TaxTMI 
TaxTMI 
2025 (4) TMI 2212
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....2 of the Act. A notice under section 153A of the Act was issued to the assessee on 25.06.2019. In response to the said notice, the assessee filed his return of income on 24.07.2019 admitting total income of Rs. 41,810/-; agricultural income of Rs. 14,05,376/- after claiming exemption under section 10(38) of the Act to the tune of Rs. 5,96,11,906/- towards long term capital gains on sale of shares. 2.1. The case was selected for scrutiny and during the course of assessment proceeding, the Assessing Officer noticed that search operations and survey action was conducted by the Directorate of Investigation, Kolkata on various share brokers revealed the modus operandi of the brokers for providing accommodation entry of bogus long term capital gains and short term capital gains to various beneficiaries. Further, during the course of investigation, it was noticed that, they have facilitated various entities to trade in shares of M/s. Twenty First Century India Limited and other penny scrips for providing accommodation entry of bogus long term/short term capital gains. Further, information received from the Directorate of Investigation, Kolkata shows that the Directors and other family ....
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....fficer, the Assessing Officer referred to the Investigation report received from the Directorate of Investigation, Kolkata and statement recorded from A Mahesh Reddy in the case of AMR India Limited. Further, the said material relied upon by the Assessing Officer does not constitute incriminating material found as a result of search and consequently, the addition made by the Assessing Officer in absence of any incriminating material cannot be sustained. In this regard, he relied upon the decision of Hon'ble High Court of Bombay in the case of CIT vs., Continental Warehousing Corporation (Nhava Sheva Ltd.,) [2015] 374 ITR 645 (Bom.). The assessee had also challenged the assessment order passed by the Assessing Officer in light of 4th proviso to section 153A of the Act and argued that, assessment year in question falls beyond 6 years from the end of relevant assessment year in which search is conducted and, therefore, in absence of any income which represent assets that exceeds Rs. 50 lakhs, the assessment cannot be reopened. The assessee had also challenged addition made by the Assessing Officer towards consideration received on sale of shares as unexplained cash credits under secti....
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.... made by the Assessing Officer towards bogus long term capital gains derived from sale of shares as unexplained cash credits u/sec.68 of the Act. 5. Aggrieved by the learned CIT(A) order, the assessee is now in appeal before the Tribunal. 6. CA D K Chhablani, Learned Counsel for the Assessee submitted that, this issue is squarely covered in favour of the assessee by the decision of ITAT, Hyderabad Bench in the case of Mahesh Reddy Althuri and others vs., ACIT, CC-2(1), Hyderabad in ITA.No.40 to 43/Hyd./2023 dated 30.08.2023 wherein identical issue has been considered by the Tribunal in light of search operation conducted in the case of AMR India Limited and statement recorded from A Mahesh Reddy and after considering relevant facts and by following the decision of Hon'ble Supreme Court in the case of PCIT vs., Abhisar Buildwell P. Ltd., [2023] 454 ITR 212 (SC) held that, addition made by the Assessing Officer towards capital gains derived from sale of shares under section 68 of the Act as unexplained cash credits cannot be sustained, in absence of any incriminating material found as a result of search. Learned Counsel for the Assessee, further, referring to the decision of Co....
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....ion on account of accommodation entries in respect of bogus loan and bogus long term capital gains/short term capital gains received by assessee, since said assessment order making addition was passed on basis of incriminating materials available on record and Assessing Officer had very exhaustively dealt with said material, findings recorded by the Tribunal that additions had not been made on the basis of incriminating material could not be sustained as devoid of merit and cannot be accepted. Therefore, he submitted that there is no merit in the arguments of Counsel for the Assessee and same needs to be rejected. 8. We have heard both the parties, perused the material on record and the orders of the authorities below. There is no dispute with regard to the date of search in the case of AMR India Limited on 02.05.2018. It is also an admitted fact that, the assessment year in question is unabated/concluded as on the date of search, because the time limit for issue of notice under section 143(2) of the Act for the assessment year 2012-2013 would expire on or before 30.09.2012. It is also an admitted fact that, addition made by the Assessing Officer towards long term capital gains ....
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....ssee has categorically mentioned that no incriminating material constituting the tangible assets were found in the premises of the assessee. In our view, in the absence of any incriminating material, no addition can be made in the hands of the assessee. For the above said purposes, we may fruitfully reply upon the decision of Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra). The co-ordinate Bench of the Tribunal has an occasion to examine the applicability of the decision in the case of Abhisar Buildwell Pvt. Ltd. (supra) in the case of Preranaa Agarwal ITA 458/Hyd/2021 wherein the co-ordinate Bench of the Tribunal in Para 8.2 to 9.1 had held as under : "8. We have gone through the record in the light of the submissions made on either side. Insofar as the facts and figures are concerned, there is not much dispute. The return of income filed by the assessee for the assessment year 2013-14 on 27/07/2013 was processed under section 143(1) of the Act and notice under section 143(2) of the Act was never issued. By the date of search on 15/11/2018, four years elapsed after the last date for issuance of notice under section 143(2) of the Act in this ca....
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.... under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be reopened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. 9.1. This decision applies to the facts of the case on all fours and respectfully following the same, we hold that since no incriminating material found in the case of assessee for the assessment year 2013-14, the concluded assessment cannot be disturbed and the addition made by the learned Assessing Officer and sustained by the learned CIT(A) cannot be upheld. We accordingly allow the appeal of assessee." 11. In the present case, admittedly, no incriminating material was referred to by the Assessing Officer in the assessment order and the same is also in the case of ld.CIT(A). Therefore, in our view, no addition can be made in the hands of the assessee in view of the law laid down by the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra)." 9. We further note that the Hon'ble Supreme Court in the case of PCIT vs., Abhi....
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....n received from Directorate of Investigation, Kolkata and statement recorded from A Mahesh Reddy to make addition towards long term capital gains derived from sale of shares as unexplained cash credit. In our considered view, neither the investigation report received from Directorate of Investigation, Kolkata nor statement recorded from AMR India Limited, cannot be considered as incriminating material found as a result of search, because said material is not found as a result of search. Therefore, in absence of any incriminating material found as a result of search, the addition made by the Assessing Officer towards long term capital gains derived from sale of shares as unexplained cash credit cannot be sustained. 11. Coming back to the arguments of the learned SR. AR that the assessment year under consideration is abated and further it cannot be said that it is unabated/concluded, because the assessee did not file his return of income on or before the due date provided u/sec.139 of the Act and, therefore, whatever information submitted by the assessee in the return of income furnished u/sec.153A becomes incriminating material in nature and the Assessing Officer can make additio....