CHANDRIKA TAPURIAH, MUMBAI V. DCIT, CENTRAL CIRCLE-1(2), MUMBAI

ITA 543/MUM/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7331 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 03-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Loose papers; Document seized; Principle of natural justice; Documents seized; Reassessment proceedings
• Section: 148; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) “C” BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER ITA NOs. 542, 543, 544 & 545/MUM/2019 (A.Ys: 2001-02, 2002-03, 2001-02 & 2006-07) Chandrika Tapuriah 9, Rowdon Street Udyanchal Building Flat No. 20, 5 th Floor Kolkata, West Bengal-700017 PAN: ABPPT9474K v. DCIT – Central Circle – 1(2) Old. CGO Building Annexe M.K.Road, Mumbai - 400020 (Appellant) (Respondent) Assessee by : None Department by : Shri R.A. Dhyani Date of Hearing : 03.03.2022 Date of Pronouncement : 09.03.2022 O R D E R PER S. RIFAUR RAHMAN (AM) 1. These appeals are filed by the assessee against different orders of the Learned Commissioner of Income Tax (Appeals)-47, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 28.11.2018 for the A.Y. 2001-02, 2002-03 and 2006-07. 2 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah 2. Since the issues raised in all the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order. We are taking ITA.No. 542/Mum/2019 for Assessment Year 2001-02 as a lead case. 3. Assessee has raised following grounds in its appeal: - “1. The Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 32,60,60,000/- on the grounds of alleged credit of 7 millions USD in foreign Bank account. 2. The Learned Commissioner of Income Tax (Appeals) failed to appreciate that the Learned Assessing officer had relied on incomplete investigation and had also failed to bring all evidences and findings of investigation on record and erred in not directing the Learned Assessing officer to obtain findings of investigations made by enforcement directorate having relied on the information provided by said department. 3. The appellant prays that:- i) The department may be directed to produce and bring on record all the findings of investigation made by Income tax department and enforcement directorate. ii) Addition of Rs. 32,60,60,000/on the ground of alleged credit in bank account may be deleted. iii) Any other relief your honours may deem fit. 4. The Appellant Craves leave to add, alter, amend or delete any of the above grounds of appeal.” 4. We observed from the record that the hearing was posted since 27.10.2020, none appeared on behalf of the assessee until today except on 28.07.2021 a letter was filed for adjournment. The hearing was posted 3 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah 13 times and none appeared. We deem it fit and proper to proceed to dispose off these appeal as it is pending from 2019. The notice sent to the assessee has been duly served as is evident from the acknowledgement available on record. Since the assessee has not appeared in spite of the several notices, it seems that the assessee is not interested in prosecuting the appeal. Therefore, we decided to dispose off these appeals on merits after hearing the Ld.DR and examining the material on record. 5. Ld. DR briefly explained the facts and supported the orders of the lower authorities. 6. Heard Ld. DR and perused the material placed on record, orders of the authorities below. On perusal of the order of the Ld.CIT(A), we find that the Ld.CIT(A) considered this aspect of the matter elaborately with reference to the submissions of the assessee and the averments in the Assessment Order and sustained the addition made by the Assessing Officer. While holding so, the Ld.CIT(A) observed as under: - “10.3. Thus, as per the information received from the Enforcement Directorate, the appellant had received an amount of USD 7 Million in her A/c No. 18-2203316-01 maintained with Standard Chartered Bank, Dubai. As per the document received from the Enforcement Directorate, the transaction of USD 7 million is dated March 12, 2001. Thus, the transaction relating to transfer of 4 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah money clearly falls under the AY. 2001-02, which is the current assessment year, under consideration. 10.4 After examining in details the "Transfer Instruction" provided by the Enforcement Directorate, I am of the considered opinion that this is a speaking document and can't be considered as dumb documents by any. stretch of imagination. All the ingredients/components for levying taxation are clearly decipherable from the document either on standalone basis or in association with other documents. The components which enter into the concept of taxation are first, the transaction/events which attract the levy, second, the person on whom the levy is imposed and who is obliged to pay the tax, third, the assessment year in which charge of income- tax is levied, fourth, whether any taxable income arises from the transaction recorded in the document and fifth, the rate or rates at which tax is to be imposed. [Refer- ACIT v. SaiapalWassan (2007) 295 ITR (A.T.) 352 (Jbl)] The rates are prescribed in the annual Finance Act and, therefore, this component has no value in determining the total income arising from a seized document. Thus, the other four elements are relevant and in the present case all the four are easily discernible from the seized document. 10.5 Thus, for affixing the tax liability on the basis of seized documents, the following four ingredients are required to be established on a reasonable basis:- (i) Name of the assessee, (ii) Nature of transaction, (iii) Quantum involved (iv) Period of transaction. ..... 10.9 I have noted that in the original assessment proceedings conducted by the Assessing Officer, the appellant had denied the above mentioned transaction and had stated that she is not aware about this transaction. Further, the appellant had contended that she does not have any such account in her name. In view of the fact that the denials of the Appellant were unsubstantiated, the Assessing Officer held that the Appellant had not explained the entry of USD 7 Million. Accordingly, the AO had made an addition of Rs. 32,60,60,000/- (USD 7,000,000" Rs. 46.58 per USD). ..... 5 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah 10.11 I am constrained to note that before the passing of the original assessment order on 31 st December, 2008, the then Assessing Officer has, vide letter dated 19 th December, 2008 given to the appellant the copies of the incriminating documents, which had been forwarded by the Enforcement Directorate. It is also pertinent to note that the same incriminating document is enclosed as Annexure A-14 to the assessment order. Thus, the Appellant had been duly confronted with the adverse material available with the Assessing Officer and hence I have noted that there is no violation of principles of natural justice. 10.12 As regards the claim of the Appellant that she never had any account with Standard Chartered Bank, Dubai is concerned, I am constrained to note that the Appellant had accepted the ownership of the said A/c No. 18220331601 of Standard Chartered Bank, Dubai vide letter dated 13 th March, 2011 addressed to ACIT, CC-2, Mumbai, during the course of the reassessment proceedings under Section 148 in the case of Shri Kashinath Tapuriah, the husband of the appellant. In the said letter dated 13 th December, 2011, Late Shri Kashinath Tapuriah and the appellant had clearly admitted that the bank A/c. No. 18-2203316-01 of Standard Chartered Bank, Dubai belongs to Mrs. Chandrika Tapuriah, the Appellant. The tabular data containing the details of the foreign bank accounts owned and admitted by the Appellant and her husband in the year 2011, being important is reproduced hereunder: - Sr. No Bank detail Account No. Accepted or not belonging to me Belongs to Transaction during the FY. 2003- 04 Remark 1 UBS, Zurich 760001 Accepted Kashinath Tapuriah No transaction in F.Y.2003-04 The Account was opened in year 1986 and was closed in the year 2000. 2 Standard Chartered Bank, Sahrjah 18- 5748968- 01 Accepted Kashinath Tapuriah No Transaction in F.Y. 2003-04 The account was opened in the year 2000-01 but it was never operative. 6 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah Sr. No Bank detail Account No. Accepted or not belonging to me Belongs to Transaction during the FY. 2003- 04 Remark 3 Standard Chartered Bank, Sahrjah 18- 2203316- 01 Accepted Chandrik a Tapuriah No transaction in F. Y. 2003-04 The account was never operative. 4 Maerki Bauman, Driekonig strasse 88022 Zurich Konto 2905 (Sitaram) Accepted Kashinath Tapuriah No transaction in F. Y. 2003-04 The account was opened in 1960's 70's and was closed in 2000-01. 5 Credit Suisse, Paradeplatz, 8070 Zurich 0835- 337902-3 Accepted Kashinath Tapuriah No transaction in F. Y. 2003-04 The account opened in year 2003 but no transaction in any year and was automaticall y closed by the bank as there was no balance in the account 6. Credit Lyonnaise Bahanh of Strasse 3, Zurich 08- 06702.7 Accepted Kashinath Tapuriah No transaction in F.Y. 2003-04 No transaction in the account in any year. The account was closed in 2005. 7. Union Bancaire Privee, Zurich 713.169 Accepted Kashinath Tapuriah No transaction in F.Y. 2003-04 No transaction in the account in any year. 8. Bank Jullius Baer AG, Zurich A/c. No. not available I am not recalling having such account ...... 7 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah 10.16 I am constrained to note that the appellant had even after admitting the impugned bank account failed to produce the copies of the same for verification. There is a hollow claim of the appellant that the said bank account was not operative at all, as no documentary evidence in support of the said claim had been placed on record. Thus, the Appellant had been playing hide and seek with the Department and had miserably failed to adduce any evidence to rebut the transactions reflected in the "Transfer Instruction" provided by the Enforcement Directorate. 10.17 I have taken note of the fact that when the matter went to the Hon’ble ITAT in the original assessment proceedings, the Appellant had contended that the Bank A/c under reference does not belongs to her but to her husband, Late Shri Kashinath Tapuriah. In this regard, reference may be made to Para 8 on Page 17 of the order of the Hon'ble ITAT 'D Bench, Mumbai in the case of the appellant in ITA No. 3822 to 3828/MI10 for AY.s 2001-02 to 2007- 08. The relevant Para 8 being important, the same is reproduced hereunder:- "8. We have heard the parties, and perused the material on record. This is a Tranfer Instruction (TI) based addition, made and confirmed in the absence of the assessee furnishing any explanation qua the said transaction/s or even information as to the stated bank account. Similar additions stand made in the case of HAK, his wife, Rheema Hassan Ali Khan (RHAK), and KT, and for principally the same reasons. The Tribunal, in second appeal, found that the material on record clearly established the assessees to have business interests, including, as it appeared, joint, abroad, particularly at Switzerland, Dubai, Singapore and London (to which places frequent trips were also undertaken by them), as well as access to large, albeit unexplained, investible resources. The inescapable inference was of the same being held in such accounts, lockers, besides in Bonds (in which investment was envisaged to yield guaranteed, even if comparatively low, returns), and even projects/real estate properties, in which in fact both HAK and KT evinced considerable interest, making enquiries; holding meetings (with the prospective sellers) in which the officials of UBS AG, Zurich were also present. The notarized statement dated 30/6/2003 (at London) by HAK, 8 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah whereat KT was also present (forming part of the tribunal's order in the case of HAK dated 29/2/2016 for these years), wherein he admits to have opened his first account with UBS, Singapore in 1982, is relevant in this regard. The assessee and husband have also subsequently supplied a list of eight foreign bank accounts, of which the earliest dates back to 1960s. The transferee account specified in the impugned TI, finds mention therein. Though therefore the action of the Revenue cannot, in view thereof, be assailed in principle, yet, the matter, in all fairness, considering the totality of the facts and circumstances of the case, including the documents admitted in evidence and the facts and brought on record/to light, deserves a set aside to enable the assessee an opportunity to explain the transactions, establishing facts. Reference in this regard is also made to paras 9-12 and 6-7 in the case of HAK (supra) and KT (in ITA Nos.3815- 3821/Mum/2010) respectively (annexed as Annexure A to this order). We may though clarify that where the amount is not received (or to the extent it is not), the TI itself cannot be the sole basis of the addition, i.e., unless the Revenue has material to exhibit the assessee's right to the amount/s stated therein. Reference is also drawn to paras 15, 25, 30, 49, 65A and 106 or the order in the case of HAK (supra) -in public domain. The matter, as in the case of other assessees, is accordingly set aside to the file of the AO for fresh determination. All the facets of the issue, including the explanation of the transactions by the assessee, are kept open. This decides all TT- based additions in these appeals, viz. Gd. 5 for AYs 2002-03 and 2006- 07. We may, however, before concluding this aspect, add that qua some accounts, the assessee has stated that the bank account/s under reference does not belong to her but to her husband, KT and, therefore, no addition could be made in its respect in her hands. This contention shall be considered on merits qua each account, i.e., where made. In respect of the instant Ground, this plea cannot be accepted; the assessee herself admitting her account vide her letter dated 13/12/2611 (APB 6/pages 936 - 938)." ..... 9 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah 10.21 As far as the evidences provided by the Enforcement Directorate are concerned, the authenticity and correctness of the same cannot be doubted, as the source of such information is a Department of Govt. of India. In any case, the appellant had failed to provide any material evidence, which even prima-facie indicate that the information provided by the Enforcement Directorate is not correct. 10.22 There is material evidence on record to show that Shri Kashinath Tapuriah, husband of the appellant was working in close association and cooperation with Shri Hassan Ali Khan and others. This is evident from a large number of seized documents, which were found independently at two places, namely, the residence of the appellant at Kolkatta and the residence of Shri Hassan Ali Khan at Pune. The details of the documentary evidences indicating the close association amongst them is narrated, as under:- I. Page No. 18 of Annexure A-5 to Panchanama dated 05.01.2007 seized from Pune residence of Shri Hassan Ali Khan and page No. 22 of the Annexure A-7 dated 06/01/07 seized from the residence of Late Shri Kashinath Tapuriahis an agreement dated 07.08.2001 made- at Dubai, which clearly indicates their close business relationship, joint venture and the sharing of profits parked in offshore accounts. II. The loose papers seized from the residence of Late Shri. Kashinath Tapuriah, as per Annexure A-2 of Panchanama dated 06.01.2007 reveals about their frequent visits together to Europe and more particularly to Switzerland. The Annexure A-2, Page No. 35,4043,448'45 seized from the residence of Late Shri Tapuriah clearly reveals that tickets for foreign visits had been regularly booked through M/s. Travel Hub P. Ltd. These seized pages also proves that Late Shri Kashinath Tapuriah and Shri. Hassan Ali Khan had been travelling together regularly to Europe. III. As per Page 98 of Annexure A-1, seized from the residence of Late Shri. Kashinath Tapuriah at Kolkata, he had signed a power of attorney jointly with one Shri G.S. Gupta, as representative of Mis Robert Mclean and Co. Ltd., Kolkata 10 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah in favour of Mr. Hassan Ali Khan to deal with the property at 10-A, Prithviraj Road, New Delhi. IV. Seized Pages No. 68 to 70 of Annexure A-1 found from the possession of Late Shri. Kashinath Tapuriah at his residence are basically blank papers signed by Shri. Hassan All Khan. The signed blank papers of Shri Hassan Ali khan found from the residence of Late Shri. KashinathTapuriah clearly reveals that Shri Hassan Ali Khan had reposed full faith and confidence in Late Shri. KashinathTapuriah. V. A Loan agreement of Rs. 5 crores between Shri. Hassan All Khan, the lender and M/s. R.M. Consulting, a company of Shri. Kashinath Tapurlah, the borrower is evident from Page No. 71 to 94 of Annexure A-1, seized from the residence of Late Shri. Kashinath Tapuriah. ...... 10.37 At this juncture, it is also brought on record that the AO had taxed the right person i.e. the Appellant on the basis of the "Transfer Instruction" provided by the Enforcement Directorate. In the case of ITO Vs. Atchaiah, (1996) 1 SCC417, the Hon'ble Supreme Court has held that the right person and the right person alone has to be taxed by the LT. Authorities. The relevant observations in this regard are reproduced below:- "7. In our opinion, the contention urged by Dr Gauri Shankar merits acceptance. We are of the opinion that under the present Aa, the Income Tax Officer has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By "right person", we mean the person who is liable to be taxed, according to law, with respect to a particular income. The expression "wrong person" is obviously used as the opposite of the expression "right person". Merely because a wrong person is taxed with respect to a particular income, the Assessing Officer is not precluded from taking the right person with respect to that income. This is so irrespective of the fact which course is more beneficial to the Revenue. In our opinion, the language of the relevant provisions of the present Act is quite clear and unambiguous. Section 183 shows that where Parliament intended to provide an option, it provided so expressly. Where a person is taxed wrongfully, 11 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah he is no doubt entitled to be relieved of it in accordance with law but that is a different matter altogether. The person lawfully liable to be taxed can claim no immunity because the Assessing Officer (Income Tax Officer) has taxed the said income in the hands of another person contrary to law. We may proceed to elaborate." ....... 10.39 I am of the considered opinion that the information supplied by Enforcement Directorate is to be treated as genuine SE can be used by the AO for making an assessment. In large number of judicial pronouncements, the action taken by the AO on the basis of documents supplied by the Enforcement Directorate had been upheld. In the absence of any material on record to the contrary, the information supplied by the Enforcement Directorate, a Government of India Department is to be treated as highly reliable and authentic. Such sensitive information supplied by a premier investigating of Government of India needs to be taken at face value and the only exception can be if there is any contrary material on record. ...... 10.54 In view of the above detailed discussion and various judicial pronouncements, it is held that there is an unexplained & unaccounted deposit of USD 7 Million in the account of the appellant maintained with Standard Chartered Bank, Dubai for the year in consideration, on the basis of the information provided by the Enforcement Directorate. Hence, the addition made by the Assessing Officer amounting to Rs. 32,60,60,000/- is upheld. Accordingly, the Ground No. 1 of the present appeal is dismissed.” 7. On a careful perusal of the order of the Ld.CIT(A) and the reasons given therein, we do not find any reason to interfere especially when there is no material to controvert the findings of the First Appellate Authority. Accordingly, appeal filed by the assessee is dismissed. 12 ITA NOs. 542, 543, 544 & 545/MUM/2019 Chandrika Tapuriah 8. Since the facts in other appeals are identical, the decision taken in ITA.No. 542/Mum/2019 shall apply mutatis-mutandis to the other three appeals i.e. ITA.No. 543, 544 & 545/Mum/2019. We order accordingly. 9. In the result, appeals filed by the assessee are dismissed. Order pronounced in the open court on 09.03.2022. Sd/- Sd/- (VIKAS AWASTHY) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 09.03.2022 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum