HARSHAD R. MEHTA,MUMBAI vs. DCIT CEN CIR 1, MUMBAI

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in for A.Y.2003-04 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-36, Mumbai in appeal No. CIT(A)-36/AP.221/09-10 dated 25/02/2011 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/12/2009 by the ld. Dy. Commissioner of Income Tax- Central Circle-1, Mumbai (hereinafter referred to as ld. AO).

1.1. Both these appeals are disposed off by this common order for the sake of convenience.

2. We find that the assessee had filed an additional ground challenging the validity of reopening of assessment made in this case. At the time of hearing before us, the ld AR stated that on instructions from the assessee, the same is not pressed by him. Infact the ld AR also had filed a written submission dated 26.7.2019, wherein he had duly confirmed that the additional ground raised challenging the validity of reopening is not pressed. Accordingly, the same is dismissed as not pressed.

3. The only issue involved in quantum appeal is as to whether the ld CITA was justified in upholding the addition in the sum of Rs 5,35,23,181/- in the facts and circumstances of the case.

“The Income Tax Department had received information that you are a beneficiary of the bank account opened in the name of Dryade Stiftung and Dianese Stiftung Vaduz in LTG Bank, Liechtenstein. The amount deposited in the bank or the benefits derived out of the interest accrued or otherwise on such deposit was no where reflected in your returns of income .Accordingly, this case was reopened u/s,148 of the I.T. Act, 1961. This case was centralized in this circle vide order dated 3.9.2009 issued by CIT,16, Mumbai, In response to this office notice dt.30-03- 2009, You had strongly denied any knowledge of any such trust and had categorically denied of receiving any benefit from such trust. The undersigned has information in my possession that you along with three others had deposited $ 43,87,146.00 in the name of Dryade Stiftung and Dianese Stiftung Vaduz in LTG Bank, Liechtenstein during the period relevant to the assessment year 2002 - 03, 2003-04, 1 have further reason to believe that this amount is taxable in India due to the following reasons: (A) The address given to the LTG Bank, Liechtenstein is Bombay- India.

No proof of this amount having been declared to any of the Revenue Authorities abroad has been furnished. (B) Origin of the deposit has been stated as "Family Money" The above facts make it clear that you have no explanation to offer regarding the amount of $ 43,87,146.00 deposited in the name of Dryade Stifftung and Dianese Stiftung Vaduz , in LTG Bank Liechtenstein for which you along with your other three members were the sole beneficiaries. The LTG Bank, Liechtenstein is a bank which has been put under "Grey List" by Paris based Organization for Economic Cooperation and since 2007. The activities of LTG Bank, Liechtenstein are under the scanner of almost all the countries as this is considered as one of the safe uncooperative tax heavens along with Andorra and Monaco. The activities of LTG Bank, Liechtenstein which are downloaded from the website, are summarized as under:- Background Millions of Euros belonging to hundreds of citizens living in Germany were channeled into the LGT Bank and other banks in Liechtenstten, taking advantage of Liechtenstein-based trusts to evade paying taxes in Germany. According to the prosecutor's office these trusts have been created apparently only to evade paying taxes. According to the law in Liechtenstein, such trusts allow the separation of monetary assets from their owners and are kept anonymously. In contrast to trusts of most other countries, Liechtenstein trusts can be revoked at any time and the assets will be returned to the owner. Furthermore, such trusts as well as their maintaining shell entities are only charged 0.1% (minimum 1,000 Swiss francs) annually. Liechtenstein thus is known to be a tax haven. Investigations Germany According to the lead prosecuting office responsible for economic crime in Bochum, which is supported by prosecuting offices in other towns as well as the criminal police, currently about 600 to 700 individual are suspected in the investigations. In addition, search warrants have been issued. An official confirmation about the total number of suspects and amount of money involved has not yet been issued. According to the prosecutors, current investigations provide a "Very high level of evidence."

The affair became known on February 14, 2008, when a raid was conducted against Klaus Zumwinkel, the chief executive of Deutsche Post AG, under the suspicion that he evaded about 1 million ($1.46 million) in taxes. Pressured by the government, Zumwinkel resigned from his position. Similarly a number of other individuals have been under investigation for months, and the appearance that the well to do have ways and means to evade the German tax laws has caused complaints about inequality. According to. a report by the Suddeutsche Zeitung, Heinrich Kieber, a bank computer technician, sold a CD with incriminating bank information to the Bundesnachrichtendiens (BND, English; Federal Intelligence Service), which handed the material over to the tax investigation office in Wuppertal. Kieber was paid $4.2 million by the Federal Ministry of Finance for the data on which the investigation is based. Facing death threats, the informant is currently in hiding and has asked for police protection. Kieber is wanted by Interpol. The Wall Street Journal indicated on February 19, 2008, the name of the Informant who apparently lives now In Australia and had sold the data to tax ministries of a number of countries, including the USA. Since February 18 a number of raids have been conducted in Hamburg, Munich, Frankfurt and other cities. Several banks were searched including Bankhaus Metzler, the Hauck & Aufhauser bank, Dresdner Bank, UBS in Munich and the Berenberg Bank in Hamburg. In the meantime revenue offices also noted a higher number of voluntary self incriminations this will avoid or reduce punitive damages - for possible tax evasions by people with financial assets in Liechtenstein. . While the BND received the data in 2006, the LGT group indicated 'that in 2002 secret information had; been stolen but the informant had been caught and tried in 2003, and all material had been returned. United States of America The informant also had sold data to the government of the United States. After the affair broke open, Senator Carl Levin, chairman of a senate Investigations committed, indicated his intention to probe to what degree American citizens have used the LGT Bank to evade his intention to probe to what degree American citizens have used the LGT bank to evade taxes. In July 2008 the U.S. Subcommittee determined that offshore tax haven supported tax cheats to the cost of about $100 billion per year for the U,S. taxpayer. Specifically mentioned were Switzerland UBS AG and Liechtenstein LGT Group. The report indicates that the LGT group contributed to a "culture of secrecy and deception" According to the report UBS holds 1,000 declared accounts versus 19,000 that are not declared to the IRS. The report recommended a number of steps including tighter regulations for financial institutions. Other Countries On February 24, 2008, it became apparent that secret bank information had also been sold to the British tax authorities and that about 100 individuals in the UK are at risk for investigations for tax evasion. The information also provided the governments of Australia, Canada and France with data. On February 26 it became known that the German Government was willing to share relevant data of the about 4,500 accounts with other governments; two third of these accounts belong to accounts of non-German individuals or entities, Fiscal authorities In Ireland, Finland/ Italy, the Netherlands, Norway, Greece and Sweden indicated interest, and while the Danish government initially declined - it considered the material to have been stolen - it appears to have reversed its position. The governments of the Czech Republic and Spain have also announced investigations derived from Germany's list. India, however, has thus far not considered Germany's offer despite reports that many wealthy Indian citizens might have accounts in the bank. The above activities of the LTG Bank, your heavy deposit in that bank with three others to prove it beyond doubt that the Trust under the name and style of Dryade Stiftung and Dianese Stiftung Vaduz has been incorporated in Liechtenstein only to stash your and other three family members income from undisclosed sources in a safe uncooperative tax heaven outside India. You are, therefore, requested to please explain as to why your share in the amount of $.43,87,146.00 deposited in LTG bank, Liechtenstein, in the name Dryade Stiftung and Dianese Stiftung Vaduz a Trust of Vaduz during the period relevant to the assessment year 2002-03, and 2003 - 04 may not be treated as investment out of undisclosed sources and added back to your income. You are requested to personally appear on the next date of hearing as your statement is required to be recorded. Notice u/s.142(1) dnd summons u/s.131 of the I.T. Act, 1961 are enclosed for compliance. Copies of relevant documents are enclosed for your perusal. Your case stands fixed for hearing on 18/12/2009 at 11:30 am in my office at the address given on the letterhead above. Since the matter is getting barred by 31-12-2009, your cooperation in not seeking any adjournment will be highly appreciated.”

4.1. The assessee in response to the said show cause notice replied vide letter dated 18.12.2009 as under:-

“This has reference to the Notices under Section 142(1) and 143(2) of the Income tax Act 1961 dated 9th December 2009 received along with the letter dated 8th December 2009, in respect of the re-assessment proceedings initiated under Section 148 of the Act for the Assessment Years 2002-03 and 2003-04. In this connection, I wish to make the following submissions for your perusal and record:

1.

2. I have perused the notices and the letter referred to above which alleges that; 2.1 I am a beneficiary of Dryade Stiftung and Dianese Stiftung Vaduz in LGT Bank, Liechtenstein. 2-2 I along with other three members have deposited $ 4,387,146 in the name of Dryade Stiftung and Dianese Stiftung Vaduz during the period relevant to the assessment years 2002-03 and 2003-04. 2.3 That the above said amount is taxable in India on account of the following reasons. (a) The address given to LGT Bank, Liechtenstein is Bombay-India. (b) No proof that this amount is declared to any of the revenue authorities abroad has been furnished. (c) Origin of the deposit has been stated as "family money"

(d) I have no explanation to offer regarding the amount deposited in the name of Dryade Stiftung and Dianese Stiftung Vaduz for which I along with other three members were the sole beneficiaries. (e) That the LGT Bank, Liechtenstein is a bank which has been put under grey list of Paris based Organization for Economic Cooperation and Development since 2007. Accordingly, I am called upon to explain as to why my alleged share in the amount of $ 4,387,146.00 alleged to be deposited in LGT Bank, Liechtenstein in the name of Dryade Stiftung and Dianese Stiftung Vaduz, a Trust of Vaduz, during the period relevant to assessment years 2002-03 and 2003-04 may not be treated as investment out of undisclosed sources and added to my income. In respect of the above allegation, I place on record my submissions hereunder: i) In this context, kindly refer to my letter dated 31" July 2009 in which I had asserted that I have not received any amount or income from the said Trusts and I reiterate the same. ii) I have noted from the annexure to your letter that 1 am a beneficiary of Dryade Stiftung and Dianese Stiftung Vaduz. Actually, I am one of the persons named in whose favour the Foundation Board may exercise discretion. I further reiterate that I have not signed any document in this regard and although I may have been named as a beneficiary 1 have never received any benefit from the said Stiftung and have had no role whatsoever to play, in the said Stiftung during the assessment years under reference. iii) I strongly deny the allegation that I, along with others have deposited the said sum of $4,387,146.00 in LGT Bank, Liechtenstein. iv) My brother Arun Mehta has already enquired with our non- resident younger brother Dilip Mehta about the aforesaid allegations. A communication received from LGT Bank (now known as Fiduco Treuhand AG) through his lawyer is enclosed marked Annexure "A" v) I have been advised that a Stiftung is akin to a discretionary trust with absolute and exclusive powers vested in the Foundation Board of the Trust to appoint and/or replace the beneficiaries and to amend the statutes and/or bye laws and to manage the assets of the Stiftung. As mentioned earlier, I had no role to play either with the creation or the management of the Stiftung and this is borne out by the confirmation furnished by Fiduco Treuhand AG. I may reiterate that the Foundation Board has never exercised discretion in my favour and hence I have never been a member of the Foundation Board and no income has accrued to me or has been received by me from the said Stiftung which can be brought to tax for the assessment years under reference. It is well settled that a beneficiary of a discretionary trust can only be assessed in respect of an amount which is received by him from the trust or in respect of an amount which accrues to him as a consequence of a discretion being exercised in his favour although the actual amount may not be paid over to the concerned beneficiary. In the present case, no such amount has ever been received by me and similarly no such benefit has been granted to me which would result in any part of the said sum of $ 4,387,146.00 being treated as part of my income chargeable to tax in India. vi) You propose to draw an inference that the amount is taxable in India on account of the fact that the address given to LGT Bank is my address in India. Merely because 1 am named as a beneficiary in a document and my address in such document is of a place in India does not lead to an inference that any income has accrued or is received by me and, hence, would become chargeable to tax in India during the relevant years under reference. vii) You have also alleged that no proof has been furnished as to whether this amount has been declared to any of the revenue authorities abroad. In this regard, I may point out that 1 was liable to tax only in India as I was a resident of India. I had not received any income nor has any income of any nature of whatsoever accrued to me in any country other than India during the relevant years under reference. viii) You have also inferred that the origin of the deposit has been stated as 'family money'. This inference is erroneous because a perusal of the document would reveal that what has been stated as 'family money7 is the origin of the amounts deposited with Stiftung initially when it was crested. These, as you are aware were created in 1986 and hence is irrelevant to the circumstances for the purpose of the present assessment. ix) You have also referred to the activities of the LGT Bank and the investigations made by various countries in connection with their operations. However, the same has no relevance to the assessment that you propose to make of an amount which has never been received by me or accrued to me. x) You propose to make the addition on the footing that the amount represents an investment out of an undisclosed source. However, for an investment to be assessed as income, it must be established that the person who is sought to be assessed has made such an investment. In the present case, there is no material whatsoever that I as an alleged beneficiary of a Stiftung have made an investment in such a Stiftung and accordingly, the question of assessing any amount in my hands does not arise. In view of the above, I humbly state that; i) l have not deposited $ 4,387,146.00 in the account of Dryade Stiftung and Dianese Stiftung Vaduz. ii) I have not received any income from these Trusts Under the circumstances, I request you to drop the proceedings initiated under Section 148 of the Act against me.”

4.2. The ld AO observed that the explanation offered by the assessee is to be rejected in the light of following evidences available on record :-

1) “Verification of the beneficial owner's identity signed by Proxy holder ABN AMRO Trust Company (Suisse) SA, which stated that the beneficial owner of the assets deposited with the Bank are – Dilip Ramniklal Mehta Antwerp, Belgium Arun Ramniklal Mehta Bombay, India Harshad Ramniklal Mehta Bombay, India Amit Bhansali Antwerp, Belgium 2) Background information / profile - Form for existing business relationship with institutional clients prior to January 1, 2001, which shows the origin of the assets deposited in Dryade Stifstung as "family money". This also shows the assets held by the above mentioned entity as follows : i) Snow Drop Company Ltd. - One bearer share (100%) ii) Sundew Company Ltd. - One bearer share (100%) iii) Ruby Enterprises Inc - 300 bearer shares This form also gives profession and business of beneficial owners as "Executive Officers - Own Diamond Trade" 3) Another Bank summary for the above mentioned Account showing credit of US $ 4386,034.37 on 17.04,2002. 4) A Bank summary of ABN AMRO Bank in respect of Dryade Stifstung having Account No. IBAN CH70 0864 5000 OG20 4109 C which shows debit of US $ 4,387,146 on 19.04.2002.”

4.3. The ld AO further observed that the copies of all these documents were duly provided to the assessee. The assessee had merely submitted that he was never on the Board of the Trust or Founder Member and had no role to play of whatsoever nature in the abovementioned entity. The ld AO considered the reply submitted by the assessee as detailed hereinabove. The ld AO observed that the assessee submitted that he had not received any benefit from the said trust but had not stated a single word regarding the debit / credit entries appearing in the above mentioned bank account. Since the business in which the assessee and his family members were matching i.e own diamond trade, Country in which the respective brothers were stationed was matching and in view of the fact that LGT Bank in Liechtenstein is a tax haven and in the absence of any contradictory evidence produced by the assessee, the ld AO held that the deposit made in the bank account of the trust on 17.4.2002 represented undisclosed income of the assessee from his business activity . There are four beneficiaries of the trust and as such in absence of exact allocation of shares amongst the beneficiaries, the assessee‟s share was taken at 25%. Considering the exchange rate for USD to INR at Rs 48.80 as prevailing in April 2002 , the deposit in equivalent INR was worked out at Rs 21,40,92,725/- and 25% thereon worked out to Rs 5,35,23,181/- , being the assessee‟s share thereon, was brought to tax as his undisclosed income for the Asst Year 2003-04. Penalty proceedings u/s 271(1)(c ) of the Act for deliberate concealment of such income were also initiated in the assessment order.

5. The assessee reiterated his submissions before the ld CITA. Among other submissions, it was specifically pleaded that the ld AO had made the addition on the footing that no contradictory evidence was produced by the assessee and therefore the deposit made in the bank account of Dryage Stiftung among represented undisclosed income of the assessee from his business activities. In this regard, the assessee submitted that it is an established fact that the assessee along with his brother had ventured into manufacture and export of diamond trade in the year 1969; that the family business was conducted through Rosy Blue (India) Private Limited, engaged in the manufacture and export of diamonds from India; that his assessment records would establish beyond doubt that he had never carried any business activities in his personal capacity ; that it would appreciated that to carry on a business of such magnitude, one needs an establishment and that there was no evidence of whatsoever that the assessee ever carried any diamond business in his individual name.

6. The ld CITA confirmed the action of the ld AO by observing as under:- “16. I have perused the above submissions of the appellant and the order of the AO. The bank documents bear the signature of the trustees and hence the same are genuine. These documents bear the correct name, address and date of birth of the appellant. The document shows that the trust was created on July 02, 1986. The account has been mentioned as active. There is a mention of transaction on April 17, 2002 valued at 4,386,034.37 which created the balance of 4,387,146.86. The transaction is related to Rosy Blue Fin SA. It is pertinent to note that the appellant is a director of Rosy Blue (India) Private Limited. The company is engaged in manufacture and export of diamond, which is incidentally also mentioned in the bank documents and the trust. The date of birth and the address of the appellant are correctly mentioned on the bank document. All this clearly proves that the appellant is closely connected to the said bank account and the trust. Even if the appellant has denied any knowledge of the trust or has not travelled to that area, the appellant cannot explain how a trust was created wherein he and his family members were made the beneficiaries. Since, the transaction has taken place in Financial Year 2002-03, the income has been correctly assessed in AY 2003-04. As there are four beneficiaries mentioned, the AO has correctly taken the income of the appellant at the 25% value of the amount mentioned therein.

19. In view of the above, the stand of the AO is upheld and the grounds of appeal of the appellant are dismissed.”

7. Aggrieved, the assessee is in appeal before us.

(i) No contribution has been made by the assessee to the Foundations. (ii) The assessee had no role to play either with the creation or the management of the Stiftung. (iii) No distribution of income or capital have been made to the assessee during the Asst Year 2003-04. c) There is no concrete evidence that has been produced by the revenue to establish that : (i) The assessee has made any contribution to the trust. (ii) Any distribution of income or capital has been made to the assessee from the trust. d) All the allegations are leveled on the assessee only on conjectures and surmises. The evidence led by the assessee on this issue had neither been rebutted nor dealt with by the lower authorities. e) The name of the foreign trust is Dryade Stiftung which was started on 2.7.1986 with the source of funds being mentioned as „family money‟. The Bye-laws of the said trust indicate that turst being a discretionary trust, the Foundation Board is vested with absolute and exclusive powers to modify the beneficiaries and amend the statutes and / or bye-laws to manage the assets of the Stiftung. Further, the only remittance of funds has been to an entity other than the assessee. f) The assessee is neither a member of the Advisory Board nor a Founder and has no role to play in the Foundation. g) The confirmation given by Fiduco Treujhand AG had been noted in both assessment as well as the order of the ld CITA, but no finding has been given by both the authorities with regard to the said document. No doubts had been raised by them with regard to the authenticity or genuineness of the said confirmation placed on record. Hence the assessee had produced the necessary evidence to prove his stand and the revenue cannot shift the onus of proof and require the assessee to prove the negative. h) The ld Special Counsel for the revenue had submitted that the provisions of Section 106 (burden of proving fact especially within knowledge) , Section 111 (proof of good faith in transactions where party is in relation of active confidence) and Section 114 (presumption of existence of certain facts) of the Indian Evidence Act, 1872, in a bid to draw a presumption that the income is that of the assessee. In this regard, the ld AR submitted that even if any such presumptions arise, they would clearly stand rebutted by the confirmation from Fiduco Treuhand AG, which states that the assessee had made no contribution nor received any distribution qua the Dryade Foundation account. The ld AR stated that infact it is the department which has failed to disprove the said confirmation and it has also not been considered by the lower authorities. i) During the course of hearing, ld Special Counsel for the revenue sought to translate and explain the various documents which are at pages 21,22 to 25 and 31 of the Paper Book by referring to the German translation. A preliminary point was made that the document at page 24 was not in German but in French. Therefore, reference to the German translation is wholly inappropriate. It is further submitted that, seeking to give an additional thrust to the Department‟s case, by referring to a translation at the first stage before this tribunal, had denied the assessee a full and effective opportunity of defense. It was submitted that if in fact, the Department wanted the bench to consider the documents in light of translation claimed by ld Special Counsel for the revenue , consistent with the principles of natural justice, the assessee must be made aware and given an opportunity to respond thereto, as even on a prima facie basis, there were some errors in the translations referred to. j) The matter in the present case has serious monetary and reputational consequences. There are also related criminal prosecutions initiated. In this background, as per law settled by the Hon‟ble Apex Court in the case of Hadibandhu Das vs District Magistrate , Cuttack (1969 AIR 43 SC) , the affected party must receive translations of the document in a language he is familiar with so as to enable him to fully and adequately defend his case. Reliance was also placed on the decision of Nandkumar Alias Nandu vs S.Ramamurthi, Commissioner (1992 Cri LJ 1078). In view of the aforesaid position in law, the assessee must be extended a full and effective opportunity of defending his case in relation to the translations sought to be relied upon by the Ld Special Counsel for the revenue. In support of this, the ld AR relied on Section 45 of the Indian Evidence Act, 1872, which inter alia provides that : “ When the Court has to form an opinion upon a point of foreign law or of science or art, or as to identity of handwriting or finger impressions, the opinions upon that point of persons specially skilled in such foreign law, science or art, in questions as to identity of handwriting or finger impressions are relevant facts.”

Moreover, Section 57 of Indian Evidence Act, 1872 specifically provides that Indian Courts can take judicial notice of Indian law. No such mention is made of foreign law. Section 57 of the Indian Evidence Act, 1872 inter alia provides that: “The Court shall take judicial notice of the following facts :- (1) All laws in force in the territory of India; (2) All public Acts passed or hereafter to be passed by Parliament of the United Kingdom, and all local and personal Acts directed by Parliament of the United Kingdom to be judicially noticed ; ………………. (13) The rule of the road, on land or at sea. In all these cases, and also on all matters of public history, literature, science or art, the Court may resort for its aid to appropriate books or documents of reference. If the Court is called upon by any person to take judicial notice of any fact, it may refuse to do so, unless and until such person produces any such book or document as it may consider necessary to enable it to do so.”

On a conjoint reading of the above provisions, if any foreign law (other than mentioned under the above provision) is to be relied on or applied by an Indian Court / Tribunal, then expert opinion(s) on the same should be obtained and placed on record. If necessary, cross-examination of the experts may also require to be carried out. k) The revenue cannot make an altogether a new case before the tribunal for the first time which was not the subject matter of the consideration by the ld AO. Reliance in this regard was placed on the Special Bench decision of Mumbai Tribunal in the caes of Mahindra and Mahindra Ltd vs DCIT reported in 2009-TIOL-255-ITAT-MUM-SB. In the instant case, the ld Special Counsel for the revneue is making an altogether new case before this tribunal in relation to the following:- a) Unsupported translations of the foreign language documents provided by the Department; b) Whether the ld AO was incorrect in giving a finding that the Dryade Foundation is in the nature of a „Discretionary Trust‟ c) Reliance on the laws of Liechtenstein, on the basis that as the Trusts are of Liechtenstein, the tax laws of Government of India do not apply. l) It is well settled that under the Income Tax Act, a Discretionary Beneficiary who has not received any distribution cannot be taxed until there is an actual distribution in his favour. Reliance in this regard was placed on the following judgements :- (i) CWT, Rajkot vs Estate of HMM Vikramsinhji of Gondal reported in [(2015) 5 SCC 666] (ii) Maharaja Jyotindrasinhji vs ACIT reported in (2008) 174 Taxman 605 (Guj) (iii) CIT vs Kamalini Khatau reported in [(1994) SCC (4) 308] It was submitted that in the case of CWT Rajkot vs Estate of HMM Vikramsinhji of Gondal supra, although the Trusts were based in US and UK, the Hon‟ble Supreme Court did not in any manner suggest that examination of the local laws of those jurisdictions was necessitated or appropriate. m) Furthermore, contrary to the finding in the order of the ld CITA, there is no question of taxing a Discretionary beneficiary in terms of Section 166 of the Income Tax Act, as has been held in both Kamalini Khatau supra and Maharaja Jyotindrasinhji supra. n) In the present facts, it is undisputed even in the assessment order that both the Foundations (i.e Dryade and Dianese Stiftung) are Discretionary Foundations. Accordingly, having regard to the well established position in law, since no distribution has been made in favour of the assessee which was also confirmed in writing by Fiduco Treuhand AG, no income ought to be taxed in the hands of the assessee. o) It is settled law that no such burden of proof can be placed on the assessee under a taxing statute, and it remains the onus of the department to prove taxability on a strict construction. However, contrary to this well established position, the department in the present case is placing an impossible burden on the assessee to prove the negative viz that he has not received any income from the Trust. Reliance was placed on the following decisions to drive home the point that entity must strictly fall within the charging provisions of the law:-

(i) AV.Fernandez vs State of Kerala reported in AIR 1957 SC 657 (ii) CWT , Gujarat vs Ellis Bridge Gymkhana reported in (1998) 1 SCC 384 Reliance was placed on the following decisions to drive home the point that onus of establishing the condition of taxability is on the department:- (i) K.P.Varghese vs ITO Ernakulam reported in 131 ITR 597 (SC) (ii) CIT vs Shivakami Co. Pvt Ltd reported in (1986) 2 SCC 418 p) It is clear that the default position is that the onus of proof to demonstrate taxability is on the department and cannot be reversed or shifted to the assessee. Infact, where the legislature intended to shift the burden of proof under the Income Tax Act to the assessee, specific provisions have been enacted for this purpose as under:-

(i) Section 278D – Presumption as to assets, books of account , etc in certain cases (ii) Section 278E – Presumption as to culpable mental state (iii) Section 292C – Presumption as to assets, books of account, etc Accordingly, shifting of onus of proof under the Income Tax Act is only envisaged in the aforesaid situations and cannot be pressed into play in any other situation. q) Assessee cannot be asked to prove the negative. Reliance in this regard was placed on the following decisions:-

(i) K.P.Varghese vs ITO Ernakulam reported in 131 ITR 597 (SC) (ii) Advani Oerlikon Ltd and Anr vs UOI and Ors reported in 1981 ELT 432 Hence onus is on the revenue to prove that the assessee has received a distribution from the Foundation, which constitutes income in respect of which he was liable to discharge tax in India. Further, the department cannot palce a negative burden of proof on the assessee to show that he has not received a distribution as a discretionary beneficiary. r) In the instant case, the ld AO in page 7 of his assessment order had observed that Dryage is in the nature of a „Discretionary Trust‟ . It is submitted that at the present stage before the Tribunal, the department is now seeking to negate a finding of the subordinate officer in the assessee‟s appeal. It is settled law that if the department is aggrieved by the decision of the lower authorities, cross appeal should be filed challenging the order. No such cross appeal has been filed in the present case before this tribunal. Hence the revenue is not entitled at this stage of the proceedings to impugn a finding in the assessment order and raise a ground so as to work adversely to the assessee without filing an appeal itself challenging the said finding. Reliance in this regard was placed on the following decisions :-

(i) State of Kerala vs Vijaya Stores reported in (1979) 116 ITR 15 (SC) (ii) The Motor Union Insurance vs CIT reported in (1945) 13 ITR 272 (Bom) s) It was further submitted that Section 5 of the Income Tax Act imposes a general liability to tax all income. However, the burden of proof lies on the department to prove that there exists an amount which falls within the taxing provision as income of the assessee. Reliance in this regard was placed on the decision of Hon‟ble Supreme Court in the case of Parimisetti Seetharanama vs CIT reported in (1966) 1 SCR 8 , wherein it was held that “ the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the Department to prove that it is within the taxing provision.” In the present case, neither the assessment order nor the ld CITA order make mention or invoke any provision of the Income Tax Act under which the amount is liable for taxagtion (i.e no mention is made of any of the typical provisions such as section 5, section 68, section 69A etc). t) With regard to judgements cited by the ld Special Counsel for the department in the case of Mohan Manoj Dhupelia vs DCIT in dated 31.10.2014 reported in 67 SOT 12 (Mumbai Trib) and Hasmukh Gandhi vs DCIT in ITA Nos. 2795 & 2796/Mum/2011 dated 15.11.2017, the relevant paragraphs of the decision in the case of Hasmukh Gandhi which followed Mohan Manoj Dhupelia are reproduced :-

18. In our considered opinion the above evidence is cogent and sufficeitn. Furthermore, we note that in terms of the extant secrecy provisions of Liechestein, no further information from the said bank can be obtained by the AO. The assessee is clearly trying to get benefit under this provision and denying the existence of the said bank account. This as per the facts discussed hereinabove is a self serving statement not at all sustainable. In the background of the above discussion, the onus now is clearly on the assessee to prove that the assessee has no beneficial interest in the said bank account or that the said bank account is a fictitious story, which the assessee has failed to discharge. Hence, the impugned additions in the hands of the assessee are justified and I uphold the same.

Contrary to the aforesaid judgements relied upon by the department, in the instant case, the assessee had not blanketly denied the existence of the bank account in question. Rather, the assessee has produced on record the confirmation dated 5.11.2009 from Fiduco Treuhand AG. No proof has been submitted by the department to demonstrate that the assessee has a beneficial interest in the bank accounts in the name of Dryade Stiftung and Dianese Stiftung Vaduz in LGT Bank, Liechtenstein. Without prejudice, even if there is any onus on the assessee, the same stands discharged by the confirmation obtained from Fiduco Treuhand AG, which affirms that the assessee made no contribution to, and received no contribution from, the Foundations in question. There is no corroborative evidence , or any material whatsoever, brought on record by the department to justify the addition in this backdrop. u) It was further submitted that in the case of Hasmukh Gandhi vs DCIT supra, it has also been held that :-

It was submitted that if the department is of the opinion that since the Discretionary Foundation is in Liechtenstein, the tax laws of the Governmetn of India do not apply, and the tax laws of Liechtenstein would instead apply, then the following must necessarily occur: (i) The Department cannot urge this ground for the first time at the Tribunal stage, in a bid to sidestep the binding rulings of the Indian Supreme Court in the cases of (i) CWT, Rajkot vs Estate of HMM Vikramsinhji of Gondal reported in [(2015) 5 SCC 666] (ii) CIT vs Kamalini Khatau reported in [(1994) SCC (4) 308] (ii) The Department must lead evidence as to the applicable law in Liechtenstein; and (iii) The assessee must be given an opportunity to lead all evidence in its defense, in accordance with the principles of natural justice. v) Furthermore, without prejudice to the foregoing, even if the Liechtenstein law is to be considered, even the extracts of the law in Hasmukh Gandhi supra which were relied upon by the ld Special Counsel for the Department, show that the law supports the following:

(i) A Foundation may be constituted for private use (Page 31 of paper book) (ii) It is the Founder who endows assets for a specific purpose and regulates the beneficial interest (Page 31 of paper book) (iii) The Foundation is a separate legal entity. A Foundation and Trust are distinct entities (Pages 26 and 30 of paper book)

In view of the foregoing, the existence of a Foundation per se has no implication for the taxability of the assessee. Infact, the confirmation of Fiduco Treuhand AG that the assessee is not the Founder is critical in as much as it affirms that the assets of the Foundation have not been endowed by the assessee. w) In any event, if Liechtenstein law is to be relied upon, the matter perforce requires to be remanded to the file of ld AO for this purpose.

2. Effort on our part is to explain mainly the documents at Pages (21) to (24) and Page (31) which relates to Dryade Foundation and in order to understand the translated version of the German terms and words, sentences used in these pages.

3. But, before proceeding to explain the aforesaid documents, it is considered necessary to place for consideration of Hon'ble bench some facts which would cause anguish and pain because such situations are unexpected and unusual. Very recently in the case of Lal Bahadur Gautam v. State of U.P., (2019) 6 SCC 441, Hon'ble Justice Shri Navin Sinha observed as under: "As a responsible officer of the court and an important adjunct of the administration of justice, the lawyer undoubtedly owes a duty to the court as well as to the opposite side. He has to be fair to ensure that justice is done." Necessity of extracting the quote from the above judgment is felt for the reason that in the course of hearing of the appeal, Hon'ble Bench was at pains and anxious, to know the status of assessment in the case of the brother of the appellant-assessee, Shri Arun Ramniklal Mehta and there was complete silence on the part of the appellant-assessee nor any instruction was given in this regard to the learned Counsel appearing in the case on the part of the appellant-assessee. It was rather on the part of the Revenue that efforts taken to find out the status of that assessment was stated and it was informed that after much efforts, the counsel for Revenue could find that Hon'ble Co- ordinate Bench for the assessment year 2005-06 quashed the re-assessment proceeding where re-assessment proceeding was initiated to include notional interest in the hands of the brother, Shri Arun Ramniklal Mehta. It was however assured to Hon'ble Bench on the part of the special counsel appearing for & on behalf of the Revenue that efforts are continuing to ascertain the status thereof. It is now brought to the notice of Hon'ble Bench that learned Assessing Officer has on 18/07/2019 forwarded through WhatsApp message a copy of the assessment order dated 30.12.2009 in the case of the brother, Shri Arun Ramniklal Mehta to the special counsel appearing for and on behalf of the Revenue and under instructions a copy of the said assessment order is enclosed as "Annexure A" to this submission. A reading of this assessment order would show that an addition of Rs. 5,35,23,181/- has been made in the case of Shri Arun Ramniklal Mehta being 25% share of the deposit made in the bank account of Dryade Foundation on identical facts and circumstances as in the case of the appellant-assessee. Further, it would be seen that the explanation offered on the part of Shri Arun Ramniklal Mehta is almost similar as given in the case of the appellant-assessee. Pursuant to assessment order under section 143(3) read with section 148 dated 30.12.2009, demand of Rs. 3,08,08,337/- including interest amounting to Rs. 1,39,36,328/- under section 234B of the Act was raised. In addition, penalty of Rs. 3,37,19,602/- was imposed under section 271(1) (c) at 200% of demand raised thereby raising an aggregate demand of Rs. 6,45,27,939/- for the assessment year 2003-04. It is, under instructions, informed to Hon'ble Bench that Shri Arun Ramniklal Mehta has paid entire tax demand amounting to Rs. 6,45,27,939/- by way of instalments and has applied for waiver of interest charged in terms of Section 220 (2A) of the Act. It has further been found from the official website of the ITAT that Shri Arun Ramniklal Mehta had filed an appeal against the assessment order before the ITAT being ITA No. 2743/Mum//2011. The status of this appeal is shown as pending. A copy of the snapshot taken from the website is also enclosed as "Annexure-B" herewith.

3, Documents relating to Dryade Foundation are at Pages (17) to (20), (22) to (24), Page (31), Pages (36) to (39) of the compilation. Pages (17) to (20) are in English and are self- explanatory. Page (21) is compte courant which means transaction account with ABN Amro Bank, Geneva. The currency in which the transaction is maintained is US Dollars of account number G 20 4109. Extrait Journalier means Account statement. The credit entry of USD 43,86,034.37 with balance at the end of the day at USD 43,87,146.86 in the account is of 17.04.2002 with narration "Bonification AA1452197 Rosy Blue FIN SA". The term "Bonification", as defined in Black's Law Dictionary means the remission of tax, particularly on goods intended for export, being a special advantage extended by government in aid of trade and manufactures, and having the same effect as a bonus or drawback. It is a device resorted to for enabling a commodity affected by taxes to be exported and sold in the foreign market on the same terms as if it had not been taxed." Copy of the definition is already filed with Hon'ble Bench in the course of hearing of the appeal. At Page (23) the same account is debited with USD 43,87146/- as payment to AA 1454221 with closing balance at USD 0.86. These entries would show that opening balance as on 17.04.2002 was USD 1112.49 in this account with a fresh credit of USD 43, 86,034.37 on 17.04.2002. Page (24) is a review of the debit entries which were instant and with narration" we debit to account" and the name of the beneficiary of this debit is shown to be Sundew Company Limited. Page (31) indicates the details of the Dryade Foundation as to (1) who are the foundation Board; (2) since when it is active; (3) who are the bankers; (4) various details as to institutional clients, representatives, customers; (5) purpose; (6) investment participation etc. There can be seen various instructions relating to the transactions of the family concerns involving loans of USD 4 million and USD 2 million to Rosy Blue Finance and of debit notes to ABN Amro Bank for the period 06.09,2000 to 14.09.2000 and to keep updated the Rosy Blue Finances and with delivery instructions to Luxembourg. As explained in the course of hearing it was an attempt to understand the nature of these transactions by using the translation platform available on the Google public domain.

4. As far as explanation dated 18th December, 2009 of the appellant-assessee is concerned, it was submitted that the explanation offered does not sound credence as the reference made to the Brother Arun Mehta's enquiries with another brother Dilip Mehta has missing links. No supporting evidence has been filed as to when the appellant-assessee made enquiry with Arun Mehta and when Arun Mehta made enquiry with Dilip Mehta. Neither the letter of the counsel, which is enclosed as annexure with this explanation indicated on whose behalf the letter dated 13th November 2009 is given. The letter dated 13th November 2009 is from Fiducio Treuhand AG and information given is for dissolved Dryade Foundation. Further, the appellant-assessee states that he is advised that stiftung is akin to a discretionary trust. This assertion is also without any supporting evidence.

7. The Assessing Officer has made addition without the mention of section of the Act in the assessment order under which the addition is made. It was submitted in the course of hearing of the appeal that being unexplained money, addition is made under section 69A of the Act. It is a fact that no explanation has been offered of this deposit of USD 43, 86034.37 with ABN Amro Bank, Geneva by any of the beneficial owners nor by Manacor Management Services who were acting as manager/administrator for and on behalf of Dryade Foundation and not by any other person on behalf of the four beneficial owners. The deposit having remained unexplained, learned Assessing Officer has correctly made an addition of Rs. 5, 35, 23,181/-being l/4th Share of the appellant- assessee. The justification of this addition is found by admission on the part of the resident brother, Shri Arun Ramniklal Mehta of the appellant-assessee who has paid tax not only on the addition made but also by payment of the amount of penalty imposed under section 271(1) (c) of the Act.”

1.This Submission-ln-Rejoinder is filed in response to the Written Submissions ('WS') dated 29 07.2019 made in the above matter by the Special Counsel for the Revenue ('SCR'). This Submission-in-Rejoinder is necessitated as several assertions, factual and legal, have been made in the WS of the SCR which are beyond the scope of the proceeding to date, and which are raised for the very first time at the level of the appeal before this Hon'ble Tribunal. While normally the matter would have rested with the Appellant's WS (filed on 26.07.2019) and the SCR's WS, in the peculiar facts of the present case and given the nature of issues agitated in the WS by the SCR, it is prayed that this Submission- ln-Rejoinder be taken on record oy this Hon'ble Tribunal.

2. At Para 2 of the WS of the SCR: it is submitted that the Learned SCR has attempted before this Hon'ble Tribunal to explain the documents based on a translated version of the German terms and words used in the documents. Later in the WS it is stated that these translations are reference from an internet service provider, viz. Google. It is submitted on behalf of the Appellant that, through the translations, the Department is at the stage of appeal before this Hon'ble Tribunal, seeking to urge a different or additional connotation and context to the documents in question. The immediate legal consequence which follows from the attempt to lead the translations at this stage is that: i. The case of the Department has been articulated at the level of the Tribunal differently from the case of the Department at all earlier stages (when the very documents were sought to be reiied upon without reference to any translations). This would appear to indicate that: (a) the Department is seeking to make out a fresh and additional case at the level of the Tribunal, which is impermissible in law; (b) the Department accepts that the case as earlier made out fell short of the required standards that the Department should have met to sustain its case. ii. It is worth noting that at the stage of the hearing before this Hon'ble Tribunal, from the same internet sources as relied on by the SCR, the Appellant was able to establish that some of the translations as claimed were inaccurate and therefore -required to be fully authenticated and answered to.

iii. In view of the above, for the reasons stated in the Appellant's submissions dated 26.07.2019 at Para 19, if the translations in question are to be relied on, it is necessary to comply with the principles of natural justice and requirements of due process that the Appellants be given an opportunity to respond to the authenticity of the translations and the consequential factual or legal issues which are sought to be articulated for the first time by the Department before this Hon'ble Tribunal."

The SCR claims that the Appellant has not made a full disclosure to assist the Hon'ble Tribunal. The assertions in this regard are wholly misguided and unsustainable for the reasons that: i. The Hon'ble Tribunal was aware that the appeal was pending in the case of Mr. Arun Ramniklal Mehta, Reference was made by the SCR, as also a member of Bench. When this specific issue came up as to whether the Department is suggesting that both the appeals be heard together, the SCR himself responded to say that he was not suggesting that the present appeal be delayed and both the matters be heard together. ii. The proceedings of Mr. Arun Ramniklal Mehta referred to are the proceedings at the level of the Assessing Officer. The amounts mentioned therein the approach adopted by the Assessing Officer and the payments made under protest, are all matters of record, details of which were always fully available before the Tax Department. There is therefore no question whatsoever of this information not being available or shared, as Respondent Tax Department was always fully aware of all of the relevant facts relating to the proceedings in relation to ARM, including details as to the pendency of the Appeal in that matter. iii. It is noteworthy that even in the matter of the present Appellant, payments have in fact been made under protest and clear details in relation to such payments are available with the Tax Department which have collected payments of the amount in question. The relevant payment challans and correspondence in this regard are annexed hereto as Annexure A. iv. Seeking to refer to these facts which are already in the know of the Department and giving it a colour of non-disclosure is unfortunate, given the status of the facts available to the Department as to both the present appeal proceedings and the proceedings in relation to ARM. v. It also is required to be emphasized that the AO and CIT(A) in relation to both, the present Appellant and Mr. Arun Rammklal Mehta, are the same. vi. As the payments have been made under protest and without prejudice, in light of the Appeals which have been lodged by both assessees, there is clearly no question of treating such payment as an admission or acceptance of the addition.

4. In response to Para 3 (apparently erroneously numbered at Page 2), the Appellant seeks to rely on Para 19 of the Appellant's WS dated 26.07.2019 and Para 2 hereinabove of this Submission-!n-Rejoinder. While the Department may feel entitled to rely on the translations for the first time at the stage of appeal, the Appellant submits that if any such translations are now to be made part of the Department's case, it is essential that the Appellant is afforded full opportunity to deal with the authenticity of the translation, and the connotation sought to be drawn from the translation. The Appellants reserve the right to respond to the said translations, and would also believe that they should be given an opportunity to lead a duly authenticated translation by way of evidence in response to the translation made available by the SCR.

5. In respect of Para 4 at Page 3, submissions have been made for the first time that there are certain issues in relation to the Appellant's reply dated 18.12.2009 and the letter dated 5.11,2009 from Fiduco Treuhand AG. It is submitted that the reply dated 18.12.2009 and the Fiduco Treuhand AG letter dated 05.11.2009 were first placed on record before the Tax Authorities on 18,12.2009. It is significant that the submissions now made vis-a-vis there being some missing link or missing documents have never been raised as an issue either at the level of Assessing Officer or the CIT(A). These submissions are an afterthought to try and discredit documents which have been on record and remained uncontested for almost 10 years. It is submitted that if the factual veracity of documents is sought to be challenged after a period 10 years it would have a disastrous effect across the tens of thousands of proceedings pending before this Hon'ble Tribunal if such issues could be raised for the first time before this Hon'ble Tribunal, as it would lead all similar matters in a state of uncertainty if it were permissible to try and reinvent the factual matrix and the basis of the Department's case 10 years into the life of such a proceeding. (Refer ACIT v. Aishwarya K Rai [2009-TIOL-11-ITAT-MUM] Mahindra and Mahindra Limited v. DCIT [2009-TIOL-255-ITAT-MUM-SB] The WS seeks to raise an issue as to whether the Dryade Foundation is a Discretionary Trust The WS is effectively seeking to challenge the finding of the Assessing Officer in this regard in his Order dated 30.12.2009. where he has clearly observed that the Dryade Foundation is a Discretionary Trust This finding has never been challenged before now, by the Department, by initiating appropriate proceedings in this regard. The attempt to assail an unchallenged factual finding of its Assessing Officer is impermissible and unsustainable in law. 6. In response to Para 5 at Page 3, it settled law that in relation to an Indian Resident named in to foreign bank deposit, a liability to tax would arise only if (Refer 'CWT Rajkot vs Estate of HMM Vikramsinhji of Gondal. [20155 SCC 666], CIT v. Karnalini Khatau [(1994) SCC (4) 308] (i) the Resident was proven to have contributed to a deposit outside India from any source which has not been taxed in India, or (ii) the Assessee has received a distribution from a Trust or Foundation outside India which the Assessee has not offered to tax in India. The position in this regard is that, the Appellant has led clear evidence by way of the Fiduco Treuhand AG letter 05.11.2009 that: (i) He is not the Founder (not a Contributor) to the Dryade Foundation; (ii) He has received no distribution in the relevant period from the Dryade Foundation. In addition, the documents relied on by the SDR himself at Pages 22 and 24 establish that the contribution was made by Rosy Blue Fin SA and the remittance of the amount of $4,387,146 was made to Sundew Company Limited. In view of these unchallenged facts and documents, the inevitable conclusion would be that the Appellant is not liable to be charged to income tax in the facts and circumstances of the present case.

is well settled that a person cannot be asked to speak to or explain events wholly beyond the remit of his knowledge. There is clear evidence on record that the present Appellant has neither opened the account of the Foundation nor operated it In view of the evidence, it would be an wholly onerous and erroneous obligation to place on the present Appellant that he should explain the source of the credit. It is erroneously suggested that there has been no explanation. The Fiduco Treuhand letter dated 05.11.2009 clearly answers all the relevant questions as to taxability, viz. the current Appellant is not a contributor and has not received a distribution from, the Dryade Foundation in the relevant period. An explanation has clearly been given which is required under law to be followed, the Department has however continuously chosen to ignore such explanation.

8. In response to Para 6 at Page 4 of the WS, assertions have been made that documents submitted by the present Appellant are incomplete or some documents have been withheld by the Appellant. As pointed out hereinabove, to permit such assertions 10 years after the documents have been first produced and to permit such submissions at the stage of second appeal is wholly impermissible in law and has the potential to add immeasurably to the already long period of pendency of litigation in tax proceedings Any request to redefine the scope of proceedings at this stage would be improper and contrary to the legal diktat that remands, even if necessary, should not be made to reconstruct a case, but only to prevent a failure of justice." (Refer Enumalai vs. Kanthamani Ammal [(2017) 1 MLJ 379] The Department, seeking to rely on the German translation at this stage has created a situation that a fresh opportunity of response must be secured to the Appellant. It is however urged that the proceedings ought not to be entirely reinvented in the interests of certainty and expediency. The suggestion that the Appellant has not come clean and deliberately withheld information is entirely unsustainable as the Appellant has already led his evidence in the year 2009 and it is for the first time that that evidence is sought to be critiqued as being inadequate. The approach of the Department in taking up these issues for the first time in second appeal by the Appellant is improper and impermissible and certainly cannot sustain the allegations that the Appellant has withheld vital information. (Refer supra) 9 In response to Para 6 at Page 5 of the WS, in the case of Hasmukh Gandhi reported at [Order dated 15.11.2017 in and 2796 Mumbai 2011] (relied on by the SCR) at para 19, it is said that the issue of the character of the trust needed to be determined not in terms of the Indian Law (which it is submitted is contrary to the law laid down by the Supreme Court in CWT, Rajkot vs. Estate of HMM Vikramsinhji of Gondal. {(2015) 5 SCC 666]}, but should instead be determined as per the local law of the jurisdiction where the Trust/Foundation is formed If this is in fact the relevant test, it was submitted by the Appellant that in terms of Section 45 of the Indian Evidence Act, 1872, the position in relation to foreign law must be proved as a relevant fact based on expert evidence from the relevant jurisdiction. The submission in this regard is therefore consequent only to Para 19 of the said judgement. It is also required to be noted that the Appellant has strongly urged that, given the evidence produced by way of Letter dated 05.11 2009 by Fiduco Treuhand AG, no addition can be made in the present Appellant's hands as per the test laid down in Para 18 of the case of Hasmukh Gandhi (supra). In view of what is set out hereinabove and what is set out in the Appellant's WS dated 26.07.2019, it is submitted that the addition sought to be made in the hands of the Appellant is without the authority of law and if the Department is seeking to support its case based on the translations, a full opportunity must be granted to the Appellant consistent with the principles of natural justice for the reasons set out hereinabove on behalf of the Appellant.

10. As regards Para 7 of the WS, the candid admission that the addition in the present case is made without specifically invoking a specific provision of the law goes to the very root of the matter to establish that the entirety of the proceeding is without authority of law, as till date there is an omission of the law under which the Department seeks to make an addition It is at this stage that an attempt is made to suggest that the addition is sustainable u/s 69A of the Act. The articulation for the first time, before the Tribunal, of the provision of law under which the Department is acting, is unsustainable and bad in law.

Hence we are inclined to appreciate the argument of the ld AR that the ld Special Counsel for the Revenue cannot try to improve the case of the ld AO during the appellate proceedings before this tribunal.

11.1. Admittedly, the contents of various papers as detailed above in German language were produced by the ld AO to the assessee and hence it is the duty of the revenue to furnish the translated version of the said documents to the assessee for his effective rebuttal. It is an undisputed fact that the assessee had led crucial evidence in the form of confirmation from Fiduco Treuhand AG (formerly LGT Bank) dated 5.11.2009 , the contents of which are enclosed in pages 36 and 37 of the paper book and fully reproduced elsewhere in this order above. Admittedly, no efforts had been taken to verify the veracity of this confirmation by the lower authorities and we find that this confirmation has not been dealt with at all by the lower authorities in their order. With regard to the averment of the ld Special Counsel for the Revenue that the attachment to Memorandum of Formation dated 2.7.1986 of Dryade Stiftung not enclosed by the assessee before the lower authorities, we find that the lower authorities had not disputed the same or even remotely suggested in their orders that absence of the said attachment had led them to eventually draw an adverse inference against the assessee.

11.2. We hold that all the relevant facts were not brought on record by both the parties in the instant case. It is just and fair that the English translated version of all the documents relied upon by the revenue need to be given to the assessee by the revenue in order to enable the assessee to understand the contents of the documents furnished by the revenue for his effective rebuttal. Without adjudicating the relevant facts on record, it would be pre-matured to directly address the various case laws relied upon by both the sides and hence the same are not addressed here at this stage. Each decision is rendered in the context of facts and circumstances of that case and one decision rendered in a case cannot be uniformly applied in all other set of cases. Hence the entire facts of the case should be first brought on record, which in the instant, case is not done by both the parties. Considering the totality of facts and circumstances and the various elaborate averments made by the learned counsels from both the sides, we deem it fit and appropriate, in the interest of justice and fair play, to remand this appeal in Asst Year 2003-04 to the file of the ld AO for de novo adjudication , with all the issues and averments contained in their written submissions, reproduced supra, of both the sides, left open. The assessee is given liberty to furnish further evidences , if any, to support his contentions before the ld AO. Similarly the revenue is also at liberty to make necessary enquiries and verification from the competent authorities and furnish the relevant information duly translated in English to the assessee and pass an order afresh in accordance with law after giving reasonable opportunity of being heard to the assessee and meeting his rebuttal, if any. Accordingly, the grounds raised by the assessee in on merits of the addition are allowed for statistical purposes.

Order pronounced in the open court on this 04/09/2019