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Facts
The Revenue appealed against the CIT(A)'s deletion of an addition of Rs. 6,87,75,000/- made under Section 153A of the Income Tax Act, 1961. The addition was related to share premium received at a discount and was based on material seized during a search operation.
Held
The Tribunal held that the addition was not based on any incriminating material seized during the search. Following judicial consistency and a Supreme Court decision, the Tribunal upheld the CIT(A)'s deletion of the addition.
Key Issues
Whether the addition made under Section 153A is sustainable when it is not based on incriminating material seized during a search operation?
Sections Cited
153A, 56(2)(vii)(c), 147, 148, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year : 2012-13 ACIT, Vs Sohan Lal Singla, Central Circle-1, 31, Punjabi Bagh, West Avenue, Faridabad, Haryana-121001 New Delhi-121001 (APPELLANT) (RESPONDENT) PAN No. AEZPS1205E Assessee by : Sh. G. C. Srivastava, Adv. & Sh. Kalrav Malhotra, Adv. Revenue by : Ms. Monika Singh, CIT-DR Date of Hearing: 17.07.2025 Date of Pronouncement: 25.08.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This Revenue’s appeal for Assessment Year 2012-13, arises against the CIT(A)-3, Gurgaon’s in case No. 347/CIT(A)- 3/GGN/2017-18 dated 14.08.2019, in proceedings u/s 153A of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
The Revenue raises the following “revised” grounds of appeal in the instant case:
“1. Whether on the facts and in the circumstances of the case and in law, ld. CIT(A) is right in deleting the addition of Rs.6,87,75,000/- by holding that the said addition is not based on incriminating material whereas such addition is based upon the seized material impounded during the course of search operation at Sohan Lal Singla corporate office of the MASPKO Group i.e. 52, North Avenue Road, Punjabi Bagh, New Delhi and inventorised as page No. 100, A-2, UP-1? 2. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not considering the document seized as page No. 100, A-2 seized from the corporate office of the MASPKO Group i.e. 52 North Avenue Road, Punjabi Bagh, New Delhi as incriminating in nature despite the enquiry conducted by AO shows that had the document not been seized, the Department would have not known about the actual shareholding of M/s Confident Distributors Pvt. Ltd. in F.Y. 2011-12? 3. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in holding that the addition is not based on incriminating material despite the fact that the Assessing Officer elaborately discussed the said incriminating material as well as enquiries conducted in para Nos. 03, 04, 07, 08 & 09 of the assessment order?”
Suffice to say, the Revenue’s sole endavour herein is to revive the Assessing Officer’s action making section 56(2)(vii)(c) addition of Rs.6,87,75,000/- thereby holding the assessee’s share premium received at a heavy discount price of Rs.10.- against fair market value of Rs.78.75 per unit; as a colourable transaction, in a section 153A assessment framed in furtherance to the search in question dated 29.12.2015 and reversed the CIT(A)’s findings.
That being the case, the assessee has filed this tribunal’s recent learned co-ordinate bench order in connected cases in Revenue’s appeal in case of Sh. Krishan Singla, 8432 & 8436/Del/2019 involving Sh. Prem Singla, Sh. Rajeev Singla and Sh. Pankaj Singla; Sohan Lal Singla holding the identical addition has not sustainable in law since not based on any incriminating/seized material, in light of PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) qua the very search. The Revenue is equally fair in not disputing all these intervening developments. We thus adopt judicial consistency to uphold the learned CIT(A)’s lower appellate findings deleting the impugned addition made in the assessee’s hands. Ordered accordingly.