TMI Blog2021 (8) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... income in two A.Ys when the assessee has paid taxes in A.Y 2007 08. Making the addition of same income in two A.Ys definitely amounts to double taxation. We, accordingly direct the Assessing Officer to delete the addition. Interest on the balances in his bank account with HSBC, Geneva - AO assumed that in India a Savings Bank account holder earns interest at the rate of 4%, therefore, applying the same rate, AO made the impugned addition - HELD THAT:- Action of the Assessing Officer defies the taxability of concept of real income. The undisputed fact is that in the alleged sheets of bank deposits received from the French government under DTAC, there is no mention of any interest paid by the bank to the assessee. Therefore, it is illogical to compute interest and that too at the rate prevailing in India. Since there is no documentary evidence to support the presumption of the Assessing Officer, we do not find any reason to interfere with the findings of the ld. CIT(A). - ITA No. 3917 to 3921/DEL/2017 ITA No.6648/DEL/2017 ITA No.6268/DEL/2017 & ITA No.6269/DEL/2017 - - - Dated:- 3-8-2021 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the amount of ₹ 2,26,71,100/- pertaining to balance in the account with HSBC while filing return of income for A.Y 2006 07. The assessee replied vide letter dated 22.01.2014 that income has been declared in A.Y 2007 08 and taxes have been paid thereon. 10. The Assessing Officer, vide letter dated 28.02.2014, requisitioned details of income declared for A.Y 2007 08. Vide letter dated 12.03.2014, the assessee explained that the amount declared in A.Y 2007 08 has been declared at the behest of the tax authorities, basis of which was peak balance as appearing in the sheets of paper shown as having been received from the French Government under DTAC. This letter is exhibited at pages 110 115 of the paper book. 11. During the assessment proceedings, once again the statement of the assessee was recorded and once again he stated that he has no knowledge of any such overseas bank account and once again, pointed out that the alleged peak deposit has been offered for tax in A.Y 2007 08. 12. The Assessing Officer was not convinced and was of the firm belief that peak credit has to be bifurcated into two A.Ys, i.e 2006 07 and 2007 08 and accordingly, he issued a notice da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evity, we would like to highlight only the relevant part of the judgement: 1. This order will decide application u/s 245 (2) Cr.P.C moved by accused Kishan Lai Madhok seeking his discharge in the present case. A detailed reply to the said application was filed by the complainant department, followed by rejoinder by the accused / applicant. 2. The present complaint case is filed u/s 276 C(l) read with Section 277 of Income Tax Act, 1961 for the alleged violation made by the accused during the assessment year 2007-2008. It is alleged in the complaint that an information was received from Government of France under the Double Taxation Avoidance Convention (DTAC) that the accused is a beneficiary in bank account with HSBC Geneva, BUP_SIFIC_PER_ID xxxxxx5582 which is having personal I.D No.xx813, personal no.xxx482 having a peak credit balance of USD $ 40,842 (^18,58,311/- for Assessment Year 2007-08, taking prevailing exchange rate @ of 45.50 i.e. average rate for financial year 2006-2007. It is stated that the copy of information received showed the date of birth and the residential address of the accused. 3. It is stated that after receipt of the information, on 23.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that accused has admitted the fact of opening bank account in his statement u/s 132 (4) of the Income Tax Act. He submits that accused has admitted filing the requisite form for opening of bank account and he has also mentioned the name of the agent in his statement. Though, during arguments Ld. SPP conceded that no inquiry was made from the said agent and no inquiry was made from the bank in question to obtain the account opening form or to corroborate and authenticate the data received in the pen drive from French authorities. He submits that as per article 28 of the Convention the data can be used for the purpose of prosecution. He submits that certificate u/s 65 B of the Indian Evidence Act, 1872 is given in support of data to establish its authenticity. He opposes the application. 8. XXX 9. Before proceeding further to address the other contentions, it will be prudent to decide the contention raised by the Ld. Defence Counsel that the data received by the Income Tax Authorities from the French Government under Double Taxation Avoidance Convention (DTAC), cannot be used for the purposes of prosecution. In this regard Ld. SPP has pointed out circular no. F- 414/88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ian Currency). 7. And whereas the authenticity of the information received under Exchange of Information Mechanasim through DTAC is not under dispute and the statement of accused made during the search is also found to be made voluntarily. If the statement had been under duress the accused would not have shown a sum of .2,23,68,000/- as other income in the return for Assessment Year 2007-2008 and deposited the tax thereon. The assessee, however, did not sign the consent waiver form and denied having foreign bank account in the course of assessment proceeding. The basis of the notices issued u/s 279 of the Income Tax Act was not only the statement of the assessee recorded dumng the search, as contended by the accused, but also the evidences, documents available with the department. Therefore, the plea of the assessee not to launch the prosecution proceeding is rejected. 11. The first limb of the sanction pertains to the alleged admission made by the accused in his statement u/s 132(4) Income Tax Act, 1961. So far as the question of the admissions made by the accused in his statement u/s 132 (4), of the Income Tax Act are concerned, the facts show that during investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, the receipt is accepted and certain amount is accepted as taxable, it could be added but it was not accepted by the assessee, however, that it had deliberately furnished inaccurate particulars or concealed any income.... 13. XXX 14. XXX 15. The other limb of the sanction order is based on the information obtained by the complainant department from the French Government under article 2# of the DTAC. It is the admitted position that the data from the French Government was received in the form of Pen Drive (page 47). Letter dated 03.07.2015 Ex. CW-l/E (Page-11) clarifies that print from the contents were taken and handed over to the DGIT (Inv.) for further investigation. The copy of the printouts of data has been placed on record (page 83 to 92). 16. A bare perusal of the said printouts shows that they are not on the letter head of any bank. The information is printed on plain paper. Part of the information is written in foreign language and part of the information is written in English. The translated copy of the bank record is not filed before the Court. Perusal of the documents shows that though it mentions about the name, address, account number e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused in the accounts have been proved. Therefore, it is patently clear that the prosecution has failed to prove the foundational facts and therefore the question attracting the presumption does not lie. 24. XXX 25. XXX 26. In the present case the prosecution has failed to satisfy said ingredients. The prosecution is launched on the basis of retracted admissions. The data obtained from French Authorities is not certified as per section 78 (6) of the Indian Evidence Act. Neither the Indian Authorities nor the French Authorities verified the data from the bank in question. No bank account opening form and KYC documents is obtained during investigation. No transaction from the account of accused to the foreign account is shown. Prosecution has failed to show any link of the accused with the said bank account. Even in the case of prosecution proceeds further on the basis of admitted documents on record, accused cannot be convicted merely on the basis of unauthenticated and unverified printouts obtained from third party. The said documents may create suspicion against the accused but are not sufficient to proceed further by framing of charge and to force the accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was calculated by the tax authorities and at the behest of the tax authorities the assessee offered the same in his income for A.Y 2007 08 and paid taxes thereon. 25. Nowhere the Assessing Officer has demolished this claim of the assessee which means that the Assessing Officer has inherently accepted the contention of the assessee that the disclosure was at the behest of the tax authorities and calculation of peak credit was also at the behest of the tax authorities. 26. We have carefully examined the computation of income for A.Y 2007 08 and under the head income from other sources at item L Other Income , the assessee has shown income of ₹ 2,23,68,007/ . Once the assessee has returned the undisclosed income and paid taxes thereon, in our considered opinion, there should not be any quarrel to bifurcate the disclosed amount in two A.Ys when tax rate in both the A.Ys is the same and there is no loss to the revenue. We are of the considered view that the revenue authorities should desist from such litigation. 27. Considering the facts of the case in totality, as discussed hereinabove, as culled out from the records, and the relevant documentary evidences, we do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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