TaxTMI 
TaxTMI 
2021 (8) TMI 119
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....the representatives have filed written synopsis in support of their respective contentions and have relied upon several judicial decisions. 4. We will first address the appeals of the assessee in ITA No 6268/DEL/2017 and 6269/DEL/2017 for A.Ys 2006-07 and 2007-08. 5. The bone of contention and roots for the quarrel lie in the statement of Shri Krishan Lal Madhok, recorded under section 132(4) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] dated 23.08.2011 during the course of search proceedings, conducted at the premises of the assessee. 6. Information was received from the Government of France under the Double Taxation Avoidance Convention [DTAC] that the assessee is a beneficiary in the bank account with HSBC, Geneva. After receipt of the information on 23.08.2011, a search was conducted at the premises of the accused wherein he was confronted with the information regarding the undisclosed foreign bank account. 7. In his statement, the assessee specifically stated that he has no knowledge of the said bank account, as his deceased wife Smt. Sudesh Madhok was managing the business as Proprietor of M/s Indian Artwares Corporation since 1970 ti....
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....of the Assessing Officer, the assessee furnished revised computation of income for A.Ys 2006-07 and 2007-08 wherein the amount of Rs. 2,23,68,000/- was segregated for two A.Ys i.e 2006-07 and 2007-08. This revised computation of income along with the submissions is placed at pages 127 to 131 of the paper-book. 15. The Assessing Officer completely disregarded the facts mentioned hereinabove and made addition of Rs. 2,05,50,545/- as unexplained investment under section 69 of the Act in A.Y 2006-07 and Rs. 18, 58,311/- as unexplained investment under section 69 of the Act in A.Y 2007-08. 16. A bare perusal of the aforesaid facts show that same amount has been taxed twice, that is in A.Ys 2006-07 and 2007-08. As mentioned elsewhere, the sole basis is the admission in the statement recorded under section 132(4) of the Act and the alleged sheets received from the French government under DTAC. 17. Before going into the legalities and merits of the facts of the case in hand, under the Income Tax Act, it would be pertinent to refer to the judgement of Additional Chief Metropolitan Magistrate, [Special Acts], Central, Tis Hazari Courts, Delhi dated 28.06.2021. Though, we are aware t....
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....rench Government, the information shared was supposed to be kept secret and cannot be utilized for any other fiscal (taxation) ends (purposes). It is argued that the data received from the French Government could have been only used for taxation purposes and not for launching prosecution. It is further argued that the data in the pen drive does not satisfy the criterion laid down in section 76 and section 78 (6) of the Indian Evidence Act. It is submitted that from the admitted record, it is clear that neither the French Government clarified about the source of data and nor they were in possession of the originals. Ld. defence counsel further argued that the record is not certified by the bank who was the legal keeper of the record. It is submitted that the data is not on the letter head of the bank and nor certified by the bank and cannot and therefore cannot be relied upon. He submits that the prosecution has failed to prove the authenticity of the information and no investigation is done to cross check from the bank about the authenticity of the details. He submits that no bank account opening form is procured or placed on record. The agent mentioned in the shared data is also n....
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.... /-. The said assessment was arrived on the basis of the information received from the French Authorities under the Double Taxation Avoidance Convention (DTAC) and on the basis of statement u/s 132 (4) of the Income Tax Act of the accused. The sanction to prosecute in present case was granted vide order dated 05.11.2015 EX CW1/B. The relevant portion of the sanction order u/s 279 (1) of the Income Tax Act Ex. CW-l/B reproduced herein to have clarity regarding the premises of prosecution: "6. And whereas information was received from the Government of France in 2011 under Double Tax Avoidance Convention with India which revealed that certain Indians, including the accused, held or were beneficial owners of bank accounts with HSBC, Geneva, Switzerland. The accused was provided with copy of the information obtained under Exchange of Information Mechansim through DTAC, which was not rebutted by him. The document contained the personal information of the accused viz his name, address, nationality, date of birth, place of birth, profession, place of office, passport number etc, which has not been disputed by him. The document also contained the name of other person linked / rela....
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....Inv.) also the accused stated that he is not aware about any bank account as the business was looked after by his deceased wife. In letter dated 05.08.2013 written to Assistance Commissioner Income Tax the accused also reiterated that he has no knowledge about the bank account in question and only to buy peace and to avoid protected litigation he has deposited the tax. Even in the statement u/s 132(4) of the Income Tax Act, the accused in answer to question no. 25 stated that he is depositing the tax in order to buy peace and under the condition that no penalty/prosecution may be launched against him. 12. From the aforesaid admitted material on record, it is clear that the alleged admissions in the statement u/s 132 (4) of the Income Tax Act Ex. CW-l/G weiV retracted and were not unequivocal. It is apparent that the ^statements were made under the belief that no further harassment will be caused to the accused as he wanted to earn peace. In the case of Sir Shadi Lai Sugar & General Mills Ltd v. Commissioner of Income Tax, AIR 198~ SC 2008 it was held that merely because an amount has offered as tax does not mean that the person has admitted that such amount belongs to him.....
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.... the data is not verified from the bank concerned. During the stage of arguments, Ld. Special Public Prosecutor conceded that no inquiry was made by the complainant department from the concerned bank to cross check the authenticity of the bank account data in question. He also admitted that the agent 'HABCONSULT AG' was also not joined in the investigation and no inquiry was made from it to verify the authenticity of the bank account in question. 17. Nothing has been placed on record to show that it was accused who was operating the bank account in question. No bank statement of the accused is, seized to prove the transactions done in the said bank account. No remittance or withdrawal in favor of the accused is shown on record to link the accused with the bank accounts in question. The investigation in this regard is done totally in casual manner and no attempt was made by the complainant department to verify the authenticity of the data from the bank in question. No attempt was made to obtain the bank account opening form and the KYC documents, if any, submitted at the time of opening of bank account. I am afraid that in the absence of the aforesaid investigation ther....
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....a 380 ITR 573, Anil Bhatia 211 Taxman.com 453 and of the Hon'ble Supreme Court in the case of Singhad Technical Education Society 397 ITR 344 squarely apply. 21. Rebutting to this contention of the ld. counsel for the assessee, the ld. DR stated that the Hon'ble Kerala High Court in the case of Saint Francis Clay Décor Tiles 70 Taxman.com 234 has held that "Neither under section 132 or under section 153A, the phraseology "incriminating" is used by the Parliament. Therefore, any material unearthed during the course of search proceedings or any statement made during the course of search by the assessee is a valuable piece of evidence in order to invoke section 153A of the Act. 22. The ld. DR further stated that in his statement on oath, the assessee voluntarily accepted that he had an account with HSBC Bank, Switzerland and therefore, this statement was incriminating document and further buttressed her submissions by the decision of the Tribunal Mumbai bench in the case of Renu Tharani 117 Taxmann.com 804 and Mohan Manoj Dhupelia 52 Taxmann.com. 23. All the averments raised by the ld DR have been duly answered by the Additional Chief Metropolitan Magistrate in....
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.... of the Act on account of difference appeared in peak balances in bank account maintained with HSBC, Geneva and second ground relating to deletion of addition of Rs. 73,074/- made by the Assessing Officer on account of interest accrued to the assessee on bank balance in his foreign bank account maintained with HSBC, Geneva. 30. The grievance raised vide ground No. 1 becomes otiose qua our decision in ITA No 6268 and 6269/DEL/2017. 31. Addition on account of interest accrued on HSBC account, Geneva is common in all the appeals of the revenue bearing ITA Nos. 3917 to 3921/DEL/2017, though the quantum of amount may differ. 32. The short issue is that in all these appeals for the revenue relating to different A.Ys, the Assessing Officer was of the firm belief that the assessee must have earned some interest on the balances in his bank account with HSBC, Geneva. The Assessing Officer assumed that in India a Savings Bank account holder earns interest at the rate of 4%, therefore, applying the same rate, the Assessing Officer made the impugned addition. 33. The first appellate authority in all the A.Ys in which the revenue is in appeal found that the assumption made by the Ass....