PCIT Vs Milan Kavin Parikh (Bombay High Court)
The Bombay High Court dismissed the appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal which had allowed the assessee’s appeal for Assessment Year 2006–07. The core issue was whether additions could be made under Section 153A of the Act in the absence of any incriminating material found during the course of a search conducted under Section 132.
The assessee had filed a return of income declaring a modest income, which stood processed and completed prior to the search. A search and seizure action was conducted on 8 August 2011 in the case of a group entity and related persons, including the assessee, following information received by the tax authorities regarding undisclosed foreign bank accounts. The information was in the form of a “base note” received from foreign authorities, which contained details suggesting that certain Indian nationals held accounts with HSBC Bank (Suisse) SA, Geneva.
Relying on the base note, the Assessing Officer concluded that the assessee was a beneficial owner of certain foreign bank accounts held in the names of overseas entities. During the search, the assessee denied having any connection with such accounts in his statement recorded under Section 132(4). The assessee also produced a letter from HSBC Bank (Suisse) SA, Geneva, confirming that he had no bank account or transactions with the bank. This position was later confirmed by the bank to the tax authorities.
