IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1161 OF 2007 PURSHOTTAM KHATRI Appellant(s) VERSUS COMMISSIONER OF INCOME TAX, BHOPAL, MADHYA PRADESH Respondent(s) O R D E R present appeal is by assessee on account of fact that High Court has, by impugned judgment dated 25.01.2006, set aside reasoned order of Appellate Tribunal, in which Appellate Tribunal, after looking at exchange vouchers and other evidence produced by assessee, held that entire sum of $7,55,534 is explained, as result of which, sum of $3,14,534 equivalent to Rs.1,03,49,720 could not be held to be unexplained deposits. Appellate Tribunal insofar as this aspect of matter is concerned held as follows: 13. With regard to that foreign currency, shown to have been brought in India by assessee, for which no declaration forms were available, we have perused foreign currency exchange vouchers and find that Signature Not Verified these exchange vouchers were issued few days prior to Digitally signed by R NATARAJAN date of arrival of assessee in India. Since Date: 2019.07.20 11:42:52 IST Reason: date of exchange vouchers co-relates with date of arrival of assessee, contention of assessee that foreign currency shown in 1 CIVIL APPEAL NO. 1161 OF 2007 currency exchange vouchers was infact brought to India by assessee during his visit, also appears us to be plausible but AO while working out unexplained deposits of dollars, has totally ignored fact of availability of foreign currency exchange vouchers and has not allowed credit of this much of foreign currency brought to India. He has simply allowed credit of 10,000$ per visit till June, 1995 and thereafter 2500$ without bringing anything on record that assessee did not bring foreign currency shown in exchange vouchers to India at time of his visit whereas visitor to India is required to surrender declaration form before customs authorities at time of his departure from India if he wishes to carry any unutilised foreign currency with himself. In these circumstances, possibility that assessee might have brought some foreign currency alongwith himself while leaving India and for which he had surrendered declaration forms to customs authorities, is not ruled out. common man will not anticipate that in years to come he would be searched by income tax authorities and he would be required to produce all evidence through which he has brought foreign currency which is not chargeable to tax in India. Since assessee has earned foreign currency outside India, which is not chargeable to tax in India, same should not be viewed with evil eye whenever it is being brought to India through lawful means. learned counsel for assessee has prepared complete details of foreign currency which was brought to India on different occasions in forms of cash and travellers cheques appearing at page nos. 308 and 309. details given in chart are not objected to by revenue. It is obvious from details given at pages 294, 308, 309 and 310 that 7,55,534$ were deposited in banks and invested in FDRs. While working out unexplained deposits, AO has only given credit of 4,41,000$ and treated $3,14,534 which are equivalent to Rs.1,03,49,720/- as unexplained deposits. learned counsel for assessee has submitted that if availability of 2,21,800$ brought to India for which declaration forms were available between 25.10.1982 to 2.12.1987 with assessee is accepted, credit of $2,21,800/- is required to be given from unexplained deposit of 3,14,534$. Our attention was also invited to fact that if foreign currency shown in foreign exchange vouchers is considered to have been brought in India, credit of 2,36,000$ 2 CIVIL APPEAL NO. 1161 OF 2007 should also be given against so called deposited dollars. If credits of aforesaid foreign currency is given, there would be excess balance of $1,43,266 with assessee which was utilised and brought back by him at time of departure from India and for these reasons declarations form of certain dollars were not available with assessee as same were required to be produced before customs authorities at time of departure. Besides, our attention was also invited to fact that pounds brought to India by assessee were either retained by assessee or utilised by him and none else. 14. We have carefully examined details furnished by assessee in light of his submissions and find that since revenue has not brought anything on record to demolish stand of assessee and to prove that dollars brought between 25.1.1982 to 2.12.1987 were not available with assessee for deposit in bank nor did he bring that much of foreign currency which was shown in exchange vouchers but was not supported by declaration forms, stand of assessee is acceptable to us. More so, when there is no iota of evidence with regard to utilisation of dollars brought by assessee between 25.10.1982 to 2.12.1982 due credit of (2,21,800$ + 2,36,000$ = 4,57,800$) should have been given while determining unexplained deposits of dollars. 15. Keeping in view totality of facts and circumstances of case we are of considered opinion that assessee has brought $9,08,800 besides pounds out of which he has deposited $7,55,534 in his NRE accounts. Out of this deposit, assessee invested $40,575 in FDRs. balance $1,43,266 was either utilised in India for different purposes or taken back by assessee while leaving India. Since assessee has duly explained source of deposits of dollars in FDRs and NRE accounts, he should not be penalised for minor discrepancies pointed out by revenue though these discrepancies were clarified by assessee in its chart appearing at page 308 to 310 of compilation of assessee. We also agree with alternative argument of assessee that for violation of FERA, assessee may be penalised in that act but fact that assesseee brought foreign currency in India and retained it for longer period cannot be ignored while determining unexplained deposit of dollars. 3 CIVIL APPEAL NO. 1161 OF 2007 We, thereafter, delete addition made on account of unexplained deposit of dollars. impugned judgment has added as unexplained income sum of Rs.1.03 crores, as aforesaid, basically on ground that assessee has been unable to present declaration forms that had been filled in by him at time of his visits to India from abroad. Keeping in mind fact that these declaration forms were asked for long after such expenditure had, in fact, been incurred, it cannot possibly be said that Appellate Tribunal s judgment and findings therein are perverse, which is only entry on facts for High Court exercising its appellate jurisdiction under Section 260-A of Income Tax Act, 1961. Having heard learned counsel for both parties, we are clearly of view that High Court ought not to have interfered with Appellate Tribunal s Judgment as no substantial question of law arose therefrom. Accordingly, we allow appeal and set aside judgment of High Court and reinstate that of Appellate Tribunal. ., J. [ ROHINTON FALI NARIMAN ] ., J. New Delhi; [ SANJIV KHANNA ] July 09, 2019. 4 CIVIL APPEAL NO. 1161 OF 2007 ITEM NO.102 COURT NO.5 SECTION IV-A S U P R E M E C O U R T O F I N D I RECORD OF PROCEEDINGS Civil Appeal No. 1161/2007 PURSHOTTAM KHATRI Appellant(s) VERSUS COMMISSIONER OF INCOME TAX, BHOPAL, MADHYA PRADESH Respondent(s) Date : 09-07-2019 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN HON'BLE MR. JUSTICE SANJIV KHANNA For Appellant(s) Mr. Akshat Shrivastava, Adv. Ms. Pooja Shrivastava, Adv. Ms. Manjeet Kirpal, AOR For Respondent(s) Mr. Vikramjit Banerjee, ASG. Mr. K. Radhakrishnan, Sr. Adv. Mr. D. L. Chidananda, Adv. Mr. Vaibhav Chadha, Adv. Mr. Shubhend Anand, Adv. Mr. Sarthak Raizada, Adv. Mrs. Anil Katiyar, AOR UPON hearing counsel Court made following O R D E R appeal is allowed in terms of signed order. (NIDHI AHUJA) (RENU DIWAN) COURT MASTER (SH) ASSISTANT REGISTRAR [Signed order is placed on file.] 5 Purshottam Khatri v. Commissioner of Income-tax, Bhopal