2021 (10) TMI 82 - AT - Income Tax

Addition on account of interest in the HSBC Geneva bank account - AO has computed the interest by taking the last known credit balance in the bank account as on May, 2006 - HELD THAT - As after the May, 2006 there was no material available with the Assessing Officer to show whether any credit balance was available in the said bank account in the subsequent year and particularly for the year under consideration. The Assessing Officer has not disputed the fact that the there is no bank statement available or any other information to show the status of existence or foreclosure of the bank account as on 31.03.2014. Therefore, the Assessing Officer has made addition on presumptive interest income of the assessee. DR has not disputed the facts as recorded by the Ld. CIT(A) that the Assessing Officer has made the addition without any material to show any interest income of the assessee from the alleged HSBC Geneva bank account - As relying on own case 2016 (4) TMI 668 - ITAT DELHI AO had not brought on record any evidence to link the money brought into India or kept in foreign accounts by the assessee have a link with any Indian defence contract payment. The income has not accrued or arisen in India. - Decided against revenue. Unexplained deposits in the ICICI Bank London - HELD THAT - Assessing Officer was not sure about the year in which these deposits were made in those bank accounts. Finally, the Assessing Officer has held that in the absence of any required information amount appearing in the Column No.9 of the table showing the difference of the amount already added to the income of the assessee in the preceding Assessment Years to be added as income for the year under consideration. Assessing Officer has also recorded the fact that the status of the assessee as NRI during those years is not finally settled as pending before the Hon ble Supreme Court. Now the said dispute of NRI status is finally settled and the order of the Hon ble jurisdictional High Court has been upheld by the Hon ble Supreme Court as pointed out by the Ld. AR which was not disputed by the Ld. DR. As relying on own case 2016 (4) TMI 668 - ITAT DELHI issue decided in favour of assessee.

Summary

Issues Involved:
1. Deletion of addition on account of interest received in Ilora account.
2. Deletion of addition on account of unexplained deposits in ICICI Bank London.

Issue-wise Detailed Analysis:

1. Deletion of addition on account of interest received in Ilora account:

The Revenue contested the deletion of ?6,51,158/- added by the Assessing Officer (AO) due to interest received in the HSBC Geneva bank account. The Tribunal noted that the AO computed interest based on the last known balance in May 2006, without any evidence of the account's status in the subsequent years, particularly for the year under consideration. The AO's addition was based on presumptive interest income without any bank statements or material evidence. The CIT(A) deleted the addition, noting the absence of bank statements post-February 2007 and the lack of evidence for interest credited even for the period up to February 2007. The CIT(A) emphasized that the AO's computation was presumptive and based on an arbitrary interest rate of 4%, without any basis or material evidence. The Tribunal upheld the CIT(A)'s decision, referencing earlier Tribunal orders for AYs 2006-07 to 2009-10 and 2012-13, which had similarly deleted such additions due to lack of evidence and the assessee's NRI status affirmed by the Hon’ble Delhi High Court and the Supreme Court.

2. Deletion of addition on account of unexplained deposits in ICICI Bank London:

The Revenue also contested the deletion of ?5,70,24,638/- added by the AO for unexplained deposits in ICICI Bank London. The Tribunal noted that the AO made the addition based on the opening balance in the account, which was added to the income in the relevant AYs but was unsure about the year of the deposits. The AO admitted the lack of bank statements for the relevant period and relied on presumptive additions. The CIT(A) deleted the addition, noting the absence of bank statements and evidence for the balances post the mentioned periods. The Tribunal upheld the CIT(A)'s decision, referencing earlier Tribunal orders for AYs 2006-07 and 2007-08, which had similarly deleted such additions due to lack of evidence and the assessee's NRI status affirmed by the Hon’ble Delhi High Court and the Supreme Court.

Conclusion:

The Tribunal upheld the CIT(A)'s deletion of additions on both accounts due to the lack of material evidence and the assessee's NRI status. The Revenue's appeal was dismissed. The order was pronounced in the open court on 21/09/2021.