be believed at face value, that such public records will be maintained. That is an ideal situation, as on now, for holding the unaccounted monies through a web of proxy corporate entities. The only persons who are privy to vital information about these transactions are the persons who are privy to these transactions-maybe as owner, as settlor, as beneficiaries or as facilitators or even as accomplices in these manoeuvrings, and when they decline to share the correct information, and thwart further probe in the matter, investigations reach a cul-de-sac. The assessee before us is closely involved with the transaction and it is unconceivable that the assessee will have no direct knowledge of the owners of the underlying company and settlors of the trust which has her, as she herself puts it, as beneficiary of such a huge amount. This inference is all the more justified when we take into account the fact that the assessee has been non-cooperative and has declined to sign the consent waiver. One of the arguments raised by the assessee, as set out in a chart showing arguments of the assessee-below paragraph 20 earlier in this order, that the assessee could not have performed the impossible act of signing consent waiver because she was not owner of the account is too naive and frivolous to be even taken seriously. If the assessee was indeed not the owner of the account, there was 35 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors all the more reason to sign the consent waiver form because it would have established that fact when the HSBC Private Bank (Suisse) Geneva was to decline the information on the basis of that consent waiver. A consent waiver signed by the assessee would have been infructuous in that case, and it could not have done any harm to the assessee. Consent waiver form does not prejudice the claim of the assessee that he does not own the account in question; all it does is, as can be seen from the extracts from consent waiver form format reproduced earlier, is that it waiver assessee"s rights, if any, under the data protection and banking secrecy laws. The plea of the assessee, as noted earlier, is fit, if at all it is fit for anything, only to be rejected.

While we have noted the claim of the assessee that she is a discretionary beneficiary of Tharani Family Trust, that fact does not find mention in the base note. As we have clearly analyzed above, the base note shows that the assessee was beneficial owner or beneficiary of GWU Investments Ltd. We may add that in the remand report filed by the Assessing Officer, there is a reference to some unsigned draft copy of the trust deed having been filed before him but neither this deed is authentic nor is it placed before us in the paper-book. The assessee has not submitted the trust deed or any related papers but merely referred to a somewhat tentative claim made in a letter between one Mahesh Tharani, apparently a relative of the assessee and the HSBC Private Bank (Suisse) SA-an organization with a globally established track record of hoodwinking tax authorities worldwide. All that this letter, addressed to one Mahesh Tharani, states is "As per the request of director, we hereby confirm that, GWU Investments Ltd was holder of the account 1414771. According to our records GWU Investments Ltd. Used to be an underlying company of the Tharani Famify Trust for which Mrs. Renu Tharani was a discretionary beneficiary. To the best of our knowledge, The Tharani Family Trust was terminated and none of the assets deposited with HSBC Private Bank (Suisse) SA were distributed to Mrs. Renu Tharani". It is not clear as to how is the director, and of which company; if Mahesh Tharani was a director of GWU Investments Ltd, when he could share this letter, he could have as well shared the information. If he is not the director, he would have at least known the director because director requested the Bank to provide this information to Tharani. Nothing is clear, nor does the assessee throw any light on the same. Be that as it may, this letter does not show deny, nor show any material to controvert, what is stated in the base note Le. GWU Investments Ltd and the assessee are linked as beneficial owner. There is no dispute that account was in the nominal name of GSW Investments Ltd but the question is who is the natural person beneficial owner thereof. As for the Trust, there is no corroborative evidence about the statement, but nothing turns thereon as well. The assessee being discretionary beneficiary owner of the trust, and beneficial owner of the underlying company, is not mutually exclusive anyway but the claim of the assessee being a discretionary beneficiary of the trust is without even minimal evidence. There is another letter from HSBC Private Bank (Suisse) SA to the assessee which states that "Further to your request, we hereby confirm that you, Mrs Renu Tharani, are not the holder nor, to the best of our knowledge, the beneficial owner of any account opened in the books of HSBC Private Bank (Suisse) SA. However, you are a discretionary beneficiary of a trust called the Tharani family Trust for which HSBC Guyerzeller Trust Company, acts as trustee. No bank account is maintained in the name of the trustee, and we confirm that you are not, nor have your even been, an authorized signatory on the bank account held in the name of the 37 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors trust's underlying company". As for the first statement made in this letter, it does not show why the base note records assessee as the beneficial owner of the company, and how does the bank reconcile these two conflicting positions taken. As regards the assessee being a discretionary beneficiary, nothing turns on it anyway for the reasons we have discussed earlier in this paragraph. As for assessee not being authorised signatory for GWU Investments Ltd, that is not even the case of the assessee or the position taken in the base note. An HSBC entity, i.e, HSBC Guyerzeller Trust Company, being a trustee for Tharani Family Trust shows that if it was indeed desired by the assessee, trust deed would have been available with the HSBC entity. Its a also a coincidence that with all this available information, neither the assessee asks for the trust deed nor does the HSBC share the same. On the contrary, assessee, in one of the communications to the Assessing Officer, specifically states her inability to furnish the same. What these letters state may have some truth- half truth or technical truth, but then these qualified truths are only different forms of falsehood in entirety. There is something seriously amiss in all this; something is rotten in the State of Denmark. There is a series of coincidences, right from the HSBC account being closed after the information contained in the base note coming out and to the underlying company being removed from the name of Register of Companies in Cayman Island, right from assessee living in complete denial about any knowledge about a HSBC Private Bank (Suisse) SA account in her name to her lack of information about the company which is holding US $ 4 million for her, and, despite assessee being purportedly so clean in her affairs, her thwarting any efforts of the income tax department to get at the truth by declining to sign the consent waiver form. It is wholly un-understandable as to how can assessee, on one hand, seek to treat a cleverly worded private letter from HSBC Private Bank (Suisse) SA as gospel truth, and, on the other hand, effectively stall, by declining consent waiver and by stating half truths- even if her statements have an element of truth, the Assessing Officer obtaining direct information from the same organization. There is no meeting ground in this approach. In any case, for the reasons set out above and as evident from the base note, the assessee is beneficial owner of GWU Investments Ltd, Cayman Islands. There is nothing to controvert this fact stated in the base note, and since the assessee has declined consent waiver in this case, the assessee cannot decline correctness of the details obtained from the HSBC Private Bank (Suisse) SA.

As regards the repeated references to Hon"ble Supreme Court"s judgment in the case of Estate of HMM Vikramsinhji of Gonda (supra), it is important to understand that it was a case in which a discretionary trust was settled by the assessee and the limited question for adjudication was taxability of income of the trust, after the death of the settlor and in the hands of the beneficiary. It was in this context thatHon"ble Supreme Court held that the question of 38 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors taxation in the hands of the beneficiary arises only when he receives the money because, as Their Lordships noted, "A discretionary trust is one which gives a beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or appfy for his benefit, such part of the income as they think fit. The trustees must exercise their discretion as and when the income becomes available, but if they fail to distribute in due time, the power is not extinguished so that they can distribute later. They have no power to bind themselves for the future. The beneficiary thus has no more than a hope that the discretion will be exercised in his favour." These observations have no relevance in the present context. Firstly, neither there is any trust deed before us, nor the question before us pertains to taxability of income of the trust. Secondly, beyond a mention in the base note as a personnes legales liees" (i.e. related legal persons), there is no evidence even about existence, leave aside nature, of the trust. Thirdly, the point of taxability here is beneficial ownership of GWU Investments Ltd, a Cayman Island based company, by the assessee. Finally, even if there is a dispute about the alleged trust, the dispute is with respect of taxability of funds found with the trust and the source thereof. Clearly, therefore, the issue adjudicated upon in the said decision has no relevance in the present context. The very reliance on the said decision presupposes that the assessee was discretionary beneficiary simplicitor of a discretionary family trust, and nothing more- an assumption which is far from established on the facts of this case."

The Ld. A.R. submits, at the outset, that the AO has made the addition on the ground that assessee is beneficial owner/beneficiary of HSBC bank accounts and it was not the case of the AO that assessee was the owner of the bank accounts. The ld AR submits that during the course of the proceedings before CIT(A), some documents were received by the Department from the Government of virgin Islands & Jersey, 42 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors which were made available to the assessee vide letter of CIT(A) dated 08-09-2020. The ld AR submits that the A.O. had made addition based on the ‘base note’ whereas the CIT(A) has confirmed the same based on this information received from foreign government. The AR refers to the letter of the CIT(A) dated 08-09-2020 and also the enclosed information/details which are filed at page 17 to 50 of the paper book. Further, ld AR stated that the CIT(A) has also taken in to consideration a letter dated 16-10-2020 filed at page 72 of the paper book addressed by the trustee, TMF group. Referring to the letter, the ld AR submits that it is relevant to note that the letter of TMF group has been produced by the assessee and the same has been taken on record and considered by the CIT(A) at page 56 of the appellate order and the information contained in this letter is in conformity with the information independently obtained by the Department from the foreign government. The ld AR refers to these documents and analyzed the contents to prove his averments that whatever information/details are contained in these letters/documents do not in any manner prove that assessee is beneficial owner of the HSBC bank accounts. The ld AR refers to the following documents to prove his averments to the effect that assessee was not the beneficiary during the year under consideration and therefore there is no question of making any addition in his hands in the instant assessment year: a. Letter of Government of Virgin Islands dated 19-05-2017 (page 18 of paper book) b. Instrument of Trust dated 26-03-1997 (page 23 of paper book) c. Deed of Appointment, Retirement and Indemnity dated 14-09-2006 (page 36 of paper book) d. Deed of addition of beneficiaries dated 07-09-2007 (page 37 of paper book) e. Deed of Appointment and Indemnity dated 05-12-2007 (page 41 of paper 43 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors book) f. Deed of Addition of beneficiary dated 28-08-2009 (page 45 of paper book) g. Letter of TMF group dated 16-10-2020 (page 72 of paper book) 22. The ld AR submits that it is relevant to note that each of the Trust documents, forwarded by the Sovereign Government of Virgin Island and Jersey, refers to all earlier chain of the documents entered into thereby ruling out any possibility of having any other unknown document/missing document whereby assessee could have been appointed as beneficiary during any prior period than what has been stated in these letters. The ld AR argues that based on the above, it can be concluded that , at the highest, the assessee was added as a beneficiary to ‘The Beal Trust’ vide supplemental deed on 07.09.2007 only and therefore prior to this deed, assessee had nothing to do with the said trust whatsoever. T h e l d A R p r a y s t h a t i n view of these facts, no addition can be made in the assessment year under consideration. The ld AR submits that based on the information provided by CIT(A), it is conclusively proved that assessee had no connection or control over the trust or its investments or its distribution prior to 07.09.2007 and thus, any addition made in assessment year prior to AY 2008-09 is grossly incorrect and deserves to be deleted as any arguments in support of such addition could be only presumptive assumptive and not based on any evidence, direct or circumstantial. Further, in response to the letter of appellant’s legal counsel dated 25.09.2020, TMF Services S.A, the trustees of the aforesaid “The Beal Trust” provided their reply vide letter dated 15.10.2020 giving chronology of the events that occurred and most importantly, shedding light on 44 ITA Nos.1955 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors relationship of the assessee with the Trust and the companies mentioned in the base note. The ld AR submits that this letter is of utmost importance as it brings out the facts correctly which are in line with the information/details provided by the CIT(A). It states that in October 2009, appellant was removed from the list of beneficiaries of the Trust. The ld AR further emphasized that the said letter also explicitly clarifies that no approval from the assessee was sought to either add or remove him from the list of beneficiaries.

The ld AR further argues that it may be noted that now the information has been directly received by the department from abroad and has far more evidentiary value than ‘base note’. The ld AR also submits that based on this, it can be concluded that appellant never received any distribution from the Trust and the companies, in any manner whatsoever. The ld. Draws our attention towards the judgment of Apex Court in case of Estate of Late HMM Vikramsinjhi of Gondal (363 ITR 679) wherein it was held that the income not distributed to the beneficiaries cannot be assessed in the hands of the beneficiaries. The ld AR submits that addition cannot be made in the hands of an individual who is neither an owner nor a beneficiary nor a beneficial owner of such bank account during the year under consideration. In his defence , the ld counsel relies upon the decision of Hon’ble Mumbai bench of the Tribunal in the case of Yashovardhan Birla vs. DCIT (W.T.A. No. 02 to 08/Mum/2020) (Pg no 168 of P.B. 2). In this case bank balance in the offshore companies which were governed by the trustees of the irrevocable discretionary trusts in which assessee was one of the beneficiaries were treated by the AO to 45 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors be that of the assessee. The Hon’ble ITAT held that actual legal ownership has to be considered rather than deemed ownership. It further held that even though in KYC compliance the assessee is mentioned as the beneficiary, the same does not take away the ownership of bank accounts from the companies and trust and the bank accounts can never be said to be belonging to the assessee.

On the issue non signing of consent waiver form and non cooperation of the assessee with the department by not signing the consent waiver form, the ld AR submits that the consent waiver form, which the assessee was asked to sign by the A.O., proceeded on the premise that the assessee has an account with HSBC bank. The printed consent waiver form required the assessee to declare that he is owner/beneficiary of the bank account. It also required the assessee to obtain consent of other persons like trustee etc. The ld AR submits that the assessee has consistently denied having any bank account with HSBC bank and hence it would not be correct to sign the consent waiver form. T h e l d A R s u b m i t s t h a t a detailed submission, pointing out the reasons as to why the form could not be signed, was furnished before the Assessing Officer copy of which is placed at Pg no 7 to 11 of the P.B.

The ld AR argues that in any case, the department has now in its possession the copy of trust deed and complete chain of documents concerning changes in the trustees, beneficiaries etc. The purpose of consent waiver form is to procure all the relevant documents. It is submitted that in light of the fact that the source documents have been received by the department, 46 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors the issue of consent waiver form loses its relevance.

Without prejudice to the aforesaid two fold contentions and strictly in alternate, if the relief is not granted on the aforesaid contentions, the ld AR prays that following further contentions of the appellant may kindly be adjudicated. First contention is that the assessment was made in violation of principles of natural justice. The ld AR submits that during the entire assessment proceedings, the copy of the base note, the sole document based on which addition has been made by the A.O., has not been made available to the appellant. The base note has been alleged to be received by the Government of India from the French Government under DTAA between India and France, the veracity of which is in serious doubt. Further, various other documents and evidences mentioned in the assessment order and based on which adverse inferences have been drawn against the appellant have not been provided to the appellant. The ld AR submits that assessee made repeated requests to the CIT(A) for providing these documents, the list of which has been reproduced by the CIT(A) page 52, 53 of order. However, the CIT(A) has not commented on request in respect of providing these documents. As regards the copy of the base note, the CIT(A) has held that the same was shown to the appellant while recording his statement. It is submitted that appellant ought to have been provided with the copy of the base note, which is very vital document as per the Department, so as to enable the appellant to effectively defend his case. Admittedly, no prejudice would have been caused to the Department. Similarly, action of the Department in not providing or even showing other documents as stated herein

It was stated that the appellant came to know for the first time that the name of Mr. Mahendra Parikh, assessee’s uncle, is figuring in the documents now provided by the CIT(A). A time was sought to seek clarification of Mr. Mahendra Parikh, who is aged 82 years and is residing at Dubai. The need for granting some more time has been elaborated in the said letters which are part of the paper book and the same is not repeated here for the sake of brevity. Suffice to say that the correctness of reasons for adjournment have not been disputed by the CIT(A).However, without acceding to the request of the assessee, the CIT(A) passed the order on 19.10.2020, which is in violation of principles of natural justice. The assessee has since obtained a letter dated 29.10.2020 from Mr. Mahendra Parikh, assessee’s uncle, stating that the HSBC bank accounts were opened in name of companies belonging to one ‘The Beat Trust’ and the said trust was created by his friend. It further states that the name of assessee, along with other three individuals, were added as beneficiary of the said trust without their knowledge and no distribution was made to the assessee. Most importantly, Mr. Mahendra Parikh has confirmed that all the benefits and interests in the said trust belonged to him. The assessee has filed the said letter as an additional evidence before the Hon’ble Tribunal. Apart from this, the Trustee of the above referred trust has also given updated letter dated 05-02- 2021, which is very relevant to the issue under consideration. It is submitted that for the detailed reasons mentioned in the above covering letter, the additional evidence may kindly be

The Ld. D.R., on the other hand, heavily relied on the orders of authorities below and submits that there is no merit in the arguments of the Ld. A.R. that the assessee had never visited Geneva in order to open bank account in HSBC Bank (Suisse) SA Geneva. The Ld. D.R. submits that there is no need of going to Geneva for opening a bank account in HSBC. The Ld. D.R. submits that the assessee is a beneficiary and not primary account holder of the said bank accounts. The Ld. D.R. submits that it is a secret and clandestine process of quietly parking the money in the foreign countries and making person who is the owner of money as beneficiary so that these funds could ultimately go to the individuals/entities who are shown as beneficiaries. The Ld. D.R. submits that the companies which are holding the bank accounts in HSBC Bank (Suisse) SA Geneva were so frequently changed that it is not possible for the Revenue Authorities to conduct inquiries into the matter. The Ld. D.R. also argues that in case of tax evasion and black money matters, the standard of evidences have to be lowered as we can not have the same standard at par with the other crimes like murder, dacoity and rape etc. Controverting the contentions of the Ld. A.R. on stolen data from Swiss bank, the Ld. D.R. submits that though these datas were leaked from the bank but the same was a reliable information and piece of evidence since it contains the exact details mentioning the exact particulars about the assessee. Therefore it does not matter whether the data is stolen or not or is officially supplied. The Ld. D.R. submits that the base note contains the minute details about the beneficiaries and therefore, how the same could be said to be 49 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors bogus data. The Ld. D.R. submits that had the assessee signed the consent waiver form, the Revenue Authority could have found out the truth behind the curtain. In defense of his arguments, the Ld. D.R. relies on the decision of Renu Tharani v. DCIT ITA No. 2333/Mum/2018 dated 16.07.2020 and submits that since the facts of the present case are similar to the impugned case, therefore the order of Ld. CIT(A) may kindly be sustained. The Ld. D.R. finally submits that 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 foreign country, it is very difficult for the Revenue Authority to conduct the enquiry and dig out the truth. Under these circumstances, the Ld. D.R. submits that the addition as made by the AO and affirmed by the Ld. CIT(A) may kindly be upheld.

In the rejoinder the ld. A.R submits that the department has placed reliance upon the order of the Hon’ble Tribunal in the case of Renu Tharani v. DCIT (Supra) which is distinguishable on facts. The ld AR submits that in the said case, the trust deed was not on record whereas in the present case, all the documents concerning the trust are on record of the department. Thus, the complete details about the trustees and beneficiaries are on record. Further, Hon’ble Tribunal in the said case has also emphasized that facts of each case have to be seen while deciding the issue.

Accordingly, it is submitted that the above decision of the coordinate bench would not be applicable to the facts of the present case. In fact, the subsequent order of the Mumbai 50 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors bench of the tribunal in the case of Yashovardhan Birla (supra) is more appropriate and applicable to the facts of the case. Accordingly, it is submitted that the addition sustained by the CIT(A) may kindly be deleted.

We have heard the rival submissions of both the parties and perused the material on record including the impugned orders of the lower authorities and decisions cited by both sides. We note that during the appellate proceedings before the Ld. CIT(A), numerous documents were received from foreign government which were also made available to the assessee by Ld. CIT(A) vide letter dated 08.09.2020. All these documents have been referred by the Ld. A.R. in his submissions and arguments as discussed supra. For the sake of ready reference these are listed along with the contents therein as under: a) Letter of Government of Virgin Islands dated 19-05-2017 (page 18 of paper book) - Laptis Trading is owned by The Beal Trust. The said Trust has been formed by Mr. Raju Navinchandra Shah. - The beneficiaries of The Beal Trust are (i) Milan Parikh (ii) Shaunak Parikh (iii) Jay Parikh (iv) Raj Parikh (v) Mahendra Parikh (vi) Care Britain and (vii) Feed the Children (Europe). - Out of the above, first four are appellants before Your Honours, fifth is uncle of the appellants and rest two are charitable organisations. b) Instrument of Trust dated 26-03-1997 (page 23 of paper book) - The Beal Trust has been formed on 26-03-1997 with ABN Amro as Trustee. - The beneficiaries were (i) Care Britain and (ii) Feed the Children (Europe). c) Deed of Appointment, Retirement and Indemnity dated 14-09-2006 (page 36 of paper book) - The full document is not available but based on the subsequent documents it is evident that on this day ABN Amro retired as a Trustee and Equity Trust has been appointed as Trustee. d) Deed of addition of beneficiaries dated 07-09-2007 (page 37 of paper book) - As per the recital, on 14-09-2006, Equity Trust had been appointed as a 51 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors Trustee in place of ABN Amro. - (i) Milan Parikh (ii) Shaunak Parikh (iii) Jay Parikh and (iv) Raj Parikh have been appointed as beneficiaries. - It may be noted that the appellant has been appointed as beneficiary for the first time on 07-09-2007, which date falls beyond the end of the previous year. - . e) Deed of Appointment and Indemnity dated 05-12-2007 (page 41 of paper book) - An amount of USD 2.30 million was appointed to the beneficiary, HSBC Trustee, Singapore. - This also happened much after the end of the relevant previous year. f) Deed of Addition of beneficiary dated 28-08-2009 (page 45 of paper book) Mahendra Parikh has been appointed as beneficiary of the Trust. - g) Letter of TMF group dated 16-10-2020 (page 72 of paper book) - Equity Trust has been merged with TMF group - The Beal Trust has been formed on 26.03.1997 by one Mr Raju Navinchandra Shah of Israel and the trustee was ABN Amro. - 100% share capital of four companies including Sulay Trading Ltd and Laptis Trading Ltd is held by The Beal Trust. On 14th September,2006, Equity Trust has been appointed as trustee - On 07-09-2007 Milan Parikh, Shaunak Parikh, Jay Parikh and Raj Parikh - have been appointed as beneficiary. On 28-08-2009, Mahendra Parikh has been appointed as beneficiary - In October 2009, Milan Parikh, Shaunak Parikh, Jay Parikh and Raj Parikh - have been removed from the list of beneficiaries. - Milan Parikh, Shaunak Parikh, Jay Parikh and Raj Parikh have not received any distribution from the trust.

Upon perusal of all the above documents, we note that each of the Trust documents, received from Government of virgin Islands & Jersey, contains reference to all earlier chain of the documents. We also note that the assessee has filed some documents before the revenue authorities which were counter verified by the revenue independently and found them correct. We have perused all these documents supplied by the foreign government to the Indian counter part and letter from government of Virgin Island dated 19.05.2017 and we find 52 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors that Laptis Trading Co. Ltd is owned by Beal Trust and the trust has been formed by Mr. Raju Navinchandra Shah with beneficiary namely Milan Parikh, Shaunak Parikh, Jay Parikh, Raj Parikh, Mahendra Parikh, Care Britain and Feed the Children (Europe). Of the above beneficiaries, the first 4 are appellants before us and 5th is uncle of the various appellants and the remaining two are charitable organizations. Similarly, the instrument of trust dated 26.03.1997 with ABN Amro as trustee with two beneficiaries namely Care Britain and Feed the Children (Europe) and deed of appointment, retirement and indemnity dated 14.09.2006 which is filed at page No.36 of the paper book were perused and we find that that ABN Amro retired as trustee and equity trust has been appointed as trustee. We further note from deed of addition of beneficiaries dated 07.09.2007, a copy of which is filed at page No.37 of the paper book that ABN Amro was replaced by equity trust as trustee and the 4 appellants including the assessee before us namely Mr. Milan Kavinchandra Parikh, Mr. Shaunak Jitendra Parikh, Mr. Raj Hiten Parikh & Mr. Jay Ketan Parikh have been appointed as beneficiaries. It is important to note at this stage that the assessee is appointed as beneficiary for the first time on 07.09.2007 which apparently and undoubted after the end of the previous year under consideration. We also note that this chain or chronology of events as unfolded by the various documents sent by the Sovereign Government of Virgin Island & Jersey to the Indian counter part that assessee was never a beneficiary prior to the 07.09.2007. Further, vide deed of appointment and indemnity dated 05.12.2007, a copy of which is filed at page No.41 of the paper 53 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors book, an amount of USD 20.3 million was appointed/earmarked to the beneficiary HSBC trustee, Singapore. We note that this earmarking of funds also happened after the close of the financial year in question. We further note that vide deed of addition of beneficiary dated 28.08.2009 Mahendra Parikh the uncle of four appellants before us was appointed as beneficiary of the trust. Finally, comes the letter of TMF group dated 16.10.2020, a copy of which is filed at page No.72 of the paper book, which evidenced all the correspondences/documents as discussed above and some additional facts/documents as under:

Thus, on the basis of above set of documents as supplied by Ld. CIT(A) to the assessee vide its letter dated 08.09.2020, we observe that assessee was added as a beneficiary to Beal Trust 54 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors vide deed of addition of beneficiary dated 07.09.2007 and prior to this date the assessee had nothing to do with the trust. We also note that on the basis of letter of TMF group that the assessee has been removed as beneficiary w.e.f. October 2009. After taking into the account these undisputed facts in entirety and considering the various documents as placed by the assessee before us as have been discussed hereinabove, we find that the assessee was never a beneficiary prior to 07.09.2007 and also post October 2009. Based on the said information and facts, we are quite convinced with the contentions of the Ld. A.R. that no addition can be made in the year under consideration as the assessee was not a beneficiary during the year under consideration. We observe that the assessee was not the owner of the foreign bank account. He was added as beneficiary on 07.09.2007 and ceased to be beneficiary w.e.f. October 2009. We have also perused the decision relied upon by the Ld. D.R in the case of Renu Tharani vs. DCIT (supra) and find that the facts of the said case are distinguishable than that of the assessee’s case. We note that in that case the trust deed was not on record whereas in the instant case all the documents were before the Revenue Authorities. We also note that in the case of Renu Tharani vs. DCIT (supra) the Tribunal has made an observation that it can not be a general proposition that wherever name of the assessee figures in base note from HSBC Bank (Suisse) SA Geneva, an addition will be justified in each case. The co- ordinate bench of the Tribunal noted that an account in HSBC Bank by itself can not be taken to mean that money in the account is unaccounted, illegitimate and illegal. The co-ordinate bench of the Tribunal noted that in each case, the facts and the surrounding circumstances are to be examined on merit and 55 ITA Nos.1955 & 1956/M/2020 & ors M/s. Jay Ketan Parikh & ors then a call has to be taken about as to whether the explanation of the assessee merits acceptance or not and there can not be a short cut or one size fits of approach to this exercise. Besides, the revenue could not prove that any distribution was done. In view of the above facts and circumstances, we are inclined to set aside the finding of the Ld. CIT(A) and direct the AO to delete the addition made under section 69A of the Act of Rs.27,99,45,729/-. Consequently ground no. 2 is allowed.

The issue raised in ground No.3, 4 & 5 are in support of ground No.1 & 2 and needs no separate adjudication.

In the result, the appeal of the assessee is allowed. A.Y. 2007-08, ITA Nos.1957 & 1958/M/2020 A.Ys 2006-07 & 2007-08 and ITA Nos.1959 & 1960/M/2020 A.Ys 2006-07 & 2007-08 36. The issue involved in these appeals is identical to the one as decided by us in ITA No.1955/M/2016 for A.Y. 2006-07 hereinabove. Therefore, our decision in ITA No.1955/M/2016 for A.Y. 2006-07 would , mutatis mutandis, apply to these appeals as well. Accordingly the appeals of the assessees are allowed. 37. In the result, all the appeals of the assessee are allowed.