ITAT deletes additions as sum appearing in SWISS bank was assessee’s foreign-sourced income earned when he was NR

Case Details: Deputy Commissioner of Income-tax v. Ganpat Singhvi - [2022] 134 taxmann.com 6 (Mumbai - Trib.)

Judiciary and Counsel Details

• • Rajesh Kumar, Accountant Member and Ravish Sood, Judicial Member
  • A.K. Gosh, A.R. for the Appellant. 
  • Vijay Kumar Subramaniyan, D.R. for the Respondent.

Facts of the Case

Assessee-individual was a Chartered Accountant. During the assessment year 2006-07, he was non-resident, and the assessment was completed accordingly. Afterwards, AO received information that the assessee had two bank accounts in HSBC Bank, Geneva. The first account was in the name of company Blueridge, and the other account was in the joint names of the assessee and his brother and said it was not disclosed by the assessee.
AO finalised the assessment was framed under section 143(3) read with section 147 making an addition to the assessee’s income equal to peak balance in both the bank accounts. However, CIT(A) reversed the finding of AO. Aggrieved-AO filed the instant appeal before the Tribunal.

ITAT Held

The Mumbai Tribunal held that the department had failed to bring any evidence on record to show that the assessee has any beneficial interest in the company, i.e. Blueridge or the bank account held by the company with HSBC Geneva.

The assessee filed three independent/third-party pieces of evidence before the CIT(A) to show that he had no direct or indirect beneficial interest in the company, namely, Blueridge with HSBC Geneva.

Regarding the other account, the assessee had opened a joint account along with his brother in HSBC Geneva in 1998 and had transferred funds since 1998 to this account from his other account in HSBC Abu Dhabi, UAE. The source of the funds transferred from HSBC Abu Dhabi, UAE were out of the income earned in Abu Dhabi and savings made by the assessee during his stay in Abu Dhabi, UAE, as a non-resident Indian since 1976.
Considering all these facts, the order of Commissioner (Appeals) was to be upheld and the appeal filed by the revenue to be dismissed.

List of Cases Referred to

• • ACIT v. Suresh Nanda [IT Appeal Nos. 4802 to 4806 (Delhi) of 2015, dated 22-2-2016] (para 7)
  • CIT v. Suresh Kumar [IT Appeal No. 85 of 2013, dated 25-2-2013] (para 7)
  • Addl. CIT v. Jatinder Mehra [2021] 128 taxmann.com 152/190 ITD 611 (Delhi – Trib) (para 7)
  • GVK Industries Ltd. v. ITO [2015] 54 taxmann.com 347/231 Taxman 18/371 ITR 453 (SC) (para 7)
  • Soignee R. Kothari v. Dy. CIT [2017] 81 taxmann.com 340/[2016] 386 ITR 466 (Bom.) (para 7).