ACIT, CENTRAL CIRCLE- 26, , NEW DELHI vs. KRISHAN KUMAR MODI, NEW DELHI

ORDER PER BENCH : The above batch of five appeals filed by the Revenue are directed against the separate orders dated 07.06.2017 of the Ld. CIT(A)-29, New Delhi, relevant to the A.Ys. 2008-2009 to 2012-2013 respectively.

ITA.No.5911/Del./2017 – A.Y. 2008-2009 [Revenue] :

That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in deleting the penalty of Rs.6,29,271/- 1. on the concealed income of Rs.18,51.345/- which was imposed by the AO on account of undisclosed interest income in HSBC Geneva. That on the facts and in the circumstances of the case the CIT(A) has erred in law and on 2. facts in deleting the penalty, disregarding the facts that the assessee has deliberately concealed his income of Rs.18,51,345/- in HSBC, Geneva. That the grounds of appeals are without 3. prejudice to each other.

3 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal 4. either before or at the time of hearing of the appeal ITA.No.5912/Del./2017 – A.Y. 2009-2010 [Revenue] :

That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in deleting the penalty of Rs.7,47,795/- 1. on the concealed income of Rs.22,00,045/- which was imposed by the AO on account of undisclosed interest income in HSBC Geneva. That on the facts and in the circumstances of the case the CIT(A) has erred in law and on 2. facts in deleting the penalty, disregarding the facts that the assessee has deliberately concealed his income of Rs.22,00,045/- in HSBC, Geneva.

4 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. That the grounds of appeals are without 3. prejudice to each other. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal 4. either before or at the time of hearing of the appeal ITA.No.5913/Del./2017 – A.Y. 2010-2011 [Revenue] :

That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in deleting the penalty of Rs.7,29,148/- 1. on the concealed income of Rs.23,59,704/- which was imposed by the AO on account of undisclosed interest income in HSBC Geneva. That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in 2. deleting the penalty, disregarding the facts that the assessee has deliberately concealed his income of Rs.23,59,704/- in HSBC, Geneva.

5 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. That the grounds of appeals are without 3. prejudice to each other. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal 4. either before or at the time of hearing of the appeal ITA.No.5914/Del./2017 – A.Y. 2011-2012 [Revenue] :

That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in deleting the penalty of Rs.7,28,890/- 1. on the concealed income of Rs.23,58,868/- which was imposed by the AO on account of undisclosed interest income in HSBC Geneva. That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in deleting the penalty, disregarding the facts that 2. the assessee has deliberately concealed his income of Rs.23,58,868/- in HSBC, Geneva.

6 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. That the grounds of appeals are without 3. prejudice to each other. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal 4. either before or at the time of hearing of the appeal ITA.No.5915/Del./2017 – A.Y. 2012-2013 [Revenue] :

That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in deleting the penalty of Rs.9,04,898/- 1. on the concealed income of Rs.29,28,474/- which was imposed by the AO on account of undisclosed interest income in HSBC Geneva.

That on the facts and in the circumstances of the case the CIT(A) has erred in law and on facts in 2. deleting the penalty, disregarding the facts that the assessee has deliberately concealed his income of Rs.29,28,474/- in HSBC, Geneva.

7 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. That the grounds of appeals are without 3. prejudice to each other. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal 4. either before or at the time of hearing of the appeal

3. Learned Counsel for the Assessee, at the outset submitted that the addition based on which penalty has been levied has already been deleted by the Tribunal in ITA.No.3951/Del./2017 to ITA.No.3956/Del./2017 vide consolidated Order Dated 05.07.2019 for the A.Ys. 2007- 2008 to 2012-2013 respectively. Referring to Para-6.4 of the Order of the Tribunal, he is submitted that the Tribunal has deleted the addition made by the A.O. on account of notional interest in the Foreign Bank Account at Geneva. He submitted that the Order of the Tribunal has been upheld by the Hon’ble Jurisdictional Delhi High Court in I.T.A.Nos. 48 to 54 of 2021 vide Order Dated 22.02.2021 and the appeals filed by the Revenue has been dismissed. He

8 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. accordingly submitted that since the very basis on which the penalty has been levied by the A.O. has been deleted by the Ld. CIT(A) which was upheld by the Tribunal and on further appeal by the Revenue the Hon’ble Delhi High Court has dismissed the appeal filed by the Revenue, therefore, the grounds raised by the Revenue do not survive and accordingly, the appeals filed by the Revenue are liable to be dismissed.

9 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. CIT(A) deleted the penalty levied by the A.O. under section 271(1)(c) of the I.T. Act on the ground that the addition with regard to notional interest has been deleted and, therefore, the penalty does not survive. We do not find any infirmity in the Order of the Ld. CIT(A) in deleting the penalty levied by the A.O. on account of notional interest earned from HSBC, Geneva for all these years under consideration. Admittedly, in the quantum proceedings, the Tribunal has already decided the issue in favour of the assessee and the appeal filed by the Revenue has been dismissed by the Hon’ble Delhi High Court by observing as under :

“ 8. We do not find any perversity in the aforesaid observations made by the learned ITAT in respect of additions made on quantum and interest. In view of the aforesaid, the question of law raised by the Appellant-Revenue in the present appeals in respect of quantum does not arise for our consideration. Since the addition on quantum cannot be sustained, the addition of 10 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. interest cannot survive. Thus, no question of law arises in respect of deletion of addition of interest component.”

5.1. Since the Tribunal has already upheld the Order of the Ld. CIT(A) in deleting the quantum addition and the Hon’ble Delhi High Court has already dismissed the appeal filed by the Revenue, therefore, the very basis on which the penalty was levied by the A.O. does not survive. Accordingly, the order of the Ld. CIT(A) for all the five assessment years under appeal deleting the penalty on account of addition of notional interest is upheld. Accordingly, the grounds raised by the Revenue in all the five assessment years under appeal are dismissed.

11 ITA.Nos.5911 to 5915/Del./2017 Shri Krishan Kumar Modi, New Delhi. Order pronounced in the open Court at the time of hearing itself i.e., on 20.07.2021.