ESTATE OF LATE SHRI.DAVENDRA CHTANDAS AHUJA(THROUGH MRS. TANIA DEOL,THE LEGAL REPRESENTATIVE OF THE ESTAT/WILL), Mumbai V. INCOME TAX OFFICER-17(1)(3), Mumbai

ITA 2011/MUM/2018

AI Insights

The case involves the Estate of Late Shri Davendra Chetandas Ahuja, represented by Mrs. Tania Deol, appealing against the order of the CIT(A)-28, Mumbai, which confirmed the addition of Rs. 43,35,30,427 to the assessee's income for the Assessment Year 2004-05. The addition was based on information received from the Addl. CIT, Central Range-2, Mumbai, regarding a foreign bank account held by the late Shri Ahuja with UBS AG, Zurich, which had a substantial credit balance as of 31-03-2004. The Assessing Officer (AO) reopened the assessment under sections 147, 148, and 149 of the Income Tax Act, 1961, citing that the income from this account had escaped assessment. The Tribunal dismissed the appeal due to the absence of the assessee's representative at multiple hearings and upheld the CIT(A)'s decision, noting that the assessee had not provided sufficient evidence to contest the reopening of the assessment or the addition made.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125758 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 28-05-2023
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Peak credit; Deemed to accrue or arise in india
• Section: 147; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI S. RIFAUR RAHMAN, AM आयकर अपील सं/ I.T.A. No.2011/Mum/2018 (निर्धारण वर्ा / Assessment Years: 2004-05) Estate of Late Shri Davendra Chetandas Ahuja (Through Mrs. Tania Deol, the legal representative of the Estate/Will) 502, Raheja Chambers, Nariman Point, Mumbai- 400021. बिधम/ Vs. ITO, Ward-17(1)(3) Room No. 116, 1 st Floor, Aayakar Bhavan, Mumbai-400020. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AAAPA8072C (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 29/05/2023 घोषणा की तारीख /Date of Pronouncement: 14/06/2023 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Ld. CIT(A)-28, Mumbai dated 06.12.2017 for the AY 2004-05. 2. At the outset, the Ld. CIT-DR brought to our notice that despite this appeal being fixed several times for hearing, the assessee/Ld. AR does not appear, therefore, the appeal may be heard and disposed off ex-parte qua assessee. 3. We have heard the Ld. CIT-DR and perused the material on records. We note that the appeal has been fixed for hearing twenty (20) times and non-appeared for the assessee after 29.12.2022. We note that the assessee has raised legal issue challenging the reopening of the assessment. We note that the AO has given the reason for reopening which reads as under: - Assessee by: None Revenue by: Smt. Riddhi Mishra (DR) ITA No.2011/Mum/2018 A.Y. 2004-05 Estate of Late Shri Davendra Chetandas 2 “......Information has been received from the offices of Addl.CIT, Central Range 2, vide letter No.Addl.CIT CR- 2/CPGRAM/2015-16 dated 14-10-2015, that during the search proceedings in the case of late Shri Devendra C. Ahuja was found that the assessee has a bank account bearing No.0206- 712931 with UBS AG Zurich and that the income corresponding to this particular bank account was not offered for tax for the period prior to 01-04-2004. The said bank account was opened on 29-06-2000. The funds of US $ 96,49,019.07 as on 31-03- 2004 was earned by the assessee. The corresponding income of the assessee remained to be taxed. In view of the amended provision of section 147 r.w.s 148 & 149 by Finance at 2012 w.e.f.01-07-2012, assessment can be reopened upto 16 years. As the foreign bank account of the assessee was operative from 29-06-2000, I have reason to believe that income in relation to Foreign Bank Account located outside India, chargeable to tax has escaped assessment and therefore it is a fit case for issue of notice u/s.148 of the LT. Act, 1961.” 4. A perusal of the aforesaid reason would reveal that AO has received information from Addl. CIT, Central Range-2, Mumbai regarding existence of foreign bank account in the name of Shri Davendra C. Ahuja with UBS AG, Zurich. And that the said foreign bank account was opened on 29.06.2000, wherein there was a balance of US$ 96,49,019.07 as on 31.03.2004. Based on this adverse information which came to his possession, the AO has re-opened the assessment of assessee on the reason that deposit in foreign bank has ITA No.2011/Mum/2018 A.Y. 2004-05 Estate of Late Shri Davendra Chetandas 3 escaped assessment. It is noted that the account holder/assessee has expired i.e, Shri Devendra Ahuja passed away on 20.08.2010. So the deceased assessee is represented in this appeal by Ms. Tania Deol (daughter of assessee) viz, legal representative of Shri Davendra C. Ahuja who has contested the AO’s action of reopening the relevant AY. 2004-05. Since neither any averments in support of the legal issue is found placed before us nor any pleading to show that Ld. CIT(A)’s impugned action is bad in law, we confirm the action of Ld. CIT(A) and dismiss the legal issues raised by the assessee. However, we make it clear that assessee can move appropriate application to recall this order provided there is just cause for non-appearance before us on the date of hearing or for not filing adjournment application. Therefore, the legal grounds raised by assessee stands dismissed. 5. Coming to the merit of the addition of Rs.43,35,30,427/- u/s 68 & 69A of the Act is concerned, we note that the AO has made the addition by holding as under: - “5. Undisclosed Income 5.1 In this case, information was received from Addl.CIT, Central Range-2, Mumbai regarding existence of foreign bank account in the name of Shri Davendra C. Ahuja (A/c No. 0206- 712931) with UBS AG, Zurich importantly, in the information received from the Addl. CIT, it is mentioned that the said foreign bank account was opened on 29-06-2000 wherein there is a balance of US$ 96,49,019.07 as on 31.03.2004. 5.2 From the above information, it is amply clear that the assessee is having foreign bank account held with UBS AG, Zurich. Further, the said bank account has a credit balance of ITA No.2011/Mum/2018 A.Y. 2004-05 Estate of Late Shri Davendra Chetandas 4 US$ 96,49,019.07 for the year under consideration. More importantly, in the return of income filed, there is no disclosure in respect of existence of such foreign bank account wherein the assessee is having the aforesaid credits. Also, there is no mention in respect of such bank account in the return of income filed in compliance to notice u/s.148 of the Act. 5.3 In view of the above, during the course of assessment proceedings, the assessee has been asked to file complete details in respect of opening of the bank account, source of funds, complete bank account statement and related expenditure incurred for opening the account with necessary supporting evidences. It has also been asked to show cause as to why the peak credit of US $ 96,49,019.07 equivalent INR 43,35,30,427/- (converted into INR by adopting SBT Rate of Rs.44.93 per US$) reflected in the said aforesaid bank account should not be considered as ‘deemed income’ and added to the total income. In response, the assessee simply furnished the bank statement and argued that the income reported in the bank account has already offered to tax in the course of search action by the assessee, however, no evidences in respect of the same regarding disclosure of income on the credits made in the bank statement maintained at USS AG, Zuerich has been filed. In absence of any explanation and evidences thereon the USD made in the aforesaid bank account has been considered as deemed income and added to the total income. 5.4 Importantly, the earlier record of the assessee in respect of disclosure of income, on the foreign bank account has been examined. Upon examination of the same it came to light that the assessee has disclosed undisclosed income for the A.Ys.2005-06 to 2011-12 and not for the year under con-id - ITA No.2011/Mum/2018 A.Y. 2004-05 Estate of Late Shri Davendra Chetandas 5 Therefore, the argument of the assessee that the income relating to foreign bank account has been disclosed is not maintainable. 5.5 As per the information available with this office the assessee is having foreign bank account, which has credit balance of US $ 96,49,019.07 equivalent INR 43,35,30,427/-. In absence of such details, the claim of the assessee that the said amount has already been offered to tax and relevant taxes thereon have been paid by paid is not acceptable. 5.6 In light of the above discussion and considering the information received on this issue, I consider the credit balance worked in respect of credits reflected in the UBS AG, Zuerich as ‘Deemed Income’ in the hands of assessee as the assessee is the owner of the said foreign bank account. 5.7. Thus, I consider the credit of US $ 96,49,019.07 equivalent INR 43,35,30,427/- (converted into INR by adopting SBT rate of Rs.44.93/per US$) as ‘Deemed Income’ in the hands of the assessee. Accordingly, an addition of Rs. 43,35,30,427/- is made to the total income of the assessee under the head Income from Other Sources.” 6. The Ld. CIT(A) has confirmed the addition made by AO at page one hundred and twenty four (124) of his order and relied on plethora of judicial precedents. Since there is nothing on record/written submission or paper book filed by assessee to show that the Ld. CIT(A)’s view is not a plausible view on fact or law, we confirm the action of the Ld. CIT(A) and dismiss the appeal of the assessee. However, it is made clear that if the assessee has just cause for not appearing on the date of hearing, the Tribunal may recall the order since this order has been passed without hearing the assessee. ITA No.2011/Mum/2018 A.Y. 2004-05 Estate of Late Shri Davendra Chetandas 6 7. In the result, the appeal of the assessee stands dismissed. Order pronounced in the open court on this 14/06/2023. Sd/- Sd/- (S. RIFAUR RAHMAN) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 14/06/2023. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai