2014 (2) TMI 731 - AT - Income Tax

Legality of Addition made u/s 153A of the Act – Held that:- The assessment had been processed under section 143(1) and no notice under section 143(2) had been issued - The decision in Alcargo Global Logistics Ltd. v. Dy. CIT [2012 (7) TMI 222 - ITAT MUMBAI(SB)] followed - provisions of section 153A come into operation if a search or requisition is initiated after 31.5.2003 and on satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income for six years immediately preceding the year of search – thus, the AO had no jurisdiction to make addition under section 153A - The addition made is therefore deleted on the legal ground.

Merit of additions u/s 68 and Section 2(22)(e) of the Act – Held that:- The addition made is on account of gift which is nothing but loan taken by the assessee which was converted into gift during the year - Thus source of gift was loan which the AO himself has admitted had been taken by the assessee in the year prior to 2000 - addition if any could have been made in the year of loan - CIT(A) rightly held that the current year profit has to be excluded - there is no case for any addition under section 2(22)(e) –Decided in favour of Assessee.