TMI Blog2014 (2) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - IT APPEAL NOS. 2075 AND 2669 (MUM.) OF 2010 - - - Dated:- 16-11-2012 - H.L. KARWA AND RAJENDRA SINGH, JJ. For the Appellant : Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv. Avatar Singh Bawa (Uncle) - ₹ 29,27,310/- 2.1 The AO after going through the accounts observed that the amounts shown as gift were outstanding balance of loans taken by the assessee from the above persons. These loans were availed prior to the year 2000 and assessee had transferred these balances on gift account on 31.03.2005. AO further observed that the assessee could not prove that the assessee had received these amounts as genuine gifts. He, therefore, added the same as income under section 68 of the Act. Similarly AO noted that the assessee had received a sum of ₹ 1,05,00,000/- as loan from Kaybee Developers Pvt. Ltd. a group concern in which he held 49.9% shareholdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under section 2(22)(e) of the Act. 4. We first take up the issue relating to legal validity of addition made under section 153A of the Act because this is a basic issue having a bearing on outcome of the appeal. The assessee had raised the legal dispute before CIT(A). It was submitted that under the provisions of section 153A, in case, there was a search conducted in case of the assessee the AO shall assess or reassess the total income of six assessment years immediately preceding assessment year relevant to the previous year in which the search was conducted. The section also provides that assessment or reassessment relating to the said six assessment years pending on the date of initiation of search would abate. In the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 153A of the Act as no incriminating material was found during the search. Aggrieved by the said decision, the assessee is in appeal before the Tribunal. 5. Before us, Ld. A.R submitted that return filed by assessee had been accepted by AO under section 143(1). Since return was filed on 18.8.2005, notice under section 143(2) could have been issued by 17.8.2006. Since AO had not issued any notice under section 143(2), there was no assessment pending for assessment year 2005-06 on the date of search i.e. 5.1.2007. Since there was no assessment pending, there was no question of abatement and, therefore, in such cases, no addition could be made under section 153A of the Act. The Ld. A.R further submitted that, on merits also, there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating any undisclosed income. Some of the Tribunal Benches had taken the view that in case no incriminating material was found AO had no jurisdiction to make assessment or reassessment under section 153A while some other Benches held that jurisdiction under section 153A was automatic to reassess six immediate preceding assessment years irrespective of the fact whether any incriminating material was found or not. Another aspect on which there had been divergent views was whether even if AO had jurisdiction under section 153A, addition can be made in assessment/reassessment only when some incriminating material has been found. All these aspects had been referred to the Special Bench of the Tribunal in case of Alcargo Global Logistics Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of abatement. Therefore, addition could be made only on the basis of incriminating material found during search. 6.2 In this case, the AO had made assessment on the information/material available in the return of income. The information regarding the gift was available in the return of income as capital account had been credited by the assessee by the amount of gift. Similar was the position in relation to addition under section 2(22)(e). The AO had not referred to any incriminating material found during the search based on which addition had been made. Therefore following the decision of the Special Bench (supra), we hold that the AO had no jurisdiction to make addition under section 153A. The addition made is therefore delete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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