Case Law Details
DCIT Vs Malvinder Mohan Singh (ITAT Delhi)
Sufficient returned income & timely Form 67 can’t be ignored: ITAT upholds deletion of foreign investment addition & allows FTC u/s 90/91
Delhi ITAT dismissed Revenue’s appeal & upheld CIT(A)’s order deleting addition of ₹3.31 crore u/s 69 on account of alleged unexplained foreign investment in shares held in names of minor daughters & allowing foreign tax credit of ₹23.02 lakh u/s 90/91.
Tribunal noted that Assessee was a high-income taxpayer with returned income of ₹26.80 crore, had duly disclosed foreign investments in Schedule FA, furnished Indian & overseas bank details, & possessed sufficient sources to make such investments, leaving no scope for adverse inference merely for want of further documentation.
On FTC, Tribunal held that Form 67 was filed well within the time permitted u/s 139(4) along with revised return, & details of foreign income & taxes paid were duly reported in return schedules. Non-filing of Form 67 before due date u/s 139(1) was held not fatal in such facts, & double taxation relief could not be denied. Revenue appeal was accordingly dismissed in entirety
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is preferred against the order of the ld. CIT(A), Delhi dated 21.05.2024 pertaining to A.Y. 2017-18.
2. The revised grievances raised by the Revenue read as under:
1. Whether on the facts of the case and in law, the Ld. CIT(A) was right in deleting the addition of unexplained foreign investment of Rs. 3,31,42,742/- relying of the ITR without appreciating that the assessee was not able to provide any documentary evidences in respect of the aforesaid foreign investment?
2. Whether on the facts of the case and in law, the Ld. CIT(A) was right in allowing the relief u/s 90/91 of the Act amounting to Rs. 23,02,920/- without appreciating that the assessee has not filed Form No. 67 before the due date u/s 139(1) of the Income Tax Act 1961 which is mandatory for claiming Foreign Tax Credit as prescribed in Rule 128 of the Income Tax Rules?
3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) was justified in allowing the appeal of the assessee without calling for a remand report from the Assessing Officer when assessee clearly did not submit any evidences to Assessing Officer during assessment proceedings?
4. The assessee craves to be allowed to add any fresh ground(s) of appeal and or deleted or amend any of the ground(s) of appeal.”
3. None appeared on behalf of the assessee. We decided to proceed ex-parte with assistance of the ld DR. The ld. DR was heard at length and the case records were carefully perused.
4. The brief facts of the case is that the assessee filed his return of income for A.Y. 2017-18 declaring taxable income of Rs. 26,80,79,640/- and tax thereon, amounting to Rs. 9,50,54,813/- was paid. The assessee derived income from, salary, income from house property, capital gain and income from other sources. Income of three minor daughters was also clubbed in the income of the Assessee in terms of Section 64(1A) of the Income Tax Act. The case of the Assessee was taken in Limited Scrutiny on grounds of Double Taxation Relief was claimed u/s 90/91 and the Assessee was having foreign assets. The Notice in this regard was issued by the Assessing Officer u/s 143(2) of the Act dated 28.08.2018.
5. The assessing officer noticed that the assessee, during the year has made investments in foreign assets on behalf of minor daughters namely, Nanaki Parvinder Singh and Nandini Parvinder Singh in shares of a company namely, Clonberg Holding Ltd. equivalent to Rs. 1,64,61,100/- and Rs. 1,66,78,642/- respectively.
6. The assessing officer further noticed that the assessee has claimed benefit of Double Taxation Relief u/s 90/91 of the Act. The Assessing Officer finally passed the assessment order dated 06.12.2019 where he made addition on account of investment in shares of foreign company for an aggregate amount of Rs. 3,31,42,742/- in the name of two minor daughters namely, Nanki Parvinder Singh and Nandini Parvinder Singh u/s 69 of the Act and he has also not allowed credit for tax paid in Singapore amounting to Rs. 23,02,920/- and also invoked provisions of Section 115BBE.
7. The aggrieved assessee appealed before the CIT(A) who granted relief on both the issue. Now the Revenue is aggrieved and is before us.
8. The ld DR vehemently argued that the CIT(A) granted relief on the basis of ITR only. The ld DR stated that the assessee has not submitted the source and mode of such purchases/investment in foreign assts in respect of investment made in foreign assets.
9. We have heard the submissions of the ld DR and have perused the materials on record. We find that the assessee is a large taxpayer whose taxable income for AY under consideration, was of Rs. 26.80 crores which included income of minor daughters also of Rs. 3.42 crores. Further we note that the assessee has declared the said investment, in the name of two minor daughters, at item nos. 27 and 28 of Schedule FA (Details of Foreign Assets) at Page No. 31 of original return of income. The assessee has also provided the bank accounts in India with Axis Bank Ltd Karol Bagh, New Delhi where these investments are reflected. In such factual matrix of the case, we are of the considered view that with the kind of Returned income declared, there should not be any doubt as regards the source of investments as the assessee was having sufficient source of income to make investments of Rs. 3.31 crores. We also note that the assessee had given complete details of foreign assets, bank accounts in the name of assessee and also in the name of minor daughters in India and in foreign countries to the AO. The ground 1 is dismissed.
10. With respect to double taxation relief, we note that the assessee had duly claimed double taxation relief in the return of income filed by him vide item No. 7b of Part B –TTI (Computation of Tax liability on Total Income) and information regarding foreign income and tax relief thereon was also duly given in return vide Schedule FSI (Details of Income from outside India) and Schedule TY (Summary of tax relief claimed for taxes paid outside India) of original as well as revised return. Form 67 was also duly submitted under Acknowledgment No. 342138281221217 dated 22.12.2017 along with copy of return filed in Singapore and tax paid in Singapore. Further, a statement giving details of tax paid in Singapore and tax payable in India on the salary income of Singapore taxable in India and also included in taxable income in the return was also submitted to the AO with reply dated 21.06.2019. Here, it would be relevant to reproduce the findings of the ld. CIT(A) on this issue which reads as under:
“8.4 The above judicial decision and submissions of the assessee is carefully considered. As the last date for filing the return under section 139(4) of the Act for A.Y. 2017-18 was 31.03.2019 and the assessee filed form no. 67 on 22.12.2017 and revised return on 29.08.2018 which was within the prescribed time limit. Therefore, the form no. 67 is acceptable and no income to be taxed twice, by disallowing the same once again for the second time. Under these circumstances and factual aspects of the case the Assessing Officer is directed to allow the claim of the assessee made in form no. 67 and delete the relevant disallowance made.”
11. In view of the above findings of the ld. CIT(A) on the impugned issue, we decline to interfere with the same and direct the Assessing Officer to grant the relief u/s 90/91. The ground 2 is dismissed.
12. In the result, appeal of the Revenue in ITA No. 3029/DEL/2024 is dismissed.
The order is pronounced in the open court on 10.12.2025.
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