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2019 (8) TMI 154 - AT - Income TaxAssessment u/s 153A - Addition on account of gain on sale of investment - HELD THAT - There is no unaccounted transaction found during the course of search. The capital gain that arose from the sale of shares are already recorded in the books of accounts and no incriminating material whatsoever was found during the course of search. Since the Hon'ble Jurisdictional High Court MEETA GUTGUTIA PROP. M/S. FERNS N PETALS 2017 (5) TMI 1224 - DELHI HIGH COURT has clearly held that addition in order passed u/s 143(3)/153A cannot be made In absence of any incriminating material and since in the instant case, there is no evidence whatsoever on record that any incriminating material was found during the course of search and since the addition was made on the basis of certain inquiries conducted subsequent to the search on the basis of return already filed, therefore, on this issue itself addition has to be deleted. The issue in the present case is identical with that of the decision given by the Tribunal as the same is son of the assessee herein. In fact, now the son only representing the assessee after her death. Therefore, the CIT(A) rightly allowed the appeal of the assessee. Thus, appeal of the revenue is dismissed.
Issues:
- Assessment of long term capital gains - Validity of additions made by the Assessing Officer - Decision of the CIT(A) in deleting the additions - Application of legal precedents Assessment of Long Term Capital Gains: The appellant filed appeals against the CIT(A)'s order for assessment years 2011-12 and 2012-13. The appellant's total income was declared at ?9,08,750, but the Assessing Officer assessed it at ?1,18,89,120, making an addition of ?1,09,80,369 on account of bogus exempt long term capital gain. The search and seizure operation under section 132 of the Act led to the initiation of assessment under section 153A. The appellant challenged the assessment, leading to the CIT(A) allowing the appeal. Validity of Additions Made by the Assessing Officer: The Assessing Officer's additions were based on post-search inquiries without any incriminating material found during the search. The appellant's original return of income and subsequent filings were consistent, with no undisclosed transactions discovered. The tribunal noted that the additions lacked a legal basis due to the absence of incriminating material, following the jurisprudence that additions cannot be made under section 153A without such material. Decision of the CIT(A) in Deleting the Additions: The CIT(A) relied on legal precedents, including the decision in CIT vs. Kabul Chawla, to delete the additions. The tribunal upheld the CIT(A)'s decision, emphasizing that the capital gains from the sale of shares were duly recorded in the books, and no incriminating material was found during the search. The tribunal dismissed the revenue's challenge, highlighting the jurisdictional High Court's stance that additions without incriminating material are impermissible under section 153A. Application of Legal Precedents: The tribunal referenced various legal judgments to support its decision, including the case of Sameer Gupta, where similar circumstances led to a favorable ruling for the appellant. The tribunal aligned its decision with the jurisprudence established by the jurisdictional High Court, emphasizing the necessity of incriminating material for making additions under section 153A. The tribunal dismissed the revenue's appeals, affirming the CIT(A)'s decision to delete the additions. In conclusion, the tribunal dismissed both appeals filed by the revenue, emphasizing the importance of incriminating material for additions under section 153A and upholding the CIT(A)'s decision to delete the additions based on legal precedents and factual considerations.
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