ANIL KAPILASHRAMI,GURGAON vs. DCIT, CIRCLE-16, NEW DELHI

We come to the assessee’s “lead” appeal A.Y. 2016-17. It emerges during the course of hearing with the able assistance coming from both the parties that the learned Assessing Officer had framed his section 153C r.w.s. 143(3) assessment dated 29.03.2023 in the assessee’s case disallowing his long term capital loss amounting to Rs.40,20,794/- which stands upheld in the lower appellate discussion.

We further deem it appropriate to clarify here that the learned departmental authorities had carried out the search in question in M/s Pythhos Group on 13.06.2018 followed by issuance of section 153C notice to the assessee on 30.07.2021.

The above being the clinching factual position, learned CIT-DR could hardly dispute that the impugned assessment year 2016-17; when counted as on the date of 153C satisfaction becoming the date of search in case of such a third person as on 30.07.2021, becomes an “unabated” assessment year wherein any disallowance or addition; as the case may be, & 3094/Del/2024 36 & 37/Del/2025 Anil Kapilashrami ought to be made on the basis of the corresponding specific seized material only. We further wish to emphasize here that the impugned long term capital loss disallowance is not based on any such specific seized material as per the assessment findings in the assessment order. Faced with this situation, we quote PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) to conclude that the impugned disallowance; or for that, the assessment herein dated 29.03.2023 itself is not sustainable in law in very terms. Quashed accordingly. This assessee’s first and foremost “lead” appeal is accepted in very terms.

Same order to follow in the assessee’s penalty appeal being consequential in nature. Allowed accordingly.

The assessee’s third appeal in assessment year 2017-18 is directed against both the learned lower authorities’ action levying section 270A penalty of Rs.1,32,150/- @ 200% of the mis-reported income amounting to Rs.66,075/- pertaining to the income from other sources of Rs.6,95,750/-. It is made clear that the foregoing head of income had also not been deducted during the course of search & 3094/Del/2024 36 & 37/Del/2025 Anil Kapilashrami on the basis of seized material forming a conditioned precedent in an unabated assessment herein as well. We thus quote PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) to conclude that the impugned penalty is not sustainable in law. Deleted accordingly. The assessee instant third appeal ITA No. 36/Del/2025 is accepted.

The assessee’s twin appeal and in assessment year 2018-19 involve section 143(3) r.w.s. 153C quantum and section 270A penalty proceedings; respectively. A perusal of the assessment order herein also indicates that the quantum disallowance was of long term capital loss only amounting to Rs.4,66,951/- again not based on any specific seized material.

We thus refer to the foregoing landmark decision herein as well to quash the impugned assessment dated 29.03.2023 itself in very terms. So is the outcome of the assessee’s consequential penalty appeal since the same has got no legs to stand any more in foregoing terms. These assessee’s twin appeals and ITA No. 37/Del/2025 succeed in above terms.