The Mumbai Bench of the Income Tax Appellate Tribunal, ITAT in the case DCIT Versus Bhavya Pankaj Shah observed and has held that the additions could not have been made in the absence of any incriminating material.
The bench comprising of Judicial Member, Kavitha Rajagopal and the Accountant Member, B.R. Baskaran in the case observed and has stated that the additions made by the Assessing Officer as stated under section 68 of the Income Tax Act, 1996 which being towards the sale of shares and it also estimated the commission expenditure and are liable to be deleted since they are bot being based on any incriminating material f=which is being found during the course of the search.
In the present case, the assessee, along with other family members and the group companies was being subjected to search operations as it has been stated under Section 132 on February 4, 2016. Subsequently, the assessment for Assessing Year 2014-2015 was being completed in the hands of the assessee as stated under Section 143(3) reding with section 153A, in which long-term capital gains declared by the assessee were being disallowed, thus, holding them to be bogus in nature.
Therefore, the Assessing Officer in the case assessed the sale proceeds of shares sold by the assessee as stated under Section 68. Thus, the Assessing Officer in the case made an addition to the estimated commission expenses incurred in procuring bogus capital gains.
It has also been submitted by the assessee in the case that the assessments already completed prior to the date of the search do not abate. Thus, he also submitted before the Tribunal that, in the case of unabated assessments, the assessing officer can make any addition only on the basis of any incriminating material found during the course of the search.
Accordingly, the Tribunal in the case observed and has stated that the addition relates to the sale of shares already recorded in the books, and the commission expenses have been made on an estimated basis and the same cannot be said that the additions have been made on the basis of the materials incriminating. The counsel, Mani Jain and Patreek Jain appeared for the Petitioner. The Counsel, Riddhi Mishra represented the respondent.
