TMI Blog2015 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... xist any such incriminating evidence, the additions on the basis of mere suspicion about the genuineness of the transactions cannot be held to be justifiable. Thus the assessment proceedings made under section 153A in this case are held to be bad in law and the same are set aside and the consequential additions made are also accordingly ordered to be deleted. - ITA No.3569/M/2013, ITA No.3570/M/2013 & ITA No.3571/M/2013 - - - Dated:- 11-2-2015 - Shri R.C. Sharma And Shri Sanjay Garg JJ. For the Appellant : Shri Reepal G. Tralshwala, A.R. For the Respondent : Smt. S. Padmaja, CIT-D.R. ORDER Per Sanjay Garg, Judicial Member: The above titled appeals have been filed by different but related assessees against the orders dated 21.03.2013 25.03.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)]. Since the facts and issues involved therein are identical, hence the same are taken together for disposal by this common order for the sake of brevity. The facts, for the sake of convenience, have been taken from ITA No.3569/M/2013. ITA No.3569/M/2013. 2. The assessee has taken the following grounds of appeal: A) Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the assessment year in question i.e. A.Y. 2004-05 on 12.08.04 declaring total income of ₹ 6,70,420/-. The Assessing Officer (hereinafter referred to as the AO) noted that the assessee had shown to have received gift of ₹ 1,25,00,000/- from an NRI Shri Kanhaiyalal Sharma. During the assessment proceedings under section 143(3) of the Act, the AO called for necessary details from the assessee to substantiate the claim of gift received from Shri Kanhaiyalal Sharma. The assessee submitted the necessary details such as copy of passport of Shri Kanhaiyalal Sharma, certificate from Asia Exchange Center and Wall Street Exchange Center for the verification of gift received and also the confirmation from the donor namely Shri Kanhaiyalal Sharma. After necessary verifications to his satisfaction, the income of the assessee was assessed accordingly vide assessment order dated 15.12.06 passed under section 143(3) of the Act. Thereafter a search action, under section 132 of the Act, was conducted followed by subsequent assessment proceedings under section 153A of the Act. During the said subsequent assessment proceedings, the AO asked the assessee to provide necessary evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settle some where abroad. I have no idea about his personal and professional life. Q.22. What is his present address? Ans. I do not remember, as lost touch with him. Q.22. Have he ever Iived in Dubai? Ans, Yes. I think so. Q.23. In case of reply to question 27 of your statement dated 14-11-2008, you have clearly said that none of your or your families friend or relative lives in Dubai or ever lived in Dubai now you are saying that your family friend Mr. Kanihyalal Sharma has sometime lived in Dubai? Ans. At that time, I would not remember the same, but when you have told me the name of Mr. Kanihyalal sharma, I remembered him. Q.24. In such situation why the gift from this person, whose name you are not able to remember, you do not know about his personal and professional life. Thus why the gift from such party should be exempted from tax, as this gift does not have means of natural love and affection. Ans. Just because I was not able to remember that he lives in Dubai, and do not know his personal and professional life does not mean that our relation is devoid of love and affection. This statement clearly establishes that the donor is not having any clos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the paper book filed with us. During the said lengthy cross examination, the AO picked up some questions/ answers which have already been reproduced above. From the said answers, the AO concluded that the donor was not having any close relations with the family of the assessee. It has also been recorded in the assessment order that the examination/cross examination of Shri Ritesh Jain continued for two days. A perusal of the above reproduced question/answers numbering 20, 23 27, relied upon by the AO, reveals that there was nothing incriminating in the said replies/answers given by Shri Ritesh Jain to the questions put by the AO. The AO has just made inferences and presumptions from the reply that the assessee was not having any close relation with the donor. Assumptions and presumptions made by the AO out of some answers given by Shri Ritesh Jain in his lengthy statement/cross examination which continued during the whole night were not sufficient to hold that there is some incriminating evidence in the said statement. Even as per the law, as was in force at the time of occurring of above stated transactions, there was no legal requirement that the donee should be closely relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court has been duly discussed by the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd. (supra), holding that the same was distinguishable on the facts. In the case of Gopal Lal Badruka Vs. DCIT (Supra), incriminating evidence was found in relation to eight plots of land but no evidence was found in respect of 24 plots. Since incriminating material was found in respect of eight plots, Hon'ble Court held that the AO can estimate the income in respect of all 32 plots. The fact was that incriminating material was found in that case. The proposition of law which emerges out in the light of the law laid down by the Rajasthan High Court in the case of Jai Steel (India) (supra) , Hon'ble Gujarat High Court in the case of Gopal Lal Badruka (supra) is that where incriminating material is found during the search action, the AO while making assessment u/s. 153A can take note of other materials on record, which are relevant and connected to the material found during the search and inference can be drawn relating to other transactions of similar nature. However, when no incriminating evidence is found during search, it is not open to the AO to make re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had failed to discharge the burden relating to genuineness of gifts. We may point out here that the present proceedings were not the original assessment proceedings under section 143(3) of the Act where the initial burden was upon the assessee to prove the genuineness of the transaction. In the proceedings under section 153A, there must be some incriminating material indicating that the income of the assessee in the original assessment proceedings had escaped assessment. On the basis of that incriminating material, the assessment proceedings can be initiated under section 153A. The initial burden is upon the Revenue under section 153A to prove that there is an incriminating material which shows that the claim made by the assessee in its original return was not correct. Once there does not exist any such incriminating evidence, the additions on the basis of mere suspicion about the genuineness of the transactions cannot be held to be justifiable. 9. In view of the above, the assessment proceedings made under section 153A in this case are held to be bad in law and the same are set aside and the consequential additions made are also accordingly ordered to be deleted. ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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