DCIT Vs Smt. Kamla Prabha (ITAT Jaipur)
The ITAT Jaipur ruled that merely possessing registered property deeds cannot be treated as incriminating material under Sections 153A/153C of the Income Tax Act. Reassessment requires evidence of previously undisclosed income or assets, and disclosed transactions cannot be reopened based solely on documents.
In DCIT vs Smt. Kamla Prabha (ITAT Jaipur), the Revenue challenged the CIT(A)’s deletion of additions made by the AO in relation to capital gains arising from sale of land, alleging that the CIT(A) relied on technical grounds without addressing the merits and that notices issued under section 153C were valid due to incriminating material discovered during a search. The search had been conducted on 06/09/2018 at Oswal Group and associated premises, with documents showing sale of land by Shri Gopal Lal to M/s S.G. Enterprises for Rs. 10.43 crore, including notarized possession letters. The AO claimed that the assessee had understated indexed cost of acquisition to reduce capital gains. The CIT(A) noted that the sale consideration and capital gains were fully disclosed in the ITRs for AY 2012-13 and 2014-15, and the variations in indexed cost were a matter of opinion rather than undisclosed income. The ITAT upheld the CIT(A)’s findings, emphasizing that no incriminating material was discovered in the search that could justify reassessment under sections 153A/153C. Reliance was placed on Apex Court precedents, including PCIT v. Abhisar Buildwell and Delhi High Court rulings, as well as the ITAT Jaipur decision in DCIT vs Rigid Conductors Pvt. Ltd., confirming that registered property deeds alone cannot be considered incriminating. Consequently, the AO lacked jurisdiction to reopen completed assessments where no undisclosed income was found. The Revenue’s appeal was dismissed, and the assessee’s cross-objections were rendered academic. The ruling reinforces that properly disclosed transactions in ITRs cannot be reassessed under search provisions absent incriminating material.
