DCIT v. Manish Vijay Mehta

By CA Nikhil Gupta · Judgment date: 2022-10-31 · ITAT Mumbai

ITATQuashed / set asidePUBLISH_READY

Important disclaimer

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Source status: Sanitized readable full judgment copy packaged; the exact issuing-court primary record remains pending. Open packaged judgment PDF. This indexed page retains explicit official-source and later-history disclosures for reliance checks.

Case in 2 minutes

S. 68 : Cash credits-Foreign bank deposits-HSBC account-Non-Resident-Merely on the basis of ‘base note’ addition cannot be made in the hands of non-Resident-Deletion of addition is affirmed. [S. 5(2), 6, 147, 148] The assessee is a non-resident since AY. 2001-02. The assessee is working an employee in Belgium and has no business communication in India or outside India and source of income are only those which are disclosed to the tax authorities. The assessment of assessee was reopened on the basis of ‘base note’ of the assessee in HSBC account being USD 67421, translated to Rs. 30,33,945 added as income deemed…

Result: Quashed / set aside. The controlling text is the reasoning and operative order in the packaged judgment, not this editorial summary.

Case snapshot

Court / TribunalITAT Mumbai

Case numberITA Nos. 493–494/Mum/2021 with connected cross-objections

Decision date2022-10-31

Assessment yearAY 2006-07

CoramSHRI PRASHANT MAHARISHI, AM AND SHRI SANDEEP SINGH KARHAIL , JM

OutcomeQuashed / set aside

Sections / provisions: 68

Questions before the Court / Tribunal

S. 68 : Cash credits-Foreign bank deposits-HSBC account-Non-Resident-Merely on the basis of ‘base note’ addition cannot be made in the hands of non-Resident-Deletion of addition is affirmed. [S. 5(2), 6, 147, 148] The assessee is a non-resident since AY. 2001-02. The assessee is working an employee in Belgium and has no business communication in India or outside India and source of income are only those which are disclosed to the tax authorities. The assessment of assessee was reopened on the basis of ‘base note’ of the assessee in HSBC account being USD 67421, translated to Rs. 30,33,945 added as income deemed…
What factual, statutory and procedural conditions control the relief?
How does the operative order apply to the parties and the challenged proceeding?

JUDGMENT-GROUNDED CASE RECORD

Material facts and procedural background

BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI SANDEEP SINGH KARHAIL , JM ITA No. 494/Mum/2021 ( Assessment Year 2006-07) ITA No. 493/Mum/2021 ( Assessment Year 2007-08) Manish Vijay Mehta The DCIT Flat No.E-26, Circle 3(3)(2) 7 t h Floor, E-48, Room No.1607, 16 t h Venus Apartments Floor, Vs. Dr. R.G. Thadani Marg, Air India Building Sea Face (South ), Nariman Point Mumbai-400 021 Worli, Mumbai-400 018 (Appellant) (Respondent) PAN No. AADPM7278D CO No. 155/Mum/2021 (Arising in ITA No. 494/Mum/202 1 A.Y.2006 -07) CO No. 156/Mum/2021 (Arising in ITA No. 493/Mum/202 1 A.Y.2007 -08)

Manish Vijay Mehta The DCIT Flat No. E-26, Circle 3(3)(2) 7 t h Floor, E-48, Room No.1607, 16 t h Floor, Venus Apartments Vs. Air India Building Dr. R.G. Thadani Marg, Nariman Point Sea Face (South ), Worli, Mumbai-400 021 Mumbai-400 018 (Cross Objector) (Respondent) ITA No. 491/Mum/2021 ( Assessment Year 2006-07) ITA No. 492/Mum/2021 ( Assessment Year 2007-08) Urvi Manish Mehta The DCIT Flat No. E-26, Circle 3(3)(2) 7 t h Floor, E-48, Room No.1607, 16 t h Floor, Venus Apartments Air India Building Vs. Dr. R.G. Thadani Marg, Nariman Point Mumbai-400 021 Sea Face (South ), Worli, Mumbai-400 018 (Appellant) (Respondent)

Urvi Manish Mehta The DCIT Flat No. E-26, Circle 3(3)(2) 7 t h Floor, E-48, Room No.1607, 16 t h Floor, Venus Apartments Vs. Air India Building Dr. R.G. Thadani Marg, Nariman Point Sea Face (South ), Worli, Mumbai-400 021 Mumbai-400 018 (Cross Objector) (Respondent) Assessee by : Shri Ajay Singh, AR Revenue by : Shri Soumendu Kumar Dash, DR

01. These are the bunch of four appeals filed by the Dy. Commissioner of Income Tax, Circle 3(3)(2), Mumbai (the learned Assessing Officer) in case of two assessee, husband and wife, namely Mr. Manish Vijay Mehta and Mrs. Urvi Manish Mehta for A.Y. 2006-07 and 2007-08. Both the assessee have also filed Cross Objections in these appeals.

“1. Whether on the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in holding that the onus was on the Department in this case to prove that credits in HSBC Bank account were within the taxing provisions of the Indian Income Tax Act. without appreciating that the onus lies on the assessee to prove the contents of the Base note incorrect in view of his refusal to sign the Consent- Waiver Form to bring back the complete bank statements as mentioned in the Base-Note received from the French Government which the AO has relied during the Scrutiny Proceedings?

Appellant / assessee submissions

08. Assessee reiterated the submission made before the learned Assessing Officer and further challenged that Assessing Officer has not disclosed the base information containing in ‘base note’ stating that same is confidential information and further that the learned Assessing Officer has fallen into grave error in reopening the assessment on the basis of the ‘base note’. It was further argued that the ‘base note’ does not mention any amount deposited during the relevant assessment year and thus, no addition can be made. It was further challenged that the addition has been made on the basis of base note only without any corroborative evidence that assessee has any connection with India. It was further stated that the false allegation

11. The first time Notice u/s 142(1) and 143(2) of the Act were issued by AO on 17.03.2015 and therefore in fact the assessment was completed within 13 days from the date of the issue of the Notice viz. on 31 March 2015. It means his inquiry must have been completed in 13 days. It is submitted that the time available to the AO to conduct enquiries was such short and there was not even an iota of evidence which was made available to the appellant in this regard.

16. It is submitted that this is against the rule of natural justice and therefore the entire reassessment proceedings require to be held as null and void. Page 179 182 of paper book.

6. The conclusions arrived at by the AO are WHOLLY AND TOTALLY factually and legally incorrect which goes to prove that his finding is vitiated by the reason of his indulging in conjectures, suspicions, surmises, assumptions and presumptions and without any authenticate material to support the same and that, in any case, it was perverse, and therefore it is submitted that the entire reassessment proceedings require to be held as null and void.

Revenue / respondent submissions

The packaged judgment does not separately label the respondent's submissions in an independently extractable passage. No contention is inferred; read the full order.

Court / Tribunal analysis and reasoning

The reasoning is integrated into the packaged record. Read it with the facts, statutory text and operative directions; this editorial article does not invent missing reasons.

Operative decision and relief

022. Accordingly, both the appeals of the learned Assessing Officer in case of Mr. Manish Vijay Mehta and both the CO of the assessee are dismissed.

023. Identical additions were made by the learned Assessing Officer in the hands of Mrs. Urvi Manish Mehta of the identical sum for A.Y. 2006-07 and 2007-08 by passing an order under Section 143(3) read with section 147 of the Act for A.Y. 2006-07 and 2007-08 on 31st March 2015. Both the years of appeals were preferred before the learned CIT (A)-57, Mumbai and by separate orders dated 24th September, 2020, deleted the addition. The main reason for deletion of the addition was deletion of addition by the learned CIT (A) for both the years in the hands of the husband of the assessee namely Mr. Manish Vijay Mehta. Therefore, the learned Assessing Officer has preferred the ITA No. 491 and 492/Mum/2021 for A.Y. 2006-07 and 2007-08 respectively. Assessee has preferred the Cross Objections in Co Nos. 153 & 154/Mum/2021 for both the years respectively. As we have already upheld the orders of the learned CIT (A) in the hands of Mr. Manish Vijay Mehta deleting the above addition and the orders under challenge in the hands of his wife are also identical, for the reason given in appeals related to Mr. Manish Vijay Mehta, we also dismissed the appeals of the assessee in case of M/s Urvi Manish…

024. In the result, appeals of the learned Assessing Officer and CO of the assessee for both the years are dismissed.

025. In the result, all the appeals of the learned AO and CO of both the assessee are dismissed.

Official source and later-history control

Primary record: OFFICIAL_PRIMARY_SEARCH_PENDING

Later-history status: RECTIFICATION_HIGH_COURT_APPEAL_SLP_CHECK_PENDING

ITAT rectification, jurisdictional High Court appeal and Supreme Court SLP history remain to be closed.

Release decision: Published with a sanitized local judgment copy and explicit source disclosure; official-primary retrieval and later-history surveillance remain open. Checked 2026-08-11; page is published as index,follow with these limitations disclosed.

FININ2MIN ANALYSIS

Ratio and legal principle

The packaged judgment addresses S. 68 : Cash credits-Foreign bank deposits-HSBC account-Non-Resident-Merely on the basis of ‘base note’ addition cannot be made in the hands of non-Resident-Deletion of addition is affirmed. [S. 5(2), 6, 147, 148] The assessee is a non-resident since AY. 2001-02. The assessee is working an employee in Belgium and has no business communication in India or outside India and source of income are only those which are disclosed to the tax authorities. The assessment of assessee was reopened on the basis of ‘base note’ of the assessee in HSBC account being USD 67421, translated to Rs. 30,33,945 added as income deemed…. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with s. 68 : cash credits-foreign bank deposits-hsbc account-non-resident-merely on the basis of ‘base note’ addition cannot be made in the hands of non-resident-deletion of addition is affirmed. [s. 5(2), 6, 147, 148] the assessee is a non-resident since ay. 2001-02. the assessee is working an employee in belgium and has no business communication in india or outside india and source of income are only those which are disclosed to the tax authorities. the assessment of assessee was reopened on the basis of ‘base note’ of the assessee in hsbc account being usd 67421, translated to rs. 30,33,945 added as income deemed… Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
Verify current appellate, review and SLP history and any later amendment or controlling authority.
Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

Can I rely on this judgment?

Authority level	ITAT
Source integrity	Sanitized readable full judgment copy packaged; issuing-court primary pending
Repository release	PUBLISH_READY
Reliance rule	Verify current history and cite the judgment's narrow proposition, not the editorial headnote.

Does this case match your facts?

Stronger match when

The same primary issue is raised.
The same statutory version and jurisdiction apply.
The procedural stage and burden of proof are comparable.
The material documentary record is substantially similar.

Weaker / distinguishable when

A later higher-court ruling changes the position.
The statutory provision or relevant period differs.
The evidence or procedural chronology is materially different.
A defect decisive here was cured in the user's case.

Questions this judgment answers

What was the main dispute in DCIT v. Manish Vijay Mehta?

Which facts matter most?

What did the ITAT Mumbai decide?

025. In the result, all the appeals of the learned AO and CO of both the assessee are dismissed.

What legal principle can be taken from the judgment?

The packaged judgment addresses S. 68 : Cash credits-Foreign bank deposits-HSBC account-Non-Resident-Merely on the basis of ‘base note’ addition cannot be made in the hands of non-Resident-Deletion of addition is affirmed. [S. 5(2), 6, 147, 148] The assessee is a non-resident since AY. 2001-02. The assessee is working an employee in Belgium and has no business communication in India or outside India and source of income are only those which are disclosed to the tax authorities. The assessment of assessee was reopened on the basis of ‘base note’ of the assessee in HSBC account being USD 67421, translated to Rs. 30,33,945 added as income deemed…. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions. Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Which provisions should be checked?

When is the case most useful?

When the user's facts raise the same issue - S. 68 : Cash credits-Foreign bank deposits-HSBC account-Non-Resident-Merely on the basis of ‘base note’ addition cannot be made in the hands of non-Resident-Deletion of addition is affirmed. [S. 5(2), 6, 147, 148] The assessee is a non-resident since AY. 2001-02. The assessee is working an employee in Belgium and has no business communication in India or outside India and source of income are only those which are disclosed to the tax authorities. The assessment of assessee was reopened on the basis of ‘base note’ of the assessee in HSBC account being USD 67421, translated to Rs. 30,33,945 added as income deemed… - at a comparable procedural stage and under the same statutory version.

What could distinguish the case?

Different evidence, jurisdiction, statutory period, procedural chronology, or later controlling authority can materially change the result.

Can it be cited without another current-law check?

No. Read the packaged judgment and verify current appellate/review/SLP history, statutory amendments and jurisdiction before citation or advice.