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

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that in the absence of any incriminating material found during the search, no addition could be made in respect of completed and unabated assessments. The reliance was placed on decisions of the Hon'ble Apex Court and various High Courts.

What were the facts?

The appeals involved assessment year 2012-13 with identical facts concerning an addition of Rs. 46.65 Lacs made by the Assessing Officer (AO) under section 68, treating LTCG on sale of shares as unexplained money. The assessee claimed exemption under section 10(38), but the AO, based on information from ADIT, considered the entity to be bogus.

What were the issues?

Whether additions can be made under Section 68 for unexplained income without any incriminating material in unabated assessments, especially when the regular return has attained finality?

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

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

Heard together (2 matters)

ITA No.153/CHANDI/2023
ITA No.154/CHANDI/2023

Read from the judgment's own cause title. This page is filed under one of them.

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.

2.

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.

3.

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.

4.

It is admitted position that facts in are quite identical. Accordingly, our aforesaid adjudication would mutatis- mutandis apply to this appeal also. This appeal also stand allowed.

5.

Both the appeals also stand allowed. Order pronounced on 22-05-2025.

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