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Facts
The assessee sold shares of PMC Fincorp Ltd., reporting long-term capital gains. A search and seizure action was conducted, and the Assessing Officer subsequently treated the gains as bogus and made an addition under Section 68 for unexplained cash credit, relying on external information and reports rather than material found during the search. The assessment year 2015-16 was an unabated assessment year.
Held
The Tribunal, citing the Supreme Court's decision in Abhisar Buildwell Pvt. Ltd., ruled that additions in unabated assessments under Section 153A can only be made based on incriminating material found during the search. It found that no such material related to the share transactions was discovered during the search on the assessee, and external information or mere recording of transactions in books did not qualify as incriminating material. Consequently, the addition made under Section 68 was deemed unsustainable in law.
Key Issues
Whether additions made in unabated search assessments under Section 153A require incriminating material found during the search, and if external reports or general ledger entries alone constitute such material for an addition under Section 68.
Sections Cited
153A, 68, 132, 143(2), 142(1), 10(38), 132(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
ORDER PER BENCH
These appeals by the respective assessee These appeals by the respective assessee(s) (s) are directed against separate orders dated 31.12.2024 passed by the Ld. Ld. against separate orders dated 31.12.2024 passed by the Ld. Ld. against separate orders dated 31.12.2024 passed by the Ld. Ld. Commissioner of Income Commissioner of Income-tax (Appeals) – 54, Mumbai [in short ‘the 54, Mumbai [in short ‘the Ld. CIT(A)’ for assessment year 2015 Ld. CIT(A)’ for assessment year 2015-16 respectively. 16 respectively.
In all these appeal common issue in dispute is involved In all these appeal common issue in dispute is involved In all these appeal common issue in dispute is involved and therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this consolidated order for the sake of convenience der for the sake of convenience, taking the case of taking the case of Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 4 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 Ashish Shashikant Choksi as the lead case. The parties agreed that Ashish Shashikant Choksi as the lead case. The parties agreed that Ashish Shashikant Choksi as the lead case. The parties agreed that decision of the said case may be applied mutatis m decision of the said case may be applied mutatis mutandis in other utandis in other cases.
2.1 The grounds raised by the assessee in appeal in grounds raised by the assessee in appeal in grounds raised by the assessee in appeal in were revised by the assessee by way of letter 1341/Mum/2025 were revised by the assessee by way of letter 1341/Mum/2025 were revised by the assessee by way of letter dated 30.05.2025. The said revised grounds are reproduced as dated 30.05.2025. The said revised grounds are reproduced as dated 30.05.2025. The said revised grounds are reproduced as under:
The CIT (A) erred in upholding the asses 1. The CIT (A) erred in upholding the assessment u/s. 153A of sment u/s. 153A of the Act without appreciating that during the course of search, the Act without appreciating that during the course of search, the Act without appreciating that during the course of search, neither any incriminating documents/papers/evidence have been neither any incriminating documents/papers/evidence have been neither any incriminating documents/papers/evidence have been found in regards to sale of shares of PMC Fincorp Ltd for the year found in regards to sale of shares of PMC Fincorp Ltd for the year found in regards to sale of shares of PMC Fincorp Ltd for the year under consideration nor any adverse points ha under consideration nor any adverse points has been observed s been observed during the course of search, therefore the addition of Rs. during the course of search, therefore the addition of Rs. during the course of search, therefore the addition of Rs. 1,34,69,754/ 1,34,69,754/-is illegal, invalid, bad-in law and the same should in law and the same should be deleted.
2. Further the Ld. CIT (A) erred in stating that appellant has not 2. Further the Ld. CIT (A) erred in stating that appellant has not 2. Further the Ld. CIT (A) erred in stating that appellant has not furnished the copies of panchnamas or furnished the copies of panchnamas or statement of appellant statement of appellant recorded during the search proceedings which were never called recorded during the search proceedings which were never called recorded during the search proceedings which were never called for during the entire appellate proceedings without prejudice the for during the entire appellate proceedings without prejudice the for during the entire appellate proceedings without prejudice the same are part of assessment records which ought to have same are part of assessment records which ought to have same are part of assessment records which ought to have perused by the Id CIT(A) before adjudicating th perused by the Id CIT(A) before adjudicating the matter. e matter. Addition of Rs. 1,34,69,754/ Addition of Rs. 1,34,69,754/- under section 68 of the Act. under section 68 of the Act.
3. The ld. CIT(A) erred in confirming the addition of Rs. 3. The ld. CIT(A) erred in confirming the addition of Rs. 3. The ld. CIT(A) erred in confirming the addition of Rs. 1,34,69,754/ 1,34,69,754/- under section 68 of the Act, by treating the entire under section 68 of the Act, by treating the entire Sale Consideration on Sale of Shares of PMC Fincorp Ltd as Sale Consideration on Sale of Shares of PMC Fincorp Ltd as Sale Consideration on Sale of Shares of PMC Fincorp Ltd as unexplained Cash Credit without taking the cognizance of the plained Cash Credit without taking the cognizance of the plained Cash Credit without taking the cognizance of the documents and submissions made during the course of documents and submissions made during the course of documents and submissions made during the course of assessment and appellate proceedings respectively, therefore the assessment and appellate proceedings respectively, therefore the assessment and appellate proceedings respectively, therefore the additions ought to be deleted. additions ought to be deleted. 4 The Ld. CIT(A) erred in confirming the order of L 4 The Ld. CIT(A) erred in confirming the order of L 4 The Ld. CIT(A) erred in confirming the order of Ld. AO by treating the said shares as Penny Script as per the information treating the said shares as Penny Script as per the information treating the said shares as Penny Script as per the information
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 5 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 received from DGIT (inv) received from DGIT (inv) Lucknow and relying on order dated relying on order dated 26.02.2021 passed by the SEBI against some entities which 26.02.2021 passed by the SEBI against some entities which 26.02.2021 passed by the SEBI against some entities which were allegedly involved in manipulating the share prices of PMC were allegedly involved in manipulating the share prices of PMC were allegedly involved in manipulating the share prices of PMC Fincorp Ltd, without appreciating the fact that appellant is not Fincorp Ltd, without appreciating the fact that appellant is not Fincorp Ltd, without appreciating the fact that appellant is not connected with PMC Fincorp Pvt Ltd and all the purchase and connected with PMC Fincorp Pvt Ltd and all the purchase and connected with PMC Fincorp Pvt Ltd and all the purchase and sale transactions was through stock exchange, therefore addition sale transactions was through stock exchange, therefore addition sale transactions was through stock exchange, therefore addition ought to be deleted. ought to be deleted.
5. The Ld. CIT(A) erred in confirming the ord 5. The Ld. CIT(A) erred in confirming the order of Ld. AO without er of Ld. AO without providing the opportunity to cross examine Mr. Raj Kumar Modi providing the opportunity to cross examine Mr. Raj Kumar Modi providing the opportunity to cross examine Mr. Raj Kumar Modi whose statement has been relied upon for making the erroneous whose statement has been relied upon for making the erroneous whose statement has been relied upon for making the erroneous addition of sale consideration of Shares of PMC Fincorp Ltd. The addition of sale consideration of Shares of PMC Fincorp Ltd. The addition of sale consideration of Shares of PMC Fincorp Ltd. The Ld. AO has not made any independent enquiry be Ld. AO has not made any independent enquiry before making fore making such erroneous addition and has merely relied upon the such erroneous addition and has merely relied upon the such erroneous addition and has merely relied upon the information received from Investigation Wing Lucknow, copies of information received from Investigation Wing Lucknow, copies of information received from Investigation Wing Lucknow, copies of statement of director of PMC Fin Corp Ltd and orders passed by statement of director of PMC Fin Corp Ltd and orders passed by statement of director of PMC Fin Corp Ltd and orders passed by SEBI, therefore addition SEBI, therefore addition be deleted.
Briefly stated, the fa Briefly stated, the facts of the case are that the assessee, an he assessee, an individual, derives income under the heads “Salary”, “Capital individual, derives income under the heads “Salary”, “Capital individual, derives income under the heads “Salary”, “Capital Gains”, and “Income from Other Sources”. For the year under Gains”, and “Income from Other Sources”. For the year under Gains”, and “Income from Other Sources”. For the year under consideration, he filed his return of income on 18.08.2015 declaring consideration, he filed his return of income on 18.08.2015 declaring consideration, he filed his return of income on 18.08.2015 declaring a total income of ₹ ₹2,25,60,490/-. Subsequently, a search and . Subsequently, a search and seizure action under section 132 of the Income seizure action under section 132 of the Income-tax Act, 1961 (“the tax Act, 1961 (“the Act”) was carried out on 24.08.2018 in the case of the Hindustan Act”) was carried out on 24.08.2018 in the case of the Act”) was carried out on 24.08.2018 in the case of the Platinum Group, which also covered the residential premises of the , which also covered the residential premises of the , which also covered the residential premises of the assessee. Pursuant thereto, notice under section 153A of the Act thereto, notice under section 153A of the Act thereto, notice under section 153A of the Act was issued and the assessee filed a return of income in response on was issued and the assessee filed a return of income in response on was issued and the assessee filed a return of income in response on 11.10.2019.
3.1 During the assessment proceedings, the Assessing Officer (“AO”) During the assessment proceedings, the Assessing Officer (“AO”) During the assessment proceedings, the Assessing Officer (“AO”) M/s PMC Fincorp Ltd. noted that the assessee had sold shares of noted that the assessee had sold shares of M/s PMC Fincorp Ltd
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 6 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 (earlier Priti Mercantile Ltd. Priti Mercantile Ltd.), and the resultant long ), and the resultant long-term capital gain was treated by the AO as a bogus gain arising from gain was treated by the AO as a bogus gain arising from gain was treated by the AO as a bogus gain arising from accommodation entries. The AO, therefore, made an addition under accommodation entries. The AO, therefore, made an addition under accommodation entries. The AO, therefore, made an addition under section 68 of the Act treating the sale proceeds as unexplained cash section 68 of the Act treating the sale proceeds as unexplained section 68 of the Act treating the sale proceeds as unexplained credit.
In appeal before the CIT(A), the assessee raised a legal In appeal before the CIT(A), the assessee raised a legal In appeal before the CIT(A), the assessee raised a legal challenge to the addition on the ground that no incriminating challenge to the addition on the ground that no incriminating challenge to the addition on the ground that no incriminating material pertaining to such share transactions had been found material pertaining to such share transactions had been found material pertaining to such share transactions had been found during the search. The assessee also contested the addition on during the search. The assessee also contested the addition during the search. The assessee also contested the addition merits. However, the first appellate authority rejected both the legal merits. However, the first appellate authority rejected both the legal merits. However, the first appellate authority rejected both the legal and the substantive grounds. Aggrieved thereby, the assessee is in and the substantive grounds. Aggrieved thereby, the assessee is in and the substantive grounds. Aggrieved thereby, the assessee is in further appeal before us. further appeal before us.
We first take up the legal grounds. Ground No. 1 challenges We first take up the legal grounds. Ground No. 1 challenges We first take up the legal grounds. Ground No. 1 challenges the very jurisdiction to the very jurisdiction to make the impugned addition under section make the impugned addition under section 153A in the absence of any incriminating material found during 153A in the absence of any incriminating material found during 153A in the absence of any incriminating material found during search. The law in this regard now stands conclusively settled by search. The law in this regard now stands conclusively settled by search. The law in this regard now stands conclusively settled by the judgment of the Hon’ble Supreme Court in the judgment of the Hon’ble Supreme Court in PCIT (Central) PCIT (Central)-3 v. Abhisar Buildwell Pvt Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC), wherein it has (2023) 454 ITR 212 (SC), wherein it has been held that in respect of unabated assessments, additions can been held that in respect of assessments, additions can be made only on the basis of incriminating material only on the basis of incriminating material found during the found during the search. Thus, either of the following two conditions must hold: search. Thus, either of the following two conditions must hold: search. Thus, either of the following two conditions must hold:
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 7 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 (i) the assessment is pending on the date of search (i.e., abated), or essment is pending on the date of search (i.e., abated), or essment is pending on the date of search (i.e., abated), or (ii) incriminating material is found qua the addition made. (ii) incriminating material is found qua the addition made. (ii) incriminating material is found qua the addition made.
5.1In the present case, the assessee filed his return on 18.08.2015. In the present case, the assessee filed his return on 18.08.2015. In the present case, the assessee filed his return on 18.08.2015. The time-limit for issuance of notice under section 143(2) expired limit for issuance of notice under section 143(2) expired limit for issuance of notice under section 143(2) expired on 30.09.2016. Therefore, on the date of search on 24.08.2018, no on 30.09.2016. Therefore, on the date of search on 24.08.2018, no on 30.09.2016. Therefore, on the date of search on 24.08.2018, no assessment proceedings were pending. The assessment for this year assessment proceedings were pending. The assessment for this year assessment proceedings were pending. The assessment for this year was thus unabated. Consequently, the impugned addition could was thus unabated. Consequently, the impugned addition could was thus unabated. Consequently, the impugned addition could have been made only if supported by incriminating material found have been made only if supported by incriminating material fou have been made only if supported by incriminating material fou during the search.
The central issue, therefore, is whether any incriminating The central issue, therefore, is whether any incriminating The central issue, therefore, is whether any incriminating material pertaining to the impugned share transactions of PMC material pertaining to the impugned share transactions of PMC material pertaining to the impugned share transactions of PMC Fincorp Ltd. was found during the course of the search. Fincorp Ltd. was found during the course of the search. Fincorp Ltd. was found during the course of the search.
6.1 The learned counsel for the assessee invited our a The learned counsel for the assessee invited our a The learned counsel for the assessee invited our attention to the assessment order as well as the order of the CIT(A), and the assessment order as well as the order of the CIT(A), and the assessment order as well as the order of the CIT(A), and submitted that neither authority has referred to any seized material submitted that neither authority has referred to any seized material submitted that neither authority has referred to any seized material relating to the impugned share transactions. On the contrary, the relating to the impugned share transactions. On the contrary, the relating to the impugned share transactions. On the contrary, the AO himself has noted in the notice under section 142(1) dated AO himself has noted in the notice under section AO himself has noted in the notice under section 03.02.2021 that, from the financials of the assessee from the financials of the assessee, it was observed , it was observed that exempt long-term capital gains of term capital gains of ₹61,07,884/ 61,07,884/- had been claimed. Similarly, in para 4 of the assessment order, the AO states claimed. Similarly, in para 4 of the assessment order, the AO states claimed. Similarly, in para 4 of the assessment order, the AO states that “from the records” it was noticed that the assessee had sold that “from the records” it was noticed that the assessee had sold that “from the records” it was noticed that the assessee had sold
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 8 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 shares of PMC Fincorp Ltd. Further, the addition is founded shares of PMC Fincorp Ltd. Further, the addition is founded shares of PMC Fincorp Ltd. Further, the addition is founded primarily on an information report recei primarily on an information report received from the DGIT ved from the DGIT (Investigation), Lucknow, stating that the assessee was one of the (Investigation), Lucknow, stating that the assessee was one of the (Investigation), Lucknow, stating that the assessee was one of the beneficiaries of alleged accommodation entries. It is undisputed beneficiaries of alleged accommodation entries. It is undisputed beneficiaries of alleged accommodation entries. It is undisputed that this information was that this information was not recovered during the search on the recovered during the search on the assessee, and therefore cannot constitute assessee, and therefore cannot constitute “incriminating material” “incriminating material” for the purposes of section 153A. for the purposes of section 153A.
6.3 During the hearing on 07.08.2025, the learned DR sought During the hearing on 07.08.2025, the learned DR sought During the hearing on 07.08.2025, the learned DR sought time to verify from the field authorities regarding the specific time to verify from the field authorities regarding the specific time to verify from the field authorities regarding the specific incriminating material, if any, found during search pertaining to the incriminating material, if any, found during search pertaining to the incriminating material, if any, found during search pertaining to the PMC share transactions. However, despite such opportunity, no MC share transactions. However, despite such opportunity, no MC share transactions. However, despite such opportunity, no such material was produced before us. such material was produced before us.
The learned DR filed a written submission traversing both the 6.4 The learned DR filed a written submission traversing both the The learned DR filed a written submission traversing both the legal and factual aspects. While the Revenue has relied upon (i) the legal and factual aspects. While the Revenue has relied upon (i) the legal and factual aspects. While the Revenue has relied upon (i) the statement of Shri Rajk statement of Shri Rajkumar Modi during search in his case, (ii) the umar Modi during search in his case, (ii) the SEBI order dated 26.02.2021, (iii) the general modus operandi SEBI order dated 26.02.2021, (iii) the general modus operandi SEBI order dated 26.02.2021, (iii) the general modus operandi unearthed in the PMC group, and (iv) the existence of certain books unearthed in the PMC group, and (iv) the existence of certain books unearthed in the PMC group, and (iv) the existence of certain books and documents seized from the assessee, we find that none of these and documents seized from the assessee, we find that none of these and documents seized from the assessee, we find that none of these constitute incriminating material criminating material qua the assessee qua the assessee discovered during his search.
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 9 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 6.5 The SEBI order was passed much after the search; the DGIT The SEBI order was passed much after the search; the DGIT The SEBI order was passed much after the search; the DGIT report was an external input; and the statement of Shri Rajkumar report was an external input; and the statement of Shri Rajkumar report was an external input; and the statement of Shri Rajkumar Modi pertains to proceedings in his own case. Merely because books Modi pertains to proceedings in his own case. Merely because Modi pertains to proceedings in his own case. Merely because of account showing the transactions were found does not, in law, of account showing the transactions were found does not, in law, of account showing the transactions were found does not, in law, render the transaction “incriminating” unless the seized document render the transaction “incriminating” unless the seized document render the transaction “incriminating” unless the seized document itself reveals unaccounted income or a falsity not otherwise itself reveals unaccounted income or a falsity not otherwise itself reveals unaccounted income or a falsity not otherwise discernible. In the present case, the transaction is rendered discernible. In the present case, the transaction is rende discernible. In the present case, the transaction is rende suspicious only by external investigation reports, none of which suspicious only by external investigation reports, none of which suspicious only by external investigation reports, none of which were part of the seized material. were part of the seized material. The Ld. DR filed written The Ld. DR filed written submission on both the legal as well as merit of the addition which submission on both the legal as well as merit of the addition which submission on both the legal as well as merit of the addition which is reproduced as under: is reproduced as under:
The assessee, Shri Ashish Choksi, al The assessee, Shri Ashish Choksi, along with several family ong with several family members, traded in shares of M/s PMC Fincorp Ltd. during AY members, traded in shares of M/s PMC Fincorp Ltd. during AY members, traded in shares of M/s PMC Fincorp Ltd. during AY 2015-16.The Assessing Officer (AO) noted that the trading in 16.The Assessing Officer (AO) noted that the trading in 16.The Assessing Officer (AO) noted that the trading in these shares was part of a larger modus operandi for these shares was part of a larger modus operandi for these shares was part of a larger modus operandi for generating bogus Long Term Capital Gains (LTCG), as generating bogus Long Term Capital Gains (LTCG), as generating bogus Long Term Capital Gains (LTCG), as established during a search conducted in the case of the ished during a search conducted in the case of the ished during a search conducted in the case of the company company company and and and its its its operator, operator, operator, Shri Shri Shri Rajkumar Rajkumar Rajkumar Modi, Modi, Modi, on on on 11.10.2018. Shri Rajkumar Modi, the director of PMC Fincorp Ltd., admitted Shri Rajkumar Modi, the director of PMC Fincorp Ltd., admitted Shri Rajkumar Modi, the director of PMC Fincorp Ltd., admitted to providing accommodation entries, including bogus LTCG, to providing accommodation entries, including bogus LTCG, to providing accommodation entries, including bogus LTCG, and explained the modus and explained the modus operandi in detail. The AO also operandi in detail. The AO also relied upon SEBI's order dated 26.02.2021, which concluded relied upon SEBI's order dated 26.02.2021, which concluded relied upon SEBI's order dated 26.02.2021, which concluded that the entities involved in the trading of PMC Fincorp Ltd. that the entities involved in the trading of PMC Fincorp Ltd. that the entities involved in the trading of PMC Fincorp Ltd. shares manipulated the share prices through circular trading, shares manipulated the share prices through circular trading, shares manipulated the share prices through circular trading, artificially inflating the share price f artificially inflating the share price for tax evasion purposes. or tax evasion purposes. The AO relied upon the SEBI order dated 26.02.2021 against The AO relied upon the SEBI order dated 26.02.2021 against The AO relied upon the SEBI order dated 26.02.2021 against entities involved in price manipulation of PMC Fincorp Ltd. entities involved in price manipulation of PMC Fincorp Ltd. entities involved in price manipulation of PMC Fincorp Ltd. shares. The Panchanama drawn during the course of search shares. The Panchanama drawn during the course of search shares. The Panchanama drawn during the course of search clearly records seizure of the assessee's books of acco clearly records seizure of the assessee's books of acco clearly records seizure of the assessee's books of accounts
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 10 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 and documents, as specifically enumerated in Annexure A (2 and documents, as specifically enumerated in Annexure A (2 and documents, as specifically enumerated in Annexure A (2 sheets) at Page No. 105 and Annexure A (1 sheet) at Page No. sheets) at Page No. 105 and Annexure A (1 sheet) at Page No. sheets) at Page No. 105 and Annexure A (1 sheet) at Page No. 107 of the assessee's paperbook. Clearly reveal incriminating 107 of the assessee's paperbook. Clearly reveal incriminating 107 of the assessee's paperbook. Clearly reveal incriminating material. Further, details relating to investments and other material. Further, details relating to investments and other material. Further, details relating to investments and other financial dealings were also unearthed during the course of l dealings were also unearthed during the course of l dealings were also unearthed during the course of search, substantiating the findings of the Assessing Officer. search, substantiating the findings of the Assessing Officer. search, substantiating the findings of the Assessing Officer. In this case, not one but 7 members suddenly decided to In this case, not one but 7 members suddenly decided to In this case, not one but 7 members suddenly decided to invest in the shares of this company. Since, the assesse has invest in the shares of this company. Since, the assesse has invest in the shares of this company. Since, the assesse has stated in the submission stated in the submission that the investment is made purely that the investment is made purely on his own instinct, how the same instinct could have occurred on his own instinct, how the same instinct could have occurred on his own instinct, how the same instinct could have occurred to 7 family members at the same time remains a mystery. to 7 family members at the same time remains a mystery. to 7 family members at the same time remains a mystery. Similarly, in the present case, the appellant purchased shares Similarly, in the present case, the appellant purchased shares Similarly, in the present case, the appellant purchased shares of PMC Fincorp Ltd. and sold them at an of PMC Fincorp Ltd. and sold them at an extraordinary extraordinary increase in price, which is not supported by the financials of increase in price, which is not supported by the financials of increase in price, which is not supported by the financials of the company. The Hon'ble Bombay High Court in Sanjay Bimalchand Jain v. The Hon'ble Bombay High Court in Sanjay Bimalchand Jain v. The Hon'ble Bombay High Court in Sanjay Bimalchand Jain v. Pr. CIT [2018] 89 taxmann.com 196 has categorically held that Pr. CIT [2018] 89 taxmann.com 196 has categorically held that Pr. CIT [2018] 89 taxmann.com 196 has categorically held that transactions in penny stock shares, where pu transactions in penny stock shares, where purchase is at a rchase is at a nominal price and sale at exorbitant prices without any cogent nominal price and sale at exorbitant prices without any cogent nominal price and sale at exorbitant prices without any cogent justification, are dubious transactions meant to introduce justification, are dubious transactions meant to introduce justification, are dubious transactions meant to introduce unaccounted income in the guise of Long Term Capital Gains, unaccounted income in the guise of Long Term Capital Gains, unaccounted income in the guise of Long Term Capital Gains, and such gains are not eligible for exemption under section and such gains are not eligible for exemption under section and such gains are not eligible for exemption under section 10(38). Applying the ratio of this binding precedent, the AO 10(38). Applying the ratio of this binding precedent, the AO 10(38). Applying the ratio of this binding precedent, the AO was fully justified in bringing the impugned sale consideration was fully justified in bringing the impugned sale consideration was fully justified in bringing the impugned sale consideration to tax under Section 68.It is therefore respectfully submitted to tax under Section 68.It is therefore respectfully submitted to tax under Section 68.It is therefore respectfully submitted that the Hon'ble ITAT may be pleased to uphold the addition that the Hon'ble ITAT may be pleased to uphold the addition that the Hon'ble ITAT may be pleased to uphold the addition made by the AO and dismiss the appeal of the assessee. the AO and dismiss the appeal of the assessee. the AO and dismiss the appeal of the assessee. In the present case, the Assessing Officer has rightly relied In the present case, the Assessing Officer has rightly relied In the present case, the Assessing Officer has rightly relied upon the information from received Lucknow DGIT, search upon the information from received Lucknow DGIT, search upon the information from received Lucknow DGIT, search materials, and statements of Rajkumar Modi have establish materials, and statements of Rajkumar Modi have establish materials, and statements of Rajkumar Modi have establish that the LTCG claimed by the app that the LTCG claimed by the appellant is nothing but a sham ellant is nothing but a sham transaction and a mere device to evade tax. The appellant has transaction and a mere device to evade tax. The appellant has transaction and a mere device to evade tax. The appellant has utterly failed to rebut the incriminating materials brought on utterly failed to rebut the incriminating materials brought on utterly failed to rebut the incriminating materials brought on record, and there exists ample documentary evidence record, and there exists ample documentary evidence record, and there exists ample documentary evidence demonstrating clear price manipulation and generat demonstrating clear price manipulation and generat demonstrating clear price manipulation and generation of artificial gain. artificial gain. Further, it is relevant to note that Shri Rajkumar Modi, the Further, it is relevant to note that Shri Rajkumar Modi, the Further, it is relevant to note that Shri Rajkumar Modi, the Director of PMC Fincorp Ltd., had initially admitted during his Director of PMC Fincorp Ltd., had initially admitted during his Director of PMC Fincorp Ltd., had initially admitted during his search proceedings that the company and its related operators search proceedings that the company and its related operators search proceedings that the company and its related operators
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 11 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 were engaged in providing accommodation were engaged in providing accommodation entries, including entries, including bogus LTCG, and had explained the modus operandi in detail. bogus LTCG, and had explained the modus operandi in detail. bogus LTCG, and had explained the modus operandi in detail. Subsequently, on 27.10.2018, he filed a retraction affidavit, Subsequently, on 27.10.2018, he filed a retraction affidavit, Subsequently, on 27.10.2018, he filed a retraction affidavit, claiming that his earlier statement was made under stress, claiming that his earlier statement was made under stress, claiming that his earlier statement was made under stress, depression, mentally and physically breakdown. depression, mentally and physically breakdown. Importantly, ly, ly, this this this retraction retraction retraction was was was unsupported unsupported unsupported by by by any any any contemporaneous documentary evidence. No medical reports, contemporaneous documentary evidence. No medical reports, contemporaneous documentary evidence. No medical reports, hospital records, or other corroborative materials were hospital records, or other corroborative materials were hospital records, or other corroborative materials were furnished furnished furnished to to to substantiate substantiate substantiate the the the alleged alleged alleged mental/physical mental/physical mental/physical condition. It is well settled in law that a b condition. It is well settled in law that a bald retraction after ald retraction after search, without credible supporting evidence, cannot override search, without credible supporting evidence, cannot override search, without credible supporting evidence, cannot override a categorical statement made under oath u/s 132(4), which a categorical statement made under oath u/s 132(4), which a categorical statement made under oath u/s 132(4), which has strong evidentiary value. has strong evidentiary value. It is submitted that the assessment framed under Section It is submitted that the assessment framed under Section It is submitted that the assessment framed under Section 153A of the Income 153A of the Income-tax Act is valid and legal. Section 153A s valid and legal. Section 153A empowers the Assessing Officer to assess income of a person empowers the Assessing Officer to assess income of a person empowers the Assessing Officer to assess income of a person for any assessment year when a search or seizure operation is for any assessment year when a search or seizure operation is for any assessment year when a search or seizure operation is carried out, irrespective of whether incriminating material is carried out, irrespective of whether incriminating material is carried out, irrespective of whether incriminating material is found for every particular transaction. found for every particular transaction. The statutory mandate The statutory mandate does not require that incriminating evidence must be does not require that incriminating evidence must be does not require that incriminating evidence must be discovered for each transaction; the AO is empowered to discovered for each transaction; the AO is empowered to discovered for each transaction; the AO is empowered to examine the entire financial position of the assessee for the examine the entire financial position of the assessee for the examine the entire financial position of the assessee for the relevant years covered by the search. relevant years covered by the search. The assessee has contend The assessee has contended that he was denied the ed that he was denied the opportunity to cross opportunity to cross-examine Shri Rajkumar Modi, Director of examine Shri Rajkumar Modi, Director of PMC Fincorp Ltd., whose statement was relied upon by the PMC Fincorp Ltd., whose statement was relied upon by the PMC Fincorp Ltd., whose statement was relied upon by the Assessing Officer in making the addition. The law is well Assessing Officer in making the addition. The law is well Assessing Officer in making the addition. The law is well settled that the right of formal cross settled that the right of formal cross-examination is examination is not a component of natural justice under the Income component of natural justice under the Income-tax Act. Natural tax Act. Natural justice, under the doctrine of audi alteram partem, requires justice, under the doctrine of audi alteram partem, requires justice, under the doctrine of audi alteram partem, requires that the assessee should have a fair and reasonable that the assessee should have a fair and reasonable that the assessee should have a fair and reasonable opportunity to see, comment, and criticise the evidence or opportunity to see, comment, and criticise the evidence or opportunity to see, comment, and criticise the evidence or record relied u record relied upon by the AO. It does not mandate a formal pon by the AO. It does not mandate a formal cross-examination as per the procedural rules of a Court of examination as per the procedural rules of a Court of examination as per the procedural rules of a Court of law. Reliance is placed on ITAT Bombay, GTC Industries Ltd. law. Reliance is placed on ITAT Bombay, GTC Industries Ltd. law. Reliance is placed on ITAT Bombay, GTC Industries Ltd. v. ACIT [65 ITD 380]: The Tribunal, relying on the Calcutta v. ACIT [65 ITD 380]: The Tribunal, relying on the Calcutta v. ACIT [65 ITD 380]: The Tribunal, relying on the Calcutta High Court judgment in Kisanlal High Court judgment in Kisanlal Agarwalla v. Collector of Land Agarwalla v. Collector of Land Customs AIR 1967 Cal 80, held that: "No natural justice Customs AIR 1967 Cal 80, held that: "No natural justice Customs AIR 1967 Cal 80, held that: "No natural justice requires that there should be a kind of formal cross requires that there should be a kind of formal cross requires that there should be a kind of formal cross- examination. Formal cross examination. Formal cross- examination is procedural justice. examination is procedural justice. Natural justice certainly includes that any statement Natural justice certainly includes that any statement Natural justice certainly includes that any statement of a Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 12 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 person before it is accepted against somebody else, that person before it is accepted against somebody else, that person before it is accepted against somebody else, that somebody else should have an opportunity of meeting it somebody else should have an opportunity of meeting it somebody else should have an opportunity of meeting it whether it be by way of interrogation or by way of comment whether it be by way of interrogation or by way of comment whether it be by way of interrogation or by way of comment does not matter. "The Tribunal further clarified that if a does not matter. "The Tribunal further clarified that if a does not matter. "The Tribunal further clarified that if a witness provides dire witness provides directly incriminating statements, cross ctly incriminating statements, cross- examination may be required; however, if the statements are examination may be required; however, if the statements are examination may be required; however, if the statements are collateral or documentary in nature, there is no legal collateral or documentary in nature, there is no legal collateral or documentary in nature, there is no legal requirement for cross requirement for cross- examination. Allahabad High Court, Motilal Padampat Udyog Ltd. v. CIT Allahabad High Court, Motilal Padampat Udyog Ltd. v. CIT Allahabad High Court, Motilal Padampat Udyog Ltd. v. CIT [293 ITR 56 [293 ITR 565]: The Court held that the right of cross 5]: The Court held that the right of cross- examination of persons from whom AO has collected evidence examination of persons from whom AO has collected evidence examination of persons from whom AO has collected evidence is not required under the Income is not required under the Income-tax law. In that case, copies tax law. In that case, copies of rough cash books and statements of partners had been of rough cash books and statements of partners had been of rough cash books and statements of partners had been provided to the assessee, and the a provided to the assessee, and the assessee had submitted its ssessee had submitted its replies. The Court held that this constituted adequate replies. The Court held that this constituted adequate replies. The Court held that this constituted adequate opportunity to controvert the material, and the assessment opportunity to controvert the material, and the assessment opportunity to controvert the material, and the assessment was valid. In the instant matter, all the relevant statements of Shri In the instant matter, all the relevant statements of Shri In the instant matter, all the relevant statements of Shri Rajkumar Modi were part of the assessment reco Rajkumar Modi were part of the assessment records, and the rds, and the appellant was aware of and had the opportunity to file its appellant was aware of and had the opportunity to file its appellant was aware of and had the opportunity to file its replies and submissions during assessment and appellate replies and submissions during assessment and appellate replies and submissions during assessment and appellate proceedings. The statement relied upon by the AO forms part proceedings. The statement relied upon by the AO forms part proceedings. The statement relied upon by the AO forms part of the collateral evidence establishing the modus operandi of of the collateral evidence establishing the modus operandi of of the collateral evidence establishing the modus operandi of PMC Fincorp Ltd. and its manipulation of share prices. There ncorp Ltd. and its manipulation of share prices. There ncorp Ltd. and its manipulation of share prices. There was no requirement under law for the AO to allow formal was no requirement under law for the AO to allow formal was no requirement under law for the AO to allow formal cross-examination, as the appellant had adequate opportunity examination, as the appellant had adequate opportunity examination, as the appellant had adequate opportunity to comment and rebut the materials, thereby satisfying the to comment and rebut the materials, thereby satisfying the to comment and rebut the materials, thereby satisfying the requirements of natural requirements of natural justice.”
Having considered the rival submissions, we are of the considered view Having considered the rival submissions, we are of the considered view Having considered the rival submissions, we are of the considered view that the Revenue has failed to demonstrate that any incriminating material that the Revenue has failed to demonstrate that any incriminating material that the Revenue has failed to demonstrate that any incriminating material relating to the impugned share transactions was found during the search on relating to the impugned share transactions was found during the search on relating to the impugned share transactions was found during the search on the assessee. It is well settled that the mere presence of statutory books l settled that the mere presence of statutory books l settled that the mere presence of statutory books reflecting recorded transactions cannot be treated as incriminating material per reflecting recorded transactions cannot be treated as incriminating material per reflecting recorded transactions cannot be treated as incriminating material per se. The incriminatory character arises only if the books or seized documents se. The incriminatory character arises only if the books or seized documents se. The incriminatory character arises only if the books or seized documents themselves reveal undisclosed income. In the p themselves reveal undisclosed income. In the present case, the suspicious resent case, the suspicious nature of the transaction surfaces only when read in conjunction with the nature of the transaction surfaces only when read in conjunction with the nature of the transaction surfaces only when read in conjunction with the Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 13 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 DGIT Investigation report DGIT Investigation report — which concededly does not originate from the originate from the search conducted on the assessee. search conducted on the assessee. Thus, in light of the authoritative Thus, in light of the authoritative pronouncement of the Hon’ble Supreme Court in nt of the Hon’ble Supreme Court in Abhisar Buildwell Abhisar Buildwell (supra), the addition made in this unabated assessment year cannot survive in the absence addition made in this unabated assessment year cannot survive in the absence addition made in this unabated assessment year cannot survive in the absence of incriminating material. of incriminating material.
We find that the Ld. We find that the Ld. DR has referred to the SEBI order dated SEBI order dated 26.01.2021 but said report said report was also not found during the course of was also not found during the course of the search. Further, according to the Ld. DR books of accounts and the search. Further, according to the Ld. DR books of accounts and the search. Further, according to the Ld. DR books of accounts and documents found as per Punchnama documents found as per Punchnama, which is available on Paper which is available on Paper Book page 106 were i Book page 106 were in the nature of the incriminating qua the n the nature of the incriminating qua the addition of the cash credit on sale of PMC Fincorp Ltd. But in our addition of the cash credit on sale of PMC Fincorp Ltd. But in our addition of the cash credit on sale of PMC Fincorp Ltd. But in our opinion, merely books of accounts indicating said transaction, are opinion, merely books of accounts indicating said transaction opinion, merely books of accounts indicating said transaction not itself incriminating material not itself incriminating material. That transaction becomes hat transaction becomes incriminating only in view of information received from the DGIT in view of information received from the DGIT in view of information received from the DGIT Investigation Wing, Lucknow Investigation Wing, Lucknow, which is undisputedly was not found which is undisputedly was not found during the course of the search action at the premises of the during the course of the search action at the premises of the during the course of the search action at the premises of the assessee and therefore, the assessee and therefore, the ld Assessing Officer was Assessing Officer was not unjustified in making addition in the year under consideration without the aid tion in the year under consideration without the aid tion in the year under consideration without the aid of any incriminating material found during the course of the search. of any incriminating material found during the course of the search. of any incriminating material found during the course of the search. The Legal ground accordingly is allowed in favour of the assessee. The Legal ground accordingly is allowed in favour of the assessee. The Legal ground accordingly is allowed in favour of the assessee.
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 14 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399
As regards the assessee’s additional legal ground alleging that As regards the assessee’s additional legal ground alleging that As regards the assessee’s additional legal ground alleging that the panchnama and statements recorded during search were not the panchnama and statements recorded during search were not the panchnama and statements recorded during search were not supplied by the CIT(A), we find that the CIT(A) rejected the ground supplied by the CIT(A), we find that the CIT(A) rejected the ground supplied by the CIT(A), we find that the CIT(A) rejected the ground merely on the basis that the assessee did not furnish such merely on the basis that the assessee did not furnish such merely on the basis that the assessee did not furnish such documents before him. documents before him. The finding of the Ld. CIT(A) on this legal The finding of the Ld. CIT(A) on this legal ground is reproduced as under: round is reproduced as under:
“5.3.6 The appellant has also raised a legal ground that “5.3.6 The appellant has also raised a legal ground that “5.3.6 The appellant has also raised a legal ground that there was no incriminating material was found during there was no incriminating material was found during there was no incriminating material was found during the search proceedings, therefore, no addition could be the search proceedings, therefore, no addition could be the search proceedings, therefore, no addition could be made for unabated assessment year. The appellant has made for unabated assessment year. The appellant has made for unabated assessment year. The appellant has relied upon decision in the case of All Cargo Global upon decision in the case of All Cargo Global upon decision in the case of All Cargo Global Logistics Ltd. Vs. DCIT (ITAT Mumbai Special Bench), Logistics Ltd. Vs. DCIT (ITAT Mumbai Special Bench), Logistics Ltd. Vs. DCIT (ITAT Mumbai Special Bench), Commissioner of Income Tax vs. Kabul Chawla High Commissioner of Income Tax vs. Kabul Chawla High Commissioner of Income Tax vs. Kabul Chawla High court of Delhi (2015) 93 CCH 0210 DelHC (2015) 281 court of Delhi (2015) 93 CCH 0210 DelHC (2015) 281 court of Delhi (2015) 93 CCH 0210 DelHC (2015) 281 CTR 0045(Del): (2015) 126 DTR 0130 (Del): (2016) 380 CTR 0045(Del): (2015) 126 DTR 0130 (Del): (2016) 380 CTR 0045(Del): (2015) 126 DTR 0130 (Del): (2016) 380 ITR 0573 (Delhi): (2015) 234 ΤΑΧΜΑΝ0300(Delhi), 0573 (Delhi): (2015) 234 ΤΑΧΜΑΝ0300(Delhi), 0573 (Delhi): (2015) 234 ΤΑΧΜΑΝ0300(Delhi), Commissioner of Income tax vs. Lancy constructions Commissioner of Income tax vs. Lancy constructions Commissioner of Income tax vs. Lancy constructions High court of Karnatka (2015) 94 CCH 0256 KarHC High court of Karnatka (2015) 94 CCH 0256 KarHC High court of Karnatka (2015) 94 CCH 0256 KarHC (2016) 237 ΤΑΧΜΑΝ 0728 (Karnatka), (2023) 149 (2016) 237 ΤΑΧΜΑΝ 0728 (Karnatka), (2023) 149 (2016) 237 ΤΑΧΜΑΝ 0728 (Karnatka), (2023) 149 Taxman.com 399 (SC) Supreme Court of India Principal Taxman.com 399 (SC) Supreme Court of India Principal Taxman.com 399 (SC) Supreme Court of India Principal Commissioner o Commissioner of Income Tax central-3 Vs. Abhisar 3 Vs. Abhisar Buildwell (P.) Ltd.. Vijayrattan Balkrishan Mittal Vs. Buildwell (P.) Ltd.. Vijayrattan Balkrishan Mittal Vs. Buildwell (P.) Ltd.. Vijayrattan Balkrishan Mittal Vs. DCIT CC8(1) (2020) 121 taxmann.com 1000 (Mumbai DCIT CC8(1) (2020) 121 taxmann.com 1000 (Mumbai DCIT CC8(1) (2020) 121 taxmann.com 1000 (Mumbai- Trib). Smt. Anjli pandit Vs. ACIT, Central Circle 12, Trib). Smt. Anjli pandit Vs. ACIT, Central Circle 12, Trib). Smt. Anjli pandit Vs. ACIT, Central Circle 12, Mumbai (2017) 88 taxmann.com 657 (Mumbai Mumbai (2017) 88 taxmann.com 657 (Mumbai-Trib). Trib). It is a fact th It is a fact that in the cvase of the appellant a search at in the cvase of the appellant a search action was carried out on 24.08.2018, therefore, A.Y. action was carried out on 24.08.2018, therefore, A.Y. action was carried out on 24.08.2018, therefore, A.Y. 2015-16 16 16 was was was unabated unabated unabated assessment assessment assessment year. year. year. Thus, Thus, Thus, respectfully following the the decision decision cited cited by by the the appellant no addition was required to be made during appellant no addition was required to be made during appellant no addition was required to be made during the year witho the year without any incriminating material. However, ut any incriminating material. However, during the appellate proceedings, the appellant has not during the appellate proceedings, the appellant has not during the appellate proceedings, the appellant has not furnished copies of panchnamas or statements of the furnished copies of panchnamas or statements of the furnished copies of panchnamas or statements of the Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 15 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 appellant and other family members recorded during appellant and other family members recorded during appellant and other family members recorded during the search proceedings from which it could be verified the search proceedings from which it could be verified the search proceedings from which it could be verified that inf act there was no incriminating material was at inf act there was no incriminating material was at inf act there was no incriminating material was found during the search proceedings. In absence of that found during the search proceedings. In absence of that found during the search proceedings. In absence of that alternative argument taken by the appellant is rejected.” alternative argument taken by the appellant is rejected.” alternative argument taken by the appellant is rejected.”
The CIT(A), however, overlooked the fact that these documents The CIT(A), however, overlooked the fact that these documents The CIT(A), however, overlooked the fact that these documents were necessarily within t were necessarily within the possession of the AO, and could have he possession of the AO, and could have been requisitioned for verifying whether any incriminating material been requisitioned for verifying whether any incriminating material been requisitioned for verifying whether any incriminating material existed. The relevant portion of the CIT(A)’s order shows an existed. The relevant portion of the CIT(A)’s order shows an existed. The relevant portion of the CIT(A)’s order shows an incorrect approach, which cannot be sustained. incorrect approach, which cannot be sustained.
10.1 We accordingly set aside this findi We accordingly set aside this finding of the CIT(A) as well. ng of the CIT(A) as well. However, since we have already allowed the primary legal ground However, since we have already allowed the primary legal ground However, since we have already allowed the primary legal ground and held that the addition is unsustainable for want of and held that the addition is unsustainable for want of and held that the addition is unsustainable for want of incriminating material, all other grounds incriminating material, all other grounds — both on the merits of both on the merits of the addition and on procedural issues the addition and on procedural issues — are rendered academic rendered academic and do not require adjudication. and do not require adjudication.
In view of the foregoing discussion, the impugned addition In view of the foregoing discussion, the impugned addition In view of the foregoing discussion, the impugned addition made under section 68 in the proceedings under section 153A is made under section 68 in the proceedings under section 153A is made under section 68 in the proceedings under section 153A is held to be unsustainable in law. The appeal of the assessee is held to be unsustainable in law. The appeal of the assessee is held to be unsustainable in law. The appeal of the assessee is allowed on the legal ground. egal ground.
In other appeals also identical grounds have been raised in In other appeals also identical grounds have been raised in In other appeals also identical grounds have been raised in same set of facts and circumstances and therefore, following our same set of facts and circumstances and therefore, following our same set of facts and circumstances and therefore, following our
Ashish Shashikant Choksi, Sicharth Ashish Shashikant Choksi 16 Abhay Choksi, Tanu Gautam Choksi, Abhay Choksi, Tanu Gautam Choksi, Vikram Sajanlal Choksi, Gaurav Abhay Vikram Sajanlal Choksi, Gaurav Abhay Choksi, Gautam Ashok Choksi & Choksi, Gautam Ashok Choksi & Vishwas Shasikant Choksi Vishwas Shasikant Choksi 1344, 1345, 1391, 1397, , 1344, 1345, 1391, 1397, 1398 & 1399/MUM/2025 1398 & 1399 finding in the case of Ashish Shashikant Choksi result of which is finding in the case of Ashish Shashikant Choksi result of which is finding in the case of Ashish Shashikant Choksi result of which is applied mutatis mutandis mutatis mutandis in other cases.
In the result, all the appeals of the assessee are allowed. In the result, all the appeals of the assessee are allowed. In the result, all the appeals of the assessee are allowed.
Order pronounced in the open Court on ounced in the open Court on 26/11/2025. /11/2025.