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05-07-2019, Krishan Kumar Modi, Section 132, 139(1), 69A, Tribunal Delhi

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3 months 3 days ago #10009 by amit
Section - 132, 139(1), 69A, 271(1)(c), 153A, 69
Order Date - 05-07-2019
Favouring - Partly
Court - Tribunal Delhi
Appellant - Krishan Kumar Modi
Respondent - ACIT
Citation - 719Taxpundit103
Appeal No. - ITA No.2894/Del/2017
Asstt. Year - 2012-13



These appeals have been preferred both by the assessee as well as by the department for the different assessment years under consideration. As the issues were identical, they were heard together and are being disposed of through this common order for the sake of convenience.

2.0 Briefly stated, the facts, as culled out from the orders of the lower authorities, are that a search and seizure operation under section 132 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) was carried out on 09.11.2011 at the residential premises of the assessee located at A-1, Maharani Bagh, New Delhi. During the course of search, the assessee was stated to have been shown certain papers which were in the possession of the search team. The said papers have been reproduced in the assessment order and also form part of paper book filed by the assessee. As per the assessment order, the said information related to the bank account of the assessee in HSBC Bank, Geneva and was received under DTAA/ DTAC between India and other countries. The information, according to the assessment order, was that certain persons in India (including the assessee) held bank accounts in HSBC Private Bank (Suisse), SA, Switzerland. The statement of the assessee was recorded by the search team on 9.11.2011, copy whereof is placed at pages 35-49 of the assessee’s paper book (in short “APB”). In the course of statement recorded under section 132(4) of the, though the appellant denied ownership of any such bank account, the assessee agreed upon to offer to tax income equivalent to US $11,46,368 to buy peace and avoid litigation.

2.1 On the basis of the aforesaid statement, in the return of income filed by the assessee on 28.07.2012 under section 139(1) of the Act for assessment year 2012-13, the assessee offered for tax Rs. 5,81,32,321/- as income under section 69A of the Act to cover the aforesaid offer of US$ 11,46,358. The said amount was computed by applying the conversion rate of Rs. 50.71 per dollar, as applicable in the relevant assessment year 2012-13. Along with the said return, following note was also filed by the assessee:

“1.During the course of search carried at the residential premises, statement of the assessee was recorded on 09.11.2011 under section 132(4) of the Income Tax Act, 1961 (‘the Act )

During the course of recording of the said statement, the applicant, on the basis of contents of a paper shown to him for the first time, merely in order to avoid entering into protracted/costly litigation with the Tax Department, agreed to voluntarily surrender income equivalent to US$ 11.46 lakhs mentioned therein. This voluntary surrender was without prejudice to the primary contention of the assessee that the said paper did not belong/pertain to the assessee. This fact was elaborately explained in the letter dated 09.02.2012 filed before JCIT (OSD), Jhandewalan, New Delhi, copy attached as Annexure 2. In view of the aforesaid, the assessee has, suo moto, offered to tax Rs.5,81,32,321 in the return of income for the assessment year 2012-13 under section 69A of the Act, to specifically cover US$ 11,46,368 surrendered in the aforesaid statement. For the said purpose, the TT buying rate of State Bank of India as on 31.03.2012 has been adopted as the applicable exchange rate for conversion into Indian rupee as per Rule 115 of the Income Tax Rules, 1962.

The aforesaid payment of tax is, it is reiterated at the cost of duplicity, is being made only in a spirit of cooperation and without prejudice to the main contention that the assessee is not aware of the nature/contents of the paper that was shown to him at the time of search and the said paper does not belong/pertain to him.”

2.2 The aforesaid note was filed by the assessee before the assessing officer along with letter dated 30.11.2012, the relevant extracts whereof are also reproduced hereunder:

“It may also be pertinent to point out that for the reasons stated in the statement recorded on 09.11.2011, to avoid entering into protracted/costly litigation and in a spirit of cooperation, the assessee voluntarily and suomotu agreed to pay tax on income equivalent to US$ 11.46 lakhs mentioned therein.

It may be mentioned that subsequently, in the light of the aforesaid statement, the assessee, in the return of income for the assessment year 2012-13 offered for tax additional income of Rs.5,81,32,321 (equivalent to US$ 11.46 lacs by applying exchange rate @Rs.50.71 per dollar) and paid tax thereon. A copy of the return filed by the assessee for the assessment year 2012-13 along with computation of income is attached for your kind perusal and ready reference as Annexure 4.

It is again clarified that since the document, on the basis of which the aforesaid amount has been additionally offered for

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