Man Mohan Sadani v. CIT

304 ITR 52High Court2008#772 most cited

What is Man Mohan Sadani v. CIT authority for?

When assessing income from undisclosed or unrecorded sales, the entire sale proceeds cannot be added to the assessee's income; instead, only the net profit embedded in such unaccounted sales, determined by applying the assessee's net profit rate, should be taxed.

132

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2025.

Also referred to as

Man Mohan Sadani v. CIT · undisclosed sales income · unaccounted sales addition · net profit rate application · entire sale proceeds not to be added · Section 153A search assessment · Section 132 search and seizure · best judgment assessment undisclosed sales · on-money income computation · rejection of books of account profit rate · 304 ITR 52

Also reported as

188 Taxmann 277

Sections most often in play

Section 143(3)Section 153ASection 69CSection 115BBESection 132(4)Section 142(1)Section 132Section 143(2)

Issues it is cited on

on money receiptexplanation to section 37principal officersurvey under section 133asection 192section 145(3)rejection of books of accountblock periodsection 145on-moneyloose paperssection 40(a)(i)

Judgments citing Man Mohan Sadani v. CIT

M/S Shivhare Associates, Gwalior vs. A.C.I.T., Range-1, Gwalior

In the result, the appeals of the assessee are partly allowed

ITA 48/AGR/2015[2011-12]Status: DisposedITAT Agra16 May 2018AY 2011-12

Bench: Shri A.D. Jain & Dr. Mitha Lal Meenam/S Shivhare Associates, Jcit, Range-1, 44, Sindh Bihar, Nadi Gate, Vs. Gwalior Gwalior Pan Abbfs 6377 G

For Appellant: Shri K.C. Agarwal, AdvocateFor Respondent: Shri Waseem Arshad, Sr. DR And
Section 145(3)

…en at discounted rates. 3.5 The Hon’ble M.P. High Court (jurisdictional High Court) in the case of CIT Vs Balchand Ajit Kumar 263 ITR 610 M.P has held that the total sales cannot be regarded as the profit of the assessee. In the case of Manmohan Sadani Vs CIT 304 ITR 52 M.P the Hon’ble jurisdictional High Court has held that total sales cannot be regarded as profit of the assessee, on the contrary it is a net profit rate which has to be adopted in such cases. In view of the findings of the Hon’ble M.P High Court(jurisdictional High Court) in the above cited two cases I am of the considered opinion that the entire…

M/S Shivhare Associates, Gwalior vs. J.C.I.T., Range-1, Gwalior

In the result, the appeals of the assessee are partly allowed

ITA 47/AGR/2015[2010-11]Status: DisposedITAT Agra16 May 2018AY 2010-11

Bench: Shri A.D. Jain & Dr. Mitha Lal Meenam/S Shivhare Associates, Jcit, Range-1, 44, Sindh Bihar, Nadi Gate, Vs. Gwalior Gwalior Pan Abbfs 6377 G

For Appellant: Shri K.C. Agarwal, AdvocateFor Respondent: Shri Waseem Arshad, Sr. DR And
Section 145(3)

…en at discounted rates. 3.5 The Hon’ble M.P. High Court (jurisdictional High Court) in the case of CIT Vs Balchand Ajit Kumar 263 ITR 610 M.P has held that the total sales cannot be regarded as the profit of the assessee. In the case of Manmohan Sadani Vs CIT 304 ITR 52 M.P the Hon’ble jurisdictional High Court has held that total sales cannot be regarded as profit of the assessee, on the contrary it is a net profit rate which has to be adopted in such cases. In view of the findings of the Hon’ble M.P High Court(jurisdictional High Court) in the above cited two cases I am of the considered opinion that the entire…

ITO, WD-12(4), Kolkata vs. M/S Shee Sen Leather Pvt. Ltd., Kolkata

In the result, the appeal filed by the Revenue (Ground No

ITA 1044/KOL/2014[2010-2011]Status: DisposedITAT Kolkata17 Jan 2018AY 2010-2011

Bench: Shri S.S. Viswanethra Ravi, Jm & Dr. A.L. Saini, Am आयकरअपीलसं./Ita No.1044/Kol/2014 (िनधा"रणवष" / Assessment Year: 2010-11) I.T.O, Ward-12(4), Kolkata Vs. M/S Shee Sen Leather Pvt. Ltd. 114/C, Matheswartolla Road, Aayakarbhavan (7Th Floor), P-7, Kolkata – 700 046. Chowringhee Square, Kolkata – 69. "थायीलेखासं./जीआइआरसं./Pan/Gir No. : Aaecs 3938 C (Appellant) .. (Respondent) Appellant By : Shri Saurabh Kumar, Addl. Cit(Dr) Respondent By : Shri S.M. Surana, Advocate & V.N. Purohit, Fca सुनवाईकीतारीख/ Date Of Hearing : 18/10/2017 घोषणाकीतारीख/Date Of Pronouncement : 17/01/2018 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Revenue, Pertaining To Assessment Year 2010-11, Is Directed Against An Order Passed By The Cit(A)-Xii, Kolkata, In Appeal No.111/Xii/Cir-12/13-14, Dated 19.02.2014, Which In Turn Arises Out Of An Order Passed By The Assessing Officer U/S.143(3) Of The I.T. Act, 1961 (Hereinafter Referred To As The ‘Act’), Dated 28.03.2013. 2. The Grounds Of Appeal Raised By The Revenue Are As Follows: “1. That Is The Facts & In Law Of The Case The Ld. Cit(A) Erred In Deleting The Addition Amounting To Rs.29,84,786/- Made The Ao On Account Of Difference In Valuation In Closing Stock & G.P. On Unaccounted Sales Of Chemicals Which Was Detected On The Basis Of Findings Of Survey U/S 133A.

For Appellant: Shri Saurabh Kumar, Addl. CIT(DR)For Respondent: Shri S.M. Surana, Advocate & V.N. Purohit, FCA
Section 133ASection 143(1)Section 143(2)Section 143(3)Section 14A

…sive. The Hon’ble M.P High Court in the case of CIT vs. Balchand Ajit Kumar reported in (2003) 263 ITR 610 has held that application of net profit rate instead of gross profit rate on such enhanced sales would be justified. In Man Mohan Sadani vs. CIT, (2008) 304 ITR 52, it has been held by the Hon’ble MP High Court that only net profit had to be adopted. This decision has been followed by the ITAT Indore Bench in the case of A.S.NBAgri Genetic P. Ltd. Vs. DCIT (ITA No.303/Ind(2010) 15 ITJ 160-Ed. Therefore, having M/s Shee Sen Leather Pvt. Ltd Assessment Year: 2010-11 regard to the facts and the ratio laid down…

The ACIT, Circle-2, Bhavnagar vs. M/S. Madhav Steels, Bhavnagar

In the result, appeal filed by the assessee in ITA No

ITA 2274/AHD/2014[2010-11]Status: DisposedITAT Ahmedabad24 Aug 2017AY 2010-11

Bench: Shri N.K. Billaiya & Shri Mahavir Prasad

For Appellant: Shri Tushar P. Hemani, A.RFor Respondent: 22/08/2017
Section 143(3)Section 145(1)Section 234ASection 271(1)(c)

…dded profit element” added in assessee’s hands and that too based on “Net Profit”. Learned AR has relied on following judgment, as under: " President Industries – 258 ITR 654 (Guj) " CIT vs. Balchand Ajit Kumar – 263 ITR 610 (MP) " Man Mohan Sadani vs. CIT – 304 ITR 52 (MP) " Chetan C. Patel and others – IT(SS)A Nos.522-524/Ahd/2011 “Goss Profit” rate of the assessee is 4.07% and “Net Profit” rate is 1.65% and same is mentioned at Page No.2 of Asst. Order. Hence, impugned addition be restricted to Net Profit element embedded in such alleged unaccounted sales. 5. With the above observation, we allow the alternat…

Sh. Manish Thakur, New Delhi vs. ITO, New Delhi

Appeal is partly allowed

ITA 4668/DEL/2014[2010-11]Status: DisposedITAT Delhi26 Jul 2017AY 2010-11

Bench: Shri I. C. Sudhir & Shri Prashant Maharishi

For Appellant: Shri R. S. Singhvi, C. AFor Respondent: Shri Rajesh Kumar, Sr. D. R
Section 68

…assessee is having two accounts in ICICI Bank and one account in Punjab National Bank. Particulars of deposit and withdrawals are given as under. We are pleased to make reference to following case laws Man Mohan Sadani v. Commissioner of Income Tax [2008] 304 ITR 52 (Madhya Pradesh High Court) The entire sale proceeds cannot be regarded as profit or treated as undisclosed income of the assessee. On the contrary, it is the net profit rate which has to be adopted in such cases. Commissioner of Income Tax v. President Industries [20021 258 ITR 654 (Gujarat High Court) Held, dismissing the application for refe…

Tejaram R Balotia, Mumbai vs. ITO 15(2)(4), Mumbai

In the result, the appeal filed by the assessee is hereby ordered to be Allowed for statistical purpose

ITA 7448/MUM/2012[2008-09]Status: DisposedITAT Mumbai31 Mar 2017AY 2008-09

Bench: Shri D. Karunakara Rao, Am & Shri Amarjit Singh, Jm

For Appellant: NoneFor Respondent: Smt. Jothilakshmi Nayak
Section 142(1)Section 143(1)Section 143(2)Section 44ASection 68

…centage basis has not been dealt by the Assessing Officer as well as CIT(A), therefore, in the said circumstances the Assessing Officer is liable to be directed to decide the matter afresh in view of the law settled by Hon’ble Madhya Pradesh High Court [2008] 304 ITR 52 (MP) in case of Man Mohan Sadani Vs. Commissioner of Income Tax dated 31.10.2007 and Hon’ble Bombay High Court in case of Commissioner of Income Tax – 8 Vs. Shri Hariram Bhambhani in IT No. 313 of 2013 dated 4th February 2015 and Hon’ble Income Tax Appellate Tribunal, Mumbai bench in ITA No.4618&4580/Mum/2010 dated 25th May 2012. However, on the o…

DCIT, Bangalore vs. M/S Sudarshan Silks, Bangalore

In the result, the appeals as well as cross objections are partly

ITA 1225/BANG/2011[2007-08]Status: DisposedITAT Bangalore15 Mar 2017AY 2007-08

Bench: Shri Vijay Pal Rao & Shri S. Jayaraman

For Appellant: Shri H. N. Khincha, C.AFor Respondent: Ms. Neera Malhotra, CIT (DR) (ITAT)-2, Bengaluru
Section 132Section 143(3)Section 153A

…ead of the average gross profit for the preceding year which should be considered for the purpose of addition. In support of his contention, he has relied upon the following decisions : a) CIT Vs. President Industries 258 ITR 654 b) Man Mohan Sadani Vs.CIT 304 ITR 52 c) CIT Vs. Sameer Synthetic Mills 326 ITR 399 C.O. Nos. 54 to 57/Bang/2012 d) Order dt.14.12.2012 in the case of DCIT Vs. Meenu Electric Co. ITA Nos.728 to 732/Bang/2011. Thus the learned Authorised Representative submitted that the rate of profit should have been average rate as admitted by the assessee for the earlier assessment year. He has r…

Sapra Metal Co., Delhi vs. ITO, New Delhi

In the result, the appeal of the Assessee is allowed

ITA 2910/DEL/2016[2006-07]Status: DisposedITAT Delhi09 Mar 2017AY 2006-07

Bench: Shri H.S. Sidhu

For Appellant: Shri Anil Malhotra, CAFor Respondent: Shri S.K. Jain, Sr. DR
Section 143(1)Section 143(3)Section 147Section 148

…thak Securities Co. Pvt. Ltd vs. ITO, Ward 7(3) (2010) 329 ITR 110; copy of order passed by the SMC-2, ITAT, New Delhi in the matter of Unique Metal Industries vs. ITO in ITA No. 1372/Del/2015; copy of judgment in the matter of Man Mohan Sadani vs. CIT (2008) 304 ITR 52. He stated that the assessment in this case was also reopened on the same allegation. He further submitted that the facts of the case are identical as number of assessments were opened by the same AO on the basis of the same set of information and by recording similar reasons. He draw our attention towards the page no. 9-23 vide para 7 to 13 of th…

ITO 16(2)(1), Mumbai vs. Ashwin Purshottam Bajaj, Mumbai

In the result , we dismiss both the appeal of the assessee as well of Revenue

ITA 5207/MUM/2014[2010-11]Status: DisposedITAT Mumbai14 Dec 2016AY 2010-11

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपील सं./I.T.A. No. 4736/Mum/2014 ("नधा"रण वष" / Assessment Year : 2010-11) Shri Ashwin Purshotam The Ito – Ward 16(2)(1), बनाम/ Bajaj, Mumbai. V. C/O Shri Prakash Jhunjhunwala, Chartered Accountant, 5, Jolly Bhawan No. 2, 7 New Marine Lines, Churchgate, Mumbai – 400020. "थायी लेखा सं./Pan : Aacpb7522J .. (अपीलाथ" /Appellant) (""यथ" / Respondent)

For Respondent: Shri Vikash Kumar Agarwal
Section 143(3)Section 145(3)Section 69C

…required to the presumed that there is a corresponding purchase against each such sale and moreover, in impugned case, ITA 4736/Mum/2014 & 7 there is a direct nexus of sales with the purchases. [38 Taxmann.com 385 (Guj), 355 ITR 290 (Guj), 263 ITR 610 (MP), 304 ITR 52 (MP), 258 ITR 654 (Gu}); As per comparative chart of sales vis-a-vis purchase (copy enclosed), it is evident that each purchase corresponds to the sales. For example : The purchase of 257 pairs of footwear made vide bill no 16 on 17th September, 2009 aggregating to Rs. 126,333 from Deep Enterprises were sold on 23rd September, 2009 at Rs. 1,44,27…

Ashwin Purshotam Bajaj, Mumbai vs. ITO, Ward- 16(2)(1), Mumbai

In the result , we dismiss both the appeal of the assessee as well of Revenue

ITA 4736/MUM/2014[2010-11]Status: DisposedITAT Mumbai14 Dec 2016AY 2010-11

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपील सं./I.T.A. No. 4736/Mum/2014 ("नधा"रण वष" / Assessment Year : 2010-11) Shri Ashwin Purshotam The Ito – Ward 16(2)(1), बनाम/ Bajaj, Mumbai. V. C/O Shri Prakash Jhunjhunwala, Chartered Accountant, 5, Jolly Bhawan No. 2, 7 New Marine Lines, Churchgate, Mumbai – 400020. "थायी लेखा सं./Pan : Aacpb7522J .. (अपीलाथ" /Appellant) (""यथ" / Respondent)

For Respondent: Shri Vikash Kumar Agarwal
Section 143(3)Section 145(3)Section 69C

…required to the presumed that there is a corresponding purchase against each such sale and moreover, in impugned case, ITA 4736/Mum/2014 & 7 there is a direct nexus of sales with the purchases. [38 Taxmann.com 385 (Guj), 355 ITR 290 (Guj), 263 ITR 610 (MP), 304 ITR 52 (MP), 258 ITR 654 (Gu}); As per comparative chart of sales vis-a-vis purchase (copy enclosed), it is evident that each purchase corresponds to the sales. For example : The purchase of 257 pairs of footwear made vide bill no 16 on 17th September, 2009 aggregating to Rs. 126,333 from Deep Enterprises were sold on 23rd September, 2009 at Rs. 1,44,27…

ITO, Ward-53(1), Kolkata vs. Shri Chittaranjan Ghosh, Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1549/KOL/2014[2006-2007]Status: DisposedITAT Kolkata02 Sept 2016AY 2006-2007

Bench: Shri P.M. Jagtap

Section 144Section 147Section 148

…. This proposition has been followed in various judicial pronouncements like CIT vs. Balchand Ajit Kumar (2003) 263 ITR 610 (MP)/135 Taxman 180 (MP), CIT vs. President Industries (2002) 258 ITR 654 (GUJ)/124 Taxman 654 (GUJ) and Manmohan Sadani vs. CIT (2008) 304 ITR 52 (MP). Under the circumstances only profit shown by the appellant on the sales of the undisclosed materials/ items purchased by the appellant can be brought to tax. The appellant has worked out estimated gross profit of Rs.5,11,415/., on the projected sales on the basis of the corresponding figures of purchases, sales etc. in the declared P&L A/ c.…

Commissioner of Income Tax.R.Mundry vs. B.Guruva Reddy and Lakshmi

ITTA/15/2003HC Telangana21 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN