DY. COMMISSIONER OF INCOME-TAX- 41 1 1, MUMBAI vs. SATYA KIM YASHPAL, MUMBAI

ITA 5502/MUM/2024Status: DisposedITAT Mumbai30 April 2025AY 2008-0927 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 81,89,072/- for AY 1997-1998, being a protective addition when the income was already offered to tax by the assessee's father, was contrary to law laid down in Lalji Haridas v. ITO and thus deleted. Consequently, the penalty for AY 1997-1998 was dismissed. For AY 2001-2002, the Tribunal concurred with the CIT(A) that the additions of INR.96,80,005/- could not be sustained, noting that the foreign bank account statement showed 'Fiduciary Deposit Repayment', supporting the assessee's stand that these were maturity proceeds of deposits made from her father's savings. The penalty for AY 2001-2002 was also deleted as the quantum addition was deleted. For AY 2008-2009, the appeals were partly allowed, indicating that some additions or penalties were upheld while others were deleted or modified, though the specific reasoning for the partial allowance is not detailed in the provided excerpt. The operative direction for AY 1997-1998 (quantum) was deletion of addition, for AY 2001-2002 (quantum) was deletion of addition, and for AY 2008-2009 (quantum) was partly allowed. The penalty appeals for AY 1997-1998 and 2001-2002 were dismissed, and for AY 2008-2009, they were also dismissed.

What were the facts?

The appeals and cross-objections concern assessment years 1997-1998, 2001-2002, and 2008-2009. The assessee, Satya Kim Yashpal, is the daughter of JSY and BSY. JSY, a British national, worked as a pilot outside India and retired in 1993. He maintained a foreign bank account with HSBC, Geneva, where the assessee and her mother were signatories for administrative convenience. All funds in this account were JSY's salary savings and accrued interest. JSY purchased a foreign asset in 1997, funded by his foreign bank account savings, which was later sold in 2007. Reassessment proceedings were initiated against the assessee, JSY, and BSY, alleging escaped income from foreign bank account credits. The Assessing Officer (AO) made additions for unexplained investment and levied penalties under Section 271(1)(c). The CIT(A) granted relief by deleting these additions and penalties. The Revenue is in appeal before the ITAT, and the assessee has filed cross-objections.

What were the issues?

1. Whether the addition of Rs. 81,89,072/- for unexplained investment for AY 1997-1998 is sustainable, considering it was a protective addition when the income was offered to tax by the assessee's father? (Question of law and fact, concerning Section 143(3)/147 of the Income Tax Act, 1961). 2. Whether the penalty levied under Section 271(1)(c) for AY 1997-1998 is sustainable if the primary addition is deleted? 3. Whether the addition of Rs. 96,80,005/- for unexplained investment for AY 2001-2002 is sustainable, given that the funds in the foreign bank account were 'Fiduciary Deposit Repayment' originating from the father's savings? 4. Whether the penalty levied under Section 271(1)(c) for AY 2001-2002 is sustainable if the primary addition is deleted? 5. Whether the additions for LTCG and interest for AY 2008-2009 are sustainable? 6. Whether the penalty levied under Section 271(1)(c) for AY 2008-2009 is sustainable if the primary addition is deleted? Assessee's Contentions: The assessee's father, JSY, had advised to set up joint accounts for immediate access to funds in case of untoward incidents. The funds in the foreign bank account were JSY's savings. The foreign asset was purchased using JSY's savings. The amounts credited to the foreign bank account were 'Fiduciary Deposit Repayment' from earlier deposits, which were the father's earnings/savings and not taxable in the assessee's hands as unexplained investment. The penalty is not sustainable if the additions are deleted. Revenue's Contentions: The revenue argued for the sustainability of the additions and penalties made by the AO, as reflected in their appeals against the CIT(A)'s relief.

Which sections of the Income-tax Act were involved?

Section 250,Section 149(1)(c),Section 143(3),Section 147,Section 271(1)(c)

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Cases cited in this judgment(2)Show list

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Heard together (10 matters)

ITA No. 5309/MUM/2024
ITA No.5311/MUM/2024
ITA No.5502/MUM/2024
ITA No.5138/MUM/2024
ITA No.5137/MUM/2024
C.O.No.260/MUM/2024
C.O.No.267/MUM/2024
C.O. No.272/MUM/2024
C.O.No.261/MUM/2024
C.O. No.269/MUM/2024

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL "G" BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Assessment Year: 1997-1998 Assessment Year:1997-1998 Assessment Year: 2008-2009 & ITA No.5137/MUM/2024

Assessment Year: 2001-2002

Assessment Year: 2001-2002 Deputy Commissioner of Income Tax 41(1)(1), Mumbai Room No.828, 8th Floor, Kautilya Bhavan, Bandra Kurla Complex,Bandra (East), Mumbai-400051, Maharashtra Vs. Appellant Satya Kim Yashpal 101 Palm Beach Building, Gandhigram Road, Juhu, Mumbai – 400049, Maharashtra. [PAN:AAFPY8166N] Respondent C.O.No.260/MUM/2024 & C.O.No.267/MUM/2024

Assessment Year: 1997-1998

Assessment Year: 1997-1998 C.O. No.272/MUM/2024

Assessment Year: 2008-2009 C.O.No.261/MUM/2024 & C.O. No.269/MUM/2024

Assessment Year: 2001-2002

Assessment Year: 2001-2002 Satya Kim Yashpal 101 Palm Beach Building, Gandhigram Road, Juhu, Mumbai – 400049, Maharashtra. [PAN:AAFPY8166N]............... Mumbai-400

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