ITAT Delhi order on investments made in foreign shares in the names of the assessee’s minor daughters could be treated as unexplained investments u/s 69 of ITA, 1961 merely on the allegation that no separate documentary evidence of source was furnished and whether foreign tax credit claimed under sections 90/91 could be denied on the ground that Form No. 67 was allegedly not filed within the due date u/s 139(1)
The Delhi Bench of the Income Tax Appellate Tribunal in DCIT Vs Malvinder Mohan Singh dismissed the Revenue’s appeal and upheld deletion of additions and grant of foreign tax credit, holding that fully disclosed foreign investments cannot be treated as unexplained under section 69 merely for want of additional documentary evidence. The Tribunal noted that investments of ₹3.31 crore in foreign shares made in the names of the assessee’s minor daughters were transparently reported in the return, duly reflected in Schedule FA, routed through disclosed Indian bank accounts, and supported by substantial returned income of ₹26.80 crore, including clubbed income of minors exceeding ₹3.42 crore. In the absence of any material showing undisclosed sources, mechanical invocation of section 69 was held impermissible. On foreign tax credit, the Tribunal affirmed that Form No. 67 filed within the extended time under section 139(4) and prior to assessment completion satisfies Rule 128, which is procedural. Denial of credit would cause impermissible double taxation. The absence of a remand report caused no prejudice.
