ZX DRUGS PRIVATE LIMITED,KARNAL V. ACIT, CENTRAL CIRCLE, KARNAL

ITA 1060/DEL/2025

AI Insights

The case involves ZX Drugs Pvt. Ltd., which appealed against the order of the CIT(Appeals)-3, Gurgaon, concerning the assessment year 2012-13. The primary contention was the validity of the section 153A assessment conducted by the ACIT, Central Circle, Karnal, which was challenged due to the absence of any incriminating material during a search operation on 22.01.2018. The Tribunal considered the legal precedent set by PCIT v. Abhisar Buildwell, which stipulates that additions in an unabated assessment must be based on specific seized material. The Tribunal concluded that the assessment was not validly made as no such material was presented.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772467 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2012-2013
• Other Referred Cases: PCIT v. Abhisar Buildwell (2023) 149 taxmann.com 399 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus
• Section: 143(3); 153A; 68

Judgement Text

"1 ITA No. 1060/Del/2025 ZX Drugs Pvt. Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1060/Del/2025 Assessment Year: 2012-13 ZX Drugs Pvt. Ltd., Flat No. 63, Sector-9, Rohini North Delhi. PAN: AAACZ 4206 E Vs ACIT Central Circle, Karnal, Haryana. APPELLANT RESPONDENT Assessee represented by Shri Ved Jain, Adv. & Shri Pawan Garg, CA Department represented by Shri Jitender Singh, CIT DR Date of hearing 27.08.2025 Date of pronouncement 27.08.2025 O R D E R PER SATBEER SINGH GODARA, J.M: This assessee’s appeal for assessment year 2012-13 arises against CIT(Appeals)-3, Gurgaon’s order dated 15.01.2025 in case No. 10398/CIT(A)- 3/GGN/2019-20 in proceedings 143(3) r.w.s. 153A(1)(b) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’. Heard both the parties. Case file perused. 2. It emerges during the course of hearing that there arises first and foremost issue of validity of the impugned section 153A assessment dated 31.12.2019 Printed from counselvise.com 2 ITA No. 1060/Del/2025 ZX Drugs Pvt. Ltd. formed by the learned ACIT, Central Circle, Karnal itself as the assessee seeks to challenge the same for want of any incriminating material found and seized during the course of search herein dated 22.01.2018. We sought to verify this clinching fact from the Revenue’s side represented by the learned CIT(DR) who has taken us to para 3 in the assessment order that the assessee was not even found at the address declared in the income tax return which renders itself as bogus entity only. The very factual position is stated to have been discussed in the learned CIT(A)’s lower appellate order at page 78 as well. 3. We have given our thoughtful consideration to the assessee and Revenue’s foregoing vehement submissions. There is hardly any dispute between the parties that we are dealing with an “unabated” assessment in A.Y. 2012-13 as on the date of search i.e. 22.01.2018 wherein any addition in course thereof has to be made based on the specific seized material as per PCIT v. Abhisar Buildwell (2023) 149 taxmann.com 399 (SC). This being the clinching legal proposition, we are of the considered view that the mere fact of the assessee not even found at the given address at a particular point of time would not itself constitute an incriminating material seized during the course of search so as to validate the assessment herein framed by the learned Assessing Officer. We accordingly find merit in the assessee’s instant and foremost argument to delete the section 68 addition of Printed from counselvise.com 3 ITA No. 1060/Del/2025 ZX Drugs Pvt. Ltd. unexplained cash credits representing share capital amounting to Rs. 27.50 lakhs in very terms. Ordered accordingly. All other pleadings between the parties stand rendered academic. 4. This assessee’s appeal ITA No. 1060/Del/2025 is allowed. Order pronounced in open court on 27.08.2025. Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.08.2025. *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "