SHRI PRAVEER MURARKA,KOLKATA vs. A.C.I.T., CC - 3(3), KOLKATA

The ground no.14 is against the charging of interest u/s 234B of the Act is purely consequential.

The issue raised in ground nos. 3 to 10 are against the confirmation of addition of ₹9,53,00,514/- by the ld. CIT (A) as made by the ld. AO in respect of undisclosed income/deposits in bank accounts of deposit in HSBC Geneva, Switzerland bank account.

The facts in brie are that the assessee filed return of income u/s.139(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) on 31.07.2006. No notice u/s.143(2) of the Act was issued within the time required for issuing of notice u/s. 143(2) of the Act, which expired on 30.09.2007. Therefore, assessment would not be regarded as pending on or after 30.09.2007. Search and seizure operations u/s 132 of the Act , were carried out in relation to the Murarka Group on 28.07.2011 and on subsequent dates. Notice u/s.153A of the Act was issued to the assessee calling upon the assessee to file return of income for AY 2006-07 on 27.12.2012. The Assessee filed return of income on 30.08.2013 declaring income of Rs.430/-. In the Assessment proceedings, it was the case of the AO that Government of India received information from foreign Government under relevant clauses of Double Taxation Avoidance Agreement which provide for exchange of information between two sovereign countries.

In the assessment proceedings, the Assessee denied that he holds any Bank Account as alleged by the AO. This is the state of evidence that was before the AO, when he framed the original order of Assessment. The AO did not have any concrete evidences that the Assessee was the owner of the alleged Bank Account nor did he receive any concrete evidences pursuant to his reference to the Swiss Authorities through Foreign Tax and Tax Research Division of CBDT. In the given circumstances, the AO had no other option but to frame order of assessment based on the information which he received from the foreign Government about the existence of Bank A/c in the name of the Assessee with HSBC, Geneva, Switzerland. The AO in the order of assessment for AY 2006- 07 & 2007-08 both dated 31/12/2014 concluded as follows: i. That Mr.Shyama Prasad Muruarka had Bank Account with Code Profit Client No.5091437453 and Identifiants interns No. BUP_SIFIC_PER_ID 5090124793 and the said account was linked with several other accounts viz., ii. DipikshaMurarka, being grand Daughter of Mr.Shyama Prasad Murarka, vide Code Profit Client No.5091437453 with Indentifiants interns No. BUP_SIFIC_PER_ID 5090183141 and Nom (Code BUP) DipikshaMurarka (5090183141) i.e., having the same Bank Account number.

The AO also relied on Page-48 of SPM/8 found from his residence in the course of search. The said document is at Page-62 of Assessee’s paper book. It is a certificate of Foreign Inward remittance dated 09/01/2004. The certificate mentions remittance to the credit of A/c. of Billipack Ltd., at Kolkata in the form of foreign currency (US $ 50,000 equivalent to Rs.22,60,500/-) from HSBC, Geneva, Switzerland. There is no other reference to any bank account or the name of Shyama Prasad Muraruka. The document does not pertain to AY 2006-07 or 2007-08. The AO on assumptions and surmises concluded that Shyma Prasad Murarka was beneficial owner of Bank A/C. and linked accounts and therefore the amounts found deposited in all the

In the appellate proceedings, the ld. CIT(A) confirmed the order of the AO in so far as addition made in respect of deposits in HSBC, Geneva, Switzerland bank accounts.

The Assessee preferred further appeals before the Income Tax Appellate Tribunal (ITAT) against the orders of CIT(A), in IT(SS) A No.533 & 534/Kol/2015 for AY 2006-07 & 2007-08 respectively. The ITAT by it’s common order dated 15.02.2019, was of the view that the addition has been made on improper appreciation of facts and therefore the assessment has to be done de novo and accordingly set aside the orders of the revenue authorities and remanded the entire issue for de novo assessment. The relevant observations of the ITAT was as follows:

Further Mr.shyana Prasad Murarka was the signatory of Bank Account No. 509-1622552 entitled ‘48728 AY’ (formerly 31792YA) of which Mrs.Yamini Agarwala was the holder and beneficial owner.

At last, Mr.Shyana Prasad Murarka was beneficial owner as well as the signatory of the Bank Account No.509-1622528 entitled ‘BILLY PACK LTD.’

The AO concluded that the information was sufficient to sustain the addition which he had made in the original assessment order and accordingly made the addition as was made in the original assessment order.

On appeal by the Assessee, the CIT(A) confirmed the order of the AO on the sole ground that the Assessee failed to give consent to the AO to get details from HSBC, Geneva, Switzerland by refusing to sign waiver and consent form. Hence, the CIT(A) drew adverse inference and held that the

The ld. AR vehemently argued that in so far as the above issue is concerned, it is respectfully submitted that it is not in dispute before us that with respect to the additions made during the course of assessment proceedings u/s.153A of the Act for AY 2006-07 and 2007-08, there was no incriminating material found at the time of search by which it could be said that the Assessee was the beneficial owner of the Bank Accounts with HSBC, Geneva, Switzerland. This will be evident from a perusal of the Panchanama drawn at the time of search conducted in the case of the Assessee. The copy of the said Panchanama is at page-29 to 34 of Assessee’s paper book. For AY 2006-07, the Assessee filed return of income u/s.139(1) of the Income Tax Act, 1961 (Act) on 31.07.2006 and the same was duly acknowledged. No notice u/s.143(2) of the Act was issued within the time required for issue of notice u/s. 143(2) of the Act, which was 30.09.2007. Therefore assessment would not be regarded as pending on or after 30.09.2007. For AY 2007-08, the Assessee filed return of income u/s.139(1) of the Act on 31.07.2007 and the same was duly acknowledged. No notice u/s.143(2) of the Act was issued within the time required for issue of notice u/s. 143(2) of the Act, which was 30.09.2008. Therefore assessment would not be regarded as pending on or after 30.09.2008. Therefore for AY 2006-07 & 2007-08, the Assessment has already been completed and there was no assessment proceedings that could be regarded as pending. Search and

The ld. AR submitted that the AO while concluding the assessment u/s.153A of the Act has not referred to any incriminating material found in the course of search as the basis for making the impugned addition. As already stated, SPM-8 Page-48 being Foreign Inward Remittance Certificate cannot be regarded as material found in the course of search that is relevant for AY 2006-07 & 2007-08. Submissions have been made in this regard in the earlier paragraphs. The AO has all along been referring only to information received from foreign Government, which is the basis for making enquiry with regard to deposit of money in the aforesaid Bank Account with HSBC, Geneva, Switszerland. It is the plea of the Assessee that the impugned additions made by the Assessing Officer could not have been made in the impugned assessment proceedings as they are not based on any material seized or found during the course of search at the business premises of the assessee. The revenue however would argue that where an original assessment has not been framed under section 143(3) of the Act, there is no question of abatement and that in the present case original assessment has been made under section 143(1) of the Act. According to the revenue, the provisions of section 153A empower the Assessing Officer to assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which a search was conducted and, therefore, under these circumstances the Assessing

The issue raised in these appeals are similar to one as decided by us in ITA No. 13/KOL/2026 A.Y. 2006-07(supra).

In the result, the appeals of two assessee’s are allowed.