Narayanaswamy Ramamoorthy Vs Deputy Director of Income Tax (Investigation) (ITAT Chennai)
Additions on Windsor and Dalham Trusts Quashed: ITAT Finds No Evidence of Assessee’s Funding; Black Money Act Additions Unsustainable Without Proof of Contribution, Rules ITAT Chennai; Assessee Not Beneficial Owner of Foreign Trusts, Says ITAT; Additions Deleted; CRS Data Alone Insufficient: ITAT Chennai Quashes Additions for Alleged Undisclosed Foreign Assets.
The case before the Income Tax Appellate Tribunal (ITAT), Chennai, involved an appeal by Narayanaswamy Ramamoorthy against additions made by the Assessing Officer (AO) under the Black Money (Undisclosed Foreign Income and Asset) and Imposition of Tax Act, 2015 (“Black Money Act”). The AO had treated the account balances of two foreign trusts—Windsor Trust and Dalham Trust, both located in Guernsey—as undisclosed foreign assets of the assessee.
Background and Facts
The dispute arose from information received by the Income Tax Department through the Common Reporting Standard (CRS) in the Insight Portal. The CRS data reflected account balances of ₹24.09 crore in Windsor Trust (Account No. GG004789_ADR06332) and ₹2.00 crore in Dalham Trust (Account No. GG004793_ADR06332). The appellant, Narayanaswamy Ramamoorthy, was identified as the Settlor of both trusts, which were established in 2003 with an initial corpus of 3,500 GBP each.
The AO noted that the appellant had not disclosed any foreign asset or income relating to these trusts in his income tax returns for the relevant assessment year. The AO treated the balances as undisclosed foreign income and assets under Section 10(3) of the Black Money Act, reasoning that the assessee, being both Settlor and alleged beneficial owner, failed to explain the source of investment in the trusts.
