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TMI Blog2018 (2) TMI 1731X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment. Before ld. 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, we restore this issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh - Decided partly in favour of assessee for statistical purposes. - ITA No.5499/Del/2017 - - - Dated:- 26-2-2018 - Shri R. K. Panda, Accountant Member And Shri Kuldip Singh, Judicial Member Assessee by : Shri Hiren Mehta, CA Department by : Shri Vijay Verma, CIT-DR ORDER R. K. Panda, AM : This appeal filed by the assessee is directed against the order dated 11.08.2017 of the CIT(A)-XXVI, New Delhi relating to assessment year 2006-07. 2. Facts of the case, in brief, are that the assessee is an individual and derives income from salary, busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a have been attorney holder for your account. Details of client, linked to the person Parag Dalmia are as under: 1. ASPREY WORLDWIDE S.A. 2. RONDEBERG LIMITED 3. 12717RSK 4. MENKO FOUNDATION, VADUZ And details of maximum amount lying with the bank are as under: 1. ASPREY WORLDWIDE SA $ 10912 AS ON 11/2005 2. RONDEBERG LIMITED $ 2,52,246 AS ON 12/2005 3. TAIRA FOUNDATION $ 7658 AS ON 11/2005 Please give your comments. Ans. I have nothing to comment. I deny to have anything to do with this. Q.58 How do you know the following entities/society/foundation and how did you found/created these entities/society/foundations etc. 1. APREY WORLDWIDE SA 2. RONDEBERG LIMITED 3. TARA FOUNDATION 4. 12717 RSK 5. MENKO FOUNDATION 6. EBERSBERG DR.INR CHRIST OF MECHAIL (99070137872) 7. PRASIDIAL MANAGEMEM ANTAL (9070242256) 8. HABCONSULT AG (9070235991) 9. ASPREY WORLWIDE SA (9070242902) 10. RONDEBERG LIMITED (9070242902) 11. HABCONSULT AG (GESCHLOSSEN) (9070242904) 12. HABERMACHER CHRLES SIEGFRIED (9070142859) 13. TAIRA FOUNDATION (9070242906) 14. DALMIA SANGEETA (9070144326) 15. DALMIA ARUNA (907014432 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other were put to undue pressure and the assessee was forced to sign the letter under duress. Even a part of the jewellery was seized although the same was duly explained and, therefore, the assessee and his family members do not have peace of mind. In the said letter, it was further mentioned that the information was passed on to a TV Channel. 4.2 The Assessing Officer, during the course of assessment proceedings, recorded the statement of the assessee on 02.12.2014 wherein the assessee again denied to have any knowledge about the existence of the bank account. However, the Assessing Officer was not satisfied with the statement given by the assessee as well as the explanation made during the course of assessment proceedings. He observed that the assessee has opened and/or operated account(s) in HSBC Bank and has been given a unique code which is BUP SIFIC PER ID 9070142903. His profile was found linked to five client profiles namely, ASPREY WORLWIDE S.A., RONDEBERG LIMITED, TAIRA FOUNDATION, 12717 RSK AND MENKO FOUNDATION, VADUZ. Although reference(s) has/have been sent to competent authorities in Switzerland and other countries to verify the above foreign bank accounts however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring as attorneys. This according to the Assessing Officer gives credence to the genuineness of the document and veracity to the details mentioned therein. Further from the details furnished by the assessee regarding his travel to Switzerland, he inferred that the assessee was physically present in Switzerland when the document was created and/or some operation has taken place. He observed that the accounts could not have been opened without the permission of the assessee or without his knowledge. The link between the travels which the assessee has undertaken to Switzerland and the creation/modification of the linked client profiles indicate that there is some relation between the two and there is some further information which is not being made available to the Department intentionally thereby concealing the information from the Department. As regards the submission of the assessee that it is stolen data and he has no idea under what circumstances his name, name of his family members and other personal particulars are appearing in the document, the Assessing Officer observed that the document was received from French Government under mutual agreement signed between India and Franc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessee to show-cause as to why the above amounts appearing in the bank accounts/linked profiles shall not be added to his income for the assessment year 2006-07. The assessee filed his reply dated 27.02.2015 strongly refuting the allegation of the Assessing Officer which is appearing at para 15 of the assessment order. However, the Assessing Officer was not satisfied with the explanation given by the assessee by recording the following reasons :- 1. The document has been received under mutual agreement between India and other countries. The details appearing in the Document pertain to information relating to accounts of the persons, the personal details of which are also appearing in the Document. Your name and other personal details are there in the Document. 2. The same has been corroborated by the fact that your family members details are also appearing in the accounts to which he is related. 3. Independent reference has been made to the authorities outside India to get a copy of the bank statement and other particulars about the account to verify the genuineness of the account as stated by you in your submission. Reference has also been made to get the accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenging the addition made on merit, the assessee challenged the validity of the assessment proceedings undertaken u/s 153A of the I.T. Act on the ground that no incriminating materials were found during the course of search and the same is also barred by limitation. 11. So far as the grievance of the assessee that the order passed by the Assessing Officer is barred by the limitation is concerned, the ld. CIT(A) rejected the same by holding as under :- The appellant has referred to the observations of the AO in the assessment order to highlight that there had been some exchange of information where by the department had received certain information from DTAA/ DTAC even before the search had been carried out and the said period could not be excluded for such exchange of information. It was contented that the reference for exchange of information had to be made during the course of assessment made by the competent authority under the agreement to another competent authority. It was contended that no record of having made such reference had been made part of the assessment order. It has also been contended that what information had been received in consequence thereof was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department and later retracted the disclosure on very specious grounds that the information came out in public domain. 12. Ld. CIT(A) however deleted the interest on such foreign bank account for which the Revenue is not in appeal and therefore we are not concerned with the same. 13. So far as the validity of the assessment completed u/s 153A in absence of any incriminating material found during the course of search is concerned, ld. CIT(A) also rejected the said ground by observing as under :- The issue of existence of incriminating material has to be considered in totality. The assessee cannot hide behind seizure or non seizure of documents. The same has to be construed with the peculiar facts of the case and the expected action on part of an independent entity in normal circumstances. There cannot be a fit all template in such cases. The AO and this appellate forum too have to construe the incriminating material in a harmonious fashion. Hon ble Delhi High court has also reiterated in many rulings that action u/s 153A is bound to be initiated in such situations. Therefore, this action of the AO is in tune with judgment of Hon ble Delhi High Court in CIT (C)-III vs. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case and in law the impugned order passed by the CIT(A) is contrary to law in as much as the addition u/s 69A has been made in the absence of any incriminating document unearthed during the course of search. 3.1 That on the facts and circumstances of the case and in law the CIT(A) erred by not following the proposition of law laid down the jurisdictional High Court in the case of CIT Vs. Kabul Chawla 380 ITR 573 (Delhi). 4. That the impugned order passed by the CIT(A) is non-speaking, laconic, cryptic and devoid of cogent reasoning. 4.1 That on the facts and circumstances of the case ad in law the CIT(A) erred in not following the proposition laid down by the Hon'ble ITAT in the case of Bishwanath Goradia Vs. DCIT 78 taxmann.com 81 (Kol) and Shyam Sunder Jindal Vs. ACIT (Del). 4.2 That the impugned order passed by the CIT(A) is vitiated as it does not address the arguments raised by the Appellant in the preceding ground of appeal. 5. The Appellant craves leaves to add, alter, amend, withdraw or substitute the grounds of appeal before or at the time of hearing. 15. The ld. counsel for the assessee strongly challenged the order of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are inadmissible evidence as the documents were photocopies which were not duly authenticated. The documents relied on by the AO are the copies which did not have any signature of bank official or name of the bank or the place or the country were the branch was situated. For the above proposition, he relied on the decision of the Delhi Bench of the Tribunal in the case of Shyam Sunder Jindal Vs. ACIT reported in 81 Taxmann.com 123 (Del). 18. In his 3rd alternate contention, the ld. counsel for the assessee submitted that a perusal of the 7 pages received under DTAA confirms that none of the client profile reflecting outstanding bank balance is in the name of Parag Dalmia or his family members. The outstanding bank balance is only shown in the name of Asprey Worldwide SA, Rondeberg Ltd. and Taira Foundation. In view of the same, no addition can be made in the hands of an individual who is neither an owner nor a beneficiary nor a beneficial owner of such bank account. 19. He submitted that even assuming but not admitting that such HSBC account did exist in the name of aforesaid entities, the same cannot be taxed in the hands of an individual namely Mr. Parag Dalmia in his capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under identical facts and circumstances, the Tribunal has deleted the addition made by the Assessing Officer and sustained by the ld. CIT(A). Referring to the decision of the Delhi Bench of the Tribunal in the case of Shyam Sundar Jindal vs. ACIT reported in (2017) 81 taxmann.com 123, he submitted that under identical circumstances, the Tribunal has restored the issue to the file of the Assessing Officer. He accordingly submitted that the order of the CIT(A) be set-aside and the grounds raised by the assessee be allowed. 23. The ld. DR on the other hand strongly supported the order of the CIT(A). He submitted that the original return filed on 30.10.2006 was processed u/s 143(1). The Government of India then received information regarding undisclosed foreign bank accounts of the assessee from another sovereign nation under relevant international arrangements/treaties the information of which is placed from page 3 to page 9 of the assessment order. He submitted that during the course of search, the assessee's statement was recorded u/s 132(4) and he was also shown the information regarding his undisclosed foreign bank accounts received (supra). The period of visits to Switze ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that for any evidence which is found/related to search, addition can be made only u/s 153A/153C. The ld. DR submitted that in this back ground for holding that the above addition could not have been made u/s 153A, the Tribunal may have to refer the matter to a Special Bench. He submitted that the decisions of Hon'ble Delhi High Court in the cases of Anil Kumar Bhatia, reported in 211 Taxman 453(Del) and Filatex India Ltd , reported in 229 Taxmann 555(Del) also support the stand of the Revenue that this addition is to be made u/s 153A. He submitted that the decision in the case of Kabul Chawla, reported in 380 ITR 573 does not apply in the present case as in the case of Kabul Chawla, the addition made had no connection with any material, evidence or statement found/recorded, letter filed during search or post search enquiries. 28. So far as merits of the case is concerned, he submitted that the information was received from a sovereign government. Though, the strict tests of Evidence Act do not apply to assessment proceedings, even in Evidence Act, documents /evidence received from foreign governments the acceptance of such evidence are different from evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case information was received by Govt. of India under DTAA/DTAC between India and other countries that certain persons in India held bank accounts in HSBC Private Bank (Suisse), SA, Switzerland which contained the name of the assessee. A search u/s 132 was conducted in the premises of the assessee on 20.01.2012 during which the statement of the assessee was recorded u/s 132(4) of the I.T. Act. He was also asked to give the details of his foreign bank accounts to which the assessee had categorically denied to have known or maintained any such foreign bank account. We find the Assessing Officer, during the course of assessment proceedings, confronted the information received in the form of 7 page documents to which the assessee had also denied to have any knowledge about the existence of such bank account. It is pertinent to mention here that the assessee vide letter dated 09.02.2012 addressed to the DDIT (Inv.) New Delhi had clarified that neither he created any such entity nor is aware of one existing on that date as mentioned in the 7 pages which were confronted to him. He, however, had stated that in order to buy peace and avoid litigation with the revenue authorities is willin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent profile reflecting outstanding bank balance is in the name of the assessee i.e. Parag Dalmia or his family members and, therefore, addition, if any, can be made in the hands of those entities and not in the hands of the assessee. 33. It is the submission of the ld. DR that the assessee was shown the information received by the Government of India regarding the undisclosed foreign bank account during the course of search and his statement was recorded u/s 132(4) of the I.T. Act. The assessee vide his letter dated 09.02.2012 i.e. 20 days after the search had filed a letter before the DDIT (Inv.) agreeing to pay the tax and interest due thereon. The declaration of the assessee voluntarily on such undisclosed income in post-search enquiries and the statement recorded during the course of search constitute incriminating evidence found during the course of search. It is also the submission of the ld. DR that since a search has taken place u/s 132 during which the assessee was confronted with those 7 pages documents, therefore, the Assessing Officer could not have issued notice u/s 148 on the basis of the 7 pages received from a sovereign country containing the name of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been given a unique code which is BUP SIFIC PER ID 9070142903. His profile was found linked to five client profiles namely, ASPREY WORLDWIDE S.A.; RONDEBERG LIMITED; TAIRA FOUNDATION, 12717 RSK AND MENKO FOUNDATION, VADUZ. With a view to verifying the above foreign bank account(s) a reference(s) has/have been sent to competent authorities in Switzerland and other countries. Till date the verificatory report in respect of above foreign bank account(s) has not 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 ld. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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