2021 (8) TMI 638 - AT - Income Tax

Assessment u/s 153A - Addition on account of gain on sale of investment - HELD THAT - When the capital gain earned from the sale of shares were already recorded in the books of accounts and no incriminating material was found during the course of search operation on Jakson Group being run by Sameer Gupta, Bhawana Gupta and Sandeep Gupta, addition made on the basis of sole statement of Sandeep Gupta is not sustainable in the eyes of law, particularly when all the transactions qua sale of shares and capital gain earned during the year under consideration have been duly recorded in the books of accounts. So, in these circumstances we find no illegality or perversity in the impugned order passed by Ld. CIT (A), hence, appeal filed by the revenue is hereby dismissed.

Summary

Issues:
Deletion of addition of ?4,62,96,186 made on account of gain on sale of investment.

Analysis:
The appeal filed by the Revenue challenged the order passed by the Ld. CIT(A)-23, New Delhi, regarding the deletion of the addition made by the Assessing Officer on account of gain on the sale of investment. The Ld. CIT(A) quashed the reassessment order based on the judgment in the case of the brother of the assessee, which was confirmed by the Ld. Tribunal in appeal. The Revenue also filed an appeal in the case of a family relative, which was dismissed by the Hon’ble Tribunal relying on the judgment in the case of CIT Vs. Kabul Chawla. During the hearing, it was highlighted that the assessment of the assessee for AY 2012-13 had been allowed by the Ld. CIT(A) on the same set of facts. The Ld. DR failed to counter this submission, and it was noted that no incriminating material was found during the search operation, and the addition was based on post-search inquiry.

The Tribunal examined the impugned order and noted that no incriminating material was found during the search, and the addition was made based on post-search inquiries. The Tribunal referred to a similar case involving Sameer Gupta, where the addition was deleted as no incriminating material was found during the search. The Tribunal upheld the CIT(A)'s decision to delete the addition, citing various legal precedents. The Tribunal also mentioned that the Revenue did not challenge the legal ground on which the addition was deleted. The Tribunal dismissed the Revenue's appeal based on the findings in the case of Sameer Gupta before the Hon’ble Delhi High Court.

Considering the facts and the precedent set in the case of Sameer Gupta and Bhawna Gupta, the Tribunal found no error in the Ld. CIT(A)'s order. The Tribunal concluded that the addition made on the basis of the sole statement of Sandeep Gupta was not sustainable, as all transactions related to the sale of shares and capital gains were duly recorded in the books of accounts. Therefore, the Department's appeal was deemed devoid of merit and dismissed.