Addition based on incriminating material found in search at premises of third parties- Assessment order passed u/s 143(3) set aside
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Case Details: |
Rajendra Agarwal, Delhi vs. ACIT |
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Order pronounced by: |
ITAT Delhi |
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Appeal No.: |
ITA 2631/DEL/2019 |
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Date of Order: |
04-12-2023 |
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In favour of: |
Assessee |
Brief Facts of the case:
The assessee filed his return of income which was processed under section 143(1). Later, the return was selected for scrutiny and assessment was framed under section 143(3) of the Income Tax Act after making addition on account of bogus long term capital gain.
The assessee challenged the assessment order on the ground that the same is bad in law as much as the same should have been framed under section 153A read with section 153C as the entire assessment is based on the outcome of search and seizure proceedings conducted at the premises of several stock brokers from where it was found that the assessee is also one of the beneficiaries of long-term capital gain earned through manipulation of shares
Ruling of the Tribunal:
On the given facts read with the observations of the Assessing Officer, we do not find any merit in the submissions of the Ld DR even if the assessments were ongoing but when search took place and when information came to the knowledge of the Revenue, pending assessments get abated as per the provisions of section 153A of the Act and proceedings u/s 153C are off shoot of proceedings u/s 153A of the Act. Therefore, the impugned assessment order should have been framed as per the provisions of Section 153C of the Act as held by the Hon’ble Supreme Court in the case of ITO vs. Vikram Sujit Kumar Bhatia (2023) 149 taxmann.com 123(SC). Hence, assessment order passed under section 143(3) was set aside being bad in law.
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