ACIT, CIRCLE- 15, NEW DELHI V. KRISHAN LAL MADHOK, NEW DELHI

ITA 3917/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9047 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHMA SINGH
• Keywords: Unexplained investment; Search and seizure; Peak credit
• Section: 153A; 13; 22; 69; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI F BEN CH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI MAHAVIR PRASAD, JUDICIAL M EMBER ITA NO. 3917 TO 3921/DEL/2017 [A.YS 2006-07 TO 2012-13] & ITA NO.6648/DEL/2017 [A.Y 2007-08 ] THE A.C.I.T. VS. SHRI KRISHAN LAL MADHOK CENTRAL CIRCLE 15 672, TULSI FARMS, OPP. NAND A HOSPITAL NEW DELHI CHATTARPUR, NEW DELHI PAN: AAKPM 8593 J ITA NO.6268/DEL/2017 [A.Y 2006-07 ] & ITA NO.6269/DEL/2017 [A.Y 2007-08 ] SHRI KRISHAN LAL MADHOK VS. THE A.C.I.T. 672, TULSI FARMS, OPP. NANDA HOSPITAL CENTRAL CIR CLE 15 CHATTARPUR, NEW DELHI NEW DELHI PAN: AAKPM 8593 J [APPELLANT] [RESP ONDENT] ASSESSEE BY : SHRI PRANSHU GOEL, CA, REVENUE BY : MS. SUSHMA SINGH, CI T-DR DATE OF HEARING : 15.07.2021 DATE OF PRONOUNCEMENT : 03.08.2021 2 ORDER PER BENCH :- THE ABOVE CAPTIONED APPEALS ARE BY THE ASSESSEE AND REVENUE PREFERRED AGAINST THE MENTIONED A.YS. THIS BUNCH OF APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH, THE CASE RECORDS CAREFULLY PERUSED AND WITH THE ASSISTA NCE OF THE LD. COUNSEL, WE HAVE CONSIDERED THE DOCUMENTARY EVIDENC ES BROUGHT ON RECORD IN THE FORM OF PAPER BOOK IN LIGHT OF RULE 1 8(6) OF ITAT RULES AND HAVE ALSO PERUSED THE JUDICIAL DECISIONS RELIED UPON BY BOTH THE SIDES. 3. IN ADDITION TO ORAL SUBMISSIONS, BOTH THE REPRES ENTATIVES HAVE FILED WRITTEN SYNOPSIS IN SUPPORT OF THEIR RESPECTI VE CONTENTIONS AND HAVE RELIED UPON SEVERAL JUDICIAL DECISIONS. 4. WE WILL FIRST ADDRESS THE APPEALS OF THE ASSESSE E IN ITA NO 6268/DEL/2017 AND 6269/DEL/2017 FOR A.YS 2006-07 AN D 200708. 3 5. THE BONE OF CONTENTION AND ROOTS FOR THE QUARREL LIE IN THE STATEMENT OF SHRI KRISHAN LAL MADHOK, RECORDED UNDE R SECTION 132(4) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT'] DATED 23.08.2011 DURING THE COURSE OF SEARCH PROCEEDINGS, CONDUCTED AT THE PREMISES OF THE ASSESSEE. 6. INFORMATION WAS RECEIVED FROM THE GOVERNMENT OF FRANCE UNDER THE DOUBLE TAXATION AVOIDANCE CONVENTION [DTAC] THA T THE ASSESSEE IS A BENEFICIARY IN THE BANK ACCOUNT WITH HSBC, GENEVA . AFTER RECEIPT OF THE INFORMATION ON 23.08.2011, A SEARCH WAS CONDUCT ED AT THE PREMISES OF THE ACCUSED WHEREIN HE WAS CONFRONTED W ITH THE INFORMATION REGARDING THE UNDISCLOSED FOREIGN BANK ACCOUNT. 7. IN HIS STATEMENT, THE ASSESSEE SPECIFICALLY STAT ED THAT HE HAS NO KNOWLEDGE OF THE SAID BANK ACCOUNT, AS HIS DECEASED WIFE SMT. SUDESH MADHOK WAS MANAGING THE BUSINESS AS PROPRIETOR OF M /S INDIAN ARTWARES CORPORATION SINCE 1970 TILL HER DEATH IN T HE YEAR 2005. 8. PURSUANT TO THE SEARCH, STATUTORY NOTICES WERE I SSUED AND SERVED UPON THE ASSESSEE, IN RESPONSE TO WHICH, THE ASSESS EE FILED RETURN OF 4 INCOME ON 04.12.2012 DECLARING RETURNED INCOME AT R S.1,05,98,070/ FOR A.Y 2006 07 AND RS. 4,54,88,542/ FOR A.Y 20 0708. 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, VIDE LETTER DATED 19.12.2013, SOUGHT CLARI FICATION FROM THE ASSESSEE AS TO WHETHER HE HAS DECLARED THE AMOUNT O F RS. 2,26,71,100/- PERTAINING TO BALANCE IN THE ACCOUNT WITH HSBC WHILE FILING RETURN OF INCOME FOR A.Y 2006 07. THE ASSE SSEE REPLIED VIDE LETTER DATED 22.01.2014 THAT INCOME HAS BEEN DECLAR ED IN A.Y 200708 AND TAXES HAVE BEEN PAID THEREON. 10. THE ASSESSING OFFICER, VIDE LETTER DATED 28.02. 2014, REQUISITIONED DETAILS OF INCOME DECLARED FOR A.Y 200708. VIDE LE TTER DATED 12.03.2014, THE ASSESSEE EXPLAINED THAT THE AMOUNT DECLARED IN A.Y 200708 HAS BEEN DECLARED AT THE BEHEST OF THE TAX AUTHORITIES, BASIS OF WHICH WAS PEAK BALANCE AS APPEARING IN THE SHEET S OF PAPER SHOWN AS HAVING BEEN RECEIVED FROM THE FRENCH GOVERNMENT UNDER DTAC. THIS LETTER IS EXHIBITED AT PAGES 110 115 OF THE PAPER BOOK. 5 11. DURING THE ASSESSMENT PROCEEDINGS, ONCE AGAIN T HE STATEMENT OF THE ASSESSEE WAS RECORDED AND ONCE AGAIN HE STATED THAT HE HAS NO KNOWLEDGE OF ANY SUCH OVERSEAS BANK ACCOUNT AND ONC E AGAIN, POINTED OUT THAT THE ALLEGED PEAK DEPOSIT HAS BEEN OFFERED FOR TAX IN A.Y 2007 08. 12. THE ASSESSING OFFICER WAS NOT CONVINCED AND WAS OF THE FIRM BELIEF THAT PEAK CREDIT HAS TO BE BIFURCATED INTO T WO A.YS, I.E 200607 AND 200708 AND ACCORDINGLY, HE ISSUED A NOTICE DAT ED 19.02.2015 REQUISITIONING THE ASSESSEE TO SHOW CAUSE AS TO WHY AN AMOUNT OF RS. 2,05,50,545/ SHOULD NOT BE ADDED AS INCOME FOR THE A.Y 200607 AND WHY THE AMOUNT OF RS.18,58,311/ BE NOT ADDED AS IN COME FOR A.Y 200708. 13. VIDE SUBMISSION DATED 24.02.2015, ONCE AGAIN, T HE ASSESSEE EXPLAINED THAT THE AMOUNT OF TAX ON THE PURPORTED P EAK BALANCE OF RS. 2,23,68,000/ SUGGESTED BY THE TAX AUTHORITIES WAS DEPOSITED AND DECLARED IN THE RETURN OF INCOME FOR A.Y 200708. I T WAS STRONGLY CONTENDED THAT IF THIS AMOUNT IS ONCE AGAIN TAXED, THE SAME SHALL TANTAMOUNT TO DOUBLE TAXATION. 6 14. THIS REPLY IS PLACED AT PAGES 120 TO 126 OF THE PAPER BOOK. HOWEVER, WITHOUT PREJUDICE TO HIS CONTENTIONS SO FA R, ACCEDING TO THE REQUISITION OF THE ASSESSING OFFICER, THE ASSESSEE FURNISHED REVISED COMPUTATION OF INCOME FOR A.YS 200607 AND 200708 WHEREIN THE AMOUNT OF RS. 2,23,68,000/ WAS SEGREGATED FOR TWO A.YS I.E 200607 AND 200708. THIS REVISED COMPUTATION OF INCOME ALO NG WITH THE SUBMISSIONS IS PLACED AT PAGES 127 TO 131 OF THE PA PER-BOOK. 15. THE ASSESSING OFFICER COMPLETELY DISREGARDED TH E FACTS MENTIONED HEREINABOVE AND MADE ADDITION OF RS.2,05, 50,545/ AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT IN A.Y 200607 AND RS.18, 58,311/ AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT IN A.Y 200708. 16. A BARE PERUSAL OF THE AFORESAID FACTS SHOW THAT SAME AMOUNT HAS BEEN TAXED TWICE, THAT IS IN A.YS 200607 AND 2007 08. AS MENTIONED ELSEWHERE, THE SOLE BASIS IS THE ADMISSION IN THE S TATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT AND THE ALLEGED SHE ETS RECEIVED FROM THE FRENCH GOVERNMENT UNDER DTAC. 7 17. BEFORE GOING INTO THE LEGALITIES AND MERITS OF THE FACTS OF THE CASE IN HAND, UNDER THE INCOME TAX ACT, IT WOULD BE PERTINENT TO REFER TO THE JUDGEMENT OF ADDITIONAL CHIEF METROPOLITAN M AGISTRATE, [SPECIAL ACTS], CENTRAL, TIS HAZARI COURTS, DELHI DATED 28.0 6.2021. THOUGH, WE ARE AWARE THAT THIS ORDER WAS TO DECIDE THE APPLICA TION UNDER SECTION 245[2] OF CR. P.C FOR COMPLAINT FILED UNDER SECTION 276C(1) READ WITH SECTION 277 OF THE ACT BUT IN OUR CONSIDERED OPINIO N, THIS DECISION DOES HAVE PERSUASIVE VALUE. 18. THIS JUDGEMENT OF THE ADDL CHIEF METROPOLITAN M AGISTRATE HAS BEEN FILED BY THE LD. COUNSEL FOR THE ASSESSEE ALON G WITH SYNOPSIS AND A COMPLETE ORDER IS AT PAGES 21 TO 32 OF THE SYNOPSIS . FOR THE SAKE OF BREVITY, WE WOULD LIKE TO HIGHLIGHT ONLY THE RELEVA NT PART OF THE JUDGEMENT: 1. THIS ORDER WILL DECIDE APPLICATION U/S 245 (2) CR.P.C MOVED BY ACCUSED KISHAN LAI MADHOK SEEKING HIS DISCHARGE IN THE PRESENT CASE. A DETAILED REPLY TO THE SAID APPLICATION WAS FILED BY THE COMPLAINANT DEPARTMENT, FOLLOWED BY REJOINDER BY TH E ACCUSED / APPLICANT. 8 2. THE PRESENT COMPLAINT CASE IS FILED U/S 276 C(L) READ WITH SECTION 277 OF INCOME TAX ACT, 1961 FOR THE ALLEGED VIOLATION MADE BY THE ACCUSED DURING THE ASSESSMENT YEAR 2007 -2008. IT IS ALLEGED IN THE COMPLAINT THAT AN INFORMATION WAS RE CEIVED FROM GOVERNMENT OF FRANCE UNDER THE DOUBLE TAXATION AVOI DANCE CONVENTION (DTAC) THAT THE ACCUSED IS A BENEFICIARY IN BANK ACCOUNT WITH HSBC GENEVA, BUP_SIFIC_PER_ID XXXXXX55 82 WHICH IS HAVING PERSONAL I.D NO.XX813, PERSONAL NO. XXX482 HAVING A PEAK CREDIT BALANCE OF USD $ 40,842 (18,58,311/- F OR ASSESSMENT YEAR 2007-08, TAKING PREVAILING EXCHANGE RATE @ OF 45.50 I.E. AVERAGE RATE FOR FINANCIAL YEAR 2006-200 7. IT IS STATED THAT THE COPY OF INFORMATION RECEIVED SHOWED THE DA TE OF BIRTH AND THE RESIDENTIAL ADDRESS OF THE ACCUSED. 3. IT IS STATED THAT AFTER RECEIPT OF THE INFORMATI ON, ON 23.08.2011 A SEARCH WAS CONDUCTED AT THE PREMISES O F THE ACCUSED WHEREIN HE WAS CONFRONTED WITH THE INFORMATION REGA RDING THE UNDISCLOSED FOREIGN BANK ACCOUNT. IT IS STATED THAT THE ACCUSED AGREED TO PAY THE TAX ON THE AMOUNT REFLECTED IN TH E UNDISCLOSED BANK ACCOUNT, BUT STATED THAT HE HAS NO KNOWLEDGE O F THE SAID BANK ACCOUNT AS HIS DECEASED WIFE LATE SMT. SUDESH MADHO K WAS MANAGING THE BUSINESS AS PROPRIETOR OF M/S INDIAN A RT-WARES CORPORATION SINCE 1970 TILL HER DEATH IN THE YEAR 2005. 4. XXX 5. XXX 9 6. IT IS ARGUED BY LD. DEFENCE COUNSEL THAT THE PRE SENT COMPLAINT IS LODGED ON ME BASIS OF INFORMATION RECE IVED IN PEN DRIVE FROM FRENCH AUTHORITIES. IT IS ARGUED THAT LETTER D ATED 28.06.2011 (PAGE 47-48) RECEIVED FROM FRENCH GOVERNMENT, THE I NFORMATION SHARED WAS SUPPOSED TO BE KEPT SECRET AND CANNOT BE UTILIZED FOR ANY OTHER FISCAL (TAXATION) ENDS (PURPOSES). IT IS ARGUED THAT THE DATA RECEIVED FROM THE FRENCH GOVERNMENT COULD HAVE BEEN ONLY USED FOR TAXATION PURPOSES AND NOT FOR LAUNCHING PR OSECUTION. IT IS FURTHER ARGUED THAT THE DATA IN THE PEN DRIVE DOES NOT SATISFY THE CRITERION LAID DOWN IN SECTION 76 AND SECTION 78 (6 ) OF THE INDIAN EVIDENCE ACT. IT IS SUBMITTED THAT FROM THE ADMITTE D RECORD, IT IS CLEAR THAT NEITHER THE FRENCH GOVERNMENT CLARIFIED ABOUT THE SOURCE OF DATA AND NOR THEY WERE IN POSSESSION OF T HE ORIGINALS. LD. DEFENCE COUNSEL FURTHER ARGUED THAT THE RECORD IS N OT CERTIFIED BY THE BANK WHO WAS THE LEGAL KEEPER OF THE RECORD. IT IS SUBMITTED THAT THE DATA IS NOT ON THE LETTER HEAD OF THE BANK AND NOR CERTIFIED BY THE BANK AND CANNOT AND THEREFORE CANN OT BE RELIED UPON. HE SUBMITS THAT THE PROSECUTION HAS FAILED TO PROVE THE AUTHENTICITY OF THE INFORMATION AND NO INVESTIGATIO N IS DONE TO CROSS CHECK FROM THE BANK ABOUT THE AUTHENTICITY OF THE DETAILS. HE SUBMITS THAT NO BANK ACCOUNT OPENING FORM IS PRO CURED OR PLACED ON RECORD. THE AGENT MENTIONED IN THE SHARED DATA IS ALSO NOT EXAMINED DURING INVESTIGATION TO :ES: THE VERAC ITY OF INFORMATION. IN RESPECT OF THE STATEMENT U/S 132 (4 ) OF THE INCOME TAX ACT, IT IS ARGUED THAT, IT WAS RECORDED UNDER DURESS AND WAS RETRACTED BY THE ACCUSED. IT IS SUBMITTED T HAT THE ASSESSMENT PROCEEDINGS ALSO RECORD THE FACT OF RETR ACTION AND SUCH STATEMENT IN THE ABSENCE OF ANY OTHER CONCRETE EVIDENCE 10 CANNOT BE MADE SOLE GROUND TO PROSECUTE THE ACCUSED . 7. ON THE OTHER HAND, LD. SPP SUBMITS THAT ACCUSED HAS ADMITTED THE FACT OF OPENING BANK ACCOUNT IN HIS ST ATEMENT U/S 132 (4) OF THE INCOME TAX ACT. HE SUBMITS THAT ACCUSED HAS ADMITTED FILING THE REQUISITE FORM FOR OPENING OF BANK ACCOU NT AND HE HAS ALSO MENTIONED THE NAME OF THE AGENT IN HIS STATEME NT. THOUGH, DURING ARGUMENTS LD. SPP CONCEDED THAT NO INQUIRY W AS MADE FROM THE SAID AGENT AND NO INQUIRY WAS MADE FROM THE BAN K IN QUESTION TO OBTAIN THE ACCOUNT OPENING FORM OR TO CORROBORATE A ND AUTHENTICATE THE DATA RECEIVED IN THE PEN DRIVE FRO M FRENCH AUTHORITIES. HE SUBMITS THAT AS PER ARTICLE 28 OF T HE CONVENTION THE DATA CAN BE USED FOR THE PURPOSE OF PROSECUTION . HE SUBMITS THAT CERTIFICATE U/S 65 B OF THE INDIAN EVIDENCE AC T, 1872 IS GIVEN IN SUPPORT OF DATA TO ESTABLISH ITS AUTHENTICITY. H E OPPOSES THE APPLICATION. 8. XXX 9. BEFORE PROCEEDING FURTHER TO ADDRESS THE OTHER C ONTENTIONS, IT WILL BE PRUDENT TO DECIDE THE CONTENTION RAISED BY THE LD. DEFENCE COUNSEL THAT THE DATA RECEIVED BY THE INCOM E TAX AUTHORITIES FROM THE FRENCH GOVERNMENT UNDER DOUBLE TAXATION AVOIDANCE CONVENTION (DTAC), CANNOT BE USED FOR THE PURPOSES OF PROSECUTION. IN THIS REGARD LD. SPP HAS POINTED OUT CIRCULAR NO. F- 414/88/2011-IT(INV.I)(PT)/08 DATED 01.06.2015 ISSUE D BY MINISTRY OF FINANCE WHICH IS FILED BY THE COMPLAINANT ON REC ORD. IN PARA 7, IT IS CLARIFIED THAT THE INFORMATION OBTAINED UNDER AR TICLE 28 OF THE 11 DTAC CAN BE USED FOR THE PURPOSES OF THE PROSECUTIO N. ARTICLE 28 OF THE DTAC ALSO CLARIFIES THAT THE INFORMATION CAN BE USED FOR ENFORCEMENT OR PROSECUTION. THEREFORE, I DO NOT FIN D ANY MERITS IN THE CONTENTIONS RAISED BY THE ACCUSED THAT PROSECUT ION CANNOT BE LAUNCHED ON THE BASIS OF THE DATA RECEIVED FROM THE FRENCH GOVERNMENT UNDER DTAC AND THE CONTENTION IS HEREBY REJECTED. 10. THE ASSESSMENT ORDER DT.09.03.2015 EX. CW-L/K IN THE PRESENT CASE ASSESSED THE UNDISCLOSED DEPOSITS IN T HE HSBC BANK AT THE VALUE OF ?. 1888,311 /-. THE SAID ASSESSMENT WAS ARRIVED ON THE BASIS OF THE INFORMATION RECEIVED FROM THE FREN CH AUTHORITIES UNDER THE DOUBLE TAXATION AVOIDANCE CONVENTION (DTA C) AND ON THE BASIS OF STATEMENT U/S 132 (4) OF THE INCOME TA X ACT OF THE ACCUSED. THE SANCTION TO PROSECUTE IN PRESENT CASE WAS GRANTED VIDE ORDER DATED 05.11.2015 EX CW1/B. THE RELEVANT PORTION OF THE SANCTION ORDER U/S 279 (1) OF THE INCOME TAX ACT EX . CW-L/B REPRODUCED HEREIN TO HAVE CLARITY REGARDING THE PRE MISES OF PROSECUTION: '6. AND WHEREAS INFORMATION WAS RECEIVED FROM THE GOVERNMENT OF FRANCE IN 2011 UNDER DOUBLE TAX AVOID ANCE CONVENTION WITH INDIA WHICH REVEALED THAT CERTAIN I NDIANS, INCLUDING THE ACCUSED, HELD OR WERE BENEFICIAL OWNE RS OF BANK ACCOUNTS WITH HSBC, GENEVA, SWITZERLAND. THE ACCUSE D WAS PROVIDED WITH COPY OF THE INFORMATION OBTAINED UNDE R EXCHANGE OF INFORMATION MECHANSIM THROUGH DTAC, WHI CH WAS NOT REBUTTED BY HIM. THE DOCUMENT CONTAINED THE 12 PERSONAL INFORMATION OF THE ACCUSED VIZ HIS NAME, A DDRESS, NATIONALITY, DATE OF BIRTH, PLACE OF BIRTH, PROFESS ION, PLACE OF OFFICE, PASSPORT NUMBER ETC, WHICH HAS NOT BEEN DIS PUTED BY HIM. THE DOCUMENT ALSO CONTAINED THE NAME OF OTHER PERSON LINKED / RELATED TO THE CLIENT VIZ 'AG HABCONSULT', 'SUDESH MADHOK' AND 'KANIKA MADHOK'. THE INFORMATION RECEIV ED CONTAINED MONTHLY BALANCES OF FIDUCIARY DEPOSITS, L IQUID ASSESTS AND WARRANTS IN THE FOREIGN BANK ACCOUNT. T HE ASSESSING OFFICER HAD TAKEN THE PEAK CREDIT BALANCE S AVAILABLE IN THE ACCOUNT AND ACCORDINGLY HAD MADE A DDITION OF T. 18,58,311/- AND ALSO ADDITION OF T.73,074/- BEIN G INTEREST ACCRUED DURING THE YEAR ON THE BALANCE IN THE FOREI GN BANK ACCOUNT (IN TERMS OF INDIAN CURRENCY). 7. AND WHEREAS THE AUTHENTICITY OF THE INFORMATION RECEIVED UNDER EXCHANGE OF INFORMATION MECHANASIM THROUGH DT AC IS NOT UNDER DISPUTE AND THE STATEMENT OF ACCUSED M ADE DURING THE SEARCH IS ALSO FOUND TO BE MADE VOLUNTAR ILY. IF THE STATEMENT HAD BEEN UNDER DURESS THE ACCUSED WOULD N OT HAVE SHOWN A SUM OF .2,23,68,000/- AS OTHER INCOME IN THE RETURN FOR ASSESSMENT YEAR 2007-2008 AND DEPOSITED THE TAX THEREON. THE ASSESSEE, HOWEVER, DID NOT SIGN TH E CONSENT WAIVER FORM AND DENIED HAVING FOREIGN BANK ACCOUNT IN THE COURSE OF ASSESSMENT PROCEEDING. THE BASIS OF THE N OTICES ISSUED U/S 279 OF THE INCOME TAX ACT WAS NOT ONLY THE STATEMENT OF THE ASSESSEE RECORDED DUMNG THE SEARCH , AS CONTENDED BY THE ACCUSED, BUT ALSO THE EVIDENCES, 13 DOCUMENTS AVAILABLE WITH THE DEPARTMENT. THEREFORE, THE PLEA OF THE ASSESSEE NOT TO LAUNCH THE PROSECUTION PROCEEDING IS REJECTED. 11. THE FIRST LIMB OF THE SANCTION PERTAINS TO THE ALLEGED ADMISSION MADE BY THE ACCUSED IN HIS STATEMENT U/S 132(4) INCOME TAX ACT, 1961. SO FAR AS THE QUESTION OF THE ADMISS IONS MADE BY THE ACCUSED IN HIS STATEMENT U/S 132 (4), OF THE IN COME TAX ACT ARE CONCERNED, THE FACTS SHOW THAT DURING INVESTIGA TION THE ACCUSED HAD ALREADY RETRACTED FROM HIS STATEMENT. T HE PARA 4 OF THE COMPLAINT RECORDS THAT ACCUSED STATED THAT HE H AS NO KNOWLEDGE OF THE SAID BANK ACCOUNT. THE ASSESSMENT ORDER DT.05.11.2015 EX.CW-L/B IN PARA 6.1 ALSO RECORD THA T ACCUSED HAS STATED THAT HE HAS NO KNOWLEDGE OF FOREIGN ACCOUNT AND HIS DECEASED WIFE WAS MANAGING THE AFFAIRS. HE STATED T HAT HE HAS NO KNOWLEDGE AS TO WHY, WHEN AND HOW THE ALLEGED ACCOU NTS WERE OPENED AND THE TRANSACTIONS REFLECTED IN THOSE ACCO UNTS WERE CARRIED OUT BY WHOM. HE STATED THAT HE HAS NEVER CO NTACTED OR INSTRUCTED ANY CONSULTANT TO EITHER OPEN OR DEAL WI TH THE SAID ACCOUNT. IN THE LETTER DATED 03.07.2013 WRITTEN BY THE ACCUSED TO THE DEPUTY DIRECTOR INCOME TAX (INV.) ALSO THE ACCU SED STATED THAT HE IS NOT AWARE ABOUT ANY BANK ACCOUNT AS THE BUSINESS WAS LOOKED AFTER BY HIS DECEASED WIFE. IN LETTER DATED 05.08.2013 WRITTEN TO ASSISTANCE COMMISSIONER INCOME TAX THE A CCUSED ALSO REITERATED THAT HE HAS NO KNOWLEDGE ABOUT THE BANK ACCOUNT IN QUESTION AND ONLY TO BUY PEACE AND TO AVOID PROTECT ED LITIGATION HE HAS DEPOSITED THE TAX. EVEN IN THE STATEMENT U/S 13 2(4) OF THE 14 INCOME TAX ACT, THE ACCUSED IN ANSWER TO QUESTION N O. 25 STATED THAT HE IS DEPOSITING THE TAX IN ORDER TO BUY PEACE AND UNDER THE CONDITION THAT NO PENALTY/PROSECUTION MAY BE LAUNCH ED AGAINST HIM. 12. FROM THE AFORESAID ADMITTED MATERIAL ON RECORD, IT IS CLEAR THAT THE ALLEGED ADMISSIONS IN THE STATEMENT U/S 13 2 (4) OF THE INCOME TAX ACT EX. CW-L/G WEIV RETRACTED AND WERE N OT UNEQUIVOCAL. IT IS APPARENT THAT THE STATEMENTS WE RE MADE UNDER THE BELIEF THAT NO FURTHER HARASSMENT WILL BE CAUSE D TO THE ACCUSED AS HE WANTED TO EARN PEACE. IN THE CASE OF SIR SHADI LAI SUGAR & GENERAL MILLS LTD V. COMMISSIONER OF INCOME TAX, AIR 198~ SC 2008 IT WAS HELD THAT MERELY BECAUSE AN AMOUNT HAS OFFERED AS TAX DOES NOT MEAN THAT THE PERSON HAS ADMITTED THAT SUCH AMOUNT BELONGS TO HIM. THE RELEVANT PORTION IS REPRODUCED BELOW: '16 ............. FROM AGREEING TO ADDITIONS IT DOES NOT FOLLOW THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED. THERE MAY BE HUNDRED ANCL ONE REASONS FOR SUCH ADMISSIONS I.E. W HEN THE ASSESSEE REALISES THE TRUE POSITION IT DOES NOT DIS PUTE CERTAIN DISALLOWANCES BUT THAT DOES NOT ABSOLVE THE REVENUE TO PROVE THE MENS REA OF QUASI-CRIMINAL OFFENCE IT IS FOR THE INCOME TAX AUTHORITY TO PROVE THAT A PARTICULAR RECEIPT IS TAX ABLE. IF, HOWEVER, THE RECEIPT IS ACCEPTED AND CERTAIN AMOUNT IS ACCEP TED AS TAXABLE, IT COULD BE ADDED BUT IT WAS NOT ACCEPTED BY THE AS SESSEE, HOWEVER, THAT IT HAD DELIBERATELY FURNISHED INACCUR ATE PARTICULARS OR CONCEALED ANY INCOME....' 15 13. XXX 14. XXX 15. THE OTHER LIMB OF THE SANCTION ORDER IS BASED O N THE INFORMATION OBTAINED BY THE COMPLAINANT DEPARTMENT FROM THE FRENCH GOVERNMENT UNDER ARTICLE 2#'OF THE DTAC. IT IS THE ADMITTED POSITION THAT THE DATA FROM THE FRENCH GOV ERNMENT WAS RECEIVED IN THE FORM OF PEN DRIVE (PAGE 47). LETTER DATED 03.07.2015 EX. CW-L/E (PAGE-11) CLARIFIES THAT PRIN T FROM THE CONTENTS WERE TAKEN AND HANDED OVER TO THE DGIT (IN V.) FOR FURTHER INVESTIGATION. THE COPY OF THE PRINTOUTS OF DATA HAS BEEN PLACED ON RECORD (PAGE 83 TO 92). 16. A BARE PERUSAL OF THE SAID PRINTOUTS SHOWS THAT THEY ARE NOT ON THE LETTER HEAD OF ANY BANK. THE INFORMATION IS PRINTED ON PLAIN PAPER. PART OF THE INFORMATION IS WRITTEN IN FOREIG N LANGUAGE AND PART OF THE INFORMATION IS WRITTEN IN ENGLISH. THE TRANSLATED COPY OF THE BANK RECORD IS NOT FILED BEFORE THE COURT. P ERUSAL OF THE DOCUMENTS SHOWS THAT THOUGH IT MENTIONS ABOUT THE N AME, ADDRESS, ACCOUNT NUMBER ETC BUT THE NAME OF THE BANK IS ALSO NOT CLEAR. THE RECORD IS NOT CERTIFIED BY THE BANK IN QUESTION OR THE LEGAL KEEPER. THE RECORD IS ALSO NOT CERTIFIED BY ANY OTHER AUTHO RITY AS PER SECTION 78(6) INDIAN EVIDENCE ACT, 1872. THE RECORD WAS RECEIVED VIDE LETTER DATED 28.06.2011 FROM THE FRENCH GOVERN MENT (PAGE NO. 47 AND 48). THE SAID LETTER DOES NOT CLARIFIES ABOUT THE SOURCE FROM WHICH THE FRENCH GOVERNMENT HAS OBTAINED THIS DATA. IT ALSO D OES NOT CLARIFY 16 WHETHER THE FRENCH GOVERNMENT IS IN POSSESSION OF O RIGINAL RECORD OR WHETHER THE FRENCH GOVERNMENT HAS GOT THE SAME V ERIFIED FROM THE BANK CONCERNED. IN OTHER WORDS, THE PRINTOUTS T HOUGH CONTAIN THE DETAILS OF THE BANK ACCOUNT, BUT THE DATA IS NO T VERIFIED FROM THE BANK CONCERNED. DURING THE STAGE OF ARGUMENTS, LD. SPECIAL PUBLIC PROSECUTOR CONCEDED THAT NO INQUIRY WAS MADE BY THE COMPLAINANT DEPARTMENT FROM THE CONCERNED BANK TO C ROSS CHECK THE AUTHENTICITY OF THE BANK ACCOUNT DATA IN QUESTI ON. HE ALSO ADMITTED THAT THE AGENT 'HABCONSULT AG WAS ALSO NO T JOINED IN THE INVESTIGATION AND NO INQUIRY WAS MADE FROM IT T O VERIFY THE AUTHENTICITY OF THE BANK ACCOUNT IN QUESTION. 17. NOTHING HAS BEEN PLACED ON RECORD TO SHOW THAT IT WAS ACCUSED WHO WAS OPERATING THE BANK ACCOUNT IN QUEST ION. NO BANK STATEMENT OF THE ACCUSED IS, SEIZED TO PROVE THE TR ANSACTIONS DONE IN THE SAID BANK ACCOUNT. NO REMITTANCE OR WITHDRAW AL IN FAVOR OF THE ACCUSED IS SHOWN ON RECORD TO LINK THE ACCUSED WITH THE BANK ACCOUNTS IN QUESTION. THE INVESTIGATION IN THIS REG ARD IS DONE TOTALLY IN CASUAL MANNER AND NO ATTEMPT WAS MADE BY THE COM PLAINANT DEPARTMENT TO VERIFY THE AUTHENTICITY OF THE DATA F ROM THE BANK IN QUESTION. NO ATTEMPT WAS MADE TO OBTAIN THE BANK AC COUNT OPENING FORM AND THE KYC DOCUMENTS, IF ANY, SUBMITTED AT TH E TIME OF OPENING OF BANK ACCOUNT. I AM AFRAID THAT IN THE AB SENCE OF THE AFORESAID INVESTIGATION THERE IS NOTHING ON RECORD TO CONNECT THE ACCUSED WITH THE BANK ACCOUNTS IN QUESTION. 18. XXX 17 19. XXX 20. XXX 21. XXX 22. XXX 23. FROM THE FACTS, IN HAND IT IS CLEAR THAT THE CO MPLAINANT DEPARTMENT HAS FAILED TO BRING ON RECORD ANY EVIDEN CE TO SHOW THAT THE DATA IN QUESTION IS AUTHENTICATED AND CERTIFIED . NO EFFORTS HAVE BEEN MADE DURING THE INVESTIGATION TO VERIFY T HE SAID DATA FROM THE CONCERNED BANK. NO ACCOUNT OPENING FORMS H AVE BEEN OBTAINED. NO TRANSACTION BY THE ACCUSED IN THE ACCO UNTS HAVE BEEN PROVED. THEREFORE, IT IS PATENTLY CLEAR THAT THE PR OSECUTION HAS FAILED TO PROVE THE FOUNDATIONAL FACTS AND THEREFOR E THE QUESTION ATTRACTING THE PRESUMPTION DOES NOT LIE. 24. XXX 25. XXX 26. IN THE PRESENT CASE THE PROSECUTION HAS FAILED TO SATISFY SAID INGREDIENTS. THE PROSECUTION IS LAUNCHED ON T HE BASIS OF RETRACTED ADMISSIONS. THE DATA OBTAINED FROM FRENCH AUTHORITIES IS NOT CERTIFIED AS PER SECTION 78 (6) OF THE INDIA N EVIDENCE ACT. NEITHER THE INDIAN AUTHORITIES NOR THE FRENCH AUTHO RITIES VERIFIED THE DATA FROM THE BANK IN QUESTION. NO BANK ACCOUNT OPENING FORM AND KYC DOCUMENTS IS OBTAINED DURING INVESTIGATION. NO TRANSACTION FROM THE ACCOUNT OF ACCUSED TO THE FOREIGN ACCOUNT IS SHOWN. PROSECUTION HAS FAILED TO SHOW ANY LINK OF THE ACCUSED WITH THE SAID BANK ACCOUNT. EVEN IN THE CASE OF PROSECUTION PROCEEDS FURTHER ON THE BASIS OF ADMITTED DOCUMENTS ON RECOR D, ACCUSED 18 CANNOT BE CONVICTED MERELY ON THE BASIS OF UNAUTHEN TICATED AND UNVERIFIED PRINTOUTS OBTAINED FROM THIRD PARTY. THE SAID DOCUMENTS MAY CREATE SUSPICION AGAINST THE ACCUSED BUT ARE NO T SUFFICIENT TO PROCEED FURTHER BY FRAMING OF CHARGE AND TO FORCE T HE ACCUSED TO FACE ORDEAL OF CRIMINAL TRIAL. IN THESE CIRCUMSTANC ES, THE AFORESAID ANALYSIS OF TESTIMONIES OF WITNESSES CONSIDERING TH E DOCUMENTS AVAILABLE ON RECORD, IT IS CLEAR THAT THE COMPLAINA NT UNABLE TO MAKE OUT THE CASE AND THE ACCUSED IS DISCHARGED FOR THE OFFENCES U/S 276C(1) AND SECTION 277 INCOME TAX ACT, 1961. 19. IN LIGHT OF THE ABOVE JUDGEMENT, WE WILL NOW CO NSIDER THE SUBMISSIONS MADE BY THE RIVAL PARTIES. 20. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THA T NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THEREFORE, THE RATIO LAID DOWN BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF MEETA GUTGUTIA 395 ITR 526, KABUL CHAWLA 380 ITR 573, AN IL BHATIA 211 TAXMAN.COM 453 AND OF THE HON'BLE SUPREME COURT IN THE CASE OF SINGHAD TECHNICAL EDUCATION SOCIETY 397 ITR 344 SQU ARELY APPLY. 21. REBUTTING TO THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, THE LD. DR STATED THAT THE HON'BLE KERALA HIGH COUR T IN THE CASE OF SAINT FRANCIS CLAY DCOR TILES 70 TAXMAN.COM 234 HA S HELD THAT 19 NEITHER UNDER SECTION 132 OR UNDER SECTION 153A, T HE PHRASEOLOGY INCRIMINATING IS USED BY THE PARLIAMENT. THEREFOR E, ANY MATERIAL UNEARTHED DURING THE COURSE OF SEARCH PROCEEDINGS O R ANY STATEMENT MADE DURING THE COURSE OF SEARCH BY THE ASSESSEE IS A VALUABLE PIECE OF EVIDENCE IN ORDER TO INVOKE SECTION 153A OF THE ACT . 22. THE LD. DR FURTHER STATED THAT IN HIS STATEMENT ON OATH, THE ASSESSEE VOLUNTARILY ACCEPTED THAT HE HAD AN ACCOUN T WITH HSBC BANK, SWITZERLAND AND THEREFORE, THIS STATEMENT WAS INCRI MINATING DOCUMENT AND FURTHER BUTTRESSED HER SUBMISSIONS BY THE DECIS ION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF RENU THARANI 117 TAXMA NN.COM 804 AND MOHAN MANOJ DHUPELIA 52 TAX MANN.COM . 23. ALL THE AVERMENTS RAISED BY THE LD DR HAVE BEEN DULY ANSWERED BY THE ADDITIONAL CHIEF METROPOLITAN MAGISTRATE IN HIS JUDGEMENT [SUPRA]. 24. BE THAT AS IT MAY, THE QUESTION WHICH NEEDS TO BE HIGHLIGHTED IS THAT EVEN ASSUMING THAT THE STATEMENT OF THE ASSESS EE IS PARAMOUNT AND SACROSANCT, THEN THERE IS NO DENIAL BY THE REVE NUE AUTHORITIES THAT THE ASSESSEE HAS HONOURED HIS STATEMENT AND OFFERED RS.2,23,68,000/ 20 IN HIS RETURN OF INCOME FOR A.Y 200708 AND HAS PAI D TAXES THEREON. IN ALL HIS SUBMISSIONS MADE DURING THE COURSE OF ASSES SMENT PROCEEDINGS AND HIGHLIGHTED BY US ELSEWHERE, THE ASSESSEE WAS C ONSTANTLY STATING THAT THIS PEAK CREDIT WAS CALCULATED BY THE TAX AUT HORITIES AND AT THE BEHEST OF THE TAX AUTHORITIES THE ASSESSEE OFFERED THE SAME IN HIS INCOME FOR A.Y 200708 AND PAID TAXES THEREON. 25. NOWHERE THE ASSESSING OFFICER HAS DEMOLISHED TH IS CLAIM OF THE ASSESSEE WHICH MEANS THAT THE ASSESSING OFFICER HAS INHERENTLY ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE DI SCLOSURE WAS AT THE BEHEST OF THE TAX AUTHORITIES AND CALCULATION OF PE AK CREDIT WAS ALSO AT THE BEHEST OF THE TAX AUTHORITIES. 26. WE HAVE CAREFULLY EXAMINED THE COMPUTATION OF I NCOME FOR A.Y 200708 AND UNDER THE HEAD INCOME FROM OTHER SOURC ES AT ITEM L OTHER INCOME, THE ASSESSEE HAS SHOWN INCOME OF RS . 2,23,68,007/. ONCE THE ASSESSEE HAS RETURNED THE UNDISCLOSED INCO ME AND PAID TAXES THEREON, IN OUR CONSIDERED OPINION, THERE SHOULD NO T BE ANY QUARREL TO BIFURCATE THE DISCLOSED AMOUNT IN TWO A.YS WHEN TAX RATE IN BOTH THE A.YS IS THE SAME AND THERE IS NO LOSS TO THE REVENU E. WE ARE OF THE 21 CONSIDERED VIEW THAT THE REVENUE AUTHORITIES SHOULD DESIST FROM SUCH LITIGATION. 27. CONSIDERING THE FACTS OF THE CASE IN TOTALITY, AS DISCUSSED HEREINABOVE, AS CULLED OUT FROM THE RECORDS, AND TH E RELEVANT DOCUMENTARY EVIDENCES, WE DO NOT FIND ANY MERIT IN BIFURCATING THE INCOME IN TWO A.YS WHEN THE ASSESSEE HAS PAID TAXES IN A.Y 200708. MAKING THE ADDITION OF SAME INCOME IN TWO A.YS DEFI NITELY AMOUNTS TO DOUBLE TAXATION. WE, ACCORDINGLY DIRECT THE ASSESSI NG OFFICER TO DELETE THE ADDITION IN A.Y. 2006.07 AMOUNTING TO RS. 2,05, 50, 550/ AND RS. 18,58,311.00 IN F.Y 200708 ALSO. ACCORDINGLY, THE APPEALS OF THE ASSESSEE IN ITA NOS. 6269 AND 6268/DEL/2017 ARE ALL OWED. 28. NOW WE WILL ADDRESS TO THE APPEALS OF THE REVEN UE. 29. IN ITA NO 6648/DELL/2017, THE REVENUE HAS RAISE D TWO ISSUES. ONE IS RELATING TO DELETION OF ADDITION OF RS.18,58,311 /- MADE BY THE ASSESSING OFFICER UNDER SECTION 69 OF THE ACT ON AC COUNT OF DIFFERENCE APPEARED IN PEAK BALANCES IN BANK ACCOUNT MAINTAINE D WITH HSBC, GENEVA AND SECOND GROUND RELATING TO DELETION OF AD DITION OF RS. 73,074/- MADE BY THE ASSESSING OFFICER ON ACCOUNT O F INTEREST ACCRUED 22 TO THE ASSESSEE ON BANK BALANCE IN HIS FOREIGN BANK ACCOUNT MAINTAINED WITH HSBC, GENEVA. 30. THE GRIEVANCE RAISED VIDE GROUND NO. 1 BECOMES OTIOSE QUA OUR DECISION IN ITA NO 6268 AND 6269/DEL/2017. 31. ADDITION ON ACCOUNT OF INTEREST ACCRUED ON HSBC ACCOUNT, GENEVA IS COMMON IN ALL THE APPEALS OF THE REVENUE BEARING ITA NOS. 3917 TO 3921/DEL/2017, THOUGH THE QUANTUM OF AMOUNT MAY DIFFER. 32. THE SHORT ISSUE IS THAT IN ALL THESE APPEALS FO R THE REVENUE RELATING TO DIFFERENT A.YS, THE ASSESSING OFFICER W AS OF THE FIRM BELIEF THAT THE ASSESSEE MUST HAVE EARNED SOME INTEREST ON THE BALANCES IN HIS BANK ACCOUNT WITH HSBC, GENEVA. THE ASSESSING O FFICER ASSUMED THAT IN INDIA A SAVINGS BANK ACCOUNT HOLDER EARNS I NTEREST AT THE RATE OF 4%, THEREFORE, APPLYING THE SAME RATE, THE ASSESSIN G OFFICER MADE THE IMPUGNED ADDITION. 33. THE FIRST APPELLATE AUTHORITY IN ALL THE A.YS I N WHICH THE REVENUE IS IN APPEAL FOUND THAT THE ASSUMPTION MADE BY THE ASSESSING OFFICER IS BASELESS AND DELETED THE ADDITION. 23 34. BEFORE US, THE LEARNED DR STRONGLY SUPPORTED TH E FINDINGS OF THE ASSESSING OFFICER. 35. PER CONTRA, THE LEARNED COUNSEL FOR THE ASSESSE E RELIED UPON THE DECISION OF THE LD. CIT(A). 36. ON THE FACTS MENTIONED HEREINABOVE, WE ARE OF T HE CONSIDERED OPINION THAT THE ACTION OF THE ASSESSING OFFICER DE FIES THE TAXABILITY OF CONCEPT OF REAL INCOME. THE UNDISPUTED FACT IS THAT IN THE ALLEGED SHEETS OF BANK DEPOSITS RECEIVED FROM THE FRENCH GO VERNMENT UNDER DTAC, THERE IS NO MENTION OF ANY INTEREST PAID BY T HE BANK TO THE ASSESSEE. THEREFORE, IT IS ILLOGICAL TO COMPUTE INT EREST AND THAT TOO AT THE RATE PREVAILING IN INDIA. SINCE THERE IS NO DOC UMENTARY EVIDENCE TO SUPPORT THE PRESUMPTION OF THE ASSESSING OFFICER, W E DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A) 37. IN THE RESULT, ALL APPEALS BY THE REVENUE ARE A CCORDINGLY DISMISSED. 24 38. TO SUM UP, IN THE RESULT, ITA NO. 3917/DEL/2017 REVENUE DISMISSED ITA NO. 3918/DEL/2017 REVENUE DISMISSED ITA NO. 3919/DEL/2017 REVENUE DISMISSED ITA NO. 3920/DEL/2017 REVENUE DISMISSED ITA NO. 3921/DEL/2017 REVENUE DISMISSED ITA NO.6648/DEL/2017 REVENUE DISMISSED ITA NO.6268/DEL/2017 ASSESSEE ALLOWED ITA NO.6269/DEL/2017 ASSESSEE ALLOWED THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.0 8.2021. SD/- SD/- [MAHAVIR PRASAD] [ N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03 RD AUGUST, 2021 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 25 DATE OF DICTATION ATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER