Ashish Shashikant Choksi Vs ACIT (ITAT Mumbai)
No Seized Material, No 153A Addition- Search Yielded Nothing Against Assessees: Entire ₹1.34 Cr Penny-Stock Addition Quashed
These seven connected appeals arose from assessments framed u/s 153A after a search on 24.08.2018 in the Platinum Group, covering residential premises of the Assessees. All cases involved a common addition: treating entire sale consideration from sale of shares of PMC Fincorp Ltd (formerly Priti Mercantile Ltd) as unexplained credit u/s 68, based on DGIT (Inv) Lucknow reports, SEBI’s 26.02.2021 order & the statement of PMC director Shri Rajkumar Modi recording alleged penny-stock price manipulation.
Assessees contended that AY 2015-16 was an unabated year, original return having been filed on 18.08.2015 & the time for issue of s.143(2) notice expired on 30.09.2016. They argued that no incriminating material relating to PMC Fincorp share transactions was found during search & that AO relied only on external investigation reports, not seized material. CIT(A) rejected both the legal & factual grounds.
Tribunal examined the assessment order, CIT(A)’s findings & the documents referred to by Revenue. It noted that the AO himself repeatedly referred to “records” & financials rather than seized material when initiating enquiry. The DGIT report & SEBI order were post-search external inputs, & Shri Rajkumar Modi’s statement pertained to proceedings in his own case. Tribunal held that none of these constituted incriminating material qua the Assessees. Even books of account seized only recorded disclosed transactions & did not reveal unaccounted income. Suspicion arose solely from external reports, not from seized material.
