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TMI Blog2024 (10) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... available with the Revenue were thus overwhelming and specific in nature. With a view to verify the credibility and precision of such information on purported foreign bank account, a reference was sent to competent authorities in Switzerland and other countries by the Indian Revenue Authorities. The confirmatory verification report in respect of the foreign bank accounts allegedly maintained by the assessee could not however be obtained by the Revenue Authorities owing to the conditional handicap namely Consent Waiver Form which is required to be necessarily signed by the account holder. The Swiss authorities would, otherwise, in the absence of consent from the account holder would not officially part with the information of the customer to authorities of other sovereign state. The Revenue is in possession of cogent material which indicated the details of bank account maintained in the name of the assessee including the date of opening of bank account (06.10.1998) and date of closure (25.01.2006). The authenticated copy of such bank account could be obtained only with the consent and concurrence of the assessee, i.e., bank account holder, owing to limitations fastened by the stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. Additions on account of notional interest attributable to undisclosed bank account in HSBC Bank is not permissible owing to closure of the bank account itself. Unexplained investment in jewellery found during the search - For gifts received on wedding, name and address of the persons, relationship and the description of item of jewellery is mentioned along with the corresponding serial number of the valuation report prepared during search matching the respective jewellery item. The total value of jewellery received on the occasion of the wedding comes to Rs. 25,36,118/-. The appellant has also filed hand written Aashirvad Patras in substantiation of the above. In view of the same, there is enough evidence and material in support of the appellant s contention that the said jewellery items were received on its wedding. AO in case he disbelieved the version of the appellant could have conducted inquiries from the persons gifting jewellery items for which names and addresses are available in the details filed by the appellant. AO failed examine the issues and disprove the contention of the appellant. In view of the same, addition to the extent of Rs. 25,36,118/-, out of total addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment Order under section 143(3) of the Income Tax Act, 1961. 7. ITA No.6610/Del/2017 Revenue 2014-15 CIT(A)-26, New Delhi order dated 11.08.2017 Assessment order dated 31.08.2016 Assessment Order under section 143(3) of the Income Tax Act, 1961. 8. ITA No.920/Del/2018 Revenue 2007-08 CIT(A)-26, New Delhi order dated 28.11.2017 Assessment order dated 30.06.2015 Penalty Order under section 271(1)(c) of the Income Tax Act, 1961. 9. ITA No.921/Del/2018 Revenue 2008-09 CIT(A)-26, New Delhi order dated 28.11.2017 Assessment order dated 30.06.2015 Penalty Order under section 271(1)(c) of the Income Tax Act, 1961. 10. ITA No.922/Del/2018 Revenue 2009-10 CIT(A)-26, New Delhi order dated 28.11.2017 Assessment order dated 30.06.2015 Penalty Order under section 271(1)(c) of the Income Tax Act, 1961. 11. ITA No.923/Del/2018 Revenue 2010-11 CIT(A)-26, New Delhi order dated 28.11.2017 Assessment order dated 30.06.2015 Penalty Order under section 271(1)(c) of the Income Tax Act, 1961. 12. ITA No.924/Del/2018 Revenue 2011-12 CIT(A)-26, New Delhi order dated 28.11.2017 Assessment order dated 30.06.2015 Penalty Order under section 271(1)(c) of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Swiss authorities also and thus no information other than what was considered in the original assessment order is available with the revenue; (iii) the Hon'ble ITAT in para 34 of its appellate order dated 26/02/2018 in the first round of appeal no. ITA 5499/Del/2017, never held that the said incriminating material was found during the course of search on the assessee and an admitted fact by the revenue also, (iv) though the Hon'ble ITAT held therein the same to be an incriminating material but for application of the provisions of the section 153A of the Act in respect of a completed assessment is finding of an incriminating material in the premises of the assessee during an income-tax search and nowhere else or in any other manner as has been held by the Hon'ble Apex Court in the above judgments; (v) the directions from the Hon'ble ITAT vide above appellate order dated 26/02/2018 in the first round stood fully met and which otherwise stand overruled since then by the above stated judgments; (vi) the authorities below failed to correctly appreciate the directions, material on record, the sanctity of the information with the revenue, and law in this regard wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erificatory reports on the existence of alleged Foreign Bank. 6. It would be apt to reproduce the relevant paras of the order passed by the Co-ordinate Bench dealing with the issue. "30. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer as well as the Id. CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant 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, Switzerand 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 assasee was recorded u/s. l32(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion can be made. It is also the submission of the Id. counsel for the assessee that the documents relied on by the Assessing Officer are inadmissible since these documents are not signed by any authority and these are merely photocopies which were not duly authenticated. Further, it is the submission of the ld. counsel for the assesses that none of the client 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch type of argument was never taken in the case of Bishwanath Garodia (supra) and Shyam Sunder Jindal (supra). 35. Now, coming to the merits of the case is concerned, we find the Assessing Officer at para 11 of the order as observed as under :- "11. From the above facts it is clear that the assessee has opened and/or operated accounts) in HSBC Bank. He 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 accounts) 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 comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of facts and circumstances involved in the case, opined against the assessee and thus denied any relief. The CIT(A) has dealt with the issue as under: "Ground No.s. 2 to 6: In the present case certain information was received in April-May-2011 under DTAA that certain persons in India including the appellant have bank accounts in Hong Kong and Shanghai Banking Corporation (HSBC Bank), Switzerland. A search and seizure action u/s 132 was carried out in the case of appellant on 20.01.2012. During the search certain assets in the form of cash, documents and jewellery had been found and seized. Assessment u/s 153A/143(3) of the Act, was completed in the case of appellant vide order dated 18.03.2015 by making addition at Rs. 1,20,37,863/- on account of income from undisclosed foreign bank account u/s 69 of the Act and a further addition of Rs. 1,23,130/- was made on account of interest on these deposits in the foreign bank account. Aggrieved with the assessment order, the appellant had filed appeal before CIT(A)-26, Delhi who vide order No. 10138/06-07 dated 11.08.2017, confirmed the addition of Rs. 1,20,37,863/- made on account of undisclosed deposits in foreign bank account but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the assessee. We hold and direct accordingly. The grounds raised by the assessee are partly allowed for statistical purposes." 10.1 Subsequently, the assessment proceedings in pursuance to the direction of Hon'ble ITAT, Delhi were completed u/s 254/153/143(3) of the Act, vide order dated 30.12.2018 which is the subject matter of the present appeal. The relevant extract of the assessment order has already been reproduced in para 3 above of this order. 10.2 In pursuance to the directions of Hon'ble ITAT, Delhi in ITA no.5499/DEL/2017 dated 26.02.2018 the AO had issued letters to Foreign Tax Authority for seeking a response/verificatory letter. Though the response was not received during the course of reassessment proceedings, but subsequently, during the remand proceedings, it has been conveyed by the Foreign Tax Authority that the administrative assistance was only available from F.Y. 2011/2012 onwards. Therefore the information from 1st April, 2011 onwards could only be provided. Meaning thereby, that the information pertaining to prior years could not be provided as they were not covered by the scope of convention. It was also informed that during the time perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges cannot be discarded summarily in cryptic manner by observing that the assessee in a belatedly filed affidavit has retracted from his statement. Such retraction is required to be made as soon as possible or immediately after the statement of the assessee was recorded. Duration of time when such retraction is made assumes significance and in the present case retraction has been made by the assessee after almost eight months to be precise, 237 days. In view of above discussion, we are persuaded to allow the appeal of the revenue which is accordingly allowed. The substantial question of law formulated by this Court vide order dated 10.04.2018 is answered in favour of the revenue and against the assessee in the aforesaid terms." 10.4 Now going by the merits of the document relied upon by the AO during the assessment as well as re-assessment proceedings, it is seen that the document contains the personal details of the appellant i.e. its name, date of birth, and address borne on the account profile which could not have been accessed without the explicit approval of the appellant. The name of the family members of the appellant such as Sangeeta Dalmia (wife), Aruna Dalmia (moth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edible source for making the addition. In view of the same and also considering that the documents available with the department corroborate with the personal details of appellant and the circumstantial evidences such as travel history, I am inclined to agree with the order of AO. 11. In the result, the appeal of the appellant is hereby dismissed." 9. Further aggrieved, the assessee has knocked the door of the Tribunal once again. 10. The ld. counsel submitted at the outset that the controversy revolves around the taxability of deposits kept in alleged foreign bank allegedly maintained with HSBC Switzerland by the assessee without any corroboration. The ld. counsel contended that the Tribunal had set aside the matter to the file of the AO for determining the issue after obtaining certain verificatory report or letters from Switzerland Authorities to corroboration the allegations towards undisclosed bank account. No such verificatory report or any authenticated corroboration has been confronted to the assessee while repeating the additions in contravention of the order the tribunal. 10.1 The ld. counsel thereafter raised jurisdictional issue and pointed out that the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Revenue is thus under grave doubt and the onus lies on the revenue to confront some credible material to support its action. 10.5 The ld. counsel thus submitted that neither the action of Revenue is justified within the jurisdiction conferred to AO under Section 153A nor such additions are plausible on the touchstone of factual matrix. The ld. counsel thus urged for suitable relief in the matter. 11. The ld. CIT-DR for the Revenue, on the other hand, pointed out that the present appeal lies against the second round of proceedings and thus is governed by the landscape set out by the ITAT in the first round. The ITAT in the present second round is thus not entitled to revisit any concluded aspect of the appeal as it would tantamount to review which is impermissible. The ITAT thus cannot expand the scope of its power and revise the conclusive findings of the Tribunal rendered in the first round on the jurisdictional issue already stood decided. 11.1 To support such assertions, the ld. CIT-DR referred to paragraph 34 of the decision of the Co-ordinate Bench of the Tribunal in ITA No.5499/Del/2017 order dated 26.02.2018 for the A.Y. 2006-07 (first round) to contend that the ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of 7 pages document (extracted in para 6 of the assessment order passed in first round representing particulars of undisclosed bank account etc.) was confronted to the assessee in the course of search. Subsequently, the assessee vide letter dated 09.02.2012 before DDIT (Inv.) also consented and voluntarily expressed his willingness to pay income tax and interest due on such undisclosed amount for the relevant year so detected [provided no penal action and / or prosecution action is under taken and is to be kept confidential]. Despite such assurance and undertaking given in writing by the assessee before the DDIT (Inv.), the assessee resiled from its stand and no such undisclosed sum was eventually offered to tax in the return filed pursuant to notice under Section 153A of the Act. 11.5 The CIT-DR thus asserted that in the light of the material available on record, and in the absence of any co-operation from the assessee in the matter of deeper enquiry which prevented the Revenue to bring exact facts on undisclosed facts to the fore, it is not open to the assessee to take the plea of his innocence and bona fides. The assessee has consciously prevented the Revenue to gather pin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act in the first round of proceedings, it is manifest that similar grievance towards lack of jurisdiction to assess the undisclosed income attributable to Foreign Bank Account within the ambit of Section 153A were raised before the Tribunal. The ITAT, on appraisal of facts and circumstances of the case, clearly held that 7 pages document in possession of the Revenue constituted incriminating material for the purposes of assessment. Therefore where on facts, it was found by the Tribunal that incriminating material was existing in the present case and the ingredients for assumption of jurisdiction to assess the income of the assessee under s. 153A stood satisfied, the jurisdictional issue raised yet again in the second round of proceedings are non longer available to the assessee. The review of jurisdictional issue already decided earlier, is outside the mandate of the ITAT. It is not open to the Tribunal to review and re-ascertain the view already expressed by the Tribunal in the first round of proceedings. The jurisdictional question thus being not maintainable is answered against the assessee and in favour of the Revenue. 15. The assessee has heavily relied upon the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were thus overwhelming and specific in nature. With a view to verify the credibility and precision of such information on purported foreign bank account, a reference was sent to competent authorities in Switzerland and other countries by the Indian Revenue Authorities. The confirmatory verification report in respect of the foreign bank accounts allegedly maintained by the assessee could not however be obtained by the Revenue Authorities owing to the conditional handicap namely 'Consent Waiver Form' which is required to be necessarily signed by the account holder. The Swiss authorities would, otherwise, in the absence of consent from the account holder would not officially part with the information of the customer to authorities of other sovereign state. 17. Contextually, the Tribunal in the first round of proceedings in paragraph 32 of its order, noted that 'it is also the submissions of the ld. counsel for the assessee that the documents relied upon by the AO are inadmissible. These documents are not signed by any authorities and these are merely photocopies which are not duly authenticated.' 18. The Tribunal in paragraph 34 also inter alia observed that documents in the shape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterially different. The Revenue is in possession of cogent material which indicated the details of bank account maintained in the name of the assessee including the date of opening of bank account (06.10.1998) and date of closure (25.01.2006). The authenticated copy of such bank account could be obtained only with the consent and concurrence of the assessee, i.e., bank account holder, owing to limitations fastened by the stated policy, protocols and regulations of Swiss Govt. The question of self incrimination by signing the consent waiver form would arise only in the case of a finding of any offence committed. Where the assessee has not maintained any bank account, the existence of 'offence' would not arise. Besides, a person who is called upon to assist the deptt. in the course of enquiry and investigation of facts is not an 'accused' per se. Hence self incrimination plea is a damp squib. This view is supported by the judgment rendered in the case of Ramesh Chandra Mehta vs. State of West Bengal AIR 170 SC 940. Therefore, in the context of income tax proceedings, providing consent waiver form on non existent bank account, in our view , would not tantamount to testamentary compul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10/Del/2017 are dismissed. ITA No.925/Del/2018 (A.Y. 2012-13) - Revenue's Appeal 27. The grounds of appeal raised by the Revenue read as under: 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 7,24,438/- made by the AO on account of undisclosed interest income on the undisclosed deposits of Rs. 1,81,11,008/- in HSBC Bank, Geneva without appreciating the fact that the assessee had not submitted any details regarding the same during the assessment proceedings or appellate proceedings. 2. The Ld. CIT(A) has erred in deleting the addition of Rs. 41,08,342/- on account of unexplained investment in jewellery found during search and seizure action without appreciating the fact that the assessee has not submitted any documentary evidence in support of his claim. 3. The Ld. CIT(A) has erred in deleting the addition of Rs. 6,60,000/- on account of undisclosed cash found during search and seizure action without appreciating the fact that the assessee has not submitted any documentary evidence in support of his claim. 28. Ground No.1 of the Revenue's Appeal has already been adjudicated in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as under:- S. No Particulars Status Amount (in INR) 1 Dalmia Infrastructure Private Limited Company 89,919.00 2 Globus Estate Private Limited Company 6,565.00 3 Globus Property Management Private Limited Company 17,297.00 4 Sh. Nar Hari Dalmia Individual 157,670.00 5 Smt. Aruna Dalmia Individual 100,316.00 6 Sh. Parag Dalmia Individual 73.028.00 7 Mrs. Sangeeta Dalmia Individual 32,537.00 8 Parag Dalmia (HUF) Hindu Undivided Family 130,456.00 9 Ms. Rasalika Dalmia Individual 48,413.00 10 Ms. Saudamani Dalmia Individual 24,376.00 11 Mr. Krittvas Dalmia Individual 30,394.00 Total 710,971.00 In corroboration of the above, the appellant has filed copies of respective Ledger Accounts showing the availability of cash. It has been pointed out that soft copies of these books of accounts have been seized during the search action and therefore the veracity of the appellant's claim regarding availability of sufficient cash in hand can be cross verified from the seized material. The arguments of the Assessing Officer that no Ledger Account have been furnished in support of granting of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of jewellery of such magnitude is in tune with the social status of the assessee. Hence the aforesaid explanation of the appellant appears acceptable. It is also noted that out of total jewellery aggregating Rs. 5,23,51,795/- found during search, the appellant is claiming only an amount of Rs. 8,26,944/- as being belonging to its married sister Mrs. Alpana Gujral, which is 1.56% of the total jewellery. Even on preponderance of probabilities the explanation of the appellant does not merit rejection, especially keeping in view the fact that jewellery of Rs. 18,97,402/-, that could not be reconciled, has already been included by the appellant in its return of income and offered for taxation. In the circumstances, addition of Rs. 13,04,724/-in respect of jewellery stated to be belonging to Mrs. Archana Gujral, married sister of the appellant is directed to be deleted. It is seen that the Assessing Officer has not extended the benefit of Instruction No. 1914 in respect of jewellery amounting to Rs. 2,67,500/- in the hands of Mr. Krittvas Dalmia, son of the appellant in terms of Instruction No. 1916 of the CBDT on the reasoning that the operation of said instruction was only appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6418 Diamond 10.50 262,500 288,918 43 Late Sh. Sohanlal Singhania R/o Udichi, 7/184 Swaroop Nagar, Kanpur Matenal Grand Father Bangle s with diamonds in Gold & white Metal 15.900 5.000 11,900 Diamonds 14.00 385,000 396,900 45 Late Smt. Lalita Dalima R/o No.9, 30 January Marg, New Delhi My Aunt (Taiji) One parisolitai rediamon ds tops in white metal Gold Ginnie s of 51 Nos 4.400 408.00 408.000 500 1,071,000 Diamonds 3.25 357,500 358,000 1,071,000 53 32 583.000 559.100 1,431,118 27.75 2,536,118 The following items have been received as Gifts by my children on their Birth 1 Friends and Relatives Pendant set in diamonds & Stones in white metal 15.000 0.000 750 Diamonds Stones 1.50 15,000 3,000 18,750 21 2 Friends and Relatives One pair Kara with Polki in victorious 99.700 Polki Victoria 0.20 160,000 160,000 40 3 Friends and Relatives One chain, pendant with stones, amethis and diamond 16.100 11.000 26,180 Diamonda Amethes 2.50 2,400 10,000 38,580 42 4 Friends and Relatives One chain, one 3 pcs ring, one pair tops & diamond 31.800 31.300 74,49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is observed that the CIT(A) has examined the issue in length and the issue has been decided on nuanced analysis of the facts and circumstances of the case. The preponderance of probabilities tilts in favour of the assessee. The Revenue has failed to successfully rebut the findings of the CIT(A). We thus decline to interfere. 31. Ground No.2 of the Revenue's Appeal is dismissed. 32. Ground No.3 concerns undisclosed additions on account of cash found in the search. 33. The CIT(A) on analysis of facts found that cash in hand found in the course of search is corroborated by the cash in hand of family members and companies at the time of search. 34. To our mind, the CIT(A) has taken a view [reproduced in para 29] which passes the test of reasonableness and is plausible. We thus see no reason to interfere with such order. 35. Ground No.3 of the Revenue's Appeal is thus dismissed. 36. In the result, the appeal of the Revenue is dismissed. ITA No. 920, 921, 922, 923, 924 and 3285/Del/2018 (A.Y. 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13) 37. The captioned appeals relates to penalty imposed under s. 271(1)(c) on notional interest charged on purported deposits with HSBC Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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