TaxTMI 
TaxTMI 
2021 (4) TMI 252
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.... loss of Rs. 10,01,742/-. During the assessment proceedings, the Assessing Officer noted that as per calculation made in AY 2014-15, the closing balance of the foreign bank account including interest was USD 362354.79 as on 31.03.2014 which became the opening balance for the assessment year 2015-16 and the assessee also earned interest income on this sum from 01.04.2014 to 31.03.2015 i.e. for twelve month which @4% works out to Rs. 9,04,872.28/- (USD 14494.19 X 62.43), the closing balance of the foreign bank account for the AY 2015-16 including interest was USD 3,76,848.98 as on 31.03.2015 which became the opening balance for the assessment year 2016-17 and the assessee also earned interest income on the sum from 01.04.2015 to 31.03.2016 i.....
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.... Total 376848.98 4% 15073.96 391922.94 66.25 998649.85 3. The Assessing Officer therefore, held that the interest income of Rs. 9,19,649/- was not disclosed by the assessee to the Department. He, therefore, added the same as undisclosed income of the assessee by invoking the provisions of section 69 of the Act. 4. In appeal, the learned CIT(A) following his order for AY 2013-14 deleted the addition by observing as under:- "There is only one issue which relates to addition of Rs. 9,98,649/- made by the Assessing Officer. The other grounds of appeal are neither general or consequential in nature. The addition was made u/s. 69 of the IT Act on account of interest @4% on the balance of an alleged undis....
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....n made in AY 2006-07. Referring to the assessment order for 2006-07, he submitted that an amount of Rs. 1,20,37,863/- was added by the AO as undisclosed foreign bank account u/s. 69 of the Act being the peak balance of the alleged foreign bank account maintained with HSBC Bank Switzerland. He submitted that irrespective of the fate of the said addition assessing authorities thereafter computed interest @ 4% on the peak balance of the alleged foreign bank account and in subsequent years, such addition was made on the basis of such premises. Accordingly, an amount of Rs. 9,98,649/- being interest earned on such account was made to the total income of the assessee for the current assessment year. He submitted that since the CIT(A) following hi....
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....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 highlights the absence of certainty in AO's presumption based upon Indian banking system. It clearly shows that there is no documentary evidence to support such a presumption. In view of these facts the earning of interest cannot be taken for granted so as to be made the basis of addition of having earned income. In the circumstances the addition made by the AO on presumptive....
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....the HSBC Bank account has been reproduced. Referring to pages 10-17 of the order, he drew the attention of the Bench to the translation of the same in English. He submitted that HSBC Bank account in the name of "ASPREY WORLDWIDE SA" was closed on 14.12.2005. Similarly, HSBC account in the name of "RONDERBERG LIMITED" was closed on 25.01.2006 and HSBC account of "TAIRA FOUNDATION" was closed on 03.01.2006. This fact has been admitted by the AO in the assessment order for AY 2006-07. He accordingly submitted that when the bank accounts are closed way back in financial year 2005-06, as admitted by the AO in the assessment order for AY 2006-07, therefore, the question of making any addition on account of notional interest for the impugned asses....