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14. The second substantial question of law formulated by the Court for decision in this appeal is as follows :

Whether, on the facts and circumstances of the case, the learned Tribunal was justified in law in deleting the addition of Rs. 1,45,000 made on account of interest earned on unexplained deposits in the NRE bank account of the assessee even when such interest was not exempt in view of the provisions of Section 10(4)(ii) of the IT Act?

In para 32 of the impugned order, the Tribunal, after perusing the provisions of Section 10(4)(ii) of the Act, has held that since the deposits of dollars in the NRE accounts was duly explained by the respondent and his explanation has been accepted by the Tribunal, the interest accrued thereon is not chargeable to tax in view of the provisions of Section 10(4)(ii) of the Act.

Provided that such individual is a person resident outside India as defined in Clause (q) of Section 2 of the said Act or is a person who has been permitted by the RBI to maintain the aforesaid account:

Provided further, that nothing contained in this sub-clause shall apply to any income by way of interest paid or credited on or after the 1st day of April, 2005 to the non-resident (external) account of such individual.

It will be very clear from the aforesaid provision that income by way of interest on moneys standing to the credit of an individual in his NRE account in any bank in India in accordance with the FERA and the rules made thereunder shall not be included in the total income of the assessee for purposes of the Act. We have already held that Section 13 of the FERA put restrictions on the import of foreign currency into India and that foreign currency beyond the prescribed limits could only be brought into India by visitors only by furnishing foreign currency declarations at the time of arrival in India. No material has been placed before the Tribunal or before us to show that such declarations were required to be surrendered to the bank in which the foreign currency was to be deposited. Rather, several foreign currency declarations have been produced before the AO to explain the foreign currency deposits made by the respondent in his NRE accounts in the bank which shows that the declarations were not surrendered to the bank at the time of depositing the foreign currency. We have also held that foreign currency declaration forms were not required to be surrendered to the Customs authorities by a visitor at the time of leaving India if he was to take back any unutilized balance of the foreign currency shown in the declaration made at the time of arrival in India. Hence, the foreign currency for which no declarations have been produced by the respondent but only exchange vouchers issued by the exchange centres outside the country were produced, even if deposited in the NRE accounts cannot be said to be moneys standing to the credit of the respondent in the NRE accounts in accordance with the FERA and the rules made thereunder and the income by way of interest on such moneys is not exempt from inclusion in total income of the respondent under Section 10(4)(ii) of the Act. The Tribunal was thus not justified in deleting addition of the interest earned on foreign currency deposits in NRE bank account of the assessee beyond the limits prescribed by notifications issued under the FERA for which no declaration was produced by the assessee before the AO or the Tribunal.