Dhakeshwari Cotton Mills Ltd. v. CIT

Uma Shanker Sharma, Vrindavan, Mathura vs. ITO, Ward 2, ITO WD Two, Bharatpur

In the result, the appeal filed by the assessee is allowed

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

….O. has reasons to suspect and not reason to believe that income chargeable to tax has escaped assessment rendering the re- assessment proceedings all the more vulnerable. In this relation assessee places reliance on (1) Dharkeshwari Cotton Mills Ltd. Vs. CIT 26 ITR 775, (2) Omar Salay Mohammed Vs. CIT 37 ITR 151 and (3) Lal Chand Bhagat Ambica Ram Vs. CIT 37 ITR 288. 3. That the Indian Courts including the Apex Court have time and again held that action u/s.147 of the I.T. Act 1961 cannot be taken for reopening assessment if the information is wholly vague, indefinite, far-fetched and remote. The courts have als…

Dhanuka Realty Limited, Jaipur vs. ITO Ward 4(4), Jaipur

In the result, the appeal of the assessee is allowed with no orders as to costs

Bench: SHRI SANDEEP GOSAIN (Judicial Member)

…A.O. has reasons to suspect and not reason to believe that income chargeable to tax has escaped assessment rendering the re-assessment proceedings all the more vulnerable. In this relation assessee places reliance on (1) Dharkeshwari Cotton Mills Ltd. Vs. CIT 26 ITR 775, (2) Omar Salay Mohammed Vs. CIT 37 ITR 151 and (3) Lal Chand Bhagat Ambica Ram Vs. CIT 37 ITR 288. 3. That the Indian Courts including the Apex Court have time and again held that action u/s 147 of the I.T. Act 1961 cannot be taken for reopening assessment if the information is wholly vague, indefinite, far-fetched and remote. The courts have als…

Assistant Commissioner of Income Tax, Central Circle, Kota vs. Nisha Jain, Kota

In the result, the appeal of the Revenue is dismissed with no orders as to cost

…n: It is well settled that suspicion, however strong, cannot take the place of reality. Thus, the impugned additions have been made merely on suspicion, impugned addition deserves to be deleted here itself. Kindly refer Dhakeshwari Cotton Mills v/s CIT (1954) 26 ITR 775 (SC), wherein it is held as under: “Assessment—Validity—ITO is not barred by technical rules of evidence and pleadings, and he is entitled to act on material which may not be accepted as evidence in a Court of law, but in making the assessment under sub-s. (3) of s. 23 the ITO is not entitled to make a pure guess and make an assessment without ref…

Assistant Commissioner of Income Tax, Central Circle, Kota vs. Nisha Jain, Kota

In the result, the appeal of the Revenue is dismissed with no orders as to cost

Bench: SHRI SANDEEP GOSAIN (Judicial Member), DR MITHA LAL MEENA (Accountant Member)

…, cannot take the place of reality. Thus, the impugned 13 ACIT, CENTRAL CIRCLE, KOTA VS NISHA JAIN, KOTA additions have been made merely on suspicion, impugned addition deserves to be deleted here itself. Kindly refer Dhakeshwari Cotton Mills v/s CIT (1954) 26 ITR 775 (SC), wherein it is held as under: “Assessment—Validity—ITO is not barred by technical rules of evidence and pleadings, and he is entitled to act on material which may not be accepted as evidence in a Court of law, but in making the assessment under sub-s. (3) of s. 23 the ITO is not entitled to make a pure guess and make an assessment without ref…

G. N. Buildev Private Limited, Jaipur vs. Income Tax Officer, Ward 6(2), New Central Revenue Building, Statute Circle, Jaipur

In the result, the appeal of the assessee stands allowed with no orders as to costs

…my view the suspicion would always remain suspicion unless the same is established and can never take place of reality. And in this regard Reliance is being placed on the judgement of Honorable Supreme Court in the case of the Dhakeshwari cotton mills Limited 26 ITR 775 wherein it was held that no assessment can be made on the basis of suspicion or guess work without any reference to any material on record. I also noticed that AO has grossly erred in ignoring the most vital facts to the effect that turnover decreased drastically from 16.93 crores during FY 2015-16 to 6.28 crores during FY 2017-18 i.e. around 269.…

Silver Wings Life Spaces, Kota vs. DCIT Circle-1 Kota, Kota

In the result, the appeal of the assessee is allowed

Bench: Learned Cit(A), Which Appeal Was Filed By The Assessee

…no addition can be the basis of suspicion, assumptions’ and presumption. An allegation remains a mere allegation unless proved. Suspicion may be strong however cannot take the place of reality, are the settled principles kindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer 24 Silver Wings Life Spaces vs DCIT, Kota R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All).Also refer CIT v/s KulwantRai 291 ITR 36( Del). In CIT v/s Shalimar BuildwellPvt Ltd 86 CCH 250(All). And in the present case the ld. AO invoked provision of sec. 115BBE merely on suspicion which was no…