SONNET STONE PRIVATE LIMITED,UDAIPUR vs. COMMISSIONER OF INCOME TAX ,APPEAL UDAIPUR-2, UDAIPUR

PDF · subscribers
ITA 68/JODH/2025Status: DisposedITAT Jodhpur27 April 2026AY 2016-174 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition was made on assumptions and presumptions, contrary to facts. The CIT(A)'s observation that no evidence was furnished regarding the use of the declared amount for disputed payments lacked basis.

What were the facts?

The assessee, engaged in marble trading, faced an addition of Rs. 5,37,572/- on account of undisclosed sales. The addition was sustained by the CIT(A) who found the assessee's claim of set-off for an amount declared by the Director in AY 2015-16 unacceptable.

What were the issues?

Whether the addition sustained by the CIT(A) was based on assumptions and presumptions, and whether the income declared by the Director should be considered for explaining the disputed amount.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Amit Kothari, CA (Physical)
For Respondent: Shri Ghanshyam Meena, Addl. CIT-DR
Hearing: 09.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 68/Jodh/2025 (Assessment Year – 2016-17) Sonnet Stone Private Limited Commissioner of Income Tax 9, Kothari Bhawan, E-Road, Appeal Bhopalpura Udaipur - 2 Udaipur - 313001 PAN No. AAMCS 4305 B Assessee by Shri Amit Kothari, CA (Physical) Revenue by Shri Ghanshyam Meena, Addl. CIT-DR (Virtual) Date of Hearing 09.04.2026. Date of Pronouncement 27.04.2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of Ld. Commissioner of Income Tax, Appeal Udaipur – 2 [hereinafter referred to as CIT(A)] dated 26.10.2024 with respect to assessment year 2016-17 where the appellant has challenged sustaining the addition of Rs. 5,37,572/-.

2.

There was a delay of 27 days in filing the appeal. The appellant has filed an application for condonation of delay duly supported with affidavit certified by registered notary Government of India. The Ld. DR has no objection to the request of the assessee. Considering the short delay of just 27 days, the delay has been condoned and appeal admitted on merits.

2 ITA No. 68/Jodh/2025 Asst. Year: 2016-17 3. We have heard both the sides and perused the material on record, the Ld. AR has submitted that the appellant assessee is engaged in the business of marble trading. A search and seizure action was carried out at the residential premises of Pacific Group of Udaipur on 26.08.2015. Assessee’s case was selected for scrutiny and the AO has made an addition of Rs. 6,93,572/- on account of undisclosed sales to the return of income.

4.

The counsel argued that the Ld. CIT(A) has summarily rejected the appeal of the assessee by observing that assessee’s claim of set off for the amount which is declared by the Director of the Company in the assessment year 2015-16 is not found acceptable as the appellant has not furnished the evidence that the same amount was pertaining to the alleged undisclosed sales and it has been used for making cash payments.

5.

The Counsel has further submitted that addition sustained by Ld. CIT(A) is contrary to the facts of the case. The addition upheld based on assumptions and presumptions are against the settled principles of law. He further submitted that the lower authorities have ignored the written submissions duly supported with various case law cited on validity, sanctity and legality. The AR has made alternative plea that the lower authorities have ignored the facts that the Director of the Company has declared Rs. 35 lakhs to cover

3 ITA No. 68/Jodh/2025 Asst. Year: 2016-17 various aspects of his income in the capacity as an individual and as Director of Company and without assigning any cogent reasons, the addition made by the AO and sustained by the Ld. CIT(A) is also deserves to be deleted.

6.

The Ld. DR on the other hand stands by the impugned order.

7.

Admittedly, the Director of Company has declared Rs. 35 lakhs during the search to cover up various aspects of his income during the course of search, the Department ought to have allowed the credit for the income declared by the Director of the Company. If the aforesaid income declared by the Director of the Company is considered, then by no stretch of imagination, the source of the disputed amount of Rs. 5,37,572/- stands explained. The observation of the Ld. CIT(A) that no evidence is furnished by the assessee whether the amount declared by the Director of Company has been used for making disputed payments has no basis or supporting material evidence on record. In our view, the addition made by the AO and sustained by the Ld. CIT(A) is contrary to the facts on record. Any addition made on the basis of assumption and presumption so sustained by Ld. CIT(A) is not justified. Suspicion cannot take the place of reality unless it is duly supported with factual material evidence.

4 ITA No. 68/Jodh/2025 Asst. Year: 2016-17 8. In the present case, neither the AO nor the Ld. CIT(A) has given valid reasons or rebutted the appellant contentions while rejecting the claim of the assessee that part of the income declared by the Director has been used for the payment of the disputed amounts. Therefore, we hold that the decision of the Ld. CIT(A) is perverse to the facts on record and the addition would be liable to be deleted.

9.

In the above view, we accept the grievance of the assessee as genuine and as such delete the addition of Rs. 5,37,572/-.

10.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 27/04/2026. Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 27/04/2026. True Copy Nimisha Sr. PS Copies to: (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,

Recent GST High Court judgments

Search GST case law →