Ira Maulik Shah Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, considered an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising from an assessment under Sections 143(3) read with 144B of the Income Tax Act, 1961 for Assessment Year 2023-24. The dispute concerned an addition of ₹25,05,81,504 under Section 69 in respect of foreign investments disclosed in Schedule FA.
The Assessing Officer selected the case for scrutiny under CASS on the risk parameter relating to a new foreign asset in the nature of accounts in which the taxpayer was a signing authority. During assessment proceedings, the Assessing Officer examined the assessee’s foreign equity investments, deposits, and foreign bank accounts. Comparing these with the disclosures made in Schedule FA, the Assessing Officer concluded that a differential amount of ₹25,05,81,504 remained unexplained and proposed to treat it as unexplained investment under Section 69.
The Assessing Officer also observed that certain foreign investments disclosed in Schedule FA had acquisition dates going back to earlier years, including March 2018, but found that corresponding disclosures were absent in the Schedule FA for Assessment Year 2022-23. According to the Assessing Officer, the assessee failed to substantiate the dates of acquisition and continuity of ownership with supporting documentary evidence. The explanation that the overseas Portfolio Management Service (PMS) investment was jointly held and jointly funded by the assessee and her husband was not accepted. The Assessing Officer held that the claim of bifurcation of ownership was unsupported by independent contemporaneous evidence and completed the assessment by making an addition of ₹25,05,81,504 under Section 69. The Commissioner of Income Tax (Appeals) upheld the addition, observing that the assessee had not produced satisfactory evidence such as banking records, remittance documents, confirmations from financial institutions, foreign inward remittance certificates or SWIFT transfer details to establish the husband’s contribution.
