COMMISSIONER OF INCOME TAX Vs. PARVATHAVARTHINI AMMAL S

JUDGEMENT

(1.) THE following three questions are referred by the Income-tax Appellate Tribunal, Cochin Bench :

(2.) IN fact after hearing learned counsel for the parties the crucial question is as to whether the registration in the matter of transfer of share certificate would relate to the date of the submission of the application form for the said purpose and the question whether, as is now sought to be contended, the transfer on the basis of the application would be considered to be proper and legal, would be the only aspect that would require consideration and consequential decision. IN fact, during the course of hearing of the reference before us, the first question that the registration relates back to the date of the application in question was not in serious dispute in view of the settled position in regard thereto.

(3.) THE matter was taken up before the appellate authority constituted by the Commissioner of Income-tax (Appeals), Ernakulam. THE appellate authority considered the material on record to find out as to whether the material is acceptable in support of the contention of genuineness of the transaction and observed that there is no clear evidence brought on record to doubt the evidence of Mr. Moraes, an advocate of the company, who is also the director thereof, to doubt the transaction in any manner. In fact, the appellate authority has observed that the deponent, not only deposed but also filed an affidavit in support thereof has not been cross-examined in any manner. THE appellate authority has considered this aspect by referring to certain peculiarities of the company to the effect that none of the shareholders of the company was the director thereof. THE appellate authority also observed that there is no material to the effect that the affidavit of the director who is also an advocate is not reliable. THE fact-finding authority has also pinpointed that no attempt has been made to find out any material in regard to the evidence on record. It appears that initially there was a legal advice to the effect that the shares could not be registered in the name of minor children. After considering the facets of such legal advice, it appears that ultimately a decision was taken and the share application for transfer of shares was granted and the shares came to be registered on the basis of the application subsequently in 1980. THE fact-finding authority has accepted the position that the shares were actually gifted on November 20, 1978, and were handed over by the assessee to the donees. This fact-finding is specifically recorded when the authority found that there is no contrary material to show that the positive assertion of the assessee in regard thereto could be said to be false or otherwise unacceptable. THE appellate authority has proceeded further, relying on the affidavit of the director of the company that such application for transfer came to be lodged with the company some time in December 1, 1978, and as a result thereof the assessee had done everything in her power to make the transfer complete and effective as far back as on December 1, 1978.