We find that the Assessing Officer has made the addition in the hands of the assessee of interest income from an A/c with HSBC held by the assessee jointly with her husband which was opened by his employer to deposit his salary income. Therefore, it is not an undisclosed foreign a/c of the assessee and therefore, the exception (d) to the circular will not apply. Therefore, this M.A is dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
This M.A.is filed by the Revenue u/s 254(2) of the I.T. Act seeking recall of the order of the Tribunal dated 23.8.2019 dismissing the Revenues appeal on account of low tax effect. The Revenue has stated as under:
“Appeal filed by the Department before the Hon’ble ITAT, B-Bench, Hyderabad vide ITA Nos. 931/Hyd/2015 dated 2308-2019 for the AY 200607 was adjudicated by the Hon’ble’ ITAT, Hyderabad, wherein as per the CBDT Circular No.3/2018 dated 11.07.2018 and Circular No.17 of 2019 dated 09.08.2019, the tax limit for filing of appeal by the Revenue before the Tribunal has been fixed at Rs.50 lakhs. Since the tax effect in this appeal is less than Rs.50 lakhs, the appeal was dismissed on account of low tax effect with the liberty to the Revenue to seek recall of the order.
In this connection, kind attention is to be drawn of the Hon’ble ITAT, B- Bench, Hyderabad and bringing the following facts:
1. The assessee has not filed her Return of Income for the A.Y .2006-07. Assessment order u/s.144 was passed on 27.03.2013 determining the taxable income of the assessee at Rs.1,09,13,600/- by making the following additions:
a. Unexplained credits in bank account Rs.58,72,244/-
b. Unexplained investment in house Rs.10,00,000/-
c. LTCG on sale of house 39,41,156/-
d. Estimated Interest income in HSBC a/c. Rs.1,00,000/-(foreign account)
2. Aggrieved, the assessee filed an appeal before the CIT(A)-4, Hyderabad. The CIT(A) sustained the addition of Rs.15,52,244/- made on account of unexplained credits in bank account and had given combined relief of Rs.93,61,356/- .
3. Aggrieved the department filed appeal before the ITAT and the ITAT vide combined order dated 23.08.2019 dismissed the appeal of Revenue on account of low tax effect (Rs.27,08.767/-) with liberty to the Revenue to seek recall of the order, if the appeal falls within the exceptions mentioned in the CBDT Circular No.03/2018 dated 11.07.2018 and Circular No.17 /2019 dated 08.08.2019.
4. The tax effect is Rs.27,08,767/- which is less than the prescribed monetary limit of Rs.50,00,000/-. However, the case falls under exception(d) mentioned in Para No.10 of the Circular No.3/2018 dated 11. 07.2018, the details of which are as follows:
Based on the information received from the Addl. DIT(Inv), Hyderabad, and in the absence of relevant details like bank account statement, the AO made an addition of Rs.1,00,000/- being estimated interest income on the HSBC account. As the addition relates to undisclosed foreign bank account, the case falls under exception(d) mentioned in Para 10 of the Circular No.3/2018 dated 11.07.2018.
Keeping in view of the above facts and circumstances, it is very clear even though the tax effect is less than the prescribed monetary limit of Rs.50,00,000/-, the case falls under exception (d) mentioned in Para 10 of the Circular No.3/2018. Hence, the Hon’ble ITAT is requested to kindly consider the Miscellaneous Application, and adjudicate the appeal filed by the Revenue in ITA No.931/Hyd/2015 dated 23.08.2019 on the facts and merits of the case in accordance with law”.
2. At the time of hearing, the learned Counsel for the assessee submitted that the clause in the Circular which is being invoked by the Department is not applicable to the assessee’s case. In support of the said contention, the assessee filed submissions stating that the assessee’s husband had an a/c with HSBC Bank which was opened by his employer for the purpose of salary deposit and it was in his assessment order that it was found that his wife, the assessee before us was the joint account holder and had accordingly earned interest income therefrom.
3. The learned Counsel for the assessee further submitted that the CIT (A) has granted relief to the assessee on the ground that the assessee is only a housewife and did not have any independent source of income and that the estimated interest income from HSBC A/c needs to be considered in the hands of the assessee’s husband and as he had admitted that the a/c was opened by his employer to credit his salary income. She also drew our attention to the assessment order in the case of assessee’s husband wherein the Assessing Officer, after verification of the information, has accepted the return filed by the assessee’s husband. Therefore, according to the learned Counsel for the assessee this M.A is not maintainable as the clause (d) of Para 10 of the Circular No.3/2018 dated 11.07.2018 is not attracted to the case before us.
4. Having regard to the rival contentions and the material on record, we find that the Assessing Officer has made the addition in the hands of the assessee of interest income from an A/c with HSBC held by the assessee jointly with her husband which was opened by his employer to deposit his salary income. Therefore, it is not an undisclosed foreign a/c of the assessee and therefore, the exception (d) to the circular will not apply. Therefore, this M.A is dismissed.
5. In the result, M.A. filed by the Revenue is dismissed.
Order pronounced in the Open Court on 28th May, 2021.