TaxTMI 
TaxTMI 
2023 (4) TMI 688
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..../RJT/2021 relating to the asst year 2006-07 is taken as the lead case. 2. Brief facts of the case is that the assessee is an individual and Partner in 14 Partnership Firms which are engaged in Construction, Trading of Commodities, Film Industry and deriving income from Business, Capital Gains and also Income from Other Sources. For the asst year 2006-07 the assessee filed his Return of Income on 31-07-2006 admitting total income of Rs.4,17,050/=. The return was processed under section 143[1] dated 06-12-2006 and refund was issued to the assessee. Thus there was no regular assessment u/s.143[3] of the Act. 2.1. There was Search action u/s.132 of the Act at the residential premises was commenced on 08.09.2011 and concluded on 09.09.2011 at 4.00 a.m. and no incriminating materials was found. Therefore Prohibitory order was passed on 09.09.2011 for the cupboard in the bedroom of Mr. Jay R. Patel [son of the assessee]. The said Prohibitory order was revoked on 15.09.2011 and continued with Search action, again nothing incriminatory documents were found to give rise to disclosure of undisclosed income. However, the Investigation Officer on 15.09.2011 showing the unauthenticated pap....
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....tent Authority was made by the Commissioner of Income tax [Central-II], Ahmedabad vide letter dated 01-01-2013 with a request to get details of foreign bank accounts held by the assessee with HSBC Geneva. In reply the Under Secretary [FT&TR-III][2] vide his letter bearing no. 504/0300/2012-FTD-1 dated 22-01-2013 stated in paragraph 2 that a reference for Administrative Assistance has been made to the Competent Authority under the provisions of "Exchange of information" under Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. Since the reference was made to the Competent Authority and the information was not received till 31- 03-2014, the limitation period to pass the assessment orders for the assessment years 2006-07 to 2012-13 gets extended by one year as per explanation [viii] to section 153B[1] of the Act. Therefore the one year from the end of 31-03-2014 shall get extended upto 31-03-2015 and therefore the notices issued are valid in law. 2.3. During the assessment proceedings again a statement u/s.131[1A] was recorded on 22-11-2013 from the assessee as follows: 11. Have you opened' any bank account with HSBC Geneva, either directly or through any of y....
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.... form-could not be signed. I may clarify that we tried to find out such details. However nothing is found. 15. Are you aware that this statement is being recorded on oath and subsequently if it is found that you had made false affirmation, then you shall be subject to prosecution? You are therefore again asked to specify whether you are / were having the above mentioned bank account. Ans:- Sir, my replies to the questions are not false to the best of my knowledge, belief and my memory and I know that my replies should not be false in the statement recorded under oath. 2.4. Thus the assessing officer held that there was receipt of specific information that the assessee was holding and maintaining foreign bank account with client profile was created on 15-02-2005 along with the two persons namely Rashmikant V Bhalodia and Rajnikant M Bhalodia. Further based on the admission of Rs.39.6 crores by the assessee during the recording of statement under section 132[4] of the Act and the news report appearing in Indian express dated 09th February 2015 wherein details of independent investigation carried out by Washington-based International Consortium of Investigative Jo....
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....incriminating material had been found during the search or not 5.12 From the copies of material on record and on perusal of the assessment order, it is seen that, first and foremost, there is no mention of any incriminating material in the statement recorded during the course of search on 08.09.2011 or subsequently in assessment order, which led to the addition of unexplained investment in bank account. Further, from the perusal of the assessment order, it is clear that during the course of search neither any material indicating the holding of any foreign bank account was found nor details / link of investment in HSBC Geneva. The AO has not made any reference in the assessment order in respect of any seized material. Had there been any material of incriminating nature, AO would have referred to it in the assessment order. Thus, it is abundantly clear that nothing was found in respect of HSBC Bank account during search and addition has been made without the backing of any incriminating material in connection with such alleged unexplained investments. 5.13 The second limb to this argument is that, whether voluntary disclosure of income made during search at the time....
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....state as to what it means, what it pertains to, how it reveals that it pertains to a Bank Account and to which bank, location of the bank, financial information in form statement which shows the debits and credits etc. 5.18 It will be appreciated that no incriminating document was found during the course of search proceedings. It appears that the AO was also not sure of its own source of information and the veracity of the information on which heavy reliance is placed. 5.19 The AO till date has not been able to find/unearth any information regarding the purported offshore account of the appellant. It appears that upto the date, (FT&TR-1) Division has not been in a position to supply any positive information to the CIT(Central) in regard to the purported account. This is so even after the passage of more than eight years since the date of reference made by the Commissioner of Income tax (Central)-II Ahmedabad on 01.01.2013 to the JS(FT&TR-1) Division of the CBDT under DTAA 5.20, The AO has heavily relied on the so called "base document" in coming to the conclusion that the appellant has a Off Shore Account with HSBC Bank Geneva and that the amount of Rs.39....
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....ent was made by the assessee. 5.24 Therefore, here it is imperative to ascertain whether the information lying with the AO is said to be authentic and constitute a valid evidence. It is seen from the assessment order that the AO has specifically mentioned that there was receipt of information which, (i) shows the assessee is holding foreign bank account. (ii) shows the assessee's date of birth and legal residential address, (iii) it clearly speaks of specific instructions given by the assessee to the bank, (iv) the assessee was in touch with the bank, wherein he was having active telephonic communication in respect of the investments, movement of funds etc. and (v) date and time of conversation with the bank officials are shown clearly. Thus, on these observations, the AO alleged that the assessee is having foreign bank account. However, on confrontation of the above information to assessee on different occasions, he denied having any such foreign bank account and reiterated the absence of any authentic information 5.25 Before me the AR of the assessee submitted that the document relied upon by the AO is not an evid....
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.... the AO that assessee's admission of Rs.39.60 crores was on account of concealed foreign bank account. The inference drawn by her is that, there was existence of information in possession of the AO, as per which the assessee owned foreign bank account and based on such assertion, search was carried out and thereafter, post search, the assessee had admitted unaccounted income to the tune of Rs 39.60 crores, although he denied knowledge of having any foreign bank account. The statement recorded u/s. 132(4) of the Act, reproduced in the assessment order at Page 11, also clearly spells out that, the appellant had vehemently denied having knowledge of any foreign bank account, though however, in order to buy peace of mind and to cover up any incriminating material which is/may be found during search, in respect of his individual capacity or family members or group concerns, he is making admission of unaccounted income to the tune of Rs 39.60 crores. 5.27 It has been noticed that the appellant in the statement u/s 132(4) recorded on 15.09.2011 vide answer to Q.No.4 has surrendered the undisclosed income at Rs.39.60 Crores in the hands of family members, group concerns and co....
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....he statement recorded and reproduced by the AO in the assessment order itself. To reiterate, the disclosure was not specific, but was ad hoc. The AO's observation that the name, address and other details of the assessee are tallying with the impugned data, is not a new fact it was there on the date of revocation and despite these details, the assessee had denied the existence of any foreign bank account. Further, the disclosure was voluntary on behalf of entire group and subject to finding out any undisclosed income or investment etc. As regards the retraction after more than two years, the AR stated that incriminating material only to the tune of Rs.2.05 crores was found and hence there was no justification to stick to the earlier admission of Rs.39.60 crores. 5.30 However, as discussed supra, the very material relied upon by the AO cannot be termed as evidence, therefore, the subsequent stand of the appellant of having retracted the admission, stands vindicated. I find substantial force in the argument of the assessee that there cannot be any admission of unaccounted income, in the absence of any incriminating material. The decisions relied upon by the AO are on diff....
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....time to time regarding statements obtained during search and survey operations, it is undisputedly clear that the ADIT/AO have not collected any other evidence to prove that the impugned income (Rs. 39.60 Crores) was earned by the assessee. It is a proven fact that, once a statement is retracted, the contents stated in the retracted affidavit/statement must be substantially corroborated by other independent and cogent evidence and such onus is upon the assessee. However, since there is no evidence of any real income earned/any incriminating material found/any concealment of income, etc, it can be construed that such onus is discharged by the assessee. It has been consistently held by various courts that a sworn statement cannot be relied upon for making any addition and must be corroborated by independent evidence for the purposes of making assessments. The statement recorded under section 132(4) cannot be independently used for making any addition in the hands of the assessee and the said statement cannot be the sole basis for making any addition and must be independently corroborated by evidence. 5.34 The reliance have also been placed on various decision/judgment whereb....
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....dering the ratio laid down in the above decision and in the facts of the present case, we are of the view that the issue raised in this Appeal is required to be answered in favour of the assessee and against the Department" The Gujarat High Court in the case of Chandrakumar Jethmal Kochar (55 taxmann.com 292) dated 12 November 2014 is also relied upon by the Appellant. In that case the assessee retracted from said admission contending that it was made at mid night under pressure and coercion. Assessing officer, however, made addition on basis of disclosure made by assessee in statement recorded under section 132(4). The question before the court was whether merely on basis of admission that few benami concerns were being run by assessee, whether the addition could be justified when despite retraction revenue could not furnish any corroborative evidence in support of such admission. The Court has ruled in favour of assessee following Kailashben Manharlal Chokshi v. CIT [2010] 328 ITR 411/[2008] 174 Taxman 466 (Guj.) (Para 6). 5.47 I have considered the material on record and various case Laws relied upon by the appellant and legal precedents laid down by the jurisd....
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....unt. It is also seen that, even if the material in possession of Investigation Wing prior to search, is treated as incriminating, still there is substantial force in the argument of the AR that, the very fact that the Assessing Officer sought clarification of such information from the foreign agencies, in order to authenticate the said information, she failed to retrieve such clarification from the custodians of such information. This proves that the assessing officer herself was not sure about the authenticity of the said information. Under, the circumstances it is difficult to term the information in possession of the AO as evidence, much less incriminating. This proposition finds ample support from the various rulings referred supra, more particularly that of the jurisdictional High Court in the case of Saumya Construction Pvt. Ltd. supra. 5.49 In this case no such information was found during the search and hence in view of the principle laid down by the jurisdictional High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. 387 ITR 529 and other decisions/judgments cited above, addition cannot be roped in the assessment u/s 153A particularly when it has not....
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....formation Article-2 India Switzerland Double Taxation Avoidance Agreement However, since the information was not received till 31.03.2014 and is yet to be received, therefore, limitation date for passing assessment order gets extended as per explanation (viii) to section 153B As per AO the time limit for completion of assessment gets extended as per provisions of explanation (viii) to Section 153B of the IT Act for a further period of one year. As per AO, by virtue of referred extension the time barring date was extended to 31.03.2015. As per AO the relevant assessment order passed on 17.02.2015 was well within the limit envisaged as per the provisions of IT Act but the appellant objected the same. The appellant submitted that as per the prevalent provisions of law u/s. 153B(1)(viii) the time limit for completion of assessment to be excluded was from date of reference and upto the date of receipt of the information or six months whichever is less. Appellant further submitted that the amendment in the provisions was made effective from 01.07.2012 and according to the amended provisions the time limit for completion of assessment was extended by excluding the period....
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.... per the prevalent provisions of the law. 2. The exclusion period of six months or one year would be started/counted from the date of reference for exchange of information i.e. from 21.02.2013 or would be counted from the limitation date for completing the assessment i.e. from 31.03.2014. 6.15 As per the information available during the appeal Proceedings, a reference to competent authority was made for exchange of information on 02.01.2013 as confirmed by FT & TR division vide their letter to Pr. CIT (Central) Accordingly, as per Explanation (viii) to the Section 153B the limitation for completion of the assessment shall be deemed to be excluded for a period of Six Months i.e. Period commencing from the date on which a reference for exchange of information is made ending with the date on which the information so requested is received by the Commissioner or a period of six months, whichever is less, shall be excluded. Since no information in this case has been received by the Pr. CIT, the upper limit of six months exclusion would be available to the AO for completion of assessment 6.16 The above situation is once again reiterated as under - Financial Y....
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....07.2012 - Date of Reference to Competent Authority: 21.02.2013 - Period of extension from the date of reference (One Year) to end on 20.02.2014 - Normal Due Date of completion of assessment 31 March 2014 -Time available after the date of extension from 21.02.2014 to 31.03.2014 = 38 days In such a case the assessment order would have been to be passed by 22nd April, 2014 as the period available after the period of extension from the date of reference to competent authority was less than 60 days and hence in view of proviso to Explanation 153 B of IT Act the AO would have the 60 days' time to complete the assessment which expired on 22.04.2014. In this case also the assessment completed on 15.02.2015 is far later than the limitation date of 22.04.2014. 6.19 To summarise the issue, it is noticed that as per Explanation (viii) to section 153B, the period to be excluded begins from the date of reference made, till the date of Six Months (or one year as per AO) or the receipt of the information whichever is earlier. Since, in the instant case on reference no information has been received from foreign authorities even til....
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....etation of the AO regarding the extension of the period beyond the date of limitation i.e 31 March 2014 by adding a period of one more year and extending the limitation up to 31 March 2015 is not in line with the harmonious interpretation of the provisions of section 153B. If the same is considered, then it would lead to the Proviso appended to the Explanation of Section 153 B redundant and infructuous as under no circumstances the period of sixty days mentioned in the said proviso would become applicable due to availability of extended period of one year from the normal time barring date as per Section 153 B(a) or (b) of IT Act. Similarly, if the exclusion period of six months is counted from the date of limitation of assessment i.e. 31.03.2014 then also the limitation expires on 30.09.2014 while the assessment in the case has been completed on 17.02.2015 which is much beyond the limitation date hence, assessment became barred by limitation Moreover, the proviso to explanation of Section 153 B for availability of 60 more days' time for completing the assessment would become infructuous and redundant as under no circumstances the period of sixty days mentioned in the s....
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.... time this situation occurs, the proviso comes into play and has to be applied. The proviso can come into operation on one, two or more occasions in the same assessment/reassessment proceedings. In the present case, the respondent assessee had filed a writ petition. Because of the stay order passed, the period during which the stay order was in operation in the High Court has to be excluded. Thereafter, the Assessing Officer passed an order under Section 142(2A) of the Act and the period for conducting special audit has to be excluded. The proviso to Explanation stipulates that the Assessing Officer can pass the assessment order within 60 days, if after excluding the time mentioned in the Explanation, the time for completing the assessment is less than 60 days. In terms of the said proviso, the Assessing Officer had the extended period to complete the assessment proceedings. The Assessing Officer had to complete the assessment within 60 days from the date on which the special audit report was to be submitted to him." In view of the above discussion, there had been the breach of the period of limitation while passing the assessment order as the assessment has not been compl....
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....ention of the legislature. Further, the AO is duty bound to assess correct income of assessee as held in various judgments. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.26,33,23,482/- made on account of the deposit/investment in HSBC Geneva Bank Account held by the assessee & his cousin brothers jointly. 6. On the facts and in the circumstances of the case and in law the impugned order passed by the Ld. CIT(A) is contrary to law in as much as the addition made on account of undisclosed foreign bank account has been made on the basis of incriminating documents duly confronted to the assessee during the course of search. 7. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has not following the proposition of law laid down in the Finance Act, 2012. 8. On the facts and in the circumstances of the case and in law, the ld. CIT(A) ought to have upheld the order of the A.O. 9. It is, therefore, prayed that the order of the ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 5. Assessee has filed Cross Objections as....
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....en made to the Competent Authority under the provisions of "Exchange of information" under Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. However no information was received from the Competent Authority before completion of the assessment orders by the A.O. as well as during the pendency of the above appeals by Ld CIT[Appeals] in January 2021, that is almost nine years after the so called reference made by the Department. Again two years after filing of the above appeals by the Revenue, in the above circumstances the Ld DR is seeking further time to get the details is highly unjustifiable and against the Principle of Natural Justice and therefore requested not to grant further time of 60 days. 6.1. We have carefully considered the submissions of the rival parties and granted time to the Ld DR to submit his written arguments within 15 days of the conclusion of the hearings of the appeals. Since the question of getting the details of foreign bank account from CBDT/Investigation Wing after a period of 10 years is not justifiable. Further the Administrative Commissioner namely PCIT, Central has filed the present appeals for the Revenue, it is the very same office who h....
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....ec. 153A notice. 5. Ld. AO in her assessment order has corroborated the 'admission' of Shri Rajeshkumar G Ptel with independent corroborative evidences. The assessment order also discusses the reasons advanced by the assessee regarding his retraction. It mentions that the assessee has been demanding certified copies of documents from authorities/banks from the department. 6. During the course of assessment, after retraction, the assessee was required to provide a 'consent waiver', as per procedure, to enable the department to proceed ahead with independent enquires. It mentions that the assessee has refused to provide even the consent waiver. 7. Thereafter, on the strength of the findings in the Search, especially the 'admission' by the assessee when confronted with the details of Bank-deposit in HSBC, Geneva and other corroborating and circumstances indicating that the amount 'held' by assessee has not been disclosed in the Return of Income for AY 2006-07 and AY 2007- 08, added the amount of deposits (converted into Indian rupees), the ld. AO added the undisclosed amount to taxable income of the assessee, in respective years. 8. Ld. CIT (A) dele....
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.... or documentary or contained in electronic form which suggests any inference as to any fact, any issue or relevant fact, and which is made by any of the person, and not the circumstances herein after mentioned. One such persons mentioned in Section 18(1) is " by party interested in subject matter"-which is defined as- Persons who have any property or pecuniary interest in the subject matter of the proceeding, and who make the statement in their character of persons so interested. Sec.31 admission not conclusive prove but may estop:- Admissions are not conclusively proof of the matter admitted but they may operate as a stoppage under the provisions hereinafter contained. 11. Thereafter kind attention of Hon'ble ITAT was brought towards the fact that despite being on 'oath', the assessee has given affidavit wherein he has retracted his disclosure. (the affidavit is not on record and is Hon. ITAT may require the assessee to provide a copy of Affidavit filed before AO). Thereafter arguments were made on "perjury" and that perjury, even by filing an affidavit has been held as contempt of court in various decision of Hon'ble Supreme Court: a. Perjury: ....
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....false evidence against public justice. The offences incorporated under this Chapter are based upon recognition of the decline of moral values and erosion of sanctity of oath. Unscrupulous litigants are found daily resorting to utter blatant falsehood in the courts which has, to some extent, resulted in polluting the judicial system. Hon. Karnataka High Court, in a writ petition, WRIT PETITION NO.19448 OF 2015 (GM-FC), in the matter of Dr.Pravin R and Dr.Arpitha, has held that consideration of complaints regarding perjury should not be deferred or delayed by the Courts. In this case proceedings, the respondent wife had submitted an affidavit which was found to be false on fact. In this case the High Court of Karnataka remanded the matter back to Lower Court for initiating perjury proceedings. Hon. Court has held as follows: The tone for this judgment may be set by what Shakespeare said in Richard III about perjury; the relevant stanza runs as under: "My conscience hath a thousand several tongues, And every tongue brings in a several tale, and ever tale condemns me for a villain. Perjury, Perjury in the highest degree; Murther, in the direst degree; All several sins....
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....statement is within the meaning of this section, whether it is made verbally or otherwise. Explanation 2.-A false statement as to the belief of the person attesting is within the meaning of this section, and a person may be guilty of giving false evidence by stating that he believes a thing which he does not believe, as well as by stating that he knows a thing which he does not know." It can be seen from the definition that to constitute an act of giving false evidence, a person must make a statement which is either false to the knowledge or belief of the maker or which the maker does not believe to be true. Further, it requires that such a statement is made by a person (1) who is legally bound by an oath; (2) by an express provision of law to state the truth; or (3) being bound by law to make a declaration upon any subject. "........there is no rule of law that common sense should be put in cold storage' 12. It was argued as to how the case in hand is different from case like Saumya Construction (Gujarat HC); Kabul Chawla (Delhi HC) by pointing out that that the assessment order has a direct connection with the findings of Search and seizure action. The ....
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....peals, before the matter engages the appellate jurisdiction of this court, are authorities vested with the jurisdiction, power and obligation to reach appropriate findings on facts. Noticeably, it is only the appeal to the High Court, under Section 260-A, which is restricted to consideration of "substantial question of law", if any arising. As would be seen from the discussion that follows, the obligation to make proper inquiry and reach finding on facts does not end with the AO. This obligation moves upwards to CIT (Appeals), and also ITAT, should it come to their notice that there has been default in such respect on the part of the AO. In such event, it is they who are duty bound to either themselves properly inquire or cause such inquiry to be completed." 16. The assessee has not refuted that the investment in Bank account belongs to him. Only the authenticity of the document is being doubted. I have requested for a time of 30 days for me to collect details from investigation wing and CBDT. Hon'ble ITAT has been pleased to provide only 15 days. It is humbly submitted that this is a case filed in the year 2021 and there appears no basis to hurry up the proceedings in dep....
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....this reason only the assessment proceedings were extended. 3. It is further submitted that, as a matter of caution, the ld. CIT(A) Ahmedabad, before finalizing the appellate order, had once again called for a report from the AO, as to whether any information was received from the CBDT (FT&TR), post assessment order. Since the reply of the AO was not in affirmative, the ld. CIT(A) proceeded to finalize the appeal. The Respondent gathered this information from the departmental records for which inspection was sought. 4. Now that when the Ld. CIT(DR) chose to revisit this statutory exercise once again, the Respondent feels that this is nothing but dragging the matter to endless litigation, which is against the spirit of the decision of the Hon. Supreme Court in the case of Sun Engineering Works. Hence kind objection is raised to the adjournment sought of 60 days, just for the sake of revisiting the old exercise, and hence, may kindly be detested. 5. The Respondent is also of a strong belief that, it is beyond the jurisdiction of the Ld. CIT(DR) to revisit the work done by a senior officer of the same rank. 6. In light of the above, the Respondent pr....
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....statement recorded u/s. 132(4). This is grossly unjust because, an income tax assessment order relies heavily on evidence (which is devoid here) and not on the construction of sentence in the stattement recorded u/s. 132(4). The jugglery of language manipulated in the assessment order, is as under. 3.3 From the above it can be seen that, the finding recorded by the AO supra that "what prompted him (Respondent)", is nothing but a surmise. Nowhere in the assessment order, the AO has cited a single evidence in support of the finding that the Respondent had any foreign bank account. Para 4 (under the heading Brief facts of the case) As per this para, the ld. CIT(DR) has submitted that, after 29 months of such admission, Shri Rajesh Patel filed a statement of retraction of his disclosure to department. Reply 4.1 Unfortunately, here the Ld. CIT(DR) is totally silent about the numerous correspondences made by the Respondent to the Department, though however, he acceedes in para 5 that, the Respondent had vehemently pleaded the department to furnish copies of the corroborative materials, so as to enable him to proceed in the matter. No such materials were given t....
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....s of the case, is perplexing because, in the absence of any material, there is no merits in the case. 9. No comments 10. Under this para, the ld. DR has relied upon the Evidence Act. Reply 10.1 The Respondent prays that, before citing the definition of evidence as per the Indian Evidence Act, it is prayed that the definition of 'evidence' should be read together with the definition of 'proved' and the merged result of these two definitions are to be considered for ascertaining a fact to be evident to the case. According to Section 3 of the Evidence Act 1872, evidence means and includes: • All such statements which the court allows or needs to be presented before it by the witnesses in connection to matters of fact under inquiry. These statements are termed as oral evidence. • All such documents including any electronics record, presented before the court for inspection. These documents are termed as documentary evidence. 10.2 Documentary evidence is the evidence that mentions any issue described or expressed upon any material by way of letters, figures or marks or by more than one of the ways which can be used for record....
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....and seizure proceedings. Reply 12.1 This allegation is grossly unacceptable because, the ld. CIT(A) has relied upon various judicial pronouncements passed by Hon. Judges of various High Courts. Not a single judgement has been passed by him. The ld. CIT(A) is duty bound to adhere to the decisions / precedents laid down by various Courts, especially the Hon. Gujarat High Court. The Respondent relies upon the following judgements in this regard. G.M Mittal Stainless Steel (P), CIT vs. - (2003) 179 CTR 553 = 263 ITR 255 = 130 Taxman 67 (Guj.) Binding nature - Jurisdictional High Court decision - Is binding on the Revenue authorities within the State. Revenue authorities within the State cannot refuse to follow the jurisdictional High Court's decision on the ground that the decision of some other High Court was pending disposal before the Supreme Court. Air Conditioning Specialists Pvt. Ltd. vs. Union of India & Ors. (1996)221 ITR 739 (Guj.) The Commissioner of Income Tax is a "Tribunal" subject to the supervisory jurisdiction of the High Court under Article 227 of the Constitution. Hence, he is bound to obey the law declared by the High Cour....
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.... Union of India vs. Kamalakshi Finance Corporation Ltd. AIR 1992 SC 711 that judicial discipline requires that decision of higher authority should to be followed in the case of quasi-judicial authority and, therefore, a lower officer is bound to follow the decision of the higher authority e.g. Assessing Officer is bound to follow the decision of the Tribunal particularly so in the case of the same assessee. This principle requires that decisions of higher authorities such as Tribunal should be followed by lower officers, viz., CIT(A) and Assessing Officer. Even decision of the Tribunal, not a jurisdictional Tribunal, is required to be followed by the lower authority. Sometimes, an argument is made and also put on record that the Department has not accepted the decision of the Tribunal and Appeal has been preferred to the High Court. However, courts have repeatedly held that phraseology of not accepting the decision is obnoxious and unparliamentary in respect of the order of the higher authority. Unless, in Appeal the order of the higher authority is stayed, it operates as a valid binding decision to the lower authority not only in the case of the same assessee but also in other cas....
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....y has the Board delayed the matter and why was no information shared so far. This being only hearsay, no credence may be attributed. Against, as discussed in the first part of this note, it is prayed that, the above pretext are only meant to drag litigation. It is thus prayed that, adjournment of 60 days is too much to collect authentic data from CBDT. Conclusion 17. In light of the above it is prayed that, the matter may be proceeded on the information available on record and kind justice may be given to the Respondent." 7. We have carefully considered the notes of arguments filed by the Ld CIT DR and the reply arguments filed by the Ld AR. Before going into the same we find from the Grounds of Appeal filed by the Revenue namely Grounds 1 to 4 are inter connected namely "Whether any incriminating material should be found and seized during the course of search for making assessment under section 153A of the Act". Ground nos 5 and 6, are relating to deletion of addition made on account of deposit/investments in HSBC Geneva bank account. Ground no 7 is the Ld CIT[A] has not following the proposition of law laid down in the Finance act, 2012. Ground nos. 8 and 9 i....
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....ake effect from 1 July 2012." 7.3. As it can be seen from paragraph 4 of the assessment order, the Competent Authority namely Under Secretary [FT&TR-III][2] vide its letter dated 21-02-2013 sought for information under the provisions of 'Exchange of information' article to Indo-Switzerland, DTAA. Since the reference been made after 1st July 2012, the amended extention period of 12 months will be applicable in the present case. It is further clear from the Memorandum explaining the changes in the Income Tax Act vide Finance Bill 2012 that the time period to be excluded would start from the date on which the process of getting information is initiated by making an reference by the Competent Authority in India to the foreign tax authorities and end with the date on which information is received by the Commissioner. In the present case since the reference was made on 21-02-2013 by the Competent Authority, the extended 12 months period expires on 20- 02-2014. But the normal time barring period for completion of assessment order is on 31-03-2014. Thus there is 38 days time available from 21-02-2013 to 31-03- 2014. 7.4. As per the proviso to Explanation [viii] to section 153B[1], wh....
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....certificate & acknowledgement of Return of Income of Jay Bhalodia [for Visa purpose], rough details of rent for premises Nirali, draft of flat agreement [belongs to Pushpa Ben] and passport copies of the assessee and his wife. The above seized materials of 99 pages were been clarified by the assessee with each seized material by way of a table [which is placed in pages 59 to 61 of the paper book]. These sized materials are NOT the basis of making addition by the assessing officer in the assessment order. But additions were made based on what was NOT found and seized from the premises of the assessee during the course of search, namely three pages entries of HSBC Bank. 8.2. As it can be seen from para 6.2 of the Assessment order, a THREE pages photocopy document of HSBC, Geneva bank account with code profile client 5095020378 was confronted to the assessee and statement u/s. 132[4] was recorded admitting Rs.39.6 crores as investment in Foreign Bank accounts by the assessee on behalf of the entire group. This is NOT A DOCUMENT SEIZED during the continuation of the Search on 15-09-2011 at the premises of the assessee, but brought by the Investigation Team as 'an information' by the....
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.... Section 3 of the Evidence Act 1872, evidence means and includes: • All such statements which the court allows or needs to be presented before it by the witnesses in connection to matters of fact under inquiry. These statements are termed as oral evidence. • All such documents including any electronics record, presented before the court for inspection. These documents are termed as documentary evidence. 10.2. Documentary evidence is the evidence that mentions any issue described or expressed upon any material by way of letters, figures or marks or by more than one of the ways which can be used for recording the issue. Primary documentary evidence includes the evidence that shows the original documents as mentioned in Section 62 of the Indian Evidence Act, whereas secondary documentary evidence is the evidence that includes copies of documents that can be presented in the court under certain circumstances or as mentioned in Section 63 and Section 65 of the Indian Evidence Act. Direct Evidence is acknowledged as the most important evidence required for deciding the matter in issue. Direct evidence directly proves a fact or disapproves of the fact by....
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.... from the possession of the assessee). The only requirement/plea of the assessee was that, he may be given copy of any document to prove the allegation, which was NOT PROVIDED since it is non-existing document. This amply proves that the 'satisfaction note' of the Investigation Wing was also on a wrong footing as they came only for roving inquiry. 9.3. In this connection, Jurisdictional High Court of Gujarat in the case of Kailashben Manharlal Chokshi Vs. CIT reported in [2008] 174 taxmann.com 466 (Guj.) held that merely on the basis of admission of the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such addition. When the statement recorded at such odd hours cannot be considered to be a voluntary statement, when the same is retracted by the assessee. Therefore the addition made is liable to be deleted. Operative portion of the above judgement reads as follows: "...26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of ....
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.... provided any information to Revenue Authorities in India about assessee's bank account with HSBC, Geneva, Switzerland for assessment years under appeals i.e., A.Ys. 2006-2007 to 2011-2012. Thus, there is no incriminating material available on record to make any addition in any assessment years. It may also be noted here that assessee since the very beginning denied to have maintained any such bank accounts with HSBC, Geneva, Switzerland. There is no material available on record that the assessee made deposits in HSBC Bank A/c in A.Y. 2006- 2007 or thereafter earned any interest in remaining assessment years under appeals. Operative portion of the decision reads as follows: "... 6. Learned Counsel for the Assessee submitted that it is an undisputed fact that search was conducted on 28-7-2011 on the assessee. Learned Counsel for the Assessee referred to paper book filed by the Ld. D.R. containing letter Dated 22-8-2019 of ACIT, Central Circle-7 [ A.O.] to the CIT-DR in which it was categorically stated that last panchanama was drawn on 26-9- 2011. He has, therefore, submitted that in F.Y. 2011-2012 search is executed and last panchanama drawn. Learned Counsel for the As....
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....n only be provided for information starting from the financial years 2011/2012 as the prior years are not covered by temporal scope of Article 26 of the amended Double Tax Agreement between India & Swtizerland. Therefore we can only provide you with information from 1 April 2011 (see decision A-4232/2013 of 12 December 2013 of the Swiss Federal Administrative Court)". 6.1.1.2 The Learned Counsel for the Assessee submitted that the Agreement between The Republic of India and The Swiss Confederation for avoidance of double taxation with respect to taxes on income as modified by Notification No. S.O.2903(E) Dated 27-12-2011. Copy of Notification No. S.O.2903(E) Dated 27-12-2011 together with amended protocol filed to show it apply to later period. Therefore, reliance is placed on the following judicial decisions which hold that if the Reference based upon which the limitation is sought to be extended is held bad, limitation so extended would also be bad in law. ... ... .... 8. We have considered the rival submissions and perused the material on record. It is not in dispute that search was conducted in the case of assessee on 28-7-2011. Both the part....
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....on was provided for the period prior to 1-4-2011. Therefore, it is clear that no information have been provided by the Swiss Authorities that assessee maintained any bank account with HSBC, Geneva, Switzerland in assessment years under appeals i.e., 2006-2007 to 2011-2012. Therefore, it is clear that no incriminating material was found against the assessee so as to make any addition against the assessee. The Hon'ble Delhi High Court in the case of, Kabul Chawla (supra) held as under: "vii. Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment" 8.2 The Hon'ble Delhi High Court in its recent decision in the case Meeta Gutgutia (supra) in paras 69 to 72 has held as under : "69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person....
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....eign bank accounts either held by certain Indians or were beneficiaries in these bank accounts under the exchange of information between India and France. The French Authorities on 28.06.2011 gave information in USB that certain persons in India held bank accounts in HSBC Pvt. Bank (SUISSE), Switzerland. In the said information, the name of the assessee had also figured and 11 pages document pertaining to the assessee was also received. The contents of the documents have been reproduced in the assessment order. These documents revealed that in the bank accounts of certain entities, the assessee was either beneficial owner in the account or had been shown as the person having right of inspection or as account holder. The name of the entities which held the bank accounts have already been discussed above. The total sums standing in the bank accounts for the relevant financial year, aggregated to Rs.27.92 crore in terms of INR. The details of amount appearing in the account of various entities have already been incorporated above. After receiving the said information, the Investigation Wing of the department carried out search and seizure action in the case of the assessee and group c....
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....late stage that in the post search anything has been found, except that the information which though was incriminating against the assessee was already in the possession of the department. Ld. CIT (A) though has tried to rope in the element of incriminating material/evidence found during the course of search by holding that statement u/s. 132(4) it constitutes incriminating material within the meaning and scope of Section 153A. However, such an observation and the finding is de hors the fact as admittedly in the statement recorded on oath u/s 132(4) at the time of search, assessee has categorically denied having such transaction or any kind of link with the foreign bank accounts. Thus, the observation of the ld. CIT (A) to this extent is erroneous on facts and hence cannot be upheld. In the letter filed by the ld. CIT-DR written by the Assessing Officer before us, it is clearly established that the information was received by the French Authority on 28.06.2011 and based on this information the investigation wing had carried out search in the case of the assessee. This fact itself is a testament that the material information which has been referred to in the assessment order was pri....
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....relating thereto and this position was categorically admitted by the Assessing Officer during the course of appellate proceedings before the ld. CIT (Appeals) as is evident from the relevant order-sheet entry dated 21.12.2015 recorded by the ld. CIT (Appeals) (copy at page no. 22 of the paper book). The question that arises now is whether in the absence of such incriminating material, any addition to the total income of the assessee can be made on account of the transactions reflected in the Bank account of the assessee with HSBC Bank or any income relating thereto in assessments completed under section 153A of the Act for both the years under consideration. 9. As per the provisions contained in Section 153A, if the search or requisition is initiated after 31.03.2003, the Assessing Officer is under an obligation to initiate proceedings under section 153A for six years immediately preceding the year of search. The Assessing Officer is then required to assess or reassess the total income of the said six years and if any assessment or reassessment out of the said six years is pending on the date of initiation of the search, the same would abate, i.e. pending proceeding qua th....
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....Court in this context in the case of Anil Kumar Bhatia (supra), the Tribunal held that the only logical conclusion which could be traced out by harmonizing the legislative intendment and the judicial decision was that where the assessments had already become final prior to the date of search, the total income has to be determined under section 153A by clubbing together the income already determined in the original assessments and the income that is found to have escaped assessment on the basis of incriminating material found during the course of search. To arrive at this conclusion, reliance was placed by the Tribunal on the decision of Special Bench, Mumbai in the case of All Cargo Global Logistics Ltd. (supra), wherein it was held that even though all the six years shall become subject matter of assessment under section 153A as a result of search, the Assessing Officer shall get the free hand through abatement only on the proceedings that are pending. But in a case or in a circumstances where the proceedings have reached finality, assessment under section 143(3) read with section 153(3) has to be made as was originally made and in a case certain incriminating documents were found....
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....dismissed. Order pronounced in the open court on 12-04-2023 ============= Document 1 A SSLC Business Support 1.5.06 to 30.5.07 Rs.2,91,934/- Service Development and 1.6.07 to 15.5.08 Rs.8,52,492/- B SSLC Supply of C SSLC Scapped Contents Information and 16.5.08 onwards Rs.21,72,745/- Technology till 31.3.11 Software Rs.12,25,844/- Document 2 Therefore, with a view to ascertain and reaffirm the facts, the assessee was summoned to this office and his statement was recorded on oath on 22.11.2013. In the said statement, the assessee was specifically asked to furnish details about foreign bank accounts. In reply to question No. 10, he deposed that, as far as I remember and to the best of my knowledge and belief, I do not have such foreign bank accounts. [verbatim] 6.1 The next question was more direct, viz., whether he has opened any bank account with HSBC Geneva, either directly or through any of your agents or relatives? In reply to this question, he denied having opened any such bank account. Again, in the next question he was informed that the Department is in possession of information that....