AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 1706
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....espect of addition of INR 8,26,879/- made by the AO on account of addition of interest on HSBC Account on protective basis by holding that the assessee is having account with HSBC, Geneva, Switzerland. However, the Ld.CIT(A) has confirmed the addition on substantive basis. 4. Brief facts of the case are that the information was available with the Investigation Wing of the Department that the assessee alongwith her husband, Shri Praveen Swahney was having a bank account in HSBC Bank, Geneva, Switzerland. This information was received from the Competent Authority under exchange of information from time to time of DTAC/DTAA between India and France. Since the assessee's husband has not disclosed this account in his return of income nor the funds were disclosed and the assessee was the beneficiary of this account. She has also not disclosed the said account in her return of income therefore, the AO estimated the interest @ 4 % on the yearly balance computed by him and made the additions from AYs 2008-09 to 2012-13 towards interest. The year under appeal i.e. AY 2012-13 where the AO has the interest of 16306.04 USD on the opening balance of 4,07,651.17 USD @ 4 % and by applying the c....
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.... said account rather there were maintenance charges levied of more than 1000 USD on the said account. There was closing balance of NIL on 30.09.2011, thus how it could be presumed that the assessee has received interest on the balance in the said account. He further submits that the AO has calculated the interest on estimation basis by applying rate of interest @ 4 % on the balance as on 01.04.2007 which was increased by year to year interest calculated by the AO himself @ 4 % wherein from the perusal of the statement as described above, there was no balance available in the bank account rather as against the alleged interest, the bank account has levied maintenance charges. Therefore, there is no question of estimating any income towards interest on the said account. The Ld.AR for the assessee further submits that the substantive additions made in the hands of the assessee's husband, Shri Praveen Sawhney. However, the said order was quashed by the Co-ordinate Bench of the Tribunal, Delhi Benches in ITA No.1545/Del/2017 of the assessee on the issue of limitation as notice issued u/s 143(2) and served beyond the time limit prescribed under the Act. He further submits that similar ad....
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....Kumar Modi (supra) where under identical circumstances, additions were made on notional interest @ 4% were deleted by the Co-ordinate Bench by observing in para 6.4 as under:- 6.4 "We have considered rival submissions and the decisions relied upon by both the parties. We have already deleted the addition made in assessment year 2006-07 and also in assessment year 2007-08, therefore, on this ground itself the addition made by the assessing officer is liable to be deleted. Independent thereof, we note that in the instant case, the addition of Rs. 1,64,962 has been made purely on notional basis on the premise that the assessee: (a) had alleged foreign bank account, which itself is under serious challenge; and (b) 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-à-vis the facts in judicial precedents relied upon by the Ld. Counsel inasmuch as in the aforesaid cases there was at least some basis of taxation of notional amount/ interest, which was never realized/ received by the assessee, but in the case of the assessee, the so-called amount of interest brought to tax is totally without a....
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.... by the assessee that bank withdrawals made within the period of one month totaling to INR 4,50,000/- from her bank account out of which a sum of INR 2,78,142/- was available with assessee as on the date of search. The withdrawals were made on 26.11.2011 of INR 2,50,000/- and on 08.07.2011 of INR 2,00,000/- and the date of search is 28.07.2011. Looking to this short span of time of around of 30 days from the withdrawals and the search, the claim of the assessee cannot be ignored solely for the reason that she was not able to state these facts during the course of search. It is not the case of the Revenue that the bank account from where the withdrawals were made was not of the assessee nor the said account was undisclosed bank account. Therefore, we find no reason to confirm such addition. Accordingly, we hereby direct the AO to delete the addition of INR 2,78,142/-. Ground No.4 raised by the assessee is accordingly, allowed. 15. Ground Nos. 5 & 6 raised by the assessee are in relation to the addition of INR 1,01,52,902/- made towards the jewellery found during the course of search. 16. Brief facts of the case are that during the course of search, total jewellery 2196.800 gra....
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....hat addition made deserves to be deleted. 18. On the other hand, Ld.CIT DR for the Revenue submits that the AO has already allowed the credit of jewellery declared by the assessee in VDIS and therefore, further claim of deduction is not permissible. He further submits that the assessee has failed to furnish the copies of the invoices of the jewellery purchased therefore, even otherwise, this claim of the assessee of purchase of jewellery cannot be allowed. Ld.CIT DR further submits that in absence of any declaration of gift from the mother in law, the claim of the assessee that certain jewellery was received as a gift also cannot be accepted and therefore, he prayed for the confirmation of the addition so made. 19. We have heard the rival contentions and perused the material available on record. It is seen that out of total jewellery 369.170 grams, the AO has wrongly taken the figure of 3951.900 grams which is evident from para 3 of page 5 of the assessment order where the AO after reducing the claim of the assessee of VDIS declaration of 1088.65 grams held the balance jewellery of 2863.25 grams as unexplained jewellery. Since the total jewellery found at 3619.170 gram as evi....
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.... the contrary, the assessee since beginning of the proceedings, assessee claimed that this amount of cash withdrawal was utilized for purchases of jewellery and the necessary bank statements were filed before the lower authorities and the AO never doubted the sources thereof, nor denied the withdrawals made on various dates. Looking to these facts, the claim of the assessee of purchase of jewellery out of such cash withdrawals cannot be denied. 23. It is further seen that CBDT vide its instruction No.1916 dated 11.05.1994 has held that "the jewellery of 500 grams in respect of married lady and 100 gram for male member should be treated as explained". This view is supported by the judgement of Hon'ble Karnataka High Court in the case of Smt. Pati Devi vs ITO & Anr. [1999] 240 ITR 727 (Kar.) and further by Hon'ble Gujarat High Court in the case of CIT vs. Ratan Lal Vyapari Lal Jain (2011) 339 ITR 351 (Guj). Thus, by respectfully following the judgement of Hon'ble Karnataka High Court and Gujarat High Court (supra), we hold that 700 grams of jewellery in terms of CBDT instruction can be held as explained. 24. Thus, the total jewellery found of 3619.170 grams during the course of....