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TMI Blog2024 (11) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,741/- made by the A.O. on account of undisclosed interest income on the deposit of Rs. 8,87,18,528/- in HSBC bank Geneva. 4. The facts in brief as mentioned in the order of the Ld. CIT(A) are as under: - "The appellant is an individual deriving income from salary, business and other sources during the relevant previous year. For the previous year relevant to the assessment year 2014-15, the appellant filed its return declaring income of Rs. 7,05,95,220 on 24.07.2014. However, in the impugned assessment completed vide order dated 31.08.2016, passed under section 143(3) of the Income Tax Act, 1961 (Act), income of the appellant has been assessed at Rs. 7,41,43,961 as against income of Rs. 7,05,95,220 declared by the appellant. In the impugned assessment order, the assessing officer has, merely following the addition(s) made in earlier assessment year(s) proceeded to make addition of Rs. 35,48,741 on account of notional interest income received from balances held in some alleged foreign bank account with HSBC, Geneva. 5. Aggrieved by the above addition made by the A.O, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) while deleting the addition made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id offer was made only in the spirit of settlement and to avoid litigation, without prejudice to the primary contention of the appellant that the said unsigned/ undated piece of paper did not belong/ pertain to him. In the light of the aforesaid, the appellant additionally offered for tax Rs. 5,81,32,321 as income under section 69A of the Act in the return filed on 28.07.2012 for the assessment year 2012-13, in order to cover the aforesaid offer of US $ 11,46,368. Along with the said return, detailed note was also filed by the appellant explaining the circumstances in which the said amount was offered for tax. However, in the assessments completed under section 153A r.w.s. 143(3) of the Act, the assessing officer proceeded to make addition under section 69 of the Act of Rs. 4,90,20,749 (equivalent to US$ 11,02,829) and Rs. 18,79,578 (equivalent to US $ 43,5.39) in assessment years 2006-07 and 2007-08 respectively, on the alleged presumption that the appellant maintained a foreign bank account with HSBC, Geneva. Further, despite the said additions being made in assessment years 2006-07 and 2007-08, the assessing officer did not exclude amount of Rs. 5,81,32,321 (equivalent to US$ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a fact that no such information is evident front the documents received by the AO from French Government under information exchange mechanism of DTAC. The perusal of said documents only shows that month end balances have been written in respect of the bank account operated by the appellant and, there is no mention of any interest earned on the said credit balances. Perusal of information available in respect of the said bank, account does not show payment of any interest credited with regard to the deposits. The presumption of the AO is apparently based on experience with the Indian Banking System wherein the saving bank accounts generally, earns an interest, of 4% or so. The AO therefore applied the same standards in respect of the credit balances, held by the assessee in Its foreign bank account as well. It is also a matter of common knowledge that the rate of interest on time deposit/FDRs in developed countries banking system, are generally from low and nowhere in comparison to the Indian banking system. In fact, the rate of interest in the current/saving bank account could sometimes be negative in terms of operational cost of maintaining such an account. This only highli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant, on account of interest income worked out purely on presumptive basis is deleted. The appellant's appeal is allowed." 6. As against the order of the Ld. CIT(A) in deleting the addition, the Department of Revenue preferred the present Appeal on the grounds mentioned above. 7. The Ld. Departmental Representative by relying on the assessment order, submitted that the Ld. CIT(A) committed error in deleting the addition made by the A.O. on account of undisclosed interest income on the undisclosed deposit of Rs. 8,87,18,528/- in HSBC Bank Geneva without appreciating the fact that the Assessee had not submitted any details regarding the same during the assessment proceedings or during the appellate proceedings, therefore, sought for setting aside the order of the Ld. CIT(A). 8. Per contra, the Assessee's Representative submitted that the issue involved in the present Appeal are squarely covered in Assessee's own case for Assessment Year 2006-07 to 2012-13 in ITA No. 2892/Del/2017 and other connected matters, thus, sought for dismissing the Appeal filed by the Revenue. 9. We have heard both the parties and perused the material available on record. The very same issue regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any information, evidence or record, notional interest income cannot be added in the assessee's hands, merely on hypothesis, assumption, conjectures & surmises. For the said proposition reliance was placed on the following decisions, wherein it has been held that no addition on account of interest can be made where no interest has in fact been charged by the parties within the terms of funds/loan advanced. * CIT vs. Goyal M.G. Gases (P) Ltd.: 303 ITR 159 (Del.) * B & A Plantations and Industries vs. CIT: 242 ITR 22 (Gau.) * KeshrichandJaisukhlal vs. CIT: 248 ITR 47 (Gau.) * Highways Construction Co. Pvt. Ltd vs. CIT: 199 ITR 702 (Gau.) * Jwala Prasad Radha Krishna vs. CIT [1992]: 198 ITR 415(All) * CIT vs. Punjab Financial Corpn. Ltd.: 295 ITR 510 (P&H HC) * CIT vs. South India Corpn. (Agencies) Ltd.: 293 ITR 237 (Chennai HC) * CIT vs. Sanghi Finance and Investment Ltd.: 190 CTR 207 (MP) 6.4 We have considered rival submissions and the decisions relied upon by both the parties. We have already deleted the addition made in assessment year 2006-07 and also in assessment year 2007-08, therefore, on this ground itself the addition made by the assessing officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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