SH. KAMAL GALANI, MUMBAI V. ACIT 23 (3), MUMBAI

ITA 138/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6119 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2003-2004
• Appeal Filed On: 10-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVANEESH TIWARI
• Keywords: Reopening of assessment; Income from undisclosed sources; Residential status; Double taxation relief; Document seized; Principle of natural justice; Peak credit; Period of limitation; Source of fund; Additional evidence; Corroborative evidences; Non compliance; Onus to prove; Reason to believe; Documents seized; Reassessment proceedings; Set aside
• Section: 142(1); 5(2); 69A; 191; 43; 13; 22; 147; 131; 68; 69; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I, BENCH MUM BAI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NOS.138/MUM/2019 TO 142/MUM/2019 ( ASSESSMENT YEARS: 2003-04 TO 2007-08 ) MR. KAMAL GALANI 801, GYM VIEW 16 TH ROAD, KHAR WEST MUMBAI-400 052 VS. ACIT - 23(3) ROOM NO.104,1 ST FLOOR, MATRU MANDIR, J.D.ROAD TARDEO MUMBAI -400 007 PAN/GIRNO. A FZPG4292G ( APPELLANT ) .. ( RESPONDENT ) & ITA NOS.266 & 267/MUM/2019 ( ASSESSMENT YEARS: 2006-07 & 2007-08 ) ACIT - 23(3) ROOM NO.104,1 ST FLOOR, MATRU MANDIR, J.D.ROAD TARDEO MUMBAI -400 007 VS. MR. KAMAL GALANI 801, GYM VIEW 16 TH ROAD, KHAR WEST MUMBAI-400 052 PAN/GIRNO. A FZPG4292G (APPELLANT ) .. (RESPONDENT ) & ITA NOS.286/MUM/2019 TO 289/MUM/20 19 ( ASSESSMENT YEARS: 1999-2000 TO 2002-03 ) ACIT - 23(3) ROOM NO.104,1 ST FLOOR, MATRU MANDIR, J.D.ROAD TARDEO MUMBAI -400 007 VS. MR. KAMAL GALANI 801, GYM VIEW 16 TH ROAD, KHAR WEST MUMBAI-400 052 PAN/GIRNO.AFZPG4292G (APPELLANT ) .. (RESPONDENT ) & SHRI KAMAL GALANI 2 CROSS OBJECTION NOS.273/MUM/2019 TO 276/MUM/2019 (ARISING OUT OF ITA NOS.286/MUM/2019 TO 289/MUM/201 9) ( ASSESSMENT YEARS: 1999-2000 TO 2002-03 ) MR. KAMAL GALANI 801, GYM VIEW 16 TH ROAD, KHAR WEST MUMBAI-400 052 VS. ACIT - 23(3) ROOM NO.104,1 ST FLOOR, MATRU MANDIR, J.D.ROAD TARDEO MUMBAI -400 007 PAN/GIRNO. A FZPG4292G (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI. MADHUR AGARWAL, AR REVENUE BY SHRI. AVANEESH TIWARI, J CIT - SR. DR DATE OF HEARING 04/08 /2020 DATE OF PR ONOUNCEMENT 10 /09 / 20 20 / O R D E R PER BENCH: THIS BUNCH OF CROSS APPEALS FILED BY THE ASSESSEE, AS WELL AS THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASS ESSEE FOR THE ASST.YEARS 1999-2000 TO 2002-2003 ARE DIRECTED AGAINS T SEPARATE, BUT IDENTICAL ORDERS OF THE LD. COMMISSION ER OF INCOME TAX (APPEALS)34, MUMBAI, DATED 25/10/2018 AN D PERTAINS TO ASSESSMENT YEARS 1999-2000 TO 2007-08. S INCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAK E OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND AR E BEING DISPOSED-OFF BY THIS CONSOLIDATED ORDER. SHRI KAMAL GALANI 3 2. THE ASSESSEE HAS MORE OR LESS FILED COMMON GROU NDS OF APPEAL FOR ALL ASST.YEARS. THEREFORE, FOR THE SAKE O F BREVITY, GROUNDS OF APPEALS FILED FOR ASST.YEAR 2004-05 IN IT A NO.139/MUM/2009 ARE REPRODUCED AS UNDER:- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE ASSESSMENT ORDER DATE 25/03/2015, PASSED UNDER SECT ION 147 READ WITH SECTION 144OF THE ACT IS INVALID AND BAD IN LAW AS THE FOLLOWING JURISDICTIONAL CONDITIONS REQUIRED TO ASSUME JURISD ICTION UNDER SECTION 147 WERE NOT FULFILLED BY THE AO: EXISTENCE OF REASON TO BELIEVE; SANCTION OF APPROPRIATE AUTHORITY; AND NOTICE ISSUED BEYOND THE EXPIRY OF PERIOD OF LIMIT ATION. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE ORDER PASSED BY THE AO AND AS CONFIRMED BY CIT(A), IS BAD IN LAW AN D CONTRARY TO THE PRINCIPALS OF NATURAL JUSTICE, AS ADEQUATE OPPORTUN ITY OF BEING HEARD WAS NOT PROVIDED TO THE APPELLANT. THE AO FURTHER ERRED IN INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LEARNED AO AS WELL AS THE COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE FOLLOWING FACTUAL ASSUMPTIONS: A)THE AO HAS INCORRECTLY ASSUMED THAT THE APPELLANT IS THE OWNER OF THE BANK ACCOUNT; B) THE AO HAS ERRED IN ASSUMING THAT AN INVESTMENT OF USD 3 MILLION WAS MADE IN ORDER TO OPEN THE ACCOUNT; C) THE ALLEGED INVESTMENT OF USD 3 MILLION WAS MADE OUT OF INCOME WHICH ORIGINATED FROM INCOME CHARGEABLE TO T AX, BUT NOT DISCLOSED IN INDIA; AND D)THAT THE BANK HAD PAID INTEREST OF 17 PER CENT PE R ANNUM. THE APPELLANT SUBMITS THAT ADDITIONS OF RS. 2,34,35 ,316/- MADE BASED ON SUCH INCORRECT FACTUAL ASSUMPTIONS MUST BE DELETED. 4) THE AO AS WELL AS CIT(A) HAS ERRED IN RELYING ON THE BASE NOTES, WITHOUT BRING ANY COGENT MATERIAL ON RECORD TO ESTA BLISH THE AUTHENTICITY OR THE VERACITY OF THE BASE NOTES. THE AO HAS FURTH ER ERRED IN PLACING RELIANCE ON INCOMPLETE INFORMATION EXTRACTED FROM T HE HSBC PRIVATE BANK WEBSITE TO JUSTIFY THE AUTHENTICITY OF THE BASE NOT E. 5) WITHOUT PREJUDICE TO THE ABOVE, THE AO AS WELL AS THE CIT(A) ERRED IN CONFIRMING THE ADDITIONS CONTRARY TO THE TRANSACTIO NS REFERRED TO IN THE BASE NOTE, WHICH REFLECTS THAT TRANSACTIONS HAD BEE N ENTERED INTO ONLY BETWEEN NOVEMBER 2005 AND FEBRUARY 2007. SHRI KAMAL GALANI 4 3. THE REVENUE, HAS MORE OR LESS FILED COMMON GROUN DS OF APPEAL FOR ALL ASST.YEARS. THEREFORE, FOR THE SAKE OF BREVITY GROUNDS OF APPEALS FILED FOR ASST.YEAR 1999-2000 IN ITA NO.286/MUM/2009 IS REPRODUCED AS UNDER:- 1) 'ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO OF THE UNACCOUNTED INCOME, ON THE GROUND THAT THE ASSESSEE IS AN NON - RESIDENT INDIAN DURING THE RELEVANT, PREVIOUS YEAR WITHOUT APPRECIATING THE FACT THAT INCOME ACCRUING OR ARISING OR DEEMED TO A CCRUE OR ARISE TO HIM IN INDIA DURING THE RELEVANT PREVIOUS YEAR IS ASSES SABLE IN INDIA AS PER PROVISIONS OF SECTION 5(2)(B) OF THE INCOME TAX ACT .' 2) 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED.' 3) 'THE APPELLANT CRAVES LEAVE TO ADD, DELETE, AL TER, AMEND AND MODIFY ANY OR ALL GROUNDS OF APPEAL.' 4. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA NO.139/MUM/2018 FOR ASST.YEAR 2004-05 ARE THAT THE AS SESSEE IS A INDIAN CITIZEN AND WAS RESIDENT OF UNITED ARAB E MIRATES (UAE) FROM THE YEAR 1979-1991 AND THEREAFTER WORKIN G AT VIENNA, AUSTRALIA. THE ASSESSEE WAS A NON RESIDENT I N INDIA UP TO ASST.YEAR 1999-2000 UNDER THE PROVISIONS OF THE I.T .ACT, 1961. IN THE YEAR 2001, THE ASSESSEE CAME BACK TO IND IA FOR SETTLING IN INDIA. SINCE, THEN THE ASSESSEE HAS BEEN FI LING HIS RETURN OF INCOME IN INDIA FROM ASST.YEAR 2002-03 ON WARDS. THE ASSESSMENT HAS BEEN REOPENED U/S 147 OF THE I.T.ACT , 1961 BY ISSUE OF NOTICE U/S 148 OF THE ACT, DATED 30/04/2013 FOR THE REASONS RECORDED, AS PER WHICH INFORMATION RECEIVED FROM THE GOVERNMENT OF FRANCE UNDER THE CONVENTION OF AVOIDANCE OF SHRI KAMAL GALANI 5 DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL DATED 28/09/1992. TH E SAID INFORMATION RECEIVED WAS REGARDING BANK ACCOUNTS IN HSBC PRIVATE BANK (SUISSE), SA, GENEVA, SWITZERLAND HELD B Y CERTAIN PERSONS IN INDIA. THE INFORMATION RECEIVED FROM THE FRENCH GOVERNMENT IN THE FORM OF SUMMARY SHEETS (HEREINAFTER REFERRED TO AS THE BASE DOCUMENT) REVEALS THAT THE AS SESSEE IS OPENED A BANK ACCOUNT IN HSBC BANK, GENEVA. THE INFO RMATION FURTHER REVEALED THAT THE ASSESSE WAS A BENEFICIARY OF AN ACCOUNT OPENED UNDER CODE BUP 5090171854 WITH HSBC B ANK. THE ACCOUNT HAD BEEN OPENED UNDER CLIENT NAME DIPAK VARANDMAL GALANI AND/OR KAMAL VARANDMAL GALANI BEAR ING ACCOUNT NUMBER 509-4077262. THE SAID ACCOUNT WAS OPE NED ON 17/04/1998 AND WAS ACTIVE. AS PER THE BASE DOCUMENT , THE ACCOUNT HAD A MAXIMUM CREDIT BALANCE OF USD 9,40,191 /- IN NOVEMBER 2015, A BALANCE OF USD 4,97,198 AS ON DECE MBER, 2005 AND USD 3,17,080 IN SEPTEMBER, 2006. BASED ON SAID INFORMATION, THE LD. AO HAS RECORDED REASONS FOR REO PENING OF THE ASSESSMENT, ON THE GROUND THAT INCOME CHARGEABLE TO TAX HAD BEEN ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC TION 147 OF THE I.T.ACT, 1961 DUE TO NON DISCLOSURE OF EXISTEN CE OF BANK ACCOUNT IN HSBC BANK, GENEVA. ACCORDINGLY, ISSUED N OTICE U/S 148 AND CALLED UPON THE ASSESSEE TO FILE RETURN OF IN COME. IN SHRI KAMAL GALANI 6 RESPONSE, THE ASSESSE VIDE LETTER DATED 20/01/2014 STA TED THAT THE RETURN OF INCOME FILED ON 01/11/2004 MAY BE TREA TED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE I. T.ACT, 1961. SIMULTANEOUSLY, THE ASSESSEE HAS REQUESTED FOR REASON S FOR REOPENING OF THE ASSESSMENT AND THE SAME WAS SUPPLIED TO THE ASSESSEE. THE ASSESSEE HAS FILED ITS OBJECTIONS FOR REOPENING OF THE ASSESSMENT AND THE SAME HAS BEEN DISPOSED-OFF BY THE LD. AO. 5. THE CASE HAS BEEN SELECTED FOR SCRUTINY AND DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE LD. AO HAS EXA MINED THE ASSESSEE PERSONALLY IN THE STATEMENT RECORDED U/S 131 ON 22/06/2013. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE ASSESSEE WAS SPECIFICALLY ASKED TO PRODUCE COMPLETE STATEMENT OF BANK ACCOUNTS WITH HSBC BANK AND WAS ALSO ASKED TO EXPLAIN AS TO WHY, THE AMOUNT INVESTED OF USD 3 MILLION FOR O PENING THE BANK ACCOUNTS AND INCOME FROM THE INVESTED AMOUNT SH OULD NOT TREATED AS UNDISCLOSED INCOME AND TAXED ACCORDINGLY I N THE RELEVANT ASSESSMENT YEARS. FURTHER, THE ASSESEE WAS P ROVIDED WITH A COPY OF THE BASE DOCUMENT/INFORMATION SHEETS REC EIVED FROM THE FRENCH GOVERNMENT AND SNAPSHOTS OF THE RELE VANT WEB PAGES OF THE HSBC BANK. THE ASSESSEE WAS ONCE AGAIN ISSUED FINAL NOTICE U/S 142(1), DATED 12/02/2015 AND ASKED TO FURNISH SHRI KAMAL GALANI 7 COMPLETE STATEMENT OF ACCOUNTS DULY CERTIFIED BY THE HSBC PVT.BANK, GENEVA AND OTHER RELEVANT DETAILS FOR OPENI NG ACCOUNT. IN RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE FURNISHED COPY OF HIS PASSPORT AND THAT OF HIS BROTHER, MR. DIPAK GALANI AND A COPY OF LETTER, DATED 09/03/2015 OF DIPAK V. GA LANI ADDRESSED TO THE LD. AO AND SUBMITTED THAT BANK ACCOUN T WAS OPENED BY HIS BROTHER MR.DIPAK V. GALANI WITH THE BR ITISH BANK OF THE MIDDLE EAST IN THE YEAR 1998, WHICH WAS SUBSEQ UENTLY TAKEN OVER BY HSBC PVT. BANK (SUISSE). THE ASSESSEE, FURTHER STATED THAT BANK ACCOUNT WAS OPENED BY HIS BROTHER AND ALL RIGHTS, INTEREST IN THE SAID BANK ACCOUNT IS COMPLE TELY BELONGS TO HIS BROTHER AND HIS NAME WAS INCLUDED AS A SECOND ACCOUNT HOLDER AS A RESPECT TO HIS ELDER BROTHER. THE ASSESSEE FURTHER STATED THAT HIS BROTHER MR.DIPAK V.GALANI HAS OWNED UP THE ACCOUNT AND STATED THAT ACCOUNT IS OPENED BY HIM IN THE YEAR 1998 AND HIS BROTHER NAME WAS INCLUDED AS A MARK OF RESPECT AND FURTHER, HIS BROTHER DO NOT HAVE ANY RIGHT IN BANK ACCOUNT. 6. THE LD. AO AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO BY TAKEN NOTE OF BASE DOCUMENTS OBS ERVED THAT ALTHOUGH, THE ASSESSEE CLAIMS THAT ACCOUNT IS BELON GS TO HIS BROTHER, BUT FAILED TO FILE ANY EVIDENCES TO PROVE T HAT HE WAS NOT THE OWNER OF FUNDS/ASSETS HELD IN BANK ACCOUNT. THE L D. AO, SHRI KAMAL GALANI 8 FURTHER NOTED THAT INSTEAD OF FURNISHING COMPLETE DETA ILS OF BANK ACCOUNTS, THE ASSESSEE MERELY FILED A LETTER FROM HI S BROTHER TO SUPPORT HIS CLAIM. THEREFORE, HE OPINED THAT IN ABSEN CE OF ANY CORROBORATIVE EVIDENCES TO PROVE HIS CLAIM THAT ACCOUNT IS BELONGS TO HIS BROTHER, AN ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE, IF HE HAD SUPPRESSED THE DOCUME NTS AND EVIDENCE, WHICH WAS EXCLUSIVELY WITHIN HIS KNOWLEDG E. THEREFORE BY TAKING NOTE OF VARIOUS FACTS AND ALSO, BY TAKING SUPPORT FROM CERTAIN JUDICIAL PRECEDENTS HELD THAT BY VIRTUE OF A SECOND HOLDER IN THE BANK ACCOUNT, THE ASSESSEE IS VESTED WITH RIGHTS/OBLIGATIONS CONNECTED WITH THE ACCOUNTS AND TH EREFORE, IT IS INCORRECT ON THE PART OF THE ASSESSEE TO CLAIM THA T HE IS NOT OWNER OF THE BANK ACCOUNT. ACCORDINGLY, HE WAS OF THE OPINION THAT THE ASSESSEE IS BENEFICIAL OWNER OF THE BANK ACC OUNT OPENED A HSBC BANK ACCOUNT, GENEVA. THE LD. AO, FURTH ER NOTED THAT BY TAKING NOTE OF REQUIREMENT OF OPENING A B ANK ACCOUNT AND MINIMUM DEPOSITS NEEDS TO BE KEPT, WHICH IS AS PER THE LD. AO IS AT USD 3 MILLION, HE HAS MADE ADDITIONS OF USD 3 MILLION FOR ASST.YEAR 1999-2000 AND THEREAFTER, ESTIM ATED RETURN OF INVESTMENTS @ 17% P.A, YEAR ON YEAR FOR SUBSEQUE NT ASST.YEARS AND ADDED TO THE TOTAL INCOME. THE RELEVAN T FINDINGS OF THE LD. AO ARE AS UNDER:- SHRI KAMAL GALANI 9 15. IN SUM, THE INFORMATION RECEIVED CONTAINED ADDR ESS/NATIONALITY, COUNTRY OF DOMICILE AS THAT OF THE ASSESSEE AS MENT IONED IN HIS INDIAN PASSPORT. THE ASSESSEE WAS DUTY PROVIDED WITH THE COPY OF THE DOCUMENT RECEIVED CONTAINING THE ABOVE INFORMATION. AS PER T HE INFORMATION CONTAINED IN THE SAID DOCUMENT THE ASSESSEE WAS THE ACCOUNT HOLDER OF THE NUMBERED ACCOUNT WITH HSBC PRIVATE (SUISE) BANK , GENEVA. IN THE RETURN OF INCOME THE ASSESSEE HAD NEITHER OFFERED A NY INCOME WITH REFERENCE TO THE BANK ACCOUNT NOR DISCLOSED ANY DET AILS TO THE EFFECT THAT THE HE WAS A BENEFICIARY OF THE SAID ACCOUNT. UNDER THE GENERAL CONDITIONS OF THE BANK WHEN TWO OR MORE PERSONS ARE HOLDERS OF AN ACCOUNT, EACH OF THE ACCOUNT HOLDERS IS VESTED WITH THE TOTALITY OF THE RIGHTS AND OBLIGATIONS CONNECTED WITH THE ACCOUNT; THAT EACH OF THE ACCOUNT HOLDERS IS AUTHORIZED TO ACCOMPLISH ALONE O R JOINTLY IN ACCORDANCE WITH RELEVANT POWER OF SIGNATURE ALL TRA NSACTIONS WITHOUT ANY LIMITATION WHATSOEVER; THAT THE OTHER ACCOUNT HOLDE R IS JOINTLY AND SEVERALLY BOUND THEREBY AND DESIGNATED ATTORNEY LEG ALLY BINDS ALL THE ACCOUNT HOLDERS; AND THAT IF THE ACCOUNT SEVERAL AC COUNTS AT ONE OR MORE BRANCHES OF THE BANK THESE ACCOUNTS ARE DEEMED TO CONSTITUTE ONE ENTITY AND WHATEVER THE CURRENCY AND THE HEADING OF THE ACCOUNTS MAY BE THE BANK MAY COMBINE THE BALANCES IN THESE ACCOUNTS INDIVIDUALLY OR SET THEM OFF WHOLLY OR IN PART AFTER EFFECTING THE NECE SSARY CONVERSIONS INTO THE CURRENCY OF ITS CHOICE 15.2 THUS IN TERMS OF THE ABOVE CONDITION OF THE BANK AS THE ACCOUNT HOLDER THE ASSESSEE IS VESTED WITH THE TOTALITY OF THE RIGHTS AND OBLIGATIONS CONNECTED WITH THE NUMBERED ACCOUNT NUMBER 509-4077 262; IS AUTHORIZED TO ACCOMPLISH ALONE OR JOINTLY IN ACCORD ANCE WITH RELEVANT POWER OF SIGNATURE ALL TRANSACTIONS THROUGH THE A;, -;*MENTIONED NUMBERED ACCOUNT WITHOUT ANY LIMITATION WHATSOEVER; AND ALL THE CURRENT ACCOUNTS CONNECTED WITH THAT ACCOUNT ARE DEEMED TO CONSTITUTE ONE ENTITY AND WHATEVER THE CURRENCY AND THE NAME OR THE HEADI NG OF THE ACCOUNTS MIGHT BE THE BANK COMBINED THE BALANCES IN THESE AC COUNTS INDIVIDUALLY OR SET THEM OFF WHOLLY OR IN PART AFTER EFFECTING T HE NECESSARY CONVERSIONS INTO THE CURRENCY OF ITS CHOICE AND SO REFLECTED AS MAXIMUM BALANCE BETWEEN NOVEMBER 2005 TO FEBRUARY 2007 IN THE BASE DOCUMENT. 15.3 I AM, THEREFORE, CONSTRAINED TO OBSERVE THAT DESPITE THE RIGHTS AND OBLIGATIONS CAST ON HIM AS THE OWNER OF THE NUMBERE D CLIENT ACCOUNT 4077262 THE ASSESSEE HAS NOT CO-OPERATED AND REMAIN ED EVASIVE SO FAR. THE ASSESSEE HAS CHOSEN TO DEFY THE REQUEST TO PROD UCE STATEMENTS OF ACCOUNTS TO BUTTRESS HIS CASE. HIS CLAIM OF HAVING NO CONNECTION WITH THE ABOVE ACCOUNT CARRIES NO WEIGHT WITHOUT CORROBORATI VE MATERIALS. THE ASSESSEE HAS BEEN CONSISTENTLY DEFIANT IN COMPLYING WITH THE LEGAL REQUIREMENT, THE ASSESSEE HAS FAILED TO COMPLY WITH FULL TERMS OF THE NOTICES ISSUED U/S 142(1) FROM TIME TO TIME. I AM L EFT WITH NO OPTION BUT TO EXERCISE POWERS U/S 144 INCOME TAX ACT OF RESORTING TO BEST JUDGMENT AND COMPLETE THE ASSESSMENT BASED ON THE MATERIALS AVAI LABLE ON RECORD. QUNTIFICATION OF INCOME 16. IN VIEW OF THE DISCUSSIONS MADE ABOVE, I HOLD THAT THAT THE ASSESSEE COULD OPEN THE BANK ACCOUNT WITH HSBC BANK ON 17-04 -1998 ONLY AFTER MAKING DEPOSIT OF NOT LESS THAN USD 3 MILLION. IT I S SEEN THAT THE BASE SHRI KAMAL GALANI 10 DOCUMENT SHOWS BALANCE IN THE 'BANK ACCOUNT FROM 20 05-06 TO 2006-07 RELEVANT TO A.YRS.2006-07 TO 2007-08. THEREFORE, I HOLD THAT THE ASSESSEE HAS MAINTAINED THE INITIAL DEPOSIT OF USD 3 MILLION THROUGHOUT 1998-99 TO 2004-05 RELEVANT TO A.YRS 1999-00 TO 2005-06. I OB SERVE THAT THE THERE HAS BEEN ACCRETION TO VALUE OF INVESTMENTS MADE IN VARIOUS CLASSES OF ASSETS AS REVEALED FROM THE DETAILS OF SUCH INVESTM ENTS FOUND IN THE ANNEXURE TO THE BASE DOCUMENT SCANNED SUPRA. THE FU NDS WERE DEPLOYED IN VARIOUS ASSETS LIKE LOANS & ADVANCES, B ONDS AND FIDUCIARY DEPOSITS. THEY SHOW THE RETURN ON INVESTMENT IN 5 M ONTHS IS ALMOST 7.1%. IF THE SAME IS ANNUALIZED THE ANNUAL RETURN C OMES TO 17%. IN THE ABSENCE OF ANY DETAILS FORTHCOMING IN THIS REGARD I N ME ASSESSMENT YEAR UNDER CONSIDERATION, A RETURN IS ESTIMATED @ 17% AN NUALLY ON INVESTMENT MADE BY THE ASSESSEE ON USD 3 MILLION. THIS WORKS O UT TO USD RS. 45.31PER USD] FOR 2003-04 RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, RS.2,31,08,100/- IS ADDED IN THE INCOME OF THE ASSESEE FOR THE YEAR UNDER CONSIDERATION BEING INC OME EARNED ON HIS INVESTMENT OF USD 3 MILLION WITH THE HSBC BANK GENE VA. (ADDITION:RS.2,31,08,100) 7. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSE SEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE TH E LD.CIT(A), THE ASSESEE HAS CHALLENGED REOPENING OF ASSESSMENT ON VARIOUS GROUNDS, INCLUDING VALIDITY OF REASONS RECORDED FOR REOPENING OF ASSESSMENT. THE ASSESSEE HAS ALSO, CHALLENGED ADDIT IONS MADE BY THE LD. AO TOWARDS BANK ACCOUNT IN THE NAME OF ASSE SSEE AND IS BROTHER AND ESTIMATION OF ANNUAL RETURNS ON SAID INVESTMENTS @ 17%. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS FILED VARIOUS ADDITIONAL EVIDENCES T O JUSTIFY HIS STANDS THAT ACCOUNT IS NOT BELONGS TO HIM, NOR DOES HE HAVE ANY INTEREST IN THE BANK ACCOUNT. DURING THE COURSE OF APP ELLATE PROCEEDINGS, THE LD.CIT (A) HAS CALLED FOR REMAND RE PORT FROM THE LD. AO ON VARIOUS AVERMENTS MADE BY THE ASSESSEE. IN RESPONSE, THE LD. AO VIDE REMAND REPORT, DATED 13/03 /2018 AND SHRI KAMAL GALANI 11 17/08/2018 HAS COMMENTED UPON VARIOUS AVERMENTS MADE BY THE ASSESSEE ON OWNERSHIP OF BANK ACCOUNT, AS WELL AS RETURN ON INVESTMENTS ESTIMATED @17% ON TOTAL INITIAL DEPOSITS S TATED TO BE MADE BY THE ASSESSEE. THE LD.CIT(A) AFTER CONSIDE RING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO TAKEN NOTE OF REMAND REPORT OF THE LD. AO REJECTED LEGAL GROUNDS TAKE N BY THE ASSESSEE CHALLENGING VALIDITY OF REASSESSMENT PROCE EDINGS, ON THE GROUND THAT THE LD. AO HAS INITIATED AND COMPLETED REASSESSMENT PROCEEDINGS AS PER LAW. THE RELEVANT FI NDINGS OF THE LD.CIT(A) ARE AS UNDER:- V. CONCLUSION ON THE GROUNDS RELATED TO RE- OPENING OF ASSESSMENT: I I HAVE CONSIDERED THE SUBMISSION OF THE APPELLAN T AND DO NOT FIND MERIT IN THE SAME. THE APPELLANT HAS STATED THAT THE REASONS TO FORM THE BELIEF ABOUT INCOME ESCAPING ASSESSMENT HAD NOT BEEN RECORDED BY THE AO , WHO HAD ISSUED NOTICE U/S 148, BUT INSTEAD THE REASONS WERE FURNISHED TO THE APPELLANT UNDER THE SEAL AND SIGNATURE OF THE NEW INCUMBENT. ON PERUSAL OF A LL THE FACTS AVAILABLE ON RECORD, IT APPEARS THAT THIS ISSUE IS WITHOUT BASIS , AND THE REASONS HAVE BEEN DULY RECORDED BY THE CONCERNED ASSESSING OFFICER, A ND THERE APPEARS TO BE NO FLAW IN THE SAME. FURTHER THE OBJECTION OF APPELLAN T THAT THE COPY OF SNAPSHOT OF WEB PAGE, WHICH IS PART OF REASONS HAVE NOT BEEN FU RNISHED TO HIM, IS ALSO INCORRECT AS THE SAME HAS BEEN FURNISHED AND FORMS PART OF THE ASSESSMENT ORDERS FOR AY 2004-05 TO 2006-07. THERE IS NO MERIT IN THE APPELLANT'S SUBMISSIONS AND THE SAME ARE THEREFORE REJECTED. II THE APPELLANT'S CHALLENGE TO THE AUTHENTICITY OF THE BASE NOTE IS BASELESS SINCE THE SAME HAS BEEN RECEIVED FROM THE GOVERNMEN T OF FRANCE UNDER THE CONVENTION FOR AVOIDANCE OF DOUBLE TAXATION AND PRE VENTION OF FISCAL EVASION DATED' 28 TH SEPTEMBER, 1992. THE AUTHENTICITY AND VERACITY STA ND ESTABLISHED. IN ANY CASE THE APPELLANT HAS HIMSELF ADMITTED TO HOLD ING THE ACCOUNT WITH HIS BROTHER, WHICH ESTABLISHES THE CREDIBILITY OF THE I NFORMATION AVAILABLE WITH THE AO. FURTHER THE ARGUMENT OF THE APPELLANT THAT DATA IN SUMMARY SHEETS ARE FOR THE PERIOD NOVEMBER 2005 TO FEBRUARY 2007 AND THERE FORE REASONS RECORDED FOR INCOME ESCAPING ASSESSMENT FOR YEARS OTHER THAN THE PERIOD NOVEMBER 2005 TO FEBRUARY 2007 IS ALSO NOT ACCEPTABLE. THE BASE NOTE CLEARLY MENTIONS THE DATE OF OPENING ACCOUNT WITH HSBC BANK AS 17-04-1998 AND THE APPELLANT ALSO ADMITS THE SAME. CONSEQUENTLY ALL THE YEARS BEGINNI NG 17/04/1998 FALL WITHIN THE PURVIEW OF JURISDICTION FOR THE PURPOSE OF FORM ING REASON TO BELIEVE FOR INCOME ESCAPING ASSESSMENT. SHRI KAMAL GALANI 12 III. THE APPELLANT HAS FURTHER URGED THAT THE RELI ANCE PLACED BY THE ASSESSING OFFICER 1 ON .THE INFORMATION CONTAINED IN THE WEB SITE OF HS BC PRIVATE BANK, REGARDING MINIMUM OPENING BALANCE OF USD 3 MILLION, IS INCORRECT. HOWEVER, THIS INFORMATION HAS BEEN USED ONLY TO FORM A BELIE F THAT INCOME BEYOND THE THRESH HOLD LEVEL HAS ESCAPED ASSESSMENT. SIMILARLY THE RATE OF RETURN AT 17% IS ALSO AN ESTIMATE TO ASCERTAIN THE LIKELY QUANTUM OF INCOME ESCAPING ESCAPEMENT ABOVE THE THRESHOLD AND NOT THE DETERMIN ATION OF ACTUAL INCOME, WHICH IS THE SUBJECT MATTER OF THE ASSESSMENT PROCE EDINGS TO BE UNDERTAKEN SUBSEQUENTLY. IV. THE ARGUMENTS OF THE APPELLANT REGARDING INCORR ECT RESIDENTIAL STATUS BEING MENTIONED FOR AYRS. 1999-2000, 2000-01, 2001-02, 20 02-03 AND NON OBTAINING OF SANCTION FROM THE APPROPRIATE AUTHORITY I.E. THE PRINCIPAL CIT, ARE ALSO DELVING UPON MERE TECHNICALITIES TO TAKE THE ATTENTION OFF, THE MAIN ISSUE ON HAND. THE SAME ARE LIABLE TO BE REJECTED. THE CONTENTION THAT NOTICE U/S 148 IS ISSUED BEYOND PERIOD OF LIMITATION ALSO FAILS. THE PROVISI ONS OF SECTION 149 CLEARLY STATES THAT NO NOTICE UNDER SECTION 148 OF THE ACT SHALL B E ISSUED FOR AN ASSESSMENT YEAR IF: A) FOUR YEARS HAVE ELAPSED FROM THE END OF TH E ASSESSMENT YEAR; OR B) IF FOUR YEARS BUT NOT MORE THAN SIX YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHAR GEABLE TO .TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO A MOUNT TO RS. 1 LAKH OR MORE FOR THAT YEAR; OR C) IF FOUR YEARS, BUT NOT MORE THAN 16 YEARS, HAVE ELAPSED FROM THE END OF RELEVANT ASSESSMENT YOUR UNLESS THE INCOME IN RELAT ION TO ANY ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATE D OUTSIDE INDIA, CHARGEABLE TO TAX, HAS ESCAPED ASSESSMENT.' V) IN THE INSTANT CASE THE APPELLANT IS FOUND TO B E OWNER OF A BANK ACCOUNT / ASSET OUTSIDE INDIA AND HENCE THE EXTENDED TIME LIM IT OF 16 YEARS WOULD APPLY. THE NOTICE U/S 148 ARE CLEARLY WITHIN THE TIME LIMI T OF 16 YEARS. FURTHER, IT IS ALSO TO BE KEPT IN MIND THAT THE AO IS NOT REQUIRED TO M AKE A FOOLPROOF CASE FOR REOPENING OF THE ASSESSMENT. ONCE, THERE ARE PRIMA- FACIE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, IT IS SUFFI CIENT TO INVOKE THE PROVISIONS FOR REOPENING THE ASSESSMENT. IN THE PRESENT CASE, ALL THESE CRITERIA HAVE BEEN FULFILLED. VI. AFTER DUE APPLICATION OF RIND, JURISDICTIONAL A DDL. CIT AND THE AO HAD REASONS TO BELIEVE THAT INCOME OF MORE THAN RS, 1 LAKH HAS ESCAPED ASSESSMENT DURING THE YEAR DUE TO FAILURE ON THE PART OF THE APPELLAN T TO FURNISH FULLY AND TRULY ALL FACTS IN THE RETURN OF INCOME FOR RESPECTIVE YEARS. VII IT IS PERTINENT TO MENTION HERE THAT NOTHING CO ULD BE CONSTRUED FROM THE PERUSAL OF RETURN OF INCOME THAT FULL DISCLOSURE OF MATERIAL FACT HAS BEEN FURNISHED. THE APPELLANT HAS NOT DISCLOSED THE FORE IGN BANK ACCOUNT NOR DISCLOSED THE INCOME EARNED FROM HOLDING SUCH BANK ACCOUNT. VIII. IT IS WORTH NOTING THAT THE FULL BENCH OF HON 'BLE HIGH COURT OF DELHI IN THE CASE OF CIT- VI, NEW DELHI VS. USHA INTERNATIONAL LTD. (2O12) 25 TAXMANN.COM 200 ((DELHI) (FB) HAS HELD THAT THE REASONS MUST BE RELEVANT TO SUBJECTIVE OPINION AND NOT CONCLUSIVE FINDINGS. THE RELEVANT EXTRACT IS REPRODUCED HEREUNDER : SHRI KAMAL GALANI 13 'AS RECORDED ABOVE, THE REASONS RECORDED OR THE DOC UMENTS AVAILABLE MUST SHOW NEXUS THAT IN FACT THEY ARE GERMANE AND RELEVA NT TO THE SUBJECTIVE OPINION FORMED BY THE ASSESSING OFFICER REGARDING ESCAPEMEN T OF INCOME. AT THE SAME TIME, IT IS NOT THE REQUIREMENT THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED ESCAPEMENT OF INCOME BY RECORDING CONCL USIVE FINDINGS. THE FINAL ASCERTAINMENT TAKES PLACE WHEN THE FINAL OR REASSES SMENT ORDER IS PASSED. IT IS ENOUGH IF THE ASSESSING OFFICER CAN SHOW TENTATIVEL Y OR PRIMA FACIE ON THE BASIS OF THE REASONS RECORDED AND WITH REFERENCE TO THE D OCUMENTS AVAILABLE ON RECORD THAT INCOME HAS ESCAPED ASSESSMENT.' IX. THE ABOVE DECISION OF THE HON'BLE HIGH COURT OF DELHI HAS BEEN AUTHORITATIVE IN SAYING THAT THERE SHOULD BE NEXUS IN THE MATERIA L AVAILABLE, WHICH SHOULD BE GERMANE AND RELEVANT TO FORM A SUBJECTIVE OPINION. BESIDES, IT ALSO CLEARLY STATES, THAT IT IS ENOUGH TO SHOW TENTATIVELY OR PR IMA FACIE THAT INCOME HAS ESCAPED ASSESSMENT. A PLAIN READING OF THE REASONS RECORDED BY THE ASSESSING OFFICER, SHOWS THAT THERE WAS ENOUGH MATERIAL BEFOR E HIM, TO FORM A PRIMA FACIE BELIEF THAT INCOME BEYOND THE THRESHOLD LEVEL HAD E SCAPED ASSESSMENT. HE WAS NOT REQUIRED TO ARRIVE AT A CONCLUSIVE FINDING OF F ACT REGARDING ESCAPEMENT OF INCOME. ' X THE HON'BLE SUPREME COURT IN ACIT V/S RAJESH JHAVERI STOCK BROKERS PUT. LTD. (291 ITR 500 AT 511) WHILE DEALING WITH THE QUESTION REGARDING THE VALIDITY OF ISSUE OF NOTICE UNDER SECTION 148 OF TH E ACT HAS HELD AS UNDER: 'THE WORD 'REASON.' IN THE PHRASE 'REASON TO BELIEV E' WOULD MEAN CAUSE OR JUSTIFICATION, IF THE A.O. HAS CAUSE OR JUSTIFICATI ON TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REAS ON TO BELIEVE THAT AN INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNO T BE READ TO MEAN THAT THE A.O. SHOULD HAVE FINALLY ASCERTAINED THE FACT B Y LEGAL EVIDENCE OR CONCLUSION. THE FUNCTION OF THE A.O. IS TO ADMINIST ER THE STATUTE WITH, SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXP AYERS. AS OBSERVED BY THE SUPREME COURT IN CENTRAL PROVINCES MANGANESE ORE CO. LTD. VS. ITO [1991] 191 ITR 662 (59 TAXMAN 17), FOR INIT IATION OF ACTION UNDER SECTION , 147(A) (AS THE PROVISION STOOD AT THE RELEVANT TI ME) FULFILLMENT OF THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. A T THAT STAGE, THE FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABL ISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE THE QUESTI ON IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COUL D HAVE FORMED A REQUSIITE BELIEF WHETHER THE MATERIALS WOULD CONCLUSIVELY PRO VE THE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMA TION OF BELIEF BY THE A.O. IS WITHIN THE REALM OF SUBJECTIVE SATISFACTION (SEE IT O V. SELECTED DALURHAND COAL CO. (P) LTD. (1996) 217 ITR 597 (SC) RA YMOND WOOLLEN MILLS LTD.V. ITO (1999) 236 ITR 34 (SC) * XI. AS CAN BE SEEN FROM THE ABOVE, T HE SETTLED LEGAL POSITION, AT THE STAGE OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT IS THAT, WHAT IS REQUIRED ON THE PART OF ASSESSING OFFICER IS T HE EXISTENCE OF 'REASONABLE BELIEF AND NOT CONCLUSIVE EVIDENCE TO SU PPORT ESCAPEMENT OF INCOME. NOTWITHSTANDING ANYTHING STATED ABOVE, IT IS THE PREROGATIVE OF THE AO/REVENUE TO REOPEN THE ASSESSMENT IF THE AO HAS F OUND IN THE COURSE OF TIME THAT CERTAIN AMOUNTS WHICH SHOULD HAVE BEEN B ROUGHT TO TAX HAVE , SHRI KAMAL GALANI 14 ESCAPED ASSESSMENT. THESE POWERS HAVE BEEN CLEARLY PROVIDED U/S. 149 R.W.S, 151 OF THE 'ACT. AS PER THESE PROVISIONS, WH AT THE AO' IS SUPPOSED TO SEE IS WHETHER THERE IS ENOUGH MATERIAL TO FORM A PRIMA FACIE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT, AND WHETHER IT IS WITHIN FOUR YEARS OR BEYOND FOUR YEARS OF THE RELEVANT ASSESSMENT YEAR, AND FURTHER, WHETHER THE ORIGINAL ASSESSMENT HAD BEEN CARRIED OUT U/S 14 3(1) OR 143(3} SO AS TO -OF* 1 * TAKE APPROVAL FROM THE APPROPRIATE SENIOR OFFICER A S REQUIRED. ONCE THE AO TOTE* FULFILLS THESE REQUIREMENTS HE CAN THEN REOPEN THE ASSESSMENT BY RECORDING HIS REASONS FOR FORMING A BELIEF REGARDING ESCAPEM ENT OF INCOME. THE AO WILL BE ACTING WITHIN THE POWERS CONFERRED ON H IM, TO REOPEN ANY ASSESSMENT, AND HIS ACTION IN SUCH SITU ATION CANNOT BE SUBJECT TO CHALLENGE. . , XII. RELIANCE IS FURTHER PLACED ON THE DECISION IN THE CASE OF MOHAN MANOJ DHUPELIA VS. DY.CIT, CENTRAL CIRCLE (52 TAJCRNCTNN. COM 146) AND THE DECISION IN THE CASE OF AMBRISH MANOJ DHUPELIA (87 TAXMAIM.COM 195) WHEREIN IT IS HELD THAT THE ASSESSEE BEING THE BENEFICIAL OWNER OF DEPOSITS IN FOREIGN B ANK ACCOUNTS FAILED TO DISCLOSE INTEREST FROM SAID DEPO SITS IN ITS. RETURN OF INCOME, REOPENING OF ASSESSMENT IN CASE OF ASSESSEE WAS JUSTIFIED. XIII. IN VIEW OF THE ABOVE, THE GROUNDS OF APPEAL CHALLENGING THE INVOKING OF JURISDICTION U/S 147, ARE REJECTED. 8. AS REGARDS, ADDITIONS MADE BY THE LD. AO TOWARD S BALANCE IN BANK ACCOUNT AND RETURN ON INVESTMENTS FOR SUBSE QUENT YEARS, THE LD.CIT(A) OBSERVED THAT AS PER THE FACTS B ROUGHT ON RECORD BY THE LD. AO, THE ASSESSEE WAS AN ACCOUNT HOLD ER ALONG WITH HIS BROTHER MR. DIPAK V.GALANI. ALTHOUGH, THE ASSE SSEE CLAIMS THAT ACCOUNT BELONGS TO HIS BROTHER, BUT EVIDE NCES BROUGHT ON RECORD BY THE LD. AO CLEARLY PROVES THAT THE ASSESSEE IS A JOINT HOLDER OF BANK ACCOUNT AND HE IS HAVING A BENEFICIAL INTEREST IN SAID ACCOUNT. ONCE, THE FACT OF HAVING ACCOUNT JOINTLY WITH HIS BROTHER IS ESTABLISHED, THE O NUS CLEARLY SHIFTS ON THE ASSESSEE THAT HE WAS NOT THE ACTUAL OWN ER. SINCE, THE ASSESEE HAS NOT BROUGHT ON RECORD ANY EVIDENCES TO PROVE HIS CLAIM, THERE IS NO ERROR IN THE FINDINGS RECORDE D BY THE LD. SHRI KAMAL GALANI 15 AO TO CONCLUDE THAT THE ASSESSEE IS THE BENEFICIAL OWN ER OF THE BANK ACCOUNT AND ACCORDINGLY, THE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE IS IN ACCORDANCE WITH LAW. AS REGARD S, TAXABILITY OF INITIAL DEPOSITS OF 3 US MILLION DOLLARS, THE LD.C IT(A) OBSERVED THAT SINCE APPELLANT IS NRI AND NOR, THERE IS NO QUES TION OF TAXABILITY OF INCOME, WHICH WAS ACCRUED OR ARISEN OUT SIDE INDIA AND THUS ADDITIONS MADE BY THE LD. AO FOR THE ASST.YEA R 1999- 2000 ON ACCOUNT OF INITIAL DEPOSITS OF USD 3 MILLIO N AND RETURN ON INVESTMENTS @ 17% FOR ASST.YEAR 2001-02 & 2002-03 ARE INCORRECT AND HENCE DELETED. AS REGARDS ADDITIONS MA DE FOR ASST.YEAR 2003-04 TO 2007-08 TOWARDS RETURN ON INVEST MENTS @17% PA, THE LD.CIT(A) OBSERVED THAT ESTIMATING RETUR N ON INVESTMENTS @17% PA IS REASONABLE, BECAUSE THE ASSE SSEE HAS NOT FILED ANY EVIDENCES DESPITE VARIOUS OPPORTUNITIES ARE GIVEN IN MAKING THE LD. AO TO ASCERTAIN THE CORRECT RATE OF RETU RN. THEREFORE, HE OPINED THAT THE ASSESSEE HAS CLEARLY FA ILED TO DISCHARGE ONUS CAST UPON BY BRINING ON RECORD TO SU BSTANTIATE ITS CLAIMS THAT HE HAD NOT EARNED 17% RETURN OF INCOME ON INVESTMENTS. THEREFORE, HE OPINED THAT THERE IS NO R EASON TO DEVIATE FROM THE FINDINGS OF THE LD. AO AND HOLD THAT THE ADDITIONS MADE ON RETURN ON INVESTMENTS FOR ASST.YEAR 2003-04 TO ASST.YEAR 2007-08 IS IN ACCORDANCE WITH LAW. AS R EGARDS, ADDITIONS TOWARDS PEAK CREDIT BALANCE LYING IN BANK ACCOUNT FOR SHRI KAMAL GALANI 16 ASST.YEAR 2006-07 AND 2007-08, THE LD.CIT(A) NOTED THAT THE LD. AO HAS NOT BROUGHT ON RECORD, WHICH WOULD EVEN REMOTELY SUGGEST THAT THE ENTIRE BALANCE OF USD 3 MILLIONS AND INTEREST EARNED THERE ON WAS APPROPRIATED ON A DATE PRIOR TO N OVEMBER, 2005, THUS A BALANCE OF USD 9,40,191 BEING LESS THAN USD 3 MILLION CANNOT BE SEPARATELY ADDED AS PEAK CREDIT IN THE HANDS OF THE ASSESSEE. THEREFORE, HE OPINED THAT AN ADDITION M ADE TOWARDS PEAK BALANCE IS UNCALLED FOR AND UN-SUSTAINA BLE. THE RELEVANT FINDINGS OF THE LD.CIT(A) ARE AS UNDER;- IV. CONCLUSION ON THE INITIAL DEPOSIT I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPEL LANT. THE ASSESSMENT CARRIED OUT AND THE CONTENTIONS RAISED BY THE APPEL LANT RAISE TWO ISSUES FOR ADJUDICATION. A. WHAT WAS THE INITIAL AMOUNT DEPOSITED AT THE TIME OF OPENING OF ACCOUNT ON 17.04.1998. B. WHETHER SUCH AMOUNT SHOULD BE TAXED IN TH E HANDS OF THE APPELLANT FOR THE ASSESSMENT YEAR 1999-2000. A. INITIAL AMOUNT DEPOSITED AT THE TIME OF OP ENING OF ACCOUNT I. THE FIRST ISSUE IS REGARDING THE VALIDITY OF THE EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER TO ARRIVE AT THE VIEW THAT THE IN ITIAL DEPOSIT MUST HAVE BEEN USD 3 MILLION. THE ASSESSING OFFICER HAS RELIED ON THE INFORMATION CONTAINED IN THE WEB SITE OF HSBC PRIVATE BANK IN THE YEAR 2013, TO ARRIVE AT THE FINDING ABOUT INITIAL DEPOSIT OF USD 3 MILLION. HE HAS ALSO REFERRED TO THE BALANCES MAINTAINED BY TWO OTHER ASSESSEES, NAMELY MS JANKI MUKHI, AND MR KANU BHAI PATEL WHICH EXCEED THE FIGURE OF USD 3 MILLION. II. ON THE OTHER HAND THE APPELLANT HAS QUESTIONED THE SAME ON THE GROUNDS THAT THE SAID INFORMATION ABOUT USD 3 MILLION CONTAINED IN THE WEB SITE OF THE BANK PERTAINS TO THE YEAR 2013, AND THAT IT HAS SINCE BE EN RAISED TO USD 5 MILLION. THE ACCOUNT WAS OPENED ON 17.04.1998, AND THAT IT W AS OPENED WITH THE BRITISH BANK OF MIDDLE EAST. THE HSBC PRIVATE BANK CAME INT O EXISTENCE IN THE YEAR 1999, I.E SUBSEQUENT TO THE OPENING OF THE IMPUGNE D ACCOUNT. THE APPELLANT HAS ALSO QUESTIONED THE EVIDENTIARY VALUE OF THE BA NK ACCOUNT DETAILS OF OTHER SIMILAR ACCOUNT HOLDERS, IN HIS CASE. III. THE APPELLANT HAS STATED THAT IT IS NOT CLEAR HOW THE BALANCES MAINTAINED BY MS JANKI MUKHI AND MR KANU BHAI PATEL, ARE RELEVANT IN ARRIVING AT THE FINDING THAT THE APPELLANT HAD MADE AN INITIAL DEPOSIT OF U SD 3 MILLION. THE BANK BALANCES AND OTHER INVESTMENTS MAINTAINED BY ANY PE RSON ARE A FACTOR OF HIS NET WORTH, HIS INVESTMENT PROFILE AND HIS PERSONAL PREF ERENCE. FURTHER, THE BALANCES IN THE CASE OF THESE TWO INDIVIDUALS ALSO DO NOT TH ROW LIGHT ON THE FACT, WHETHER THESE WERE INITIAL DEPOSITS OR ACCRETION OVER THE Y EARS. IN ANY CASE, THE BALANCES SHRI KAMAL GALANI 17 MAINTAINED BY THE TWO INDIVIDUALS ARE NO EVIDENCE O F MANDATORY INITIAL DEPOSIT AMOUNTS AND THE BALANCES IN THESE ACCOUNTS CANNOT B E THE BASIS TO AFFIX LIABILITY ON THE APPELLANT. THE APPELLANT ALSO STATED THAT TH E ASSESSING OFFICER HAS BEEN UNABLE TO COUNTER THE VALID OBJECTIONS RAISED BY HI M REGARDING THE GAP OF OVER 15 YEARS BETWEEN THE OPENING OF THE ACCOUNT AND THE WE B SITE INFORMATION RELIED UPON, THE FACT THAT THE ACCOUNT WAS OPENED WITH AN ENTIRELY DIFFERENT BANK WHICH LATER MERGED WITH THE HSBC BANK, AND THAT THE REQUI REMENT OF MANDATORY MINIMUM BALANCE HAS BEEN INCREASING FROM YEAR TO YE AR. IV. I HAVE PERUSED THE ASSESSMENT ORDER, THE REMAND REPORTS, AS WELL AS SUBMISSIONS MADE BY THE APPELLANT. IT IS NOT DENIED THAT ACCOUNT WAS OPENED ON 17-04-1998, SECONDLY, THE BASE DOCUMENT, RELIED UPO N GIVES MONTHLY BALANCES FOR A PERIOD COMMENCING FROM NOVEMBER 2005 AND HENC E DOES NOT THROW LIGHT ON THE INITIAL DEPOSIT OR THE BALANCE IN THE ACCOUN T UP TO NOVEMBER 2005. THE ASSESSING OFFICER HAS BEEN ABLE TO BRING ON RECORD, EVIDENCE IN THE FORM OF INFORMATION CONTAINED IN THE HSBC WEBSITE, WHICH ME NTIONS A FIGURE OF USD 3 MILLION AS A MINIMUM REQUIREMENT TO OPEN A BANK ACC OUNT WITH THE HSBC PRIVATE BANK, AS HAS BEEN DISCUSSED EARLIER, THE AP PELLANT IS AN ACCOUNT HOLDER WITH HSBC BANK, AND THE BURDEN OF PROOF REST UPON H IM TO COUNTER THE CLAIM OF THE ASSESSING OFFICER, REGARDING THE INITIAL DEPOSI T OF USD 3 MILLION. THIS CONTENTION OF THE ASSESSING OFFICER COULD HAVE BEEN EASILY COUNTERED BY BRINGING ON RECORD, THE STATEMENT OF THE IMPUGNED BANK ACCOU NT WHICH WOULD HAVE CLARIFIED NOT ONLY THE INITIAL AMOUNT DEPOSITED, BU T ALSO THE BALANCE IN THE ACCOUNT UP TO 2005. THE APPELLANT BEING THE ACCOUNT HOLDER, IS THE PERSON OF THIS INFORMATION, AND THE RULES OF EVIDENCE CLEARLY CASTS A BURDEN UPON HIM TO LEAD EVIDENCE IN HIS SUPPORT. I AM OF THE VIEW THAT THE APPELLANT FOR REASONS BEST KNOWN TO HIM, HAS FAILED TO DISCHARGE THIS LIABILIT Y CAST UPON HIM, AND HENCE I AM UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CO MPUTING THE AMOUNT OF INITIAL DEPOSIT AT THE TIME OF OPENING OF ACCOUNT ON 17-04- 1998 AT USD 3 MILLION. FURTHER, THERE IS NOTHING ON RECORD WHICH WOULD LEA D TO FORMATION OF BELIEF, THAT THE BALANCE IN SUCH ACCOUNT WAS LESS THAN USD 3 MIL LION UP TO 33/10/2005, AND HENCE IN THE ABSENCE OF ANY EVIDENCE PROVIDED BY TH E APPELLANT, I AM OF THE VIEW THAT FROM THE DATE OF OPENING OF ACCOUNT TILL 31-10-2005 THE BALANCE IN THE IMPUGNED ACCOUNT SHALL HAVE TO BE CONSIDERED AS USD 3 MILLION. FROM NOVEMBER 2005 ONWARDS, THE BASE DOCUMENT ITSELF PRO VIDES COMPLETE DETAILS OF THE BALANCES MAINTAINED IN THIS ACCOUNT, AND HENCE NO FURTHER PRESUMPTIONS ARE CALLED FOR. B. WHETHER SUCH AMOUNT SHOULD BE TAXED IN TH E HANDS OF THE APPELLANT FOR THE A.Y.I999-2000 THE SECOND ISSUE IS REGARDING TAXABILITY OF THIS IN ITIAL DEPOSIT OF USD 3 MILLION IN THE ASSESSMENT YEAR 1999-2000 IN THE HANDS OF THE A PPELLANT. IT IS AN UNDISPUTED FACT THAT THE APPELLANT WAS A NON RESIDE NT IN INDIA, FOR TAX PURPOSES, IN THE ASSESSMENT YEAR 1999-2000 AND THE YEARS PRIO R TO IT. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE BALANCES IN THE IMPUGNED ACCOUNT REFLECT INCOME WHICH WAS EARNED IN INDIA OR ACCRUED OR AROSE IN IN DIA. IN FACT THERE IS NOT EVEN A WHIFF OF SUCH SUGGESTION IN THE ASSESSMENT ORDER OR ANY REPORT FURNISHED BY THE ASSESSING OFFICER. IN VIEW OF THE SAME NO ADDIT ION ON ACCOUNT OF INITIAL DEPOSIT IN THE BANK ACCOUNT CAN BE MADE IN THE HAND S OF THE APPELLANT FOR THE ASSESSMENT YEAR 1999-2000. III. DETERMINATION OF RETURN ON INVESTMENT @ 17 % PER ANNUM, YEAR ON YEAR. I. THE APPELLANT HAS CONTESTED THE ADDITIONS MADE I N ALL THE ASSESSMENT YEARS I.E FROM A.YRS. 1999-2000 TO 2007-2008, BASED ON AN SHRI KAMAL GALANI 18 ESTIMATED RETURN OF 17% PER ANNUM ON THE BALANCE IN THE ACCOUNT. FOR THIS PURPOSE, THE BALANCE HAS BEEN ASSUMED AT USD 3 MILLION AS DISCUSSED EARLIER. THE APPELLANT HAS ARGUED THAT TH E RATE OF RETURN @ 17% ANNUALLY IN BANK ACCOUNT WITH HSBC BANK IS ARBI TRARY AND BASED ON ASSUMPTION WITHOUT ANY BASIS OR EVIDENCE AGAINST THE APPELLANT. II. THE APPELLANT HAS CONTENDED THAT IN THE ASSESS MENT YEAR 1999-2000, HIS RESIDENTIAL STATUS WAS THAT OF A NRI. CONSEQUENTLY, THE SCOPE OF INCOME CHARGEABLE TO TAX FOR NON-RESIDENT IS GOVERNED BY S ECTION 5(2) OF THE INCOME TAX ACT AND INCOME OF A NON RESIDENT IS ONLY THAT I NCOME WHICH IS RECEIVED OR IS DEEMED TO BE RECEIVED IN INDIA OR ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARISE IN INDIA. THE ALLEGED INITIAL DEPOSIT OF USD 3 MILLION AND INTEREST EARNED AT 17% ON SAME IN AY 1999-2000 THEREFORE CLEARLY IS OU TSIDE THE PURVIEW OF CHARGING SECTION FOR A NON RESIDENT ASSESSEE. II. SIMILARLY THE APPELLANT IS A RESIDENT BUT NOT O RDINARILY RESIDENT FOR THE AY 2000-01, 2001-02 AND 2002-03. THE SCOPE OF INCOM E CHARGEABLE TO TAX FOR A RESIDENT BUT NOT ORDINARY RESIDENT (NO R) IS GOVERNED BY PROVISO TO SECTION 5(1) OF THE INCOME TAX ACT WHICH READS AS UNDER : 'PROVIDED THAT, IN. THE CASE OF A PERSON NOT ORDINA RILY RESIDENT IN INDIA WITHIN THE MEANING OF SUBSECTION (6) OF SECTION 6, THE INCOME WHICH ACCRUES OR ARISES TO HIM OUTSIDE INDIA SHALL NOT BE SO INCLUDED UNLESS I T IS DERIVED FROM A BUSINESS CONTROLLED IN OR PROFESSION SET UP IN INDIA' THE APPELLANT THEREFORE SUBMITS THAT THE INTEREST I NCOME AS ASSESSED AT 17% FOR THE AYRS. 2000-01, 2001-02 AND 2002-03 ARE ALSO INC OME WHICH HAVE ACCRUED OR HAVE ARISEN TO HIM OUTSIDE INDIA. HENCE THERE CA NNOT BE ANY ASSESSMENT OF INCOME FROM BANK ACCOUNT HELD IN HSBC FOR THESE YEA RS AS WELL. AS REGARDS THE RESIDENTIAL STATUS OF THE APPELLANT FOR THE A.YRS.2003-04 TO 2007- 08, THE AO HAS ENCLOSED A FACTUAL REPORT IN HIS REM AND REPORT DATED 13.08.2018 REGARDING THE STAY OF APPELLANT IN INDIA ON THE BAS IS OF PASSPORT AND IMMIGRATION DETAILS. IT IS EVIDENT FROM THE CHART ENCLOSED THAT THE APPELLANT IS ORDINARY RESIDENT FROM THE A.YRS.2003-04 TO 2007-08. IV.. FURTHER, WITH RESPECT TO THE YEARS IN WHICH THE APPELLANT IS ORDINARY RESIDENT, IT HAS BEEN CONTENDED AS FOLLOWS: 'THE ASSUMED RATE OF RETURN IS APPLIED ON ASSUMED A MOUNT OF INVESTMENT OF USD 3 MILLION,. THERE IS NO EVIDENCE BROUGHT ON RECORD BY AO. FURTHER, IN WESTERN DEVELOPED ECONOMIES THE YIELD / RETURN OF 17% IS UN HEARD OF IN THE PAST 15-20 YEARS AND IS AN IMPOSSIBILITY. WE ENCLOSE HEREWITH THE COPY OF YIELD CHART OF US DOLLAR DENOMINATED BONDS AND SWISS GOVERNMENT BOND YIELDS. THE SAME ARE IN RANGE OF 3 TO 4 %. IN FACT IN SWITZERLAND THE YIELD S ARE NEGATIVE. WE THEREFORE PLEAD THAT ASSUMED ADDITION OF 17% RETURN ON USD 3 MILLION AMOUNTING TO USD 5,10,000/- IN EACH OF THE YEARS MAY BE DELETED*'. V. A REMAND REPORT WAS CALLED FOR FROM THE A.O. VIDE LETTER NO. CIT(A)- 34/REMAND REPORT/2018-19 DATED 12/07/2018 REGARDING THE ABOVE SUBMISSIONS OF THE APPELLANT. THE AO IN HIS REMAND REPORT HAS S TATED AS FOLLOWS : SHRI KAMAL GALANI 19 I FURTHER HOLD THAT THE DEPOSIT RESULTED IN ACCRET ION BY WAY OF INTEREST INCOME CHARGEABLE TO TAX IN ALL THE YEARS. IN THIS REGARD THE DETAILS OF DEPLOYMENT OF FUND BY HSBC BANK OUT OF THE FUNDS INVESTED BY MS. JANKI N MUKHI SHOW THAT THE FUNDS WERE DEPLOYED IN VARIOUS ASSETS SUCH AS FIDUC IARY DEPOSITS, SHARES, LIQUID ASSETS, MUTUAL FUNDS, STOCK, STRUCTURED PRODUCTS ET C ON MONTH TO MONTH BASIS. AS ILLUSTRATION I SCAN BELOW THE TABLE GIVING DETAI LS OF INVESTMENT IN HER INDIVIDUAL ACTIVE ACCOUNT WHICH IS ANNEXED TO HER B ASE DOCUMENT: THE ABOVE DOCUMENT IS ENOUGH EVIDENCE TO RATE THE G ROWTH OF THE FUNDS OF THE ASSESSEE BEING DEPLOYED IN VARIOUS ASSETS LIKE LOAN S & ADVANCES, BONDS AND FIDUCIARY DEPOSITS. FROM THE CHART MENTIONED ABOVE IT IS CLEAR THAT THE AMOUNT OF $ 10,92,629.39 IN THE MONTH OF NOVEMBER 2005 INCREA SES TO $11,70,268.31 BY THE MONTH OF MARCH 2006. THUS, THERE IS A GROWTH OF $ 77568,92 IN THE PERIOD OF 5 MONTHS. THIS GROWTH COMES TO 7. 1 % FOR 5 MONTHS, AND WHEN ANNUALIZED THIS RATE . . COMES TO EFFECTIVELY 17% ANNUALIZED RETURN S. THUS, IN THE ABSENCE OF ANY DETAILS FORTHCOMING IN THIS REGARD IN THE ASSESSMEN T YEAR UNDER CONSIDERATION, A RETURN WAS CORRECTLY ESTIMATED @ 77% ANNUALLY ON IN VESTMENT MADE BY THE ASSESSEE ON USD 3 MILLION. IN VIEW OF THE FACTS AND CIRCUMSTANCES AS ENUMERATED ABOVE BY THE AO IN HIS ASSESSMENT ORDER FOR THE A.Y.2004-05 TO 2007-08, YOU ERE REQUESTED TO UPHOLD THE ACTION OF THE AO'. VI THE APPELLANT WAS FURNISHED WITH THE COP Y OF REMAND REPORT OF THE AO IN RESPONSE TO WHICH THE A.R. OF THE APPELLANT SUBM ITTED AS UNDER: RETURN ON INVESTMENT COMPUTED @17% :- YOUR HONOUR, AGAIN THE A. 0. HAS ANNEXED / SCANNED THE INVESTMENT DETAILS OF SOME OTHER ACCOUNT HOLDER 'MS. JANKI MUKHI' TO CALC ULATE THAT RETURN OF 17% P.A. IS EARNED UNIFORMLY ON INVESTMENT MADE ON USD 3 MIL LION. YOUR HONOUR, WE REITERATE THAT SUCH STATEMENT LACKS EVIDENTIARY VAL UE FOR REASONS STATED IN AFORESAID PARAGRAPH. FURTHER, THIS ASSUMPTION ALSO SUFFERS FROM A LOT OF INFIRMITIES AS STATED BELOW;- A) THE ASSET OF SO CALLED JANKI MUKHI COMPRISES OF VAR IOUS CLASSES SUCH ES FIDUCIARY DEPOSITS, SHARES, LIQUID ASSETS, MUTUAL F UNDS, STOCKS AND STRUCTURED PRODUCTS, ETC. WHICH CANNOT HAVE UNIFORM RETURNS FO R OBVIOUS REASONS DUE TO DIFFERENCE IN THE ASSET CLASS PER-SE, B) THE ASSET CLASS ALLEGED TO HAVE BEEN OWNED BY AP PELLANT ARE DIFFERENT THAN THAT OF MS. JANKI MUKHI. C) THE ACCRETION TO ASSETS NEED CANNOT BE SOLELY AT TRIBUTED TO ANY INTEREST INCOME BUT ALSO CAN BE DUE TO NEW INVESTMENTS OR WI THDRAWALS ALSO, WHICH IS TOTALLY IGNORED. ANY INCREASE NEED NOT BE ONLY DUE TO INCOME. D) THE RISK PROFILE OF PERSONS ARE DIFFERENT AND CA NNOT BE SAME. E) THE RETURN CANNOT BE UNIFORM 17% FOR A P ERIOD OF A YEARS ALTOGETHER(9 YEARS TO BE SPECIFIC). WE, THEREFORE, SUBMIT THAT RELIANCE OF A. 0. TO EST IMATE RETURN @17% FOR PURPOSE OF REOPENING THE ASSESSMENT U/S. 147 IS ABSOLUTELY ON INCORRECT BASIS AND SAME NEEDS TO BE QUASHED. VII. CONCLUSION ON DETERMINATION OF RETURN ON INVESTMENT @ 17% PER ANNUM I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT, AND THE REPORT SUBMITTED BY THE ASSESSING OFFICER. THE ISSUES THAT ARISE FOR AD JUDICATION ARE AS FOLLOWS; A) WHAT IS THE AMOUNT OF BALANCE INVESTMENT IN THE ACC OUNT OF THE APPELLANT, FOR THE PERIOD COVERED BY A.YRS 1999-2000 TO 2007-0 8, ON WHICH INCOME HAS BEEN EARNED BY THE APPELLANT SHRI KAMAL GALANI 20 B) WHETHER SUCH INCOME IS TAXABLE FOR ALL TH E ASSESSMENT YEARS UNDER APPEAL. C) WHAT IS THE RATE OF RETURN ON THE INVESTMENTS / BAL ANCES HELD BY THE APPELLANT, WHICH SHALL FORM INCOME OF THE YEAR D) WHETHER THE ENTIRE AMOUNT OF RETURN SHOULD BE TAXED IN THE HANDS OF THE APPELLANT A. THE FIRST ISSUE, HAS BEEN DECIDED IN PRECEDING P ARA WHEREIN IT HAS BEEN HELD THAT ON THE BASIS OF EVIDENCE BROUGHT ON RECOR D, THE ONLY VIEW SUSTAINABLE IS THAT THE INITIAL DEPOSIT ON 17-04-19 98 WAS USD 3 MILLION. B. C. THE SECOND ISSUE IS WITH REGARD TO TAXABILITY OF SUCH RETURN ON INVESTMENT IN EACH ASSESSMENT YEAR BETWEEN 1999-2000 TO 2007-0 8. AS HAS BEEN DISCUSSED AND DECIDE IN PRECEDING PARA, THE RESIDEN TIAL STATUS OF THE APPELLANT WAS NON RESIDENT IN THE ASSESSMENT YEAR 1 999-2000. THIS FACT IS UNDISPUTED. HENCE, IN VIEW OF THE PROVISIONS OF SECTION 5(2) OF THE ACT, SUCH INCOME IS OUTSIDE THE SCOPE OF THE INDIAN TAXI NG STATUTE. SIMILARLY, THE RESIDENTIAL STATUS OF THE APPELLANT FOR THE AYR S 2000-01, 2001-02 AND 2002-03, IS RESIDENT BUT NOT ORDINARILY RESIDENT (N OR). THE RETURN ON BALANCES IN THE ACCOUNT CANNOT BE SUBJECTED TO TAX IN THE HANDS OF THE APPELLANT FOR THESE ASSESSMENT YEARS IN VIEW OF THE PROVISIONS OF SECTION 5(1) OF THE ACT. C. THE THIRD ISSUE IS RATE OF RETURN ON THE INVESTM ENTS / BALANCES REFLECTED IN THE IMPUGNED ACCOUNT. THE ASSESSING OFFICER HAS ADOPTED A RATE OF 17% PER ANNUM BASED ON DATA CONTAINED IN THE BASE DOCUMENT RECEIV ED IN THE CASE OF MS JANKI MUKHI, WHERE THE FACTS OF THE CASE ARE REASONABLY S IMILAR. AS FAR AS THE ARGUMENT OF SIMILARITY WITH THE CASE OF JANKI MUKHI IS CONCERNED, THE APPEAL HAS NOT BEEN DECIDED ON THIS ISSUE. RATHER, THE APPEAL HAS BEEN DECIDED ON THE BASIS OF RESIDENTIAL STATUS BEING NRI/NOR. I AM WIL LING TO AGREE TO THE VIEW THAT THE RETURN ON INVESTMENT IN ANY CASE SHALL DEPEND O N THE NATURE OF INVESTMENTS MADE, WHICH ITSELF SHALL DEPEND ON THE BOUQUET OF I NVESTMENTS MADE BY ANY PERSON. HOWEVER, THE ONUS OF FURNISHING EVIDENCE RE GARDING RETURN RECEIVED AND INCOME EARNED FROM THE IMPUGNED ACCOUNT RESTS ON TH E APPELLANT. HE IS THE ACCOUNT HOLDER AND HENCE THE RESPONSIBILITY LIES ON HIM TO LEAD EVIDENCE WHICH SHALL HELP IN THE EXACT DETERMINATION OF INCOME FRO M SUCH ACCOUNT. HE HAS PROVIDED NO ASSISTANCE IN MAKING SUCH EVIDENCE AVAI LABLE, AND HENCE HE CANNOT BE GIVEN THE BENEFIT OF SUCH STONE WALLING. ON THE OTHER HAND THE ASSESSING OFFICER HAS BEEN ABLE TO BRING ON RECORD EVIDENCE W HICH GIVES RISE TO A REASONABLE BELIEF THAT RETURNS ON INVESTMENTS HELD IN AND MANAGED BY HSBC BANK DURING THE RELEVANT PERIOD, WERE YIELDING HIGH RETURNS IN THE REGION OF 17%. I AM HENCE OF THE VIEW THAT ESTIMATING RETURN ON IN VESTMENT / BALANCE @ 17% PER ANNUM IS REASONABLE KEEPING IN VIEW THE FACTS O F THE CASE. THUS, THE ADDITION OF RS.2,31,08,100/- FOR THE A.Y.2004-05, R S.2,24,91,000/- FOR THE A.Y.2005-06, RS.2,31,03,000/- FOR THE A.Y.2006-07 A ND RS.2,10,83,400/- FOR THE A.Y.2007-08 ARE CONFIRMED. D. FINALLY, THE ISSUE TO BE CONSIDERED IS WHETHER THE ENTIRE AMOUNT OF RETURN ON INVESTMENTS / BALANCES REFLECTED IN THE IMPUGNED AC COUNT SHOULD BE TAXED IN THE HANDS OF THE APPELLANT. IT IS AN UNDISPUTED THAT TH E ACCOUNT IS JOINTLY HELD BY THE APPELLANT AND HIS BROTHER DEEPAK GALANI. THE ONUS W AS ON THE APPELLANT TO EXPLAIN THE BENEFICIAL OWNERSHIP, ACTUAL DEPOSITOR AND ULTIMATELY THE SHARE OF THE APPELLANT IN THE JOINT ACCOUNT. HAD THE APPELLANT S UBMITTED COMPLETE SET OF BANK STATEMENT, PROBABLY MANY OF THE DISPUTE WOULD HAVE BEEN SETTLED. THE APPELLANT SHRI KAMAL GALANI 21 HAS CHOSEN NOT TO RESPOND AND SUBMIT RELEVANT SPECI FIC EVIDENCES. THE APPELLANT HAS, THEREFORE, CLEARLY FAILED TO DISCHAR GE THE ONUS CAST UPON HIM. THE AO HAS ELABORATED AND ANALYSED AS TO HOW THE APPELL ANT HAD ENJOYED THE RIGHT BEING A JOINT ACCOUNT HOLDER. HENCE, I DO NOT FIND ANY .REASON TO DEVIATE FROM THE FINDINGS OF THE AO AND HOLD THAT THE ADDITION OF RS .2,31,08,100/- FOR THE A.Y.2004-05, RS.2,24,91,000/- FOR THE A.Y.2005-06, RS.2,31,03,000/- FOR THE A.Y.2006-07 AND RS.2,10,83,400/- FOR THE A.Y.2007-0 8 MADE BY THE AO ON ACCOUNT OF RETURN OF 17% PER ANNUM ON INVESTMENT AR E CONFIRMED. IV) CHALLENGING THE ASSESSMENT OF PEAK CREDIT IN TH E AY 2006-07 (USD 9,40,191 AND USD 3,17,080 FOR AY 2007-08 I T I. THE APPELLANT HAS ARGUED THAT THE ADDITION ON AC COUNT OF PEAK BALANCE IN A.Y. 2006-07 (USD 9,40,191) AND IN A.Y.2007-08 (USD 3,17,080) IS CONTRADICTORY IN AS ITSELF IS USD 3 MILLION. HENCE THERE CANNOT BE A PEAK FIGURE LESSER THAN THE HIGHER FIGURE OF INITIA L DEPOSIT. FURTHER, THE APPELLANT HAS ALSO CONTENDED THAT THE ASSESSING OFF ICER HAS ADDED SUBSTANTIAL AMOUNTS AS INCOME FROM YEAR TO YEAR ON ACCOUNT OF INTEREST ALLEGEDLY RECEIVED, AND SUCH INCOME IN AGG REGATE EXCEEDS THE SO CALLED PEAK AVAILABLE IN NOVEMBER 2005. HENC E, IN ALL MANNER THE ADDITION ON ACCOUNT OF PEAK DEPOSIT IS WITHOUT ANY BASIS IN FACT AND IN LOGIC AND AMOUNTS TO DOUBLE TAXATION. II. THIS ISSUE IS CONSEQUENTIAL TO THE DECISIONS TA KEN BY ME, IN RESPECT OF INITIAL DEPOSIT AND INCOME EARNED ON BALANCES LYING IN THE ACCOUNT. AS DISCUSSED EARLIER, THE INITIAL DEPOSIT HAS BEEN HELD TO BE A FIGURE OF USD 3 MILLION. FURTHER, TO SUCH INITIAL DEPOSIT, A RETURN OF 17% PER ANNUM HAS BEEN ESTIMATED FROM YEAR TO YEAR WHICH HAS BEEN HELD AS TAXABLE IN THE HANDS OF THE APPELLANT FOR THE YEARS WHEN HE WAS RESIDENT IN INDIA. FURTHER, NOTHI NG IS ON RECORD WHICH WOULD EVEN REMOTELY SUGGEST THAT THE ENTIRE BALANCE OF US D 3 MILLION, AND INTEREST EARNED THEREON WAS DISSIPATED ON A DATE PRIOR TO NO VEMBER 2005. THUS, A BALANCE OF USD 940,191/- BEING LESS THAN USD 3 MILL ION CANNOT BE SEPARATELY ADDED AS PEAK CREDIT IN THE HANDS OF THE APPELLANT. IN LIGHT OF THE ABOVE FACTS, FURTHER ADDITION ON ACCOUNT OF PEAK BALANCE IN NOVE MBER 2005, AND LESS THAN PEAK BALANCE IN SEPTEMBER 2006 IS UNCALLED FOR AND UNSUSTAINABLE. THUS, THE ADDITION ON ACCOUNT OF PEAK CREDIT FOR A.YRS. 2006- 07 AND 2007-08 IS UNSUSTAINABLE. 9. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE LD.CI T(A) WAS ERRED IN CONFIRMING ADDITIONS MADE BY THE LD. AO TOWARDS RETURN ON INVESTMENTS ON PURPORTED INITIAL DEPOSITS M ADE BY THE ASSESSEE TO OPEN ACCOUNT AT HSBC BANK, GENEVA, EVEN TH OUGH, THE ASSESEE HAS CLEARLY ESTABLISHED WITH FACT THAT ACC OUNT IS NEITHER BELONGS TO HIM, NOR HE IS HAVING ANY INTEREST IN MONEY LYING WITH BANK ACCOUNT. THE LD. AR, FURTHER SUBMITTED THAT THE SHRI KAMAL GALANI 22 ASSESSEE HAS RIGHT FROM THE DAY ONE MADE IT VERY CLEA R THAT ACCOUNT WAS OPENED BY HIS BROTHER IN THE YEAR 1998 W ITH THE BRITISH BANK OF THE MIDDLE EAST, UAE AND SAID BANK H AS BEEN SUBSEQUENTLY TAKEN OVER BY HSBC BANK, GENEVA AND ACCO UNT OPENED IN BRITISH BANK OF THE MIDDLE EAST BY HIS BROTHE R IS SOLELY OWNED BY HIM, FOR WHICH BROTHER HAS FILED LETTER BEF ORE THE LD. AO ALONG WITH AFFIDAVIT AND OWNED UP ACCOUNT. BUT, TH E LD. AO HAS DISCARDED ALL EVIDENCES FILED BY THE ASSESSEE AN D MADE ADDITIONS IN THE HANDS OF THE ASSESSEE ONLY ON THE GR OUND THE BASE NOTE RECEIVED FROM FRENCH GOVERNMENT CONTAINS N AME AND ADDRESS OF THE ASSESSEE. HE, FURTHER SUBMITTED THAT THE ASSESSEE NEVER DISPUTED FACT THAT BANK ACCOUNT IS NOT OPENED BY HIS BROTHER WITH JOINT NAME, HOWEVER HE MADE IT VERY CLEAR THAT THE BANK ACCOUNT WAS COMPLETELY OPERATED BY HIS BROTHER M R. DIPAK. V. GALANI AND WHATEVER MONEY LYING IN BANK ACCOUNT I S BELONG TO HIM. THE LD. AR FOR THE ASSESSEE, FURTHER REFERRING TO VARIOUS DOCUMENTS SUBMITTED THAT UNLESS, THE LD. AO BROUGHT ON REC ORD NECESSARY EVIDENCES TO PROVE OWNERSHIP OF BANK ACCOU NT IN THE NAME OF ASSESSEE, HE CANNOT MAKE ADDITIONS ONLY ON THE BASIS OF BASE NOTE, WHEN THE ASSESSEE HAS CATEGORICALLY DE NIED OF HAVING ANY LINK TO BANK ACCOUNT. FURTHER, THE LD. A O HAS DISREGARDED ALL THE EVIDENCES FILED BY THE ASSESSEE A ND MADE ADDITIONS, ONLY ON THE BASIS OF BASE NOTE ON PURE ASS UMPTIONS SHRI KAMAL GALANI 23 THAT SINCE, THE ASSESSEE IS SECOND HOLDER OF BANK ACC OUNT AND HE IS VESTED WITH RIGHTS AND OBLIGATIONS CONNECTED WITH TH E ACCOUNT AND A SIGNATORY, EITHER JOINTLY / ALLOW WITHOUT ANY LI MITATIONS AND HAS DESIGNATED BY ALL THE ACCOUNT HOLDERS. THEREFORE , HE FINALLY CONCLUDED THAT THE ASSESSEE IS A BENEFICIAL OWNER OF THE ACCOUNT, DESPITE FACT THAT ASSESSEE HAS DENIED ALL ALLEGATIONS. IN THIS REGARD, HE RELIED UPON CERTAIN JUDICIAL PRECEDENTS, I NCLUDING THE DECISION OF HONBLE DELHI HIGH COURT, IN THE CASE O F CIT VS SHIVAPRAKASH AGGARWAL (2008) 306 ITR 324. 10. THE LD. DR, ON THE OTHER HAND SUBMITTED THAT THE LD . AO, AS WELL AS THE LD.CIT(A) HAS BROUGHT OUT CLEAR FACTS TO THE EFFECT THAT THE ASSESSEE IS A BENEFICIAL OWNER OF BANK ACCOU NT HELD IN JOINT NAME WITH HIS BROTHER MR. DIPAK.V.GALANI IN HSB C BANK ACCOUNT, GENEVA AND ALSO BROUGHT VARIOUS EVIDENCES TO PROVE THAT THE ASSESSEE HAS EARNED 17% RATE OF RETURN ON INV ESTMENTS ALONG WITH CERTAIN COMPARABLES CASES. THEREFORE, THE RE IS NO MERIT IN THE ARGUMENTS OF THE ASSESSEE THAT THE ACCOUN T IS BELONGS TO HIS BROTHER AND HE IS NOT HAVING RIGHT OR INTEREST IN SAID BANK ACCOUNT. THE LD. DR HAS FILED DETAILED WR ITTEN SUBMISSIONS ON THE ISSUE, WHICH HAS BEEN REPRODUCED AS UNDER:- SHRI KAMAL GALANI 24 I. ISSUE OF JURISDICTION: YOUR HONOURS IN THESE CASES COMMON ISSUE RAISED BY THE APPELLANT ARE ISSUE OF JURISDICTION WHEREBY VALIDITY OF RE-ASSESSMENT PROC EEDINGS ARE CHALLENGED. THE APPELLANT CHALLENGED THE JURISDICTION PRIMARILY ON THE GROUNDS THAT THERE WAS NON-RECORDING OF REASON TO BELIEVE; THERE IS ABSENC E OF REASONS TO BELIEVE ABOUT INCOME ESCAPING ASSESSMENT; THERE IS ABSENCE OF VAL ID SANCTION U/S 151 OF THE INCOME TAX ACT, 1961 (HEREINAFTER, THE ACT) FOR ISS UANCE OF NOTICE U/S 148 OF THE ACT AND THE NOTICE FOR REOPENING U/S 148 OF THE ACT ARE ISSUED BEYOND THE PERIOD OF LIMITATION. YOUR HONOURS MAY APPRECIATE THAT AS FAR AS ISSUE OF NON-RECORDING OF REASON TO BELIEVE IS CONCERNED IT IS ABUNDANTLY CLEAR FROM THE ASSESSMENT ORDERS WHICH CLEARLY STATES THAT REASONS FOR REOPEN ING WAS RECORDED AND WERE SUPPLIED TO THE APPELLANT. FURTHER THE LD. CIT (A) HAS DISPOSED OFF THE SAME IN THE ORDER AND HELD THAT REASONS WERE DULY R ECORDED. FURTHER YOUR HONOURS ON PERUSAL OF THE CASE RECORDS AND THE PAPE R BOOK OF APPELLANT, IT IS SEEN THAT FOR THE AY 2004-05 TO AY 2007-08 THE AO H AS RECORDED REASONS AND SOUGHT APPROVAL FROM THE JCIT WHICH WAS GRANTED BY THE JCIT AFTER RECORDING SATISFACTION, SUBSEQUENTLY, THE AO ISSUED THE NOTICE U/S 148 OF THE ACT ON 30/04/2013. LIKEWISE FOR AY 1999-00 AY 2 003-04 THE AO RECORDED THE REASON AND SOUGHT APPROVAL FROM THE JC IT AND AFTER RECEIVING THE APPROVAL ISSUED THE NOTICES ON 30/3/2 015. FURTHERMORE, IMPORTANT ASPECT REQUIRING KIND ATTENTION OF YOUR G OOD SELVES IS THAT DURING THE AYS 1999-2000 TO 2003-04 THE APPELLANT HAS ALSO FIL ED THE OBJECTIONS TO THE REASONS RECORDED AND THESE WERE DISPOSED OFF BY SPE AKING ORDER. THEREFORE YOUR HONOUR IN MY HUMBLE OPINION IT IS NOT CORRECT TO ARGUE THAT NO REASONS WERE RECORDED WHEN THE APPELLANT OBJECTED TO THE REASONS RECORDED DURING THE ASSESSMENT PROCEEDINGS AND WHICH WERE DULY DISPOSED BY THE AO. OVERALL IT MAY BE KINDLY APPRECIATED YOUR HONOURS T HAT CONSIDERING THE VARIOUS FACTS DISCUSSED PREVIOUSLY IT APPEARS TO HAVE NO INFIRMITY IN THE REOPENING PROCEEDINGS SO FAR AS REASONS WERE RECORDED BY THE AO AND APPROVAL WAS GRANTED BY THE JCIT AFTER RECORDING SATISFACTION AN D THIS WAS PRIOR TO THE ISSUANCE OF THE NOTICE U/S 148 OF THE ACT. THE KIND ATTENTION OF YOUR HONOURS IS INVITED TO TH E LANDMARK JUDGEMENT OF HON'BLE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LT D VS ITO (2003) 259 ITR 19 HON'BLE COURT HAS HELD THAT- HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTIO N 148 OF THE INCOME TAX ACT IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTI CE IS TO FILE RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES (EMPHA SIS SUPPLIED). THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASON ABLE TIME. ON RECEIPT OF REASONS, THE NOTICE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME B Y PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCL OSED IN THESE PROCEEDINGS, THE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTI ONS, IF FILED, (EMPHASIS SUPPLIED) BY PASSING A SPEAKING ORDER BEFORE PROCEE DING WITH THE ASSESSMENT. SHRI KAMAL GALANI 25 THEREFORE YOUR HONOURS MAY APPRECIATE THAT FROM THE RATIO LAID DOWN IN THE JUDGEMENT SUPRA IT FOLLOWS THAT AO IS REQUIRED TO DISPOSE OF THE OBJECTIONS IF SUCH OBJECTION IS RAISED BY THE ASSESSEE. THE AO CA N NOT PRESUPPOSE THAT THE ASSESSEE IS HAVING ANY OBJECTIONS. HENCE YOUR HONOU RS MAY CONSIDER THE FACT THAT IN THE INSTANT CASES AS DISCUSSED THE AO DISPO SED OF THE OBJECTIONS DURING AYS 1999-2000 TO 2003-04 WHEREAS FOR AY 2004-05 TO AY 2007-08 IT EMERGES THAT NO SUCH OBJECTION IS RAISED BY THE APP ELLANT THIS FACT IS ALSO MENTIONED IN THE REMAND REPORT DATED 12/3/2018 WHIC H FORMS PART OF THE ORDER OF LD. CIT (A). YOUR HONOURS ARE HUMBLY REQUE STED TO CONSIDER THESE FACTS. ON ISSUE OF VALID SANCTION U/S!51 OF THE ACT THE KI ND ATTENTION OF YOUR HONOURS IS INVITED TO THE ORDER OF THE LD C1T(A) IN AYS IT IS HELD BY LD. CIT (A) IN HIS ORDER OF AYS 1999-2000 TO 2002-03 HELD THAT- AF TER DUE APPLICATION OF MIND; THE JURISDICTIONAL ADDL. CIT AND THE AO HAD REASONS TO BELIEVE THAT INCOME OF MORE THAN RS 1 LAKH HAS ESCAPED ASSESSMENT DURING T HE YEAR DUE TO FAILURE ON THE PART OF APPELLANT TO FURNISH FULLY AND TRULY AL L FACTS IN THE RETURN OF INCOME FOR RESPECTIVE YEARS. THE FACTS ARE CLEARLY MENTIONED I N THE REMAND REPORT DATED 12/03/2018 THE PROVISION U/S 151 OF THE ACT AS APPL ICABLE IS REPRODUCED FOR THE READY REFERENCE; SANCTION FOR ISSUE OF NOTICE. 151. (1) IN A CASE WHERE AN ASSESSMENT UNDER SUB-S ECTION (3) OF SECTION 143 OR SECTION 147HAS BEEN MADE FOR THE RELEVANT ASSESSMEN T YEAR, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 [BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF ASSISTANT COMMISSIONER [OR DEPUTY COMMISSIONER], UN LESS THE [JOINT] COMMISSIONER IS SATISFIED ON THE REASONS RECORDED B Y SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE] : PROVIDED THAT, AFTER THE EXPIRY OF FOUR YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL HE ISSUED UNL ESS THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL C OMMISSIONER OR] COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE ISSUE OF S UCH NOTICE. (2) IN A CASE OTHER THAN A CASE FALLING UNDER SUB-S ECTION (I), NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER , WHO IS BELOW THE RANK OF [JOINT] COMMISSIONER, AFTER THE EXPIRY OF F OUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE /JOINT/ CO MMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY SUCH ASSESSIN G OFFICER, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE.] [EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE JOINT COMMISSIONER, THE [PRINCIPAL COMMISSIONER OR/ COMMISSIONER OR THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R, AS THE CASE MAY BE, BEING SATISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER ABOUT FITNESS OF A CASE FOR THE ISSUE OF NOTICE UND ER SECTION 148, NEED NOT ISSUE SUCH NOTICE HIMSELF.](EMPHASIS SUPPLIED) YOUR HONOURS WILL APPRECIATE THAT CLEARLY THE PROVI SION OF SUBSECTION 2 OF SECTION 151 OF THE ACT IS APPLICABLE IN THE INSTANT CASE WHERE THE ASSESSING OFFICER WHO RECORDED THE REASON TO BELIEVE TO REOPE N THE CASE IS ASSISTANT COMMISSIONER OF INCOME TAX AND DEPUTY COMMISSIONER OF INCOME TAX, FURTHER THE CASE WAS REOPENED BEYOND FOUR YEARS THEREFORE T HE PROVISION IS SQUARELY APPLICABLE IN THE INSTANT CASE. SHRI KAMAL GALANI 26 THE KIND ATTENTION OF YOUR HONOURS IS ALSO INVITED TO THE FACT THAT THE WRIT PETITION WAS FILED BY THE APPELLANT BEFORE HON 'BLE BOMBAY HIGH COURT. THIS PETITION WAS WITHDRAWN BY THE APPELLANT. YOUR HONOURS KIND ATTENTION IS WARRANTED ON THIS FACT THAT THE WITHDRAWAL OF WR IT PETITION WAS WITHOUT ANY LIBERTY. THE KIND ATTENTION OF YOUR HONOURS IS INVITED TO THE ORDER OF THE CIT(A) ON THIS ISSUE. YOUR HONOURS WITHOUT PREJUDICE TO THE FOREGOING PAR AGRAPHS HON'BLE HIGH COURT OF MADRAS IN HOME FINDERS HOUSING LTD. V ITO [2018] 303 CTR 269 HAS HELD THAT 'WE THEREFORE MAKE THE POSITION CLEAR THA T NON COMPLIANCE OF THE PROCEDURE INDICATED IN THE GKN DRIVESHAFTS (INDIA) LTD., WOULD NOT MAKE THE ORDER VOID OR NON EST. SUCH A VIOLATION IN THE MATT ER OF PROCEDURE IS ONLY AN IRREGULARITY WHICH COULD BE CURED BY REMITTING THE MATTER TO THE AUTHORITY. THE FIRST ISSUE IS ACCORDINGLY ANSWERED AGAINST THE APP ELLANT'. HON'BLE HIGH COURT IN PARA 19 OF THE JUDGEMENT SUPRA HAS MENTIONED THAT ' THE CORE QUESTION IS AS TO WHETHER NON COMPLIANCE OF A PROCEDURAL PROVISION WO ULD IPSO FACTO MAKE THE ASSESSMENT ORDER BAD IN LAW AND NON-EST. THE FURTHE R QUESTION IS WHETHER IT WOULD BE PERMISSIBLE TO COMPLY WITH THE PROCEDURAL REQUIREMENT LATER AND PASS AFRESH ORDER ON MERITS'. THIS ORDER OF HONBLE HIGH COURT OF MADRAS WAS CHALLENGED BEFORE HONBLE SUPREME COURT IN SPECIAL LEAVE PETITION, HON'BLE SUPREME COURT DISMISSED THE SLP VIDE PETITION(S) FO R SPECIAL LEAVE TO APPEAL (C) NO(S). 12721/2018 ON 18/05/2018. IN THE LIGHT OF THE DISCUSSION IN PREVIOUS PARAGRAP H IT IS PRAYED FROM YOUR GOOD SELVES TO CONSIDER THE SUBMISSION THAT TH E DEFECT IF ANY IS A CURABLE DEFECT AND WOULD NOT MAKE THE ASSESSMENT OR DER BAD-IN-LAW AND NON EST. ON THE QUESTION OF ISSUANCE OF NOTICE U/S 148 OF TH E ACT BEYOND LIMITATION IS CONCERNED LD. CIT (A) HAS MENTIONED IN HIS ORDER THAT THE PROVISIONS OF SECTION 149 OF THE ACT HAS EXTENDED THE TIME LIMIT FOR REOPENING OF THE CASE AS THE APPELLANT WAS FOUND TO BE OWNER OF BANK ACCOUNT /ASSET LOCATED OUTSIDE INDIA AND INCOME HAS ESCAPED ASSESSMENT. AS HAS BEEN MENT IONED PREVIOUSLY THAT IN CASE OF BANK ACCOUNT/ASSET LOCATED OUTSIDE AND THE INCOME HAS ESCAPED ASSESSMENT THEN THE DEEMING PROVISION GETS ATTRACTE D. HENCE YOUR HONORS IT IS HUMBLY SUBMITTED THERE IS NO MERIT IN THE CONTENTIO N THAT THE NOTICES WERE ISSUED BEYOND LIMITATION. II. ISSUES OF INVOKING PROVISION UNDER SECTION 144 , RELIANCE ON THE BASE DOCUMENTS AND OWNERSHIP OF BANK ACCOUNT: YOUR HONOURS ANOTHER COMMON ISSUE RAISED BY THE APPELLANT IS THAT THE AO ERRED IN INVOKING PROVISION OF SECTION 144 OF THE ACT. THE APPELLANT CLAIMED THAT HE HAS F ILED SUBMISSION ON NUMEROUS OCCASION AND ALSO STATED THAT ACCOUNT WAS OPENED BY THE BROTHER OF APPELLANT DEEPAK GALANI WITH THE BRITISH BANK OF MIDDLE EAST IN 1998 (THE BANK WAS SUBSEQUENTLY TAKEN OVER BY HSBC FURTHER THAT THE NA ME OF APPELLANT IS NAMED AS A SECOND ACCOUNT HOLDER FOR THE PURPOSE OF NOMIN ATION AND FOR THE SAKE OF CONVENIENCE MOREOVER ALL THE MONEY ALONG WITH THE T RANSACTIONS BELONGED TO THE APPELLANTS BROTHER ONLY. THE APPELLANT ALSO CON TENTED YOUR HONOURS THAT IN ORDER TO COOPERATE WITH THE INCOME TAX DEPARTMENT T HE APPELLANT ALSO FURNISHED THE CONSENT WAIVER LETTER AS REQUIRED BY THE DEPART MENT. FURTHER THAT THE BROTHER OF THE APPELLANT ALSO FURNISHED A LETTER CLAIMING T HE BENEFICIAL OWNERSHIP OF THE ACCOUNT HELD WITH THE HSBC BANK GENEVA. THE APPELLA NT ALSO ARGUED TO HAVE FULLY DISCHARGED THE ONUS DURING THE ASSESSMENT PRO CEEDINGS IT SELF. MOREOVER THE APPELLANT ARGUED THAT THE RELIANCE OF THE AO ON THE BASE DOCUMENT WHICH IS SHRI KAMAL GALANI 27 COMPILED OUT OF STOLEN DATA AND MODIFIED BY THE EX- CMPLOYCC IS ITSELF AN INADMISSIBLE EVIDENCE FOR THE PURPOSE OF OF ANY TAX PROCEEDINGS IN INDIA. THE APPELLANT ALSO ARGUED THAT HE IS NOT THE OWNER OF T HE BANK ACCOUNT, HE CLAIMED THAT HE IS THE SECOND HOLDER OF THE BANK ACCOUNT FO R THE PURPOSE OF NOMINATION ONLY AND FOR THE SAKE OF CONVENIENCE AND OWNERSHIP OF THE ACCOUNT LIES WITH HIS BROTHER DCCPAK GALANI. ON THE ISSUES MENTIONED ABOVE YOUR HONOURS IT IS HU MBLY SUBMITTED THAT IT IS EVIDENT FROM THE CASE RECORDS THAT THE AO CON SISTENTLY QUERIED THE APPELLANT TO FURNISH DETAILS RELATING TO THE BANK ACCOUNT SUC H AS BANK ACCOUNT STATEMENTS, TRANSACTIONS IN THE BANK ACCOUNTS, NAME AND ADDRESS OF THE ACCOUNT HOLDERS, BENEFICIAL OWNERS, CORRESPONDENCE BETWEEN ACCOUNT H OLDERS AND BANK AND OTHER SIMILAR DOCUMENTS. YOUR HONOURS WILL APPRECIA TE THAT THE EXISTENCE OF ACCOUNT IS NOT IN DISPUTE ALSO IT IS NOT IN DISPUTE THAT THE BANK ACCOUNT JOINTLY HELD BY APPELLANT AND HIS BROTHER. HOWEVER, YOUR HO NOURS DESPITE OF THE FACT THAT APPELLANT IS ONE OF THE ACCOUNT HOLDER ALONG WITH H IS BROTHER THE APPELLANT COMPLETELY FAILED TO DISCHARGE THE ONUS CAST UPON H IM TO PROVIDE BANK ACCOUNT STATEMENTS AND OTHER DETAILS WHICH WERE CALLED FROM HIM VIDE VARIOUS NOTICES U/S 142(1) ISSUED DURING THE ASSESSMENT PROCEEDINGS IN ALL THE YEARS. ONLY REQUIREMENT YOUR HONOURS WAS TO FURNISH THE DOCUMEN TS AS REQUIRED BY THE AO.\ YOUR HONOURS THE APPELLANT CLAIMED TO HAVE SIGNED T HE CONSENT WAIVER FORM AND THUS HE HAS DISCHARGED THE ONUS. IN THIS R EGARD IT IS HUMBLY SUBMITTED THAT IT IS CORRECT THAT THE APPELLANT HAS PROVIDED THE C ONSENT WAIVER FORM. HOWEVER IT IS NOT APPROPRIATE TO ARGUE THAT ONUS WA S DISCHARGED BECAUSE ONUS IS NOT DISCHARGED BY SIGNING THE CONSENT WAIVE R FORM RATHER THAT COULD HAVE BEEN DISCHARGED ONLY BY THE PRODUCTION O F THOSE DOCUMENTS AND EVIDENCES WHICH WERE CALLED FOR FROM THE APPELL ANT IN THE NOTICES U/S 142(1). YOUR HONOURS WILL APPRECIATE THAT THE CONSENT WAIVE R FORM IS NEITHER A STATUTORY REQUIREMENT NOR A PROCEDURAL ONE. IT WA S ONLY A FACILITATION MECHANISM FOR THE BENEFIT OF THE ASSESSEE VIS-A-VIS HSBC SWITZERLAND. FURTHER, THE FORMAT OF CONSENT WAIVER FORM WAS PRES CRIBED BY HSBC SWITZERLAND AND NOT BY INCOME TAX DEPARTMENT. IN FA CT IT RAISES FURTHER A DOUBT ON THE APPELLANT THAT DESPITE SIGNING THE CON SENT WAIVER FROM THE APPELLANT HAS NOT PRODUCED THE VARIOUS DETAILS WHIC H WERE REQUIRED DURING THE ASSESSMENT PROCEEDINGS. THIS IS SO BECAUSE IN A S MANY AS THREE CASES OF THE DIFFERENT ASSESSEES THE AO RECEIVED TH E BANK ACCOUNT STATEMENTS AND OTHER DETAILS FROM THEM AFTER THEY S IGNED CONSENT WAIVER FORM. YOUR HONOURS ARE REQUESTED TO GRANT KIND ATTE NTION ON THE ISSUES IN FOREGOING PARAGRAPH. FURTHERMORE YOUR HONOURS KIND ATTENTION IS INVITED TO THE CONTENTS AND FEATURES OF CONSENT WAIVER FORM. SOME OF THE IMPORT ANT FEATURE OF THE FORM ARE AS UNDER- A) CONSENT WAIVER FORM IS A FORM WHERE THE PERSON (ACCOUNT HOLDER/BENEFICIAL OWNER/ AUTHORIZED SIGNATORY/TRUST EE) REQUEST THE HSBC BANK TO PROVIDE THE BANK ACCOUNT STATEMENT AND OTHE R DOCUMENTS. IT IS BETWEEN ACCOUNT HOLDER (OR OTHER PERSON REFERRED B EFORE) AND THE BANK. SHRI KAMAL GALANI 28 THE CONSENT WAIVER FORM IS ADDRESSED TO THE OFFICIA LS OF THE HSBC BANK AND IS SIGNED BY THE ACCOUNT HOLDER ETC. THEREFORE YOUR HONOUR IS IS HUMBLY SUBMITTED THAT THERE IS NO QUESTION OF DISCHARGING ONUS BEFORE INCOME TAX AUTHORITIES IN INDIA UNDER THE ACT. B) THE ACCOUNT HOLDER DECLARES THAT HE/SHE IS COOPE RATING WITH THE INCOME TAX DEPARTMENT AND IS PROVIDING A COPY OF THE WAIVER TO INCOME TAX DEPARTMENT GOVERNMENT OF INDIA. ONLY THE COPY OF THE FORM IS PROVIDED IT IS NOT THE CASE THAT THE INCOME TAX DEPARTMENT IS TO PROCURE THE ACCOUNT STATEMENTS AND OTHER DETAILS ON THE BASIS OF THIS FORM YOUR HONOURS. C) ACCOUNT HOLDER WAIVES ALL PROTECTIONS PROVIDED UNDER THE DATA PROTECTION, PRIVACY AND/OR BANK SECRECY LAWS OF SWI TZERLAND. YOUR HONOURS MAY CONSIDER THE FACT THAT THE SWISS L AWS AND BANKS WERE RATHER INFAMOUS FOR THEIR SECRECY LAWS THIS WAIVER FROM PROTECTION IS IMPORTANT TO ENABLE THE BANK TO PROVIDE REQUESTED DETAILS AT THE ADDRESS OF THE ACCOUNT HOLDER. HENCE IT IS BETWEEN BANK AND THE ACCOUNT HO LDER BY NO MEANS THE APPELLANT CAN CLAIM TO HAVE DISCHARGED THE ONUS BY SIGNING THE FORM AND NOT PROVIDING THE REQUIRED DETAILS LIKE ACCOUNT STATEME NTS ETC. D) ACCOUNT HOLDER INSTRUCTS THE HSBC PRIVATE BANK ( SUISSE) SA TO FOLLOW THESE INSTRUCTIONS UNTIL REVOKED BY THE ACCOUNT HOL DER. E) FURTHER THE ACCOUNT HOLDER INSTRUCTS THE HSBC BA NK THAT DOCUMENTATION IS TO BE PROVIDED IN BOTH PAPER AND E LECTRONIC TO THE ABOVE MENTIONED ADDRESS (AT THE ADDRESS MENTIONED BY HIM) AND ALSO MENTIONS AGAIN THAT HE/SHE EXPRESSLY WAIVES THE PROTECTIONS OFFERED BY THE SWI SS BANKING SECRECY AND DATA PROTECTION RULES ACCORDING LY. THE KIND ATTENTION OF YOUR HONOURS IS DRAWN TO THE FACT THAT FROM THE CONSENT WAIVER FORM IT IS CLEAR THAT IT IS ADDRESSED TO THE HSBC BANK AUTHORITIES TO PROVIDE THE BANK ACCOUNT STATEMENT A ND OTHER DOCUMENTS TO THE ACCOUNT HOLDER WAIVING THE SECRECY LAWS AT THE ADDR ESS OF THE ACCOUNT HOLDER AND SUBJECT TO THE REVOCATION OF CONSENT SO WAIVED. OVERALL CONSENT WAIVER FORM WAIVES THE RIGHT OF ACCOUNT HOLDERS ON ACCOUNT OF B ANKING SECRECY AND PRIVACY LAWS OF SWITZERLAND AND GIVES THE AUTHORITY TO BANK TO PROVIDE THE BANK ACCOUNT STATEMENTS OF THE ACCOUNT HOLDER. EVEN THIS IS ALSO SUBJECT TO THE SUBSEQUENT REVOCATION. YOUR HONOURS ARE REQUESTED TO PAY ATTENTION TO THE VERY FACT THAT THE ASSESSING OFFICER VIDE NOTICE U/S 142(1) OF THE ACT DATED 12/01/2015 AGAIN RAISED SPECIFIC QUERY THAT DESPITE OF THE APPELLANT FILING THE CONSENT WAIVER NO BANK ACCOUNT STATEMENTS WERE PROVIDED BY THE APP ELLANT BEFORE HIM. IN THE NOTICE SUPRA THE AO ALSO MENTIONED THAT THE OF SIMILARLY PLACED ASSESSEES WHO GAVE CONSENT WAIVER HAVE PRODUCED THE DESIRED BANK ACCOUNT STATEMENTS AND OTHER DOCUMENTS FROM HSBC BA NK. IN RESPONSE TO THE SPECIFIC QUERY RAISED THE APPELLANT HAS NOT FIL ED THE DETAILED RESPONSE OR THE DETAILS WHICH WERE REQUIRED. THEREFORE YOUR HONOURS HUMBLE SUBMISSION IS THAT THE APPELLANT DURING THE PROCEEDINGS WAS LARGELY EV ASIVE IN SO FAR AS PRODUCTION OF BANK ACCOUNTS AND OTHER DOCUMENTS ARE CONCERNED. SHRI KAMAL GALANI 29 ANOTHER IMPORTANT ASPECT WARRANTING ATTENTION OF YO UR GOOD SELVES IS THAT IT IS UNDISPUTED FACT THAT THE APPELLANT IS JOINT A CCOUNT HOLDER OF THE HSBC BANK ACCOUNT. THIS FACT IS MENTIONED IN THE BASE NO TE, IN SUBMISSION OF HIS BROTHER AND ALSO APPELLANT NEVER DENIED OF IT. THEREFORE THERE IS NO REASON WHY THE BANK ACCOUNT MUST NOT HAVE BEEN PROV IDED TO THE APPELLANT BY THE HSBC BANK. IN SUCH A SCENARIO YOUR HONOURS WOULD APPRECIATE THAT THREE POSSIBILITIES EMERGE WHICH AR E THAT THE APPELLANT HAS NOT GIVEN THE CONSENT WAIVER TO THE HSBC BANK OR TH E APPELLANT RECEIVED THE BANK ACCOUNTS AND OTHER DOCUMENTS FROM THE HSBC BANK BUT HAS DECIDED TO NOT TO SHARE THEM WITH THE INCOME TAX AU THORITIES IN INDIA OR THE APPELLANT HAS REVOKED THE CONDITIONS LAID DOWN IN CONSENT WAIVER FORM DATED 23/07/2013. IN ANY CASE YOUR HONOURS THE APPELLANT HAS NOT DISC HARGED THE ONUS TO PRODUCE THE DETAILS RELATING TO BANK AC COUNT ASKED FROM HIM VIDE STATUTORY NOTICES. AS FAR AS BASE NOTE IS CONCERNED IT WAS OFFICIALLY RECEIVED BY GOVERNMENT OF INDIA FROM GOVERNMENT OF FRANCE AS A PART OF THE TAX INFORMATION EXCHANGE TREATY (TIET) UNDER THE DTAA BETWEEN FRANCE AND IND IA SO YOUR HONOURS THERE IS HARDLY ANY DISPUTE ABOUT THE VERACITY AND AUTHEN TICITY OF THE BASE NOTE. FURTHER IN THE INSTANT CASE THE NAME OF THE APPELLA NT IS FOUND ON THE BASE NOTE AND BOTH THE APPELLANT AND HIS BROTHER HAS ACCEPTED TO BE THE JOINT HOLDER OF THE BANK ACCOUNT MENTIONED IN THE NOTE. ANOTHER ISSUE RAISED BY THE APPELLANT YOUR HONOURS IS THAT THE APPELLANTS BROTHER SHRI DEEPAK GALANI IS THE OWNER/BENEFICIAL OWNER OF FUNDS/INVESTMENTS IN THE BANK ACCOUNT. IN THIS REGARD A LETTER HAS AL SO BEEN FILED BY SHRI DEEPAK GALANI SOME IMPORTANT ASPECTS OF THE LETTER IS THAT IN THIS LETTER BROTHER OF APPELLANT STATES THAT HE HAD OPENED AN ACCOUNT WITH HSBC BANK GENEVA WITH CLIENT ACCOUNT NUMBER 4077262 IN 1998 FOR THE PURPO SE OF INVESTMENTS IN BONDS AND SECURITIES OUT OF MY OWN FUNDS. HE ALSO STATES THAT HE HAD OPENED THE ACCOUNT WITH HIS BROTHER KAMAL GALANI AS A JOINT SE COND NAME OUT OF CONVENIENCE AND ALSO HAS A MARK OF RESPECT FOR HIS ELDER BROTHER. THE BROTHER OF APPELLANT FURTHER STATES THAT HE IS THE SOLE BENEFI CIAL OWNER OF THE FUNDS AND KAMAL GALANI (APPELLANT) DOES NOT OWN ANY FUNDS/INV ESTMENTS/ ASSET ACCRETION OUT OF THIS ACCOUNT ALSO THAT THE APPELLANT DOES NO T HAVE ANY RIGHT TITLE AND INTEREST IN THE FUNDS ETC. ON THE ISSUE OF THE OWNERSHIP OF FUNDS IT IS TO BE MENTIONED HERE YOUR HONOURS AND ATTENTION IS INVITED TO THE FACT THAT T HE AO VIDE NOTICE U/S 142(1) DATED 1/10/14 CLEARLY STATED THAT SINCE THE NAME OF APPELLANT IS APPEARING AS SECOND OWNER HENCE CLEARLY THE APPELLANT IS ALSO TH E SECOND OWNER. MORE IMPORTANTLY THE AO IN THE NOTICE U/S 142(1) DATED 1 2/01/2015 ALSO GAVE THE GENERAL CONDITIONS OF THE BANK WHICH WAS FINALLY NA MED HSBC PRIVATE BANK (SUISSE) SA THESE GENERAL CONDITIONS HAS VARIOUS CL AUSES WHICH DEFINE RELATIONS BETWEEN BANK AND THE CUSTOMERS. ON GOING THROUGH THESE GENERAL CONDITIONS IT IS CLEAR THAT THE CUSTOMERS KEEP ON RECEIVING BA NK ACCOUNT STATEMENTS FROM BANK FROM TIME TO TIME THEREFORE IN ORDER TO DISCHARGE THE ONUS THE APPELLANT OUGHT TO HAVE FURNISHED THE BANK ACCOUNT STATEMENTS AND OTHER DOCUMENTS. ANOTHER IMPORTANT CLAUSE OF GENERAL CONDITIONS IS C LAUSE 4 THIS CLAUSE IS REGARDING THE SEVERAL HOLDERS AND JO INT ACCOUNT. THE CLAUSE 4 OF GENERAL CONDITIONS CLEARLY GRANTS EQUAL RIGHTS TO THE TWO OR MORE JOINT ACCOUNT HOLDERS, IT STATES THAT WHEN TWO OR MORE PE RSONS ARE HOLDERS OF AN ACCOUNT, EACH OF (HE ACCOUNT HOLDERS SHALL BE VE STED WITH THE TOTALITY OF RIGHTS AND OBLIGATIONS CONNECTED WITH THE ACCOUNT. FURTHER THAT EACH OF THE SHRI KAMAL GALANI 30 ACCOUNT HOLDERS IS AUTHORIZED TO ACCOMPLISH, ALONE OR JOINTLY, IN ACCORDANCE WITH HIS RELEVANT POWERS OF SIGNATURE, A LL TRANSACTIONS WITHOUT ANY LIMITATION WHATSOEVER. IN LIGHT OF THESE CLAUSE YOUR HONOURS IT IS AMPLY CLEAR IN MY HUMBLE SUBMISSION THAT IN CASE OF JOINT ACCOUNT HOLDER BOTH THE ACCOUNT HOLDER HAVE EQUAL RIGHTS AND PRIVILEGES HEN CE THE LETTER OF DEEPAK GALANI BROTHER OF APPELLANT IS OF NOT MUCH VALUE. T HE RIGHTS AND OBLIGATIONS OF BOTH THE ACCOUNT HOLDERS ARC SAME AN D BOTH THE ACCOUNT HOLDERS ARE JOINTLY AND SEVERALLY BOUND. THE LETTER BY BROTHER OF APPELLANT IS NOT MATERIAL TO THE CASE AS EVEN IN THIS LETTER THE BROTHER OF THE APPELLANT HAS NOT ATTACHED THE BANK ACCOUNT STATEMENTS AND OT HER DOCUMENTS WHICH COULD ESTABLISH THE PREPOSITION FORWARDED IN HIS LE TTER. IT IS THE APPELLANT WHO IS THE ASSESEE AND HENCE THE ASSESSMENT WAS MAD E ON THE AVAILABLE INFORMATION SO THERE IS NO INFIRMITY IN THE ORDER O F THE AO. YOUR HONOURS HUMBLE ATTENTION IS INVITED TO THE ORD ER OF THE AO WHO IN HIS ASSESSMENT ORDER THE HAS ALSO MENTIONED VARIOUS DETAILS SUCH AS 'THE IDENTIFICATION OF THE BENEFICIAL OWNER' THIS IS ALS O IN THE CASE OF SIMILARLY PLACED FACTS IN TWO DIFFERENT CASES. IN THE INSTANT CASE NEITHER THE APPELLANT NOR HIS BROTHER HAS FURNISHED THE IDENTIF ICATION OF BENEFICIAL OWNER FORM. IN LIGHT OF THE ABOVE FACTS AND OTHER FACTS MENTION ED IN THE ASSESSMENT ORDER AND THE ORDER OF THE CIT (A) IT IS PRAYED FRO M YOUR HONOURS TO KINDLY TREAT THE LETTER FILED BY THE BROTHER OF THE APPELLANT AS A SELF SERVING DOCUMENT. ILL ISSUE OF QUANTIFICATION OF INVESTMENT AND INTE REST/RETURN ON INVESTMENT AND THE RESIDENTIAL STATUS AND TAXING RIGHTS: DURING THE PROCEEDINGS BEFORE YOUR HONOURS THE APPE LLANT ALSO RAISED OBJECTION ON THE ISSUE OF QUANTIFICATION OF INVESTMENT AND TH E RATE OF INTEREST EARNED, WHEREAS REVENUE CHALLENGED THE ORDER OF THE LD. CIT (A) ON THE RELIEF GRANTED BY HIM IN THE APPELLATE ORDER ON THE GROUND OF THE RES IDENTIAL STATUS. ON THE ISSUE OF QUANTIFICATION IT IS IMPORTANT TO M ENTION YOUR GOODSELVES THAT NO EVIDENCE PERTAINING TO BANK ACCOUNT STATEME NTS AND OTHER DOCUMENTS WERE PROVIDED BY THE APPELLANT TO THE AO. THE APPEL LANT AND EVEN HIS BROTHER ACCEPTED THAT THE APPELLANT IS A JOINT HOLDER OF TH E ACCOUNT. THE APPELLANT HAS FAILED EVEN TO SUBMIT THE BASIC FORM WHICH IS 'THE IDENTIFICATION OF THE BENEFICIAL OWNER' TO PROVE THAT HE IS NOT THE BENEFICIAL OWNER OF THE ACCOUNT. THIS DESPITE OF THE FACT THAT TWO DIFFERENT ASSESSEES HAVE PROVI DED SUCH FORM, THESE ASSESSEES WHOSE NAMES WERE ALSO MENTIONED IN THE IN FORMATION RECEIVED FROM THE FRENCH GOVERNMENT AND ALSO THEIR RESPECTIVE BAS E NOTES WERE RECEIVED AND THEY ALSO HAVE ACCOUNTS IN THE HSBC BANK GENEVA DUR ING THE PERIOD IN WHICH THE APPELLANT WAS HAVING THE BANK ACCOUNT. YOUR HONOURS KIND ATTENTION IS ALSO INVITED TO THE FACT THAT ON BASIS OF ENQUIRIES CONDUCTED BY THE AO FROM THE INTERNET AND ALSO ANALYZING THE BANK ACCOUNTS STATEMENTS AND OTHER FACTS OF SIMILARLY PL ACED ASSESSEES, THE AO ARRIVED AT THE FACT THAT INITIAL INVESTMENT OF 3 MI LLION USD WAS MADE. THE AO RAISED SPECIFIC QUERY IN THIS REGARD LONG BEFORE PA SSING THE ASSESSMENT ORDERS. FINALLY IN ASSESSMENT ORDER AO RELIED UPON THE CONT ENTS IN THE WEBSITE OF THE HSBC PVT BANK AND ALSO ON THE INFORMATION RECEIVED BY HIM IN THE CASES OF OTHER ASSESSEES. HENCE ON THE ENTIRE FACTUAL MATRIX AO HAS MADE THE BEST SHRI KAMAL GALANI 31 QUANTIFICATION OF INVESTMENT POSSIBLE. LIKEWISE THE COMPUTATION OF INTEREST IS MADE ON THE RATIONAL BASIS MENTIONED IN THE ASSESSM ENT ORDER. THE APPELLANT IS MAKING A CLAIM WITHOUT PRODUCING THE BANK ACCOUNT S TATEMENTS AND OTHER DOCUMENTS TO PROVE OTHERWISE. FINALLY ON THE ISSUE OF THE RESIDENTIAL STATU S DURING AY 1999- 2000 TO AY 2002-2003 AND THE ISSUE OF TAXING RIGHT THE RELIANCE IS PLACED UPON THE CASES OF RENU THARANI VS DCIT IT A NO. 2333/MUM/2018 DATED 16 (H JULY 2020 THE OPERATIVE PART OF THE DECISION IS REPRODUCED AS UNDER: CONSIDERING THE FACTS OF THIS CASE, THE DECISION OF THE HON 'BLE IT AT, MUMBAI IN THE CASE OF MOHAN MANOJ DHUPELIA AND OTHER IN ITA N O. 3544/MUM/ 2011 ETC, IS DIRECTLY APPLICABLE TO THIS CASE. IN THIS CASE, THE ASSESSEE IS A BENEFICIARY OF AMBRUNOVA TRUST HAVING AN ACCOUNT IN LIECHTENSTEIN BANK WHICH IS ANOTHER TAX JURISDICTION KNOWN FOR ITS SECRECY LAW AND MODEST T AX REGIME. IN FACT, IN THE ORDER OF THE IT AT, IT HAS BEEN CONCLUDED THAT LIECHTENST EIN JURISDICTION QUALIFIES AS AN OFF SHORE FINANCIAL CENTRE DUE TO A VERY MODEST TAX REGIME, HIGH STANDARD OF SECRECY LAWS AND FURTHER FOREIGN INVESTORS HAD THE OPPORTUNITY TO ESTABLISH COMPANIES OR TRUST IN THE PRINCIPALITY OF LIECHTENS TEIN TO THE ENJOY THE ADVANTAGES OF OFF-SHORE FINANCIAL CENTRE THE GROUND OF APPEAL BEFORE THE HON'BLE IT AT IN THIS CASE WAS AS FOLLOWS: 'THE ID. COMMISSIONER OF INCOME TAX (APPEALS), ERRED IN CONFIRMING THE ORDER OF THE ASS ESSING OFFICER MAKING AN ADDITION OF RS.2,34,64,398/- ON ACCOUNT OF ALLEGED UNDISCLOSED INCOME, WITHOUT APPRECIATING THE FACT THAT THE ALLEGED TRUST WAS DI SCRETIONARY TRUST AS NEITHER THE AMOUNT WAS ACCRUED NOR CREDITED TO THE APPELLANT'S NAME, HENCE ADDITION CANNOT BE MADE IN THE HANDS OF THE APPELLANT'. ITA NO. 2333/MUM/2018 ASSESSMENT YEAR: 2006-07 PAGE 14 OF 55 THE HON'BLE MUMBAI ITAT DISMISSED THIS GROUND OF APPEAL RAISED BY THE ASSESSE AND HEL D THAT DISCRETIONARY TRUSTS ARE CREATED FOR THE BENEFIT OF PARTICULAR PERSONS A ND THOSE PERSONS NEED NOT NECESSARILY CONTROL THE AFFAIRS OF THE TRUST. THE BANK ACCOUNT OF THE TRUST REPRESENTS UNACCOUNTED MONEY OF THE BENEFICIARIES E VEN THOUGH NO BENEFIT WERE TRANSFERRED TO THEM. 13.1 CONSIDERING THE FACTS OF THE CASE AND THE DECISION OF THE HONBLE MUMBAI IT AT AS CITED ABOVE IT CAN BE C ONCLUDED THAT THE BANK ACCOUNT OF THE TRUST REPRESENTS UNACCOUNTED MONEY O F THE ASSESSE. CONSIDERING THE FACT THAT THE ASSESSEE IS AN INDIAN HAVING INTE RESTS AND ASSETS IN INDIA THAT NO DETAILS WERE GIVEN TO SHOW THE SOURCE OF MONEY D EPOSITED IN THE HSBC ACCOUNT LEADS TO THE CIRCUMSTANCES THAT THIS UNACCO UNTED MONEY IS SOURCED FROM INDIA. IN ABSENCE OF ANYTHING CONTRARY, THE ON LY LOGICAL CONCLUSION THAT CAN BE INFERRED IS THAT THAT THE AMOUNTS DEPOSITED ARE UNACCOUNTED DEPOSITS SOURCED FROM INDIA AND THEREFORE TAXABLE IN INDIA. THIS PRESUMPTION IS AS PER THE PROVISIONS OF SECTION 114 OF THE INDIAN EVIDENCE AC T, 1872 WHICH READS AS FOLLOWS: 'SECTION 114. COURT MAY PRESUME EXISTENCE OF CERTAIN FACTS. THE COURT MAY PRESUME THE EXISTENCE OF ANY FACT WHICH IT THIN KS LIKELY TO HAVE HAPPENED, REGARD BEING HAD TO THE COMMON COURSE OF NATURAL EV ENTS, HUMAN CONDUCT AND PUBLIC AND PRIVATE BUSINESS, IN THEIR RELATION TO THE FACTS OF THE PARTICULARS CASE. THE COURT MAY PRESUME- ...... (G) THAT EVIDENCE WHI CH COULD BE AND IS NOT PRODUCED WOULD, IF PRODUCED BE UNFAVRORABLE TO THE PERSON WHO WITHHOLD IT.... ' SECTION 114(G) OF THE INDIAN EVIDENCE ACT, 1872, TH US CLEARLY SAYS THAT THE COURTS CAN PRESUME EXISTENCE OF CERTAIN FACTS IF TH E PERSON LIABLE TO PRODUCE EVIDENCE WHICH COULD BE AND IS NOT PRODUCED, WHICH IF PRODUCED WOULD HAVE BEEN UNFAVORABLE TO THE PERSON WHO WITHHOLD IT. 13. 2 FURTHER, THE PROVISION OF SECTION 5(2) OF THE ACT IS REPRODUCED AS UNDER:-' S UBJECT TO THE PROVISIONS OF THIS SHRI KAMAL GALANI 32 ACT, THE TOTAL INCOME OF ANY PREVIOUS YEAR OF A PER SON WHO IS A NON-RESIDENT INCLUDED ALL INCOME FROM WHATEVER SOURCE DERIVED WH ICH- (A) IS RECEIVED OR IS DEEMED TO BE RECEIVED IN INDIA IN SUCH YEAR BY OR O N BEHALF OF SUCH PERSON, OR (B) ACCRUES OR ARISES OR IS DEEMED TO ACCRUE OR ARI SE TO HIM IN INDIA DURING SUCH YEAR. ' DURING THE ASSESSMENT PROCEEDINGS AND AS CA N BE SEEN FROM THE FACTS OF THE CASE THAT THE ASSESSE HAS NOT MADE OUT A CASE T HAT THE DEPOSITS IN THE ABOVE MENTIONED ACCOUNTS IN HSBC, GENEVA DO NOT ALL WITHIN THE AMBIT OF THIS PROVISION OF LAW. ] 3.3 AS THE ASSESSE HAS CHOSEN N OT TO PRODUCE THE DETAILS OF HIS HSBC BANK ACCOUNTS AND THE SOURCE OF DEPOSITS T HEREOF, EVEN THOUGH HE COULD HAVE BEEN OBTAINED ALL THE DETAILS/EVIDENCES FOR THE SAME, THE ONLY COROLLARY THAT COULD BE DRAWN IS THAT THE ASSESSE H AS DECIDED TO WITHHOLD THE INFORMATION AS IF PRODUCING ITA NO. 2333/MUM/2018 A SSESSMENT YEAR: 2006-07 PAGE 15 OF 55 IT WOULD HAVE GONE AGAINST HIM. THUS, AS PER THE PROVISIONS OF SECTION 114 OF THE INDIAN EVIDENCE ACT, 1872 ALSO, IT NEED TO BE HELD AT THIS STAGE THAT THE INFORMATION/DETAILS NOT FURNISHED WE RE UNFAVORABLE TO THE ASSESSE AND THAT THE SOURCE OF THE MONEY DEPOSITED IN THE I ISBC ACCOUNT IS UNDISCLOSED AND SOURCEDFROM INDIA. NOVA PROMOTERS AND FIN/EASE (P) LTD. 342 ITR 169 (DEL), HIGHLIGHTING THE LEGAL EFFECT OF SECTION 68 OF THE ACT, THE DIVISION BENCH HAS OBSERVED IN PARA 32 THAT THE TRIBUNAL ALSO ERRE D IN LAW IN HOLDING ASSESSING OFFICER OUGHT TO HAVE PROVED THAT THE MONIES EMANAT ED FROM THE COFFERS OF THE ASSESSE COMPANY AND CAME BACK AS SHARE CAPITAL. SEC TION 68 PERMITS THE ASSESSING OFFICER TO ADD THE CREDIT APPEARING IN TH E BOOKS OF ACCOUNT OF THE ASSESSE IF THE LATTER OFFERS AND EXPLANATION REGARD ING THE NATURE AND SOURCE OF THE CREDITOR THE EXPLANATION OFFERED IS NOT SATISFA CTORY. IT PLACED NO DUTY UPON HIM TO POINT TO THE SOURCE FROM 'WHICH THE MONEY WA S RECEIVED BY THE ASSESSEE. IN THE LIGHT OF THE FACTS AND JUDICIAL PRECEDENTS D ISCUSSED ABOVE IT IS REQUESTED TO KINDLY CONSIDER THE WRITTEN SUBMISSION UPHOLD THE ORDER OF THE AO DISMISS THE GROUNDS OF APPEALS OF THE APPELLANT AND ALLOW THE APPEALS OF REVENUE. 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW ALONG WITH CASE LAWS RELIED UPON BY LD. COUNSE L FOR THE ASSESSEE. THE LD. AO HAS MADE ADDITIONS TOWARDS MONEY LYING IN HSBC BANK ACCOUNT, GENEVA, ON THE BASIS OF BASE NO TE RECEIVED FROM FRENCH GOVERNMENT BY GOVERNMENT OF IN DIA IN ACCORDANCE WITH DOUBLE TAXATION AVOIDANCE AGREEMENT AND OPINED THAT THE ASSESSEE IS A BENEFICIAL OWNER OF JO INT ACCOUNT HELD IN THE NAME OF HIS BROTHER. THE LD. AO HAS ALSO MADE SHRI KAMAL GALANI 33 ADDITIONS TOWARDS RETURN ON INVESTMENTS ON INITIAL DEPO SITS CLAIMED TO HAVE MADE BY THE ASSESEE TO OPEN BANK ACCO UNT @17% ON THE BASIS OF SOME COMPARABLE CASES OF SIMILA R NATURE. THE LD. AO HAS ANALYZED THE FACTS OF THE CASE IN LIGH T OF BASE NOTE AND CONCLUDED THAT THE ASSESSEE IS THE OWNER OF BANK ACCOUNT AND WHATEVER MONEY LYING IN BANK ACCOUNT IS UNDISCLOSED INCOME OF THE ASSESSEE FOR INCOME TAX P URPOSE. IT WAS CONTENTION OF THE ASSESSEE BEFORE THE LD. AO, AS WE LL AS THE LD.CIT(A) THAT BANK ACCOUNT WAS OPENED BY HIS BROTHER MR. DIPAK GALANI IN THE YEAR 1998 AND HIS NAME WAS INCL UDED IN THE BANK ACCOUNT FOR CONVENIENCE AND AS A MARK OF RESPE CT TO HIS ELDER BROTHER, BUT HE IS NEITHER OWNER OF THE BANK AC COUNT, NOR HAD ANY INTEREST OR RIGHT IN MONEY LYING IN BANK ACC OUNT. TO JUSTIFY HIS ARGUMENTS, AND PROVE HIS CLAIM FILED PASS PORT AND OTHER DETAILS, INCLUDING BANK ACCOUNT DETAILS AND ARGU ED THAT THE ACCOUNT WAS OPENED BY GIVING ADDRESS OF HIS BROTHER SITUATED AT OUTSIDE INDIA AND ALSO, A LETTER FROM HIS BROTHER ADDRE SSED TO THE LD. AO AND CLAIMED THAT HE IS THE OWNER OF THE BANK A CCOUNT LYING IN HSBC BANK, GENEVA. 12. THE LD. AO HAS MADE ADDITIONS TOWARDS AMOUNT LYI NG IN HSBC BANK ACCOUNT, ON THE SOLE GROUND THAT THE ASSESS EE IS OWNER OF THE BANK ACCOUNT AND HE IS HAVING BENEFICI AL INTEREST IN SHRI KAMAL GALANI 34 MONEY LYING IN SAID BANK ACCOUNT. ALTHOUGH, THE LD. AO HAS NOT SPECIFICALLY REFERRED PROVISIONS OF SECTION 69/69A O F THE ACT, BUT HE HAS INVOKED SECTION 69/69A TO BRING AMOUNT LYING IN HSBC BANK ACCOUNT AS UNEXPLAINED MONEY OF THE ASSESSEE. T HEREFORE, IN ORDER TO EXAMINE, WHETHER MONEY LYING IN HSBC BA NK ACCOUNT IN THE NAME OF THE ASSESEE AND HIS BROTHER IS A UNE XPLAINED MONEY, WHICH CAN BE TAXED U/S 69A OF THE I.T.ACT, 1 961 NEEDS TO BE EXAMINED. AS PER SECTION 69A, WHERE IN ANY FIN ANCIAL YEAR THE ASSESEE IS FOUND TO BE THE OWNER OF ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLES AND SUCH MONEY , BULLION, JEWELLERY OR VALUABLE ARTICLES IS NOT RECORDED IN THE BOOKS OF ACCOUNTS, IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF MONEY, BULLION, JEWELLERY AND OTH ER VALUABLE ARTICLES OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE LD. AO, SATISFACTORY, THE MONEY AND THE VALUE OF THE BULLION, JEWELLERY AND OTHER VALUABLE ARTICLES MAY B E DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR . A CLOSE LOOK AT THE PROVISIONS OF SECTION 69A OF THE I.T.ACT, 19 61, IT IS ABUNDANTLY CLEAR THAT IN ORDER TO BRING ANY MONEY O R OTHER VALUABLE ARTICLES WITHIN THE AMBIT OF SAID SECTION, THE LD. AO HAS TO PROVE THAT THE MONEY IS BELONG TO THE ASSESSEE. OF CO URSE, THE INITIAL BURDEN IS ON THE ASSESSEE TO PROVE THAT THE MONEY OR SHRI KAMAL GALANI 35 OTHER VALUABLE ARTICLES FOUND IN HIS POSITION IS NOT B ELONGS TO HIM. BUT, ONCE, THE ASSESSEE FILED NECESSARY EVIDENC ES TO PROVE THAT SAID UNEXPLAINED MONEY IS NOT BELONGS TO HIM, T HEN, ONUS SHIFT TO THE REVENUE TO PROVE THAT UNEXPLAINED MONEY IS IN FACT BELONGS TO THE ASSESSEE. UNLESS, THE LD. AO PROVES THA T UNEXPLAINED MONEY IS BELONGS TO THE PERSON, HE CANN OT MAKE ANY ADDITION IN THE HANDS OF THE ASSESSEE. 13. IN THE LIGHT OF ABOVE FACTUAL AND LEGAL BACKGROU ND, IF YOU SEE THE FACTS OF THE PRESENT CASE, ONE HAS TO SEE, WHET HER THE MONEY FOUND IN HSBC BANK ACCOUNT IS BELONGS TO THE AS SESSEE OR HIS BROTHER. IN THIS CASE, THE ASSESSEE RIGHT FROM BEGINNING HAS MADE IT VERY CLEAR THAT THE BANK ACCOUNT BELONGS TO HIS BROTHER AND HE WAS NAMED ONLY AS A SECOND HOLDER FO R THE PURPOSE OF NOMINATION AND FOR THE SAKE OF CONVENIENC E. TO JUSTIFY HIS CLAIM, THE ASSESSEE HAS FILED A LETTER A ND AFFIDAVIT FROM HIS BROTHER STATING THAT HIS BROTHER MR.DIPAK V. GALANI IS THE OWNER OF THE BANK ACCOUNT AND HE WAS OPENED A BA NK ACCOUNT IN HIS CAPACITY AS A NON RESIDENT IN THE YE AR 1998. FROM THE ABOVE, IT IS VERY CLEAR THAT THE BANK ACCOUNT WAS OPENED BY HIS BROTHER AS A FIRST ACCOUNT HOLDER AND THE ASSESSEE WAS INCLUDED IN THE BANK ACCOUNT AS A SECOND ACCOUNT HOL DER, WHICH IS VERY CLEAR FROM THE BASE DOCUMENTS RELIED UPON BY THE LD. SHRI KAMAL GALANI 36 AO, WHERE THE ASSESSEE NAME APPEARS AS A SECOND ACC OUNT HOLDER. FURTHER, AS STATED ABOVE, THE BANK ACCOUNT WAS OPENED IN THE YEAR 1998 AND AT THE TIME OF OPENING BANK AC COUNT, THE ASSESSEE, AS WELL AS HIS BROTHER BOTH ARE NRI RESID ING OUTSIDE INDIA. FURTHER, THE BASE DOCUMENTS ITSELF CLEARLY STA TES THE CREATION OF IDENTITY OF THE ASSESSEE AS DATE OF 19/06/ 2003, AND IT IS CLEARLY STATED THEREIN THAT ASSESSEE ACCOUNT HOL DER NO.2. THE PASSPORT DETAIL OF ASSESSEE AS PER BASE DOCUMENTS CLEARLY SHOWS HIM TO BE RESIDING AT VIENNA (AS PLACE OF HAVI NG ESTABLISHMENT) WITH PLACE OF BIRTH AS BARODA. THE COPY OF SAME PASSPORT HAS BEEN FILED ON RECORD AND CONSIDERED BY THE LD. AO IN ASSESSMENT YEAR, CLEARLY SHOWS THAT PASSPORT IS IS SUED IN VIENNA AND RENEWED THROUGH THE EMBASSY OF INDIA SINC E, 1993. THE LEGAL ADDRESS IN BASE DOCUMENTS IS TAKEN FROM THE BIRTH PLACE MENTIONED IN THE PASSPORT AS PERMANENT ADDRESS, OTHERWISE THE ADDRESS OF THE ASSESSEE IN VIENNA IS AL SO MENTIONED IN PASSPORT AS TAKEN IS PRESENT ADDRESS. FRO M THE ABOVE, IT IS VERY CLEAR THAT THE BANK ACCOUNT IN THE NA ME OF ASSESSEE AND IS BROTHER AND HIS BROTHER AS ACCOUNT HOL DER NO.1 IS CLEARLY ESTABLISHED THE FACT THAT BANK ACCOUNT IS B ELONGS TO HIS BROTHER, BUT NOT TO THE ASSESSEE AND THIS FACT HAS BEEN F URTHER STRENGTHENED BY THE LETTER OF THE ASSESSEES BROTHER, D ATED 09/03/2015, WHERE HE HAS CATEGORICALLY ACCEPTED THE OWNERSHIP SHRI KAMAL GALANI 37 OF BANK ACCOUNT AND MONEY LYING IN SAID BANK ACCOUN T. THESE FACTS HAVE BEEN DISREGARDED BY THE LD. AO WITHOUT PRO VIDING ANY BASIS FOR THE SAME. THE LD. AO HAS ALSO NOT DISPUTED THAT MR. DIPAK GALANI IS ACCOUNT HOLDER AND THE PRINCIPLE HOL DER OF THE BANK ACCOUNT , BUT WENT ON TO MAKE ADDITIONS IN THE HA NDS OF THE ASSESSEE ON PURE SUSPICIOUS AND SURMISES BY INVO KING PROVISIONS OF GENERAL CLAUSE ACT, AND FURTHER BEING A SECOND ACCOUNT HOLDER, THE ASSESSEE IS VESTED WITH RIGHTS A ND OBLIGATIONS CONNECTED WITH THE ACCOUNT AND THEREFORE, H E IS A BENEFICIAL OWNER OF THE BANK ACCOUNT. HOWEVER, AT TH E SAME TIME, THE LD. AO HAS FAILED TO APPRECIATE THAT MR. DI PAK GALANI BY VIRTUE OF BEING A FIRST ACCOUNT HOLDER IS ALSO VES TED WITH SOME RIGHTS AND THEREFORE, THE SAME PRINCIPLE / LOGIC EVEN APPLIES TO HIM. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE CONCLUSION DRAWN BY THE LD. AO THAT ASSESSEE IS A BENE FICIAL OWNER AND MR.DIPAK GALANI IS NOT THE BENEFICIAL OWNE R ON THE BASIS OF ABOVE ARGUMENTS IS HIGHLY INCORRECT. 14. FURTHER, IT IS THE CASE OF THE LD. AO THAT ACCOUNT WITH HSBC BANK , GENEVA IS OPENED BY RESIDENT INDIAN AND BLAC K MONEY EARNED BY SUCH RESIDENT INDIAN HAS BEEN STASHED ABRO AD WITHOUT PAYING TAXES/DISCLOSING INCOME IN INDIA. BUT, FACT REMAINS THAT IN THE INSTANT CASE, THE ACCOUNT WAS OPENED IN 1998, W HEN THE SHRI KAMAL GALANI 38 ASSESSEE HIMSELF AND MR. DIPAK GALANI PERMANENTLY RE SIDED IN OUTSIDE INDIA FOR 30 YEARS AND HAD NO INTENTION TO COM E TO INDIA AT THAT TIME. FURTHER, BOTH OF THEM HAVE NO SOURCE OF IN COME IN INDIA, DURING THE COURSE OF THEIR RESIDENCE ABROAD. THEREFORE, WE ARE OF THE VIEW THAT ENTIRE MOTIVE AS PRESENTED BY THE LD . AO DEFINES ALL LOGIC OF OPENING OF A SECRET BANK ACCOU NT IN GENEVA, BY NRI TO STASH UNACCOUNTED INCOME TAXABLE IN INDIA FA ILS. THE LD. AO MECHANICALLY DISREGARDING ALL EXPLANATIONS FU RNISHED BY THE ASSESSEE AS TO THE OWNERSHIP OF THE ACCOUNT ALONG WITH THE CORROBORATIVE MATERIALS IS CONTRARY TO THE SETTLED POS ITION OF LAW, BECAUSE, ONCE ASSESSEE HAS PROVIDED A REASONABLE EX PLANATION ABOUT OWNERSHIP, THEN THE ONUS WAS ON THE LD. AO TO E STABLISH THAT ACCOUNT BELONGS TO THE ASSESSEE. THIS LEGAL PRIN CIPLE IS FORTIFIED BY THE DECISION OF HONBLE DELHI HIGH COUR T IN THE CASE OF CIT VS SHIVAPRAKASH AGARWAL (SUPRA), WHERE THE H ONBLE HIGH COURT AFTER OBSERVED THAT THE ASSESSEE HAD TIME AND AG AIN SUBMITTED BEFORE THE REVENUE AUTHORITIES THAT THE DOCUM ENTS BELONGS TO HIS FATHER AND WHATEVER ADDITIONS HAVE TO BE MADE IN THE HANDS OF THE FATHER. THE FATHER OF THE ASSESSEE HA D OWNED UP TO THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND HAD ALSO FILED AFFIDAVIT TO THIS EFFECT. IN THESE CIRCUMSTA NCES, THE COURT HELD THAT THE ADDITIONS COULD NOT BE SUSTAINED I N THE HANDS OF THE ASSESSEE ON THE BASE OF SEIZED DOCUMENTS. THI S PRINCIPLE SHRI KAMAL GALANI 39 IS FURTHER SUPPORTED BY THE DECISION OF HONBLE CA LCUTTA HIGH COURT IN THE CASE OF CIT VS UNITED COMMERCIAL AND IN DUSTRIAL COMPANY LIMITED (1991) 187 ITR 596, WHERE IT WAS HEL D THAT WHERE PRIMA-FACIE INFERENCE ON FACTS IS THAT THE ASSE SSEE EXPLANATION IS PROBABLE, THE ONUS WILL SHIFT TO THE RE VENUE. 15. IN THIS CASE, ON PERUSAL OF DETAILS AVAILABLE ON RECORD, IT IS VERY CLEAR THAT THE ASSESSE RIGHT FROM DAY ONE HAS D ISOWNED THE BANK ACCOUNT. FURTHER, THE BROTHER OF THE ASSESEE HAS FILED A LETTER TO THE LD. AO ALONG WITH AFFIDAVIT AND CLAIMED THAT THE BANK ACCOUNT IS OPENED BY HIM IN HIS CAPACITY AS NRI AND WHATEVER MONEY LYING IN BANK ACCOUNT IS BELONGS TO HI M. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT UNDER TH ESE CIRCUMSTANCES, THE LD. AO WAS ERRED IN MAKING ADDITI ONS TOWARDS AMOUNT LYING IN BANK ACCOUNT AS UNEXPLAINED M ONEY OF THE ASSESSEE. 16. INSOFAR AS, ADDITIONS MADE TOWARDS RETURN ON INVE STMENTS @17% PA ON YEAR BASIS, ONCE, IT WAS ESTABLISHED THA T BANK ACCOUNT WAS NOT BELONGS TO ASSESSEE AND HE WAS NOT A BENEFICIAL OWNER, THEN FURTHER ADDITIONS TOWARDS ESTI MATED RETURN OF INCOME ON SAID UNEXPLAINED MONEY IS ARBIT RARY. AS STATED ABOVE, THE ACCOUNT WAS OPENED BY THE APPELLANT' S SHRI KAMAL GALANI 40 BROTHER WITH THE BRITISH BANK OF MIDDLE EAST. THEREF ORE, THE RELIANCE PLACED BY THE AO ON THE ACCOUNT OPENING INFO RMATION APPEARING ON THE WEBSITE OF HSBC BANK CANNOT BE RELI ED UPON. FURTHER, THE ACCOUNT WAS OPENED BY THE APPELLANT'S BR OTHER IN 1998, WHEREAS THE WEBSITE INFORMATION SOUGHT TO BE RE LIED UPON BY THE AO PERTAINS TO ACCOUNTS SOUGHT TO BE OPENED AT A BOUT THE TIME OF THE ASSESSMENT PROCEEDINGS, I.E. AROUND 2013 . SUCH RELIANCE ON WEBSITE INFORMATION IS IMPERMISSIBLE AS TH E SAME IS MERELY BASED ON FANCIFUL PRESUMPTIONS. THE AO HAS NO T BROUGHT ANY MATERIAL ON RECORD TO JUSTIFY THE USE OF ACCOUNT O PENING INFORMATION AS AT TIME OF ASSESSMENTS TO PRESUME AND A RRIVE AT THE CONCLUSION THAT THE SAME WOULD BE APPLICABLE TO AN ACCOUNT ALLEGED TO HAVE BEEN OPENED BY THE APPELLANT 15 YEAR S EARLIER. IT MAY BE PERTINENT TO POINT OUT THAT SINCE THE ASSESSM ENT WAS MADE, THE ACCOUNT OPENING REQUIREMENTS HAVE BEEN REVI SED TO REQUIRE AN INVESTMENT OR BORROWING TO BE MADE AMOUNTIN G TO AN EQUIVALENT OF USD 5 MILLION. THIS GOES TO SHOW THAT THE ACCOUNT OPENING REQUIREMENT UNDERGO CHANGES FROM TIME TO TIME AND THE PRESUMPTION THAT THE ACCOUNT OPENING REQUIREMENTS S TATED AT THE TIME OF THE ASSESSMENT WOULD HAVE BEEN THE SAME AS THOSE PREVAILING WHEN THE ACCOUNT WAS OPENED 15 YEAR S EARLIER, IN 1998, IS FALLACIOUS AND CANNOT BE SUSTAINED. THE AO FAILED TO APPRECIATE THAT ACCOUNT WAS OPENED IN THE BRITISH BANK OF SHRI KAMAL GALANI 41 MIDDLE EAST, UAE. THE SAME WAS SUBSEQUENTLY MERGED / ACQUIRED BY HSBC PRIVATE BANK. HENCE ASSUMPTION OF U SD 3 MILLION IS UNJUSTIFIED. FURTHER, THE AO HAS FAILED TO APPRECIATE THAT THE APPELLANT IS NONRESIDENT IN THE YEAR 1998 I.E . IN THE YEAR OF OPENING THE ACCOUNT, RESIDING OUT OF INDIA FOR P AST MORE THAN 20 YEARS. FURTHER, OWNING THE BANK ACCOUNT AND THE I NVESTMENT BY NON RESIDENT OUT OF SOURCES OF FUNDS AVAILABLE A BROAD IS STILL NOT TAXABLE IN INDIA. THE AO HAS FAILED TO POINT OUT A NY IOTA OF EVIDENCE TO PROVE THAT THE FUNDS OF USD 3 MILLION INV ESTED IN OPENING BANK ACCOUNT REPRESENT INCOME FROM UNDISCLO SED SOURCES EARNED/ ACCRUED TO APPELLANT IN 1998. THE APPELLANT HAS NO SOURCES OF INCOME IN INDIA UP TO 2002 AND TH E SAME HAS ALREADY BEEN ASSESSED ON RECORD IN ASSESSMENT PROCE EDINGS EARLIER. THE STATEMENT OF ASSETS AND LIABILITIES AND IN COME HAS BEEN FILED ON RECORD. REFER PAGE 66 TO 66 WE THEREFOR E ARE OF THE CONSIDRED VIEW THAT, HAVING ESTABLISHED THAT APPEL LANT IS NON-RESIDENT IN AY 1999-2000 AND COMPLETE ABSENCE OF ANY SOURCE OF TAXABLE INCOME IN INDIA, THE ADDITION U/S 6 9 MADE BY AO IN AY 1999-2000 ON ACCOUNT OF INVESTMENT OF USD 3 MILLION IN OPENING THE BANK ACCOUNT WITH HSBC AND CONSEQUENT ESTIMATION OF RETURN OF INVESTMENT @ 17% PA AS UNEXPLAI NED INVESTMENT IS HIGHLY UNJUSTIFIED. SHRI KAMAL GALANI 42 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE CONSIDERED VIEW THAT THE LD. AO, AS WELL AS TH E LD.CIT(A) WERE ERRED IN NOT APPRECIATING THE FACT IN RIGHT PER SPECTIVE, EVEN THOUGH THE ASSESSEE HAS FILED NECESSARY EVIDENCES TO PROVE THAT THE BANK ACCOUNT WAS NOT BELONGS TO HIM. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT AN ADDITION MADE TOWARDS BANK ACCOUNT IN THE NAME OF THE ASSESSEE IS INCORRECT. AC CORDINGLY, WE DIRECT THE LD. AO TO DELETE ADDITIONS MADE TOWARDS A MOUNT LYING IN BANK ACCOUNT. SIMILARLY ADDITION MADE TOWA RDS ESTIMATED RETURN OF INVESTMENTS @17% ON SAID ADDITIONS IS ALSO INCORRECT. ACCORDINGLY, WE DIRECT THE LD. AO TO DELETE ADDITIONS MADE TOWARDS ESTIMATED RETURN OF INVESTMENTS FOR ALL ASSESSMENT YEARS. 18. IN THE RESULT APPEAL FILED BY THE ASSESEE FOR AS ST.YEARS 2003-04 TO 2007-08 ARE ALLOWED AND APPEALS FILED BY THE REVENUE FOR ASST.YEARS 2006-07 & 2007-08 AND 1999-20 00 TO 2002-03 ARE DISMISSED. SIMILARLY CROSS OBJECTIONS FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 1999-2000 TO 2002-0 3 ARE ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS: 1 0/09/2020 SD/- (MAHAVIR SINGH) SD/- (G. MANJUNATHA) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI; DATED: 10/09/2020 SHRI KAMAL GALANI 43 SELF TYPED COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//