INCOME TAX OFFICER WARD-1(4), JAIPUR, JAIPUR vs. PRADEEP KUMAR DUSAD, JAIPUR

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ITA 900/JPR/2025Status: DisposedITAT Jaipur15 October 2025AY 2016-1722 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(A) was justified in deleting the addition made by rejecting the assessee's claim under section 10(38) for bogus LTCG. The Tribunal found that the satisfaction note dated 18.09.2018 did not contain any mention of information or recovery of incriminating material relating to shares of M/s Yamini Investment Company Ltd., nor did it refer to any books of account or documents seized that had a bearing on the determination of the assessee's total income. Therefore, proceedings initiated for LTCG were without reference to any incriminating material. Consequently, the direction issued by the CIT(A) to the Assessing Officer to take action for issuance of notice under section 148 of the Act, as regards the LTCG claim, was set aside. The Tribunal partly allowed the assessee's appeal (ITA No. 722/JPR/2025) by modifying the CIT(A)'s order on this point. The Tribunal also partly allowed the Revenue's appeal (ITA No. 900/JPR/2025) in the manner indicated, implying that the CIT(A)'s decision to set aside the assessment order was not fully upheld, but the specific direction regarding reassessment for LTCG was reversed. The issue regarding the validity of proceedings under section 153C for the land transaction was implicitly addressed by the partial allowance of the Revenue's appeal, suggesting the CIT(A)'s findings on this were not entirely overturned.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, heard two appeals concerning assessment year 2016-17. The assessee, Pradeep Kumar Dusad, and the Revenue (Dy. Commissioner of Income Tax and Income Tax Officer) were parties. The CIT(A) had previously set aside the assessment order dated 28.12.2018, passed under section 143(3) read with section 153C of the Income Tax Act, 1961. The Assessing Officer had made three additions: bogus Long Term Capital Gains (LTCG) of Rs. 44,68,330/-, commission paid for accommodation entry of Rs. 89,367/-, and on-money payment for land purchase of Rs. 1,45,78,885/-. These additions stemmed from search and seizure actions on the Chandra Prakash Agarwal Group, of which the assessee was a member. The CIT(A) allowed the assessee's appeal, finding the proceedings under section 153C invalid and directing reassessment for certain issues. The Revenue appealed the CIT(A)'s order, and the assessee also appealed against the direction for reassessment.

What were the issues?

1. Whether the proceedings initiated under section 153C of the Act for assessment year 2016-17 were valid, considering the satisfaction note and the nature of the incriminating material seized, particularly concerning the purchase of land. 2. Whether the CIT(A) erred in setting aside the addition relating to bogus LTCG claimed by the assessee under section 10(38) and directing reassessment proceedings under section 147/148 of the Act. Assessee's Contentions (Revenue's Appeal - ITA No. 900/JPR/2025): The assessee contended that the incriminating material did not pertain to him but to the firm M/s Eminent Build Developers, and the Assessing Officer was not justified in initiating proceedings based on the satisfaction note. The CIT(A) was correct in holding that the notice under section 153C was invalid. Revenue's Contentions (Revenue's Appeal - ITA No. 900/JPR/2025): The Revenue argued that the CIT(A) erred in concluding that the seized material pertained to the firm and not the assessee, and that the proceedings initiated on the basis of the satisfaction note were improper. The assessment order was well-reasoned and should not have been set aside. Assessee's Contentions (Assessee's Appeal - ITA No. 722/JPR/2025): The assessee argued that the CIT(A) erred in directing the Assessing Officer to take action for issuing notice under section 148 of the Act regarding the LTCG claim, as the proceedings were initiated in a search case without proper mention of incriminating material in the satisfaction note.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 143(3),Section 153C,Section 69,Section 115BBE,Section 132,Section 133A,Section 148,Section 150,Section 147,Section 142(1),Section 143(2),Section 131,Section 68,Section 69C,Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “A-Bench” JAIPUR

Before: SHRI GAGAN GOYAL, AM& SHRI NARINDER KUMAR, JM

For Respondent: Shri Rajesh Ojha, Ld. CIT
Hearing: 13/10/2025Pronounced: 15/10/2025

Heard together (2 matters)

ITA No.722/JPR/2025
ITA No.900/JPR/2025

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

File be consigned to the record room after the needful is done by the office. Copy of the order be also placed in the file of the connected appeal. Order pronounced in the open court on 15/10/2025.

Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 15/10/2025 *Santosh आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Pradeep Kumar Dusad, Jaipur. 1. 2. izR;FkhZ@ The Respondent- DCIT, Central Circle-2, Jaipur. ITO, Ward-1(4), Jaipur. 3. vk;djvk;qDr@ Theld CIT

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