April 2023
Search and seizure — Assessment in search cases — Cash credit — Assessment completed on the date of search — No incriminating document against the assessee found during the search — Long-term capital gains added as unexplained cash based on statement of the Managing Director of searched entity recorded under section 132(4) — Addition unsustainable.
By K. B. Bhujle, Advocate
Reading Time 2 mins
8 Principal CIT vs. Suman Agarwal
[2023] 451 ITR 364 (Del)
A. Y.: 2011-12
Date of order: 28th July, 2022
Sections 68, 132 and 153A of ITA 1961
Search and seizure — Assessment in search cases — Cash credit — Assessment completed on the date of search — No incriminating document against the assessee found during the search — Long-term capital gains added as unexplained cash based on statement of the Managing Director of searched entity recorded under section 132(4) — Addition unsustainable.Search and seizure operations were conducted under section 132 of the Income-tax Act, 1961 and survey operations were carried out under section 133A in the business and residential premises of one KRP and its group companies which provided bogus accommodation entries. The AO relied upon a letter and the statement recorded under section 132(4) of the Managing Director of KRP and issued a notice under section 153A against the assessee for the A. Y. 2011-12. He held that the amount of long- term capital gains claimed by the assessee in her return of income was an accommodation entry pertaining to shares of a company KGN and treated the amount as unexplained cash credit under section 68 of the Act.
The Tribunal found that there was no incriminating material against the assessee found during the search of the assessee and held that statements recorded under section 132(4) would not by themselves constitute as incriminating
