MADHU H GANDHI,MUMBAI vs. DCIT CEN CIR 1, MUMBAI

The appeal in in the case of Shri Hasmukh I. Gandhi is taken as the lead case, which is directed against the order of CIT(A)-47, Mumbai dated 25.09.2017, pertaining to the Assessment Year 2014-15, which in turn has arisen from the order dated 08.08.2016 passed by the Assessing Officer, Mumbai under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).

In this appeal, the only addition in dispute is unaccounted interest income of Rs.19,434/-. Explaining the background of the addition, the learned representative for the assessee pointed out that in the lead year of dispute of Assessment Year 2002-03, the case of the Department was that assessee alongwith his family members is the beneficiary in Marnichi Trust, which was having a deposit in LGT Bank, Liechestien, which was undisclosed. The learned representative pointed out that in Assessment Year 2002-03, additions were made in the hands of the assessee which comprised of amount of deposit in LGT Bank, Liechestien and accrued interest thereon corresponding to assessee’s purported share. The dispute travelled to the Tribunal and vide order dated 15.11.2017 in & 2796/Mum/2011, the Tribunal has held the issue against the assessee. The Tribunal also considered the additions made with regard to the interest accrued on such deposit for various other years comprised of Assessment Years 2005-06, 2010-11, 2011-12 and 2012-13 in its combined order dated 15.11.2017 (supra). In the instant year, the Assessing Officer made a similar addition of Rs.19,434/-, which according to the Assessing Officer, was assessee’s share in the interest accrued on such deposit in LGT Bank, Liechestien.

The learned representative quite fairly pointed out that in view of the decision of the Tribunal dated 15.11.2017 (supra), the issue has to be held against the assessee; so, however, she referred to the decision of CIT(A) dated 22.01.2013 in Assessment Year 2004-05 in the case of one of the family members, wherein the addition made on account of interest has been deleted though in other years the issue was decided against the assessee. The learned representative pointed out that the order of CIT(A) for Assessment Year 2004-05 in the case of Shri Chintan H. Gandhi has since become final inasmuch as no appeal by the Revenue has been preferred against it.

I have considered the rival submissions and find that in view of the order of Tribunal dated 15.11.2017 (supra), which continues to hold the field, it is imperative that the impugned addition is upheld. The plea raised by the learned representative, based on the order of CIT(A) dated 22.01.2013 for Assessment Year 2004-05 in the case of another family member, Shri Chintan H. Gandhi, cannot help the case of the assessee inasmuch as the tax effect involved in the dispute before the CIT(A) was much below the permissible limits for filing appeals before the Tribunal. Further, it is also noted that the CIT(A), in the said case, decided on the issue of validity of proceedings initiated under Sec. 147/148 of the Act by examining the facts of the specific year before him and, therefore, the same cannot be imported in the other assessment years. Thus, I hereby affirm the order of CIT(A) upholding the addition of Rs.19,434/- made by the Assessing Officer on account of interest on the deposit in LGT Bank, Liechestien standing in the name of Marnichi Trust qua the share of the assessee following the decision of the Tribunal dated 15.11.2017 (supra).

In the result, appeal of the assessee in is dismissed.

So far as the appeals of other assessees being & 6819/Mum/2017 are concerned, it was a common point between the parties that the facts and circumstances in the said appeals are pari materia to those considered by me in ITA No. 6817/Mum/2017, therefore, my decision therein shall apply mutatis mutandis to the said appeals also.

Resultantly, the appeals filed by the assessees are dismissed.