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

These appeals are filed by the assessee against the order of ld. Commissioner of Income-tax Appeals-29, New Delhi [hereinafter referred to as ‘ld. CIT (A)] dated all 11.08.2017 for Assessment Years 2008-09 to 2011-12. 2. Since the issues are common and the appeals are connected, hence the same are heard together and being disposed off by this common order. We take ITA No.6545/Del/2017 for AY 2008-09 as lead case. 3. Brief facts of the case are, assessee filed its return of income on 31.07.2010 declaring total income of Rs.45,59,196/-. The return was processed under section 143(1) of the Income Tax Act 1961 (in short ‘the Act’). A search and seizure operation under section 132 of the Act was carried out on 20.01.2012. During the search, certain assets in the form of cash, jewellery and certain documents were found and seized. Notice under section 153A was issued to the assessee to file her return of income and in response assessee vide letter dated 31.10.2012 filed the original return of income dated 31.07.2010. The notices under section 143(2) and 142(1) were issued and served on the Assessee. 4. Assessing officer based on the information that certain persons in India held bank accounts in HSBC private bank and he observed that the information received in the form of a 6 page document and the same was reproduced in the assessment order at pages 3 to 8, which contained the details of name of the assessee and her husband, Shri Anurag Dalmia. The Assessing Officer discussed the various descriptions in the above said documents at pages 9 to 12 of the assessment order. During the course of search, the statement of the assessee was recorded under section 132(4) of the act on 21.01.2012 and he reproduced the various questions and answers at pages 12 and 13 of the order. Another statement was recorded during assessment proceedings under section 153A of the Act. The same was reproduced at pages 13 to 15. The Assessing CHOTUMAN 21. In order to get further information, a communication was sent to the Swiss authorities through FT&TR division of the CBDT for getting, inter alia, statement of the account and other details. Further copy of the document was provided to the assessee and in response, she denied the existence of any account belonging to her with the said bank. After considering her statements, the Assessing Officer treated the above said documents belonging to her and her family members, such as, Mr Sanjay Dalmia (Brother in law) and Mr Anurag Dalmia (husband). And based on the information contained therein, he treated the principal amount mentioned in the statements as belongs to the assessee and he calculated the interest earned on the above said amounts from 01.04.2009 to 31.03.2010 for 12 months which was worked out at the rate of 4% to Rs.56,04,417.58. After giving opportunity to the assessee to explain the same and after considering the reply, he proceeded to make the addition under section 69 of the act. 5. Aggrieved with the above order, assessee preferred an appeal before ld. CIT(A)–29, New Delhi. The ld. CIT(A), after considering the submissions of the assessee, deleted the protective additions made in the hands of the assessee and considering the identical facts, ld. CIT (A) made the substantive addition in the hands of Mr Anurag Dalmia by passing a consolidated order. 6. Aggrieved the Revenue is in appeal before us raising following grounds of appeal. “1. Whether the Ld. CIT (A) was right in rendering addition made in the hands of the appellant infructuous on the basis of similar addition in the hands of Sh. Anurag Dalmia at CIT (A) level, when the addition has not reached finality and should have been held protectively in the hands of the assessee.

That the grounds of appeal are without prejudice to each other.”

At the time of hearing, it was brought to our notice that the issue under consideration is relating to HSBC bank related case and the proposed addition relating to notional interest on the principal amount purported to have owned by the assessee and her family. The substantive addition was made in the hands of the assessee’s husband and the protective addition made in the hands of the assessee are deleted by ld. CIT(A). Learned DR of the Revenue relied on the orders of Assessing Officer and on the other hand, ld. AR for the assessee submitted that the similar issue in the hands of assessee’s husband was considered by the Hon’ble High Court of Delhi and deleted the addition, which is placed on record at page 34 of the paper book. 8. Considered the rival submissions and material placed on record. We observed that ld. CIT(A) has deleted the protective addition in the hands of the assessee considering the fact that he has sustained the addition in the hands of Mr Sanjay Dalmia on substantive basis, in fact, the addition was sustained in the hands of Mr Sanjay Dalmia after the search and seizure operation. The Hon’ble Delhi High Court considered the relevant facts on record and deleted the addition in the hands of Mr. Sanjay Dalmia based on the findings that no incriminating material brought on record by the Revenue, the relevant findings are given below: “13. The material that the petitioner/assessee had was deficient in several aspects, as was pointed out by the counsel at the hearing held on 23.11.2023. The deficiency in the material based on which the impugned addition was made is captured in paragraph 7.1 of the order dated 23.11.2023. 14. As regards the stand of the respondent/revenue, that the appellant/assessee had refused to sign the consent form, Mr Jain submits that the consent form was framed in such a manner that if the appellant/assessee were to sign the form, he would end up incriminating himself even when position taken by him was that he did not maintain a bank account with the Geneva branch of HSBC Bank.

1 In support of this plea, our attention has been drawn to the consent form which the appellant/assessee was called upon to execute. Inter alia, the consent form required the appellant /assessee to furnish the account number(s), master particulars, name(s) of account holders, name(s) of the beneficial owner(s)/settlor(s)/beneficiaries, and if the account was held through an entity, whether he had the necessary legal authority to grant access qua the subject account.

Given that the appellant/assessee has denied the ownership of the subject account and the respondent/revenue has not been able to place before the court reliable material which would have us believe that the appellant's/assessee's stand was not correct, we are of the view that the question of law framed in the matter would have to be answered in favour of the appellant/assessee and against the respondent/revenue.”

Since the addition was made in the hands of the assessee based on the same material evidences and the Hon’ble Delhi High Court found that those materials are not conclusive and reliable material to make addition. Since the filed by the Revenue are dismissed. 10. As the facts are exactly similar in other appeals preferred by the Revenue to the facts of AY 2008-09 and the findings at para number 8 are applicable mutatis mutandis to the other assessment years under consideration. Accordingly, the appeals for assessment years i.e. 2009-10, 2010-11 & 2011-12 are also dismissed. 11. In the result, all the appeals filed by the Revenue are dismissed. Order pronounced in the open court on this 3rd day of January, 2025. (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER