ADD LOUNGE SERVICES PVT. LTD.(FORMERLY KNOWN SKYLARK HOSPITALITY INDIA PVT. LTD.),NEW DELHI V. DCIT, CENTRAL CIRCLE-19, NEW DELHI

MA 327/DEL/2025

AI Insights

The case revolves around a Miscellaneous Application filed by Add Lounge Services Pvt. Ltd. against an order of the Income Tax Appellate Tribunal dated 27.06.2025, concerning the Assessment Year 2012-13. The assessee contended that certain material documentary evidence and judicial precedents were not considered in the original order, leading to a mistake apparent from the records. The Departmental Representative argued that the application was akin to a review of the Tribunal's decision, which is not allowed under the Act. The Tribunal examined the submissions and found that all relevant materials had been considered in the original decision, and thus dismissed the MA.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792057 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-12-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: GAURAV JAIN
• Keywords: Set aside

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE SHRIMAHAVIR SINGH, VICE PRESIDENT & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER M.A. No. 327/Del/2025 ( In ITA No.974/Del/2020 [Assessment Year: 2012-13] Add Lounge Services Pvt. Ltd. (formerly known skylark Hospitality India Pvt. Ltd.), 101-102, Oriental House, Gulmohar Enclave, Commercial Complex, Yusuf Sarai, South East Delhi-110049 PAN No.AALCS7159J Vs DCIT Central Circle – 19 New Delhi Appellant Respondent Assessee by Sh. Gaurav Jain, Advocate Sh. Tarun Chanana, Advocate Revenue by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 31.10.2025 Date of Pronouncement 10.12.2025 ORDER PER AMITABH SHUKLA, AM, The captioned miscellaneous application has been preferred by the Assessee against order of this Tribunal in ITA No.974/Del/2020 for AY 2012-13 dated 27.06.2025. The reference to the word ‘Act’ herein this order shall be a reference to Income Tax Act, 1961. Printed from counselvise.com MA No.327/Del/2025 Page | 2 2. The only issue raised by the appellant assessee through the present Miscellaneous Application is that, while passing the impugned order dated 27.06.2025, certain material documentary evidences and binding judicial precedents have not been considered. It has been submitted that the same has led to existence of a mistake apparent from records. Request for rectification thereof has therefore been made. 3. The Ld. DR argued that there is no mistake in the impugned order dated 27.06.2025 which is amenable for any rectification u/s 254(2) of the Act. It was stated that the MA of the appellant assessee tantamount to review of the order of this Tribunal and that the same is not open for any rectification. It was accordingly argued that the MA deserves to be dismissed. 4. We have heard rival submissions in the light of materials available on records. It is the case of the ld. Counsel for the assessee that while passing the impugned order dated 27.06.2025, material placed on record including judicial citations have not been considered. It has however been noted that the same is not true. For the purposes of clarity relevant extract of the impugned order are reproduced hereunder:- “……….9. We have heard rival submissions in the light of the materials available on the record. We have noted that the conditions Printed from counselvise.com MA No.327/Del/2025 Page | 3 prescribed in the shares sale agreement dated 30.07.2011 are seminal to the controversy and hence, we deem it appropriate to reproduce relevant conditions herein below:- Clause B, C and D of the agreement “………….(B) The issued and paid up share capital of the Company presently comprises 40,00,000 (Four Million Only) fully paid up equity shares (the \"Equity Shares\") having a face value of Rs. 10/- (Rupees Ten only) each, aggregating to a total of Rs. 4,00,00,000/- (Rupees Forty Million Only) as set out in Appendix A. (C) The Seller holds 24,00,000 (Two Million Four Lakhs) Equity Shares of the Company representing 60% of entire equity shareholding of the Company, the details whereof are more particularly described in Appendix-A hereto: (D) The Purchaser is desirous of purchasing the entire shareholding in the Company held by the Seller. The Seller has agreed to sell its entire 24,00,000 (Two Million Four Lakhs) Equity Shares in the Company (\"Sale Shares\") to the Purchaser for an aggregate maximum sale consideration of Rs. 16,00,00,000/- (Rupees Sixteen Crores only) (\"Purchase Consideration\") and upon the terms set out in this Agreement. ………….” Para 2.2 and 2.3 of the agreement “………….2.2 The parties also agree to the allocation of the Purchase Consideration as set forth in Schedule 2 attached hereto and by this reference incorporated herein. 2.3 Purchaser has agreed to pay an amount of Rs. 2.00.00.000/- (Rupees Two Crores only) simultaneously on signing of this SPA, as a commitment amount, which shall be adjusted against the final payment of the Purchase Consideration, In case deal is not consummated due to any reason before the Long Stop Date, then SSP shall repay the Commitment Amount to the Purchaser without any demur or protest along with interest (2) 12% p.a. and to secure the repayment of Commitment Amount as per this clause, SSP has agreed to give a Post dated cheque of Rs. 2,00,00,000/- (Rupees Two Crores only) to Purchaser, simultaneously with present to its Banker and have the same encashed……..” Clause 4.2 (d)(vii) and (viii) of the agreement “……..vii. Execution by Seller and Purchaser of such deeds and documents as may be required by the lenders of the Company and for DIAL to their respective satisfaction, viii. Parties have mutually agreed that as a part of the Purchase Consideration, Purchaser shall transfer Rs. 4,00,00,000/- (Rupees Printed from counselvise.com MA No.327/Del/2025 Page | 4 Forty Million only); anticipated to be received from United Breweries Limited and United Spirits Limited (the \"UBL/USL/\") or any other alcoholic beverages Company (\"One time payment\"), to Seller alongwith with balance consideration amount. Further, the Parties have agreed that Seller shall provide a Bank Guarantee (in a format manner acceptable to the Purchaser) of aforesaid amount of Rs. 4,00,00,000/- (Rupees Forty Million only) in favour of purchaser with an understanding that if aforesaid amount of Rs. 40.000.000) (Rupees Forty Million), is not received within a period of one year from the Long Stop Date, in such an eventuailty Purchaser shall be entitled to invoke the Bank Guarantee given by Seller to the Purchaser. However, if the aforesaid amount is received by the Company at any time after the invocation and realization of bank guarantee, in such an event Purchaser shall remit the same to the Seller……..” “SCHEDULE 2 of the agreement or ALLOCATION OF PURCHASE CONSIDERATION Total Consideration Rs. 160.000,000/- INR 160 Million) Less: 60% of the Net Current Liabilities (As per Audited Accounts of the Statutory Auditors as on 31.7.2011 to be crystallised) Less: Retention Money 30% of purchase consideration, in case pledged shares are not endorsed in favour of Purchaser on the SPA Completion Date, till the time same is not endorsed in favour of the Purchaser. * Net Current Liabilities shall mean all current liabilites and provisions less all current assets. 1. A perusal of the above extracts of the agreement dated 30.07.2011 shows that the sale consideration agreed for sale of 24 lacs shares of M/s DSSH was agreed at Rs. 16 crores. The same has been clearly written in item ‘D’ extracted hereinabove. The same amount has further been reproduced and reiterated in Schedule 2 of the agreement again extracted herein above. Thus, it is clear that the agreed sales consideration was Rs. 16 crores. The Assessee has argued that by way of subsequent deductions and understandings it received Rs. 12 crores. In support of its contentions it has relied upon its financials. The argument of the Assessee are however far from convincing. The agreement dated 30.07.2011 is an agreement between two corporate entities which are backed by approvals of its Board of Directors and any changes in any conditions therein would have to be only done through another agreement only. There is Printed from counselvise.com MA No.327/Del/2025 Page | 5 nothing on record to suggest that by way of any subsequent agreement the sale consideration was reduced from Rs. 16 crores to Rs. 12 crores. 2. Coming to the analysis and reliance placed by the ld AO upon provisions of Clause 4.2(b)(vii), we have noted that the same is not unfounded. Clause 4.2(a) of the agreement clearly postulates that the purchaser shall remit to the seller consideration amount as setforth in schedule 2. It is pertinent to note that Schedule 2 (supra) clearly provided that the consideration for the sale of 24 lacs shares is Rs. 16 crores. Further, Clause 4.2(b)(vii) stipulates that the purchaser shall transfer Rs. 4,00,00,000/- to the seller. It has been clarified that the said amount is anticipated to be received by the purchaser from M/s. United Breweries Ltd. and M/s. United Spirits Ltd. or any other alcoholic beverages company. The said clause further stated that the seller shall provide a bank guarantee of Rs. 4 crores to the purchaser as a security for the said payment of Rs. 4 crores. It was provided that in case the purchaser does not receives the amount of Rs. 4 crores from M/s. United Breweries Ltd. and M/s. United Spirits Ltd. (UBS/ USL) or any other alcoholic beverages company, the purchaser would have the right to invoke the bank guarantee. The said clause further stated that in the event bank guarantee was invoked by the purchaser and he receives the said Rs. 4 crores from UBS/ USL later then Rs. 4 crores would be returned back to the seller. Thus, it is clear that the understanding that was agreed between the contracting party was that total consideration would be Rs. 16 crores out of which the said Rs. 4 crores was an integral part. It is the case of the ld counsel for the Assessee that no bank guarantee was given. It is immaterial whether bank guarantee was given or not because the same was primarily as an assurance to the prospective buyer only and was conditional upon non payment of amounts from UBS/ USL. There could have been a situation that amounts were received by the buyer from UBS/ USL and hence necessity for bank guarantee did not arise. 3. The ld counsel for the Assessee has placed heavy reliance upon case laws concerning taxation of income on accrual or receipt basis. We do not find sufficient force in the argument as the judicial precedents relied upon by the Assessee have been found to be un- contextual. In the present case the amounts have not been added by the revenue on account of any hypothetical supposition or any deeming provisions but purely on account of a contractual agreement where the Assessee is a seller. Thus, the controversy of any accrual of income etc. is not seminal to the present facts of the case. The Assessee has also argued that the amount of Rs. 12 crores was paid after arriving at all the deductions etc. agreed between the contracting parties and which were clearly stipulated in the agreement. It was vehemently stated that the amount of Rs. 12 crores was arrived at after such deductions and hence, cannot be doubted. We are again constrained to subscribe to the argument of the appellant Assessee Printed from counselvise.com MA No.327/Del/2025 Page | 6 since the impugned amount of Rs. 4 crores was not a part of any stipulated deduction mentioned anywhere in the contract dated 30.07.2011 specifically in Clause 3 and schedule 2 of the agreement which lays down conditions precedent to the contract. To this extent the argument of ld CIT(A) in para 4.5 of his order that “…the agreement stated the gross value to be capped at Rs. 16 crores there were clauses for deductions and restrictions from the capped value …” has been found to be not in consonance with the true facts of the case. The value or the sale consideration was fixed at Rs. 16 crores and the impugned Rs. 4 crores do not find any mention therein as a deduction. It is not a case that the upper limit of the sale consideration was Rs. 16 crores to be suitably reduced by the said Rs. 4 crores. 4. Accordingly, we are of the considered view that the relief allowed by the ld CIT(A) of Rs. 4 crores by deleting the corresponding addition made by the ld AO is not supported by facts on record. We, therefore, set aside the order of the ld CIT(A) and confirm the addition of Rs. 4 crores made by the ld AO. The Grounds of appeal No. 3, 4 and 5 raised by the revenue are therefore allowed. 5. After considering the MA of the assessee dated 04.09.2025, We are of the considered view that, by way of the present MA, assessee wants us to review our order dated 27.06.2025 and thus to subscribe to its erroneous line of thinking on this subject. Section 254(2) of the Act only provides an opportunity to contesting parties to bring to the knowledge of the tribunal any mistake, for correction, which is apparent from records. It does not allow for any decision making based upon any substantive analysis of the matter. We have noted that all the documents/evidences including judicial citations which were filed by the assessee were duly considered before confirming the order of the ld. CIT(A). We also find sufficient force in the arguments of Ld. DR that no mistake which is apparent from records has been pointed by the Printed from counselvise.com MA No.327/Del/2025 Page | 7 assessee and that the present MA merely attempts to get the earlier decision dated 27.06.2025 revisited. Accordingly, the MA No.327/Del/2025 filed by the assessee requesting for rectification of the order in ITA no. 974/Del/2020 dated 27.06.2025 stands dismissed. 6. In the result, the Miscellaneous Application of the assessee is dismissed. Order pronounced in the open court on 10th December, 2025. Sd/- Sd/- [MAHAVIR SINGH] [AMITABH SHUKLA] VICE PRESIDENT ACCOUNTANT MEMBER Dated: 10.12.2025 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "