PRINCIPAL COMMISSIONER OF INCOME TAX, vs. SHRI GOTAM AGARWAL

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ITA/118/2024HC RajasthanRJHC02061427202414 August 2025Bench: SANJEEV PRAKASH SHARMA,SANJEET PUROHIT2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed under Section 263 of the Income Tax Act, 1961, did not raise any question of law, much less one of public importance. The Court noted that the CIT(A) had made factual findings that the assessee's purchases and sales were genuine and that the non-maintenance of a stock register was not a valid reason for rejecting the books of accounts, which were duly audited. The ITAT had examined the record and concurred with these factual findings. Consequently, the High Court found no reason to entertain the appeal and dismissed it. No specific issue was left undecided; the appeal was dismissed on the grounds that it lacked substantial questions of law.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax (Revenue) against the order of the Income Tax Appellate Tribunal (ITAT). The ITAT had concurred with the findings of the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) had found that the assessee, Shri Gotam Agarwal, had made genuine purchases and sales, and that the non-maintenance of a stock register was not a sufficient reason to reject the books of accounts, which were duly audited under Section 44A of the Income Tax Act, 1961. The Revenue's appeal challenged the ITAT's decision to ignore these facts and the additions made by the Assessing Officer (AO).

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in ignoring that the books of accounts were rejected by the AO considering them non-reliable, fabricated, and manipulated to explain undisclosed income, and that the entire cash sale of Rs. 2,58,56,715/- credited in the books was held to be unexplained cash credit and added under Section 68 of the Income Tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case and in law, the ITAT was justified in ignoring that the Assessee suppressed interest income by formulating a colorable device, claiming abnormal and inflated expenses, thereby generating a business loss which was set off against interest income, leading to the deletion of the addition of Rs. 25,00,578/- made by the AO? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the ITAT erred in ignoring the AO's findings regarding the unreliability and manipulation of the books of accounts, the unexplained cash credit under Section 68, and the suppression of interest income through inflated expenses and set-off of business losses.

Which sections of the Income-tax Act were involved?

Section 68,Section 44A,Section 263

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:31751-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 118/2024 1. Principal Commissioner Of Income Tax, Jaipur-Ii, At New Central Revenue Building, Statue Circle, Jaipur (Raj.)- 302005 2. Pcit 2, New Central Revenue Building Statue Circle Jaipur ----Appellants Versus Shri Gotam Agarwal, 228, City Centre S.c. Road, Jaipur. ----Respondent For Appellant(s) : Mr. Sandeep Pathak For Respondent(s) : HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJEET PUROHIT Order 14/08/2025 1. Learned counsel for the Revenue has vehemently argued this appeal alleging that the CIT Appeals as well as the concurring judgments passed by the ITAT deserve to be ignored and has attempted to raise questions of law as mentioned in the appeal which are as under: “1) Whether on the facts and in the circumstances of the case and in law, Ld. ITAT is justified in ignoring the fact that books of accounts were rejected by considering them as non-reliable, fabricated, manipulated and made to serve the sole purpose of explaining undisclosed income since the entire cash sale to the tuneof Rs.2,58,56,715/- was credited in the books of accounts were held to be unexplained cash credit and addition under section 68 of the Act of 196 made by the AO? 2) Whether on the facts and in the circumstances of the case and in law, Ld. ITAT is justified in ignoring the fact that the Assesse suppressed interest income by formulating colorable device by claiming abnormal and inflated expenses thereby generated business loss which

[2025:RJ-JP:31751-DB] (2 of 2) [ITA-118/2024] was set off from interest income and thereby deleting the addition of Rs.25,00,578/- made by the AO?” 2. We have carefully gone through the order passed by the CIT, whereby it reached to findings of facts that the concerned assessee had made genuine purchase and sales and non- maintenance of stock register cannot be a reason for rejection of the books of accounts. The CIT also found that the books of accounts have been duly audited under Section 44A of the Income Tax Act, 1961 (for short ‘the Act of 1961’). 3. Taking note of the factual findings, the ITAT too reached to the similar conclusion after examining the record and concurred with the findings of fact arrived at by the CIT Appeal. 4. The present appeal filed under Section 263 of the Act of 1961 does not raise any question of law much less of public importance. In view thereto, we do not find any reason to entertain this appeal and the same is accordingly, dismissed. (SANJEET PUROHIT),J (SANJEEV PRAKASH SHARMA),J MAHIMA/RAHUL/12

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