Case Law Details
PCIT (Central) Vs Swetaben Ghanshyambhai Patel (Gujarat High Court)
Introduction: The case of PCIT (Central) vs. Swetaben Ghanshyambhai Patel, recently heard by the Gujarat High Court, delves into the critical aspect of making additions in income tax assessments without the presence of incriminating material. This article provides a comprehensive analysis of this judgment and its implications.
Background of the Case: This case revolves around an assessment order dated 27th December 2016, where the Assessing Officer, under Section 143(3) and Section 153A(1)(b) of the Income Tax Act, 1961, determined the total income of the taxpayer at Rs. 3,57,97,628. The significant additions made were Rs. 3,32,56,865 under Section 68 for alleged bogus long-term capital gains and Rs. 8,92,705 under Section 69C for expenses related to bogus long-term capital gains.
Appeal and Controversy: The Commissioner of Income Tax (Appeals) allowed the appeal of the assessee, citing the absence of incriminating material during the search at the assessee’s premises. The Income Tax Appellate Tribunal, in its order dated 8th June 2022, upheld this decision. The Revenue posed two substantial questions of law in the appeal, challenging these deletions.
Supreme Court’s Influence: During the course of the hearing, the appellant’s counsel acknowledged that the issue represented by the substantial questions of law had already been addressed by the Supreme Court in the case of Principal Commissioner of Income Tax, Central-3 vs. Abhisar Buildwell P. Ltd., decided on 24th April 2023.
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