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Tax Publishers Renu T. Tharani v. Dy. CIT [ITA No. 2333/Mum/2018, dt. 16-7-2020] : 2020 TaxPub(DT) 2880 (Mum.-Trib.) Alleged additions from offshore bank account unearthed in an investigation about Offshore bank accounts with stashed money. Averments proving ownership to assessee -- assessee providing wishy washy rejoinders -- Whose money is it? *Facts:* Assessee a very aged lady had filed her return as a resident offering meagre income which was summarily assessed by the CPC. Subsequently the case was reopened due to investigations revealing that she was the alleged beneficiary of an offshore bank account in HSBC, Geneva Switzerland for about USD equivalent of roughly INR 196 crores. This was added by the assessing officer and upheld by the Commissioner (Appeals) as unexplained investments. On appeal - Held against the assessee by the ITAT - 1. The evidences against the assessee are not controverted by her in a concrete manner. 2. As to whether if she is not the beneficiary is not sufficiently proven by her nor it has been transparently explained as to who is the actual beneficiary. 3. Merely saying that the account does not belong to her without adducing proof or evidence against the averments produced cannot exonerate the liability of the assessee. 4. She being a non-resident has filed a return alleging a resident in the first place and then in appeal claiming to be a non-resident though factually she is a non-resident. 5. Address of the assessee in return reads Bangalore, but the bank account belongs to an address in Mumbai which apparently is the passport address of the assessee. 6. Averments unearthed in investigations manifest assessee to be the alleged end owner of the said bank account and the same is not countered with adequate evidence. 7. Offshore tax havens and jurisdictions with tax/banking secrecy as in Switzerland, Liechenstein, Cayman islands etc. have got lead players like HSBC whose modus operandi and the fact of managing such secret accounts under surrogate trusts has been brought to light by media which was deliberated by the ITAT. 8. The assessee's account is also possibly one such alleged offshore accounts where benefits of ill-gotten money have been stashed/laundered thus with HSBC, Geneva Switzerland. 9. Subsequently the money have been moved from HSBC, Geneva, Switzerland to Cayman islands leaving no trail also points to suspicion. 10. The additions can be made under section 5 read with 9, 69, 69A, 69B as confirmed by the Commissioner (Appeals). 41. It must also be a coincidence, coincidence if it could be, that the process of covering the tracks did not stop with closure of the HSBC account. It is a further coincidence that even the GWU Investments Limited, after the disclosure in respect of account, was closed as its name is struck off from the records of Registrar of Companies, Cayman Islands. As a Cayman Islands Government notification, available in public domain at http://www.gov.ky/portal/pls/portal/docs/1/11574085.PDF, shows at page 45 of 102, GWU Investments Limited no longer exists in the records of the Government of Cayman Islands. *Editorial Note:* The case is one off containing conscience shaking revelations. https://www.bbc.com/news/world-europe-31296007 https://www.bbc.com/news/world-asia-india-31282677 https://www.justice.gov/opa/pr/justice-department-announces-deferred-prosecution-agreement-hsbc-private-bank-suisse-sa https://www.hsbcprivatebank.com/en/plan/wealth-planning/trust-administration

Tax Publishers

Renu T. Tharani v. Dy. CIT [ITA No. 2333/Mum/2018, dt. 16-7-2020] : 2020 TaxPub(DT) 2880 (Mum.-Trib.)

Alleged additions from offshore bank account unearthed in an investigation about Offshore bank accounts with stashed money. Averments proving ownership to assessee -- assessee providing wishy washy rejoinders -- Whose money is it?

Facts:

Assessee a very aged lady had filed her return as a resident offering meagre income which was summarily assessed by the CPC. Subsequently the case was reopened due to investigations revealing that she was the alleged beneficiary of an offshore bank account in HSBC, Geneva Switzerland for about USD equivalent of roughly INR 196 crores. This was added by the assessing officer and upheld by the Commissioner (Appeals) as unexplained investments. On appeal -

Held against the assessee by the ITAT -

1. The evidences against the assessee are not controverted by her in a concrete manner.

2. As to whether if she is not the beneficiary is not sufficiently proven by her nor it has been transparently explained as to who is the actual beneficiary.

3. Merely saying that the account does not belong to her without adducing proof or evidence against the averments produced cannot exonerate the liability of the assessee.

4. She being a non-resident has filed a return alleging a resident in the first place and then in appeal claiming to be a non-resident though factually she is a non-resident.

5. Address of the assessee in return reads Bangalore, but the bank account belongs to an address in Mumbai which apparently is the passport address of the assessee.

6. Averments unearthed in investigations manifest assessee to be the alleged end owner of the said bank account and the same is not countered with adequate evidence.

7. Offshore tax havens and jurisdictions with tax/banking secrecy as in Switzerland, Liechenstein, Cayman islands etc. have got lead players like HSBC whose modus operandi and the fact of managing such secret accounts under surrogate trusts has been brought to light by media which was deliberated by the ITAT.

8. The assessee's account is also possibly one such alleged offshore accounts where benefits of ill-gotten money have been stashed/laundered thus with HSBC, Geneva Switzerland.

9. Subsequently the money have been moved from HSBC, Geneva, Switzerland to Cayman islands leaving no trail also points to suspicion.

10. The additions can be made under section 5 read with 9, 69, 69A, 69B as confirmed by the Commissioner (Appeals).

41. It must also be a coincidence, coincidence if it could be, that the process of covering the tracks did not stop with closure of the HSBC account. It is a further coincidence that even the GWU Investments Limited, after the disclosure in respect of account, was closed as its name is struck off from the records of Registrar of Companies, Cayman Islands. As a Cayman Islands Government notification, available in public domain at http://www.gov.ky/portal/pls/portal/docs/1/11574085.PDF, shows at page 45 of 102, GWU Investments Limited no longer exists in the records of the Government of Cayman Islands.

Editorial Note: The case is one off containing conscience shaking revelations.

https://www.bbc.com/news/world-europe-31296007

https://www.bbc.com/news/world-asia-india-31282677

https://www.justice.gov/opa/pr/justice-department-announces-deferred-prosecution-agreement-hsbc-private-bank-suisse-sa

https://www.hsbcprivatebank.com/en/plan/wealth-planning/trust-administration