2023 (5) TMI 1312 - HC - Income Tax

Assessment u/s 153A - Addition u/s 68 and 69C - Bogus LTCG and expenses on it - incriminating material was found at the premises of the assessee during search or not? - HELD THAT - The supreme court in Abhisar Buildwell P. Ltd. 2023 (4) TMI 1056 - SUPREME COURT answered the question confirming the view taken by this court in Saumya Construction 2016 (7) TMI 911 - GUJARAT HIGH COURT as well as Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT which were in favour of the assessee to held that no addition can be made in respect of completed/ unabated assessment in absence of any incriminating material. Decided in favour of assessee.

Summary

Issues involved:
The judgment involves the interpretation of sections 68 and 69C of the Income Tax Act, 1961, and the scope of assessment under section 153A of the Act.

Interpretation of Section 68 and 69C:
The case revolved around the addition made under section 68 of the Act on alleged bogus long term capital gain and the addition under section 69C on expenses related to the same. The Commissioner of Income Tax (Appeals) allowed the appeal by deleting these additions, citing the lack of incriminating material found during the search. The Income Tax Appellate Tribunal upheld this decision, leading to the present appeal.

Scope of Assessment under Section 153A:
The appellant department challenged the ITAT's decision, arguing that incriminating material found during a search should be the basis for additions in completed or unabated assessments. However, the Supreme Court, in the case of Principal Commissioner of Income Tax vs. Abhisar Buildwell P. Ltd., clarified that no additions can be made in completed assessments without incriminating material. The court referenced previous decisions by the Delhi High Court and the Gujarat High Court, emphasizing the importance of seized material in assessments under section 153A.

Conclusion:
In light of the Supreme Court's ruling in Abhisar Buildwell P. Ltd., it was established that no substantial question of law arose in the present case. The appeal was dismissed as the law laid down by the Supreme Court dictated that no additions could be made in completed assessments without incriminating material.