ITAT upheld addition in for Undisclosed Income held in LGT Bank in Liechtenstein

Mr. Hasmukh I. Gandhi Vs. Dy. CIT (ITAT Mumbai)

In this case Information was received by CBDT from German Authorities about bank account held by a trust named as Manichi Trust where economically beneficial ownership of the assets is of the appellant and his family members. Specific details such as date of birth, residential address, nationality, domicile etc., were available with the bank authorities. The summary of account as on 31.12.2001 also showed that the interest income had accrued on the deposits made in the said bank account. All these information was duly provided to the assessee during the course of assessment proceedings for assessment year 2002-03 by the Assessing Officer.

On these facts, the assessment was reopened and the Assessing Officer made addition for the interest accrued on those bank deposits.

ITAT held that Once it is settled that the assessee is having sums deposited in the foreign bank account, it was incumbent upon the assessee to disclose the same in the subsequent years, unless the assessee produces necessary evidence that the afore-said deposit has been liquidated. Thus, once the Assessing Officer has come to the possession of the information that the assessee is beneficiary of deposits in foreign bank accounts and from the return of income filed by the assessee, the Assessing Officer notices that the interest from the said deposit in accounts has not been disclosed in the return of income, the reopening of the case is duly justified. The computation and assessment of interest is reasonable and justified.

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