PCIT Vs Shriti Verma (Delhi High Court)
The Delhi High Court dismissed four appeals filed by the Revenue against a common order of the Income Tax Appellate Tribunal (ITAT) relating to Assessment Years 2011-12, 2012-13, 2013-14, and 2014-15.
The dispute arose from assessment proceedings initiated against the assessee on a protective basis under the Income Tax Act, 1961. The Assessing Officer (AO) had simultaneously initiated proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. While passing the assessment order under the Income Tax Act, the AO expressly stated that the same income could not be taxed under both statutes and, therefore, the assessment under the Income Tax Act would remain only protective in nature.
Subsequently, another AO conducting proceedings under the Black Money Act passed an order dated 06.12.2021. In that order, it was concluded that the assessee was not the beneficial owner of the foreign assets that formed the basis of the proceedings. The authority found that the assets held through STEL and Master Experts Investments Ltd. were beneficially owned by the assessee’s mother, Ms. Ritu Verma. It was observed that the inclusion of the assessee’s name as a beneficial owner stemmed from the mother’s intention that the assets would devolve upon the assessee in the event of her death. However, such intention did not make the assets taxable in the hands of the assessee. Accordingly, the authority under the Black Money Act held that no addition could be made in the assessee’s case.
