DCIT(IT)-3(3)(2), MUMBAI V. VENU RAMAN KUMAR , MUMBAI

ITA 2978/MUM/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2991 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 08-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Double taxation relief; Reassessment proceedings; Set aside
• Section: 147; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.2978/Mum./2018 (Assessment Year : 2007–08) Dy. Commissioner of Income Tax Circle–3(3)(2), Mumbai ................ Appellant v/s Venu Raman Kumar Flat no.2, Hermes House–III Worli Sea Face, Mumbai 400 025 PAN – ABAPK9211E ................ Respondent Assessee by : Shri Vijay Mehta Revenue by : Shri S.N. Kabra, Sr. AR Date of Hearing – 25.04.2022 Date of Order – 05/05/2022 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the Revenue challenging the impugned order dated 07/02/2018 passed by the learned Commissioner of Income Tax (Appeals) – 57, Mumbai (“learned CIT(A)”) under section 250 of the Income Tax Act, 1961 (“the Act”), for the assessment year 2007–08. Venu Raman Kumar ITA No.2978/Mum./2018 2 2. In this appeal, the Revenue has raised following grounds: “1. Whether on the facts and circumstances of the case and in law, the CIT(A) was correct in deleting the addition of Rs. 4,78,39,775/- made by A.O ignoring the fact that the assessee failed to provide the details of his HSBC accounts and the sources of deposits thereof during the course of assessment proceedings. 2. Whether on the facts and circumstances of the case and in law, the CIT(A) was correct in deleting the addition of Rs. 4,78,39,775/- made by A.O ignoring the fact that information related to HSBC accounts of the assessee not disclosed to Indian taxation department was received by Govt. of India from the French Government under DTAA. 3. Whether on the facts and circumstances of the case and in law, the CIT(A) was correct in upholding the contention of the assessee that it is fabricated/manufactured data with some malafide intention, and has ignored the fact that the assessee did not give any evidence/proof in this regard. 4. Whether on the facts and circumstances of the case and in law, the CIT(A) erred in ignoring the fact that the assessee did not sign consent waiver form for carrying out any further enquiry from Swiss HSBC Branch which could have provided all relevant information. The CIT(A) has ignored this vital issue in his order and stated that AO should have proved reliable and authentic evidence, whereas the assessee himself thwarted such attempt. More so when assessee has not denied before any authority that such account does not belong to him. 5. The Appellant prays that the order of the Ld. CIT(A) on the above ground(s) be set aside and that of the Assessing Officer be restored. 6. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. The only grievance of the Revenue in present appeal is against deletion of addition of Rs. 4,78,39,775, which was made by the Assessing Officer with respect to certain bank accounts. Venu Raman Kumar ITA No.2978/Mum./2018 3 4. The brief facts of the case as emanating from the record are: The assessee is a non-resident Indian and has filed return of income, for the year under consideration, on 31/10/2007 declaring total income of Rs. 79,36,613. The reassessment proceedings were initiated, in the case of the assessee, vide notice dated 31/10/2014 issued under 148 of the Act, on the basis of information received by the Government of India from the French Government under the Double Tax Avoidance Agreement, inter-alia, in respect of the Assessee pertaining to bank account with HSBC Bank, Geneva. In the aforesaid reassessment notice, it was alleged that the amount in the said bank account was not considered by the assessee in his return of income and therefore, this income has escaped assessment. The assessee objected to the initiation of reassessment proceedings, which were disposed of by the Assessing Officer. Vide order dated 31/03/2015 passed under section 143 (3) read with section 147 of the Act, the Assessing Officer did not agree with the assessee’s submission and held that the assessee has not provided the bank account statement, the consent waiver form and also the source of deposits made in the HSBC accounts with material evidence. Accordingly, the Assessing Officer held that the amounts deposited in HSBC bank account are unaccounted deposits sourced from India and therefore taxable in India. As a result, the peak amount appearing in the information received by the Government of India in respect of assessee’s bank account Venu Raman Kumar ITA No.2978/Mum./2018 4 for assessment year 2007–08 being Rs. 4,78,39,775 was added to the total income of the assessee. 5. In appeal before the learned CIT(A), the assessee challenged the aforesaid order passed by the Assessing Officer on jurisdiction as well as on merits. The learned CIT(A) vide impugned order dated 07/02/2018 upheld the initiation of reassessment proceedings in the case of assessee. However, on merits, the learned CIT(A), inter-alia, allowed the appeal filed by the assessee observing as under: “I have carefully seen the facts of the case and submission made by the assessee. Here the assessing officer has asked the assessee to prove that the amount reflected in the HSBC account Geneva was not sourced from India. The assessee has repeatedly submitted he did not have any access to bank account and therefore he could not have submitted and whatever bank account he held in India, he disclosed in the Return of Income. In these circumstances, it cannot be presumed that the amount in the HSBC account belonged to the Assessee without any evidence or even corroborate evidence to that effect therefore, I am unable to subscribe to the action of the AO that the account and the peak amount in question belonged to the appellant or for that matter it was the undisclosed income of the appellant. Thus, considering the facts I am inclined to accept the arguments of the appellant that the AO has made such addition merely by conjecture and surmises. It is well settled that suspicion howsoever strong it may be cannot take the position of proof and no addition could be made on such presumption and assumption.” ............. “Thus, on the merit of the case I have also gone through numerous judicial decision relied upon by the AR in his submission and considered applicable legal provision of the Act. Thus, In my opinion and respectfully following the decision of several High Courts and tribunals, when the assessee is a non-resident having connected to bank account in a foreign country and with the Income not finding any evidence of it being received or deemed to be received or accrued in Venu Raman Kumar ITA No.2978/Mum./2018 5 India cannot be asked to pay taxes on the same in India. In view of the above and considering the facts and circumstances of the case and respectfully following the decisions discussed terein above, I am unable to subscribe to the views taken by the AD in making the addition of the peak amount appearing in various bank accounts. Considering the facts I am inclined to accept the arguments of the appellant and accordingly the addition of Rs.4,78,39,775/- made in this case is hereby deleted and appeal is allowed in favour of the appellant.” 6. Being aggrieved, the Revenue is in appeal before us. During the course of hearing, Shri S.N. Kabra, learned Departmental Representative (“learned D.R.”), vehemently relied upon the order passed by the Assessing Officer. However, the learned D.R. also fairly submitted that similar issue has been decided in favour of the assessee by the Co-ordinate Bench of the Tribunal in assessee’s own case for assessment year 2006 – 07. 7. On the other hand, Shri Vijay Mehta, learned Authorised Representative appearing for the assessee submitted that similar findings of learned CIT(A) in preceding assessment year were upheld by the Co- ordinate Bench of the Tribunal in assessee’s own case. 8. We have considered the rival submissions and perused the material available on record. We find that the Co-ordinate Bench of the Tribunal in assessee’s own case in DCIT v/s Venu Raman Kumar, in ITA No. 2977/Mum/ 2018, vide order dated 19/06/2019, for assessment year 2006–07, dismissed the appeal filed by the Revenue and upheld the deletion of similar Venu Raman Kumar ITA No.2978/Mum./2018 6 addition made on the basis of similar information received for assessment year 2006–07, by observing as under: “14. In this background, we have examined the factual findings which have been arrived at by the CIT(A). In the earlier part of this order, a portion of the said finding has also been extracted by us. As per the CIT(A) there is no material or evidence to say that the assessee was connected with the bank accounts in ITA No.2977/Mum/2018 Venu Raman Kumar question so as to justify an inference that any income thereof was received or deemed to have been received or accrued or deemed to have accrued in India. A perusal of the Grounds of appeal raised by the Revenue before us reveal that none of the findings recorded by the CIT(A) have been assailed on the basis of any material or evidence. In fact, the entire case of the Revenue, which had been adverted to at the time of hearing before us, is based on the presumption that the assessee has routed the money sourced from India through the three entities into the bank accounts in question. It is a well-settled proposition that a presumption, howsoever, strong cannot substitute an evidence and, therefore, in our view, the CIT(A) made no mistake in deleting the addition. At this stage, we may also refer to the reliance placed by the AO as well as the CIT-DR on the judgment of Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT [214 ITR 801] to defend the addition made on the test of human probability. No doubt, the test of human probabilities is an acceptable test to decide the genuineness or otherwise of a particular transaction. So, however, what is required is to weigh and consider all evidences and material which are available on record. Considering the facts of the instant case and noting that there was complete absence of material, as noted by the CIT(A) too, we find that the application of test of human probabilities to sustain the addition would be unjustified. Therefore, the reliance placed on the judgment of Hon'ble Supreme Court in the case of Sumati Dayal (supra), is not applicable to the facts of the instant case. 15. Before parting, we may also refer to the fact that there is no negation to the fact recorded by the CIT(A) that the circumstances of the case are similar to those ITA No.2977/Mum/ 2018 Venu Raman Kumar in the case of Shri Hemant Mansukhlal Pandya (supra). Even in the Grounds of appeal filed before us, the Revenue has not canvassed to the contrary. In fact, at the time of hearing, the learned representative referred to the Grounds of appeal raised in the case of Shri Hemant Mansukhlal Pandya (supra) and stated that two of the Grounds in the present appeal are identically worded. Considering that our co- ordinate Bench in the case of Shri Hemant Mansukhlal Pandya (supra) has also considered an identical issue in similar circumstances, we find no reasons to depart from the aforesaid decision and, Venu Raman Kumar ITA No.2978/Mum./2018 7 accordingly, on this ground also we affirm the ultimate decision of the CIT(A) in deleting the addition.” 9. The learned D.R. could not show us any reason to deviate from the aforesaid order and no change in facts and law were alleged in the relevant assessment year. Thus, respectfully following the order passed by the Co– ordinate Bench of the Tribunal in assessee’s own case cited supra, we find no infirmity in the impugned order passed by the learned CIT(A). Accordingly, grounds raised by the Revenue in present appeal are dismissed. 10. In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on 05/05/2022 Sd/- AMARJIT SINGH ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 05/05/2022 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. Venu Raman Kumar ITA No.2978/Mum./2018 8 True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai