TMI Blog2019 (8) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee can be disturbed. We hold that no addition can be made in the hands of the assessee in absence of any incriminating evidence leading to any unaccounted income unearthed during the course of search. Accordingly, ground number 1 3 of the appeal of the assessee is allowed. Addition u/s 68 - transfer of equity share by way of gift - gifted share still appearing in balance sheet of donor - HELD THAT:- Merely because the affidavit is not on the non-judicial stamp paper, the learned CIT A has rejected the affidavit of the donor. Even for a minute, it is believed that the affidavit of the donor is not proper, the content of the affidavit needs to be looked into in view of the overwhelming evidence produced by the assessee, which supports the affidavit. Rejecting an evidence on technical grounds by the learned CIT(A) to uphold the addition in the hands of the assessee cannot be approved. With respect to the payment of sale transfer stamps paid by the appellant of INR 5 7500/ on the share transfer forms, the learned CIT(A) found that no such withdrawal/drawings are found in the books of the donor. That may be the case of any addition if at all in the hands of the donor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in confirming the action of Ld. AO in making addition of ₹ 2,82,61,091/- on account of gift received from Smt. Meena Bhagchandka treating the same as alleged undisclosed income and that too by recording incorrect facts and findings and without observing the principles of natural justice. 5. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of ₹ 2,82,61,091/- on account of gift received from Smt. Meena Bhagchandka is bad in law and against the facts and circumstances of the case. 3. The assessee is an individual earning income from house property and income from other sources. Search and seizure action was conducted on M2K group of companies on 24/2/2007. According to ld AO, Certain documents were seized relating to the assessee as per the provisions of section 153C of the income tax act and therefore notice was issued. The assessee filed its return of income on 15/8/2008 declaring income of INR 1990520/ . 4. This appeal has a history. During the course of original assessment proceedings the assessee has claimed to have received a gift of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that it has strengthened the case of the revenue and the fact remains that shares worth ₹ 28261091/ appearing in both the balance sheet as on 31/3/2006 and the share transfer stamps were not attached with the share transfer form at the time of original assessment proceedings. Accordingly the addition of ₹ 2,82,61,091/ was made. The income of the assessee was assessed at INR 30251611/ against the returned income assessed u/s 143 (1) of the act of INR 1990520/ . 5. The assessee aggrieved with the order of the learned assessing officer preferred an appeal before the learned CIT A (11), New Delhi. He passed an order dismissing the appeal of the assessee. Therefore, assessee aggrieved with the order of the learned CIT A has preferred this appeal. 6. Ground no 1 to 3 is against the assumption of jurisdiction u/s 153C of the act and Ground no 4 -5 is against the merits of the addition. 7. The learned authorised representative, adverting to Ground no 1-3 , first challenged assumption of jurisdiction u/s 153C of the income tax act. a. He submitted that there was no material relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count has been disclosed by the assessee. In view of this, he submitted that when holding of the bank account, its income is also disclosed of interest in computation, there is no incriminating evidence in the form of bank certificate as it does not show any unaccounted income of the assessee, the whole addition made by the learned assessing officer deserves to be quashed. b. Adverting to Ground no 4 5 of the appeal, on merits of impugned addition, he submitted that assessee has received 23,00,000 shares of the Negolice India Ltd from her sister-in-law as gift, which is supported by Gift deed, share transfer details, affidavit of sister in law, confirmation of sister in law . Factum of share holding by assessee as well as details of transfer from her sister in law to assessee also demonstrated by the Annual return in Form No 20 B filed by the company. He submitted that these shares are received as a gift supported by above evidences including transfer deed along with the transfer stamps and letter from the company about transfer of these shares. He submitted that it are lying in demat account. He further referred to the letter fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court) on the sole ground that notice under section 153C of the Act was legally unsustainable. The events recorded above further disclose that the issue pertaining to validity of notice under section 153C of the Act was raised for the first time before the Tribunal and the Tribunal permitted the assessee to raise this additional ground and while dealing with the same on the merits, accepted the contention of the assessee. 17. First objection of the learned Solicitor General was that it was improper on the part of the Income-tax Appellate Tribunal to allow this ground to be raised, when the assessee had not objected to the jurisdiction under section 153C of the Act before the Assessing Officer. Therefore, in the first instance, it needs to be determined as to whether the Income-tax Appellate Tribunal was right in permitting the assessee to raise this ground for the first time before it, as an additional ground. 18. The Income-tax Appellate Tribunal permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceed to examine whether the ld AO has assumed the jurisdiction u/s 153 C of the act correctly or not. There was a search and seizure action on M2K group of companies on 24/2/2007. Based on this the learned assessing officer recorded the satisfaction under section 153C of the income tax act on 28/11/2008, which is placed at page number 187 of the paper book, as under:- satisfaction note for taking up the case of Mrs. Sunita Bhagchandka u/s 153C of the act A search and seizure action u/s 132 (1) of the IT act, 196 was conducted on 24/1/2007 in the case of the company Messer M2K group and their directors. Shri Mahesh Kumar Bhagchandka was one such a director who is residence 5, Olof palm Mark, Vasant Vihar was covered under the above action. As consequence of the search and seizure action certificate, in original, issued by Vijaya Bank , in the name of Mrs. Sunita Bhagchandka , was seized as page 24 of annexure A 1, party 1. I am satisfied that the very certificate belongs to Mrs. Sunita Bhagchandka and thus case is being taken up for assessment u/s 153C of the income tax act 1961. 13. On page number 188 of the paper book the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the bank having MICR code of 110029002 at address of Ansari Road, , darya Ganj, New Delhi in the form of savings account with account number 7601. In the computation of total income the assessee has also shown the interest income of INR 1 5522/ under the head income from other sources. Therefore, it is apparent that whatever information, unearthed during the course of search, already existed on the record of the revenue disclosed by the assessee herself in her return of income. Therefore it is apparent that the existence of the bank account cannot be said to be a new information that is undisclosed, unearthed by the revenue. 16. Now we come to the bank certificate issued by the bank. In impugned bank certificate there is no information about the undisclosed income of the assessee. If the documents unearthed during the course of search do not indicate existence of any unaccounted income, they are not incriminating in nature. It is important that documents found during the course of search must give some indication about the undisclosed income of the assessee. The impugned certificate did not give any indication about the fact of gift of the shares, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee is as per folio number 570. Such transfer is made in view of share transfer deed signed by Mrs. Meena Bhagchandka folio number 557 executive on 23/1/2006 between the transferor and transferee. The company also certified that the share transfer deed was also accompanied by requisite share transfer stamps attached separately for transfer of shares in the name of assessee. It further clarified that there is nothing unusual for share transfer tickets to be attached separately on a sheet accompanying the share transfer deed, as the space provided in the deed is insufficient. It was further clarified that the company is concerned only with the said transfer duty paid which has been correctly paid in the present transfer. The company also stated that transfer deed was duly completed in all respect and the transfer of shares was made by the company after verifying all the particulars and it is in accordance with the law. Such certificate of the company is placed at page number 4 of the paper book. At page number, seven of the paper book the assessee produced the duly executed share transfer deed of 23,00, 000 equity shares in Negolice India private limited d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the company or has subsequently sold the shares, the issued have been altogether different. However, in the present case, it is merely an accounting error in the books of the donor, which is conclusively proved by the assessee by producing substantial evidences as well as the confirmation of the donor and of the company whose shares were sold, the addition made in the hands of the assessee deserves to be deleted. Further, on the issue of withdrawal of appeal by assessee before honourable High court , we are of the view that decision of the honourable High Court is merely on withdrawal of the appeal and it is not on the merits of the case. The assessee may withdraw appeal for many numbers of reasons. Such withdrawal cannot go either in favour of the assessee or against the assessee. Thus on the merits of the addition it does not have any impact. Coming to the order of the learned CIT A wherein he referred to the enquiry made by the AO u/s 133 (6) to the registrar of the companies asking for details regarding the said transfer in case of the assessee, it is apparent that when the assessee has produced the annual return of the company filed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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