DCIT, Central Circle-26, New Delhi V. Anurag Dalmia, New Delhi

ITA 7861/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6709 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 29-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K BINDAL CA MRS RINKI SHARMA
• Assessee Lawyers: PRAKASH DUBEY
• Keywords: Search and seizure; Salary income; Notional interest
• Section: 271(1)(c); 143(3); 153A; 13; 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI G.S. PANNU, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A NO.7861/DEL/2017 (ASSESSMENT YEAR 2 012-13) DY. CIT CENTRAL CIRCLE-26, NEW DELHI. VS. SH. ANURAG DALMIA 2 ND FLOOR, INDRAPRAKASH BUILDING 21, BARAKHAMBA ROAD, NEW DELHI. PAN-AADPD 9439P (APPELLANT) (RESPONDENT) I.T.A NO.7862/DEL/2017 (ASSESSMENT YEAR 2 012-13) ASST. CIT CENTRAL CIRCLE-26, NEW DELHI. VS. SH. ANURAG DALMIA 2 ND FLOOR, INDRAPRAKASH BUILDING 21, BARAKHAMBA ROAD, NEW DELHI. PAN-AADPD 9439P (APPELLANT) (RESPONDENT) APPELLANT BY SH. V.K. BINDAL, CA MRS. RINKI SHARMA, CA RESPONDENT BY SH. PRAKASH DUBEY, SR. DR DATE OF HEARING 14.01.2021 DATE OF PRONOUNCEMENT 13.04.2021 2 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA ORDER PER SUDHANSHU SRIVASTAVA, JM: BOTH THE APPEALS ARE PREFERRED BY THE DEPARTMENT. ITA NO.7861/DEL/2017 IS THE DEPARTMENTS APPEAL AGAINST THE QUANTUM ORDER DATED 12.10.2017 PASSED BY THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS)-29, NEW DELHI {CIT(A)} FOR ASSESSMENT YEAR 2012-13 WHEREAS ITA NO.7862/DEL/2017 IS THE DEPARTMENTS APPEAL AGAINST ORDER DATED 12.10.2017 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-29, NE W DELHI {CIT(A)} FOR ASSESSMENT YEAR 2012-13, WHEREIN THE LD . CIT(A) HAS DELETED THE PENALTY OF RS.45,46,111/- IMPOSED U/S 2 71(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) . 2.0 THE BRIEF FACTS OF THE CASE ARE THAT DU RING THE YEAR, THE ASSESSEE HAD DECLARED HIS INCOME FROM SALARY AND IN COME FROM OTHER SOURCES. THE ORIGINAL RETURN WAS FILED ON 31.0 7.2012 DECLARING AN INCOME OF RS.83,71,100/-. A SEARCH AND SEIZURE A CTION U/S 132 OF THE ACT WAS CARRIED OUT IN THIS CASE ON 20.01.20 12 AND DURING THE COURSE OF SEARCH, CASH OF RS.2,21,630/- WAS FOUN D AT THE ASSESSEES RESIDENCE AND CASH OF RS.6,08,750/- WAS FOUND AT 2 ND 3 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA FLOOR, INDRA PRAKASH BUILDING, 21 BARAKHAMBA ROAD, NEW DELHI AND ALSO JEWELLERY VALUING RS.2,02,52,864/- WAS FOUN D. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER TOOK NOTE THAT INFORMATION HAD BEEN RECEIVED WHICH RELATED TO THE ASSESSEE HAVING ACCOUNTS IN HSBC BANK, GENEVA. THE ASSESSIN G OFFICER ALSO NOTED THAT DURING THE COURSE OF SEARCH, THE STATEME NT OF ASSESSEE WAS RECORDED U/S 132(4) OF THE ACT ON 20.01.2012 IN WHICH SPECIFIC QUERY WAS RAISED AS TO WHETHER THE ASSESSEE HAD MAIN TAINED ANY BANK ACCOUNTS ABROAD TO WHICH THE ASSESSEE HAD REPLI ED IN THE NEGATIVE. THE ASSESSING OFFICER FURTHER OBSERVED IN THE ASSESSMENT ORDER THAT FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT, THE STATEMENT OF ASSESSEE WAS R ECORDED ON 03.12.2014 AND THE ASSESSEE WAS AGAIN SPECIFICALLY ASKED AS TO WHETHER THE ASSESSEE MAINTAINED ANY BANK ACCOUNTS WIT H HSBC, SWITZERLAND. THE ASSESSING OFFICER FURTHER NOTED THA T THE ASSESSEE DURING THE COURSE OF SEARCH, WAS SHOWN A COPY OF THE BANK STATEMENT WITH HSBC, SWITZERLAND AND THE ASSESSEE HAD REPLIED IN THE NEGATIVE. THEREAFTER, THE ASSESSING OFFICER NOT ED THAT FROM THE RECORDS AND EVIDENCES, IT WAS EVIDENT THAT THE ASSES SEE HAD 4 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA OPENED/OPERATED ACCOUNTS IN HSBC BANK, SWITZERLAND. THE ASSESSING OFFICER FURTHER NOTED THAT THERE WERE FOU R SUCH UNDISCLOSED ACCOUNTS WHICH WERE LINKED TO THE ASSESS EE. THEREAFTER, THE ASSESSING OFFICER PROCEEDED TO COMPUTE INTEREST INCOME FROM THESE FOUR BANK ACCOUNTS FOR THE YEAR UNDER CONSIDE RATION AT RS.1,47,12,333.41. THIS AMOUNT WAS ADDED TO THE INCO ME OF THE ASSESSEE U/S 69 OF THE ACT AS UNDISCLOSED INTEREST INCOME. PENALTY PROCEEDINGS FOR CONCEALMENT OF PARTICULARS OF INCOM E AND/OR FILING INACCURATE PARTICULARS OF SUCH INCOME WERE ALSO INI TIATED. APART FROM THIS UNDISCLOSED CASH FOUND AT 2 ND FLOOR, 2 ND FLOOR, INDRA PRAKASH BUILDING, 21 BARAKHAMBA ROAD, NEW DELHI FOUN D DURING THE COURSE OF SEARCH WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE AND ASSESSMENT WAS COMPLETED U/S143(3) OF THE ACT. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. CIT(A) WHO DELETED THE ADDITION PERTAINING TO INTEREST BY FOLL OWING HIS ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 ON I DENTICAL FACTS. THE LD. CIT(A) ALSO DELETED THE ADDITION WITH RESPEC T TO THE CASH 5 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA FOUND AT THE PREMISES ON 2 ND FLOOR, INDRA PRAKASH BUILDING, 21 BARAKHAMBA ROAD, NEW DELH. 2.2 SUBSEQUENTLY, TO THE COMPLETION OF THE ASSESSM ENT AS ABOVE, PENALTY U/S 271(1)(C) OF THE ACT TO THE TUNE OF RS.45,46,111/- WAS IMPOSED. SINCE, THE LD. CIT(A) HAD ALREADY DELE TED THE ADDITION IN QUANTUM PROCEEDINGS, THE PENALTY IMPOSED WAS ALSO DELETED BY THE CIT(A). 2.3 AGGRIEVED BY BOTH THESE ORDERS, THE DEPARTMENT HAS NOW APPROACHED THIS TRIBUNAL AND HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL: ITA NO.7861/DEL/2017 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.1,47,12,333/- MADE BY THE AO ON ACCO UNT OF UNDISCLOSED INTEREST INCOME ON THE UNDISCLOSED DEPO SITS OF RS 36.78 CRORE IN HSBC BANK, GENEVA WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE HAD NO INTENT TO DISCLOSE TH E FOREIGN BANK ACCOUNT AS HE HAD NOT GIVEN THE DEPARTMENT 'CO NSENT FORM' NOT THE ASSESSEE HAD SUBMITTED ANY DETAILS RE GARDING THE SAME DURING THE ASSESSMENT PROCEEDINGS OR APPELLATE PROCEEDINGS OR PRIOR TO THAT WHILE FILING THE RETUR NS. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE AD DITION OF RS.6,08,750/- ON ACCOUNT OF UNDISCLOSED CASH FOUND DURING SEARCH AND SEIZURE WITHOUT APPRECIATING THE FACT TH AT THE 6 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA ASSESSEE HAD NOT SUBMITTED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CONTENTION TO THE CONTRARY VIZ TO WH OM THIS CASH BELONGS. 3. THAT THE GROUND OF APPEAL ARE WITHOUT PREJ UDICE TO EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AME ND, ALTER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT T HE TIME OF HEARING OF THE APPEAL. ITA NO.7862/DEL/2017 1. THAT ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE PENALTY OF RS.45,46,111/- WHICH WAS IMPOSED BY THE AO ON ACCOUNT OF CONCEAL INTEREST INCOME OF RS.1,47,12,33 3/- ON ACCOUNT OF UNDISCLOSED INTEREST INCOME IN HSBC GENE VA. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE PENALTY DISREGARDING THE FACTS THAT THE ASSESSEE HAS DELIBE RATELY CONCEALED INTEREST INCOME OF RS. 1,47,12,333/- IN H SBC, GENEVA. 3. THAT THE GROUNDS OF APPEALS ARE WITHOUT PR EJUDICE TO EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEN D, ALTER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT T HE TIME OF HEARING OF THE APPEAL. 3.0 THE LD. CIT-DR SUBMITTED THAT THE INFORMATION HAD BEEN RECEIVED IN TERMS OF THE INFORMATION REGARDING THE FOREIGN BANK ACCOUNTS WHICH HAD BEEN RECEIVED IN TERMS OF THE INF ORMATION 7 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA EXCHANGE PROGRAMME WITH THE GOVERNMENT OF FRANCE AND THAT AS PER THE RECORDS, THE NAME OF THE ASSESSEE, HIS FRIE NDS AND RELATIVES WERE APPEARING IN THE SAID INFORMATION. IT WAS SUBMI TTED THAT THIS INFORMATION ESTABLISHED THAT THE ASSESSEE WAS BENEF ICIARY HOLDER OF THESE ACCOUNTS AND, THEREFORE, THE LD. CIT(A) WAS WR ONG IN DELETING THE QUANTUM ADDITION BASED ON HIS ORDER FOR ASSESSM ENT YEAR 2006-07. THE LD. CIT-DR FURTHER SUBMITTED THAT THE ORDER OF THE LD. CIT(A) IN ASSESSMENT YEAR 2006-07 WAS UPHELD BY THE TRIBUNAL BUT THERE WAS A BASIC DIFFERENCE IN THE FACTS BETWE EN ASSESSMENT YEAR 2006-07 AND THE PRESENT YEAR NOW UNDER CONSIDER ATION FOR THE REASON THAT IN ASSESSMENT YEAR 2006-07, THE ASSESSM ENT WAS COMPLETED U/S 153A OF THE ACT AND SINCE NO INCRIMIN ATING DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH, THE LD. CIT(A) HAD DELETED THE ADDITION WHEREAS IN THE PRESENT YEAR , THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND, THEREFORE, ON FACTUAL MATRIX OF THE CASE, THE LD. CIT(A) SHOULD N OT HAVE FOLLOWED HIS ORDER IN ASSESSMENT YEAR 2006-07. THE LD. CIT-D R ALSO REFERRED TO THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2014-15 WHEREIN AN IDENTICAL ADDITION ON ACCOUNT OF INTEREST HAD 8 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA BEEN DELETED. THE LD. CIT-DR SUBMITTED THAT THERE WA S PERVERSITY IN THE FINDINGS OF THE ITAT AND, THEREFORE, THE SAME S HOULD NOT BE FOLLOWED. 4.0 THE LD. CIT-DR ALSO SUBMITTED THAT THE PENALTY IMPOSED WAS CONSEQUENTIAL AND THE SUSTENANCE OF THE PENALTY WOULD DEPEND ON THE OUTCOME OF THE QUANTUM APPEAL FILED BY THE D EPARTMENT. 5.0 PER CONTRA, THE LD. AR PLACED RELIANCE ON THE ORDER OF THE ITAT IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2014- 15 AND SUBMITTED THAT IN VIEW OF THE FINDING OF THE TRIBUNA L THAT SINCE THE QUANTUM PERTAINING TO BANK DEPOSITS ITSELF HAD BEEN DELETED, NO ADDITION ON ACCOUNT OF INTEREST COULD BE SUSTAINED, THE ADDITION IN THIS YEAR ALSO SHOULD BE DELETED. THE LD. AR ALSO S UBMITTED THAT THE INFORMATION RECEIVED UNDER THE INFORMATION EXCHANGE PROGRAMME RELATED TO ASSESSMENT YEARS 2006-07 AND 2007-08 AND NOT TO THE YEAR UNDER CONSIDERATION. THE LD. AR SUBMITTED THAT THE QUANTUM AS WELL AS THE PENALTY HAD BEEN RIGHTLY DELETED BY THE LD. CIT(A). 6.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND H AVE ALSO PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE T HROUGH THE 9 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA ORDER OF THE CO-ORDINATE BENCH OF THE ITAT IN ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2014-15 IN ITA NO.6542/DEL/2017 WHEREIN AN IDENTICAL ADDITION ON ACCOUNT OF INTEREST HAS BEEN DELETED ON THE GROUND THAT THE ITAT HAD EARLIER DELETED THE ADDITI ON ON ACCOUNT OF INVESTMENT IN THE BANK ACCOUNTS ITSELF. THE RELEVAN T OBSERVATIONS OF THE CO-ORDINATE BENCH ARE CONTAINED IN PARAGRAPH-5 OF THE SAID ORDER. THE SAME IS REPRODUCED HEREIN UNDER FOR A RE ADY REFERENCE. 5.0 WE HAVE CAREFULLY HEARD THE RIVAL CONTENTION S OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AS WELL AS THE LEARNED AUTHORISED REPRESENTATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED A PHOTOCOPY OF THE APPELLATE ORDER DATED 15 TH OF FEBRUARY 2018 PASSED BY THE COORDINATE BENCH IN THE CASE OF THE A SSESSEE FOR ASSESSMENT YEAR 2006 - 07 AND 2007 - 08 IN QUANTUM APPEAL. HE ALSO SUBMITTED A COPY OF THE ORDER OF THE COORDI NATE BENCH DATED 23 AUGUST 2019 IN CASE OF THE ASSESSEE FOR AS SESSMENT YEAR 2008 - 09. HE ALSO SUBMITTED A CHART FOR THE V ARIOUS YEARS WHEREIN THE ADDITION OF NOTIONAL INTEREST ON ACCOUN T OF BALANCE IN THE ALLEGED FOREIGN BANK ACCOUNT OF THE ASSESSEE STARTING FROM ASSESSMENT YEAR 2006 - 07 TO ASSESSMENT YEAR 2 014 - 15 ARE ADDED BY THE LEARNED ASSESSING OFFICER AND DELE TED BY THE LEARNED CIT - A. WE HAVE CAREFULLY CONSIDERED THE O RDER OF THE COORDINATE BENCH IN ITA NUMBER 5395 AND 5396/DEL/20 17 FOR 10 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA ASSESSMENT YEAR 2006 - 07 AND 2007 - 08 DATED 15 TH OF FEBRUARY 2018 WHEREIN THE ADDITION ON ACCOUNT OF IN VESTMENT IN THE BANK ACCOUNT ITSELF WAS DELETED. AS THE QUANTUM ADDITION ITSELF HAS BEEN DELETED BY THE COORDINATE BENCH WIT H RESPECT TO BALANCE IN THE FOREIGN BANK ACCOUNT, THERE IS NO QU ESTION OF MAKING AN ADDITION ON ACCOUNT OF THE NOTIONAL INTER EST ON THAT BALANCE. WITH RESPECT TO THE MAIN ADDITION IN PARAG RAPH NUMBER 14 THE COORDINATE BENCH HAS HELD THAT REVENUE HAS S EVERAL OTHER OPTIONS LEFT BUT NOT THE ACTION U/S 153A READ WITH THE SECOND PROVISO THERETO. THEREFORE , WHEN THE ASSESSEE IS NOT FOUND TO BE OWNER OF ANY BANK ACCOUNT, TILL NOW, TH ERE IS NO REASON TO UPHOLD THE INTEREST ON SUCH BANK BALANCES . IF THE ASSESSEE IS NOT OWNER OF THE AMOUNT LYING IN THE BA NK ACCOUNT, NATURALLY THE INTEREST INCOME CANNOT BE ADDED IN TH E HANDS OF THE ASSESSEE. EVEN OTHERWISE IF THE REVENUE GETS AN Y INFORMATION WITH RESPECT TO THE OWNERSHIP OF THE MO NEY LYING IN THE BANK ACCOUNT WITH HSBC BANK GENEVA, THEN THE PR OVISIONS OF EXPLANATION 2 (D) OF SECTION 148 APPLIES AND THE INTEREST INCOME CAN BE ADDED IN THE HANDS OF THE ASSESSEE. T HE TIME LIMIT AVAILABLE WITH THE REVENUE ACCORDING TO THE P ROVISIONS OF SECTION 149 (1) (C) IS UP TO 16 YEARS. THEREFORE, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT - A, AT PRESENT, IN DELETING THE ADDITION ON ACCOUNT OF INTEREST IN THE HANDS OF THE ASSESSEE FOR THIS YEAR WITH RESPECT TO THE ALLEGED THE HOLDING OF 11 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA BANK BALANCE IN THE HSBC BANK GENEVA ACCOUNT, AS TH E ADDITION ON THE QUANTUM ITSELF HAS BEEN DELETED. 6.1 THE LD. CIT-DR HAS SUBMITTED THAT THERE IS PERVERSITY IN THE ORDER OF THE ITAT IN ASSESSMENT YEAR 2014-15. H OWEVER, HOW THAT ORDER WAS PERVERSE WAS NOT DEMONSTRATED BEFORE US WITH EVIDENCE AND, THEREFORE, BEING BOUND BY JUDICIAL DI SCIPLINE, WE HAVE NO CHOICE BUT TO RESPECTFULLY FOLLOW THE ORDER PASSE D BY THE CO- ORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2014-15 AS ABOVE MENTIONED. ACCORDINGLY, WE FIND NO REASON T O DEVIATE FROM THE FINDINGS OF THE LD. CIT(A) IN THE QUANTUM PROCE EDINGS IN THE YEAR UNDER CONSIDERATION AND WE UPHOLD THE SAME. 7.0 IN THE RESULT, THE DEPARTMENTS APPEAL BEA RING ITA NO.7861/DEL/2017 STANDS DISMISSED. 8.0 SINCE, WE HAVE UPHELD THE DELETION OF THE QUANTUM ADDITION BY THE LD. CIT(A) IN THE FOREGOING PARAGRA PHS, THERE IS AGAIN NO REASON TO DEVIATE FROM THE FINDINGS OF THE LD. CIT(A) IN DELETING THE PENALTY IMPOSED AGAINST THE QUANTUM AD DITION. WE UPHOLD THE DELETION OF PENALTY BY THE LD. CIT(A). 12 ITA NOS.7861 & 7862 /DEL/2017 DCIT VS. ANURAG DALMIA 9.0 IN THE RESULT, ITA NO.7862/DEL/2017 STANDS DIS MISSED. 10. IN THE FINAL RESULT, BOTH THE APPEALS O F THE REVENUE STAND DISMISSED. ORDER PRONOUNCED ON 13 TH APRIL, 2021. SD/- SD/- (G.S.PANNU) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED:13/04/2021 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI