2022 (4) TMI 1643 - HC - Income Tax

Assessment u/s 153A - Addition u/s 68 - addition was supposed to be made on the basis that the amount shown has been received by the Assessee towards sale consideration of shares held by the Assessee was in fact received as loans - HELD THAT - It has been shown to the satisfaction of the ITAT that in the succeeding assessment year i.e. AY 2009-10 the shares against which the sale consideration was received by the Assessee was transferred to the payers of the amount. They had disclosed the transactions in their respective returns. The capital gain earned by the Assessee was offered to tax in the return of income filed for the AY 2009-10. Revenue was unable to dispute the fact that capital gains offered in the return of income filed by the Assessee was assessed for tax in the AY 2009-10. The search was conducted on 12th December, 2013 but for the AY 2009-10 itself no incriminating materials was found during the course of search. The ITAT has correctly concluded that u/s 153A of the IT Act, additions could be made only on the basis of incriminating materials found in the course of search relevant to the AY concerned. Once it is found that the Assessee had duly disclosed the receipt of capital gains in the regular books of account and offered capital gains to tax which had also been accepted by the Revenue, there was no occasion to make addition on the basis of unexplained cash credit. No substantial question of law arises for consideration from the impugned order of the ITAT.

Summary

The High Court dismissed the Revenue's appeal against the ITAT's order deleting additions made by the AO under Section 68 of the IT Act for AY 2008-09. The ITAT found that the amount received by the Assessee was not towards sale consideration but as loans, which were disclosed in subsequent years. As no incriminating materials were found during search, additions could not be made under Section 153A. The Court found no substantial question of law and dismissed the appeal.