HOSHANG MANEKJI HAVEWALA,MUMBAI V. ACIT-19(3), MUMBAI, MUMBAI

CO 338/MUM/2025

AI Insights

The case involves a series of appeals and cross-objections related to the reassessment orders for various assessment years concerning the assessee, Hoshang Manekji Havewala. The primary issue was the addition made by the AO based on information received from the French government, suggesting that the assessee had undisclosed foreign bank accounts and substantial foreign assets. The CIT(A) deleted the addition, finding that the evidence provided was insufficient to substantiate the claims. The revenue appealed against this decision, arguing that the CIT(A) erred in deleting the addition and that the AO had rightly estimated the income based on a 17% return on investment. The Tribunal found that the AO's addition was based on presumptions and lacked concrete evidence, leading to the dismissal of the revenue's appeal and the assessee's cross-objections.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836044 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-02-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 1999-2000
• Appeal Filed On: 25-11-2025
• Other Referred Cases: M/s. Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata-2
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: AKSHAY SHAH
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Onus to prove; Tax effect; Principle of natural justice; Reason to believe; Double taxation relief; Residential status
• Section: 148; 144; 143(3); 142(1); 271(1)(c); 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A No.6192/Mum/2025 A.Y.: 1999-2000 I.T.A. No.6193/Mum/2025 A.Y.: 1997-1998 I.T.A. No.6194/Mum/2025 A.Y. : 2000-01 I.T.A. No.6195/Mum/2025 A.Y. : 1996-1997 I.T.A. No.6209/Mum/2025 A.Y. : 1998-1999 I.T.A. No.6211/Mum/2025 A.Y. : 1996-1997 ACIT- 19(3), Mumbai Room No.513, 5th floor, Piramal Chambers, Parel, Mumbai-400012 vs Hoshang Manekji Havewala 58, Jami Lodge, 618, Jame Jamshed Road, Dadar, Mumbai-400014 PAN : AAAPH3372C APPELLANT RESPONDENT C.O.338/Mum/2025 (Arising out of I.T.A No.6192/Mum/2025 A.Y. : 1999-2000) C.O.340/Mum/2025 (Arising out of I.T.A. No.6193/Mum/2025 A.Y. : 1997-98) C.O.337/Mum/2025 (Arising out of I.T.A. No.6194/Mum/2025 A.Y. : 2000-01) C.O.336/Mum/2025 (Arising out of I.T.A. No.6211/Mum/2025 A.Y. : 1996-97) Printed from counselvise.com 2 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala C.O.341/Mum/2025 (Arising out of I.T.A. No.6209/Mum/2025 A.Y. : 1998-99) C.O.339/Mum/2025 (Arising out of I.T.A. No.6195/Mum/2025 A.Y. : 1996-97) Hoshang Manekji Havewala 58, Jami Lodge, 618, Jame Jamshed Road, Dadar, Mumbai-400014 PAN : AAAPH3372C vs ACIT- 19(3), Mumbai Room No.513, 5th floor, Piramal Chambers, Parel, Mumbai-400012 APPELLANT RESPONDENT Assessee by : Shri Akshay Shah Revenue by : Shri Hemanshu Joshi (SR DR) Date of hearing : 21/01/2026 Date of pronouncement : 10/02/2026 O R D E R Per Bench : A bunch of appeal of the revenue and the cross objections of the assessee filed against the separate order of the NFAC, Delhi [for brevity, ‘Ld.CIT(A)’], order passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 30.07.2025 for Assessment Year 1996-97 to Assessment Year 2000-01. The impugned orders emanated from the order of the Learned Deputy Commissioner of Income-tax-23(3), Mumbai (for brevity, ‘the Ld.AO’), order passed u/s 144 r.w.s. 147of the Act, for A.Y. 1997-98 to A.Y. 2000-01 date of order 24/03/2015 and order passed by the Ld. Assistant Commissioner of Income-tax- Printed from counselvise.com 3 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala 19(3), Mumbai (for brevity, the ‘Ld.AO’) u/sec. 143(3) r.w.s. 147 date of order 31/03/2014 & order passed under section 271(1)(c) of the Act date of order 23/09/2014 for Assessment Year 1996-97 . 2. Since all the appeals & COs pertain to the same assessee, involving similar issues arising out of a similar factual matrix, these appeals were heard together as a matter of convenience and are being decided by way of this consolidated order. With the consent of the parties, The revenue’s appeal I.T.A No.6195/Mum/2025 and assessee’s C.O. 339/Mum/2025 is for A.Y. 1996-97 is treated as a lead case, and the decision rendered therein shall apply mutatis mutandis to other appeals & COs before us. 3. ITA No.6195/Mum/2025, Grounds of revenue: “1. \"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition based on undisclosed foreign bank accounts despite credible information received from the French Government under the DTAA, which establishes the existence of substantial foreign assets.\" 2. \"Whether, on the facts and in the circumstances of the case and in law, the Ld. CITIA) failed to appreciate that the Assessing Officer rightly estimated the income at 17% return on investment as a reasonable assessment method in the absence of precise details.\" 3. \"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) wrongly held that the BUP ID and \"Base Note\" containing demographic details were insufficient evidence, ignoring that such identifiers are reliable and recognized by foreign authorities.\" 4. \"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in concluding that the Assessing Officer violated natural justice by not allowing cross-examination of foreign sources, despite ample opportunity given to the assessee to submit evidence and respond.\" Printed from counselvise.com 4 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala 5. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) overlooked that the assessee failed to provide any credible evidence to rebut the claim of ownership of the foreign accounts, and wrongly accepted the addition to be based on mere presumption and conjecture.\" 6. The Tax Effect involved in the instant case is Rs.52,71,390/-, which is below the prescribed limit for filing a further appeal before the Hon'ble ITAT. However, the case fall under one of the exception at para 3.1(g) of the CBDT Circular No. 5/2024 dated 15.03.2024. Therefore, filing of further appeal before Hon'ble ITAT in this case is recommended. 7. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.” 4. C.O. No.339/Mum/2025, Grounds of the assessee: “Grounds of cross-objections 1. That the Ld. CIT Appeal rightly deleted the addition there was no creditble information that establishes the existace of substantial foreign asset. as 2. The Ld. CIT Appeal erred in not adjudicating the ground raised by the appellant that the Ld.AO issued reasons for reopening which states that the assessee opened the bank account with HSBC Private Bank (Switzerland) SA, Geneva on 11-09-1992, however HSBC Private bank (Switzerland) SA came in to existence on 31st December 1999. Thus, assessment completed with baseless reasons for reopening. 3. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.AO concluded the assessment based on unsigned, undated and unstamped Reasons for reopening provided to the assessee. 4. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that Ld.AO concluded the assessment which is bad in the eyes of law as the reasons for reopening pertains to a period which is outside the purview of Sec.148. 5. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.AO concluded the assessment which is bad in law as the AO did not assess the Income which Printed from counselvise.com 5 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala he has reason to believe had escaped the assessment as against the reasons which formed the basis of Notice U/s.148. 6. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.AO concluded the assessment which is bad in the eyes of the law as the addition is made without mention of any section of the Act as to under which section the AO intends to make the addition. 7. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.A.O. erred in facts and in law in issuing notices u/s.143(2) and 142(1) before providing reasons for reopening the assessment. 8. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.A.O erred in passing the order without providing the appellant any authenticated copy of alleged information purportedly received from Govt.of France. 9. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.AO made the addition @ 17% as return received on alleged investment based on investment made and return earned by some other assessee having no nexus to the appellant. 10. The Ld.CIT appeal erred in not adjudicating the ground raised by the appellant that the Ld.AO vehemently concluded the assessment by making an addition to the tune of US $3 Million based on screenshot of HSBC Website (taken on or after 30-06-2012) presuming that the appellant had invested US $3 million with HSBC Bank as services of HSBC private bank are normally available for clients wanting to invest and or borrow US $3 million or more. Although this wild presumption of AO is mitigated by letter of HSBC Bank which states that \"there was no specific mandatory rule as to a minimum amount to be held in the account 11. The Ld. CIT Appeal rightly deleted the addition made by the Ld.AO holding that the BUP ID and the base note containing demographic details insufficient evidence. 12.The Ld.CIT Appeal rightly deleted the addition stating that the Ld.A.O. did not provide any opportunity to cross examine the source of the alleged information on the basis of which the A.O. made an assessment u/s.143(3) and thus made a complete denial of natural justice. Printed from counselvise.com 6 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala 13. The Ld.CIT Appeal rightly deleted the addition which is based on mere presumption and conjectures.” ITA No.6195/Mum/2025 & CO 339/Mum/2025 (AY 1996-97) 5. The brief facts of the case are duly narrated by the Ld. CIT(A) in impugned appellate order. The relevant contention of the Ld. CIT(A) is reproduced as below:- “2. Brief facts of the case: In this case, the appellant filed his regular returns of income for A.Y. 1996-97 u/s.139(1) of the I.T. Act on 30.10.1996 declaring total income at Rs.5,69,064/-. Thereafter, the information was received by the Government of India from the French Government that some Indian nationals are having foreign bank accounts in HSBC Private Bank SA, Geneva, which were not disclosed to Income-tax Department in India. The information was received in the form of document stated to be 'Base note' wherein the various details of account holder, BUP-SIFIC-PER- ID, Personal ID, Personal No., Profile Client and also found identification given to the family entities associated with the appellant, etc. are mentioned. The appellant held Bank accounts in HSBC Bank, SA, Geneva, Switzerland and the Bank offers high net worth individuals or their family members who can invest or borrow US$ 3 Million or more. The information regarding the appellant of the balance of US$ 3 million in that bank account was not disclosed to the Income- tax Department and, therefore, the case of the appellant was reopened for A.Y. 1996-97. Accordingly, the AO had recorded reason and issued notice u/s. 148 of the I.T. Act on 25.03.2013 after completing all the procedures as per the provisions of Income-tax Act. In response to the aforesaid notice, the appellant filed a letter that the returns filed u/s.139(1) of the Act be treated as returns filed in compliance with the notice issued u/s.148 of the Act. The reasons recorded for reopening the assessment were provided to the appellant. During the course of reassessment proceedings, the appellant denied owning any such Bank account in HSBC Bank. The modus operandi of the investment made by the appellant has been Printed from counselvise.com 7 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala discussed in detail by the AO at Para-7 to 11 of the assessment order. After verification of the information available on records and in the light of the crucial evidential information held in possession of the Department received from the French authorities under the provisions of the DTAA and as per the enquiries conducted during the course of assessment proceedings, the AO, vide order u/s.147 r.w.s. 143(3) of the Act dated 31.03.2014 held that the appellant is the beneficial owner of the aforesaid foreign bank accounts maintained with HSBC Bank and estimated return over investment @17% annually, accordingly he earned US$510000 (Rs.33.45 per S) equivalent to Rs. 1,70,59,500/- during the year under consideration on his investment of US $ 3 Million with HSBC Bank, Geneva. Accordingly, the Ld. AO added Rs.17059500/- treating the same as unexplained money.” The aggrieved assessee filed an appeal before the Ld. CIT(A) by challenging the legal ground as well as on merit. The Ld. CIT(A) deleted the addition by adjudicating the merit of the case but in legal grounds are duly rejected. Being dissatisfied on the impugned appellate order both the revenue & assessee filed appeal before us. 6. The Ld. DR contended that the impugned addition was made by the Ld. AO on the basis of information received from overseas sources. It was submitted that, in the BUP ID, the assessee’s name and address were duly reflected along with those of his family members, namely, Mr. Jamshed Havewala, Mrs. Spenta Havewala, and Mr. Hoshang Zarin Havewala. The assessee failed to satisfactorily explain the source of the overseas investment and deliberately sought to take advantage by not disclosing the true and correct facts before the revenue authorities. The Ld. DR, therefore, strongly supported the order passed by the Ld. AO. He further drew our attention to the reasons recorded for reopening the assessment, as placed at APB page 7, which are reproduced herein below: Printed from counselvise.com 8 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala “Name : Hoshang Manekji Havewala PAN : AAAPH3372C Assessment Year : 1996-97 Reasons for Reopening assessment, The following information is received under article 28 at the convention between the Govt. of India and Govt. of France for the avoidance of double taxation and the prevention of Fiscal evasion with respect to taxes on income and capital. The information is forwarded to this office by DIT(Inv.), Mumbai. The information received reveals that the assessee has bank account with HSBC Private Bank (Switzerland) SA, Geneva with code BUP 5090120329 revealing the following particulars: 1) Name: Manekji Hoshang Havewala Birth Date: 29.11.1947 Sex: Male Nationality: Indian Proof of identify: Pass port. Passport No: K219402 2 ) That the assessee has given following legal address to bank: 5 Floor, 618, Jame Jamshed Road, IND-Dadar, Mumbai-400014, India. 3) That the assessee has been given following bank identification codes/numbers. BUP SIFIC PER-ID 5090120329 Personal ID 18801 Personal NO. 120329 Profile client 5091130196 4) That the bank created profile of the assessee on 11.09.1992 and closed it on 17.03.2000. 5) This shows that the above bank account was opened atleast on 11.9.92 and was in operation atleast upto 17.3.2000. 6) That following identification were given to the family entities associated with the Printed from counselvise.com 9 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala assessee. Havewala Jamshed 5090135693 Havewala Spenta 5090135694 Havewala Hoshang Zarin 5090120330 It is observed from the website of HSBC Private Bank that HSBC private bank services are normally available for clients wanting to invest and or borrow $ 3 million US $ or more. A snap shot of the website is placed on record. I, therefore, have reason to believe that the assessee would not have opened the bank account unless she had invested above US S 3 Million on year to year basis. However, it is observed that the assessee being resident of India during the relevant period as also seen from the particulars given by her to the HSBC Bank, has not disclosed any income so as to invest US $ 3 Million while opening the bank account. In view of the above I have a reason to believe that income of more than Rs. 1,00,000/- has escaped assessment in the case of assessee for Assessment Year 1996-97 within the meaning of provisions of section 147 of the IT Act 1961. The assessment for A.Y. 1996-97 is therefore required to be reopened. 7. The Ld. AR argued filed two paper books the first paper book containing gpage 1 to 609 and another paper book containing pages 1 to 48 which have been placed on record. The Ld. AR first invited our attention on the BUP ID which was duly provided by the Ld. AO and the copy of the BUP ID is reproduced as below: Printed from counselvise.com 10 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala 8. The Ld. AR advanced his arguments and submitted that the entire addition had been made purely on the basis of surmises and conjectures. It was contended that the data received by the Ld. AO in the form of the BUP ID did not mention any amount whatsoever. Neither the client code nor the BUP ID reflected any actual banking transaction. It was further submitted that only a bank account is capable of reflecting transactions, and no such transaction was evidenced in the present case. The Ld. AO, however, confirmed the addition merely on the basis of observations made from the website of HSBC Private Bank (Switzerland) SA, Geneva. From the very inception, the assessee has categorically denied having any transaction or deposit in the said bank account. The Ld. AR respectfully placed Printed from counselvise.com 11 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala reliance on the findings recorded by the Ld. CIT(A), and the relevant paragraphs appearing at pages 13 to 15 of the appellate order are reproduced herein below: “(v) Grounds No.5 to 16:- The AO has made addition in respect of the BUP ID 5090120329 by holding that it is separate account which was opened in 02.02.1997 and closed it on 17.03.2000. On the basis of information claimed to have been available with the AO, it was held that an initial deposit of USD 100,000 was required to be made to open an account with HSBC Bank, Geneva and a further amount of USD 300 was required to be spent to maintain the account. 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 5090120329. Thus, the only dispute is regarding existence of account in HSBC bank or not. The base Note, is the only document available with the AO to contend existence of the account. The examination of this note reveals the following: Name : Manekji Hoshang Havewala Birth Date : 29.11.1947 Sex : Male Nationality : Indian Passport No. : K219402 Address : 5th Floor, 618, Jame Jamshed Road, IND-Dadar, Mumbai-400014, India Further, the appellant has been given Bank identification codes as under:- BUP_SIFIC_PER-ID : 5090120329 Printed from counselvise.com 12 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala Personal ID : 18801 Personal No. : 120329 Profile Client : 5091130196 It has further observed from the Base Note that the following identifications were given to the family entities associated with the appellant:- Havewala Jamshed : 5090165693 Havewala Spenta : 5090135694 Havewala Hoshang Zarin : 5090120330 From the above, it is observed that for every person the BUP ID is only stated in the \"Name\" field. Nowhere in the \"Client Profile Concerned\" field, is there any reference of BUP ID. I am 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 are required to be incurred to maintain such an account. The A.O. failed to provide the appellant an opportunity to cross-examine the source of the alleged information from the Govt. of France, amounting to a serious violation of natural justice. The \"base document\" relied upon is an unauthenticated piece of paper containing publicly available information, lacking verification or confirmation from HSBC Bank. Thisrenders the assessment legally untenable. The burden of proving that the appellant held an HSBC Geneva account rested solely with the A.O., yet the assessment was based on presumptions and unrelated cases, with no direct evidence. The A.O. arbitrarily applied a return ratio (17% annualized) from another assessee's case to estimate the appellant's income, without showing any corresponding investment. Screenshots from the HSBC website were taken well after the Printed from counselvise.com 13 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala relevant year and were incomplete or selectively cited. Furthermore, the Uniform Resource Locators (URLs) referenced contain data inconsistent with the A.O.'s claims. By requiring the appellant to disprove the existence of a foreign account and obtain documents from HSBC Geneva, the A.O. unfairly shifted the burden of proof. The final addition of Rs. 1,70,59,500/- is purely hypothetical and unsupported by evidence. Accordingly, it is held that the addition made by the AO is incorrect and not sustainable in the eyes of law. Accordingly, the addition made by the AO, is hereby deleted, Hence, appeal on these grounds is allowed.” 9. The Ld. AR advanced his arguments and submitted that the entire computation of tax made by the Ld. AO was based solely on information sourced from the website of the said bank, without any specific or concrete data having been received. It was contended that no relied-upon documents were ever furnished or shared with the assessee. Consequently, the assessee was denied a reasonable and effective opportunity of being heard, in violation of the principles of natural justice. The Ld. AR further invited our attention to the observations recorded by the Ld. AO in paragraphs 7 to 12 of the impugned assessment order, which are reproduced herein below: “7. The argument forwarded by assessee that he do not have any bank account in HSBC Bank Geneva is also not acceptable. The information received shows that assessee has ven personal details to HSBC Bank, Geneva for opening bank account such as name, Adress, birth date, Passport Number, details of family members etc It further showsidentification details given by bank to assessee. It is incomprehensive that a foreign bank in Switzerland will have account (s) appearing in the name of the assessee with all personal details of the assessee without assessee approaching the bank to do so. I have no hesitation to state that the assessee is not truthful in revealing the actual state of affairs. Printed from counselvise.com 14 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala 8 It is not out of place to mention that similar information from foreign bank was received in several other cases including some other assessees assessed to tax in this charge whereupon the concerned assessees have admitted to have opened such accounts with HSBC Bank, Geneva. Thus, it is proved beyond doubt that the credentials of information is absolutely dependable. 9. The assessee was provided all these details, hence onus was on assessee to prove that he was not having any account. Inspite of giving specific opportunity, assessee never tried to discharge onus which was casted on him. A statement u/s 131 was recorded and assessee was asked to provide consent waiver which was not given by the assessee. Further, assessee has not produced a single proof of efforts made by him to discharge onus in form of letter written to HSBC Geneva or any other evidence through which he can prove that account was not opened. No evidence in form of letters from HSBC Bank Geneva to the effect that he is not having any account with HSBC Geneva is produced. I therefore, proceed to rely on the information received from French Government for the purpose of making the assessment 10. As per the website of HSBC (Screenshot enclosed as per Annexure) HSBC Private Bank services are available for clients wanting to invest and borrow $3 million US$ or more. I therefore, hold in the absence of any material to the contrary placed on record by the assessee, the assessee opened the above account with HSBC Bank, Geneva investing 3 Million US Dollars on 11.09.1992. In the absence of any material to the contrary placed on record by the assessee, I hold that the assessee continued to maintain the aforesaid investment with the HSBC Bank, Geneva through out the period from 11.09.1992 to 17.03.2000 (when the account in the name of the assessee was closed in the said bank). 11. The details of deployment of fund by HSBC Bank out of the funds invested by another assessee of the charge (PAN AOVPM6125K) show that the funds were deployed in various as such as fiduciary deposits, shares, liquid assets, mutual funds, stock, structured products etc on Printed from counselvise.com 15 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala month to month basis. The details of investment made by the said assessee this way is illustrated in table below”: Period Class of assets Amount 11-2005 Fiduciary Deposits 229664.84 11-2005 Fiduciary Deposits 356381.02 11-2005 Funds in shares 301157.89 11-2005 Liquid assets 1846.97 11-2005 Liquid assets 822.39 11-2005 Mutual Funds 101261.39 11-2005 Stocks 5884.89 11-2005 Structured products 95610 Total on 11/2005 1092629.39 12-2005 Fiduciary Deposits 230886.44 12-2005 Fiduciary Deposits 356804.44 12-2005 Funds in shares 316563.9 12-2005 Liquid assets 694.19 12-2005 Liquid assets 1836.98 12-2005 Mutual Funds 101986.32 12-2005 Stocks 5661.27 12-2005 Structured products 95610. Total on 12/2005 1110043.54 01/2006 Fiduciary Deposits 359694.96 01/2006 Fiduciary Deposits 232146.1 01/2006 Funds in shares 354377.41 01/2006 Liquid assets 2199.84 Printed from counselvise.com 16 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala 01/2006 Liquid assets 862.04 01/2006 Mutual Funds 103598.73 01/2006 Stocks 7596.33 01/2006 Structured products 95610. Total on 01/2006 1156085.41 02/2006 Fiduciary Deposits 231592.5 02/2006 Fiduciary Deposits 358056.66 02/2006 Funds in shares 361781.27 02/2006 Liquid assets 2010.84 02/2006 Liquid assets 2618.67 02/2006 Mutual Funds 106436.93 02/2006 Stocks 7938.22 02/2006 Structured products 95610 Total on 02/2006 1166045.09 03/2006 Fiduciary Deposits 233629.47 03/2006 Fiduciary Deposits 360250.5 03/2006 Funds in shares 364088.8 03/2006 Liquid assets 552.71 03/2006 Liquid assets 850.06 03/2006 Mutual Funds 106467.69 03/2006 Stocks 8819.08 03/2006 Structured products 95610 Total on 03/2006 1170268.31 11.1 From the above details it is crystal clear that HSBC Bank, Geneva has invested funds of another assessee assessed in this charge in various classes of assets on which that assessee has Printed from counselvise.com 17 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala got handsome return. The above table shows that the return on investment in 5 months is almost 7.1%. If the same is annualized the annual return comes to 17%. 12. In the absence of any details forwarded by the assessee, a return is estimated @ 17% annually on investment made by the assessee on US $ 3 Million. Only the return over the investment is assessable during the year under consideration as account was opened in earlier year. This is estimated at Rs.1,70,59,500/- on US $ 3 Million (@ Rs.33.45 per $) Therefore, Rs. 1,70,59,500/- is added in the income of the assessee for the year under consideration being income earned on his investment with HSBC Geneva. (Addition: Rs.1,70,59,500/-)” 10, Considering the above submission the Ld. AR relied on the order of Hon'ble Supreme Court in the case of M/s. Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata-2, Civil Appeal No.4228 of 2006 date of order 02.09.2015 the relevant observations contained in the said order is reproduced as below: “According to us, aforesaid two witnesses. not allowing the to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is Printed from counselvise.com 18 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why It was not for the their ex-factory prices remain static.Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause Notice. We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal. No costs.” 11. We have carefully considered the rival submissions, perused the material available on record, and examined the impugned orders. It is evident that the entire addition made by the Ld. AO is founded solely on presumptions, Printed from counselvise.com 19 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala conjectures, and inferences drawn from unauthenticated and incomplete information, namely the so-called “Base Note” and BUP ID, which merely contain demographic particulars and do not establish either the existence of a foreign bank account or any actual transaction or investment therein. No cogent evidence, such as bank statements, transaction details, or confirmation from HSBC Private Bank (Switzerland) SA, Geneva, was brought on record to substantiate the allegation of ownership of a foreign bank account or investment of US $3 million by the assessee. The estimation of income by applying an annualized return of 17% on an assumed investment of US $3 million is wholly arbitrary and is based on data relating to another assessee having no nexus with the present assessee. Such an approach is legally unsustainable. Further, the relied-upon website screenshots were taken much after the relevant assessment year and, in any case, cannot substitute concrete evidence. We also find considerable force in the contention of the assessee that the Ld. AO failed to furnish the relied-upon material and denied the assessee an opportunity to cross- examine the source of the alleged information received from foreign authorities. This constitutes a clear violation of the principles of natural justice. The reliance placed by the assessee on the judgment of the Hon’ble Supreme Court in Andaman Timber Industries (supra) squarely applies to the facts of the present case. In view of the above facts and circumstances, we find no infirmity in the order of the Ld. CIT(A) in deleting the addition made by the Ld. AO on merits. The Ld. DR filed a report bearing No. SR.AR/ITAT ‘E’ Bench/HMH/2025-26 dated 06.02.2026 and sought time for filing the requisite documents. However, since we are deciding the issue on merits, the said documents filed by the Ld. DR relating to Printed from counselvise.com 20 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala the recorded reasons are rendered academic in nature. Accordingly, the grounds raised by the revenue are dismissed. Since the addition itself has been rightly deleted on merits, the cross-objections filed by the assessee, being either supportive in nature or academic, do not call for separate adjudication and are dismissed of accordingly. In the result, the appeal filed by the revenue stands dismissed, and the cross- objection filed by the assessee is disposed of in the above terms. ITA 6211/Mum/2025 & CO 336/Mum/2025 (AY 1996-97) 12. The appeal filed by the revenue pertains to the deletion of penalty levied under section 271(1)(c) of the Act amounting to Rs.70,00,000/-. In view of the aforesaid findings of the Bench, wherein the quantum addition deleted by the Ld. CIT(A) has been upheld, the very foundation for the levy of penalty does not survive. Accordingly, the penalty levied under section 271(1)(c) of the Act is hereby quashed, and the impugned appellate order is upheld. Consequently, the appeal filed by the revenue is dismissed, and the cross- objection filed by the assessee, having become infructuous, is also dismissed. 13. In the result all the appeals of the revenue & cross objections of the assessee are dismissed. Order pronounced in the open court on 10th day of February, 2026. Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 10/02/2026 Printed from counselvise.com 21 ITA Nos.6192, 6193, 6194, 6195, 6209 & 6211/Mum/2025 CO NOs.338, 340, 337, 336, 341 & 339/Mum/2025 Hoshang Manekji Havewala SaumyaSr.PS Copy of the Order forwarded to: 1. अपीलाथŎ/The Appellant , 2. Ůितवादी/ The Respondent. 3. आयकरआयुƅ CIT 4. िवभागीयŮितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाडŊफाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI Printed from counselvise.com "