DCIT, CENTRAL CIRCLE-1, JAIPUR, JAIPUR vs. SMT. PISTA DEVI GOYAL, JAIPUR

ITA 1340/JPR/2025Status: DisposedITAT Jaipur29 September 20268 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed by the Revenue is dismissed. The assessment was done under Section 153A read with Section 143(3) of the Act. The Tribunal noted that the AO's assessment order did not refer to any seized material found during the search as the basis for the additions. The CIT(A) had followed the decisions of the Hon'ble Supreme Court in Abhisar Buildwell Pvt. Ltd. and U.K. Paints (Overseas) Ltd., which were considered clearly applicable to the facts of the case. The Revenue failed to demonstrate any seized material found during the search and seizure that formed the basis for the impugned additions. Therefore, the grounds raised by the Revenue were found to be devoid of merit. The Tribunal upheld the deletion of additions made by the AO, as they were not based on incriminating material unearthed during the search, and such additions could have been made by the AO in reassessment proceedings under Section 147/148. The AO was at liberty to take any action as per the prevailing legal position.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) for Assessment Year 2014-15. A search and seizure operation under Section 132(1) was conducted on 04.11.2016 at premises related to the Manglam Group, where the assessee had invested in shares of M/s. Kailash Auto Finance Ltd. and M/s. Lotus Fresh Food Pvt. Ltd., alleged to be penny stock companies. A notice under Section 153A was issued to the assessee on 14.12.2017. The assessee filed a return declaring total income of Rs. 46,84,430/-. The Assessing Officer (AO) disallowed the Long Term Capital Gains (LTCG) claim of Rs. 20,38,730/- under Section 10(38) and commission paid of Rs. 41,875/-, assessing total income at Rs. 27,65,035/-. The CIT(A) deleted these additions, holding that no incriminating material was found during the search and that the assessment was unabated, relying on the Supreme Court judgment in Abhisar Buildwell Pvt. Ltd.

What were the issues?

1. Whether the CIT(A) was justified in deleting the addition of Rs. 20,38,730/- made by the AO on account of disallowing the exemption of bogus Long Term Capital Gains claimed under Section 10(38) and treating it as unexplained credits under Section 68? 2. Whether the CIT(A) correctly interpreted the Supreme Court's decision in Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. and whether the AO's additions under Section 153A were in accordance with law? 3. Whether the CIT(A) was justified in granting relief by ignoring CBDT Instruction No. 5 of 2024, which directs appeals in cases of organized tax evasion including bogus capital gains through penny stocks? 4. Whether the CIT(A) was justified in deleting additions by relying on Abhisar Buildwell and U.K. Paints judgments, despite the Revenue contending that incriminating documents were found and seized during the search? 5. Whether the CIT(A) was justified in granting relief by ignoring that additions on the same issue were sustained for AY 2014-15? 6. Whether the CIT(A) was justified in deleting the addition of Rs. 41,875/- made by the AO on account of commission paid for acquiring accommodation entries for bogus LTCG? Assessee's Contention: The CIT(A) rightly considered the judgments of the Hon'ble Supreme Court in Abhisar Buildwell Pvt. Ltd. and DCIT vs. U.K. Paints (Overseas) Ltd., and their finding requires no interference. Revenue's Contention: The AO's order should be confirmed, and the additions made should be sustained. The CIT(A) erred in deleting the additions.

Which sections of the Income-tax Act were involved?

Section 132(1),Section 153A,Section 143(3),Section 10(38),Section 68,Section 147,Section 148,Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri P. C. Parwal, CA
For Respondent: Shri P. C. Parwal, CA

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 31.07.2025 passed by Commissioner of Income Tax (Appeal), Jaipur, arising out of the assessment order passed u/s. 153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to A.Y. 2014-15. 2. Brief facts of the case are that the assessee is an individual filed her return of income for the AY 2014-15 on 31.01.2015 declaring total

I.T.A No. 1340/JPR/2025 Page No 2 Smt. Pista Devi

income of Rs. 46,84,430/-. A searc

The order continues below.

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