The addition is built on every credit in a foreign company's bank account. What does the Tribunal look for first under the Black Money Act?
Whether there is an undisclosed asset located outside India at all. On a Revenue appeal against the deletion of an addition of Rs 1,33,20,62,815 made on the credits in a Singapore bank account of a company in which the assessee was a director and shareholder, the Kolkata Bench confined its adjudication to the one account on which the Assessing Officer had actually made the addition, set out s.2(11), s.2(12) and s.4, and said that the first thing to be identified is whether there is an undisclosed asset located outside India. The only copy of the order that can be reached breaks off in the middle of that sentence, so what the Tribunal went on to decide is not known.
Decided by the ITAT (Rajpal Yadav, Vice-President (Kolkata Zone) and Manish Borad, Accountant Member) on 2024-06-25, reported as B.M.A. No. 3/Kol/2023. It bears on section BMA s.2(11), section BMA s.2(12), section BMA s.4, section BMA s.10 of the Income Tax Act 1961, in Assessment & Scrutiny, Appeals and Evidence & Burden of Proof matters.
The framing is usable on its own: before any question of the source of the investment, of beneficial ownership or of an omission from Schedule FA, the Act requires an undisclosed asset located outside India within s.2(11), and the Bench took that as the threshold question. The entry is also a caution. An addition of this size, deleted by the Commissioner (Appeals), is the kind of order that gets described secondhand as having been confirmed on appeal; no copy of this order carrying a disposition could be found, and nothing here should be cited as the Tribunal's holding.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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Proceedings under s.10 of the Black Money Act were initiated against the assessee on information from the Competent Authority, Singapore about a bank account held with SBI, Singapore, account No. 27600183120100, in the name of R.B. Global Pte. Ltd. (RBGPL), a Singapore company in which the assessee was a shareholder and director. The credits in challenge were funds remitted from India between 20 May 2011 and 28 April 2015, the dates on which the account was opened and closed, totalling about Rs 133.21 crore across financial years 2011-12 to 2015-16. Two further accounts of RBGPL with Citi Bank, Singapore and UCO Bank, Singapore were disclosed by the assessee and discussed in the assessment order, but no information on them had been received from the Competent Authority and no addition was made from them. The remittances fell into two categories: funds sent by the assessee towards the share capital of RBGPL, said to come from declared banking sources and unsecured loans, and funds sent by various Indian business concerns towards the import of goods, mainly timber. The Assessing Officer took the view that the investment in RBGPL had not been declared in the return or in the one-time window provided by the Act, that the purpose of the other remittances was not explained and that the remitting concerns were shell companies or were managed and controlled by the assessee, and assessed the total credits up to 25 November 2015, Rs 1,33,20,62,815, as undisclosed foreign income and assets. The Commissioner (Appeals), on the details of the source of the equity investment and of the purpose of the remittances, found the transactions genuine and made for commercial expediency, held it was not a fit case for invoking the Act and deleted the addition in full. The Revenue appealed.
No disposition can be stated: the copy of the order that can be reached does not contain one. What the Bench decided in the part that can be read is confined to the scope of the adjudication and to the provisions governing it. It held that although the Assessing Officer had discussed all three Singapore accounts he had made the addition only from the SBI account, and it therefore confined its adjudication to the credit entries in that account and declined to deal with the Citi Bank and UCO Bank accounts (para 19). It set out the definition of an undisclosed asset located outside India in s.2(11), the definition of undisclosed foreign income and asset in s.2(12) and the scope provision in s.4 (paras 21, 21.1 and 22), and stated that the first thing to be identified is whether there is an undisclosed asset located outside India and whether there is any undisclosed foreign income and asset located outside India (para 23). The text stops mid-sentence in that paragraph, before any finding on the source of the investment, on the imports, on beneficial ownership or on the Revenue's grounds, and before any operative paragraph. The order of the Commissioner (Appeals) deleting the addition is reproduced within para 20; whether it was upheld, varied or set aside is not known.
Paragraphs 1 to 18 are the record of the proceedings, the Revenue's grounds and the assessee's written submissions. The Tribunal's own findings begin at para 19 with 'We have heard the rival contentions and perused the record placed before us'. In the readable part the Bench does four things. It fixes the scope of the appeal to the SBI, Singapore account, on the ground that the Assessing Officer, having consciously dealt with all three accounts, confined the addition to that one (para 19). It sets out the two categories into which the remittances fall, the Assessing Officer's grounds for the addition and the findings of the Commissioner (Appeals), whose order it reproduces in full (para 20). It then turns to the statute, reciting s.2(11), s.2(12) and s.4 because, as it puts it, the relevant provisions must be perused before adverting to the adjudication of the facts (paras 21 to 22). And it begins to apply them by identifying the threshold question under s.2(11) (para 23), where the text ends. Three propositions that a reader of this case is likely to meet are the assessee's arguments and not the Tribunal's: that no addition can be made on surmise, suspicion and conjecture, advanced in the written submission at para 17 on Laichand Bhagat Ambica Ram [1959] 37 ITR 288 (SC) and Omar Salav Mohamed Sait [1959] 37 ITR 151 (SC); that FAQ No. 17 of Circular No. 13 of 2015 protects an asset acquired out of tax-paid income though not reported in Schedule FA; and that a beneficial owner must have a nexus with the source of the asset, on ACIT, Range 70 v Jatinder Mehra. Each of these appears in the assessee's submission at para 17 and in the order of the Commissioner (Appeals) reproduced at para 20. None is adopted by the Bench in any paragraph that can be read.
the first and foremost thing, which we have to identify as to whether there is an undisclosed asset located outside India
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Handle my notice → Ask a CA on WhatsAppWhether there is an undisclosed asset located outside India at all. On a Revenue appeal against the deletion of an addition of Rs 1,33,20,62,815 made on the credits in a Singapore bank account of a company in which the assessee was a director and shareholder, the Kolkata Bench confined its adjudication to the one account on which the Assessing Officer had actually made the addition, set out s.2(11), s.2(12) and s.4, and said that the first thing to be identified is whether there is an undisclosed asset located outside India. The only copy of the order that can be reached breaks off in the middle of that sentence, so what the Tribunal went on to decide is not known. This was decided by the ITAT (Rajpal Yadav, Vice-President (Kolkata Zone) and Manish Borad, Accountant Member) and bears on section BMA s.2(11), section BMA s.2(12), section BMA s.4, section BMA s.10 of the Income Tax Act 1961. It is reported as B.M.A. No. 3/Kol/2023. The framing is usable on its own: before any question of the source of the investment, of beneficial ownership or of an omission from Schedule FA, the Act requires an undisclosed asset located outside India within s.2(11), and the Bench took that as the threshold question. The entry is also a caution. An addition of this size, deleted by the Commissioner (Appeals), is the kind of order that gets described secondhand as having been confirmed on appeal; no copy of this order carrying a disposition could be found, and nothing here should be cited as the Tribunal's holding. If it applies to you, the first step is this: Start where the Bench starts: is there an asset located outside India held by the assessee or of which he is the beneficial owner, and is the source of investment in it unexplained or unsatisfactorily explained within s.2(11)?
Proceedings under s.10 of the Black Money Act were initiated against the assessee on information from the Competent Authority, Singapore about a bank account held with SBI, Singapore, account No. 27600183120100, in the name of R.B. Global Pte. Ltd. (RBGPL), a Singapore company in which the assessee was a shareholder and director. The credits in challenge were funds remitted from India between 20 May 2011 and 28 April 2015, the dates on which the account was opened and closed, totalling about Rs 133.21 crore across financial years 2011-12 to 2015-16. Two further accounts of RBGPL with Citi Bank, Singapore and UCO Bank, Singapore were disclosed by the assessee and discussed in the assessment order, but no information on them had been received from the Competent Authority and no addition was made from them. The remittances fell into two categories: funds sent by the assessee towards the share capital of RBGPL, said to come from declared banking sources and unsecured loans, and funds sent by various Indian business concerns towards the import of goods, mainly timber. The Assessing Officer took the view that the investment in RBGPL had not been declared in the return or in the one-time window provided by the Act, that the purpose of the other remittances was not explained and that the remitting concerns were shell companies or were managed and controlled by the assessee, and assessed the total credits up to 25 November 2015, Rs 1,33,20,62,815, as undisclosed foreign income and assets. The Commissioner (Appeals), on the details of the source of the equity investment and of the purpose of the remittances, found the transactions genuine and made for commercial expediency, held it was not a fit case for invoking the Act and deleted the addition in full. The Revenue appealed. The matter was decided on 2024-06-25 by the ITAT (Rajpal Yadav, Vice-President (Kolkata Zone) and Manish Borad, Accountant Member). On those facts the ITAT held as follows. No disposition can be stated: the copy of the order that can be reached does not contain one. What the Bench decided in the part that can be read is confined to the scope of the adjudication and to the provisions governing it. It held that although the Assessing Officer had discussed all three Singapore accounts he had made the addition only from the SBI account, and it therefore confined its adjudication to the credit entries in that account and declined to deal with the Citi Bank and UCO Bank accounts (para 19). It set out the definition of an undisclosed asset located outside India in s.2(11), the definition of undisclosed foreign income and asset in s.2(12) and the scope provision in s.4 (paras 21, 21.1 and 22), and stated that the first thing to be identified is whether there is an undisclosed asset located outside India and whether there is any undisclosed foreign income and asset located outside India (para 23). The text stops mid-sentence in that paragraph, before any finding on the source of the investment, on the imports, on beneficial ownership or on the Revenue's grounds, and before any operative paragraph. The order of the Commissioner (Appeals) deleting the addition is reproduced within para 20; whether it was upheld, varied or set aside is not known.
Paragraphs 1 to 18 are the record of the proceedings, the Revenue's grounds and the assessee's written submissions. The Tribunal's own findings begin at para 19 with 'We have heard the rival contentions and perused the record placed before us'. In the readable part the Bench does four things. It fixes the scope of the appeal to the SBI, Singapore account, on the ground that the Assessing Officer, having consciously dealt with all three accounts, confined the addition to that one (para 19). It sets out the two categories into which the remittances fall, the Assessing Officer's grounds for the addition and the findings of the Commissioner (Appeals), whose order it reproduces in full (para 20). It then turns to the statute, reciting s.2(11), s.2(12) and s.4 because, as it puts it, the relevant provisions must be perused before adverting to the adjudication of the facts (paras 21 to 22). And it begins to apply them by identifying the threshold question under s.2(11) (para 23), where the text ends. Three propositions that a reader of this case is likely to meet are the assessee's arguments and not the Tribunal's: that no addition can be made on surmise, suspicion and conjecture, advanced in the written submission at para 17 on Laichand Bhagat Ambica Ram [1959] 37 ITR 288 (SC) and Omar Salav Mohamed Sait [1959] 37 ITR 151 (SC); that FAQ No. 17 of Circular No. 13 of 2015 protects an asset acquired out of tax-paid income though not reported in Schedule FA; and that a beneficial owner must have a nexus with the source of the asset, on ACIT, Range 70 v Jatinder Mehra. Each of these appears in the assessee's submission at para 17 and in the order of the Commissioner (Appeals) reproduced at para 20. None is adopted by the Bench in any paragraph that can be read. In the words reproduced by the source cited on this page: "the first and foremost thing, which we have to identify as to whether there is an undisclosed asset located outside India"
It was decided by the ITAT on 2024-06-25 and is reported as B.M.A. No. 3/Kol/2023. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section BMA s.2(11), section BMA s.2(12), section BMA s.4, section BMA s.10, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. No disposition can be stated: the copy of the order that can be reached does not contain one. What the Bench decided in the part that can be read is confined to the scope of the adjudication and to the provisions governing it. It held that although the Assessing Officer had discussed all three Singapore accounts he had made the addition only from the SBI account, and it therefore confined its adjudication to the credit entries in that account and declined to deal with the Citi Bank and UCO Bank accounts (para 19). It set out the definition of an undisclosed asset located outside India in s.2(11), the definition of undisclosed foreign income and asset in s.2(12) and the scope provision in s.4 (paras 21, 21.1 and 22), and stated that the first thing to be identified is whether there is an undisclosed asset located outside India and whether there is any undisclosed foreign income and asset located outside India (para 23). The text stops mid-sentence in that paragraph, before any finding on the source of the investment, on the imports, on beneficial ownership or on the Revenue's grounds, and before any operative paragraph. The order of the Commissioner (Appeals) deleting the addition is reproduced within para 20; whether it was upheld, varied or set aside is not known. It arises in Assessment & Scrutiny, Appeals and Evidence & Burden of Proof matters, on section BMA s.2(11), section BMA s.2(12), section BMA s.4, section BMA s.10 of the Income Tax Act 1961, and was decided by Rajpal Yadav, Vice-President (Kolkata Zone) and Manish Borad, Accountant Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Read the assessment order for what was actually added. Three Singapore accounts were discussed here but the addition was made only from the SBI account, and the Bench declined to go into the other two for that reason (para 19). Separate the classes of credit before answering. The Bench divided them into funds remitted by the assessee towards the share capital of the foreign company and funds remitted by Indian business concerns towards imports (para 20); they are explained by different material. Where the source is said to be declared banking channels, put the remittance trail and the import documents before the Assessing Officer at the assessment stage; that is the material on which the Commissioner (Appeals) acted here. Do not cite this order for any outcome. Obtain the complete order from the Kolkata Bench's own record before relying on it.
The judgment itself could not be reached, so no check was possible. Pronounced 25 June 2024. Paragraphs 1 to 23 can be read, but no copy carrying the operative part of the order could be found, so there is no holding here to be applied, doubted or overruled, and none was looked for. The Tribunal's own record was tried for the closing paragraphs and could not be searched from outside. Whether the Revenue has gone further under s.19 against a deletion of this size is not known. Treat the case as open until the complete order is obtained. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This entry is deliberately thin and states no outcome. The only copy of the order that can be reached, at indiankanoon /doc/194137436/, terminates mid-sentence in para 23, at the words 'In the above referred provision of section 2(11), one of the imp' - before any finding on the source of the investment, on the imports, on beneficial ownership, on Article 16 of the India-Singapore treaty or on any of the Revenue's six grounds, and before any operative paragraph. The Tribunal's own record of orders was tried for the closing paragraphs: the judgment search at itat.gov.in is closed to automated retrieval and the order PDFs on that site are addressed by a numeric key that cannot be derived from the appeal number, so the complete order was not obtained. An independent reading of the document corrected this entry in three places, and the corrections are the reason it now says so little: the words 'no addition can be made on the basis of surmises, suspicion and conjectures', formerly given as the key quote and sourced to the Tribunal's reasoning, are counsel's, at para 17, inside the assessee's citation of Laichand Bhagat Ambica Ram; FAQ No. 17 of Circular No. 13 of 2015 and ACIT, Range 70 v Jatinder Mehra, formerly given as applied by the Tribunal, appear only in that submission and in the order of the Commissioner (Appeals) reproduced at para 20; and the statement that the Tribunal upheld the deletion of Rs 1,33,20,62,815 could not be verified from any part of the document. All three have been removed. The slug was changed for the same reason: the earlier one asserted that the Tribunal had explained the source of a foreign company, which the document does not support. The order records that the Commissioner (Appeals) relied on Srinidhi Karti Chidambaram and that the Revenue's sixth ground was that he had misapplied it; whether the Tribunal dealt with that ground is not known. No reporter citation is printed on the pages read. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
No disposition can be stated: the copy of the order that can be reached does not contain one. What the Bench decided in the part that can be read is confined to the scope of the adjudication and to the provisions governing it. It held that although the Assessing Officer had discussed all three Singapore accounts he had made the addition only from the SBI account, and it therefore confined its adjudication to the credit entries in that account and declined to deal with the Citi Bank and UCO Bank accounts (para 19). It set out the definition of an undisclosed asset located outside India in s.2(11), the definition of undisclosed foreign income and asset in s.2(12) and the scope provision in s.4 (paras 21, 21.1 and 22), and stated that the first thing to be identified is whether there is an undisclosed asset located outside India and whether there is any undisclosed foreign income and asset located outside India (para 23). The text stops mid-sentence in that paragraph, before any finding on the source of the investment, on the imports, on beneficial ownership or on the Revenue's grounds, and before any operative paragraph. The order of the Commissioner (Appeals) deleting the addition is reproduced within para 20; whether it was upheld, varied or set aside is not known.
TaxSphere, “Jt. CIT v Akhilesh Singh”, https://taxnotice.vittsphere.com/caselaw/case/jt-cit-v-akhilesh-singh-bma-the-threshold-question-of-an-undisclosed-foreign-asset/ (validity last checked 2026-09-16)
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The department has issued a Black Money Act notice for a foreign bank account opened in 2007. The Act only came into force in 2015. On what does the charge on that asset actually rest, and in which year is it charged?
My name appears as beneficial owner on a foreign bank account opening form I never signed. Is that enough to tax the balance in my hands?
They have taxed me on shares in a struck-off offshore company I paid nothing for. Can there be a charge at all if the shares have no value under the rules?
My foreign bank account was closed years before 2015. Can it still be taxed under the Black Money Act?
