TMI Blog2018 (2) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 15-2-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O. P. KANT, ACCOUNTANT MEMBER For The Appellant by: Shri V. K. Bindal, Adv. For The Respondent : Smt. Aparna Karan, CIT (DR) ORDER PER AMIT SHUKLA, J.M.: The aforesaid appeals have been filed by the Assessee against the separate impugned order dated 11.08.2017, passed by the ld. CIT(Appeals)-29, New Delhi, for the quantum of assessment passed u/s.153A/143(3) for the Assessment Years 2006-07 2007-08. Since issues involved in both the appeals are common, arising out of identical set of facts, therefore, same were heard together and are being disposed of by way of this consolidated order. 2. We will first take up the appeal for the Assessment Year 2006-07, wherein following grounds have been raised. 1. The impugned appellate / assessment orders are bad in law and on facts as those have been passed disregarding the codified law and as has been laid down by the jurisdictional courts besides ignoring the submissions of the appellant before the said authorities. Thus, the impugned orders of the authorities below must be annulled. 2. The CIT(A) erred in law and on facts in confirming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that the impugned assessment framed in pursuance to show cause notice issued to a Permanent Account Number not belonging to ne appellant vitiates the assessment. Accordingly, the assessment itself is invalid and non-est which should be cancelled. 9. That the allegation of the assessing officer that the assessee has not complied with notice issued u/s 142(1) of the Income-tax Act, 1961 on 18th July, 2013 is contrary to the facts of the case and deserves to be expunged. 2. At the outset, ld. counsel for the assessee, Shri V.K. Bindal first pressing the legal issue raised vide ground no. 5, submitted that here in this case, the addition which has been made by the Assessing Officer is not based on any incriminating material found during the course of search, and therefore, no addition could have been made in the assessment framed u/s.153A/143(3) for the impugned Assessment Year, as on the date of search, i.e., 20.01.2012, the assessment for the Assessment Year 2006-07 was not pending and had attained finality. Accordingly, in view of the various judgments of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner or the other, like; * Portland Holding Ltd., where in the account of the said entity, assessee was shown as one of the beneficial owner of the account; * Shagun-21, wherein the assessee has been shown as person having right of inspection; * Willaston Investments Ltd., wherein the assessee has been found to be related to this account being beneficial owner; and * Chotuman-1, wherein again the assessee has been shown as account holder in the bank account relating to this entity. The total amount which stood deposited in these bank accounts for the relevant financial year, aggregated to ₹ 27,91,72,017.47, the details of which are as under:- Assessment Year 2006-07 CHOTUMAN 21 (EX CHOTUMAN UNTIL 25.11.2005) USD 4,424,363.05 SHAGUN 21 (EX SHAGUN UNTIL 25.11.2005) USD 754,748.52 WILLASTON INVESTMENT LIMITED USD 1,773.43 PORTLAND HOLDINGS LTD USD1,099,700.00 Total USD 6,280,585.32 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q.2 During the course of search and seizure operation and post search proceedings, your statements were recorded by the Authorized Officers of the Department on 20.01.2012 and 21.01.2012. Please confirm that the statements recorded were signed by you after taking oath? Ans. Yes I confirm that my statement was recorded which was signed by me after taking oath. Q.3 During the course of search dated 20.01.2012 at your residential premises, you were shown a copy of your bank statement with HSBC Switzerland by the search team in which details of the client profiles linked to you were given with maximum amount lying with the bank. On this you denied to have anything to do with that. Please confirm the same and give your comments. Ans. I don't have any account with HSBC Switzerland. Q4 As per the information recorded in the bank document which was shown to you during the search on 20.01.2012 and 21.01.2012 the date of creation of this account is 12.11.2000. Were you in Switzerland in F.Y 2000- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with HSBC what have you done to find out the veracity of the document/information? Ans. I have done nothing. Q.12 Have you made any communication with HSBC bank pertaining to this account after the date of search? Ans. No. Q.13 Have you made any communication with any agency/bank/institution, other than HSBC Geneva pertaining to this bank account? Ans. No, I haven't. Q.14 Have you filed any case civil/criminal against HSBC bank or any other person/institutions relating to this bank account? Ans. No. Q.15 Have you signed any document or authorized anyone to sign any document relating to the following:- (i) Portland Holding Limited (ii) Shagim 21(Ex Shagun until 25.11.2005.) (iii) Wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the details will be given to you in due course. However, no such details has been furnished by you as on date. What do you have to say? Ans. I will checkout how it has been left and I can furnish the details within a week. Q.22 On your statement recorded during the search on 21.01.2012 you were requested to furnish the details including the address, email id etc of Mr. Stapfer Walter. In your reply you have stated that whatever the details I have will be given later. However, no such details have filed till date. What do you have to say? Ans. I have checked and I don't have any details of the above person. Q.23 On your statement recorded during the search on 21.01.2012 you were requested to state whether you were present in Switzerland on 04.02.2005 and if yes, furnish the purpose of the visit. In your reply you have stated that I don't remember but will try to find out will furnish if available. However, no such details have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Mr. Vivek Chaddha, a school friend of yours, as per the hank account details shown to you during the search Mr. Vivek Chaddha has been shown as the account holder in Shagun 21. You have been shown as the beneficiary/having a right of inspection in this account. After coming to know of this have you made any communication with Mr. Chaddha to find out the veracity of the bank details shown to you ? Ans. I haven't been shoiun any account of Mr. Vivek Chaddhar Q.28 On your statement recorded during the search on 21.01.2012 you have stated that Mr. Bhavnesh Chaddha, is a school friend of yours. The name of Mr. Bhavnesh Chaddha is appearing as an attorney in Shagun 21, one of the accounts in which you are a beneficiary/ having a right of inspection. After coming to know of this have you made any communication with Mr. Bhavnesh Chaddha to find out the veracity of the bank details shown to you? Ans. I was not shown the account of Shagun 21. Q.29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore him on 24.11.2014. Ans. We were not informed about this fact. Q.36 As per law when the summons for personal appearance were issued you were required to appear in the office of the Officer in-charge of Central Circle-2/26, New Delhi. Had you or your counsel would have come to the said office you would have come to know that Mr. Sanjay Kumar is sitting there and the office was functioning normally. In view of the above, your submission filed vide letter 25.11.2014 appears to be incorrect and the fact of your appearance on 24.11.2014 is not substantiated at all. Are you trying to intentionally take the department granted and obstruct the process of investigation in your case. Ans. I am not trying to obstruct the investigation as I have appeared today in compliance to the summons and for that date my counsel advised me as informed above. Q.37 Do you want to say anything else? Ans. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case laws relied upon by him and perused the assessment order/remand reports of the AO. I find that an information was received from the French government under DTAA/DTAC between India and other countries that the appellant was having four bank accounts in/HSRC Bank Geneva, Switzerland details of the same are mentioned by the AO in the assessment order in detail. 9.2 On the basis of information received a search action was carried out on 20.01.2012 at the premises of the appellant. It is a settled law that any evidence available howsoever collected or receipt is a valid material/evidence so long as it is relevant information related to the person against whom it is utilized as has been held by the Hon'ble Supreme court in the case of Pooran Mal Etc. vs. Director of Inspection (1974) 93 ITR 505 wherein, it has been held that even if the search was illegal the material found and seized would be liable to be used against the person from whose custody it was seized. 9.3 I find that the statement has been recorded on the basis of good and cogent material considering the specific information contained in the corroborative bank statements. I hold that the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 20.01.2012. * Thirdly, he has held that even if the material is not found from the search proceedings, then also it is a settled law that any evidence available in whatsoever manner is a valid material so long as it relevant information relating to the person against whom it is utilized. * Fourthly, the statement recorded at the time of search itself constitute incriminating material within the meaning of Section 153A, and therefore, assessment made u/s.153A is not in conflict with the judgment of Hon'ble Delhi High Court in the case of Kabul Chawla (supra); and * Lastly, he held that decision of the ITAT Delhi Bench in the case of Shyam Sunder Jindal in ITA No.5448/Del/2016, wherein the matter was set aside to the file of the Assessing Officer would not be applicable, because in the present case remand reports were called for on various issues and proper opportunity has been given to the assessee to file rejoinder and assessee has been confronted with the authentic document, i.e., the information received from the French Authorities with regard to the bank accounts in HSBC Geneva. He also referred to the judgment of Hon'ble Delhi High Court in the case of Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer cannot be sustained and deserves to be quashed being beyond the scope of assessment u/s.153A for the impugned assessment year. 9. On the other hand, ld. CIT-DR, submitted that, here in this case information has been received from the foreign authorities under DTAA and those information categorically goes to show that assessee was not only beneficial owner of the bank accounts of HSBC, Switzerland but his name also appears on those documents sought from foreign authorities under DTAA. The entire data extracted from USB pen drive, was handed over by French competent authority on 28.06.2011 to the Government of India which again has been handed over to respective DGIT (Inv.). It was on the basis of these information, Investigation Wing of the Department has carried out search in the case of the assessee and its group cases. During the course of search, assessee though have denied any such foreign bank account, but once the assessee was so sure that he is not the beneficiary or the owner of these bank accounts, then assessee should have signed the waiver consent letter for further investigation in respect of bank account held in HSBC bank. This itself goes to show that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is beyond the scope of assessment u/s.153A. Hence the matter should not be restored back to the file of the Assessing Officer. 12. We have heard the rival submissions, perused the relevant material placed on record and the finding given in the impugned order with respect to legal issue raised vide ground no.5 by the assessee that the additions made in this year are beyond the scope of assessment u/s.153A, as no incriminating material was found during the course of search for the impugned Assessment Year; and the assessment had attained finality and was not abated in terms of 2nd Proviso to Section 153A. As stated above, the original return of income was filed in July, 2006 and said return was duly accepted and processed u/s. 143(1) vide intimation dated 25.05.2007. Since no notice u/s. 143(2) was issued thereafter or any other proceedings have been commenced to disturb said return of income, accordingly, it had attained finality much prior to the date of search which was on 20.01.2012. Hence in terms of 2nd Proviso to Section 153A the assessment for the Assessment Year 2006-07 was not pending and accordingly, has to be reckoned as unabated assessment. Under the jurisdiction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd or seized during the course of search and seizure action so as to remotely suggest that either the assessee was having any bank account in Switzerland with HSBC or assessee was any way linked to these bank accounts. In the statement recorded u/s. 132(4) the assessee had categorically denied having such bank accounts or having any link with the bank accounts of such entities. No material or evidence was found to rebut the denial statement of the assessee. Apart from that, even during the course of the assessment proceedings when statement was recorded by the AO, assessee continued to deny such kind of transaction and even at the stage of the assessment proceedings the Assessing Officer did not confront with any material which can be said to have been recovered from the possession of the assessee in the course of search with regard to the deposits or any kind of link in the foreign bank accounts. The ld. CIT (A) in the impugned order also (which has been incorporated above) has not held that any document or evidence qua any link with the foreign bank accounts has found during the course of search, albeit he has given a finding that to the effect that it was on the basis of the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow link to these bank accounts. However whatever may be the incriminating information which can implicate assessee but the said information has been received as a result of search carried out on 20.01.2012. Once any document which though is in the nature of incriminating material but if it has not been found in the course of search, then in view of the principle laid down by the Hon'ble Jurisdictional High Court in several cases, such an addition cannot be roped in the assessment u/s.153A especially in the assessments which are not abated. If the Revenue had any incriminating material antecedent to the search, that is, it was found during the course of search or as a result of search, then in that case Revenue had various other courses of action left under the provisions of Income Tax Act, but certainly not within the ambit and scope of Section 153A read with 2nd proviso thereto. 15. Now coming to the ratios laid down by the Hon ble Jurisdictional High Court, first of all, in the case of Kabul Chawala (supra), the Hon'ble Court after discussing the issue threadbare and analysing the various judgments of different High Courts laid down the following legal proposition in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. This judgment of the Hon'ble Delhi High Court has been followed in several judgments not only by the Hon'ble Delhi High Court but also by other Hon'ble High Court like, Pr. CIT vs. Somaya Construction Pvt. Ltd. 387 ITR 529 (Guj), CIT vs. IBC Knowledge Park Pvt. Ltd. 385 ITR 346 (Kar) and CIT vs. Gurinder Singh Bawa reported in 386 ITR 483. In the latest judgment the Hon'ble Delhi High Court in Pr. CIT vs. Meeta Gutgutia, their Lordships reiterated the same principle after discussing and analyzing catena of decisions including that of Anil Kumar Bhatia (supra) and Dayawanti Gupta. The Hon'ble High Court observed and held as under:- 62. Subsequently, in Principal Commissioner of Income Tax- 1 v. Devangi alias Rupa {supra), another Bench of the Gujarat High Court reiterated the above legal position f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was found during the search conducted u/s 132 of the Act. We, therefore, express no opinion as to whether Section 153A can be invoked even in such a situation. That question is therefore left open. Hence, the reliance placed by the Learned CIT-DR on this judgment is wholly misplaced. 18. Post the judgment of Meeta Gutgutia (supra), also the same principle have been reiterated in the case of PCIT vs. Best Infrastructure (India) Pvt. Ltd. (supra), wherein the Hon'ble High Court held that during the course of search, statement recorded u/s. 132(4) by themselves does not constitute incriminating material and assumption of jurisdiction by the Assessing Officer u/s.153A solely based on statement is unsustainable when there is no incriminating material found during the course of search. Again in the case of PCIT vs. Dharampal Premchand Ltd., in ITA No.512 to 514/206, the Hon'ble Delhi High Court held that ratio laid down in the case of Kabul Chawla, Meeta Gutgutia, still holds ground and the Revenue s contention that the matter should be referred to a larger bench was turned down. Apart from these judgments, there are catena of other judgments of other High Courts layin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion available with the department needs to be corroborated and needs to be further inquired into. Under these circumstances also in our opinion same cannot be done within the scope of Section 153A as we have already held that nothing has been found from the assessee during the course of search, which can preempt any post search inquiry. Albeit in abated assessments AO may have power to conduct further inquiry but not in case of unabated assessments. 21. Now coming to the decision of the Tribunal in the case of Shyam Sunder Jindal vs. CIT (supra), the Hon'ble Tribunal had set aside the matter to the file f the Assessing Officer for the reason that there were certain contradictory observation made by the Assessing Officer as the requisite information from the Swiss Bank has not been received and therefore, the matter was to be adjudicated afresh after giving proper opportunity to the Assessing Officer. Here in this case, apparently no such contradiction appears to be there in the assessment order and in any case when on jurisdictional issue, we have held that such an addition itself is beyond the scope of Section 153A and for coming to this conclusion whence already the founda ..... X X X X Extracts X X X X X X X X Extracts X X X X
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