SUNIL CHIMANLAL GANDHI, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-8(3) (ERSTWHILE ACIT CC-46), MUMBAI

ITA 7179/MUM/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2900 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYKUMAR G SUBRAMANIAN
• Assessee Lawyers: RAJESH SIMHAN; ASHISH SODHANI
• Keywords: Residential status; Search and seizure; Peak credit; Valuation report; Retraction; Set aside
• Section: 143(3); 142(1); 153A; 201; 143(2); 13; 22; 131; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , I BENCH MUMBAI BEFORE : SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI M.BALAGANESH, A CCOUNTANT M EMBER SR. NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 7179/MUM/ 2017 7180/MUM/2017 7181/MUM/2017 7182/MUM/2017 7183/MUM/2017 7222/MUM/2017 7223/MUM/2017 7224/MUM/2017 7225/MUM/2017 7226/MUM/2017 7227/MUM/2017 7228/MUM/2017 2006 - 07 200 7 - 0 8 200 6 - 0 7 2007 - 08 2012 - 13 20 06 - 0 7 20 07 - 08 20 08 - 09 200 9 - 10 20 10 - 11 201 1 - 12 20 12 - 13 SHRI SUNIL CHIMANLAL GANDHI C - 62,OM DARIYA MAHAL 80, NEPEAN SEA ROAD MUMBAI 400 006 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 8(3), MUMBAI (ERSTWHILE ACIT, CC - 46, MUMBAI R.NO.659, 6 TH FLOOR AAYAKAR BHAVAN, M.K.ROAD MUMBAI 400 020 PAN/GIR NO. AA CPG5765A SR. NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 2. 7272/MUM/2017 7273/MUM/2017 2006 - 07 2007 - 08 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 8(3), MUMBAI R.NO.659, 6 TH FLOOR AAYAKAR BHAVAN, M.K.ROAD MUMBAI 400 020 SHRI NIRAV SUNIL GANDHI C - 62, OM DARIYA MAHAL 80, NEPEAN SEA ROAD MUMBAI 400 006 3 . 4 . 5 . 6 . 7. 8. 9. 7236/MUM/2017 7237/MUM/2017 7238/MUM/2017 7239/MUM/2017 7240/MUM/2017 7241/MUM/2017 7242/MUM/2017 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 2011 - 1 2 2012 - 13 SHRI NIRAV SUNIL GANDHI C - 62,OM DARIYA MAHAL 80, NEPEAN SEA ROAD MUMBAI 400 006 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 8(3), MUMBAI R.NO.659, 6 TH FLOOR AAYAKAR BHAVAN, M.K.ROAD MUMBAI 400 020 PAN/GIR NO. AACPG5764B ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 2 SR. NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 2. 7 2 74/MUM/2017 7275/MUM/2017 2006 - 07 2007 - 08 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 8(3), MUMBAI R.NO.659, 6 TH FLOOR AAYAKAR BHAVAN, M.K.ROAD MUMBAI 400 020 SHRI PRANAV SUNIL GANDHI C - 62,OM DARIYA MAHAL 80, NEPEAN SEA ROAD MUMBAI 400 006 3. 4 . 5. 6. 7. 8. 9 . 7229/MUM/2017 7230/MUM/2017 7231/MUM/2017 7232/MUM/2017 7233/MUM/2017 7234/MUM/2017 7235/MUM/2017 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 2011 - 12 2012 - 13 SHRI PRANAV SUNIL GANDHI C - 62,OM DARIYA MAHAL 80, NEPEAN SEA ROAD MUMBAI 400 006 A SST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 8(3), MUMBAI R.NO.659, 6 TH FLOOR AAYAKAR BHAVAN, M.K.ROAD MUMBAI 400 020 PAN/GIR NO. AACPG5763G ASSESSEE BY SHRI RAJESH SIMHAN & SHRI ASHISH SODHANI REVENUE BY SHRI VIJAY K UMAR G. SUBRAMANIAN DATE OF HEARING 08 / 04/ 202 1 DATE OF PRONOUNCEMENT 21 / 06 /202 1 / O R D E R PER M. BALAGANESH (A.M) : ITA NO.7180/MUM/2017 (A.Y.2007 - 08 ) AND 7179/MUM/2017 (A.Y.2006 - 07 ) IN THE CASE OF SHRI SUNIL CHIMANLAL GANDHI; 7272/MUM/2017 (A.Y.2006 - 07) AND ITA NO.7273/MUM/2017 (A.Y.2007 - 08) IN THE CASE OF SHRI NIRAV SUNIL G ANDHI ; AND ITA NO. 7274/MUM/2017 (A.Y.2006 - 07) AND 7275/MUM/2017 (A.Y.2007 - 08) IN THE CASE OF SHRI PRANAV SUNIL GANDHI ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 3 TH ESE APPEAL S ARISE OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 50, MUMBAI IN APPEAL DATED 22/09/2017 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S. 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 31/03/2015 BY THE LD. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 8(3) (HEREINAFTER REFERRED TO AS LD. AO). LET US TAK E UP THE APPEALS FIRST IN THE CASE OF SHRI SUNIL CHIMANLAL GANDHI. ITA NO.7179/MUM/2017 (A.Y.2006 - 07) - QUANTUM APPEAL IN THE CASE OF SHRI SUNIL CHIMANLAL GANDHI 2. WE FIND THAT ASSESSEE HAS CONTESTED THE ADDITION MADE U/S.69A OF THE ACT IN RESPECT OF MON IES LYING IN FOREIGN BANK ACCOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE IN THE ASSESSMENT FRAMED U/S.153A R.W.S. 143(3) OF THE ACT FOR THE A.Y.2006 - 07. WE ALSO FIND THAT ASSESSEE HAS RAISED A PRELIMINARY GROUND THAT NO ADDITION COULD BE MADE FOR THE A.Y.20 06 - 07 BEING A CONCLUDED ASSESSMENT ON THE DATE OF SEARCH IN THE ABSENCE OF ANY INCRIMINATING MATERIAL RELATABLE TO THAT ASSESSMENT YEAR. HENCE, WE WOULD LIKE TO ADDRESS THIS PRELIMINARY ISSUE AS TO WHETHER ANY ADDITION COULD BE MADE IN A CONCLUDED ASSESSME NT IN THE ABSENCE OF INCRIMINATING MATERIAL AND WHETHER THERE IS ANY INCRIMINATING MATERIAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE , SHRI SUNIL C GANDHI, I S A CITIZEN OF INDIA, AGED 71 YEARS, S/O SHRI CHIMANLAL GANDHI, RESIDING AT, C - 62, OM DARYA MAHAL, 80, NEPEAN SEA ROAD, MUMBAI - 400006. HE IS AN INDIVIDUAL AND PARTNER IN M/S NEHAL DIAMONDS, A PARTNERSHIP FIRM ENGAGED IN BUSINESS OF EXPORT OF ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 4 DIAMONDS. THE ORIGINAL RETURN OF INCOME FOR THE A.Y.2006 - 07 WAS FILED BY THE ASSESSEE ON 12/07/2006 DECLARING TOTAL INCOME OF RS.58,889/ - WHICH WAS DULY PROCESSED U/S.143(1) OF THE ACT. ON 16.09.2011, A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT WAS CARRIED OUT AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE . STATEMENT OF THE ASSESSEE U/S 132(4) OF THE ACT WAS RECORDED WHEREIN THE AUTHORIZED OFFICERS SHOWED A DOCUMENT WHICH HAD DETAILS OF A BANK ACCOUNT IN HSBC BANK GENEVA IN THE FORM OF BASE NOTE RECEIVED FR OM THE FRENCH GOVERNMENT. ADMITTEDLY, THIS BASE NOTE WAS NOT SEIZED AT THE TIME OF SEARCH BY THE SEARCH TEAM. THE ASSESSEE CATEGORICALLY STATED IN HIS STATEMENT RECORDED ON 16.09.2011 AND 14.11.2011, THAT HIS SON, SHRI. NIRAV S. GANDHI, WHO IS A RESIDENT OF BELGIUM , HAD OPENED THE SAID BANK ACCOUNT IN THE NAME OF THE ASSESSEE FOR THE SAKE OF HIS (I.E SHRI NIRAV GANDH) BUSINESS AND FUTURE SAFETY IN BELGIUM. HE FURTHER STATED THAT THE ACCOUNT WAS OWNED AND OPERATED BY SON, SHRI NIRAV S. GANDHI. HOWEVER, TO B UY PEACE AND AVOID LITIGATION, THE ASSESSEE ACCEPTED FOR INCLUDING RS. 1,35,66,701/ - AS ADDITIONAL INCOME ON ACCOUNT OF PEAK BALANCE IN THE SAID BANK ACCOUNT AS HIS INCOME . HOWEVER, HE SUBSEQUENTLY RECEIVED LEGAL ADVICE THAT THERE WAS NO LIABILITY TO PAY T AX ON THE INCOME THAT WAS NEVER RECEIVED OR ACCRUED TO HIM AND THAT THE SAID FUNDS BELONGED TO SHRI. NIRAV GANDHI WHO IS A RESIDENT OF BELGIUM AND HAVE ACCRUED AND RECEIVED BY HIM. ACCORDINGLY, THE ASSESSEE HEREIN CHOSE NOT TO OFFER THE SAME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT, WHICH TANTAMOUNT TO RETRACTION MADE BY HIM. 3.1. PURSUANT TO THE ABOVE, THE LD.AO REFERRED THE MATTER TO THE FOREIGN TAX AND TAX RESEARCH ('FT&TR') DIVISION OF CBDT ON 04.01.2012 VIDE LETTER NO. ADIT/UNI T - IX(2)/MUMBAI/HSBC_SUNIL GANDHI/2011 - 12. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 5 3.2. THE CASE WAS SELECTED FOR SCRUTINY AND LD.AO ISSUED A NOTICE U/S 153A OF THE ACT ON 21.01.2013, WHICH WAS SERVED ON THE ASSESSEE . IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED THE RETURN OF INCOME ON 2 3.07.2013 DECLARING THE INCOME OF RS. 58,889/ - . SUBSEQUENTLY, THE LD.AO ISSUED A NOTICE U/S 143(2) OF THE ACT ON 12.09.2013. VIDE NOTICE U/S . 142(1) OF THE ACT ISSUED ON 28.10.2013 , THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS ABOUT THE FOREIGN BANK ACCOUN T IN HSBC AT GENEVA. IN FULL COOPERATION WITH THE DEPARTMENT AND IN GOOD FAITH, THE ASSESSEE THROUGH DIFFERENT SUBMISSIONS FILED THE DETAILS AS REQUIRED BY THE LD.AO . THE ASSESSEE REITERATED IN ALL HIS STATEMENTS THAT HE WAS NEITHER THE OWNER OF THE SAID B ANK ACCOUNT, NOR DID HE HAVE ANY BENEFICIAL INTEREST IN THE SAID ACCOUNT. HE CONSISTENTLY HELD THAT THE ACCOUNT BELONGED TO, AND WAS OPERATED BY HIS SON, SHRI, NIRAV S. GANDHI. HENCE, HE WAS UNABLE TO FURNISH DETAILS OF THE SAID BANK ACCOUNT TO THE AUTHORI TIES. 3.3 . IN ALL HIS REPLIES TO THE INCOME TAX DEPARTMENT, THE ASSESSEE CONTINUED TO DENY ANY POSSESSION , O WNERSHIP OR BENEFICIAL INTEREST IN THIS BANK ACCOUNT. FURTHER, ON 27.03.2014, THE ASSESSEE HAD SUBMITTED A NOTARIZED COPY OF THE OFFICIAL CERTIFI CATE CONFIRMING THAT HIS SON, SHRI NIRAV GANDHI WAS THE POSSESSOR, ULTIMATE AUTHORITY HOLDER AND ECONOMIC OWNER OF THE SAID BANK ACCOUNT. SHRI. NIRAV S. GANDHI HAD ALSO DISCLOSED THE SAID INCOME PERTAINING TO THE ACCOUNT AS HIS TAXABLE INCOME IN BELGIUM AN D A CERTIFICATE FROM THE BELGIUM TAX AUTHORITIES CONFIRMING COMPLIANCE WITH BELGIUM TAX LAWS WAS ALSO GIVEN TO THE LD. AO . 3.4. FURTHER, WHEN THE STATEMENT OF THE ASSESSEE WAS BEING RECORDED ON 20.01.2015 U/S 131 OF THE ACT, THE LD.AO AGAIN CONFRONTED THE ASSESSEE WITH THE BASE NOTE RECEIVED FROM THE FRENCH GOVERNMENT AND SOUGHT AN EXPLANATION. THE ASSESSEE CONTINUED TO DENY OWNERSHIP OF THE BANK ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 6 ACCOUNT AND REQUESTED THE LD. AO TO PROVIDE HIM A COPY OF THE BASE NOTE. HOWEVER, THE ASSESSEE WAS NOT PROVI DED WITH A COPY OF THE BASE NOTE. 3.5. THE LD. AO WHILE MAKING THE ADDITION HAD ALSO OBSERVED IN HIS ASSESSMENT ORDER THAT THE BASE NOTE RECEIVED FROM FRENCH GOVERNMENT CONTAINED ALL THE PERSONAL DETAILS OF THE ASSESSEE INCLUDING HIS NAME, DATE OF BIRTH, PLACE OF BIRTH, RESIDENTIAL ADDRESS, GENDER, NATIONALITY ALONG WITH DATE OF OPENING OF BANK ACCOUNT IN HSBC BANK, GENEVA I.E. 16/10/2000 AND AMOUNT BALANCE LYING IN THE SAID BANK ACCOUNT IN THE PARTICULAR YEAR. ACCORDINGLY, THE LD. AO CONCLUDED THAT THIS BANK ACCOUNT BELONGS TO THE ASSESSEE AND SINCE ASSESSEE HAD NOT EXPLAINED THE SOURCE OF THE DEPOSITS MADE IN THE SAID BANK ACCOUNT, ADDITION U/S.69A OF THE ACT WAS MADE IN THE HANDS OF THE ASSESSEE BY GIVING A FINDING THAT THE MONEY BELONGS TO THE ASSESSEE . 3.6. IT IS PERTINENT TO NOTE THAT THE BASE NOTE RECEIVED FROM THE FRENCH GOVERNMENT WAS VERY MUCH AVAILABLE WITH THE INCOME TAX DEPARTMENT PRIOR TO CONDUCT OF SEARCH U/S.132 OF THE ACT ON 16/09/2011. DURING THE COURSE OF SEARCH, WE FIND ABSOLUTELY THER E WAS NO INCRIMINATING MATERIAL RELATABLE TO THIS ADDITION OF DEPOSITS MADE IN HSBC BANK ACCOUNTS , OR ANY OTHER DOCUMENT RELATING TO SAME , IN ANY MANNER WHATSOEVER, WAS FOUND. ADMITTEDLY, THE ASSESSMENT FOR THE A.Y.2006 - 07 WAS A CONCLUDED ASSESSMENT AS ON 16/09/2011 (BEING THE DATE OF SEARCH) IN AS MUCH AS THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 12/07/2006 WHICH WAS DULY PROCESSED U/S.143(1) OF THE ACT AND THAT THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S.143(2) OF THE ACT HAD ALREADY EXPIR ED AS ON THE DATE OF SEARCH. HENCE, THERE IS ABSOLUTELY NO QUARREL THAT AS ON THE DATE OF SEARCH, THE ASSESSMENT FOR THE A.Y.2006 - 07 HAD ALREADY BEEN CONCLUDED AND BECOMES UNABATED ASSESSMENT. ADMITTEDLY THE RESIDENTIAL ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 7 STATUS OF ASSESSEE IS RESIDENT AND O RDINARILY RESIDENT WHEREIN THE GLOBAL INCOME OF THE ASSESSEE IS TAXABLE IN INDIA. WE FIND THAT ASSESSEE HAD ALWAYS STATED THAT THE HSBC BANK ACCOUNT IN ASSESSEES NAME WAS OPENED BY HIS SON SHRI NIRAV GANDHI FOR THE PURPOSE OF SECURING HIS FUTURE (I.E. SHR I NIRAV GANDHI ) AND FOR SENTIMENTAL REASONS ONLY. HENCE, THE ASSESSEE THOUGH GAVE A STATEMENT U/S.132(4) OF THE ACT ON THE DATE OF SEARCH AND SUBSEQUENTLY , HAD LATER RETRACTED THE SAME BY NOT OFFERING THE DISCLOSED SUM IN THE RETURN OF INCOME FILED PURSUAN T TO NOTICE ISSUED U/S.153A OF THE ACT. THE VERY FACT THAT INCOME WAS NOT OFFERED IN THE RETURN U/S.153A OF THE ACT DESPITE GIVING A STATEMENT U/S.132(4) OF THE ACT MAKING SAME DISCLOSURES , TANTAMOUNT TO RETRACTION MADE BY THE ASSESSEE. 3.7. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE LD. AO ISSUED NOTICE U/S.142(1) OF THE ACT DATED 28/10/2013 ASKING THE ASSESSEE TO SUBMIT THE COMPLETE COPY OF BANK STATEMENT IN HSBC, GENEVA , RIGHT FROM INCEPTION TILL DATE. THE SAID NOTICE ALSO GAVE AN OPTION TO THE A SSESSEE THAT IF THE ASSESSEE IS NOT IN POS SESSION OF STATEMENT OF HIS BANK ACCOUNT, THEN HE WAS REQUESTED TO FILL UP CONSENT WAIVER FORM TO BE SUBMITTED TO HSBC BANK, GENEVA FOR OBTAINING THE BANK STATEMENT THEREON. IN RESPONSE TO THE SAID NOTICE, THE ASSE SSEE VIDE LETTER DATED 13/03/2014 REITERATED HIS EARLIER STAND AND DENIED HAVING ANY OWNERSHIP OR INTEREST IN THE SAID BANK ACCOUNT AND FURTHER STATED THAT HE WAS NOT IN POSSESSION OF ANY INFORMATION OR DOCUMENTS IN RELATION TO THE SAID BANK ACCOUNT. WITH RESPECT TO THE CONSENT WAIVER FORM, HE EXPLAINED THAT THE SAID FORM IS IRRELEVANT SINCE HE DOES NOT HAVE ANY OWNERSHIP OR INTEREST IN RELATION TO THE SAID BANK ACCOUNT AND THAT HE IS NOT UNDER ANY LEGAL OBLIGATION UNDER THE INCOME TAX ACT TO SIGN THE SAID CONSENT WAIVER FORM , MORE SO, WHEN ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 8 HE IS NOT THE BENEFICIAL OWNER OF THE FUNDS LYING IN THE OVERSEAS BANK ACCOUNT. 3.8. BASED ON THE ABOVE, THE LD. AO CAME TO CONCLUSION THAT ASSESSEE COULD NOT DISCHARGE HIS ONUS BY EITHER SUBMITTING THE COMPLETE BANK STATEMENTS OR THE CONSENT WAIVER FORM TO ASCERTAIN THE ENTIRE BANK ACCOUNT TRANSACTIONS FROM HSBC BANK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A STATEMENT WAS RECORDED ON OATH ON 29/07/2013 FROM THE ASSESSEE BY THE LD. AO WHEREIN THE ASSESSEE INITIAL LY DENIED HAVING ANY OVERSEAS BANK ACCOUNT WITH BENEFICIAL OWNERSHIP AND IN RESPONSE TO QUESTION NO.15 RAISED BY THE LD . AO THEREON CONFRONTING THE ASSESSEE SHOWING HIM THE STATEMENT RECORDED U/S.132(4) OF THE ACT DATED 14/11/2011, THE ASSESSEE RESPONDED T HAT HIS SON SHRI NIRAV GANDHI IS A RESIDENT OF BELGIUM HAVING INDEPENDENT BUSINESS IN BELGIUM FOR MORE THAN 20 YEARS AND THAT HE HAS VISITED BELGIUM IN THE YEAR 2000 AND DURING THE COURSE OF SEARCH VISIT, HIS SON HAD OPENED A BANK ACCOUNT IN HSBC BANK IN A SSESSEES NAME FOR SECURING THE FUTURE OF SHRI NIRAV GANDHI. THE ASSESSEE ALSO STATED THAT HE HAS NOT VISITED BELGIUM AFTER THE YEAR 2004, IN SUPPORT OF WHICH HE HAS SUBMITTED THE PASSPORT FOR VERIFICATION OF THE LD. AO. IT WAS CATEGORICALLY SUBMITTED BY T HE ASSESSEE BY WAY OF STATEMENT ON OATH THAT THE SAID BANK IN HSBC BANK, GENEVA WAS OPENED ONLY BY SHRI NIRAV GANDHI (SON OF THE ASSESSEE) IN THE NAME OF THE ASSESSEE FOR THE BUSINESS AND PERSONAL PURPOSES OF SHRI NIRAV GANDHI. IT WAS CATEGORICALLY STATED THAT THE SAID BANK ACCOUNT WAS OPERATED FULLY BY SHRI NIRAV GANDHI. IN OTHER WORDS, IT COULD BE SAFELY INFERRED THAT ASSESSEE ALWAYS MAINTAINED THAT HE WAS NEVER BENEFICIAL OWNER OF THE TRANSACTIONS IN THE BANK ACCOUNT MAINTAINED WITH HSBC BANK, GENEVA. WE FIND IN RESPONSE TO Q UESTION NO S . 15 TO 24 WHILE RECORDING A STATEMENT ON OATH BY THE LD. AO DURING THE ASSESSMENT ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 9 PROCEEDINGS ON 29/07/2013 , T HE ASSESSEE HAD CATEGORICALLY DENIED HAVING ANY TRANSACTIONS IN THE SAID BANK ACCOUNT WITH HSBC BANK, GENEVA AND SUBMITTED THAT THE SAID ACCOUNT DOES NOT BELONG TO HI M AND IT WAS ALL MAINTAINED AND OPERATED BY ONLY HIS SON SHRI NIRAV GANDHI WHO IS A RESIDENT OF BELGIUM DOING BUSINESS THERE FOR THE PAST 20 YEARS. AGAIN, THE ASSESSEE FILED YET ANOTHER LETTER DATED 19/ 09/2013 REITERATING HIS EARLIER STAND. WE FIND THAT THE LD. AO ALSO RECORDS IN PARA 8 OF HIS ASSESSMENT ORDER THAT VIDE LETTER DATED 27/03/2014 , THE ASSESSEE HAD STATED THAT THE SAID HSBC BANK WAS OWNED AND OPERATED BY HIS SON SHRI NIRAV GANDHI WHO IS A N ON - RESIDENT SINCE 1993 AND PRESENTLY IS A RESIDENT OF BELGIUM; THAT THE ASSESSEE HAD SUBMITTED A TRANSLATED STATEMENT OF APPROVAL ISSUED BY THE BELGIUM TAX AUTHORITIES STATING THAT THE FULL COMPLIANCE OF THE SAME IS DONE AS PER BELGIUM TAX LAWS; AND SINCE THE ENTIRE TRANSACTIONS IN HSBC BANK ACCOUNT, GENEVA HAS BEEN DISCLOSED TO THE GENEVA TAX AUTHORITIES AND THE SAME SHOULD NOT BE BROUGHT TO TAX AS UNDISCLOSED INVESTMENT IN THE HANDS OF THE ASSESSEE HEREIN. 3.9. THE LD. AO HOWEVER DISREGARDED ALL THE CONT ENTIONS OF THE ASSESSEE AND OBSERVED THAT THE BASE NOTE RECEIVED FROM FRENCH GOVERNMENT IS IN RELATION TO THE BANK ACCOUNT IN THE NAME OF THE ASSESSEE AND NOT HIS SON. SINCE ASSESSEE HAD ORIGINALLY GIVEN A STATEMENT U/S.132(4) OF THE ACT AT THE TIME OF SEA RCH AND LATER ON, HE OUGHT TO HAVE OFFERED UNDISCLOSED INCOME BY OWNING UP THE FUNDS LYING IN THE BANK ACCOUNT IN THE RETURN FILED U/S.153A OF THE ACT. THE LD. AO ALSO OBSERVED THAT ASSESSEE DID NOT CO - OPERATE WITH EITHER FURNISHING THE ENTIRE BANK STATEME NTS OR BY SIGNING THE CONSENT WAIVER FORM IN ORDER TO OBTAIN THE BANK STATEMENTS FROM THE SWISS AUTHORITIES. ACCORDINGLY, IN THE ASSESSMENT FRAMED U/S.153A R.W.S.143(3) OF THE ACT FOR THE A.Y. 2006 - 07, THE LD. AO PROCEEDED TO MAKE AN ADDITION OF RS.1,26,18 ,254/ - U/S.69A OF THE ACT AS UNEXPLAINED ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 10 MONEY OF THE ASSESSEE. THIS ADDITION WAS MADE BASED ON THE PEAK AMOUNT OF USD 2,82,857.07 AS ON NOVEMBER 2006 (WHICH IS NOT RELEVANT TO A.Y. 2006 - 07) EQUIVALENT TO RS.1 , 26,18,254/ - CALCULATED AT THE EXCHANGE RATE OF RS. 44.61 PER USD AS ON 31/03/2006 AND ACCORDINGLY , THIS SUM OF RS.1,26,18,254/ - WAS BROUGHT TO TAX AS UNDISCLOSED INCOME FOR THE A.Y.2006 - 07 U/S.69A OF THE ACT. WE FIND THAT THE LD. CIT(A) UPHELD THE ACTION OF THE LD. AO. 3.10. IT IS ABSOLUTELY NOT IN DISPUTE THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE RELATING TO THIS HSBC BANK ACCOUNT MAINTAINED WITH GENEVA. THE ENTIRE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE ONLY BASED ON THE BASE NOTE RECEIVED FROM THE FRENCH GOVERNMENT INDEPENDENTLY WHICH HAS GOT NOTHING TO DO WITH THE SEARCH PROCEEDINGS U/S.132 OF THE ACT AND STATEMENT RECORDED U/S 132(4) OF THE ACT AT THE TIME OF SEARCH . THE LAW IS NOW VERY WELL SETTLED THAT IN RESPECT OF CONCL UDED ASSESSMENT / UNABATED ASSESSMENT, ON THE DATE OF SEARCH, NO ADDITION COULD BE MADE THEREON UNLESS THERE IS ANY INCRIMINATING MATERIAL RELATABLE TO THAT YEAR DURING THE COURSE OF SEARCH. RELIANCE IN THIS REGARD HAS BEEN RIGHTLY PLACED BY THE LD. AR ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPORTED IN 380 ITR 573 AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WARESHOUSING CORPORATION (NHAVA SHEVA) REPORTED IN 374 ITR 645 . THE LD. AR ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD REPORTED IN 397 ITR 82 TO DRIVE HOME THE POINT THAT STATEMENT RECORDED U/S.132(4) OF THE ACT DOES NOT BY THEM SELVES CONSTITUTE INCRIMINATING MATERIAL. HENCE, THE ARGUMENT ADVANCED BY THE LD. DR IN THIS REGARD IS DISMISSED. WE FIND THAT THE LD. DR VEHEMENTLY RELIED ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 11 THE CASE OF E N GOPAKUMAR VS CIT REPORTED IN 390 ITR 131 WHEREIN IT WAS HELD THAT THERE IS NO REQUIREMENT FOR RECOVERY OF ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH SO AS TO MAKE THE ASSESSMENT U/S.153A OF THE ACT TO MAKE ANY ADDITION THEREON. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COU RT IN 374 ITR 645 STATED ABOVE HAD DECIDED THE ISSUE ON THIS LEGAL PRINCIPLE WHICH WOULD BIND THIS TRIBUNAL MORE THAN THE DECISION OF THE HONBLE KERALA HIGH COURT. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT STATED SUPRA AND IN VIEW OF THE UNDISPUTED FACT THAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND IN VIEW OF THE FACT THAT THE STATEMENT MADE U/S.132(4) OF THE ACT DOES NOT CONSTITUTE INCRIMINATING MATERIAL, WE HAVE NO HESITATION IN QU ASHING THE ASSESSMENT MADE U/S.153A OF THE ACT R.W.S.143(3) OF THE ACT ON 31/03/2015 FOR THE A.Y.2006 - 07 . WE ALSO FIND THAT ON SIMILAR FACTS AND CIRCUMSTANCES IN RESPECT OF BASE NOTE RECEIVED FROM FRENCH GOVERNMENT AND IN RESPECT OF ASSESSMENT COMPLETED U/ S.153A OF THE ACT, THE CO - ORDINATE BENCH OF KOLKATA TRIBUNAL IN THE CASE OF BISHWANATH GARODIA VS. DCIT REPORTED IN 76 TAXMANN.COM 81 DATED 21/09/2016 HAD ALSO HELD THAT THE LD. AO CANNOT MAKE ANY ASSESSMENT U/S.153A OF THE ACT MAKING ADDITION TO ASSESSEE S INCOME IN RESPECT OF AMOUNT DEPOSITED IN FOREIGN BANK SINCE ASSESSMENT FOR RELEVANT ASSESSMENT YEAR HAVE ALREADY BEEN COMPLETED U/S.143(3) OF THE ACT AND NO INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF SEARCH RELATING TO SAID ADDITION. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HONBLE JURISDICTIONAL HIGH COURT AND ALSO CO - ORDINATE BENCH DECISION OF KOLKATA TRIBUNAL, THE REVISED GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED. 3.11. SINCE THE RELIEF IS GRANTED TO THE ASSESSEE ON THE PRELIMINARY GROUND OF ABSENCE OF INCRIMINATING MATERIAL IN RESPECT OF CONCLUDED ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 12 ASSESSMENTS, ALL OTHER GROUNDS RAISED BY THE ASSESSEE INCLUDING THE GROUND RAISED ON MERITS NEED NOT BE GONE INTO AND THEY ARE LEFT OPEN AS ADJUDICATION OF THE SAME WOULD ONLY BE ACADEMIC IN NATURE. WE WOULD LIKE TO SPECIFICALLY MAKE IT CLEAR THAT NO OPINION IS HEREBY GIVEN BY US ON THE MERITS OF THE ADDITION MADE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE A.Y.2006 - 07 IN THE CASE OF SHRI SUNIL C GANDHI IN ITA NO.7179/MUM/2017 IS ALLOWED. ITA NO.7180/MUM/2017 (A.Y.2007 - 08 ) QUANTUM APPEAL IN THE CASE OF SHRI SUNIL CHIMANLAL GANDHI 5. AS THE FACTS AND CIRCUMSTANCES FOR THIS ASSESSMENT YEAR ARE IDENTICAL WITH FACTS AND CIRCUMSTANCES OF A.Y.2006 - 07 DELIBERATED HEREINABOVE, THE DE CISION RENDERED FOR A.Y.2006 - 07 IN ITA NO.7179/MUM/2017 SHALL APPLY WITH EQUAL FORCE FOR THIS ASSESSMENT YEAR ALSO EXCEPT WITH VARIANCE IN FIGURES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE A.Y.2007 - 08 IN THE CASE OF SHRI SUNIL C GANDHI IN ITA NO.7 180/MUM/2017 IS ALLOWED. ITA NO.7181/MUM/2017 & 7182/MUM/2017 (A.Y.2006 - 07 & A.Y. 2007 - 08) PENALTY APPEALS U/S.271(1)(C) OF THE ACT FOR A.YRS. 2006 - 07 & 2007 - 08 RESPECTIVELY IN THE CASE OF SHRI SUNIL C GANDHI 7. THESE APPEALS ARISE OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 50, MUMBAI (LD. CIT(A) IN SHORT) IN APPEAL DATED ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 13 22/09/2017 & 25/09/2017 RESPECTIVELY IN THE MATTER OF IMPOSITION OF PENALTY U/S.271 (1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 7 .1 . SINC E THE QUANTUM ASSESSMENTS HAVE BEEN CANCELLED FOR THE A.YRS. 2006 - 07 AND 2007 - 08 IN ITA NOS. 7179 & 7180/MUM/2017 RESPECTIVELY HEREINABOVE, THE CONCEALMENT PENALTY U/S.271(1)(C) OF THE ACT LEVIED FOR BOTH THE YEARS WOULD HAVE NO LEGS TO STAND. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR THESE TWO YEARS ARE ALLOWED. 8. IN THE RESULT, PENALTY APPEALS OF THE ASSESSEE FOR A.YRS 2006 - 07 AND 2007 - 08 IN ITA NOS. 7181/MUM/2017 & 7182/MUM/2017 RESPECTIVELY ARE ALLOWED. ITA NOS.7222/MUM/2017 TO 7228/MUM/2 017 (A.Y.2006 - 07 TO 2012 - 13) - PENALTY APPEALS U/S.271(1)(B) OF THE ACT 9. THESE APPEALS ARISE OUT OF THE INDEPENDENT ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 50, MUMBAI (LD. CIT(A) IN SHORT) IN APPEAL IN THE MATTER OF IMPOSITION OF PENALTY U/S. 271 (1)(B) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) FOR THE A.YS. 2006 - 07 TO 2012 - 13 IN THE CASE OF SHRI SUNIL C GANDHI. 9 .1 . WE FIND THAT ALL THESE APPEALS ARE IN RESPECT OF PENALTIES LEVIED U/S.271(1)(B) OF THE ACT BY THE LD. AO DUE TO NON - COOPERATION BY THE ASSESSEE WITH THE LD. AO BY NOT SIGNING THE CONSENT WAIVER FORM. WE FIND THAT THE BASIC PURPOSE OF SIGNING THE CONSENT WAIVER FORM IS ONLY TO ENABLE THE INCOME TAX DEPARTMENT TO OBTAIN THE BANK STATEMENTS FROM THE SWISS A UTHORITIES IN RESPECT OF FOREIGN BANK ACCOUNTS HELD BY THE ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 14 ASSESSEE. IN THE INSTANT CASE, THE ASSESSEE HAS ALWAYS TAKEN A STAND THAT THOUGH THE FOREIGN BANK ACCOUNT IN HSBC GENEVA WAS IN HIS NAME, THE SAME WAS OPENED BY HIS SON SHRI NIRAV GANDHI IN THE YEA R 2000 WHEN THE ASSESSEE HAD VISITED BELGIUM. IT WAS ALWAYS STATED BY THE ASSESSEE THAT THE SAID BANK ACCOUNT WAS OPENED BY HIS SON FOR SECURING HIS FUTURE (I.E. SHRI NIRAV GANDHI) AND THE SAID BANK ACCOUNT WAS ALWAYS USED FOR BUSINESS AND PERSONAL PURPOSE S OF SHRI NIRAV GANDHI. HENCE, THE ASSESSEE HAD CATEGORICALLY DENIED THE OWNERSHIP OF THE FUNDS LYING IN THE SAID BANK ACCOUNT. WHILE THAT IS SO, THE ASSESSEE ALWAYS FELT THAT THERE WAS NO NEED FOR HIM TO GIVE ANY CONSENT WAIVER FORM TO THE INCOME TAX DEPA RTMENT. THIS ACTION OF THE ASSESSEE WAS FOUND TO BE OF NON - COOPERATIVE ATTITUDE BY THE LD. AO FOR WHICH PENALTY U/S.271(1)(B) OF THE ACT WAS LEVIED. IN OUR CONSIDERED OPINION, THE ASSESSEE HAS GIVEN A PLAUSIBLE EXPLANATION ON THE SUBJECT MENTIONED ISSUE AN D THE SAID EXPLANATION WAS NOT ACCEPTED BY THE LD. AO. HOWEVER, WE FIND THAT ULTIMATELY THE ASSESSMENTS WERE FRAMED BY THE LD. AO FOR ALL THESE ASSESSMENT YEARS ONLY U/S.143(3) OF THE ACT WHICH GOES TO PROVE THAT ASSESSEE HAD INDEED COOPERATED WITH THE LD. AO FOR SMOOTH COMPLETION OF ASSESSMENT PROCEEDINGS BY MAKING SOME ADDITION . RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING DECISIONS: - A) DECISION OF CO - ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF SHIV KUMAR NAYYAR VS ACIT IN ITA NOS. 6203 & 6204 /DEL/2019 DATED 31/03/2021 B) DECISION OF DELHI TRIBUNAL IN THE CASE OF GLOBUS INFOCOM LTD VS. DCIT IN ITA NO.738/DEL/2014 C) DECISION OF DELHI TRIBUNAL IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SINGH VS ADIT IN ITA NO.2900/DEL/2005. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 15 9. 2 . HENCE, WE DO NOT DEEM THIS AS FIT CASE FOR SUSTAINING THE LEVY OF PENALTY U/S.271(1)(B) OF THE ACT. ACCORDINGLY, THE PENALTY LEVIED U/S.271(1)(B) OF THE ACT ARE HEREBY DIRECTED TO DELETED FOR A.Y.2006 - 07 TO 2012 - 13. 10 . IN THE RESULT, ALL THESE PENALTY APPEALS U/ S.271(1)(B) OF THE ACT IN ITA NOS.7222/MUM/2017 TO 7228/MUM/2017 (A.Y.2006 - 07 TO 2012 - 13) OF THE ASSESSEE I.E. SHRI SUNIL C GANDHI ARE ALLOWED. ITA NO.7183/MUM/2017 (A.Y.2012 - 13) SHRI SUNIL C GANDHI - PENALTY U/S.271AAA OF THE ACT 11. THIS APPEAL ARISE S OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 50, MUMBAI (LD. CIT(A) IN SHORT) IN APPEAL DATED 25/09/2017 IN THE MATTER OF IMPOSITION OF PENALTY U/S.271AAA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) FOR THE A.Y. 2012 - 13 I N THE CASE OF SHRI SUNIL C GANDHI. 12. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT DURING THE COURSE OF SEARCH ON 16/09/2011, THE ASSESSEE HAD ADMITTED DISCLOSURE OF RS.96,15,428/ - IN HIS STATEMENT RECORDE D U/S.132(4) OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH AND JEWELLERY FOUND DURING THE COURSE OF SEARCH AND THE SAME WAS DULY DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR A.Y.2012 - 13 ON 30/09/2012 OFFERING THE SAID INCOME . WE FIND THAT ASSESS MENT FOR THE A.Y.2012 - 13 WAS COMPLETED BY THE LD. AO U/S.143(3) OF THE ACT ON 31/03/2015 ACCEPTING RETURNED INCOME OF RS.1,01,81,170/ - WHICH ADMITTEDLY INCLUDED THE AMOUNT DISCLOSED BY THE ASSESSEE IN THE ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 16 STATEMENT U/S.132(4) OF THE ACT IN THE SUM OF RS.96 ,15,428/ - . WE FIND THAT THE LD. AO PROCEEDED TO LEVY PENALTY U/S.271AAA OF THE ACT IN RESPECT OF AMOUNT DISCLOSED BY THE ASSESSEE AT THE TIME OF SEARCH TO THE EXTENT OF RS.96,15,428/ - . WE FIND THAT THE LD. AO HAD OBSERVED THAT ASSESSEE IS NOT ENTITLED FOR IMMUNITY FOR LEVY OF PENALTY IN TERMS OF SECTION 271AAA(2) OF THE ACT IN AS MUCH AS ACCORDING TO THE LD. AO, THE ASSESSEE HAD NOT SPECIFIED THE MANNER AND SUBSTANTI ATED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED BY HIM, HENCE ASSESSEE HAS NOT S ATISFIED ONE OF THE CUMULATIVE CONDITIONS STIPULATED IN 271AAA(2) OF THE ACT . WE FIND THAT THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). 12.1. WE FIND THAT THE ASSESSEE WOULD BE ELIGIBLE FOR IMMUNITY FROM LEVY OF PENALTY IN TERMS OF 271AAA(2) OF THE ACT IF HE CUMULATIVELY SATISFIES THE FOLLOWING CONDITIONS: - A) HE HAS MADE DISCLOSURE OF UNDISCLOSED INCOME IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT AT THE TIME OF SEARCH. B) HE HAS SUBSTANTIATED THE MANNER IN WHICH THAT UNDISCLOSED INCOME HAS BEEN DERIVED BY HIM. C) HE HAS PAID THE TAXES DUE THEREON WITH INTEREST IN RESPECT OF THAT UNDISCLOSED INCOME DISCLOSED. 12.2. IN THE INSTANT CASE THERE IS ABSOLUTELY NO QUARREL THAT ASSESSEE HAS SATISFIED THE CONDITIONS STIPULATED IN POINT A & C. IN RE SPECT OF YET ANOTHER CONDITION WITH REGARD TO SUBSTANTIAT ING THE MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN DERIVED BY THE ASSESSEE, WE FIND THAT ASSESSEE HAD INDEED REPLIED ON THE DATE OF SEARCH ITSELF IN HIS STATEMENT RECORDED U/S.132(4) OF THE ACT VIDE REPLY TO QUESTION NO.4 THAT HE IS A PARTNER OF ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 17 NEHAL DIAMONDS AND HAD EARNED INCOME THEREON ALONG WITH HIS FAMILY MEMBERS. IT WAS ALSO SPECIFICALLY SUBMITTED THAT IN THE SAID STATEMENT THAT HE IS ASSOCIATED WITH M/S. NEHAL DIAMONDS SINCE 1979 AND THE MODU S OPERANDI OF BUSINESS CARRIED ON BY HIM WAS DULY SPECIFIED. SINCE THE DISCLOSURE WAS MADE ONLY IN RESPECT OF JEWELLERY PREDOMINANTLY AND THAT UNEXPLAINED CASH OF RS.3.5 LAKHS, IT COULD BE SAFELY CONCLUDED THAT THE ASSESSEE HAD EARNED UNDISCLOSED INCOME ON LY FROM HIS DIAMOND BUSINESS WHICH HE HAS BEEN CARRYING ON FROM 1979 ONWARDS AND THIS IS FURTHER STRENGTHENED BY THE STAND THAT ASSESSEE DOES NOT HAVE ANY OTHER SOURCE OF INCOME OTHER THAN THIS. WE FURTHER FIND THAT ASSESSEE HAD DULY FILED THE RECONCILIATI ON OF JEWELLERY BELONGING TO HIM AS WELL AS TO VARIOUS FAMILY MEMBERS VIDE HIS LETTER DATED 08/11/2011 BEFORE THE REVENUE. THE SAID RECONCILIATION STATEMENT FURTHER PROVIDES DETAILS OF WEALTH TAX RETURNS THAT WERE FILED AND VALUATION REPORTS THAT WERE OBTA INED FOR THE JEWELLERY WHICH WAS FOUND IN THE COURSE OF SEARCH AND SEIZURE. THE SAID DETAILS ALSO PROVIDE THAT DETAILS ABOUT THE JEWELLERY THAT WAS PURCHASED, DETAILS FROM WHOM IT WAS PURCHASED ALONG WITH COPIES OF RELEVANT BILLS THEREON. WHEN THE ONLY SOU RCE OF INCOME IS FROM DIAMOND BUSINESS, IT COULD BE SAFELY CONCLUDED AND INFERRED THAT ASSESSEE COULD HAVE EARNED UNDISCLOSED INCOME ONLY FROM SUCH BUSINESSES, HENCE, THE SECOND CONDITION PRESCRIBED IN 271AAA(2) I.E. SUBSTANTIATI NG THE MANNER IN WHICH UNDI SCLOSED INCOME HAS BEEN DERIVED HAS BEEN DULY COMPLIED WITH BY THE ASSESSEE IN THE INSTANT CASE. HENCE, WE HOLD THAT ASSESSEE IS DULY ENTITLED FOR IMMUNITY FROM LEVY OF PENALTY IN RESPECT OF UNDISCLOSED INCOME DISCLOSED DURING THE COURSE OF SEARCH IN TERMS OF SECTION 271AAA(2) OF THE ACT. ACCORDINGLY, THE PENALTY LEVIED FOR A.Y.2012 - 13 IN THE CASE OF SHRI SUNIL C GANDHI IS HEREBY DIRECTED TO BE DELETED. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 18 13. IN THE RESULT, APPEAL OF THE ASSESSEE I.E. SUNIL C GANDHI IN ITA NO.7183/MUM/2017 FOR A.Y.2012 - 13 I S ALLOWED. QUANTUM APPEAL FILED BY THE REVENUE IN THE CASE OF SHRI NIRAV SUNIL GANDHI - ITA NO.7272/MUM/2017 (A.Y.2006 - 07) 14. THE REVENUE HAS RAISED THE FOLLOWING GROUND: - ON THE FACTS AND IN THE C IRCUMSTA NCES OF THE CASE AND I N L A W, THE LD . CIT(A) ER RED IN DELETING THE ADDITION OF RS. 1,26,18 , 254 / - U/S.69A OF THE IT ACT MADE ON PROTECTIVE BASIS IN THE CASE OF THE ASSESS E E, MERELY ON THE BASIS OF CONFIRMING THE S A ME ADDITION ON SUBSTANTIVE BASIS IN THE CASE OF H I S FATHER SHRI SUN IL C GANDHI WITHOUT APP RECIATING THE FACT THAT ASSESSEE S NAME HAD ALSO APPEARED IN THE INFORMATION RECEIVED BY THE GOVERNMENT OF INDIA FROM THE GOVERNMENT OF FRANCE UNDER THE PROVISIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DT A A) AND THE VERY BASIS OF THE PROTECTIVE ADDITION IN ASSESSEES CASE IS TO PROTECT THE INTEREST OF REVENUE IN THE EVENT OF THE SUBSTANTIVE DEMAND BEING NON - RECOVERABLE?' THE APPELLANT PRAYS THAT THE ORDER OF THE C I T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 15. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT A SEARCH AND SEIZURE ACTION WAS CARRIED OUT U/S.132 OF THE ACT AT THE RESIDENCE AND BUSINESS PREMISES OF SHRI SUNIL C GAN D HI AND HIS GROUP ON 16/09/2011 BY THE INCOME TAX DEPARTMENT. THE PRESENT ASSESSEE I.D. SHRI NIRAV S GAN D HI IS THE SON OF SHRI SUNIL C GANDHI, WHO IS ALSO COVERED IN THE SEARCH ACTION. THERE IS ABSOLUTELY NO DISPUTE THAT SHRI NIRAV S GANDHI IS A NON - RESIDENT AS FAR AS INDIAN TAX LAWS ARE CONCERNED AND HE IS A TAX RESIDENT OF BELGIUM. IT IS NOT IN DISPUTE THAT SHRI NIRAV S GANDHI IS CARRYING ON BUSINESS IN BELGIUM FROM 1993 ONWARDS. AS PER INDIAN TAX LAWS, FOR A NON - RESIDENT, ONLY INCOME EARNED IN INDIA WOULD BE LIABLE TO TAX. THE ASSESSEE (I.E. SHRI NIRAV GANDHI) HAD DULY FILED HIS ORIGINAL RETURN OF INCOME FOR A.Y.2006 - 07 ON ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 19 30/06/2006 DECLARING TOTAL INCOME OF RS.99,548/ - COMPRISING OF INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. AS POINTED OUT HEREINABOVE IN THE QUANTUM APPEAL FOR A.Y.2006 - 07 IN THE CASE OF SHRI SUNIL C GANDHI IN ITA NO.7179/MUM/2017, THE LD. AO OBTAINED THE BASE NOTE FROM THE FRENCH GOVERNMENT WHICH STATED THAT THERE IS A FOREIGN BANK ACCOUNT MAINTAINED IN THE NAME OF SHRI SUNIL C GANDHI WITH HSBC BANK, GENEVA. AS S TATED SUPRA , SHRI SUNIL C GANDHI HAD ALWAYS MAINTAINED AND STATED THAT THE SAID BANK ACCOUNT IN HIS NAME WAS OPENED BY HIS SON SHRI NIRAV GANDHI FOR T HE PURPOSE OF BUSINESS PURPOSES OF SHRI NIRAV GANDHI AND FOR SECURING THE FUTURE OF SHRI NIRAV GANDHI; THAT THE SAID BANK ACCOUNT WAS OPENED IN THE YEAR 2000 WHEN SHRI SUNIL GANDHI VISITED BELGIUM TO MEET HIS SON AND THAT THE SAID BANK ACCOUNT TRANSACTIONS ARE FULLY OWNED UP AND BELONGING ONLY TO SHRI NIRAV GANDHI , WHO IS A NON - RESIDENT. SINCE, THE LD. AO HAD MADE ADDITION IN RESPECT OF PEAK BALANCE OF THE AMOUNTS LYING IN THE SAID BANK ACCOUNT AS ON NOVEMBER 2006 AMOUNTING TO RS.1,26,18,254 (USD 2 , 82 , 857.0 7) ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI SUNIL C GANDHI , WE FIND THAT THE LD. AO HAD PROCEEDED TO MAKE THE VERY SAME ADDITION IN THE HANDS OF SHRI NIRAV S GANDHI ON PROTECTIVE BASIS. THE FACT THAT THE SAID TRANSACTION BY AT ANY STRETCH OF IMAGINATION C ANNOT BE BROUGHT TO TAX IN THE HANDS OF SHRI NIRAV GANDHI IN VIEW OF THE FACT THAT HE IS A NON - RESIDENT , HAS NOT BEEN CONSIDERED BY THE LD AO . WE FIND THAT THE LD. CIT(A) HAD OBSERVED THAT SINCE THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF SHRI SUNIL C GA NDHI HAS ALREADY BEEN CONFIRMED FOR A.Y.2006 - 07 VIDE HIS ORDER DATED 22/09/2017, THE PROTECTIVE ADDITION MADE IN THE HANDS OF SHRI NIRAV GANDHI (ASSESSEE HEREIN) WAS DELETED. 16. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 20 17. WE FIND THAT AS SESSEE IN RESPECT OF NOTICE ISSUED U/S.153A OF THE ACT HAD FILED THE RETURN OF INCOME ON 23/07/2013 FOR THE A.Y.2006 - 07. WE FIND THAT ASSESSEE IN RESPONSE TO THE QUERIES RAISED BY THE LD. AO CONFIRMED THAT HE WAS THE BENEFICIAL OWNER OF THE FOREIGN BANK AC COUNT OF HSBC BANK AT GENEVA AND THAT HE HAS BEEN OPERATING THE SAME SINCE 2000. WE FIND THAT ASSESSEE HAS ALSO CONFIRMED BEFORE THE LD. AO THAT ALL THE FUNDS IN THE SAID BANK ACCOUNT ARE IN RELATION TO HIS (I.E. SHRI NIRAV GANDHI) BUSINESS ACTIVITIES OUTS IDE INDIA AND DO NOT REPRESENT ANY INCOME FROM ANY SOURCE S IN INDIA. IT WAS ALSO POINTED OUT THAT THE SAID FUNDS HAVE DULY BEEN DISCLOSED BY SHRI NIRAV GANDHI WHILE FILING HIS TAX RETURNS IN BELGIUM, WHICH FACT WAS ALSO LATER CONFIRMED BY THE BELGIUM REVEN UE AUTHORITIES. 17.1. AT THE OUTSET, WE DO NOT DEEM IT FIT TO GO INTO MERITS OF THE ADDITION MADE IN THE HANDS OF SHRI NIRAV GANDHI. WE HOLD THAT SHRI NIRAV GANDHI , BEING A NON - RESIDENT , IS NOT LIABLE TO OFFER ANY EXPLANATION IN RESPECT OF THE TRANSACTI ONS IN THE HSBC BANK, GENEVA TO INDIAN TAX AUTHORITIES. HENCE, THERE CANNOT BE ANY ADDITION THAT COULD BE MADE IN THE HANDS OF A NON - RESIDENT IN RESPECT OF A FOREIGN BANK ACCOUNT EITHER ON SUBSTANTIVE OR ON PROTECTIVE BASIS. ON THIS PRELIMINARY GROUND, WE ARE INCLINED TO GRANT RELIEF TO THE ASSESSEE (I.E. SHRI NIRAV GANDHI). WE FIND THAT ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER PASSED BY THE LD. CIT(A). WE FIND THAT REVENUE HAS CHALLENGED THE DELETION OF PROTECTIVE ADDITION MADE BY THE LD. CI T(A). SINCE ASSESSEE IS A NON - RESIDENT, AT THE COST OF REPETITION, THERE CANNOT BE ANY ADDITION IN RESPECT OF A FOREIGN BANK ACCOUNT IN HSBC BANK, GENEVA IN INDIA EITHER ON SUBSTANTIVE OR ON PROTECTIVE BASIS. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE I S DISMISSED. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 21 18. IN THE RESULT APPEAL OF THE REVENUE IN ITA NO.7272/MUM/2017 FOR A.Y. 2006 - 07 IN THE CASE OF SHRI NIRAV S GANDHI IS DISMISSED. QUANTUM APPEAL FILED BY THE REVENUE IN THE CASE OF SHRI NIRAV SUNIL GANDHI - ITA NO.7273/MUM/2018 (A.Y.2007 - 0 8) 19. AS THE FACTS AND CIRCUMSTANCES FOR THIS ASSESSMENT YEAR ARE IDENTICAL WITH FACTS AND CIRCUMSTANCES OF A.Y.2006 - 07 DELIBERATED HEREINABOVE, THE DECISION RENDERED FOR A.Y.2006 - 07 IN ITA NO.7272/MUM/2017 SHALL APPLY WITH EQUAL FORCE FOR THIS ASSESSME NT YEAR ALSO EXCEPT WITH VARIANCE IN FIGURES. 20. IN THE RESULT, BOTH THE QUANTUM APPEALS OF THE REVENUE IN ITA NO.7272/MUM/2017 & 7273/MUM/2017 FOR A.Y.2006 - 07 & 2007 - 08 RESPECTIVELY ARE DISMISSED. ITA NO. 7236/MUM/2017 TO 7242/MUM/2017 FOR A.Y.2006 - 07 TO 2012 - 13 IN THE CASE OF SHRI NIRAV SUNIL GANDHI PENALTY APPEALS U/S.271(1)(B) OF THE ACT 21. THESE APPEALS ARISE OUT OF THE INDEPENDENT ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 50, MUMBAI (LD. CIT(A) IN SHORT) IN APPEAL IN THE MATTER O F IMPOSITION OF PENALTY U/S. 271 (1)(B) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) FOR THE A.YS. 2006 - 07 TO 2012 - 13 IN THE CASE OF SHRI NIRAV SUNIL GANDHI. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 22 21 .1. WE FIND THAT THESE PENALTIES ARE LEVIED FOR VARIOUS ASSESSMENT YEARS B Y THE LD. AO ON THE GROUND THAT ASSESSEE HAS NOT COOPERATED WITH THE ASSESSMENT PROCEEDINGS. BUT WHILE NARRATING THE FACTS OF THE CASE IN THE CASE OF THE ASSESSEE (I.E. SHRI NIRAV GANDHI) IN ITA NO.72 7 2/MUM/2017 SUPRA , WE FIND THAT THE ASSESSEE , BEING A NO N - RESIDENT , HAD DULY RESPONDED TO ALL THE QUERIES RAISED BY THE LD. AO BY GIVING WRITTEN REPLIES. THE REPLIES GIVEN BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE LD. AO. THAT DOES NOT MEAN THAT ASSESSEE HAS FAILED TO COMPLY WITH THE STATUTORY NOTICE ISSU ED BY THE LD. AO. IN ANY CASE , THE ASSESSEE BEING A NON - RESIDENT, THERE CANNOT BE ANY ADDITION TOWARDS FOREIGN BANK TRANSACTIONS IN HSBC, GENEVA IN HIS HANDS IN INDIA EITHER ON SUBSTANTIVE OR PROTECTIVE BASIS. HENCE, THERE IS NO NEED FOR THE ASSESSEE TO SI GN IN CONSENT WAIVER FORM OR ANY OTHER DOCUMENT IN ORDER TO OBTAIN THE BANK STATEMENTS FROM THE S WISS AUTHORITIES. HOWEVER, WE FIND THAT ULTIMATELY THE ASSESSMENTS WERE FRAMED BY THE LD. AO FOR ALL THESE ASSESSMENT YEARS ONLY U/S.143(3) OF THE ACT WHICH GO ES TO PROVE THAT ASSESSEE HAD INDEED COOPERATED WITH THE LD. AO FOR SMOOTH COMPLETION OF ASSESSMENT PROCEEDINGS. RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING DECISIONS: - A) DECISION OF CO - ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF SHIV KUMAR NA YYAR VS ACIT IN ITA NOS. 6203 & 6204/DEL/2019 DATED 31/03/2021 B) DECISION OF DELHI TRIBUNAL IN THE CASE OF GLOBUS INFOCOM LTD VS. DCIT IN ITA NO.738/DEL/2014 C) DECISION OF DELHI TRIBUNAL IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SINGH VS ADIT IN IT A NO.2900/DEL/2005. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 23 21. 2 . ACCORDINGLY, THE PENALTIES LEVIED U/S.271(1)(B) FOR THE A.Y.2006 - 07 TO 2012 - 13 IN THE CASE OF SHRI NIRAV SUNIL GANDHI ARE HEREBY DIRECTED TO BE DELETED. 22. IN THE RESULT, ALL THE PENALTY APPEALS OF THE ASSESSEE (SHRI NIRAV SUN IL GANDHI) U/S.271(1)(B) OF THE ACT IN ITA NOS. 7236 TO 7242/MUM/2017 FOR A.Y.2006 - 07 TO 2012 - 13 RESPECTIVELY ARE ALLOWED. ITA NO.7274/MUM/2015 (A.Y.2006 - 07) - QUANTUM APPEAL FILED BY THE REVENUE IN THE CASE OF SHRI PRANAV SUNIL GANDHI 23. THE REVENUE HA S RAISED THE FOLLOWING GROUND: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,26,18,254/ - U/S.69A OF THE I.T. ACT MADE ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE, MERELY ON THE BA SIS OF CONFIRMING THE SAME ADDITION ON SUBSTANTIVE BASIS IN THE CASE OF HIS FATHER SHRI SUNIL C GANDHI WITHOUT APPRECIATING THE FACT THAT ASSESSEES NAME HA D ALSO APPEARED IN THE INFORMATION RECEIVED BY THE GOVERNMENT OF INDIA FROM THE GOVERNMENT OF FRANCE UNDER THE PROVISIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) AND THE VERY BASIS OF THE PROTECTIVE ADDITION IN ASSESSEES CASE IS TO PROTECT THE INTEREST OF REVENUE IN THE EVENT OF THE SUBSTANTIVE DEMAND BEING NON - RECOVERABLE? THE APPELL A NT PRAYS T HAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND AND / OR ADD NEW GROUNDS WHICH BE NECESSARY . 24. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT A SEARCH AND SEIZURE ACTION WAS CARRIED OUT U/S.132 OF THE ACT AT THE RESIDENCE AND BUSINESS PREMISES OF SHRI SUNIL C GAN D HI AND HIS GROUP ON 16/09/2011 BY THE INCOME TAX DEPARTMENT. THE PRESENT ASSESSEE I. E . SHRI PRANAV SUNIL GANDHI IS THE SON OF SHRI SUNIL C GANDHI, WHO IS ALSO COVERED IN THE SEARCH ACTION. THE ASSESSEE SHRI PRANAV SUNIL GANDHI IS RESIDENT OF INDIA AND IS ALSO PARTNER IN NEHAL ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 24 DIAMONDS, A PARTNERSHIP FIRM ENGAGED IN THE DIAMOND BUSINESS. T HE ORIGINAL RETURN OF INCOME FOR THE A.Y.2006 - 07 WAS FILED BY SHRI PRANAV SUNIL GANDHI ON 12/07/2006 DECLARED TOTAL INCOME OF RS.98,408/ - . P URSUANT TO THE SEARCH, THE NOTICE U/S.153A OF THE ACT WAS ISSUE D ON HIM AND HE FILED THE RETURN IN RESPONSE THERETO ON 23/07/2013 DECLARING TOTAL INCOME OF RS.98,408/ - . 24.1 AS POINTED OUT HEREINABOVE IN THE QUANTUM APPEAL FOR A.Y.2006 - 07 IN THE CASE OF SHRI SUNIL C GANDHI IN ITA NO.7179/MUM/2017, THE LD. AO OBTAINED THE BASE NOTE FROM THE FRENCH GOVERNMENT WHICH STAT ED THAT THERE IS A FOREIGN BANK ACCOUNT MAINTAINED IN THE NAME OF SHRI SUNIL C GANDHI WITH HSBC BANK, GENEVA S TATED SUPRA . SHRI SUNIL C GANDHI HAD ALWAYS MAINTAINED AND STATED THAT THE SAID BANK ACCOUNT IN HIS NAME WAS OPENED BY HIS SON SHRI NIRAV GANDHI F OR THE PURPOSE OF BUSINESS PURPOSES OF SHRI NIRAV GANDHI AND FOR SECURING THE FUTURE OF SHRI NIRAV GANDHI; THAT THE SAID BANK ACCOUNT WAS OPENED IN THE YEAR 2000 WHEN SHRI SUNIL GANDHI VISITED BELGIUM TO MEET HIS SON AND THAT THE SAID BANK ACCOUNT TRANSACT IONS ARE FULLY OWNED UP AND BELONGING ONLY TO SHRI NIRAV GANDHI WHO IS A NON - RESIDENT. SINCE, THE LD. AO HAD MADE ADDITION IN RESPECT OF PEAK BALANCE OF THE AMOUNTS LYING IN THE SAID BANK ACCOUNT AS ON NOVEMBER 2006 (WHICH IS NOT RELEVANT FOR A.Y. 2006 - 07) AMOUNTING TO RS.1,26,18,254 (USD 2 , 82 , 857.07) ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI SUNIL C GANDHI , THE LD. AO HAD PROCEEDED TO MAKE THE VERY SAME ADDITION IN THE HANDS OF SHRI PRANAV SUNIL GANDHI ON PROTECTIVE BASIS. 24.2. WE FIND THAT THE LD. CIT(A ) HAD OBSERVED THAT SINCE THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF SHRI SUNIL C GANDHI HAS ALREADY BEEN CONFIRMED FOR A.Y.2006 - 07 VIDE HIS ORDER DATED 22/09/2017, THE ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 25 PROTECTIVE ADDITION MADE IN THE HANDS OF SHRI PRANAV S GANDHI (ASSESSEE HEREIN) WAS DELETED. 25 . AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 26. THE ASSESSEE IN RESPONSE TO QUERIES OF THE LD. AO CONFIRMED THAT HIS BROTHER SHRI NIRAV GANDHI WAS THE BENEFICIAL OWNER OF THE FOREIGN BANK ACCOUNT WITH HSBC AT GENEVA AND THAT THE SAID ACCOUNT WAS OPERATE D BY HIS BROTHER SINCE 2000 AND THAT ALL THE FUNDS IN THE SAID BANK ACCOUNT ARE IN RELATION TO HIS BROTHERS BUSINESS (I.E. SHRI NIRAV S GANDHI) OUTSIDE INDIA AND DO NOT REPRESENT ANY INCOME FROM SOURCES IN INDIA. IT WAS SPECIFICALL Y CONFIRMED THAT THE SAID FUNDS HAVE BEEN DISCLOSED BY HIS BROTHER (SHRI NIRAV S GANDHI) WHILE FILING THE TAX RETURNS IN BELGIUM WHICH FACT IS ALSO CONFIRMED BY BELGIUM REVENUE AUTHORITIES. 27. WE FIND THAT THE SAID BANK ACCOUNT IS NOT IN THE NAME OF SHRI PRANAV GANDHI AND HENCE, SHRI PRANAV GANDHI IS NOT OBLIGED TO GIVE ANY EXPLANATION IN RESPECT OF FUNDS LYING IN THE SAID BANK ACCOUNT IN HSBC, GENEVA AND HENCE, NO ADDITION COULD BE MADE IN HIS HANDS EITHER ON SUBSTANTIVE BASIS OR PROTECTIVE BASIS. ACCORD INGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 28. IN THE RESULT, APPEAL OF REVENUE IN ITA NO.7274/MUM/2017 FOR A.Y.2006 - 07 IN THE CASE OF SHRI PRANAV SUNIL GANDHI IS DISMISSED. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 26 ITA NO.7275/MUM/2017 (A.Y.2007 - 08) QUANTUM APPEAL FILED BY THE R EVENUE IN THE CASE OF SHRI PRANAV SUNIL GANDHI 29. AS THE FACTS AND CIRCUMSTANCES FOR THIS ASSESSMENT YEAR ARE IDENTICAL WITH FACTS AND CIRCUMSTANCES OF A.Y.2006 - 07 DELIBERATED HEREINABOVE, THE DECISION RENDERED FOR A.Y.2006 - 07 IN ITA NO.7274/MUM/2017 SH ALL APPLY WITH EQUAL FORCE FOR THIS ASSESSMENT YEAR ALSO EXCEPT WITH VARIANCE IN FIGURES. 30 . IN THE RESULT, THE QUANTUM APPEALS OF THE REVENUE IN ITA NO.7274/MUM/2017 & 7275/MUM/2017 FOR A.Y.2006 - 07 & 2007 - 08 RESPECTIVELY IN THE CASE OF SHRI PRANAV SUNIL GANDHI ARE DISMISSED. ITA NO.7229/MUM/2017 TO 7235/MUM/2017 (A.Y S .2006 - 07 TO 2012 - 13 RESPECTIVELY) SHRI PRANAV S. GANDHI PENALTY APPEALS U/S 271(1)(B) OF THE ACT 31. THESE APPEALS ARISE OUT OF THE INDEPENDENT ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 50, MUMBAI (LD. CIT(A) IN SHORT) IN APPEAL IN THE MATTER OF IMPOSITION OF PENALTY U/S. 271 (1)(B) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) FOR THE A.YS. 2006 - 07 TO 2012 - 13 IN THE CASE OF SHRI PRANAV SUNIL GANDHI. 31 .1 . WE FIND THAT THESE PENALTIES ARE LEVIED FOR VARIOUS ASSESSMENT YEARS BY THE LD. AO ON THE GROUND THAT ASSESSEE HAS NOT CO - OPERATED WITH THE ASSESSMENT PROCEEDINGS BY NOT SIGNING THE CONSENT WAIVER FORM FOR SEEKING THE BANK STATEMENTS FROM THE S WISS AUTHOR ITIES. WHEN IT HAS BEEN CONSISTENTLY STATED BY THE ASSESSEE (SHRI PRANAV S GANDHI) THAT HE IS NO WAY CONNECTED WITH THE FOREIGN BANK ACCOUNT IN HSBC BANK, GENEVA AS IT ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 27 IS NOT AT ALL IN HIS NAME , THERE IS NO QUESTION OF SIGNING ANY CONSENT WAIVER F ORM FROM HIS SIDE. H ENCE, IT COULD BE SAFELY CONCLUDED THAT ASSESSEE WAS ASKED TO GIVE THE UNWANTED AND IRRELEVANT INFORMATION WHICH IS NOT AT ALL CONCERNED IN HIS CASE. THIS CANNOT BE CONSTRUED AS NON - COOPERATION BY THE ASSESSEE. HENCE, WE HOLD THAT NO PENALTY U/ S.271(1)(B) OF THE ACT COULD BE LEVIED IN THE HANDS OF THE ASSESSEE. HOWEVER, WE FIND THAT ULTIMATELY THE ASSESSMENTS WERE FRAMED BY THE LD. AO FOR ALL THESE ASSESSMENT YEARS ONLY U/S.143(3) OF THE ACT WHICH GOES TO PROVE THAT ASSESSEE HAD INDEED COOPERATE D WITH THE LD. AO FOR SMOOTH COMPLETION OF ASSESSMENT PROCEEDINGS BY MAKING SOME ADDITION THEREON . RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING DECISIONS: - A) DECISION OF CO - ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF SHIV KUMAR NAYYAR VS ACIT I N ITA NOS. 6203 & 6204/DEL/2019 DATED 31/03/2021 B) DECISION OF DELHI TRIBUNAL IN THE CASE OF GLOBUS INFOCOM LTD VS. DCIT IN ITA NO.738/DEL/2014 C) DECISION OF DELHI TRIBUNAL IN THE CASE OF AKHIL BHARTIYA PRATHMIK SHIKSHAK SINGH VS ADIT IN ITA NO.2900/DEL/ 2005. 31. 2 . HENCE, WE DO NOT DEEM THIS AS FIT CASE FOR SUSTAINING THE LEVY OF PENALTY U/S.271(1)(B) OF THE ACT. ACCORDINGLY, THE PENALTY LEVIED U/S.271(1)(B) OF THE ACT ARE HEREBY DIRECTED TO BE DELETED FOR A.Y.2006 - 07 TO 2012 - 13 IN THE CASE OF SHRI PRAN AV SUNIL GANDHI. 32. IN THE RESULT, ALL THESE PENALTY APPEALS U/S.271(1)(B) OF THE ACT OF THE ASSESSEE I.E. SHRI PRANAV S GANDHI IN ITA NOS. 7229 TO 7235/MUM/2017 FOR THE A.YS. 2006 - 07 TO 2013 - 13 RESPECTIVELY, ARE ALLOWED. ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 28 33. TO SUM UP : SR. NO. ITA N O. A.Y. NAME OF THE ASSESSEE RESULT 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 7179/MUM/2017 7180/MUM/2017 7181/MUM/2017 7182/MUM/2017 7183/MUM/2017 7222/MUM/2017 7223/MUM/2017 7224/MUM/2017 7225/MUM/2017 7226/MUM/2017 7227/MUM/2017 7228/MUM/2017 2006 - 07 20 07 - 08 2006 - 07 2007 - 08 2012 - 13 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 2011 - 12 2012 - 13 SHRI SUNIL CHIMANLAL GANDHI ASSESSEE APPEALS ARE ALLOWED 13. 14. 7272/MUM/2017 7273/MUM/2017 2006 - 07 2007 - 08 SHRI NIRAV SUNIL GANDHI REVENUE APPEALS ARE DISMISS E D 15 16 17 18 19 20 21 7236/MUM/2017 7237/MUM/2017 7238/MUM/2017 7239/MUM/2017 7240/MUM/2017 7241/MUM/2017 7242/MUM/2017 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 2011 - 12 2012 - 13 SHRI NIRAV SUNIL GANDHI ASSESSEE APPEALS ARE ALLOWED 22 23 7274/MUM/20 17 7275/MUM/2017 2006 - 07 2007 - 08 SHRI PRANAV SUNIL GANDHI REVENUE APPEALS ARE DISMISS ED ITA NO . 7181/MUM/2017 AND OTHER APPEALS SHRI SUNIL CHIMANLAL GANDHI 29 ORDER PRONOUNCED ON 21 / 06 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI ; DATED 21 / 06 / 2021 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 24. 25. 26. 27. 28. 29. 30. 7229/MUM/2017 7230/MUM/2017 7231/MUM/2017 7232/MUM/2017 7233/MUM/2017 7234/MUM/2017 7235/MUM/2017 2006 - 07 2007 - 08 2008 - 09 2009 - 10 201 0 - 11 2011 - 12 2012 - 13 SHRI PRANAV SUNIL GANDHI ASSESSEE APPEALS ARE ALLOWED 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY //