The case of the Assessee was selected for Limited Scrutiny on the issue that Double Taxation Relief was claimed under sections 90/91 of the Income-tax Act, 1961 and the Assessee was holding foreign assets.

During the course of assessment proceedings, the Assessing Officer noticed that the Assessee had made investments in foreign assets on behalf of his two minor daughters in the shares of a foreign company, namely Clonberg Holding Ltd., amounting to Rs. 1,64,61,100/- and Rs. 1,66,78,642/- respectively.

The Assessing Officer further observed that the Assessee had claimed Double Taxation Relief under sections 90/91 of the Act. The assessment order dated 06.12.2019 was passed making an addition of Rs. 3,31,42,742/- under section 69 of the Act in respect of investments in the shares of a foreign company in the names of the minor daughters, namely Nanki Parvinder Singh and Nandini Parvinder Singh. The Assessing Officer also denied credit of foreign tax paid in Singapore amounting to Rs. 23,02,920/- and invoked the provisions of section 115BBE of the Act.

Aggrieved, the Assessee preferred an appeal before the CIT(A), who granted relief on both issues. The Revenue carried the matter in appeal before the Tribunal.

The learned Departmental Representative contended that the CIT(A) granted relief merely on the basis of the ITR and argued that the Assessee had not established the source and mode of purchase of the foreign investments.

The Delhi Bench of the ITAT held that the Assessee had filed Form No. 67 as well as a revised return within the stipulated time prescribed under Rule 128 of the Income-tax Rules for claiming Foreign Tax Credit, and therefore the Assessee was eligible for relief under sections 90/91 of the Act. The Tribunal noted that the Assessee was a large taxpayer with a returned income of Rs. 26.80 crores for the relevant assessment year, inclusive of income of the minor daughters.

The Tribunal further observed that the Assessee had disclosed the investments made in the names of the two minor daughters in the original return of income itself and had furnished the Indian bank accounts reflecting the said investments. Considering the level of returned income, the Tribunal held that there was no doubt regarding the source of investment of Rs. 3.31 crores.

It was also noted that the Assessee had provided complete details of foreign assets and bank accounts held by the Assessee as well as by the minor daughters in India and abroad. With respect to the Double Taxation Relief, the Tribunal recorded that the Assessee had furnished a detailed statement showing tax paid in Singapore and the corresponding tax payable in India on such income, and the same income had been offered to tax in India.

The Tribunal upheld the findings of the CIT(A) that Form No. 67 and the revised return were filed within the prescribed time limit and that income cannot be subjected to tax twice. Accordingly, the Tribunal directed the Assessing Officer to grant relief under sections 90/91 and to delete the disallowance.

Held in favour of the Assessee.

Case: DCIT v. Malvinder Mohan Singh
Citation: [TS-1637-ITAT-2025 (DEL)]
Assessment Year: 2017-18
Date of Judgment: 10.12.2025