TMI Blog2021 (8) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... from the person who owns the said funds, then, the same, in our considered view would lead to incongruous results that would had never been intended by the legislature. Our aforesaid conviction is in fact fortified by the fact that the legislature in all its wisdom had in order to plug any diversion of income without there being any transfer of income yielding asset/source had specifically in Chapter V Sec. 60 to 65 of the Act provided for circumstances wherein income from revocable transfers would be related back and clubbed in the hands of the transferor. Deposits lying in the bank account in question with HSBC bank, Zurich undisputedly belong to and are owned by the assessee‟s mother, viz. Mrs. Pushpa N. Khimji. Although, it is a matter of fact borne from the record that the assessee as a joint holder of the aforesaid foreign bank account had all the rights of functional operations of the said account, but the same would by no means justify relating of any part of the interest income on such funds/deposits lying in the said foreign bank account in the hands of any other person except for the owner of said funds, viz. Mrs. Pushpa N. Khimji. Accordingly, in the backdro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and under the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) erred in confirming the action of A.O of making addition of Interest amount of ₹ 93,528/- being 50% of the total interest of ₹ 1,87,056/- earned on the foreign bank account on the following ground : - a). On the ground that appellant was a joint account holder exercising full ownership and control rights over the funds in the bank account without appreciating the fact the appellant was a nominee to the foreign bank account and her name was added only for convenience as her mother is a senior citizen b). On the ground that appellant has not offered interest income for taxation without appreciating the fact that all the credit transactions in the said bank account and the source thereof belonged to Appellant mother Mrs. Bhatia Pushpa Narendra Kumar Khimji only and not the appellant and hence any consequential interest income would belong to her mother and not appellant herself. 2. Briefly stated, the assessee who is a resident Individual was during the year under consideration engaged in the business of trading in garments and was a partner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was therein stated by the assessee that all the transactions qua the aforesaid bank account were carried out by her mother. In order to substantiate the aforesaid factual position the assessee on 26.03.2015 filed with the A.O a letter signed by her mother Mrs. Pushpa N. Khimji wherein she had admitted that the bank account was opened by her and all the transactions therein were made by her. However, the A.O was not persuaded to accept the aforesaid claim of the assessee. It was observed by the A.O that the assessee had herself filed with him a Compact Disc (bearing No. 0010374) that was received by her from HSBC bank, Zurich in her capacity as that of an account holder. Referring to the letter dated 22.04.2013 that was issued by the bank, it was observed by the A.O that the Compact Disc contained in digital form certain details, viz. the account opening documentation; correspondence and instructions; portfolio statements pertaining to the aforesaid bank account etc. On examining the contents of the Compact Disc the following details were gathered by the A.O : a). the assesee had signed the application dated 13.08.2004 to open the aforesaid account jointly with her mother Mrs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the deposits nor the income that had accrued/received in form of surpluses on account of earnings of interests and profits arising therefrom. It was observed by the A.O that the assessee had failed to discharge the onus that was cast upon her as regards proving that the funds invested in the aforesaid bank account and the income arising therefrom belonged to her mother. Rather, it was observed by the A.O that though it was the claim of the assessee that the entire investment in the aforesaid foreign bank account was made by her mother Mrs. Pushpa N. Khimji, however, the latter had failed to explain the sources of the deposits before her A.O i.e Income-tax Officer (IT), 13(3)(1), Mumbai. Also, it was observed by the A.O that the assessee in the course of the assessment proceedings had not produced any documents which would have substantiated her claim that the deposits in the aforesaid foreign bank were made by her mother Mrs. Pushpa N. Khimji from her own sources. Accordingly, the A.O on the basis of his aforesaid deliberations concluded that the deposits in the aforesaid bank account with HSBC Bank, Zurich, in the absence of any explanation as regards the source thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 7405/Mum/2016, dated 30.04.2019 for A.Y 2006-07 and A.Y 2007-08, respectively. Referring to the observations recorded by the Tribunal, it was observed by the CIT(A) that it was therein observed that the husband of Mrs. Pushpa N. Khimji had right from 1998 onwards deposited out of the earnings from his construction business amounts in his bank account No. 10388171 with ANZ Grindlays Bank, Muscat, which as increased with the interest therein credited quantified at USD 704220, and the said amount was thereafter deposited with HSBC Private Bank (Suisse) SA, Geneva. Accordingly, the CIT(A) on the basis of his observation that the source and ownership of the deposits in the bank account with HSBC Bank, Zurich, was satisfactorily explained as belonging to Mrs. Pushpa N. Khimji, therein, deleted the addition of ₹ 3,19,30,169/- that was made by the A.O in the hands of the assessee. However, as regards the interest receipts amounting to ₹ 1,87,056/-, the CIT(A) was of the view that the taxability of the said amount was intricately linked to the status of the assessee with regard to the bank account held with HSBC Private Bank, Zurich. It was observed by the CIT(A) that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted by the ld. A.R that as the amendment to Sec. 149 which extended the time limitation for reopening an assessment to sixteen years was made available on the statute vide the Finance Act, 2012 w.e.f 01.07.2012, therefore, the same could not have been resorted for reopening the proceedings which stood concluded before the amendment became effective. As such, it was the contention of the ld. A.R that the subsequent amendment to Sec. 149 by the Finance Act, 2012, which extended the limitation for initiation of reassessment proceedings to sixteen years could not have been resorted for reopening concluded proceedings in respect of which limitation had already expired/lapsed before the amendment became effective. In support of his aforesaid contention reliance was placed by the ld. A.R on the judgment of the Hon‟ble High Court of Delhi in the case of Brahm Datt Vs. ACIT (2018) 100 taxmann.com 324 (Del). It was submitted by the ld. A.R that the aforesaid judgment of the Hon‟ble High Court of Delhi had thereafter been upheld by the Hon‟ble Supreme Court and the Special Leave Petition filed by the department in ACIT Ors. Vs. Brahm Datt [SLP(Civil) Diary No(s). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d observed, that the amounts deposited in the bank account with HSBC Bank, Zurich, belonged to Mrs. Pushpa N. Khimji (supra), and the same were received by her by way of inheritance on the death of her husband on 15.07.1988. Although, the CIT(A) while passing the impugned order had concluded that the source and ownership of the deposits in the aforesaid foreign bank account, viz. HSBC Bank, Zurich, was satisfactorily explained as belonging to Mrs. Pushpa N. Khimji, but was of the view that as the assessee was a joint holder of the said bank account and had possession of the funds and also the rights of functional operations in all respects as regards the same, therefore, 50% of the interest income that had accrued/arisen on the deposits lying in the said bank account during the year under consideration was liable to be brought to tax in the hands of the assessee. Accordingly, we find that the CIT(A) had on the basis of his aforesaid conviction sustained an addition of ₹ 93,528/- i.e 50% of interest income of ₹ 1,87,056/- in the hands of the assessee. The observations of the CIT(A) vis-a-vis the issue in hand are culled out as under : 7.3.7 However with regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the CIT(A). In our considered view the taxing of an income and the source thereof are intricately interwoven and cannot be divorced from each other. As held by the Hon‟ble Supreme Court in the case of ITO vs. Ch. Attchaiah (1996) 218 ITR 239 (SC) income has to be assessed in the hands of the right person and the right person alone. Accordingly, in the backdrop of the aforesaid mandate of law, we shall herein deliberate on the aspect as to whether or not the assessee before us, viz. Smt. Manisha Jaitha, as held by the CIT(A), is the person who is rightly liable to be assessed qua 50% of the interest income that had accrued/arisen on the foreign bank account, viz. HSBC bank, Zurich during the year under consideration. As observed by us hereinabove, the CIT(A) following the view that was taken by the coordinate bench of the Tribunal while disposing off the appeals in the case of assessee‟s mother, viz. Mrs. Pushpa N. Khimji, had concluded that the deposits in the aforesaid foreign bank account, viz. HSBC Bank, Zurich belonged to and were owned by Mrs. Pushpa N. Khimji. As such, there is no dispute on the issue that the deposits in the foreign bank account with HSBC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id extent and vacate the addition of ₹ 93,528/- that was sustained by him. The Grounds of appeal No. 3 is allowed. 10. As we have allowed the appeal of the assessee on merits and vacated the addition to the extent the same was sustained by the CIT(A), therefore, we refrain from adverting to and therein adjudicating the contentions advanced by the assessee vis-a-vis the validity of the reopening of the case of the assessee, which are left open. The Grounds of appeal Nos. 1 2 are left open in terms of our aforesaid observations. 11. The appeal of the assessee for A.Y 2005-06 in ITA No. 342/Mum/2020 is allowed in terms of our aforesaid observations. ITA Nos.343 to 345/Mum/2020 ITA Nos.384 to 388/Mum/2020 (Assessment Years: 2006-07 to 2013-14) 12. As the facts and the issue involved in the captioned appeals i.e assessing of 50% of the interest income on the bank account with HSBC Bank, Zurich in the hands of the asssessee, remains the same, as were there before us in her aforesaid appeal for A.Y 2005-06 in ITA No. 342/Mum/2020, therefore, our order therein passed while disposing off the said appeal shall apply mutatis mutandis for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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