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TMI Blog2015 (10) TMI 2120X X X X Extracts X X X X X X X X Extracts X X X X ..... stence at the time of partition in which concerned family members were having their interest/shares, therefore, it was clearly a family settlement. Therefore, the family arrangement is not taxable and no addition was warranted on the income which never arose to the assessee. As discussed earlier, the entire property was already in existence having common shares and by way of the mutual settlement only the respective shares were determined. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that she gave the impugned amount to the assessee because of family settlement deed arrived at among the family members. The Assessing Officer also noted that as on 31/03/2006, she was partner in ten firms whereas as on 31/03/2007, she continued/remained partner in only one firm and at the same time, her investment in shares of M/s Sea Princess Hotels & Properties Ltd. increased to ₹ 15,89,651/- from ₹ 3 lakh. On questioning by the Assessing Officer, she explained that she retired from partnership of nine firms during the year and further alongwith her husband she retired from various partnership firms. She further tendered to settle the matter peacefully they retired from the firms and there was reshuffling of the company. The part of the statement has been reproduced in page 3 onwards of the assessment order. Subsequently, vide letter dt. 14/12/2009, the assessee furnished the details on behalf of Smt. Neeta Gundecha by mentioning the family arrangements which took place and the real estate business was taken over by the family of the assessee and the hotel business was by Shri Ashok Gundecha family (husband of donor). The Assessing Officer was of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the fact that the appellant received the impugned amount from Mrs. Neeta Ashok Gundecha is not in question since that fact also stands confirmed by the AO in the assessment order. Further, the identity and creditworthiness of Mrs. Neeta, from whom t1e money has flowed to the appellant is also not in question. Once it is held that the said payment represents part consideration for the shares of M/s Sea Princess Hotel which the AO admitted having been transferred at lower than their market value, the next question to be addressed is whether such receipt would be exigible to tax in the facts and circumstances of the case. It has already been noted above that the transfer of shares of the said hotel was a par t of the wider terms of family settlement, which also included division/ distribution of a large number of assets including the ownership of various firms and companies owning construction/ hotel business. Looking at all the facts and circumstances of the case including the case laws quoted by the AR, there is merit in the plea of the appellant that if the said receipt is treated as a part of the family arrangement, then the same would not be liable to tax in view of the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be said to be income because it is offshoot of capital asset of the joint family. It is not the case that new income was generated which escaped taxation. The statement of the donor was recorded u/s 131 of the Act by the Assessing Officer himself wherein M/s Neeta Ashok Gundecha, specifically tendered that the impugned amount was offshoot of the family settlement while dividing the property among the family members, in reply to question no. 14, she explained, while tendering statement, that as on 31/03/2006, she was partner in ten firms and due to family settlement (division of property) she remained partner in only one firm and the hotel business went to their share and the property business went to the assessee. If the statement tendered by the donor is analyzed, the identity of the donor, genuineness of the transaction and source of the amount is not in dispute. Even the Assessing Officer in para 6.1, in response to letter dated 14/12/2009, himself admitted this fact. In para 6.2 of the assessment order, it has been specifically mentioned that 53,220 shares of M/s Sea Princess Hotels & Property Pvt. Ltd. were transferred from the family members of the assessee and their other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily members. This factual matrix has been duly recorded in para-5 (page-3) of the assessment order itself. Regarding division of property has been mentioned in para 6.1 onwards of the assessment order itself. Therefore, the suspicion of the Assessing Officer is not based on documentary evidence. In such a situation, it can be said that suspicion cannot take the shape of evidence however strong it may be, more specifically, when by way of family settlement, the property was divided among the family members. 2.5. So far as, source of the impugned receipt is concerned, there is uncontroverted finding in para 5.2 of the impugned order that it was duly explained by the assessee. This factum was duly explained before the Assessing Officer during examination/recording of statement of the Ms. Neeta Gundecha. The totality of facts clearly indicates that the impugned amount cannot be said to be income in the hands of the assessee as the same was offshoot of family settlement of the property which was already in existence. 2.6. Another argument taken by the ld. CIT-DR that there was no natural love and affection by the donor when there was a division of property. We are unable to apprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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