TaxTMI 
TaxTMI 
2025 (9) TMI 8
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....ls wherever it is applicable. ITA No.4331/Mum/2024 AY: 2001-02 2. The grounds of appeal filed by the revenue are as under:- "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the substantive and protective additions made on account of initial deposit made by the assessee in the foreign bank account having BUP ID 5090260976 maintained in HSBC Bank, Geneva and maintenance cost incurred on such bank account by disregarding the fact that the foreign bank account was not disclosed in his Return of Income? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in not considering the BUP ID as account number, by placing reliance on the decision of the ITAT Mumbai in the case of DCIT vs Kumar Rasiklal Mehta [2022] ITA No. 438 to 442/Mum/2022; however in the case of Kumar Rasiklal (supra), the Hon'ble ITAT Mumbai had not deliberated on whether BUP ID is to be considered as a separate bank account number or not. 3. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the substantive and protective addition made on....
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....arranged one bank account to be opened in the name of Canbar Holdings Corporation with HSBC, bearing No. 1327690. Mr Shetty also mentions that Shri Dhirubhai's instruction to Mr. Shetty were to keep all facts strictly confidential between him and Mr.Shetty and to utilize the funds in this account as he (Shri Dhirubhai) directed. 3. However, as per copy of the 'Base Note' available with this office, in the case of Shri Mukesh D Ambani (BUP ID 5090160984) and Shri Anil D Ambani (BUP ID 5090160983) it is clear that there are two bank accounts in the name of Canbar Holding Corporation namely BUP ID 5090260976 and BUP ID 5091327690. Further as per the copy of the Base Note available with this office in the case of Shri Mukesh D Ambani (BUP ID 5090160984) and Shri Anil D Ambani (BUP ID 5090160983), there was HSBC Bank foreign account having Client/Profile (BUP ID 5090260976) held in the name of Canbar Holdings Corporation also separate from the Account No. 1327290 mentioned by Shri M K Shetty. The previous year relating to the AY 2001-02 covers the period from 01.04.2000 to 31.03.2001. Thus during the AY 2001-02, the assessee held foreign bank account which is an ass....
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....me chargeable to tax has escaped assessment in this case for AY 2001-02. Therefore, the assessment needs to be reopened in order to bring to tax income which has escaped assessment. In view of the facts narrated supra, the conditions of sec. 149(1)(c) pertaining to time limit for issue of notice are also satisfied in this case for AY 2001-02". 3. The assessing officer stated that the assessee filed objection to the reopening the assessment and the same has been rejected vide order dated 22.11.2018. Subsequently, a show cause notice u/s 142(1) of the Act was issued on 19.12.2019 to the legal heirs of the assessee, the extract of the same is reproduced as under: "You are required to show cause as to why addition should not be made in the hands of the assessee with regards to the undisclosed foreign bank accounts as mentioned in the resons for reopening of the assessment provided to you, for the initial deposit of USD 1,00,000 required for opening each account and cost of USD 300 per year incurred for maintenance of each account". 4. In the assessment order the assessing officer mentioned that assessee filed reply to the show cause notice. However, the assessing o....
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....o open the bank account along with the income generated should have been disclosed in the said return of income filed for the assessment year 2001-02. The AO opined that as per available information in the public domain, a deposit of USD 1,00000 was to be made to open such an account and also USD 300 per year required to be incurred for maintaining such account. On query, the legal heirs of the assessee submitted that they had filed return of income on 09.08.2011 on behalf of the assessee i.e. Late Shri Dhirubhai H. Ambani for financial year 2005-06 and declared an income of Rs. 24,73,46,660/- and had paid taxes of Rs. 14,09,59,731/-. The legal heirs had also submitted that there was only one account in the HSBC Bank Geneva linked to their father in the name of Canbar Holding Corporation a/c no. 5091327690. It is also submitted that legal heir had declared the aforesaid bank account and HSBC Bank Geneva in the hands of the late father Shri Dhirubhai H. Ambani for the financial year 2005-06 and offered to income in the hands of late Shri Dhirubhai H. Ambani. However, the AO stated that the assessee had not provided complete date wise details of transactions in the above mentioned ac....
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....nt. Whereas the appellant claims that no such account was in existence. The reference number in form of "BUP ID" would only indicate an identification number for CHC as an entity. Thus the only dispute is regarding existence of two separate accounts in HSBC bank. 7.2 The base Note, is the only document available with the AO to contend existence of the other account. The examination of this note reveals the following: I. The first page of the 'Base Note' shows basic details of the client profile code of Canbar Holding Corporation (CHC) and Flag. The relevant extract of the Base Note is as under: The above extract shows details of client profile code, bearing no. 50913 27690, such as date of creation, date of closure, status, nature of profile, type of profile. Further, at the right side of the details of client profile code it also shows: * "Patrimoineconstateendecembre 2005" meaning thereby "Assets (account balance) noted in December 2005", the same for 2006; and * "Patrimoine max constaté sur la periode", meaning "Maximum assets observed over the period", noting the same in November 2005." II. The above profile l....
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....m of the considered view that the BUP ID is like a Business Partner Identification No. which is akin to the Customer Relationship No. as referred to in India. The BUP ID could not be considered as a bank account and as such no addition could be made presuming some initial deposit is required to open such an account or that any maintenance charges is required to be incurred to maintain such an account. 7.6 A further reference can be made to the decision of Hon'ble Mumbai Tribunal in case of DCIT v. Kumar Rasiklal Mehta [2022] ITA No. 438 to 442/Mum/2022, wherein the Base Note showed BUP ID and Client Profile Code for entity in question. However, in that case the assessing officer had made addition u/s. 69A only for the client profile code and did not make any adjustment for the BUP ID. Therefore, the conclusion that the BUP ID is not a separate bank account is supported by this decision as well. Hence, such a presumption is fallacious. 7.7 Even otherwise, the AO does not appear to have given any specific basis for arriving at conclusion regarding requirement of initial deposit of $1,00,000 and maintenance charges of $300. Even it is assumed that it is a separat....
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....bank a/c was already offered by the legal heirs in AY 2006-07. The ld. DR also submitted that the assessee had not provided Consent Waiver Form in order to obtain further record from the said bank. The ld. DR also contended that ld. CIT(A) was not justified in holding that BUP ID 5090260976 was not the bank a/c no. but the business identification no. of the Canbar Holding Corporation. The ld. DR placed reliance on the decision of Renu T. Tharni Vs. DCIT of ITAT, Mumbai and stated that decision of ITAT Mumbai in the case of Kumar Rasikhlal Mehta is not applicable. The ld. DR also submitted that Ld. CIT(A) has ignored the fact that there was no rational in taxing the peak balance of the undisclosed bank a/c in assessment year 2006-07. The ld. DR also submitted that Base Note received from the French Government was never available with the AO at the time of earlier assessment proceedings and the foreign bank a/c with HSBC bank Geneva having BUP ID 5090260976 was undisclosed. 7. On the other hand, the ld. Counsel submitted that as per letter of Mr. M.K. Shetty there was only one a/c which was opened i.e. 5091137690 and this account was dormant and same was closed in 2006. The ld. Co....
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....er u/s 143(3) r.w.s 147 of the Act on 13.01.2012 accepting the income declared in the return filed on 09.08.2011. However, the AO subsequently, on the basis information received of Base Note alleged that assessee was having another bank a/c in the HSBC having BUP ID 5090260796 which has not been disclosed by the legal heirs. The AO opined on the basis of unspecified information of public domain that initial deposit USD 1,00000 and maintenance charges USD 300 were required for keeping such bank account. Accordingly, the AO has added the above referred deposit and maintenance charges amount to the total income of the assessee and assessed the same in the equal proportion in the name of Shri Dhirubhai H. Ambani, Shri Mukesh Ambani and Shri Anil Ambani on the substantive bases and assessed 2/3 amount on protective basis. The AO has completed the assessment u/s 143(3) r.w.s 147 of the Act for the assessment year 2001-02 to 2006-07. The detail of computation made by the assessee along with similar nature of addition made in all the years are reproduced as under: I. AY 2001-02 Sr. No. Description of item BUP ID 5090260976 (Amount) 1. Initial deposit USD 100,000 ....
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....4,043 3. Total USD 2,04,343 USD 300 4. Substantive Additions (1/3rd of total amount) Rs. 30,38,224 Rs. 4,460 5. Protective Additions (2/3rd of total amount) Rs. 60,76,480 Rs. 8,921 6. Total Additions Rs. 91.28,085 9. The AO in reopened assessment proceedings on the basis of Base Note opined that these were the two bank account in the name of Canbar Holding Corporation bearing BUP ID 5090260976 and 5091327610 as discussed. 10. The AO opined that aforesaid bank a/c bearing BUP ID 5090260976 was not disclosed by the assessee in the return of income filed. The AO was of the view that the initial deposit made to open these accounts along with maintenance charges and income generated on such account should have been disclosed in the return of income. In this regard the AO had neither disproved the submission of the assessee nor established that assessee had paid the alleged initial deposit amount to open the bank account along with maintenance charges. We have also gone through the Base note showing basic detail of client profile code of Canbar Holdings Corporation Ltd. The relevant extract of the base note is as under: 11. ....
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....name BUP ID as also discussed in the order of Ld. CIT(A). In the case of DCIT vs Kumar Rasiklal Mehta (2022) ITA No. 438 to 442/Mum/2022 as referred by the ld. CIT(A) in that case addition was only made for client profile irrespective of the similar other particulars like the case of the assessee available in the base note. In that case ITAT also held that addition of initial deposit was made on surmises which stand merged in the balances shown carried forward. It is clear from the facts and material discussed that (BUP id) 5090260976 was merely a business partner identification number for the entity and there existed no separate account. 11.3 We find the decision of ITAT, Mumbai in the case of Renu T Tharani vs DCIT (International Taxation) (2020) 117 taxmann.com 84 (Mumbai) relied upon by the ld. DR are distinguishable from the case of the assessee. In that case the assessee was clearly beneficial owner of deposit in foreign bank account showing Rs. 196 crores peak amount based on Base Note. In that case the assessee has not explained the contents of the Base Note and claimed that assessee was a non-resident and was chargeable to tax only on income which accrues or arises in I....
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....e department, so that necessary record could be received from the HSBC Bank and the necessary additions would have been made in the hand of the assessee and his legal heir. 4. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 5. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 13. The assessee has filed return of income declaring total income of Rs. 8,99,65,840/- on 29.07.2002. The case of the assessee was reopened u/s 147 of the Act by issuing of notice u/s 148 of the act on 26.03.2019. In the reason recorded for reopening the AO has mentioned about the assessment year 2001-02 which has been reopened on the basis of information received as per Base Note that assessee was beneficiary of foreign bank account with HSBC bank. The AO was also of the view that there were two bank accounts in the name of Canbar Holding Corporation having BUPID 5090260976 and BUP ID 5091327690. The AO has also referred the submission made by the authorized representative before the DGIT (Inv) Mumbai that the assessee late Shri Dhirubhai H. Ambani had opene....
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....efore, we do not find any merit in the appeal of the Revenue and the same is dismissed. ITA No.4348/Mum/2024 AY: 2003-04 14. On similar issue on identical fact, we have dismissed the appeal filed by the assessee vide ITA No.4331/Mum/2024 AY: 2001-02 and vide ITA No. 4324/Mum/2024 AY: 2002-03 as discussed supra in this order, therefore, applying the finding of the same mutatis mutandis this appeal of the revenue is also dismissed. ITA No.4347/Mum/2024 AY: 2004-05 15. On similar issue on identical fact, we have dismissed the appeal filed by the assessee vide ITA No.4331/Mum/2024 AY: 2001-02 and vide ITA No. 4324/Mum/2024 AY: 2002-03 as discussed supra in this order, therefore, applying the finding of the same mutatis mutandis this appeal of the revenue is also dismissed. ITA No.4346/Mum/2024 AY: 2005-06 16. On similar issue on identical fact, we have dismissed the appeal filed by the assessee vide ITA No.4331/Mum/2024 AY: 2001-02 and vide ITA No. 4324/Mum/2024 AY: 2002-03 as discussed supra in this order, therefore, applying the finding of the same mutatis mutandis this appeal of the revenue is also dismissed. ITA No.4345/Mum/2024 AY: 2006-07 17. On similar is....
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....s may think fit and craves leave to consider all the grounds of cross objections as without prejudice to each other." 21. Before us the ld. Counsel submitted that reopening of assessment from A.Y. 2001-02 to A.Y. 2005-06 was time barred as section 149(1)(c) could not be applied to the assessment which had attained finality before the date of operation of clause (c) i.e. 01.07.2012. The ld. Counsel has also placed reliance on the various judicial pronouncement as per the copies of decision placed in the paper book. He also submitted that in respect of deposit in HSBC Bank A/c 5091327690 assessment has already been duly completed for the A.Y. 2006-07 and the observation of initial deposit and maintenance are merely based on assumption without any relevant material. 22. On the other hand, the ld. DR has referred the amended provision of section 149 of the Act, 1961 and contended that same shall be applicable for any assessment year beginning on or before the 1st day of April, 2012. 23. Heard both the sides and perused the materials on record. We have perused the provision of section 149 as amended vide Finance Act, 2012 through which reopening upto sixteen years is enabled in....
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....gh Court in Brhma Dutt case as discussed supra and SLP filed by the department before the Hon'ble Supreme Court was dismissed vide order dated 05.07.2019. Following the decision of the Hon'ble Delhi High Court and the decision of the ITAT Mumbai as discussed the cross objection no.2 that limitation period expired for reopening the assessment which had already attained finality before the amendment is allowed. 25. Therefore, following the settled judicial findings as discussed we consider that reopening of assessment for A.Y. 2001-02 to A.Y. 2005-06 are not valid. Therefore, cross objection no. 2 filed for A.Y. 2001-02 to A.Y. 2005-06 are allowed. The assessee has filed identical cross objection in all the years on the ground that reassessment proceedings were void in absence of any income which escaped assessment as the peak balance of A/c No. 5091327690 (being client profile code as per base note) was already offered and assessed to tax in the hands of late Shri Dhirubhai Ambani in A.Y. 2006-07. In this regard, we find that reopening of assessment in respect of client code no. 5091327690 is not valid since the same has already been reopened and taxed in A.Y. 2006-07 vide ord....
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....> Attorney [ATTORNEY B / GROUP A / SEE MANNER OF SIGN IN THE FILET Nom (code DUP) Profils clients concernés Première adresse GALLAGHER PATRICK TERENCE (5090)181036) (non referesce) FLAG TELECOM GROUP LIMITED [5021426311] => Alierney [ATTORNEY C/ GROUP A / SEE MANNER OF SIGN IN THE FILE! Nom (code DUP) Profils clients concernés Première adresse HSBC PRIVATE BANKING (GSAD) LONDON [5090271542) FLAG TELECOM GROUP LIMITED [5091426311] => Leller of authorisation Įnon reference) Nom (code BUP) Profils clients concernés Premiere adresse . FLAG TELECOM GROUP LIMITED (5090201031] * FLAG TELECOM GROUP LIMITED [6001426311] -> ALLust Moller FLAG TELECOM GROUP LIMITED 9 SOUTH STREET LONDON WIK 2XA UNITED KINGDOM [ADMINISTRATIVE ADDRESS] Noms (code BUP) Profils clients concernés Première adresse SHETTY MOODANIDAMBOOR KRISHNA (5090160979) CANBAR HOLDINGS CORPORATION (5091327690] => Alierney [CLOSED / ATTORNEY 0] MR MOODANIDAMSOOR SHETTY 192 LAUDERDALE TOWER BARBICAN LONDON ECZY ABY UNITED KINGDOM [LEGAL ADDRESS] Nom (code DUP) Profils clients concernés Première adresse FIRST CORPORATE DIRECTOR INC. (5020245756) CANBAR HOLDINGS CORPORATION 15091327630] ....