Rupal Kashyap Mehta Vs DCIT (ITAT Mumbai)
Summary: ITAT Mumbai allowed the assessee’s appeals for AY 2012-13 and AYs 2014-15 to 2018-19 and deleted additions made in assessments under section 153A, holding that the disputed additions were not founded on incriminating material found during the search conducted in the assessee’s own premises. The assessee was searched on 06.10.2017 under a joint warrant covering Rupal Kashyap Mehta, Kashyap Kanaiyalal Mehta, Sunshine Housing & Infrastructure (P) Ltd. and Zenith Barter (P) Ltd. The Tribunal recorded that no material or information relating to the additions was found during that search. The material relied upon by the Assessing Officer had instead been obtained from independent searches conducted elsewhere, including material seized from the premises of M/s Evergreen Enterprises and information relating to Nilesh Bharani. The assessee’s husband, who handled her financial affairs, was confronted during his section 132(4) statement with material sourced from those other searches.
For AY 2012-13, the Assessing Officer rejected the assessee’s long-term capital gain claimed exempt under section 10(38) and made an addition of Rs. 1,26,85,229/-, together with an addition of Rs. 3,80,557/- under section 69C for alleged expenditure connected with the LTCG. The Tribunal followed the Supreme Court’s ruling in PCIT v. Abhisar Buildwell (P.) Ltd. and coordinate-bench decisions holding that an addition in a section 153A assessment, particularly for an unabated assessment, cannot be founded on material which was not unearthed during the search of the assessee. Where incriminating material concerning an assessee is found in the search of another person, the statutory route prescribed by section 153C has to be followed. Following the coordinate-bench ruling in Atul Shamji Bharani v. DCIT, the Tribunal therefore deleted both the LTCG addition and the consequential section 69C addition.
