TaxTMI 
TaxTMI 
2024 (10) TMI 1267
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....ncome Tax Act, 1961. 2. ITA No.6604/Del/2017 Revenue 2007-08 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 3. ITA No.6605/Del/2017 Revenue 2008-09 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 4. ITA No.6606/Del/2017 Revenue 2009-10 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 5. ITA No.6608/Del/2017 Revenue 2011-12 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 18.03.2015 Assessment Order under section 153A/143(3) of the Income Tax Act, 1961. 6. ITA No.6609/Del/2017 Revenue 2013-14 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 23.12.2015 Assessment Order under section 143(3) of the Income Tax Act, 1961. 7. ITA No.6610/Del/2017 Revenue 2014-15 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 31.0....
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....nd void ab initio as the statement of the assessee recorded u/s 132(4) of the Act (where no such additional income was offered as the same was not admitted) could not be considered as an incriminating material in absence of any corroborative evidence found in the search as has been held by the Hon'ble jurisdictional Delhi High Court in CIT vs Harjeev Aggarwal (2016) 70 taxmann.com 95 (Delhi) and PCIT vs Best Infrastructure Pvt Ltd (2017) 84 taxmann.com 287 (Delhi) and PCIT vs Meeta Gutgutia (2017) 82 taxmann.com 287 (Delhi) confirmed by the Hon'ble Apex Court (2018) 96 taxmann.com 468 (Delhi) (DoJ 02/07/2018). 3. The authorities below erred in law and on facts by ignoring that all the alleged foreign bank accounts of the assessee held with the HSBC Bank, Switzerland: (i) were closed before 31/03/2006 (not existing even as on the close of the period relevant to this Assessment Year) as is mentioned in the impugned assessment order; (ii) as per the DTAA with Switzerland, no information in any manner was to be given by the Swiss authorities for the bank accounts closed before the April 2011, as confirmed by the Swiss authorities also and thus no info....
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....n response to notice issued under Section 153A of the Act, the assessee filed return of income on 22.11.2012 declaring the total income at Rs. 20,73,131/- which is identical to the income declared in the return filed prior to search. The assessment was completed under Section 153A r.w. Section 143(3) vide order dated 18.03.2015 at a total income of Rs. 1,42,34,124/- against the returned income of Rs. 20,73,131/- by making an addition of Rs. 1,20,37,863/- on account of undisclosed foreign asset in the form of foreign bank account and another addition of Rs. 1,23,130/- on account of interest income earned on the deposits in the said undisclosed foreign bank account. 4. Aggrieved by the assessment order dated 18.03.2015, the assessee filed appeal before the CIT(A). The CIT(A) vide order dated 11.08.2017 declined any relief and confirmed the additions towards undisclosed deposits in foreign bank account and imputed interest on such deposits. 5. Further aggrieved, the assessee preferred appeal before the Tribunal. The Co-ordinate Bench of Tribunal in ITA No.5499/Del/2017 dated 26.02.2018 made certain observations and restored the issue to the file of the AO for re-adjudication aft....
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....of father, wife, mother, etc. and since the details of visit to Switzerland coincided with the details of consent waiver form, the assessee did not sign the same, the Assessing Officer rejected the explanation given by the assessee and made addition of Rs. 1,20,37,863/- to the total income of the assessee being the deposit in TAIRA FOUNDATION, RONDEBERG LIMITED and ASPREY WORLWIDE SA, the details of which are given at para 6 of this order. The Assessing Officer further made addition of Rs. 1,23,130/- being income on account of undisclosed income earned for such undisclosed foreign bank account deposits u/s 69 of the I.T. Act. 31. We find the Id. CIT(A) deleted the addition of Rs. 1,23,130/- being the interest on account of undisclosed interest earned on such deposits for which the revenue is not in appeal and therefore we are not concerned with the same. He, however, dismissed the ground raised by the assessee challenging the validity of the assessment proceedings u/s 153A and sustained the addition made by the Assessing Officer amounting to Rs. 1,20,37,863/-. 32. It is the submission of the ld. counsel for the assessee that in absence of any incriminating materia....
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....ll and void is not applicable to the facts of the present case. The various decisions relied on by the ld. counsel for the assessee in our opinion are not applicable to the facts of the present case and are distinguishable. Since in the instant case the documents in the shape of 7 pages received by the Government of India from a sovereign country containing information regarding the undisclosed foreign accounts were received prior to the search and was confronted to the assessee during the course of search, therefore, the same, in our opinion, constitutes incriminating material which has rightly been used by the Assessing Officer in the proceedings u/s. 153A/143(3) of the I.T. Act. Further, since the proceedings u/s. 153A was pending, the Assessing Officer is not empowered to issue notice u/s. 148 of the I.T. Act in respect of income which comes to his knowledge from a source other than the evidence found during the course of search and continued the said proceedings simultaneously with proceedings u/s. 153A/153C as held by the Tribunal in the case of ACIT vs. Vipul Motors Pvt. Ltd. vide ITA No.2675 & 2676/Del/2010 order dated 08.08.2013 and in the case of Rajat Subham Chatterjee v....
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....the Co-ordinate Bench rendered under Section 254(1) of the Act, the AO once again proceeded to re-examine the issue. In an attempt to implement the directions of the Tribunal, the AO requested the assessee to furnish copy of signed 'Consent Waiver Form' (Waiver) to enable the Revenue to gather the particulars of bank account and bank balances from HSBC, Switzerland found to be allegedly maintained by the assessee. The reframed the assessment order in pursuance of the ITAT order. The AO observed in its order passed dated 30.12.2018 under Section 254 r.w. Section 153A r.w. Section 143(3) of the Act that the assessee has declined to co-operate with the AO in the second round of assessment proceedings initiated at the instance of the ITAT order. No verification report could be received by the AO as contemplated in ITAT order owing to failure of the Assessee to provide Waiver to secure bank particulars and statement of Assessee from Swiss authorities. Hamstrung by the denial of the assessee to provide Waiver, the AO once gain reiterated the previous assessed income and thus assessed the income yet again at Rs. 1,41,10,994/-. 8. Aggrieved by the assessment order in the second round, t....
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....been received. In view of these facts and since the assessment is getting barred by limitation on 31.03.2015, the assessment of the assessee is being completed in the absence of verificatory report and appropriate action as provided in the Act, will be taken as and when the verificatory report is received." 36. This shows that the verificatory letters from the competent authorities in Switzerland was yet to be received before completion of the assessment. Before Id. CIT(A) was also, the same was not available. Even before us nothing was brought to our notice regarding the verificatory letters received from Switzerland. Since assessee in the instant case was denying from the beginning that the accounts does not belong to him and since verificatory report in respect of above is yet to be received, and since in absence of such verificatory letter, it cannot be conclusively proved that the accounts in fact do belong to the assessee, therefore, considering the totality of the facts and in the interest of justice, we restore this issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh and in accordance with law after obtaining the verificatory ....
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....ign bank accounts. Later on the appellant retracted from this statement on certain grounds after a period of 9 months. A statement recorded under the statutory provisions of section 132(4) cannot be retracted at the will of the assessee but such retraction have to be made within a reasonable time, at the earliest opportunity, when the element of pressure or coercion ceases to exist on the assessee. The retraction of the present case has been made after a time lapse of around 9 months which raises doubts on its credibility. In this regard, Reliance is placed on the order of Hon'ble Rajasthan High Court in the case of Roshan Lal Sancheti v. Pr. CIT [IT Appeal No. 47 of 2018, dated 30.10.2018], the relevant extract of which is reproduced as under: "In view of the law discussed above, it must be held that statement recorded under Section 132(4) of the Act and later confirmed in statement recorded under Section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction ought to have been generally made within reasonable time or by filing complaint to superior authorities or otherwise brought to notice of the high....
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.... the HSBC cases where department was in possession of information that certain Indian passport holders had opened and maintained HSBC bank accounts. Based on the information, investigations were initiated by the department and some persons admitted having bank account with HSBC before the tax authorities and also paid the due taxes on the deposits in such accounts. However in cases where details of transaction were denied, reference was required to be made to HSBC with the consent letter signed by the alleged account holder and duly notorized to enable HSBC to furnish requisite details such as account opening form, details of transactions etc. In present case the appellant did not sign the consent form for seeking information in respect of alleged overseas bank account which could have facilitated in seeking further details. The issue under consideration is not of a simple tax evasion but a case where the evidences available with the department relate to parking of the funds in foreign destination in an unaccounted manner contrary to the law. Accordingly, in such a case it was also beneficial to the appellant to get the charges against him clarified by way of seeking complete infor....
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....al vs. CIT, (2024) 461 ITR 96 (Delhi)(HC) to contend that in somewhat similar factual matrix, the Hon'ble High Court was persuaded to hold that in the absence of incriminating material, additions under Section 153A was not justified. The ld. counsel simultaneously pointed out that in Shyam Sunder Jindal (supra) case also, the assessee had refused to sign the Waiver and having taken note of the fact situation similar to present case, the Hon'ble High Court has held in favour of the assessee and against the Revenue. The ld. counsel thus submitted that the case of the assessee is squarely covered in favour of the assessee as per the judicial precedents cited above. 10.3 The ld. Counsel also quipped that as per the 7 page documents extracted in the assessment order in first round of proceedings, it is evident that the alleged Foreign Bank Account was closed before 31.03.2006 and thus no additions could be justified in the absence of any balance. 10.4 The ld. counsel next pointed out that so called 7 pages information indicating Foreign Bank Account held in the name of Assessee obtained from Swiss Authorities is not at all reliable since, as per the DTAA with Switzerland, no infor....
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....ncome which came to his knowledge from independent source on exchange of information etc. by the sovereign. The CIT-DR submitted that, be that as it may, the powers conferred under Section 147/148 to the AO are saved by the Hon'ble Supreme Court. The ITAT thus is fully empowered in law to give a finding or direction in terms of Section 150 of the Act and direct the AO to reopen the assessment under Section 147 r.w. Section 148 by extending the limitation period in tune with the spirit of observations of the Hon'ble Supreme Court in Abhisar Buildwell Pvt. Ltd. (supra).The Ld. CIT-DR thus pleaded that the ITAT may, if considered expedient, provide enabling 'findings' or 'directions' etc. contemplated under s. 150 of the Act to lift the embargo of time limit for issuance of notice for the purposes of reassessment under the provisions of the Act. The assessee thus cannot escape the taxation of such non-disclosure of foreign bank on technical grounds. 11.3 Addressing further, The ld. CIT-DR pointed out that the ITAT has weighed the peculiar circumstances in perspective in the first round and approved the jurisdiction assumed under Section 153A of the Act. No remedy is thus available ....
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..... The CIT-DR contended that the refusal to sign the consent waiver form to enable revenue to obtain the exact information from Swiss Authorities on the bank account found as per 7 pages document, lends credence to the presence of undisclosed foreign bank account maintained by the assessee. 11.7 The ld. CIT-DR thus contended that in the light of peculiar circumstances, no interference is called for with the order of the CIT(A) appealed against. 12. We have carefully considered the rival submissions and perused the material available on record as well as case laws cited. 13. While several grounds have been raised to narrate different facets of issues involved; two pertinent issues have been effectively raised on behalf of the assessee. (a) Firstly, whether the additions under Section 153A in search assessment is permissible in law in the absence of any incriminating material found in the course of search in view of the judgment rendered in the case of Abhisar Buildwell (supra)?. (b) Secondly, whether the additions made by the AO could be sustained in the facts of the case where the Revenue does not allegedly possess any credible material to justify its alle....
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....ue before the Hon'ble High Court was legitimacy of jurisdiction under s. 153A of the Act and not whether the claim of the assessee not sign waiver is per se justified or not. The aforesaid judgment thus is of no assistance to the assessee to justify refusal to sign waiver in the present circumstances. Joining the issue, the Tribunal in the first round of proceedings, has categorically observed the presence of incriminating material giving rise to impugned additions in the hands of the assessee. As already observed, the issue presented for decision in Shyam Sunder Jindal case has already been decided by the ITAT in the first round and thus stood concluded. The ITAT in the second round is thus not competent to re-examine the decision of the Co-ordinate Bench. 16. On facts, we observe that the AO, in the first round of proceedings, confronted the assessee with 7 page information/documents in the form of client profiles of HSBC Bank also showing unique code assigned to the assessee for operation of the bank account maintained with HSBC Bank. The profile of the assessee was found to be linked to 5 client profiles. Thus, evidently, the Revenue was in possession of definite material cl....
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....on collected in the form of photocopies. Under the circumstances, the preponderance of probabilities is clearly against the assessee for which the assessee himself is to blame. 19. At this juncture, it would be equally pertinent to address the key argument raised on behalf of the Assessee. It is the main contention of the assessee that he cannot be compelled to sign the consent waiver form as it might end up incriminating him despite he not maintaining a bank account with the HSBC Bank or other foreign bank account as alleged. We are unable to visualize any rationale in such line of plea. It does not stand to reasons as to how signature of an innocent assessee on a consent waiver form meant for ascertainment of correct factual position, would criminalize a signatory unless the culpability is established. A person not holding such undisclosed bank account has no reason to fear any adverse consequences. The defense raised thus is far cry and devoid of any ring of truth. The refusal to sign the Waiver itself vouches for culpability. We simultaneously observe that the Hon'ble Delhi High Court in the case of Shyam Sunder Jindal (supra) opined in favour of the assessee on the premise ....
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....e on merits also deserves to be answered against the assessee and in favour of the Revenue. 23. In the result, the appeal of the assessee is dismissed. ITA No. 6604, 6605, 6606, 6608, 6609, 6610/Del/2017 (A.Y. 2007-08, 200809, 2009-10, 2011-12, 2013-14, 2014-15 (Revenue's Appeal) 24. In the captioned appeals, while framing assessment, Rs. 4,72,431/- for A.Y.2007-08 and similar amounts in other assessment years captioned above, were added by the AO on account of imputed interest income attributable to amount deposited with HSBC Geneva Switzerland. 25. In the matter, it is straightaway noticed that as per the evidences collected by the Revenue as reproduced in paragraph 6 of the assessment order framed in the first round dated 18.03.2015 relevant to A.Y. 2006-07, the purported bank account maintained by the assessee in HSBC bank is shown to be closed on 25.01.2006 and thus where the deposit itself is not available with the bank, the question of notional interest on deposits in the subsequent financial years is incomprehensible. The imputed interest @ 4% in the deposits kept with HSBC bank as a secondary adjustment cannot be countenanced on such facts. The grievance of the....
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....nd report vide this office letter dated 09.08.2017. In response to the same the assessing officer submitted a remand report dated 12.10.2017. In the said remand report the assessing officer agreed that the assessee had submitted letter dated 05.11.2014 alongwith annexures1, 2 &3 during the assessment proceedings. However, on merits the assessing officer contended that the addition in respect of unexplained jewellery aggregating Rs. 44,74,226/- should be confirmed. A copy of the remand report was furnished to the AR of the appellant during the course of hearing on 26.10.2017. In response to the same the AR filed a rejoinder to the remand report vide letter dated 27.10.2017 essentially reiterating the submissions made earlier. Findings: I have considered the facts of the case, the basis of addition made by the Assessing Officer and the argument of the A.R. during assessment as well as appellate proceedings. The grounds of appeal are disposed of in the terms as below- a. In respect of Cash- I have considered the facts of the case, the basis of addition made by the AO and the arguments of the AR during the assessment as well appellate proceedings. It....
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....the same as unexplained by rejecting the contention of the assessee, that this part of jewellery has been assessed in the hands of a third person, in the absence of any documentary evidence. The appellant has submitted that the jewellery aggregating to Rs. 13,04,724/- belongs to Mrs. Archana Gujral, married sister of the appellant. It has been submitted that Locker No. 1242 from where the said jewellery aggregating Rs. 4,77,780/- was found is owned and maintained by Mrs. Archana Gujral and Smt. Aruna Dalmia (mother of the appellant) and therefore the appellant does not have any relation with the said locker. From the perusal of copy of Panchnama of Locker No. 1242 filed by the appellant it is evident that the said locker stands in the joint name of Mrs. Archana Gujral and Mrs. Aruna Dalmia. Clearly, therefore, the said jewellery aggregating Rs. 4,77,780/- cannot be assessed in the hands of the appellant. It is further submitted by the appellant that items of jewellery amounting to Rs. 8,26,944/- kept in Locker No. 1168 which is jointly owned and maintained by Mrs. Sangeeta Dalmia, appellant and Smt. Aruna Dalmia belong to Mrs. Archana Gujral. The appellant has also filed a duly not....
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....estment. In the result, addition of Rs. 2,67,500/- in respect of jewellery pertaining to Mr. Krittvas Dalmia is directed to be deleted. It is seen that the Assessing Officer has treated the jewellery aggregating Rs. 29,02,002/- as unexplained, which is being claimed by the appellant as having been received on wedding and birthday's of children. It has been stated in the assessment order that the assessee has not filed documentary evidence in support of its contention that jewellery of Rs. 29,02,002/- was received on wedding and children's birthdays. The appellant has submitted that jewellery aggregating Rs. 29,02,002/- was received by its spouse on the occasion of wedding and birthday functions and the same has been disclosed in the Wealth Tax Return of Mrs. Sangeeta Dalmia. The appellant has filed details of the persons from whom such gifts in the form of jewellery were received alongwith "Aashirvad Patras" substantiating the gifts. The details of gifts filed by the appellant, is reproduced below:- Smt. Sangeets Dalmia on her wedding on 27th April, 1980 Particulars Of Person Relationship Description Gross Weight Net Weight Value of Metal....
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....d on wedding, name and address of the persons, relationship and the description of item of jewellery is mentioned along with the corresponding serial number of the valuation report prepared during search matching the respective jewellery item. The total value of jewellery received on the occasion of the wedding comes to Rs. 25,36,118/-. The appellant has also filed hand written "Aashirvad Patras" in substantiation of the above. In view of the same, there is enough evidence and material in support of the appellant's contention that the said jewellery items were received on its wedding. The Assessing Officer in case he disbelieved the version of the appellant could have conducted inquiries from the persons gifting jewellery items for which names and addresses are available in the details filed by the appellant. However, the Assessing Officer failed examine the issues and disprove the contention of the appellant. In view of the same, addition to the extent of Rs. 25,36,118/-, out of total addition of Rs. 29,02,002/- is directed to be deleted. As regards the balance amount of Rs. 3,65,884/-, it is seen from the above table that the same is claimed to have been received as small jew....