Gujarat HC bars additions under sections 68 and 69C without incriminating material in section 153A assessment

The Gujarat HC ruled in favor of the assessee regarding additions under sections 68 and 69C for bogus LTCG and related expenses in a section 153A assessment. Following the SC decision in Abhisar Buildwell P. Ltd., the court held that no additions can be made for completed/unabated assessments without incriminating material found during search operations. The HC confirmed the established precedent that incriminating evidence is mandatory for such additions in search assessments.

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Issues involved:
The judgment involves the interpretation of sections 68 and 69C of the Income Tax Act, 1961, and the scope of assessment under section 153A of the Act.

Interpretation of Section 68 and 69C:
The case revolved around the addition made under section 68 of the Act on alleged bogus long term capital gain and the addition under section 69C on expenses related to the same. The Commissioner of Income Tax (Appeals) allowed the appeal by deleting these additions, citing the lack of incriminating material found during the search. The Income Tax Appellate Tribunal upheld this decision, leading to the present appeal.

Scope of Assessment under Section 153A:
The appellant department challenged the ITAT's decision, arguing that incriminating material found during a search should be the basis for additions in completed or unabated assessments. However, the Supreme Court, in the case of Principal Commissioner of Income Tax vs. Abhisar Buildwell P. Ltd., clarified that no additions can be made in completed assessments without incriminating material. The court referenced previous decisions by the Delhi High Court and the Gujarat High Court, emphasizing the importance of seized material in assessments under section 153A.

Conclusion:
In light of the Supreme Court's ruling in Abhisar Buildwell P. Ltd., it was established that no substantial question of law arose in the present case. The appeal was dismissed as the law laid down by the Supreme Court dictated that no additions could be made in completed assessments without incriminating material.

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