AI Drafter 
TaxTMI 
TaxTMI 
2024 (5) TMI 1204
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent Year ("AY") 2012-13 whereby the Ld. CIT(A) confirmed the addition of Rs. 3,87,075/- made by the Ld. Assessing Officer ("AO") on account of accruals/interest on foreign bank account balance in alleged HSBC Bank, Geneva and confirmed the penalty under section 271(1)(c) of the Income Tax Act, 1961 (the "Act") for concealment of particulars of income/furnishing inaccurate particulars of income qua the said addition respectively. These were heard together and are being disposed of by this common order. ITA No. 5450/Del/2016 The brief facts are that the assessee individual filed his return for AY 2012- 13 on 27.09.2012 declaring income of Rs. 3,71,04,136/-. His case was later selected for scrutiny. The assessment was completed on 27.02.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed a bank account with HSBC Bank Geneva, Switzerland with BUP no. 9070145843 and this account remained undisclosed to the Income Tax Department. Therefore, the credit entries are also not disclosed as income in the returns of income filed, and * The A.O. has determined the accruals @ 4% p.a. on the balance in the HSBC account, at the beginning of the F.Y. 2007-08, prevailing interest rate in Europe. In view of the above, the arguments of the appellant are hereby rejected and therefore, I do not find any infirmity in the findings of the A.O. Accordingly, addition of Rs. 3,87,075/-, on account of accruals/interest on bank balance, is confirmed. " 2. The assessee is aggrieved and is in further appeal before the Tribunal an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er that authentic information/ communication regarding the alleged foreign bank account was still awaited from the Swiss Authorities. 2.3 That the CIT(A)/ assessing officer failed to appreciate that (a) the above alleged foreign bank account did not belong to the appellant; (b) none of the deposits, as alleged, related to the appellant; and (c) no transaction was made by the appellant, and the above addition made in the hands of the appellant is without any evidence or basis. 2.4 That the CIT(A)/assessing officer erred on facts and in law, in making the aforesaid addition on suspicion and surmises and de-hors any material found/ seized during the course of search in the premises of the appellant. 2.5 That the CIT(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Hon'ble Delhi High Court is available at pages 66-71 of the assessee's Compilation. The Ld. AR therefore urged that there is thus absolutely no basis for the impugned addition in AY 2012-13 and the order of the Ld. CIT(A) deserves to be vacated on the issue. 4. The Ld. CIT-DR relied on the order of Ld. AO/CIT(A). 5. We have considered the rival submissions and perused the records. It is manifest from the material available in the records that similar addition on account of notional interest on the alleged balance in foreign bank account has been made in AY 2008-09 to 2011-12 by the Ld. AO which have been sustained by the Ld. CIT(A). It is also apparent from the records that the assessee's appeal challenging the said addition(s) for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the addition made by the assessing officer holding that since no corroborative evidence has on such bank account, assessee earned interest @4%. We are of the view that the case of the assessee is on a much better footing vis-a-vis the facts in judicial precedents relied upon by the Ld. Counsel in as much as in the foresaid cases there was at least some basis of taxation of notional amount/interest, which was never realised/received by the assessee, but in the case of the assessee, the so-called amount of interest brought to tax is tally without any basis and is clearly hypothetical/imaginary. Since there is no evidence that the assessee actually received interest on the disputed deposit and just by figment of imagination it has been concl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned question of law is answered in favour of the respondent/assessee and against the appellant/revenue." 8. It is thus evident that the Hon'ble Delhi High Court has held that notional interest on the addition originally made in AY 2006-07 by the Ld. AO could not be made in AY 2008-09 to 2011-12. The facts, circumstances and prevailing law admittedly remain the same in AY 2012-13 as well. Respectfully following the order (supra) of the Hon'ble Delhi High Court, we delete the impugned addition of Rs. 3,87,075/- made by the Ld. AO which has been sustained by the Ld. CIT(A) and decide the appeal of the assessee in his favour. 9. In the result, appeal of the assessee is allowed. ITA No. 3866/Del/2017 10. The appeal relates to levy of....