INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Unexplained bank deposits - Declaration of jewellery by assessee immigrant from Pakistan accepted by AO

Assessee was migrating from Pakistan and was asked to explain the sources of cash deposits in bank accounts. In reply, the assessee explained that she had migrated from Pakistan on 30-7-2009 with a view to permanently settle in India. She further pointed out that while coming to India, she had brought Rs. 2.71 crores in cash and 1387.50 gms. of gold ornaments and jewellery valuing about Rs. 22,01,500. In this regard, the assessee explained that she had filed declaration about bringing the cash and jewellery both before the ITO, Mumbai, on 15-9-2009 in terms of Board Circular F. No. 73/16/68-IT(A-II), dt. 3-2-1969. The assessee claimed that she had sufficient resources in Pakistan to which the monies and the personal jewellery brought in India could be reasonably attributed, thus, the conditions laid down in Board's circular in this regard were suitably satisfied. Assessee had filed the copy of Bank book to show that the said sum of Rs. 2.71 crores was found to be credited. The assessee had then withdrawn the amount for purchase of commercial property and almost the entire balance was invested in bank deposits. The AO treated sum of Rs. 2.71 crores as unexplained credit under section 68. CIT(A) deleted the addition made by AO.Held: The Board vide Circular dt. 3-2-1969 had given certain instructions on concessional treatment to migrants from Pakistan. The said circular is still in force, which was Assessee came to settle permanently in India and she brought in sum of Rs. 2.71 crores in cash and gold omaments and jewellery weighing 1387.50 gms. In support thereof, she produced the passport, Visa and RP number. AO The manner in which the money was transferred and brought into India cannot be looked into by the AO in view of clear-cut guidelines issued by the CBDT and once the assessee is holding requisite amount of cash balance in her bank account, out of which the assessee claims that she had brought the money into India in cash, then the availability of such cash stands explained and does not warrant any addition under section 68.

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