AMARJEET KAUR RYAIT,LUDHIANA vs. ACIT, CC-II, LUDHIANA, LUDHIANA

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ITA 153/CHANDI/2023Status: DisposedITAT Chandigarh22 May 2025AY 2012-2013Bench: SHRI LALIET KUMAR (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)1 pages

AI SummaryAllowed

Facts

Two appeals were filed concerning AY 2012-13 with identical facts. The assessee claimed Long-Term Capital Gains (LTCG) from share sales as exempt. The Assessing Officer (AO) made additions treating the gains as unexplained money under Section 68, citing information that the entity was bogus.

Held

The Tribunal held that the regular return of income had attained finality, and no incriminating material was found during the search to dislodge the assessee's claim. Following Supreme Court and High Court precedents, no addition can be made in completed assessments without incriminating material.

Key Issues

Whether additions can be made under Section 68 for LTCG claimed as exempt, without any incriminating material found during a search in a completed assessment.

Sections Cited

143(3), 153A, 68, 10(38), 143(2), 132, 132A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment

Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.

CIT v. Kabul Chawla
380 ITR 573 · 2016 · HC
3,235 citing
Pr. CIT v. Abhisar Buildwell (P.) Ltd.
149 Taxmann.com 399 · 2023 · SC
2,352 citing
Pr. CIT v. Saumya Constructions (P.)Ltd.
387 ITR 529 · 2016 · HC
670 citing

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by two different assessee for Assessment Year (AY) 2012-13 have identical facts. First, we take up which arises out of an order of learned Commissioner of Income Tax (Appeals)-5, Ludhiana [CIT(A)] dated 09- 01-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 153A of the Act on 31-12-2016. The sole grievance of the assessee is confirmation of addition of Rs.46.65 Lacs as made by Ld. AO u/s 68 of the Act. The Ld. AR relied on the decision of Hon’ble Apex Court in the case of Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399) to submit that in the absence of any incriminating material, no such addition could have been made in the hands of the assessee. The Ld. AR placed on record events chart to bolster the said claim. The Ld. CIT-DR, on the other hand, relied on the orders of lower authorities. Having heard rival submissions and upon perusal of case records, our adjudication would be as under.

The assessee was searched on 03-12-2014. However, the regular return of income was already filed by the assessee on 31-07- 2012 which attained finality since no notice u/s 143(2) was issued by due date i.e., 30-09-2013. In the regular return of income, the assessee reflected Long-Term Capital Gains (LTCG) on sale of shares of an entity viz. M/s Vindus Holdings Ltd. The same was claimed exempt u/s 10(38). However, in the assessment proceedings, Ld. AO referred to information received from ADIT (Inv.), Kolkata vide letter dated 09-12- 2016 stating that this entity was a bogus entity and accordingly, held that the said claim was not in order. Though the assessee refuted the allegation of Ld. AO, the same got rejected by Ld. AO and the gains were treated as unexplained money u/s 68. The Ld. CIT(A) dismissed the legal grounds and confirmed the impugned addition on merits against which the assessee is in further appeal before us.

Upon perusal of case records, it emerges that the regular return of income as filed by the assessee had attained finality. No incriminating material is shown to have been received from the assessee which would dislodge the claim of the assessee that the gains were bogus claim. The Ld. AO has merely relied upon subsequent information as received from investigation wing alleging that the entity in consideration was a bogus entity. This being so, the ratio of cited decision of Hon’ble Apex Court in the case of Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399) would squarely apply to the facts of this case. Approving the decision of Hon’ble Delhi High Court in the case of Kabul Chawla (380 ITR 573) as well as the decision of Hon’ble Gujarat High Court in Saumya Construction (P.) Ltd. (387 ITR 529), it was held that in respect of completed assessments / unabated assessments, no addition could be made by Assessing Officer in the absence of any incriminating material found during course of search under section 132 or requisition made under section 132A. Respectfully following the same, we allow the legal ground as urged by Ld. AR. The impugned addition is not sustainable on this score only. Delving into the merits of the case has been rendered infructuous. The appeal stand allowed accordingly.