ITAT quashes taxing Swiss a/c funds in hands of NRI

Mumbai, May 20, 2023

In a relief to Amrita Jhaveri, considered to be a leading authority on Indian painters and a well-known art dealer, the income-tax appellate tribunal (ITAT) quashed the reopening of her case for two financial years (2005-06 and 2006-07) and addition of an income of Rs 2.3 crore, the rupee equivalent of the balances appearing in HSBC bank accounts in Geneva.

Cases can be reopened within 16 years from the end of the relevant assessment year, if the income in relation to an overseas asset has escaped tax in India.

Based on 'legal technicalities' and without going into 'the merits of the case', the tax tribunal held that I-T can't reopen case of a non-resident under the Income tax Act, based on vague and general information.

She has kept her Indian passport and is married to a British citizen and settled in London. As per I-T Act, she is a non-resident, meaning her overseas income can't be taxed in India. She is engaged in buying and selling art. She has been earning income by way of consultancy and commission.

The Swiss bank details were found as the French government shared details via 'base notes' after a massive leakage by a HSBC Geneva employee-turned-whistle-blower. In Jhaveri's case, I-T sleuths gathered from a 'base note' that she was the sole beneficial owner of accounts held in name of Amaya Limited, a firm registered in tax haven of Seychelles. She was the only shareholder, beneficiary and director of this firm. She said ince she is a non-resident, holding of an overseas bank account should be of no consequence as income accruing or arising outside India is not subject to Indian income-tax in the hands of a non-resident.

[The Times of India]