SHRI RAJ KUMAR ( M/S RADHIKA SALES CORP ), AMRITSAR vs. INCOME TAX OFFICER WARD- 3 (3), AMRITSAR
What did the Tribunal hold?
The Tribunal held that the AO's estimation of sales was based on surmises and conjectures, ignoring the evidence provided by the assessee. The Tribunal found that the cash deposits were explained by the sale of stock-in-trade, which was already reflected in the turnover.
What were the facts?
The assessee deposited a significant amount of cash during demonetization, which the Assessing Officer (AO) treated as unexplained income. The AO rejected the assessee's books of accounts and made additions based on estimated sales, leading to an appeal by the assessee.
What were the issues?
Whether the addition made by the AO on account of unexplained cash deposits is justified when the assessee has provided evidence of sales and the cash is explained by the turnover. Whether the rejection of books of accounts and estimation of sales by the AO was based on proper grounds.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(16)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- K.P. Varghese v. ITO989 citing7 Taxmann 13 · 1981 · SC
- CIT v. Daulat Ram Rawatmull525 citing87 ITR 349 · 1973 · SC · Read judgment
- Roshan Di Hatti v. CIT477 citing107 ITR 938 · 1977 · SC · Read judgment
- Omar Salay Mohamed Sait v. CIT372 citing37 ITR 151 · 1959 · SC
- ACIT v. Hirapanna Jewellers101 citing128 Taxmann.com 291 · 2021 · ITAT
- 85 (Mumbai), CIT v. Harjeev Aggarwal90 citing134 Taxmann.com 256 · 2022 · HC
- R.B. Jessaram Fatehchand (Sugar Dept.) v. CIT63 citing75 ITR 33 · 1970 · HC
- CIT v. Om Overseas60 citing173 Taxmann 185 · 2009 · HC · Read judgment
- PCIT v. Swananda Properties (P.) Ltd.50 citing111 Taxmann.com 94 · 2019 · HC
- Commissioner of Income Tax v. Tam Narain Goel44 citing224 ITR 180 · 1997 · HC
- A.S. Sivan Pillai v. CIT31 citing34 ITR 328 · 1958 · HC
- Smt. Charu Aggarwal v. DCIT24 citing140 Taxmann.com 588 · 2022 · ITAT
- CIT v. Laul Transport Corporation6 citing180 Taxmann 185 · 2009 · HC
- Jet Freight Logistics Ltd. v. Commissioner of Income-tax Appeal (NFAC)6 citing146 Taxmann.com 349 · 2023 · ITAT
- 10. In Paramount Impex v. Assistant Commissioner of Income-tax, Circle-J, Ludhiana4 citing117 Taxmann.com 802 · 2020 · ITAT
- Agarwal Transport Service v. DCIT3 citing88 Taxmann.com 660 · 2017
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
per Para 6.1 had added Rs. 27400000/- u/s 68 r.w.s 115BBE of the Act after allowing the credit of the sales made up-to October 2016 and the profit margin as worked out from the submission of the assessee. 4.1 The assessee filed its appeal and challenged the additions made by the AO. During the appeal proceedings the appellant did not file any submissions to support its grounds of appeal. As discussed above, the appellant has not complied with various notices issued in the course of appeal proceedings and also did not make any compliance during assessment proceedings. Therefore, it appears the appellant is not interested in prosecuting the appeal. In view of the above the various additions and disallowances made by the AO are upheld. The Grounds of appeal are dismissed.”
12. We heard the rival submission and relied on the documents available in the record. That the ld. A.O. had not disputed, the purchases, quantitative stock and sales for the entire period except October & November. It is pertinent to mention here that the assessee has duly submitted books of accounts, sale & purchase register, confirmations, bank statements, expenses, parties from whom the purchase and to whom sales were made. However, the Ld. AO has alleged that the appellant has inflated sales for the month of October &November, 2016. The total sales declared by the assessee was to be tune of Rs. 1,58,06,636/- and Rs. 1,53,63,687/- respectively. However, the ld. Assessing Officer has computed the sales for the month of October &November 2016 at Rs. 28,06,536/- and Rs. 9,63,687/- respectively. The Ld. AO while doing such exercise has ignored the fact as to why a prudent businessman will make purchases to the tune of Rs. 3,09,69,406/- in the month of October, 2016 much before the date of demonetization in order to execute such meagre sale as computed by the AO. The assumption drawn by the AO in respect of estimating the sales is merely on assumption or presumption or surmises or conjectures. Therefore, the Ld. AO has made addition of Rs. 2,74,00,000/- in the hands of the assessee by reducing the actual sales for the month of October, & November 2016. The basis of rejection of books was not acceptable here. We respectfully relied on the order of jurisdictional High Court in the case of Ludhiana Steel Rolling Mills Ltd, supra. The Ld. AO has made such addition without discharging the burden of prove the correctness of addition. It is a settled law that once the adequate evidence/material has been provided which prima facie discharge the burden of the assessee in that case, the burden shifts on the revenue and the revenue has not discharged its onus in these circumstances. Here, no addition can be called for. In this regard, the respectfully reliance is placed on the following case laws:
• K.P. Varghese vs ITO (1981) 7 Taxman 13 (SC) • A.S. Sivan Pillai vs. CIT (1958) 34 ITR 328 (Madras) • Roshan Di Hatti vs CIT 107 ITR 938 (SC),
• CIT, Faridabad v. Laul Transport Corporation, [2009] 180 Taxman 185 (Punjab & Haryana)
More judgments on Section 145(3)
- M/S. Sarvesh Mercantile Private Limited… vs DCIT Central Circle 2(1), MumbaiITA 1952/MUM/2026[2015-16]Status: Disposed15 Oct 2026AY 2015-16
- M/S. Sarvesh Mercantile Private Limited… vs Deputy Commissioner of Income Tax, Central…ITA 1951/MUM/2026[2014-15]Status: Disposed15 Oct 2026AY 2014-15
- M/S. Sarvesh Mercantile Private Limited… vs Deputy Commissioner of Income Tax, Central…ITA 1950/MUM/2026[2013-14]Status: Disposed15 Oct 2026AY 2013-14
- Assistant Commissioner of Income-Tax… vs Pacifica India Projects Private Limited…ITA 2336/AHD/2026[2020-21]Status: Disposed13 Oct 2026AY 2020-21
- Assistant Commissioner of Income-Tax… vs Pacifica Builders Private Limited, AhmedabadITA 2335/AHD/2026[2020-21]Status: Disposed13 Oct 2026AY 2020-21
Recent GST High Court judgments
Search GST case law →- M/S South INDIA Trading Company vs. Additional Commissioner Adjudication CGST Delhi North & Anr.Delhi · 13 Oct 2026
- M/S Rishi Stonex vs. The State Of Assam And 5 OthersGauhati · 13 Oct 2026
- Gopal Datt vs. Vishal Kumar SharmaUttarakhand · 13 Oct 2026
- M/S Do Nam Enterprise And Anr vs. The Union Of INDIA And 2 OrsGauhati · 13 Oct 2026
- M Sundaravel vs. The Assistant Commissioner Of Central GST And Central ExciseMadras · 13 Oct 2026