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TMI Blog2024 (10) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 3. ITA No.6605/Del/2017 Revenue 2008-09 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 4. ITA No.6606/Del/2017 Revenue 2009-10 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 5. ITA No.6608/Del/2017 Revenue 2011-12 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 6. ITA No.6609/Del/2017 Revenue 2013-14 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 23.12.2015 Assessment Order under section 143(3) of the Income Tax Act, 1961. 7. ITA No.6610/Del/2017 Revenue 2014-15 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 31.08.2016 Assessment Order under section 143(3) of the Income Tax Act, 1961. 8. ITA No.920/Del/2018 Revenue 2007-08 CIT(A)-26, New Delhi order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as has been held by the Hon'ble jurisdictional Delhi High Court in CIT vs Harjeev Aggarwal (2016) 70 taxmann.com 95 (Delhi) and PCIT vs Best Infrastructure Pvt Ltd (2017) 84 taxmann.com 287 (Delhi) and PCIT vs Meeta Gutgutia (2017) 82 taxmann.com 287 (Delhi) confirmed by the Hon'ble Apex Court (2018) 96 taxmann.com 468 (Delhi) (DoJ 02/07/2018). 3. The authorities below erred in law and on facts by ignoring that all the alleged foreign bank accounts of the assessee held with the HSBC Bank, Switzerland: (i) were closed before 31/03/2006 (not existing even as on the close of the period relevant to this Assessment Year) as is mentioned in the impugned assessment order; (ii) as per the DTAA with Switzerland, no information in any manner was to be given by the Swiss authorities for the bank accounts closed before the April 2011, as confirmed by the Swiss authorities also and thus no information other than what was considered in the original assessment order is available with the revenue; (iii) the Hon'ble ITAT in para 34 of its appellate order dated 26/02/2018 in the first round of appeal no. ITA 5499/Del/2017, never held that the said incriminating material was foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 1,42,34,124/- against the returned income of Rs. 20,73,131/- by making an addition of Rs. 1,20,37,863/- on account of undisclosed foreign asset in the form of foreign bank account and another addition of Rs. 1,23,130/- on account of interest income earned on the deposits in the said undisclosed foreign bank account. 4. Aggrieved by the assessment order dated 18.03.2015, the assessee filed appeal before the CIT(A). The CIT(A) vide order dated 11.08.2017 declined any relief and confirmed the additions towards undisclosed deposits in foreign bank account and imputed interest on such deposits. 5. Further aggrieved, the assessee preferred appeal before the Tribunal. The Co-ordinate Bench of Tribunal in ITA No.5499/Del/2017 dated 26.02.2018 made certain observations and restored the issue to the file of the AO for re-adjudication after obtaining certain verificatory reports on the existence of alleged Foreign Bank. 6. It would be apt to reproduce the relevant paras of the order passed by the Co-ordinate Bench dealing with the issue. "30. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer as well as the Id. CIT(A) and the Paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D and ASPREY WORLWIDE SA, the details of which are given at para 6 of this order. The Assessing Officer further made addition of Rs. 1,23,130/- being income on account of undisclosed income earned for such undisclosed foreign bank account deposits u/s 69 of the I.T. Act. 31. We find the Id. CIT(A) deleted the addition of Rs. 1,23,130/- being the interest on account of undisclosed interest earned on such deposits for which the revenue is not in appeal and therefore we are not concerned with the same. He, however, dismissed the ground raised by the assessee challenging the validity of the assessment proceedings u/s 153A and sustained the addition made by the Assessing Officer amounting to Rs. 1,20,37,863/-. 32. It is the submission of the ld. counsel for the assessee that in absence of any incriminating material found during the course of search, no addition can be made. It is also the submission of the Id. counsel for the assessee that the documents relied on by the Assessing Officer are inadmissible since these documents are not signed by any authority and these are merely photocopies which were not duly authenticated. Further, it is the submission of the ld. counsel for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed foreign accounts were received prior to the search and was confronted to the assessee during the course of search, therefore, the same, in our opinion, constitutes incriminating material which has rightly been used by the Assessing Officer in the proceedings u/s. 153A/143(3) of the I.T. Act. Further, since the proceedings u/s. 153A was pending, the Assessing Officer is not empowered to issue notice u/s. 148 of the I.T. Act in respect of income which comes to his knowledge from a source other than the evidence found during the course of search and continued the said proceedings simultaneously with proceedings u/s. 153A/153C as held by the Tribunal in the case of ACIT vs. Vipul Motors Pvt. Ltd. vide ITA No.2675 & 2676/Del/2010 order dated 08.08.2013 and in the case of Rajat Subham Chatterjee vs. ACIT vide ITA No.2430/00/2015, order dated 20.05.2016. Such type of argument was never taken in the case of Bishwanath Garodia (supra) and Shyam Sunder Jindal (supra). 35. Now, coming to the merits of the case is concerned, we find the Assessing Officer at para 11 of the order as observed as under :- "11. From the above facts it is clear that the assessee has opened and/or operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reframed the assessment order in pursuance of the ITAT order. The AO observed in its order passed dated 30.12.2018 under Section 254 r.w. Section 153A r.w. Section 143(3) of the Act that the assessee has declined to co-operate with the AO in the second round of assessment proceedings initiated at the instance of the ITAT order. No verification report could be received by the AO as contemplated in ITAT order owing to failure of the Assessee to provide Waiver to secure bank particulars and statement of Assessee from Swiss authorities. Hamstrung by the denial of the assessee to provide Waiver, the AO once gain reiterated the previous assessed income and thus assessed the income yet again at Rs. 1,41,10,994/-. 8. Aggrieved by the assessment order in the second round, the assessee once again filed appeal before the CIT(A). The CIT(A) however, on appreciation of facts and circumstances involved in the case, opined against the assessee and thus denied any relief. The CIT(A) has dealt with the issue as under: "Ground No.s. 2 to 6: In the present case certain information was received in April-May-2011 under DTAA that certain persons in India including the appellant have bank accounts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment. Before Id. CIT(A) was also, the same was not available. Even before us nothing was brought to our notice regarding the verificatory letters received from Switzerland. Since assessee in the instant case was denying from the beginning that the accounts does not belong to him and since verificatory report in respect of above is yet to be received, and since in absence of such verificatory letter, it cannot be conclusively proved that the accounts in fact do belong to the assessee, therefore, considering the totality of the facts and in the interest of justice, we restore this issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh and in accordance with law after obtaining the verificatory report. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are partly allowed for statistical purposes." 10.1 Subsequently, the assessment proceedings in pursuance to the direction of Hon'ble ITAT, Delhi were completed u/s 254/153/143(3) of the Act, vide order dated 30.12.2018 which is the subject mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f around 9 months which raises doubts on its credibility. In this regard, Reliance is placed on the order of Hon'ble Rajasthan High Court in the case of Roshan Lal Sancheti v. Pr. CIT [IT Appeal No. 47 of 2018, dated 30.10.2018], the relevant extract of which is reproduced as under: "In view of the law discussed above, it must be held that statement recorded under Section 132(4) of the Act and later confirmed in statement recorded under Section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction ought to have been generally made within reasonable time or by filing complaint to superior authorities or otherwise brought to notice of the higher officials by filing duly sworn affidavit or statement supported by convincing evidence. Such a statement when recorded at two stages cannot be discarded summarily in cryptic manner by observing that the assessee in a belatedly filed affidavit has retracted from his statement. Such retraction is required to be made as soon as possible or immediately after the statement of the assessee was recorded. Duration of time when such retraction is made assumes significance and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed by the alleged account holder and duly notorized to enable HSBC to furnish requisite details such as account opening form, details of transactions etc. In present case the appellant did not sign the consent form for seeking information in respect of alleged overseas bank account which could have facilitated in seeking further details. The issue under consideration is not of a simple tax evasion but a case where the evidences available with the department relate to parking of the funds in foreign destination in an unaccounted manner contrary to the law. Accordingly, in such a case it was also beneficial to the appellant to get the charges against him clarified by way of seeking complete information against him and cooperating in this regard. The evidences received by the department are through official channels and constitute a credible source for making the addition. In view of the same and also considering that the documents available with the department corroborate with the personal details of appellant and the circumstantial evidences such as travel history, I am inclined to agree with the order of AO. 11. In the result, the appeal of the appellant is hereby dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. The ld. counsel thus submitted that the case of the assessee is squarely covered in favour of the assessee as per the judicial precedents cited above. 10.3 The ld. Counsel also quipped that as per the 7 page documents extracted in the assessment order in first round of proceedings, it is evident that the alleged Foreign Bank Account was closed before 31.03.2006 and thus no additions could be justified in the absence of any balance. 10.4 The ld. counsel next pointed out that so called 7 pages information indicating Foreign Bank Account held in the name of Assessee obtained from Swiss Authorities is not at all reliable since, as per the DTAA with Switzerland, no information in any manner was to be given or shared by the Swiss Authorities for the bank accounts closed before April, 2011. The sanctity of information collected by the Revenue is thus under grave doubt and the onus lies on the revenue to confront some credible material to support its action. 10.5 The ld. counsel thus submitted that neither the action of Revenue is justified within the jurisdiction conferred to AO under Section 153A nor such additions are plausible on the touchstone of factual matrix. The ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in Abhisar Buildwell Pvt. Ltd. (supra).The Ld. CIT-DR thus pleaded that the ITAT may, if considered expedient, provide enabling 'findings' or 'directions' etc. contemplated under s. 150 of the Act to lift the embargo of time limit for issuance of notice for the purposes of reassessment under the provisions of the Act. The assessee thus cannot escape the taxation of such non-disclosure of foreign bank on technical grounds. 11.3 Addressing further, The ld. CIT-DR pointed out that the ITAT has weighed the peculiar circumstances in perspective in the first round and approved the jurisdiction assumed under Section 153A of the Act. No remedy is thus available on issues already determined in the first round. 11.4 On facts, it was pointed out that information received under DTAA / DTAC between India and other countries, in the form of 7 pages document (extracted in para 6 of the assessment order passed in first round representing particulars of undisclosed bank account etc.) was confronted to the assessee in the course of search. Subsequently, the assessee vide letter dated 09.02.2012 before DDIT (Inv.) also consented and voluntarily expressed his willingness to pay incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al available on record as well as case laws cited. 13. While several grounds have been raised to narrate different facets of issues involved; two pertinent issues have been effectively raised on behalf of the assessee. (a) Firstly, whether the additions under Section 153A in search assessment is permissible in law in the absence of any incriminating material found in the course of search in view of the judgment rendered in the case of Abhisar Buildwell (supra)?. (b) Secondly, whether the additions made by the AO could be sustained in the facts of the case where the Revenue does not allegedly possess any credible material to justify its allegation towards undisclosed foreign bank account maintained by the assessee in HSBC Bank, Switzerland? 14. On perusal of the order of the Co-ordinate Bench previously passed under Section 254(1) of the Act in the first round of proceedings, it is manifest that similar grievance towards lack of jurisdiction to assess the undisclosed income attributable to Foreign Bank Account within the ambit of Section 153A were raised before the Tribunal. The ITAT, on appraisal of facts and circumstances of the case, clearly held that 7 pages document in po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in Shyam Sunder Jindal case has already been decided by the ITAT in the first round and thus stood concluded. The ITAT in the second round is thus not competent to re-examine the decision of the Co-ordinate Bench. 16. On facts, we observe that the AO, in the first round of proceedings, confronted the assessee with 7 page information/documents in the form of client profiles of HSBC Bank also showing unique code assigned to the assessee for operation of the bank account maintained with HSBC Bank. The profile of the assessee was found to be linked to 5 client profiles. Thus, evidently, the Revenue was in possession of definite material claimed to be obtained under DTAA/DTAC with foreign countries which seeks to indicate holding of foreign bank account by the assessee with HSBC Bank, Switzerland. The particulars available with the Revenue were thus overwhelming and specific in nature. With a view to verify the credibility and precision of such information on purported foreign bank account, a reference was sent to competent authorities in Switzerland and other countries by the Indian Revenue Authorities. The confirmatory verification report in respect of the foreign bank accounts al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ize any rationale in such line of plea. It does not stand to reasons as to how signature of an innocent assessee on a consent waiver form meant for ascertainment of correct factual position, would criminalize a signatory unless the culpability is established. A person not holding such undisclosed bank account has no reason to fear any adverse consequences. The defense raised thus is far cry and devoid of any ring of truth. The refusal to sign the Waiver itself vouches for culpability. We simultaneously observe that the Hon'ble Delhi High Court in the case of Shyam Sunder Jindal (supra) opined in favour of the assessee on the premise that material relied upon by the Revenue was not of a quality which could persuade the Court to hold that assessee did maintain the account with HSBC bank Geneva. In the instant case, however, the facts are materially different. The Revenue is in possession of cogent material which indicated the details of bank account maintained in the name of the assessee including the date of opening of bank account (06.10.1998) and date of closure (25.01.2006). The authenticated copy of such bank account could be obtained only with the consent and concurrence of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter, it is straightaway noticed that as per the evidences collected by the Revenue as reproduced in paragraph 6 of the assessment order framed in the first round dated 18.03.2015 relevant to A.Y. 2006-07, the purported bank account maintained by the assessee in HSBC bank is shown to be closed on 25.01.2006 and thus where the deposit itself is not available with the bank, the question of notional interest on deposits in the subsequent financial years is incomprehensible. The imputed interest @ 4% in the deposits kept with HSBC bank as a secondary adjustment cannot be countenanced on such facts. The grievance of the Revenue on account of imputed interest on deposits with HSBC bank in the respective appeals captioned above thus stands dismissed. 26. In the result, the appeal of the Revenue in ITAs No. 6604, 6605, 6606, 6608, 6609, 6610/Del/2017 are dismissed. ITA No.925/Del/2018 (A.Y. 2012-13) - Revenue's Appeal 27. The grounds of appeal raised by the Revenue read as under: 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 7,24,438/- made by the AO on account of undisclosed interest income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R filed a rejoinder to the remand report vide letter dated 27.10.2017 essentially reiterating the submissions made earlier. Findings: I have considered the facts of the case, the basis of addition made by the Assessing Officer and the argument of the A.R. during assessment as well as appellate proceedings. The grounds of appeal are disposed of in the terms as below- a. In respect of Cash- I have considered the facts of the case, the basis of addition made by the AO and the arguments of the AR during the assessment as well appellate proceedings. It is seen that right from the assessment stage the appellant claimed that the cash found during search stands explained in view of sufficient cash in hand available in the hands of various family members and group companies as on 20.01.2012 (date of search). Details of the same are tabulated as under:- S. No Particulars Status Amount (in INR) 1 Dalmia Infrastructure Private Limited Company 89,919.00 2 Globus Estate Private Limited Company 6,565.00 3 Globus Property Management Private Limited Company 17,297.00 4 Sh. Nar Hari Dalmia Individual 157,670.00 5 Smt. Aruna Dalmia Individual 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said locker stands in the joint name of Mrs. Archana Gujral and Mrs. Aruna Dalmia. Clearly, therefore, the said jewellery aggregating Rs. 4,77,780/- cannot be assessed in the hands of the appellant. It is further submitted by the appellant that items of jewellery amounting to Rs. 8,26,944/- kept in Locker No. 1168 which is jointly owned and maintained by Mrs. Sangeeta Dalmia, appellant and Smt. Aruna Dalmia belong to Mrs. Archana Gujral. The appellant has also filed a duly notarised affidavit dated 26th March, 2012 of Smt. Archana Gujaral stating that some jewellery items meant for her married daughter and her prospective daughter in law were kept with her brother Mr. Parag Dalmia for getting them polished and minor resetting, to make them ready for her son's forthcoming wedding in November 2012. In view of the status of the assessee, the possession of jewellery of such magnitude is in tune with the social status of the assessee. Hence the aforesaid explanation of the appellant appears acceptable. It is also noted that out of total jewellery aggregating Rs. 5,23,51,795/- found during search, the appellant is claiming only an amount of Rs. 8,26,944/- as being belonging to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same has been disclosed in the Wealth Tax Return of Mrs. Sangeeta Dalmia. The appellant has filed details of the persons from whom such gifts in the form of jewellery were received alongwith "Aashirvad Patras" substantiating the gifts. The details of gifts filed by the appellant, is reproduced below:- Smt. Sangeets Dalmia on her wedding on 27th April, 1980 Particulars Of Person Relationship Description Gross Weight Net Weight Value of Metal Stones Weight of Diamond Valu e of Stones Total Value Sl. No. RR Late lady Ansuya Singhania R/o Ganga Kuti 11- Contonnment, Kanpur Matern al Grand Mother One pair Kara set with Polka 141.500 135.000 321,300 Polki 100,000 421,300 38 Late Smt. Pushpawati Singhania R/o JK House, 12 Alipore Calutta Paterna l Grand Mother Bracelet with diamond 13.200 11.100 26418 Diamond 10.50 262,500 288,918 43 Late Sh. Sohanlal Singhania R/o Udichi, 7/184 Swaroop Nagar, Kanpur Matenal Grand Father Bangle s with diamonds in Gold & white Metal 15.900 5.000 11,900 Diamonds 14.00 385,000 396,900 45 Late Smt. Lalita Dalima R/o No.9, 30 January Marg, New Delhi My Aunt (Taiji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the same, addition to the extent of Rs. 25,36,118/-, out of total addition of Rs. 29,02,002/- is directed to be deleted. As regards the balance amount of Rs. 3,65,884/-, it is seen from the above table that the same is claimed to have been received as small jewellery items on the occasion of children's birthdays from friends and relatives. However, the names and addresses of friends and relatives have not been furnished. Even the description of certain items of jewellery reveals that expensive items such as 1 pair of Kara, aggregating Rs. 1,60,000/- has been received on birthday which is highly unlikely even for a person of the status of the appellant. In view of the same addition of Rs. 3,65,884/- is hereby confirmed due to lack of proper details and substantiating documents filed by the appellant. In the result, addition of Rs. 3,65,884/- is confirmed and the addition of Rs. 41,08,342/- is deleted out of total addition of Rs. 44,74,226/- on account of unexplained jewellery." 30. On perusal of the first appellate order, it is observed that the CIT(A) has examined the issue in length and the issue has been decided on nuanced analysis of the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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