Commissioner of Income Tax vs Smt. Poonam Rani Singh

The revenue is aggrieved by an order dated 15-12-2006 passed by the Tribunal, Delhi Bench T\\ in ITA No. 4533/Del/2003 relevant for the asst yr. 1997-98.

A deposit of US S 1,00,000 was found in the bank account of the assessee in Wells Fargo Bank, USA.

The matter was referred to the Foreign Tax Division of the CBDT for enquiry and they obtained a report from the American authorities.

The report indicates that the amount deposited with the bank came from explained sources. It is also mentioned that the persons who had advanced the sums to the assessee and her husband were repaid the amount since the agreement between the loanee and the assessee and her husband could not fructify.

Despite this report, the assessing officer added an amount of Rs. 34,55,000 being the equivalent amount in Indian rupees of US S 1,00,000 to the income of the assessee.

On appeal, the Commissioner (Appeals) (Commissioner (Appeals)3considered the report given by the IRS department of the American Government and came to the conclusion that there was no doubt about the genuineness of the transaction which had even been verified through the Foreign Tax Division of the CBDT.

Feeling aggrieved by the order passed by the Commissioner (Appeals), the revenue preferred an appeal before the Tribunal which dismissed the appeal.

Before us, in an appeal u/s 260A of the Income Tax Act, 1961, it is contended that even though the transaction may be genuine, there is nothing to suggest the creditworthiness of the loanee. We are of the opinion that in view of an inter-Governmental exchange which resulted in a report from the IRS department of the American Government to the Foreign Tax Division of the CBDT, which suggests that the transaction was completely above board, the revenue cannot seek to add the amount to the income of the assessee without any substantial material, but only on surmises.

In view of the concurrent finding of fact with regard to the genuineness of the transaction, we are of the opinion that no substantial question of law arises.

The appeal is dismissed.