TMI Blog2016 (4) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition is, therefore, deleted.- Decided in favour of assessee. - ITA Nos.4802 to 4806/Del/2015, CO Nos.266 to 269/Del/2015 - - - Dated:- 22-2-2016 - SHRI J. SUDHAKAR REDDY, AM AND SHRI SUDHANSHU SRIVASTAVA, JM For The Assessee : Shri Ajay Wadhwa, Advocate For The Department : Ms Nirupama Kotru, CIT, DR ORDER PER BENCH: All these appeals filed by the Revenue are directed against the common order passed by the CIT(A)-23, New Delhi, dated 1.5.2015 for the assessment years 2006-07, 2007-08, 2008-09 2009-10 and order dated 25.05.2015 for the assessment year 2012-13. The Cross Objections are filed by the assessee. 2. As the issue arising in all these appeals are common, for the sake of convenience they were heard together and disposed of by way of this common order. 3. The facts of the case as brought out at para 3.1 3.2 of the order of the CIT(A) is extracted for ready reference:- 3.1 Background of the matter is that in April 1 May, 2011 India received information from a foreign government under the relevant Double Taxation Avoidance Agreement (DTAA) that certain Indian passport holders had opened and maintained bank accounts with Hongkong S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which have been admitted. In the case of Late Dr. M V Rao, cash amounting in all to ₹ 7.69 crore was found in different bank lockers in Delhi held by his wife Smt. M Swarnalata and niece Ms. K Padmarani, out of which ₹ 7.60 crore was seized. One of the entities linked to the bank account with HSBC, Geneva, is M/s Clair Consultants Ltd., a company incorporated in the British Virgin Islands, a tax haven. There was a remittance of US $30,000 at the instance of this company from Deutsche Bank, Singapore to the NRO / NRE account of Sh. M Venu, son of Late Dr. Rao, maintained with Deutsche Bank, New Delhi. Thus, maintenance of foreign bank account and seizure of large amounts of cash (i.e. ₹ 2 crore in 2007 and ₹ 7.6 crore in 2012, totaling ₹ 9.6 crore), led to an inescapable conclusion that Dr. Rao was beneficiary of some business activities / transactions which he was not disclosing in the tax returns filed with the Department and was also avoiding paying due taxes thereon. Two writ petitions filed by Sh. M Venu, NRI son of Dr. Rao, against the action u/s 132 and consequent proceedings under the Act, were also dismissed by the Hon'ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that amounts kept by the appellant in his foreign accounts or capital brought by him into India are proceeds of such commission would be premature and presumptious. Thus, even if it is concluded that the amounts kept in the HSBC account belongs the appellant, it cannot be subjected to tax as income accrued or arisen in India unless requisite evidence is collected. I hold accordingly. 9. Relying on the judgement of the Hon ble jurisdictional High Court in the case of Kabul Chawla in ITA No.707/2014, it was submitted by the ld. AR that no incriminating material was unearthed during the search relating to the alleged HSBC account and, therefore, no addition could have been made to the income already assessed. 10. It was also submitted that the issue involved for these years is even otherwise covered by the judgement of the Hon ble Delhi High Court dated 25.02.2013, in ITA Nos.85/2013, 100/2013 and 87/2013 in the assessee s own case for AYs 2001-02, 2002-03 2003-04, wherein the assessee was held to be an NRI and deleted the addition in respect of the assessee s bank in Singapore holding that in absence of any evidence of accrual or receipt of income in India, foreig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relied on the order of the AO and supported the same. 13. After hearing the rival submissions and perusing the material on record, particularly, the judgements/orders cited by the ld. AR, we find that the common issue as mentioned above, involved in the appeals for the AYs 2006-07 and 2007- 08 are squarely covered by the judgements/orders cited by the ld. AR (supra) in favour of the assessee. The ld. DR could not controvert the factual finding of the ld.CIT(A) that the AO had not brought on record any evidence to link the money brought into India or kept in foreign accounts by the assessee have a link with any Indian defence contract payment. The income has not accrued or arisen in India. We therefore, uphold the orders of the CIT(A) on this issue. 14. In so far as the reliance on Kabul Chawla (supra) is concerned, since the deletion of addition has been upheld, there is no need to examine the instant issue in the light of the decision on Kabul Chawla (supra). 15. Consequential addition of interest, on amounts outstanding in ILORA (HSBC) account on presumptive basis by the AO has been rightly deleted by the ld.CIT(A). Thus, the grounds of the revenue on this issue for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. The ld.CIT(A) held as under:- 8.2 The sixth ground of appeal in AY 2007-08 is against addition of ₹ 3,44,18,350/- being the difference between the balance of ₹ 9,81,48,350/- in NRE account of the appellant in Deutsche Bank, India and amount of ₹ 6,37,30,300/- already taxed in the hands of the appellant being entries recorded in documents seized in 2007. The issue of taxability of deposits in Deutsche Bank, Singapore and transfer of funds from the said account to Deutsche Bank, India stands decided in favour of the appellant in the earlier appeals, wherein it was held that money kept in his account at Singapore is not taxable in India. Details are available in the submissions filed by Ld. AR reproduced in Para-4 above. Following the earlier appeal orders, this addition also does not survive and is deleted. This ground of appeal is allowed. 22. The ld. AR made the same submissions and relied on the same judgements/orders as for AYs 2006-07 2007-08 in support of this issue also. 23. We find that this issue is also squarely covered by the judgements/orders of the Hon ble High Court/ITAT cited above while dealing the first common issue for AYs 2006-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e uphold the order of the CIT(A) on this issue also and dismiss the ground of revenue. 28. The common grounds for AYs 2008-09 2009-10 states that the ld.CIT(A) has erred in deleting the addition of ₹ 7,20,000/- made by the AO on account of deemed dividend received. 29. The facts of the case in brief are that Crown Corporation Pvt. Ltd., entered into a commercial agreement with the assessee in respect of property at Som Vihar for which initially an amount of ₹ 7,20,000/- was paid as security deposit to the assessee on 04.03.2008. Subsequently, the said security deposit was refunded on 28.03.2009 to Crown Corporation and the same property was let out to Dynatron Exports Pvt. Ltd., receiving security of ₹ 7,20,000/- on 20.02.2009. Another property, i.e., Sonali Farms was let out to Crown Corporation Pvt. Ltd., on 11.6.2008 and a security deposit of ₹ 50,00,000/- was received. 30. The AO has treated these deposits as deemed dividend being the amount received by the assessee from companies in which he held substantial interest. 31. The ld.CIT(A) deleted the said addition holding as under:- The view taken by the revenue is incorrect inasmuch as this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Cross Objections for AYs 2006-07 2007-08 states that the ld.CIT(A) has erred in upholding the contention of the ld. AO that the onus is on the appellant to establish that the amount kept in HSBC account did not belong to him. 37. We hold that since the addition made on account of the amount found in the HSBC account of the assessee has been deleted, this ground of the Cross Objections has become academic and, therefore, this ground is dismissed as such. 38. Ground No.3 of the Cross Objections for AYs 2006-07 2007-08 states that the ld.CIT(A) has erred in holding that the appellant has admitted to pay tax on the amounts kept in HSBC bank account and therefore all due taxes on the said amounts along with interest thereon are to be realized from the appellant despite the fact that the ld.CIT(A) has himself deleted the addition relating to balances in HSBC account. 39. After hearing the parties and perusing the material on record, we subscribe to the view of the assessee that when the CIT(A) has deleted the additions relating to the balances in HSBC account, the assessee is not liable to pay any tax nor any interest thereon when it is held that this amount cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant in a capital gains deposit account but not utilized within the statutory period of 3 years as required under the law. The facts are undisputed. The appellant did not utilize the amount within the statutory period of 3 years which expired on 26.10.2008. Hence the amount becomes taxable as the Proviso to section 54 comes into operation. The addition has' been correctly made by the revenue and is sustained. This ground of appeal is dismissed. 45. Relying on the judgement of the Hon ble jurisdictional High Court in the case of Kabul Chawla in ITA No.707/2014, it was submitted by the ld. AR that no incriminating material was unearthed during the search and, therefore, no addition could have been made to the income already assessed. It was further submitted that this issue was examined in detail in AY 206-07 consequent to search dated 28.2.2007. After due verification of the transaction, the capital gain was accepted to be correct. It is a matter of record that the total expenditure incurred by the assessee for construction of new house property at Sonali Farms (at Westend Greens, NH-8) far exceeded the capital gains of ₹ 1.58 crores accrued on sale of property a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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