PR. COMMISSIONER OF INCOME TAX vs. MATHARA DAS SONI

PDF · subscribers
ITA/39/2024HC Rajasthan2026:RJ-JP:34109-DB23 July 2026Author: MUNNURI LAXMAN, ANUROOP SINGHI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal, as the final fact-finding authority, had appreciated the facts and found no concrete material to conclude that the entries in the books of account were incorrect. The Court noted that the premise of the proceedings was the abnormal sale transactions on a particular date. However, it found that the sales in question and comparative sales were undertaken under entirely different parameters and circumstances. The Court reasoned that abnormal sale transactions might occur due to heavy demand under special circumstances, such as demonetization, leading to increased customer inflow and monetization of funds by purchasing items. The comparative standards adopted by the AO and CIT (Appeals) were not based on the same situation. The Court acknowledged that two views were possible: one that real sales occurred due to special circumstances, and another that artificial sales were created. Since the Tribunal adopted one of the two possible views, the High Court found no perversity and no substantial question of law arose.

What were the facts?

The Principal Commissioner of Income Tax, Jaipur (the Revenue) filed an appeal against the order dated 22.02.2024 passed by the Income Tax Appellate Tribunal (the Tribunal). The Tribunal had allowed the appeal of the assessee, Mathara Das Soni, and deleted additions made by the Assessing Officer (AO) in an order dated 30.12.2019, which were sustained by the CIT (Appeals) in an order dated 08.01.2024. The Revenue contended that the Tribunal failed to properly appreciate the evidence, particularly the comparison of sale transactions. The AO and CIT (Appeals) had rejected the assessee's books of account, finding that certain sale transactions were artificially created to accommodate an unexplained amount. The Revenue argued that the Tribunal's reversal of these findings was perverse.

What were the issues?

1. Whether the Tribunal erred in law by reversing the findings of the AO and CIT (Appeals) regarding the artificial creation of sale transactions to accommodate an unexplained amount, thereby holding that the books of account were not based on incorrect entries? The Revenue argued that the Tribunal did not properly appreciate the evidence, specifically the comparison of sale transactions undertaken by the assessee. It contended that when the books of account were rejected by the AO and CIT (Appeals) based on this comparison, the Tribunal's setting aside of those orders was flawed and perverse. The Revenue's primary contention was that the sale transactions in question were artificially created to accommodate an unexplained amount, as indicated by a comparison with previous transactions. The Respondent (assessee) did not present any arguments before the High Court.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2026:RJ-JP:34109-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 39/2024 CNR: RJHC010606722024 URN: ITA / 158U / 2024 Pr. Commissioner Of Income Tax, Jaipur. ----Appellant Versus Mathara Das Soni, Bhistiyo Ka Bass, Ghora Ka Chowk, Inside Sojati Gate, Jodhpur (Pan-Advps1315A) ----Respondent For Appellant(s) : Mr. K.K. Bissa. For Respondent(s) : -- HON'BLE MR. JUSTICE MUNNURI LAXMAN HON'BLE MR. JUSTICE ANUROOP SINGHI

Order 23/07/2026

1.

The present Income Tax Appeal has been filed against the order dated 22.02.2024 passed by the Income Tax Appellate Tribunal (for short, “Tribunal”) whereunder, the appeal preferred by the assessee was allowed and the additions made by the assessing officer vide order dated 30.12.2019 and sustained by the CIT (Appeals) vide order dated 08.01.2024 were deleted.

2.

We have heard the learned counsel for the appellant on the substantial question of law.

3.

The learned counsel appearing for the appellant submits that the Tribunal, while reversing the orders of the Assessing Officer and the CIT (Appeals), has not properly appreciated the evidence on record, particularly the comparison of the sale transactions previously undertaken by the assessee with the transactions (Uploaded on 30/07/2026 at 10:44:58 AM) (Downloaded on 28/10/2026 at 12:41:07 AM)

[2026:RJ-JP:34109-DB] (2 of 4) [ITA-39/2024] undertaken on a particular date, which, according to the Department, were artificially created to accommodate the unexplained amount. It is also his submission that when the books of account were rejected by the Assessing Officer as well as the CIT (Appeals), the Tribunal, while setting aside the orders of both the authorities, has failed to consider that the rejection and non- acceptance of the books of account were based on a comparison of the sale transactions undertaken by the assessee with those which are in question. Therefore, the findings of the Tribunal suffer from perversity.

4.

We have gone through the assessment order, the Order passed by the Tribunal and the evidence on record.

5.

The assessment proceeded on the premise that the sales which are in question were artificially effected so as to accommodate the unexplained amount. The said conclusion was drawn based on the previous transaction history of the same assessee. There is no evidence on record, either before the Assessing Officer or before the CIT (Appeals) to show that the invoices, which were the foundation for the entries in the books of account, were either created or fabricated so that the entry relating to those invoices can be said to be a false or incorrect entry. Without going into the truthfulness of the invoices, the findings were rendered that the books of account were based on incorrect entries.

6.

We find that the Tribunal having appreciated the said facts, found that there is no concrete material to hold that the entries in (Uploaded on 30/07/2026 at 10:44:58 AM) (Downloaded on 28/10/2026 at 12:41:07 AM)

[2026:RJ-JP:34109-DB] (3 of 4) [ITA-39/2024] the books of account were incorrect. The entire genesis and foundation of the present proceedings was the abnormal sale transactions effected on a particular date. The sales which are in question and the comparative sales were undertaken in the entirely different parameters and circumstances. The abnormal sale transactions might be for the reason of heavy demand under special circumstances, i.e. demonitization which necessarily attracted greater customer inflow with an intention to see that the amount is properly monetized by purchasing the items sold by the assessee.

7.

The comparative standards adopted by the Authorities to come to a conclusion that the unexplained amount had been utilised by creating sales are not based on the same standards or the same situation existing. The two views are possible regarding the said sales. One may be that the real sales must have occurred on account of special prevailing circumstances. The Other view is that there is a chance of creating artificial sales so as to accommodate the unexplained amount. When the Tribunal, as the final fact-finding authority has adopted one of the two possible views, this Court cannot interfere with the view adopted by the Tribunal.

8.

This Court finds no perversity in the findings of the Tribunal and therefore, no substantial question of law arises for consideration by this Court in the present appeal.

9.

In the result, the present appeal is dismissed at the admission stage. (Uploaded on 30/07/2026 at 10:44:58 AM) (Downloaded on 28/10/2026 at 12:41:07 AM)

[2026:RJ-JP:34109-DB] (4 of 4) [ITA-39/2024]

10.

All the pending applications, if any, shall stand disposed of. (ANUROOP SINGHI),J (MUNNURI LAXMAN),J 2/Mohan Kishan/326 Powered by TCPDF (www.tcpdf.org) (Uploaded on 30/07/2026 at 10:44:58 AM) (Downloaded on 28/10/2026 at 12:41:07 AM)

Recent GST High Court judgments

Search GST case law →