No Tax to be levied on Interest received from Swiss Bank Accounts

Last updated: 06 August 2021

Court :
ITAT Delhi

Brief :
In The A.C.I.T. Central Circle-15, New Delhi v. Shri Krishan Lal Madhok 672, Tulsi Farms, Opp. Nanda Hospital Chattarpur, New Delhi ITA No. 3917 to 3921/DEL/2017 [A.YS 2006-07 to 2012-13] & ITA No.6648/DEL/2017 [A.Y 2007-08], the A.C.I.T. Central Circle-15 ('the Appellants') on the basis of information received from the Government of France under the Double Taxation Avoidance Convention (DTAC) wrongfully assumed that Shri Krishan Lal Madhok ('the Respondents') was earning an interest at the rate of 4% from his foreign Swiss Bank account, thereby included the same in his income while computing his tax returns.

Citation :
ITA No. 3917 to 3921/DEL/2017 [A.YS 2006-07 to 2012-13] & ITA No.6648/DEL/2017 [A.Y 2007-08]

In The A.C.I.T. Central Circle-15, New Delhi v. Shri Krishan Lal Madhok 672, Tulsi Farms, Opp. Nanda Hospital Chattarpur, New Delhi ITA No. 3917 to 3921/DEL/2017 [A.YS 2006-07 to 2012-13] & ITA No.6648/DEL/2017 [A.Y 2007-08], the A.C.I.T. Central Circle-15 ('the Appellants') on the basis of information received from the Government of France under the Double Taxation Avoidance Convention (DTAC) wrongfully assumed that Shri Krishan Lal Madhok ('the Respondents') was earning an interest at the rate of 4% from his foreign Swiss Bank account, thereby included the same in his income while computing his tax returns.

The Hon'ble bench of Income Tax Tribunal, Delhi denied the same as there was no mention of interest in the information provided by the French Government, and held that the Assessing Officer's decision defies the taxability of the concept of real income. It was not logical to compute interest on foreign funds at an interest rate prevailing in India

Dismissed the appeal.