Identity Theft: ITAT Deletes ₹23.92 Crore Black Money Act Addition

DDIT (Investigation)-2(1) Vs Tarun Trikha (ITAT Delhi)

Identity theft: ITAT upholds deletion of ₹23.92 crore addition under Black Money Act

Overview

The Delhi Bench of the Income Tax Appellate Tribunal upheld the deletion of an addition of approximately ₹23.92 crore under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The addition concerned deposits in foreign bank accounts attributed to the assessee. The appellate findings, however, established that his identity had been fraudulently used. The Tribunal dismissed the Revenue’s appeal because it failed to produce cogent material rebutting those findings.

Facts of the case

The assessee filed his return for AY 2021–22 in ITR-1 on 31 March 2022, declaring a small amount of income from other sources. According to the Assessing Officer, information available with the Department indicated that the assessee was associated with investment, travel and airline businesses.

The Assessing Officer received information concerning several bank accounts in Singapore, covering the period from January 2017 to February 2018. Summons under section 131(1A) of the Income-tax Act, 1961 were issued on 22 March 2019, followed by further summons. Following non-compliance, proceedings were initiated under the Black Money Act through a notice under section 10(1).

The assessee’s representative subsequently appeared and furnished details of Indian income and returns for earlier years. The assessee denied having any foreign source of income or financial interest outside India.

Assessment of foreign bank deposits

The Assessing Officer relied upon information concerning accounts with United Overseas Bank Ltd. and Oversea-Chinese Banking Corporation Ltd., Singapore, including accounts associated with TVI Express Holidays Pvt. Ltd.

He observed that the accounts had not been disclosed in the assessee’s returns and that no declaration had been made under section 59 of the Black Money Act. Treating the explanation as inadequate, he classified the amounts as undisclosed assets located outside India under section 2(11).

The Assessing Officer determined their value at ₹23,91,64,565.91 under sections 4 and 5, subjected the amount to 30% tax under section 3(1), and levied interest under section 40.

Assessee’s defence: Identity theft

Before the Commissioner (Appeals), the assessee challenged the fundamental premise that the foreign accounts belonged to him. His defence was supported by criminal investigation records and a Special Court order, rather than a bare denial.

The appellate order recorded that the assessee’s sister had lodged a complaint with the Economic Offences Wing. The resulting investigation and chargesheet concerned persons allegedly involved in showing the assessee as a director of TVI Express Holidays Pvt. Ltd. without his consent, resolution or permission.

The assessee also relied on findings of the Special Court for Economic Offences at Bangalore. On the material examined, the Commissioner (Appeals) accepted that the assessee had been a victim of identity theft and that the foreign accounts had been fraudulently held in his name.

Findings of the Commissioner (Appeals)

The Commissioner (Appeals) held that the Assessing Officer had presumed ownership from the information received from Singapore without adequately accounting for the evidence of fraudulent use of the assessee’s identity.

After examining the court findings and chargesheet, the appellate authority concluded that the disputed accounts and deposits could not properly be assessed as the assessee’s undisclosed foreign income or assets. Accordingly, the addition was deleted.

Since relief was granted on merits, the separate objections concerning limitation and opportunity of hearing were treated as academic and were not adjudicated.

Revenue’s objections

The Revenue contended that the assessee was connected with TVI Express Holidays Pvt. Ltd. and referred to allegations concerning cheating, forgery and overseas operations. It maintained that information supplied by the Singapore competent authority supported the assessment.

The Department also argued that the Commissioner (Appeals) had granted relief without obtaining verification or rebuttal under section 13 of the Black Money Act. At the hearing, it questioned the relevance of the identity-theft proceedings and submitted that the assessee had not adequately explained how his identity was misused.

Tribunal’s decision

The Tribunal noted that the assessee’s income-tax returns for approximately ten years, furnished before the Assessing Officer, did not indicate the financial means to make such substantial overseas investments.

It also considered the Special Court decision concerning economic offences involving TVI Express Holidays Pvt. Ltd. The Tribunal recorded that the assessee had been discharged of the offences mentioned in the complaint.

Considering the Commissioner (Appeals)’ detailed findings and the supporting material, the Tribunal found no reason to interfere. Crucially, the Revenue had brought no cogent material establishing the contrary. Its appeal was therefore dismissed.

Significance

The decision turns on proof of ownership and attribution of foreign accounts. Information received from an overseas authority must be evaluated alongside credible evidence that an individual’s identity was misused.

Relief rested on the combined evidentiary record: the court proceedings, investigation material, consistent denial and absence of rebuttal. The order does not establish that low declared income or a simple denial, by itself, defeats an assessment under the Black Money Act.

Cases Discussed

• Special Court for Economic Offences, Bangalore; CC No. 315 of 2015

FULL TEXT OF THE ORDER OF ITAT DELHI

1. The Revenue has filed appeal against the order of ld. Commissioner of Income-tax (Appeals)-31, New Delhi [for short ‘ld. CIT (A)] dated 01.05.2025 for the Assessment Year 2021-22.

2. Brief facts of the case are, the assessee filed his return of income in ITR-1 on 31.03.2022 declaring meagre income from other sources. He has not declared any other details relating to any other assets held by him in India or in abroad. It was observed that the assessee is engaged in business of investments, travels and Airlines. Based on the information available with the AO, the assessee was associated with Indonesian Commercial Airlines (Pacific Royale Airways) during FY 2012-13.

3. Based on the information received from internal sources, the AO observed that the assessee resident of Karol Bagh, New Delhi maintained several foreign bank accounts in Singapore from January 2017 to February 2018. Accordingly, summons were issued to the assessee u/s 131(1A) of the Income Tax Act, 1961 (in short Act) on 22.03.2019 followed by further summons were also issued. Since there was no response, having concurrent jurisdiction available with the AO, he initiated the proceedings under BMA, accordingly, issued notice u/s 10(1) of the BMA and proceeded to serve the notice by affixture. After several other notices issued to the assessee, Ld AR of the assessee attended. The assessee submitted details of income earned by him in India and relevant return of income for the period 2010-11 to 2018-19. It was submitted that the assessee does not have any sources of income outside India or any financial interest outside India. After considering the same, The AO observed that as per the evidence available on record, the assessee maintained several bank accounts as under:-

4. After analysing the ITRs filed by the assessee, the AO observed that the assessee has not declared any of the above assets in its return of income nor has made any declaration u/s 59 of the BMA, 2015. Even after giving several opportunities, the assessee failed to disclose the above foreign assets nor file any explanation. The case of assessee squarely falls within the definition of undisclosed assets located outside India as defined u/s 2(11) of the BMA. Accordingly, he valued the above assets u/s 4 and 5 of the BMA and determined the same at Rs.23,91,64,565.91 as undisclosed foreign assets. Therefore, he proceeded to tax @ 30% as per section 3(1) of the BMA and levied interest as per section 40 of BMA.

5. Aggrieved with the above order, the assessee preferred an appeal before Ld CIT(A)-31, New Delhi. The assessee filed detailed submissions along with the special court order relating to identity theft in the case of the assessee. After considering the detailed submissions and material facts on record, Ld CIT(A) deleted the additions made by the AO under BMA by observing as under:

“10. It has been argued referring to para 4.1. of the Assessment Order that the AO passed the Assessment Order only on the basis of Information received from Competent Authority of Singapore, wherein it has been mentioned that several foreign bank accounts in Singapore from January, 2017 to February, 2018 and Domestic Saving Bank Accounts were maintained by the appellant as well as current bank account in the name of M/s TVI Express Holidays Pvt. Ltd. It has been further observed by the AO that perusal of the ITRs of the appellant showed that the appellant had not declared any of these accounts in Schedule FA in any year. It has been argued that the AO has committed an error to rely upon documents which are contradictory to the Judgment and order of court of law. The AO assessed on the basis of available evidence on record and held that several foreign bank accounts in Singapore from January, 2017 to February, 2018 and domestic saving bank accounts were maintained by the appellant as well as current bank account in the name of M/s TVI Express Holidays Pvt. Ltd. and details of the current account of M/s TVI Express Holidays Pvt. Ltd. are mentioned in para 4.1.

11. It has been argued that it has been wrongly observed by the AO that there have been total deposits of SGD 1,41,206.90 and USD 30,54,922.61 in reported foreign bank current accounts of United Overseas Bank Ltd. (UOB), Singapore and Oversea-Chinese Banking Corporation Limited (OCBC), Singapore and that the total valuation of above current accounts in respective banks works out to be Rs. 23,91,64,565.91/-. It has been argued that as per the Assessment Order, in para-No.4.1 i.e. evidences on record that current account maintained by M/s TVI Express Holidays Pvt. Ltd. total amount deposited in current account is Rs.23,91,64,565.91/-, meaning thereby, this amount allegedly belongs to M/s TVI Express Holidays Pvt. Ltd.

12. The appellant has also placed on record that his sister had filed the complaint before EOW bearing FIR no 36/2013 at P.S EOW, Mandir Marg New Delhi and after the investigation, special cell, IFSO, Sector-16, Dwarka, New Delhi filed the charge-sheet dated 31.12.2021 against the following persons :-

A. Mohd. Nayeem Lone

B. Rameez Ashraf Wani

C. M. Manjunatha Reddy

D. K.K. Aggarwal (CA)

E. Sunil Aggarwal

F. Manoj Kumar Pahwa (CA)

G. Ms. Rajesh Aggarwal

13. After the investigation, as per the chargesheet, it was found that the above-named persons are involved in illegally showing the appointment of the appellant as Director of M/s TVI Express Holidays Private Limited without the consent, resolution and permission of appellant and aforesaid persons had troubled the appellant and his family members.

14. It is on record that the appellant has denied having any foreign bank account in the assessment proceedings before the AO as well as in the appellate proceedings before me. He has been a victim of an identity theft as per the order of Hon’ble Special Court for Economic Offence. The AO has relied upon the information received by him from the Competent Authority of Singapore which contained details of foreign bank accounts in respect of which the appellant has been charged to tax under the provisions of the BMA.

15. In the light of the above facts and circumstances of the case, it emerges that the appellant does not hold any foreign bank account or asset located outside India whereas the bank accounts stated in the assessment order were fraudulently held in the name of appellant. The findings of Hon’ble Special Court of EOW at Bangalore and charge sheet of P.S., EOW, Mandir Marg have been perused. In the wake of the contentions of the appellant that he in fact does not hold any foreign bank account or asset located outside India with regard to which he has been fraudulently framed, I am of the considered view that the appellant is not liable to tax under the BMA in respect of those accounts.

16. As regards Ground No.2, it is seen that the additions made by the AO are on account of the non-disclosure of the foreign assets of the appellant being deposit in foreign bank account to the tune of Rs.23,91,64,565.91/- (USD 3,154,056.91) and in this regard, the appellant submitted a categorical denial that no foreign bank accounts were held by him.

17. In view of the categorical denial by the appellant with regard to holding any foreign bank accounts, findings of Hon’ble Special Court for EOW at Bangalore and chargesheet of P.S., EOW, Mandir Marg, New Delhi, it is clear that the appellant was mistakenly assessed under the provisions of BMA as the AO had presumed on the basis of information received from Competent Authority of Singapore that the appellant was the owner of foreign bank accounts in question. In the light of the foregoing, I am of the considered view that the AO is not justified in holding that the appellant was the owner of foreign bank accounts in question and accordingly is not justified in making the addition of deposits as undisclosed foreign income/undisclosed foreign asset of the appellant. Since the appellant has been fraudulently framed and his identity has been stolen and used in the said the foreign bank accounts as found out by Hon’ble Special Court of EOW at Bangalore and mentioned in the charge sheet of P.S. EOW, Mandir Marg, New Delhi, I am of the considered view that the addition on account of deposits in the said foreign bank accounts as undisclosed foreign income/undisclosed foreign asset of the appellant is not warranted. Therefore, I find that the addition of Rs.23,91,64,600/- is not sustainable in law as well as on facts. Accordingly, the said addition is liable to be deleted. I hold accordingly. Hence the said addition of Rs. 23,91,64,600/- is hereby deleted. Since the appeal is allowed on merits, the other ground relating to proceedings are time barred and opportunity of being heard was not provided to the appellant remain of academic interest only, and accordingly the same are not being adjudicated upon in this order.”

6. Aggrieved with the above order, the revenue is in appeal raising following grounds of appeal.

“1. On the facts and circumstances of the case the Ld. CIT(A) erred in holding that assessee was not connected to M/s TVI Express (P) Ltd. and not responsible for any act of M/s TVI Express holidays (P) Ltd., without considering the fact that:

(i) a case was registered by CBI against Tarun Trikha and M/s TVI Express (P) Ltd (Tarun Trikha is a promoter of this company) for cheating, forgery etc.

(ii) the assessee had opened many overseas branches including Singapore to lure overseas investors and thus were maintaining several bank accounts (Saving bank account and Current bank account) in Singapore in the name of M/s TVI Express holidays (P) Ltd.

(iii) Competent authority’ Singapore shared the information about this company with the competent authority, CBDT.

2. That the Ld. CIT(A) wrongly deleted the additions of Rs.23,91,64,565/- made on the basis of deposits in foreign bank account failing to consider that the assessee held undisclosed foreign income which was not offered to tax in India.

3. That the Ld. CIT(A) erred in deleting of Rs.23,91,64,565/- which was added based on unexplained foreign bank deposits (Undisclosed Income), and without seeking verification or rebuttal under Section 13 of the BMA.”

7. At the time of hearing, Ld DR objected to the relief granted by Ld CIT(A) and submitted that the assessee has not explained how his identity was theft and merely relies on the case filed by his sister. There is no relevance of the above decision in the BMA proceedings.

8. On the other hand, Ld AR heavily relied on the detailed findings of Ld CIT(A).

9. Considered the rival submissions and material placed on record. We observed that the assessee does not have any means to make such huge investments outside India, it is reflected in the return of income filed by the assessee for the last 10 years before AO. The assessee had filed the relevant decision of the special court of EOW relating to economic offence on the existence of the company namely TVI Express Holidays Private Limited and the issues relate to Economic offences bearing CC no 315 of 2015. The special court had discharged of all the offences mentioned in the above complaint. We observed that Ld CIT(A) had deleted the additions made under BMA by relying on the above facts on record. After careful consideration of the detailed findings, we do not see any reason to disturb the same and even the revenue has not brought any cogent material to prove otherwise. In the result, the grounds raised by the revenue are dismissed.

10. In the result, appeal filed by the Revenue is dismissed.

Order pronounced in the open court on this 11th day of August, 2026.