S.N. ROTHO, A.M.: Order This appeal has been filed by assessee against order dt. 10th Nov., 1982 of CIT(A) relating to asst. yr. 1976-77, previous year of which was period from 1st April, 1975 to 31st March, 1976. 2. assessee is individual. only ground in this appeal relates to assessment of sum of Rs. 79,550 as assessee income from "undisclosed sources". assessee received sum of Rs. 79,548 as remittances from abroad through banking channels which were deposited in his savings bank account. details are given below: Amt. Foreign Date on which amount has been Rs currency debited to assessee s Bank account equivalent Rs. $ 2000 26-10-1975 17436.80 Rs. $ 2000 20-10-1975 17,605.80 Rs. $ 3000 do 26,408.45 Rs. 1000 do 18,127.40 Rs. Total .. 79,548.45 3. Regarding these remittances, assessee submitted evidence in form of bank account counterfoils issued by Canara Bank and First National City Bank which showed that these amounts were received from Shri K. K. Karani, cousin of assessee, who was residing in Spain. However, these remittance came from Miami, New York, Los Angles and London. Thus, there was no doubt that these amounts actually came from abroad to assessee. assessee s explanation before ITO was that these amounts were sent by his cousin to be held on his behalf for purpose of purchasing house property for use of remitter. This explanation was given by assessee in his letter dt. 24th March, 1979. It was explained that remitter expected fall in price of flats and so, did not immediately go in for purchase of flat. Hence, these amounts were deposited by assessee in fixed account. understanding all along was that money was held by assessee on behalf and for benefit of his cousin. It was only interest which accrued on said fixed deposit that assessee showed as his own income and paid tax thereon in order to avoid complications. It is true that, subsequently, sum of rupees one lakh had been drawn by assessee from his bank account for purchase of flat in name of his son. But it is to be noted that there was sufficient balance left behind in bank to cover amount received from his cousin. In other words, amount sent by his cousin always remained intact n d was never used for any of purposes of assessee himself. It so happened that his cousin was present in Bombay and he swore affidavit on 15th Oct., 1975. In this affidavit, Shri Karani affirms that he had sent aforesaid amounts to assessee. ITO, however, did not accept above explanation of assessee as satisfactory. According to him, these amounts totalling Rs. 79,548 really represented income of assessee. For arriving at this conclusion, he relied on following facts: When, remittance was received on 26th Oct., 1975, assessee credited it to fixed deposit account on same date. Secondly, though purpose of remittance in certificates issued by banks was not mentioned, it was stated to be to buy flat. Thirdly, Shri K. K. Karani being immigrant needed prior permission of Government of India to acquire immovable property in this country and no such permission seemed to have been taken. Further, though Shri Karani lived in Spain, he sent money from London and different places in USA. In this view of matter, he assessed sum of Rs. 79,550 as undisclosed income of assessee. 4. assessee appealed to CIT(A) and contended that action of ITO was not justified. However, CIT(A) confirmed action of ITO on ground that assessee could not prove source of amounts deposited i n his bank account satisfactorily. In particular, he pointed out that Shri K. K. Karani had not stated source from which he got money under consideration. According to CIT(A), it was assessee who owned and enjoyed money received by him from abroad. In this view of matter, he confirmed assessment and dismissed assessee s appeal. 5. Shri D. M. Harish, ld. Representative of assessee urged before us that Revenue authorities erred in their decision. He stated that facts of this case have either been mis-stated or have not been properly appreciated by Revenue authorities. To being with, he pointed out that fixed deposits were not made on same day on which they were received from abroad but after several months. He pointed to p. 8 of his paper book in this connection, which represented certificate from Canara Bank where fixed deposit was made. He urged that mere fact that assessee put certain amounts in fixed deposit did not invalidate explanation that money was received by him from abroad, specially when there was evidences to show that money came from abroad through recognised banking channels. He pointed to certificates given by bank placed at pp. 3, 4, 5 and 6 of paper book. Secondly, he urged that banks had certified money as having been received from abroad. column in certificate regarding purpose of remittance was required for purpose of satisfying authorities of country from which money was sent and, so, they were not necessarily to be stated by bank in country where money was received. In any case, he urged that omission by Indian banks to state purpose could not lead to conclusion that no money was received from abroad. Thirdly, he stated that Shri K. K. Karani was Indian citizen holding Indian passport and, so, it was not necessary for him to obtain prior permission of Government or Reserve Bank of India to acquire immovable property in India. He referred to exchange control facilities for investments by non-resident Indians at p. 42 of paper book, which clearly stated that non residents holding Indian passports did not require Reserve Bank of India s approval for acquiring assets in India. Regarding fourth point raised by ITO, he referred to letter written by CIT(A) to Shri Karani and reply of Shri Karani thereto. Copies thereof are found at pp. 13B to 18 of assessee s paper book. He took up through this letter which reads as below: "2. ...........I am to request you to kindly forward reply to me on points indicated below at your earliest convenience: (a) Did you give these drafts to Shri N. J. Mansinghani ? (b) That was nature of amount paid by you to Shri N. J. Mansinghani ? Was it loan ? Was it gift ? Was it repayment of loan ? (c) In case amount was sent for some purpose, please indicate purpose. (d) Was amount sent by post or draft given to Shri N. J. Mansinghani personally at Bombay ? (e) Has amount since been received back by you ? (f) Have you ever claimed amounts from Shri N. J. Mansinghani : Whether verbally or by letters in writing ? Please give details. (g) You are carrying on business in Spain. How was it that amounts which you gave to Shri N. J. Mansinghani were in form of cheques/drafts issued by banks situated for away at Los Angeles, London and Miami Beach ? Did you have any business transaction with these banks ? (h) What is source from which amount of Rs. 79,548 was sent by you? If source is accounted for in books of accounts, can you give details of same? (i) Did payment of said sum of Rs. 79,548 represent any transaction in nature of business ? If so, kindly give details." answers given by Shri Karani are as below: "Regarding your points, I have to say as follows: (a) Yes, I have sent these cheques/drafts to Shri N. J. Mansinghani. (b & c) It was not by way of loan. I wanted to purchase house property at Bombay Fort. For that pur es I sent amount. I am Indian national holding Indian passport as such for purchasing house property I do not require permission of Reserve Bank. It was not gift nor repayment of loan. It was sent for specific purpose and till that purpose is achieved Shri N. J. Mansinghani is holding said amount on my behalf. (d) drafts were sent by post. (e) No, I have not yet dropped idea of purchasing huse property. Therefore, I have not asked Shri N. J. Mansinghani to return amount. (f) In view of answer to (e) question does not arise. (g) Yes. (h) From my business income. In Los Palmas it is not necessary to keep books of account. (i) No." 6. He pointed out that Shri Karani had clearly stated that he had sent four amount out of his business income and that he sent those amounts from four different places because he had business connections at those four places. Thus, Shri K. M. Harish pointed out that none of grounds given by Revenue authorities was tenable to support addition made by ITO. Further, he pointed out that assessee was consistently showing amounts received from Shri Karani as debt due to him in his wealth tax returns (vide pages 10 and 11 of paper book). He explained that assessee had to show these asset sin his wealth-tax returns as they appeared his bank account and only way to avoid wealth-tax on said amounts, which did not really belong to him, was to show it as debt due to real owner. He stated that this position had been accepted in wealth-tax assessments. Under circumstances, he urged that there was no case for assessing amounts received from abroad as assessee s income from undisclosed sources. 7 . Shri Prem Kumar, ld. Departmental Representative on other hand, supported order of CIT(A) and reiterated arguments given by ITO as well as CIT(A) in their respective orders. According to him, Shri Karani had no where stated source from which he brought money which he sent to assessee and, so, same was rightly taxed in hands of assessee. 8. We have considered contentions of both parties as well as facts on record. In our opinion, contentions of assessee carry force. There is evidence to show that money actually came from abroad. remitter has confirmed remittance which came through recognised banking channels. Apart from affidavits sworn by Shri Karani, enquiries made by CIT(A) at appellate stage also confirm explanation of assessee. Thus, here can be no doubt that money came from abroad. assessee has not enjoyed or treated money as his own. There are enough funds in his bank account which cover money held by him on behalf of Shri Karani. fact that money under consideration belonged to Shri Karani has been accepted in wealth-tax assessments of assessee. Under circumstances, we see justification to treat sum of Rs. 79,550 as income of assessee. We, therefore, delete same from total income of assessee. 9. In result appeal is allowed. *** N. J. MANSINGHANI v. SEVENTH INCOME TAX OFFICER