Acit, C-6, Ludhiana vs Sh. Gurdeep Singh, Ludhiana on 26 June, 2020
ITA No. 170-Chd-2018
Shri Gurdeep Singh, Ludhiana
21
The Ld. CIT(A), therefore, held that since no doubt had been made by
the Assessing Officer about the genuineness of share transfer deed as
well as signature of the transferor or transferee, except that there were
no signature of the witness, which did not affect the legal validity of
the transfer deed, hence on the strength of the valid transfer deed,
coupled with the fact that the amount of consideration had already been
remitted by the transferee to the transferor, the legally enforceable
document could not be discarded on the basis of mere suspicion of the
AO of the same being the result of an afterthought. The ld. CIT(A) has
further observed that though, the AO has pointed out certain
inconsistencies such as that the above transfer of shares had not been
reflected properly in the balance sheet of companies and that there was
no mention about it the "notes on accounts" also, yet, the documentary
evidences in the shape of "annual return" filed on portal of "Ministry of
Corporate Affairs", share transfer deed, passing on of consideration of
shares in the Financial Years 2012-2013 and 2013-2014, through proper
banking channel, much before the start of the assessment proceedings,
could not be lightly rejected. That it was also not the case of the AO
that these documents were false or fabricated. He therefore, held that
once the authenticity of such legal documents was not under doubt then
the transaction and facts represented by those documents had to be
accepted and could not brushed aside by the AO on the basis of mere
suspicion only. The Ld. CIT(A) further noted that even in the case of
ITA No. 170-Chd-2018
Shri Gurdeep Singh, Ludhiana
22
the Assessee for Assessment Year 2014-2015, wherein, the AO had
raised same issue of deemed dividend and there again copy of the
annual return for Financial Year 2012-2013 and 2013-2014 as filed to
the ROC, had been filed and by considering the above said evidences on
record, the AO accepted the plea of the assessee and hence, no addition
on account of "deemed dividend" had been made by the AO in
subsequent years 2014-15 and 2015-16. The Ld. CIT(A), therefore, has
observed that in the light of the above discussed facts and
circumstances, which are borne out from the record, the mere
suspicion, howsoever, strong, it may be, cannot take the shape of
evidence and no addition can be made on the basis of doubt or
suspicion. He in this respect has relied upon the decision of the
jurisdictional Punjab & Haryana High Court in the case of 'CIT Vs.
Ram Narain Goel' as reported in 224 ITR 180. The Ld. CIT(A),
therefore, concluded that the assessee was not having substantial share
holding in the CCNPL and further that 99.9% shares of CCNPL were
held by JCTPL , by which the CCNPL had become the subsidiary of
JCTPL and funds transferred by subsidiary to holding did not come
under the purview of deemed dividend u/s 2 (22)(e).