TaxTMI 
TaxTMI 
2023 (4) TMI 742
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....10 to 2012-13, against order dated 30.06.2016 of Ld. CIT(A)-23, New Delhi by which appeal no. 152 & 155/ 15-16 for A.Y. 2009-10 to 2012-13 against order dated 05.03.2015 u/s 153A r.w.s. 143(3) of the Act passed by Ld. ACIT, Central circle -7, New Delhi were disposed off. 2. The facts of the case are that the assessee is individual and main source of income comprising was from salary, house property and capital gains. A search took place on M/s. Dhirani group of cases on 28th July, 2011. A search was also conducted upon a warrant of authorization in the name of assessee at D-1039, New Friends Colony, New Delhi. Notice u/s 153A of the Act was issued on 21.05.2012 requiring assessee to file the return for the relevant assessment years. Assessee filed the returns. Thereafter notice u/s 142(1) along with questionnaires were issued and accordingly assessment was completed. 2.1 In regard to assessment year 2007-08, assessee has found to have not disclosed HSBC Bank account at Dubai. Thereafter based on statement of the assessee u/s 132(4) of the Act dated 28.07.2011 and 04.08.2011, the Ld. AO observed that the said account had balanced of 19,15,148 Euros in April, 2006 and applying a co....
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....ldren Aditya Dhirani and Natalia Dhirani by one Ravinder Bahal, relative of the assessee with help of a friend Mr. Raj Kapoor. These additions were also deleted by Ld. CIT(A). 5.5 The Revenue is in appeal for AY 2008-09 to 2012-13 challenging the various deletions by Ld. CIT(A) and the assessee is in appeal against order of ld. CIT(A) for quantum addition for the base year 2007-08. 6. The arguments were heard and records have been perused. The grounds raised in the respective appeals are being taken up for discussion and adjudication in the form of issues for determination as follows. 7.1 Ld. Counsel for the assessee has focused on the arguments that the source of information is not established and referring to the fact that it was pen drive which was received allegedly from the French Govt., in the absence of link evidence, the same is not admissible. It is submitted that print out from this Pen Drive is not a bank account statement and in similar circumstances the Tribunal in the case of Parminder Singh Kalra, ITA No. 5330/Del/2016 dated 15.06.2021 has held that the so-called bank statements retrieved from the pen drive are not statement at all and that the same are not admiss....
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....ee Vikram Dhirani. That the statement recorded at the time of search corroborate all the particulars of this document and the same cannot be considered to be a dumb document. He has further defended the orders of Ld. Authorities below submitting that there was no case of time barring assessment and in accordance with protocol information was sought from the foreign authorities. Ld. DR relied following judgment primarily to submit that the sworn statements cannot be left aside without there being anything exceptional to justify retraction. B Kishore Kumar Vs CIT [2015] 62 taxmann.com 215 (SC)/[2015] 234 Taxman 771 (SC), B Kishore Kumar Vs CIT [2014] 52 taxmann.com 449 (Madras)/[2015] 229 Taxman 614 (Madras)/[2015] 273 CTR 468 (Madras), Bhagirath Aggarwal Vs CIT [2013] 31 taxmann.com 274 (Delhi)/[2013] 215 Taxman 229 (Delhi)/[2013] 351 ITR 143 (Delhi), CIT Vs M.S. Aggarwal [2018] 93 taxmann.com 247 (Delhi)/[2018] 406 ITR 609 (Delhi), Smt Dayawanti Vs CIT [2016] 75 taxmann.com 308 (Delhi)/[2017] 245 Taxman 293 (Delhi)/[2017] 390 ITR 496 (Delhi)/[2016] 290 CTR 361 (Delhi), M/s Pebble Invesment and Finance Ltd. Vs ITO [2017-TIOL- 238-SC-IT], M/s Pebble Invesment and Finance Ltd. Vs ITO?....
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....fter issued summons u/s 131 of the Act on 07.03.2014 and on 11.03.2014 the AO recorded statement of the assessee wherein the appellant, in answer to Q. No. 6, stated that "though my name does appear in the statement shown by you but I am not aware about in what capacity my name has been mentioned" and denied that the bank account statement of HSBC Dubai being shown belong to him, and that he was not aware of Mapleton Continental SA, and that the bank statement being shown is in US Dollar whereas in the statement recorded during the search the amount stated was in Euro. In reply dated 18.11.2014 to subsequent notice u/s 142(1) of the Act dated 10.11.2014 the assessee once again denied having any foreign bank account. The AO issued another notice u/s 142(1) on 12.12.2014 asking him to produce copy of bank account maintained by the assessee with HSBC Dubai which was denied again by the assessee vide his letter dated 22.12.2014. Thereafter, the AO observing, at Para 5 page 2 of the assessment order, that "as per information available with the Investigation Wing of the Department the assessee was having an account with HSBC Bank, Dubai bearing No. BUP_SIFIC_PER_JD 5090187879, PER_JD 148....
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....ent order it has not been stated as to in which currency this account was being maintained, whether it is US Dollar, Euro or UAE Dirham, but while drawing conclusion on page 10 of the assessment order the AO has considered the balance to be in Euro but on what basis this account has been considered in Euro is also not clear, and that when the allegation is being made that this bank account is in HSBC Bank, Dubai, then how come the currency being alleged is Euro and not UAE Dirham; (v) reference to the name of Mapleton Continental SA in the bank statement suggest that this document which has been shown to the assessee was in the name of Mapleton Continental SA, but how this document of Mapleton Continental SA is related to the assessee has not been investigated nor verified; (vi) the AO has not been able to bring any material or evidence which can substantiate its allegation that the assessee is having a foreign bank account; (vii) the AO repeatedly through notices u/s 142(1) of the Act has been asking the assessee to give a copy of the bank statement and in case the AO was having copy of the bank statement there was no reason and justification for the AO to ask for the same d....
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....in terms of the provisions of s.90 of the Act, and exchange of information is in accordance with Article 28 of the said convention, and this exchange of information framework is based on Article 26 of the OECD Model Tax Convention which are as under. 7.7.4.3 Under these stipulated provisions of the exchange of information framework it cannot be said that the due process has not been followed in the present case. Therefore, even if the information is related to bank account of the appellant with HSBC Bank Dubai, even though the Government of France did not have domestic interest in the HSBC account held by the appellant in Dubai, the information being relevant to India for taxation purposes was legally shared with India in terms of the provisions of the DTAA between the two countries and in terms of the provisions of Art.26 of the OECD Model Convention for Exchange of Information. This view is also consistent with s. 90(1)(c) of the Act, which provides that the exchange of information may be "for prevention of evasion or avoidance' of income-tax chargeable under this Act or under the corresponding law in force in that country, ... or investigation of cases of such evasion or a....
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....or the purpose of assessment of the correct taxable income of the appellant. 7.7.4.6 In view of the facts brought out at sub-paras-(i) to (v) above there remains no doubt as regards the chain of custody and integrity of the information received from the time it has been handed over to the competent authority of India, till it has reached the AO, and therefore as regards the authenticity of the source of information, or of the information per se, related to the impugned bank account of the appellant with HSBC Dubai. I hold accordingly." "7.7.5.2 On close scrutiny of the impugned bank account statement received from the French authorities it is observed that under "Other persons linked to the client's profiles (AUTRES PERSONNTS LIEES AUX PROFILS CLIENTS)" the Name : BUP Code is "HSBC Financial Services [ME] Ltd. (5090279917)" with the address "HSBC Financial Services (ME) Ltd., P.B. Box No.4604, Dubai, United Arab Emirates". The appellant has contended that it is not the case of the AO that the assessee was having a bank account in France and the Government of France has given a copy of the bank account being maintained by the assessee in France but in fact the allegation of the ....
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....file it is mentioned as "assets recorded in December, 2005 (in $)" and "assets maximum recorded during the period (in $)". We have also noted herein above that HSBC Private Bank is head quartered in Geneva, Switzerland, and it is well known that universally accepted currency is primarily Dollars. Since the credit balances related to liquid assets and investments in the name, and beneficiary name, of the appellant noted in the impugned bank statement is Dollars, and since the AO has not stated any reasons for adopting Euro as the currency, it would be appropriate to adopt Dollars as the currency for computing the value in INR. In view of the fact that I have herein above upheld the authenticity of the information received related to the foreign bank account, and considering that the name, personal details and address of the account holder mentioned in the impugned bank account is specifically that of the appellant and his client ID is mentioned against his name, and his name also appears as the "beneficial owner" against the client name Mapleton Continental SA, it is held that the impugned foreign bank account belongs to the appellant and he is the beneficiary of the assets/investme....
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....ra, (supra) has taken into consideration similar set of facts and discredited this information with following observations; "132. The ld. CIT(A) having referred to the remand report submitted by the AO on this issue held that that in view of the chain of custody and integrity of information received from the time it has been handed over to the Competent Authority of India, till has reached the AO, there remains no doubt. There is no quarrel with the proposition that the French Competent Authority has handed over the pen drive to the Indian Competent Authority and the 6 page document is a print out of the said pen drive. But the ld. CIT(A) failed to address the argument of the assessee that the information contained in pen drive, the source thereof and author thereof and the authenticity of the information contained in the pen drive has not been established with any credible evidence or linkage with any of the document. The pen drive so received was just like an anonymous letter forwarded by French Competent Authority to the Indian Competent Authority. The issue which the ld. CIT(A) has failed to appreciate is the origin of the source of information only and certainly not the pass....
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....y or other valuable article or thing" may be recorded, and as per Explanation below s. 132(4) of the Act the statement may be recorded "in respect of all matters relevant for the purposes of any investigation connected with any proceedings under the Act", i.e. in respect of any other relevant matter or information available with the department. It is to be noted that a total of Rs.5,11,16,540/- Cash was found from the above three premises out of which Rs.5,07,90,000/- was seized. As such, the statement of the appellant recorded u/s 132(4) of the Act during the search cannot be considered to be legally invalid and the facts of the case relied upon are distinguished on this account. Therefore, it was but natural that queries regarding information related to the impugned foreign bank account which was in the possession of the Department was put to the appellant at the time of recording of statement u/s 132(4) of the Act and after persistent questioning the appellant finally admitted, in answer to Q. No. 29 to 35 that he has bank account with HSBC Dubai opened on 13.04.2006. The impugned statement u/s 132(4) of the Act has been reproduced-at page no. 3 to 5 of the assessment order at p....
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....his statement u/s 132(4) of the Act. Recorded during search without effectively contradicting the evidence related to the foreign bank account as available with the department and the transactions recorded therein. Neither did the appellant produce the information and documents related to the foreign bank account in spite of repeated queries by the AO during the assessment proceedings nor did he submit any material so as to contradict the inference drawn by the AO that the impugned foreign bank account statement belonged and related to him and were deposits/investments made by, or on behalf of, him. As discussed above, there is no doubt with regard to the authenticity of the information related to the impugned foreign bank account received from France under the exchange of information and I have held that the impugned account belongs to the appellant and the deposits and investments reflected therein constitute his disclosed income. Besides, there is no indication in the statement that there was any coercion or pressure on him to make such admission in his statement u/s 132(4) of the Act, and at no point of time, has he indicated that the admission was under protest. Therefore, con....
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....e statement who alleges inducement, threat, promise, etc. to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat, etc. against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of his obligations at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down that the authority or any Court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing." (emphasis supplied) Further, retraction without adducing or leading evidence in support of retraction from admission and without establishing that the statement was obtained under pressure or coercion have been held to be not valid in Narayan Bhagwant Rao Gosavi Balajiwale vs Gopal Vinayak Gosavi AIR (1960) SC 100, 105; Ramji Dayawala & Sons P. Ltd. vs Invest Import AIR (1981) SC 2085, 2093; Pullangode Rubber Produce Co. Ltd. vs State of Kerala (1973) 91 ITR 18 (SC), Y. Ramachandra Reddy v.....
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.... is also settled law that the statement u/s 132(4) is deemed to be evidence under the Act. Since the statement u/s 132(4) has been corroborated by other relevant and sufficient corroborative evidence, the foreign bank account documents received under exchange of information, it may be validly utilised as 'incriminating material. Therefore, considering that the assessment has been made not merely on basis of the statement but based on the information and contents of the impugned foreign bank statement/documents, I hold that the assessment made u/s 153A of the Act is not in conflict with the judgments of the Hon'ble Delhi High Court relied upon by the appellant including that of Kabul Chawla (supra). As such, ground nos. 3 and 6(i) & (ii) against the legal validity of the assessment order u/s 153A of the Act do not survive and are dismissed. 13. It is apparent from aforesaid findings that Ld. CIT(A) has merely relied the case law without any rational of his own. What Ld. CIT(A) has failed to take cognizance of is the fact that in none of the cases only on the basis of statement the additions were made u/s 153A of the Act. 14. No doubt the admission is best piece of evidence and....
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....ded u/s 132(4) does not constitute incriminating material and no addition can be made on the basis of statement alone without any reference to material gathered during the course of search operations, we hold that no addition can be made in the instant years." 16. Third issue arises from the admitted fact that the present is case of a Completed assessment so connected to aforesaid is the issue, if the Revenue had any incriminating material antecedent to the search, that is, it was not found during the course of search or as a result of search, then in that case Revenue had various other courses of action left under the provisions of Income Tax Act, but certainly not within the ambit and scope of Section 153A read with 2nd proviso thereto. The Hon'ble Delhi High Court in the case of CIT Vs 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 ....
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....ssee no where figures in the retail cash invoices and the evidence that during the relevant period of time, the premises was in occupation of a tenant who was leased out the said premises being 2nd Floor, D-107, Defence Colony, New Delhi-110024 to M/s Fuji Photo Film Co. Ltd. vide lease deed dt. 24.07.2006 from 20.07.2006 to 19.07.2008 and tenant may have installed these air conditioners for his own use, as such the expenses have not been incurred by the assessee. 21. Seventh Issue is the ground specific to AY 2011-12 relating to the addition of Rs.4,24,040/- on account of payment made to Sh. Jindal towards excess money received on account of JMD flats sold during the year. The AO has observed that the assessee sold JMD flats for Rs. 1,23,85,440/- which were purchased on 24.03.2007 for Rs. 1,20,48,000/- and that the assessee paid Rs.4,24,040/- to one Mr. Jindal for reimbursement of excess amount received against JMD flat sales, and observing that the assess could not justify the payment made nor did he file any confirmation or reconciliation he added the amount to the income of the appellant. Ld. CIT(A) has taken into account the evidence before it and observed; "The appellant's....