Atul Shamji Bharani Vs DCIT (ITAT Mumbai)
Summary: ITAT Mumbai allowed the assessee’s appeal and held that additions under Sections 68 and 69C made in proceedings under Section 153A could not be sustained because no incriminating material was found during the search for the unabated assessment year. The assessee’s original return had been processed under Section 143(1), and the time for issuing notice under Section 143(2) had expired before the search conducted on 06.10.2017. The assessment was therefore concluded and had not abated.
The Assessing Officer treated long-term capital gains from sale of shares of M/s DB International Stock Brokers Ltd. as bogus, denied exemption under Section 10(38), treated sale consideration of Rs.1,01,35,369 as unexplained cash credit under Section 68, and also made an addition under Section 69C for alleged commission.
However, the material relied upon by the AO comprised an earlier Investigation Wing, Kolkata report, price fluctuations in the scrip, recommendations of the SIT on Black Money and a statement of Shri RK Kedia recorded in 2014. The Tribunal held that these could not constitute incriminating material found during the assessee’s search. It also held that the assessee’s statement during search could not become incriminating merely because the Revenue considered that genuineness of the transaction had not been established.
