ACIT Vs Hoshang Manekji Havewala (ITAT Mumbai)
Foreign HSBC account addition deleted – BUP ID & “Base Note” held insufficient evidence; estimation @17% arbitrary – ITAT Mumbai
In ACIT vs Hoshang Manekji Havewala (A.Ys. 1996-97 to 2000-01), reassessment was initiated based on information received from the French Government alleging undisclosed HSBC Geneva accounts with an assumed investment of US $3 million. The AO estimated income by applying a 17% annual return and made addition of ₹1.70 crore as unexplained income.
The ITAT upheld the deletion made by CIT(A), observing that the alleged “Base Note” and BUP ID only contained demographic details and did not establish existence of any bank account or transaction. The document reproduced on page 10 merely showed identification particulars and lacked evidence of deposits or banking activity. The Tribunal held that estimation based on website screenshots and comparison with another assessee’s investment pattern was arbitrary and unsupported by evidence.
Further, denial of cross-examination of foreign sources and non-furnishing of relied-upon material violated principles of natural justice. Since no concrete proof such as bank statements or confirmations from HSBC was produced, addition was held to be based on conjectures and was rightly deleted. Consequently, Revenue’s appeals were dismissed and penalty u/s 271(1)(c) also failed as quantum addition itself did not survive.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
