Deletes Section 68 addition on penny stock LTCG in Section 153A assessment sans incriminating material

Mumbai ITAT deletes addition under Section 68 on account of long term capital gain on alleged penny stocks of listed company in case of assessment under Section 153A, holding that no addition can be made for unabated AY sans incriminating material found during search in terms of Supreme Court judgment in PCIT(Central) v. Abhisar Buildwell (P) Ltd. (2023) 454 ITR 212 (SC); Tribunal observes that, in the present case, assessment for the relevant Assessment year is unabated and could have been made only if supported by incriminating material found during search; ITAT further remarks that the assessment order and CIT(A) order shows that no reference to any seized material relating to investment company transaction; Tribunal observes that perusal of assessment records shows that Assessing Officer merely relied on financial statements and external investigation reports such as DGIT report, SEBI Order and statement of searched parties; ITAT adds that mere books of account cannot constitute incriminating material unless it independently reveal unaccounted income for the purpose of Section 153A; During Assessment year 2015-16, Assessee entered into share transaction and consequently, declared LTCG from sale of shares of PMC Fincorp Ltd.; Consequently, Revenue on the basis of DGIT (Inv.) report alleging bogus accommodation entries on account of price manipulation, held that Assessee was beneficiary of LTCG accommodation entry racket and treated the sale proceeds as unexplained credits under Section 68; CIT(A) rejected Assessee’s appeal; Tribunal relies on Supreme Court judgment in Abhisar Buildwell (P) Ltd. wherein it was held that in respect of unabated assessments, addition can be made only on the basis of the incriminating material found during search; Thus, either of the following two conditions must hold: (i) the assessment is pending on the date of search (i.e., abated), or (ii) incriminating material is found qua the addition made. ITAT rejects CIT(A)’s reason that onus is on Assessee to produce panchnama or search statements and opines that the said documents are in Revenue’s possession and cannot be a mean to deny relief to Assessee; Noting that the Revenue failed to demonstrate any incriminating material found during search pertaining to LTCG, Tribunal deletes addition under Section 68. [In favour of assessee] (Related Assessment year : 2015-16) – [Ashish Shashikant Choksi v. ACIT(C) [TS-1600-ITAT-2025(Mum)] – Date of Judgement : 26.11.2025 (ITAT Mumbai)]