ACIT, CENTRAL CIRCLE-26, NEW DELHI vs. ANURAG DALMIA, NEW DELHI

the quantum addition based on his order for Assessment 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 between Assessment Year 2006-07 and the present year now under consideration for the reason that in Assessment Year 2006-07, the assessment was completed u/s 153A of the Act and since no incriminating 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 not have followed his order in Assessment Year 2006-07. The Ld. CIT-DR also referred to the order of the ITAT in assessee’s own case for Assessment Year 2014-15 wherein an identical addition on account of interest had been deleted. The Ld. CIT-DR submitted that there was perversity in the findings of the ITAT and, therefore, the same should 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 Department.

5.0 Per contra, the Ld. AR placed reliance on the order of the ITAT in assessee’s own case in Assessment Year 2014-15 and submitted that in view of the finding of the Tribunal 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 submitted 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 have also perused the material on record. We have also gone through the order of the Co-ordinate Bench of the ITAT in assessee’s own case for Assessment Year 2014-15 in wherein an identical addition on account of interest has been deleted on the ground that the ITAT had earlier deleted the addition on account of investment in the bank accounts itself. The relevant observations of the Co-ordinate Bench are contained in paragraph-5 of the said order. The same is reproduced herein under for a ready reference.

“5.0 We have carefully heard the rival contentions 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 15th of February 2018 passed by the coordinate bench in the case of the assessee for assessment year 2006 - 07 and 2007 - 08 in quantum appeal. He also submitted a copy of the order of the coordinate bench dated 23 August 2019 in case of the assessee for assessment year 2008 - 09. He also submitted a chart for the various years wherein the addition of notional interest on account of balance in the alleged foreign bank account of the assessee starting from assessment year 2006 - 07 to assessment year 2014 - 15 are added by the learned assessing officer and deleted by the learned CIT - A. We have carefully considered the order of the coordinate bench in ITA number 5395 and 5396/del/2017 for assessment year 2006 - 07 and 2007 - 08 dated 15th of February 2018 wherein the addition on account of investment in the bank account itself was deleted. As the quantum addition itself has been deleted by the coordinate bench with respect to balance in the foreign bank account, there is no question of making an addition on account of the notional interest on that balance. With respect to the main addition in paragraph number 14 the coordinate bench has held that revenue has several 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, there is no reason to uphold the interest on such bank balances. If the assessee is not owner of the amount lying in the bank account, naturally the interest income cannot be added in the hands of the assessee. Even otherwise if the revenue gets any information with respect to the ownership of the money lying in the bank account with HSBC bank Geneva, then the provisions of explanation 2 (d) of Section 148 applies and the interest income can be added in the hands of the assessee. The time limit available with the revenue according to the provisions of Section 149 (1) (C) is up to 16 years. Therefore, we 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 bank balance in the HSBC bank Geneva account, as the 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. However, how that order was perverse was not demonstrated before us with evidence and, therefore, being bound by judicial discipline, we have no choice but to respectfully follow the order passed by the Co- ordinate bench in assessee’s own case for Assessment Year 2014-15 as above mentioned. Accordingly, we find no reason to deviate from the findings of the Ld. CIT(A) in the quantum proceedings in the year under consideration and we uphold the same.

7.0 In the result, the Department’s appeal bearing stands dismissed.

8.0 Since, we have upheld the deletion of the quantum addition by the Ld. CIT(A) in the foregoing paragraphs, there is again no reason to deviate from the findings of the Ld. CIT(A) in deleting the penalty imposed against the quantum addition. We uphold the deletion of penalty by the Ld. CIT(A).

9.0 In the result, stands dismissed.

Order pronounced on 13th April, 2021.