Pradeep Kumar Dusad Vs DCIT (ITAT Jaipur)
ITAT Jaipur Holds 153C Valid but Deletes On-Money & Bogus LTCG Additions; Firm’s Investment Not Taxable in Partner’s Hands & CIT(A) Cannot Direct Reopening u/s 148
In this search-based case, AO issued notice u/s 153C to Pradeep Kumar Dusad & made three additions: alleged on-money of ₹1.45 crore on land purchase, bogus LTCG of ₹44.68 lakh on penny stock shares, & commission. The CIT(A) held 153C invalid & deleted the additions but directed the AO to reopen the LTCG issue u/s 148. Both parties appealed.
Tribunal first held that the notice u/s 153C was valid because the satisfaction note specifically mentioned A.Y. 2016-17 & the seized land purchase agreement. However, it agreed with the assessee that the land was actually purchased by the partnership firm M/s Eminent Build Developers, all payments were made through the firm’s bank account, & the earlier ITAT order for A.Y. 2017-18 (uncontested by the department) had already held that the land transaction belonged to the firm. Thus, the on-money addition in the individual’s hands was deleted.
On the LTCG issue, the Tribunal found that no incriminating material relating to penny stock transactions was found during the search & the satisfaction note was silent on LTCG. Since additions in 153C can only be based on seized material, the bogus LTCG addition was rightly deleted. Finally, the Tribunal held that the CIT(A) had no power to direct reopening u/s 148 in a search case & struck down that direction.
