2022 (3) TMI 708

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....he Ld. CIT(A) had allowed the appeal filed by the Assessee against the Assessment Order dated 11.12.2019, passed under section 143(3) read with section 153A of the Act. 2. The Revenue has raised the following grounds of appeal:- "1. On the facts and the circumstances of the case, Ld. CIT(A) erred in deleting the addition of Rs. 47,63,825/- made by the AO account of unexplained investment made in the a penny stock company M/s Global Capital Market Limited. 2. "On the facts and the circumstances of the case, Ld. CIT{(A) erred in not appreciating the fact that the sale consideration of Rs. 47,63,825/- derived from the sales of shares of company M/s Global Capital market Limited are bogus and the exemption claimed on such LTCG should not b....

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....consideration of INR 47,63,825/-. According to the AO this was a penny-stock transaction undertaken by the Assessee in a pre-arranged manner in connivance with the operators to evade taxes. Accordingly, the AO concluded that sale consideration of INR 47,63,825/- was not in the nature of capital gain and represented unexplained income invested made by the Assessee. Thus, the AO made an addition of INR 47,63,825/- to the returned income and also made a further addition of INR 2,38,891/-, being 5% commission paid for obtaining accommodation entry, as unexplained expenditure under section 69C of the Act. 4. Being aggrieved, the Assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT (A)]. The primary contention of the Assess....

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....ourse of the search, the assessment U/s 153A of the Act is to be made on originally assessed returned income and no addition or disallowance can be made de-hors the incriminating evidences recovered during the course of search. 6.3.34 In this case, since the addition of Rs. 47,63,825/- and Rs. 2,38,191/- were made on the basis of suo-motu observations and the analysis of facts by the Ld. AO, which are not based on incriminating material found during the course of search conducted u/s 153(2) of the Act, the additions are directed to be deleted. The Ground No. 1 is accordingly allowed." 5. Being aggrieved by the relief granted by the CIT(A), the Revenue is in appeal before the Tribunal. 6. We have heard the rival contentions, perused the ....