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2019 (10) TMI 916 - AT - Income TaxValidly of reassessment proceedings - contribution of addition to Sornammal Educational Trust has a gesture of goodwill - as per AO contribution of donation made by M/s. Ranstand Holdings, NV, Netherlands is part and parcel of the total contribution agreed and accordingly issued notice u/s.148 - HELD THAT:- Admittedly in the present case, MOU dated 20.08.2008 was on record but there is nothing on record to show that the Assessing Officer had examined clauses of the MOU governing the contribution of donation by M/s. Ranstand Holdings, NV, Netherlands to Sornammal Educational Trust, Chennai as a gesture of goodwill. It is only during the course of assessment proceedings in the hands of Ms. Hemalatha Rajan for the assessment year 2010-2011, the Assessing Officer had come to know that M/s. Ranstand Holdings, NV, Netherlands had paid contribution of addition to Sornammal Educational Trust has a gesture of goodwill. This would undisputedly constitute a fresh tangible material enabling the Assessing Officer to form an opinion that income escaped assessment. Furthermore, there is nothing on record to show that in the original assessment proceedings, the Assessing Officer has raised this issue of taxability of this item and formed an opinion in favour of the assessee. Therefore, it cannot be said that it is case of mere change of opinion as no such opinion was formed in original assessment proceedings. The proposition of law laid down by Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd [2010 (1) TMI 11 - SUPREME COURT] has no application to the facts of the present case. Thus, the ground of appeal No. 2 raised by the assessee stands dismissed. Tax contribution of donation made by Ranstand Holdings, NV, Netherlands to Sornammal Educational Trust, Chennai as part of compensation paid to the assessee for breach of share purchase agreement - HELD THAT:- From the reading of the above clause, it is clear that goodwill is not part and parcel of compensation paid to the assessee and his wife by Ranstand Holdings, NV, Netherlands and it is separate and distinct transaction and voluntary payment. The fact that contribution was approved by the Government of India under Foreign Contribution Act confirming the position. It prima facie proves that it is a voluntary contribution. Further, the mere fact that assessee and his wife are trustees in the trust does not ipso facto prove that they are beneficiaries of this fund nor there is no material on record brought by the Assessing Officer to say that the money was diverted to the trust by the assessee and his wife. There was no tangible material brought on record by the Assessing Officer to establish collusion in the transaction. Therefore what is apparent should be believed unless and until the contrary is proved in the light of the judgment in the case of Sumathi Dayal vs. CIT [1995 (3) TMI 3 - SUPREME COURT] . AO was not justified in treating the contribution paid to the trust as a part of compensation and bringing to tax in the hands of the assessee and his wife. Thus, ground of appeal No.3 filed by the assessee stands allowed.
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