ITO 30 (3)(1), MUMBAI vs. RAMNATHAN KRISHNAN, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI माननीय "ी महावीर िसंह, उपा"" एवं माननीय "ी मनोज कुमार अ"वाल ,लेखा सद" के सम"। BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode) आयकर अपील सं./ (िनधा"रण वष" / Assessment Year: 2009-10) Income Tax Officer-30(3)(1) Shri Ramnathan Krishnan C-13, 6th Floor, R.No.603 1003B, 10th Floor बनाम/ Pratyakshkar Bhawan Green Village Ventures BKC, Bandra (East) Express Zone Building Vs. Mumbai – 400051 Patel Vanika, WE Highway Malad (E), Mumbai-400 097. "थायीलेखासं./जीआइआरसं./PAN/GIR No. DULPK-9988-K (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : Shri Rakesh Joshi-Ld. AR Revenue by : Shri Udool Raj Singh-Ld. DR सुनवाई की तारीख/ : 05/08/2020 Date of Hearing घोषणा की तारीख / : 05/08/2020 Date of Pronouncement आदेश / O R D E R Per Manoj Kumar Aggarwal (Accountant Member)

. The order under challenge is common order for AYs 2009-10 & 2010-11. 2 Assessment Year: 2009-10 Ramnathan Krishnan

2. The Ld. Authorized Representative for Assessee (AR), Shri Rakesh Joshi, at the outset, submitted that the tax effect of quantum additions being agitated by the revenue is below the prescribed monetary limit of Rs.50 Lacs and therefore the appeal is not maintainable in terms of recently issued low tax effect Circular No. 17/2019 dated 08/08/2019 [F.No.279/Misc. 142/2007-TTJ(Pt.) issued by CBDT. This recent circular further enhances the monetary limit fixed in earlier Circular No.3 of 2018 dated 11/07/2018 issued by CBDT as amended on 20/08/2018.

3. On the other hand, Ld. DR controverted the same by placing on record Assessing Officer’s letter dated 24/09/2019. The concluding para of the said letter read as under: - iv. That as per the above provisions, the tax effect involved in the subject of appeal is below the prescribed monetary limits. That tax effect involved for A.Y. 2009-10 is Rs.44 Lakhs, whereas the TE involved in A.Y.2010-11 is approx. Rs.55 Lakhs. However, since the addition is made in respect of foreign remittances, in light of the para 10 of the Circular No. 3/2018 dated 11/07/2018, the assessee’s case is squarely covered under the exception clause of undisclosed foreign assets / foreign bank account / remittance not shown in the return of income by virtue of which, the department is precluded from withdrawing the appeal from the appellate authorities on the basis of the prescribed monetary limits. It has also been submitted in opening para of the said letter that the status of the assessee, in the assessment order, has been mentioned as resident. However, as per remand report submitted by AO to CIT(A)-41 vide dated 20/04/2018, it was stated that the assessee was a non- resident during this year as he was in India only for a period of 7 days. However, since the assessee has received certain amounts from three Indian Companies in India, in which he was director, the same would be 3 Assessment Year: 2009-10 Ramnathan Krishnan taxable in the hands of the assessee irrespective of his residential status. Thus, Ld. DR would controvert the position taken by Ld. AR.

4. We have carefully perused the case records. We find that for AY 2009-10, the assessee has been saddled with additions of Rs.132.70 Lacs in an assessment framed u/s 144 r.w.s. 147 on 26/12/2016. The said addition was made since as per information received from DDIT(Inv.), the assessee maintained one Bank Account with ICICI Bank, Nariman Point Branch and received foreign remittances of Rs.132.70 Lacs in the said account. However, no return of income was filed by the assessee for year under consideration which resulted into initiation of reassessment proceedings against the assessee. Although the assessee made certain submissions to Ld. AO during the course of assessment proceedings, however, the same could not find favor with Ld. AO who ultimately added the said amount as unexplained money u/s 69A in the hands of the assessee.

5. During appellate proceedings, the assessee submitted certain additional evidences which were subjected to remand proceedings. After perusing the material on record, remand reports, bank statements etc., Ld. CIT(A) deleted the impugned additions in its entirety since Ld. AO failed to establish that credit entries in the said account represented taxable income in India. Pertinently, out of aggregate additions of Rs.132.70 Lacs, an amount of Rs.59.44 Lacs was admitted by Ld. AO himself during remand proceedings that the said amount represented transfer from assessee’s own NRE Account. Aggrieved as aforesaid, the revenue is in further appeal before us.

4 Assessment Year: 2009-10 Ramnathan Krishnan 6. From the above facts, the undisputed position that emerges is that the assessee has received certain credits in ICICI Bank Account maintained in India. The said credit, inter-alia, represented transfer from assessee’s own NRE account as well as reimbursement of expenses on behalf of certain corporate entities. As such, there was no undisclosed foreign income / undisclosed foreign assets (including financial assets)/ undisclosed foreign bank account in terms of clause (d) of para 10 of circular no. 3/2018 dated 11/07/2018 as amended vide circular dated 20/08/2018. The bank account under question was maintained in India in which remittances were received from abroad. Therefore, the plea raised by the revenue could not be accepted. No other exception could be pointed out by revenue which would preclude it to withdraw the appeal under question. Therefore, we concur with the submissions of Ld. AR that the tax effect of quantum additions being contested by the Revenue is, prima-facie, below threshold monetary limit of Rs.50 Lacs and the appeal is not maintainable in terms of recently issued low tax effect Circular No. 17/2019 dated 08/08/2019 [F.No.279/Misc. 142/2007- TTJ(Pt.) issued by CBDT. This recent circular further enhances the monetary limit fixed in earlier Circular No.3 of 2018 dated 11/07/2018 issued by CBDT as amended on 20/08/2018. In view of the same, the appeal is not maintainable. The investigation arm of the Income Tax Department is an internal organ of the department and therefore, the same would not fall under the category of external sources in the nature of law enforcement agencies as envisaged by clause 10(e) of the said circular.