COMMISSIONER OF INCOME TAX Vs. AWANINDRA SINGH

JUDGEMENT

(1.) RESPECT of the asst. yr. 1996 -97. The AO had made an addition on account of the alleged unexplained investment made by the assessee through certificate of deposit (CD) in Wells Fargo Bank, USA. The CIT(A) had deleted the said addition and while doing so, he observed as under : "I have considered in detail the facts and circumstances of the case. I have also perused the report of the FTD dt. 14th amounts deposited in Wells Fargo Bank were the funds of Mohd. Shaikh, Khursheed Ahmed and Mrs. Dina Shah. The appellant therefore has discharged the initial burden to show that the investments in the bank account were not made by him. There is nothing contrary on record to controvert the appellant's submission that the funds were contributed by the aforesaid foreign nationals. The affidavit duly notarized of these three persons which established their identity has been filed by the appellant affirming that the contributions were made by these three persons. In these circumstances, finalization of assessment, it is clear that the source of funds available in the bank account in question was the deposits made by the three persons named above. Hence, the addition of Rs. 56,40,701 is no longer warranted and the same is deleted."

(2.) THE said observations were in the context of the explanation given by the assessee with regard to the source of the said investment made by the assessee. It is relevant to note that the assessee's wife (Smt. Poonam Rani Singh) had also made a similar investment and proceedings in respect of her were also initiated by the Revenue. The assessee sought to explain the investment by stating that the same were deposits advanced by three US citizens. The affidavits of the said three US citizens had also been filed by the assessee before the AO. Those affidavits were sent by the AO for verification through the FTD. But, before the report was received from the said authority, the AO completed his assessment and added the entire amount of investment found to be made by the assessee in the deposits with Wells Fargo Bank, USA by treating the same as unexplained. The report, however, was received from the FTD prior to the passing of the order by the CIT(A) and, therefore, it finds mention in the order passed by him, a portion of which has been extracted above.

(3.) THE Tribunal dismissed the Revenue's appeal after taking note of the fact that a similar issue was involved in the case Poonam Rani Singh, was not accepted by the Revenue and an appeal being ITA No. 99 of 2008 had been filed before this 6 DTR (Del) 96 - -Ed.]wherein the Court observed that in view of the inter -Governmental exchange which resulted in a report from the IRS Department of the American Government to the FTD of CBDT, the transaction was completely above Board and the Revenue could not seek to add the amount to the income of the assessee without any substantial material and merely on the basis of surmises. This Court also noted that in view of the concurrent findings of fact with regard to the genuineness of the transaction, no substantial question of law arose for its consideration. 2008, we dismiss this appeal for the same reason that no substantial question of law arises for our consideration.