TMI Blog2019 (7) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... observed by us earlier, the assessee did not cooperate in the assessment proceedings for the reasons best known. - No substantial question of law. - Tax Case Appeal No.308 of 2019 - - - Dated:- 10-6-2019 - Mr. Justice T.S. Sivagnanam And Mrs. Justice V. Bhavani Subbaroyan For the Appellant : Mr.G.Baskar For the Respondent : Mrs.K.G.Usharani Standing Counsel JUDGMENT T.S.SIVAGNANAM, J. This appeal, by the appellant/assessee filed under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as the Act ), is directed against the order dated 12.02.2019, passed by the Income Tax Appellate Tribunal C Bench, Chennai (for brevity the Tribunal ), in I.T.A.No.3100/Chny/2017, for the assessment year 2009-10. 2.The assessee has raised the following substantial questions of law for consideration:- Section 49 :- (i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that in the case of gift, Section 49 of the Income Tax Act, 1961 will not apply to give benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under Section 132(4) of the At, the Assessing Officer stated that he has reason to believe that the assessee's taxable income for the assessment year 2009-10 has escaped assessment. Therefore, notice under Section 148 of the Act was issued. The assessee did not respond to the notice. Subsequently, the jurisdiction of the case was transferred to the Principal Commissioner of Income Tax, Salem, vide notification dated 21.06.2016. Pursuant to which, notice under Section 142(1) of the Act was issued on 20.09.2016 calling for certain details along with return of income. Subsequently, a letter dated 20.09.2016 was sent to the assessee requesting him to file the return of income as well as the details called for in the notice dated 20.09.2016 issued under Section 142(1) of the Act. Once again, the assessee did not respond. A final opportunity was given by the Department to the assessee, vide letter dated 19.10.2016 calling upon him to file his return of income. Even for this notification, there was no response by the assessee. Subsequently, by letter dated 04.11.2016, penalty notices under Section 271(1)(b) of the Act were issued to the assessee calli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s daughter, Mrs.Meera Arun, to the assessee is a valid gift, as it is not mandatory that gift of movable assets, such as, shares needs to be by way of document much less a registered document. Further, it is submitted that there is no requirement of the donor's consent for selling the shares to third parties, since the assessee had already become owner by the positive action of original shareholder, his daughter, Mrs.Meera Arun by executing Gift Deed in respect of the shares in favour of the assessee. Further, the learned counsel referred to the Business Transfer Agreement, dated 31.12.2007; Return of Allotment of Vasan Health Care Private Limited, dated 28.10.2008; Share Transfer Form whereunder shares were transferred from Mrs.Meera Arun to the assessee, dated 29.10.2008; Share Transfer Form where the assessee transferred shares to M/s.Advantage Strategic Consulting Private Limited, dated 30.10.2008; Annual Return of Income of Mrs.Meera Arun for the assessment year 2009-10, dated 21.10.2009; Register of Allotment of Shares by Vasan Health Care Private Limited, under Section 143(3) of the Act of M/s.Vasan Health Care Private Limited for the assessment year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer also noted that the assessee was called upon to furnish the Board's resolution of the companies, viz., M/s.Vasan Health Care Private Limited and M/s.Advantage Strategic Consulting Private Limited both of which were not submitted. Further, the assessee did not submit their share purchase agreement entered into between the assessee and M/s.Advantage Strategic Consulting Private Limited in spite of notice being issued. 15.Further, the Assessing Officer noted that shares were allotted to Mrs.Meera Arun on 28.10.2008 and these shares are said to have been gifted to the assessee on 29.10.2008 and out of 3,00,000 equity shares, which are alleged to have been gifted, 1,50,000 equity shares were transferred by the assessee to M/s.Advantage Strategic Consulting Private Limited on 30.10.2008 for a nominal value of ₹ 100/- per share. The Assessing Officer further noted that the Board of Directors had given approval only for allotment of shares to Mrs.Meera Arun and no such approval was granted for transfer by way of gift to her father, viz., the assessee, who is also one of the Directors, which should have been approved by the Board of Directors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry next day, she transferred the entire shares to her father i.e., on 29.10.2008. In turn, Shri. Dwarakanathan, father of Smt. Meera Arun transferred 1,50,000 shares to M/s.Advantage Strategic Consulting Services P Ltd., on 30.10.2008. Smt. Meera Arun pays a sum of ₹ 200/- per share comprising of ₹ 100/- nominal value and premium of ₹ 100/-, while Shri. Dwarakanathan had sold part of the shares to M/s.Advantage Strategic Consulting Pvt. Ltd., only at face value i.e., at ₹ 100/- without charging any premium. 2.3 The ld. CIT(A) ought to have considered the fact that has come to light that the entire sale made by Shri Dwarakanathan was on credit basis and the actual consideration was received in the month of December, 2009 and October, 2010. In fact, M/s.Advantage Strategic Consulting Private Limited in turn has sold part of the shares to M/s.Sequola Capital India Growth Investment-I, Mauritius at ₹ 7,500/- per share with a premium of ₹ 7400/- on 30.10.2008. ............... ............... 2.6. The ld. CIT(A) failed to note that the Board of Directors had given approval only for all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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