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TMI Blog2023 (4) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... ument of the nature like Bank Account Statement, then mere inferences from the contents of a documents it cannot be assumed that same is extract of a Bank Account statement kept in regular course of Banking Business. Even in case of a Banks incorporated in India it is only by virtue of the Bankers Books Evidence Act, 1891, the Bankers books have been made admissible. When the information about an account in foreign bank was not coming from the Bank itself but some other source, there had to be some foundation to rely the same and reach a conclusion. However, that seems to be not the case here. Whether apart from the aforesaid information in the hands of Revenue there was any other material of inculpatory nature found during search itself on the basis of which assessment under Section 153A of the Act can be done? - No doubt the admission is best piece of evidence and any retracted admission continues to be relevant and admissible for drawing inferences. However, the same need corroboration in material particulars. Which is completely absent in the present case. Any search material of inculpatory nature found in search can be corroborated by a retracted statement by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot not be added in the hands of Assessee. Addition on account of air conditioner allegedly purchased by the assessee - CIT(A) has taken in due consideration the fact that the name of the assessee no where figures in the retail cash invoices and the evidence that during the relevant period of time, the premises was in occupation of a tenant who was leased out the said premises vide lease deed and tenant may have installed these air conditioners for his own use, as such the expenses have not been incurred by the assessee. Addition on account of payment made to Sh. Jindal towards excess money received on account of JMD flats sold during the year - From the notices u/s 142(1) of the Act it is observed that except for calling for details related to foreign bank account and other routine issues no question was ever raised by the AO during the assessment proceedings and addition has been made without giving the assessee any opportunity to clarify or rebut the allegation. On consideration of the facts it is apparent that all the transactions are through banking channels and there is no case for unaccounted payment. The addition is therefore deleted. Undisclosed interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued on 21.05.2012 requiring assessee to file the return for the relevant assessment years. Assessee filed the returns. Thereafter notice u/s 142(1) along with questionnaires were issued and accordingly assessment was completed. 2.1 In regard to assessment year 2007-08, assessee has found to have not disclosed HSBC Bank account at Dubai. Thereafter based on statement of the assessee u/s 132(4) of the Act dated 28.07.2011 and 04.08.2011, the Ld. AO observed that the said account had balanced of 19,15,148 Euros in April, 2006 and applying a conversion rate of Rs. 62 it was treated as undisclosed income of the assessee for the F.Y. 2006-07 relevant to A.Y. 2007-08. Ld. AO also added to the income, interest income on the credit balance up to 31st March, 2007 @ Rs. 4% per annum at Rs. 43,53,770/-. 3. Thereafter as a consequence to addition made in assessment year 2007-08 as above, addition of interest income on the credit balance was made in the subsequent assessment years 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13. 4. In appeal Ld. CIT(A) had sustained the substantial addition on account of balance with foreign bank account remaining unexplained however, directing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has focused on the arguments that the source of information is not established and referring to the fact that it was pen drive which was received allegedly from the French Govt., in the absence of link evidence, the same is not admissible. It is submitted that print out from this Pen Drive is not a bank account statement and in similar circumstances the Tribunal in the case of Parminder Singh Kalra, ITA No. 5330/Del/2016 dated 15.06.2021 has held that the so-called bank statements retrieved from the pen drive are not statement at all and that the same are not admissible for proving any fact. He specifically pointed out there is no stamp, letter head, signatures upon these so called statements and in the revenue documents they has been referred as base sheets. 7.2 He submitted that apart from this there was no recovery of any incriminating material during the search as reflected from panchnama made available at page no. 3 to 17 of the paper book. Relying judgment of Hon ble Delhi High Court in Kabul Chawla (2016) 380 ITR 573 (Del), Kurele Paper Mills P. Ltd. [2016] 380 ITR 571 (Del) Sighad Education 397 ITR 344 (SC) it was submitted that as the return was filed for A.Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 771 (SC), B Kishore Kumar Vs CIT [2014] 52 taxmann.com 449 (Madras)/[2015] 229 Taxman 614 (Madras)/[2015] 273 CTR 468 (Madras), Bhagirath Aggarwal Vs CIT [2013] 31 taxmann.com 274 (Delhi)/[2013] 215 Taxman 229 (Delhi)/[2013] 351 ITR 143 (Delhi), CIT Vs M.S. Aggarwal [2018] 93 taxmann.com 247 (Delhi)/[2018] 406 ITR 609 (Delhi), Smt Dayawanti Vs CIT [2016] 75 taxmann.com 308 (Delhi)/[2017] 245 Taxman 293 (Delhi)/[2017] 390 ITR 496 (Delhi)/[2016] 290 CTR 361 (Delhi), M/s Pebble Invesment and Finance Ltd. Vs ITO [2017-TIOL- 238-SC-IT], M/s Pebble Invesment and Finance Ltd. Vs ITO? [2017-TIOL- 188-HC-MUM-IT],Greenview Restaurant Vs ACIT [2003] 133 Taxman 432 (Gauhati)/[2003] 263 ITR 169 (Gauhati)/[2003] 185 CTR 651 (Gauhati), Raj Hans Towers (P.) Ltd Vs CIT [2015] 56 taxmann.com 67 (Delhi)/[2015] 230 Taxman 567 (Delhi)/[2015] 373 ITR 9 (Delhi), PCIT Vs Avinash Kumar Setia [2017] 81 taxmann.com 476 (Delhi)/[2017] 248 Taxman 106 (Delhi)/[2017] 395 ITR 235 (Delhi), Vinod Kumar Khatri Vs DCIT [2015-TIOL- 2669-HC-DEL-IT], Smt. Dayawanti Vs CIT [2016] 75 taxmann.com 308 (Delhi)/[2017] 245 Taxman 293 (Delhi)/[2017] 390 ITR 496 (Delhi)/[2016] 290 CTR 361 (Delhi), Bhagirath Aggarwal Vs CIT [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent notice u/s 142(1) of the Act dated 10.11.2014 the assessee once again denied having any foreign bank account. The AO issued another notice u/s 142(1) on 12.12.2014 asking him to produce copy of bank account maintained by the assessee with HSBC Dubai which was denied again by the assessee vide his letter dated 22.12.2014. Thereafter, the AO observing, at Para 5 page 2 of the assessment order, that as per information available with the Investigation Wing of the Department the assessee was having an account with HSBC Bank, Dubai bearing No. BUP_SIFIC_PER_JD 5090187879, PER_JD 148209, PER_No. 187879 opened on 13.04.2006. In this information vital details of Shri Vikram Dhirani, viz., his D.O.B. [21.06.1956] his address of New Delhi [D-1039, New Friends Colony, New Delhi-65], marital status etc were duly mentioned. The above information was received from the Competent Authority under Exchange of Information framework of DTAC/DTAA between India France and that as per the said information .... credit balance in this account was 19,15,148 as on April, 2006 and 18,12,642 as on ending December, 2007; Peak balance in the month of April, 2006 was 19,15,148 , and applying Euro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent which has been shown to the assessee was in the name of Mapleton Continental SA, but how this document of Mapleton Continental SA is related to the assessee has not been investigated nor verified; (vi) the AO has not been able to bring any material or evidence which can substantiate its allegation that the assessee is having a foreign bank account; (vii) the AO repeatedly through notices u/s 142(1) of the Act has been asking the assessee to give a copy of the bank statement and in case the AO was having copy of the bank statement there was no reason and justification for the AO to ask for the same document from the assessee and also suggests that the information with AO was in itself not sufficient enough to hold that assessee is having a foreign bank account; and that, (viii) the AO on the other hand is asking the assessee to prove that he does not have a foreign bank account against the settled principle of law that negative onus cannot be put upon the assessee. 7.7.4 In consideration of the above contentions raised by the appellant the relevant facts emanating from the documents now provided by the AO, and in turn provided to the appellant, as mentioned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have domestic interest in the HSBC account held by the appellant in Dubai, the information being relevant to India for taxation purposes was legally shared with India in terms of the provisions of the DTAA between the two countries and in terms of the provisions of Art.26 of the OECD Model Convention for Exchange of Information. This view is also consistent with s. 90(1)(c) of the Act, which provides that the exchange of information may be for prevention of evasion or avoidance' of income-tax chargeable under this Act or under the corresponding law in force in that country, ... or investigation of cases of such evasion or avoidance , and therefore I find no infirmity in the utilization of the information related to the bank account of the appellant with HSBC Dubai, being in possession of the French Republic and which was shared with the Indian authorities, in the assessment of income of the appellant. 7.7.4.4 All the above information and documents, as mentioned above at para- 4 to 6, have been provided to the appellant during the appellate proceedings alongwith letter F.No.4l4/88/2011- IT(inv.)(Pt.)/08 dt. 01.06.2015 of the Dy. Secretary (Investigation- I), CBDT a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 7.7.5.2 On close scrutiny of the impugned bank account statement received from the French authorities it is observed that under Other persons linked to the client s profiles (AUTRES PERSONNTS LIEES AUX PROFILS CLIENTS) the Name : BUP Code is HSBC Financial Services [ME] Ltd. (5090279917) with the address HSBC Financial Services (ME) Ltd., P.B. Box No.4604, Dubai, United Arab Emirates . The appellant has contended that it is not the case of the AO that the assessee was having a bank account in France and the Government of France has given a copy of the bank account being maintained by the assessee in France but in fact the allegation of the AO is that assessee was having a bank account with HSBC Dubai, that the AO himself is not clear from which competent authority it has sought information, whether it is France, Switzerland or UAE, that all these documents pertain to exchange of information between Indian and France, that as per the proforma enclosed by the AO with the letter dated 27th September, 2013 addressed to the Commissioner of Income Tax (Central) the information being sought is that of HSBC Bank Dubai, and that if that be the case this letter would hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the currency, it would be appropriate to adopt Dollars as the currency for computing the value in INR. In view of the fact that I have herein above upheld the authenticity of the information received related to the foreign bank account, and considering that the name, personal details and address of the account holder mentioned in the impugned bank account is specifically that of the appellant and his client ID is mentioned against his name, and his name also appears as the beneficial owner against the client name Mapleton Continental SA, it is held that the impugned foreign bank account belongs to the appellant and he is the beneficiary of the assets/investments and deposits reflected in that account, whether in liquid assets/deposits or deposits in form of shares, stocks or structured products in Mapleton Continental SA, or in any other company in any other company for that matter, which has not been disclosed hither to before in his income tax returns. 10. Taking into consideration the aforesaid observations of the Ld. CIT(A), the Bench is of firm view that Ld. CIT(A) has fallen in error in considering the information itself to be evidence . The information even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the pen drive to the Indian Competent Authority and the 6 page document is a print out of the said pen drive. But the ld. CIT(A) failed to address the argument of the assessee that the information contained in pen drive, the source thereof and author thereof and the authenticity of the information contained in the pen drive has not been established with any credible evidence or linkage with any of the document. The pen drive so received was just like an anonymous letter forwarded by French Competent Authority to the Indian Competent Authority. The issue which the ld. CIT(A) has failed to appreciate is the origin of the source of information only and certainly not the passing of the information from French Competent Authority to Indian Competent Authority, till such time the origin of source of information is authenticated. 133. Further, we hold that similar issue of authenticity of the documents has been examined and adjudicated in the case of AnuragDalmiaVs DCIT, Central Circle-26 in ITA Nos. 5395 5396/Del/2017 for the assessment years 2006-07 and 2007-08 dated 15.02.2018. In that case, the Tribunal held at para 22 that before parting, we are making it very clear that we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant recorded u/s 132(4) of the Act during the search cannot be considered to be legally invalid and the facts of the case relied upon are distinguished on this account. Therefore, it was but natural that queries regarding information related to the impugned foreign bank account which was in the possession of the Department was put to the appellant at the time of recording of statement u/s 132(4) of the Act and after persistent questioning the appellant finally admitted, in answer to Q. No. 29 to 35 that he has bank account with HSBC Dubai opened on 13.04.2006. The impugned statement u/s 132(4) of the Act has been reproduced-at page no. 3 to 5 of the assessment order at para-5. In Q. No.29 the appellant was shown the copy of the impugned foreign bank statement whereafter in his reply the appellant admitted that he has a bank account with HSBC Dubai which was - opened on 13.04.2006, and in answer to subsequent questions he replied that he opened the account from India itself through some person to whom he had given authorization, and that he had undertaken one transaction and subsequent transactions were made by the bank on their own as investment options under his ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t statement belonged and related to him and were deposits/investments made by, or on behalf of, him. As discussed above, there is no doubt with regard to the authenticity of the information related to the impugned foreign bank account received from France under the exchange of information and I have held that the impugned account belongs to the appellant and the deposits and investments reflected therein constitute his disclosed income. Besides, there is no indication in the statement that there was any coercion or pressure on him to make such admission in his statement u/s 132(4) of the Act, and at no point of time, has he indicated that the admission was under protest. Therefore, considering the existence of the evidence of the impugned account available with the department such retraction of admission without the appellant leading any evidence to support his retraction cannot be considered as bonafide in the face of material evidence of unaccounted deposits/investments in/through the said foreign bank account. The authenticity of the retraction is, therefore, suspect and cannot be accepted. The statement recorded during search was not under any coercion and pressure and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was not extorted. It thus boils down that the authority or any Court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. (emphasis supplied) Further, retraction without adducing or leading evidence in support of retraction from admission and without establishing that the statement was obtained under pressure or coercion have been held to be not valid in Narayan Bhagwant Rao Gosavi Balajiwale vs Gopal Vinayak Gosavi AIR (1960) SC 100, 105; Ramji Dayawala Sons P. Ltd. vs Invest Import AIR (1981) SC 2085, 2093; Pullangode Rubber Produce Co. Ltd. vs State of Kerala (1973) 91 ITR 18 (SC), Y. Ramachandra Reddy v. Additional Commissioner of Income-tax (Assessment) [2015] 57 taxmann.com 43 (AP Tel), Commissioner of Income-tax v. Lekh Raj Dhunna [2012] 20 taxmann.com 554 (Punj. Har.) Commissioner of Income-tax, Kozhikode, v. O. Abdul Razak[2012] 20 taxmann.com 48 (Ker.) wherein it has been held that a statement made under oath deemed and permitted to be used in evidence, by express statutory provision, has to be taken as true unless there is contra evidence to dispel such assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned foreign bank statement/documents, I hold that the assessment made u/s 153A of the Act is not in conflict with the judgments of the Hon ble Delhi High Court relied upon by the appellant including that of Kabul Chawla (supra). As such, ground nos. 3 and 6(i) (ii) against the legal validity of the assessment order u/s 153A of the Act do not survive and are dismissed. 13. It is apparent from aforesaid findings that Ld. CIT(A) has merely relied the case law without any rational of his own. What Ld. CIT(A) has failed to take cognizance of is the fact that in none of the cases only on the basis of statement the additions were made u/s 153A of the Act. 14. No doubt the admission is best piece of evidence and any retracted admission continues to be relevant and admissible for drawing inferences. However, the same need corroboration in material particulars. Which is completely absent in the present case. Any search material of inculpatory nature found in search can be corroborated by a retracted statement by way of establishing material facts arising from the search material matching with the retracted oral statements but where the retracted statement is the solitary evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search, that is, it was not found during the course of search or as a result of search, then in that case Revenue had various other courses of action left under the provisions of Income Tax Act, but certainly not within the ambit and scope of Section 153A read with 2nd proviso thereto. The Hon'ble Delhi High Court in the case of CIT Vs Kabul Chawla (supra) held as under: vii. Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment 17. Keeping in view the discussion made above, we hold that the additions as finally made to the total income of the assessee on account of transactions reflected in the alleged Bank account of the assessee with HSBC Bank account at Dubai and income relating thereto for relevant AY under consideration are beyond the scope of section 153A as the assessments for the said years had become final prior to the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een incurred by the assessee. 21 . Seventh Issue is the ground specific to AY 2011-12 relating to the addition of Rs.4,24,040/- on account of payment made to Sh. Jindal towards excess money received on account of JMD flats sold during the year. The AO has observed that the assessee sold JMD flats for Rs. 1,23,85,440/- which were purchased on 24.03.2007 for Rs. 1,20,48,000/- and that the assessee paid Rs.4,24,040/- to one Mr. Jindal for reimbursement of excess amount received against JMD flat sales, and observing that the assess could not justify the payment made nor did he file any confirmation or reconciliation he added the amount to the income of the appellant. Ld. CIT(A) has taken into account the evidence before it and observed; The appellant s AR has submitted that the assessee sold the flats for Rs. 1,23,85,440/- to two persons, Mr. Saurav Jindal and Mr. Gaurav Jindal (flat no. 301-902 and 301-903 for Rs.40,15,385/- each, total Rs.80,30,770/- against which Rs.55,44,020/- was received) the details of which filed have been at page-70 of the paper book from which it is seen that the payment received against the sale of flats sold to Sh. Saurav Jindal was Rs.68,41,420/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no evidence brought on record by the Ld. AO that interest was also paid on the deposits/balance in the account peak balance of which has already been added in AYs 2007-08 and 2008-09. Particularly in the subsequent years after the years relevant to AYs 2007-08 and 2008-09 for which there is no statement of the said bank account or any information, as part of the information received under exchange of information or otherwise, in respect of these subsequent years. There is also no error in Ld. CIT(A) holding that it is settled law that notional interest cannot be taxed as income. 23. Concluding on the basis of aforesaid determination of issues, the grounds raised by the assessee in appeal ITA no. 4100/Del/2016 deserve to be allowed so the appeal of assessee is allowed and grounds raised by Revenue in Appeals ITA no.4647 to 4652 /Del/2016 are not sustained and the appeals of Revenue are dismissed. ITA No.4475/Del/2016 ITA No.1092/Del/2017 ( Penalty appeals of Assessee) ITA No.1849/Del/2017; ITA No.6031/Del/2016; ITA No.6028/Del/2016; ITA No.6029/Del/2016, ; ITA No.6030/Del/2016, ;ITA No.6032/Del/2016, A.Y. 2012-13 ( Penalty appeals of Revenue) 24. Further ..... 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