Margabhai Kisanbhai Patel & Co. v. CIT

108 ITR 54High Court1977#7619 most cited

What is Margabhai Kisanbhai Patel & Co. v. CIT authority for?

Tax authorities cannot disregard figures of transactions shown in the assessee's books of accounts unless the transaction is proven to be sham or not bona fide.

14

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2016 to 2026.

Also referred to as

Margabhai Kisanbhai Patel & Co. v. CIT · 108 ITR 54 · disregard figures · transaction not bona fide · sham transaction · assessee's books of accounts · tax authorities · assessment procedure

Sections most often in play

Section 142(1)Section 143(1)Section 143(2)Section 145Section 48Section 69B

Issues it is cited on

section 112section 111section 114furnishing inaccurate particulars of incomefurnishing inaccurate particularssection 56cross objectionsection 37(1)section 132(4)section 271(1)income from other sourcesincriminating material

Judgments citing Margabhai Kisanbhai Patel & Co. v. CIT

ITO, New Delhi vs. Smt. Sudharshna Arora, New Delhi

In the result, grounds raised by the revenue are dismissed

ITA 1185/DEL/2010[2004-05]Status: DisposedITAT Delhi13 Mar 2026AY 2004-05

Bench: Shri S. Rifaur Rahman & Shri Sudhir Kumarita No.1185 /Del./2010, A.Y. 2004-05 Ito, Vs Smt. Sudharshna Arora Ward-24(4), . B-6/9, Vasant Vihar, New Delhi New Delhi Pan: Aaepa8154H (Appellant) (Respondent)

Section 143(1)Section 143(2)

…al Chandulal, (1966) 59 ITR 120 (Guj); Gnanambika Mills Ltd. v. CIT, (1965) 58 ITR 795 (Mad); Das & Co.v. CIT, (1962) 45 ITR 369 (Pat); Patiala Biscuit Manufacturers P.Ltd.v. CIT, (1976) 103 ITR 208, 216-7 (Punj); Marghabhai Kishabhai Patel & Co.v.CIT, (1977) 108 ITR 54 (Guj); CIT v. Smt. Nandini Nopany, (1998) 230 ITR 679,682 (Cal)" The Hon'ble Supreme Court in the case of K.P. Varghese Vs. Income Tax Officer reported in 131 ITR 597 observed as under: - "It is a well settled rule of law that the onus of establishing that the conditions of taxability are fulfilled is always on the Revenue and the burden lies on t…

Assistant Commissioner of Income Tax, Mumbai vs. Matix Fertilisers and Chemicals Ltd, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 2154/MUM/2023[2013-2014]Status: DisposedITAT Mumbai18 Jan 2024AY 2013-2014

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

Assistant Commissioner of Income Tax-CC-5(4), Mumbai vs. Matix Fertilisers and Chemicals Ltd, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 2152/MUM/2023[2015-16]Status: DisposedITAT Mumbai18 Jan 2024AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

Assistant Commissioner of Income Tax, Mumbai vs. Matix Fertilisers and Chemicals Ltd, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 2149/MUM/2023[2017-2018]Status: DisposedITAT Mumbai18 Jan 2024AY 2017-2018

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

Assistant Commissioner of Income Tax, Mumbai vs. Matix Fertilisers and Chemicals Ltd, Mumbai

ITA 2148/MUM/2023[2016-2017]Status: DisposedITAT Mumbai18 Jan 2024AY 2016-2017

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail ()

Section 37(1)Section 56

…mitted that the Department cannot sit in arm chair of businessmen and decide how he should have entered in the contract. The Ld. Counsel also relied on the decision of the Hon'ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, wherein it is held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard figures of transaction shown in the assessee's books of accounts". 8.5 On the other hand, the Ld. DR relied on the order of the lower authorities. 8.6 We have heard rival submission of the parties and perused the…

Matix Fertilisers and Chemicals Ltd, Mumbai vs. Commissioner of Income Tax, CIT(A)53, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 1687/MUM/2023[2015-2016]Status: DisposedITAT Mumbai18 Jan 2024AY 2015-2016

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

Matix Fertilisers and Chemicals Ltd, Mumbai vs. Commissioner of Income Tax, CIT(A)53, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 1686/MUM/2023[2016-2017]Status: DisposedITAT Mumbai18 Jan 2024AY 2016-2017

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

Matix Fertilisers and Chemicals Ltd, Mumbai vs. Commissioner of Income Tax, CIT(A)53, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 1684/MUM/2023[2019-20]Status: DisposedITAT Mumbai18 Jan 2024AY 2019-20

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

Matix Fertilisers and Chemicals Ltd, Mumbai vs. Commissioner of Income Tax, CIT(A)53, Mumbai

In the result, the appeals of the Revenue for assessment year

ITA 1683/MUM/2023[2018-2019]Status: DisposedITAT Mumbai18 Jan 2024AY 2018-2019

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Ita Nos. 1688, 1687, 1686, 1685, 1683, 1684/Mum/2023 Assessment Years: 2014-15 To 2019-2020

For Appellant: Mr. Ajay R. Singh, &

…ounsel also relied on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of on the decision of the Hon’ble Gujarat High Court in the case of Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54, Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 Margabhai Kisanbhai Patel & Co. v. CIT (1977) 108 ITR 54 wherein it is held that “unless the transaction in proved as s held that “unless the transaction in proved as s held that “unless the transaction in proved as shame or not bona fide, it is not open to the tax authorities to disregard…

ITO-33(1)(2), Mumbai vs. Shri Vikram Baijnath Agarwal, Mumbai

In the result, appeal filed by the revenue is partly allowed and cross objection filed by the assessee is dismissed

ITA 103/MUM/2021[2014-15]Status: DisposedITAT Mumbai07 Nov 2022AY 2014-15

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleincome Tax Officer – 33(1)(2) V. Shri Vikrambaijnath Agarwal Room No. 945, 9Th Floor 2003/04, Birchwood Raheja Villows Kautilya Bhavan, Bandra Kurla Complex Lokhandwala Township Nr Mahindra Gate 4 Kandivali (E), Mumbai - 400101 Bandra(E), Mumbai - 400051 Pan: Adepa8582C Appellant Respondent

Section 142Section 143(1)Section 143(2)

…ess life and dealings. 11. Addition cannot be made merely on suspicion surmises and conjectures in the hands of the assessee. 42 C.O. No. 11/MUM/2022 Shri VikramBaijnath Agarwal A. Gujarat High Court in the case of MargabhaiKisanbhai Patel & Co. vs CIT(1977) 108 ITR 54 wherein it was held that "Unless the transaction is proved as sham or not bonafide, it is not open to the Tax authorities to disregard figures of transaction shown in the assessee's books of accounts". B. The Hon'ble Supreme Court in the case of Lalchand Bhagat Ambica Ram v CIT (1959) 37 ITR 288 has held that correctness of accounts books cannot b…

Sun Pharmaceuticals Industries Ltd., Baroda vs. The ACIT, Central Circle-1, Baroda

In the result, the appeal of the Revenue is partly allowed

ITA 1659/AHD/2015[2008-09]Status: DisposedITAT Ahmedabad20 Jun 2019AY 2008-09

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy1. आयकर अपील सं./Ita No.1659/Ahd/2015 2. आयकर अपील सं./Ita No.1689/Ahd/2015 ("नधा"रण वष"/Assessment Year : 2008-09 ) बनाम/ 1. Sun Pharmaceuticals 1. The Acit Industries Ltd. Cen.Cir-1 Vs. “Sparc” Tandalja Baroda – 20 2. The Acit 2. Sun Pharmaceu- Central Circle-1 Ticals Industries Baroda Ltd. Baroda. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadcs 3124K (अपीलाथ"/Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant By : Shri S.N. Soparkar, Ar ""यथ" क" ओर से/Respondent By: Shri R.C. Panday, Cit-Dr सुनवाई क" तार"ख/ Date Of Hearing 28/03/2019 घोषणा क" तार"ख /Date Of Pronouncement 20/06/2019 आदेश / O R D E R Per Waseem Ahmed: The Captioned Cross-Appeals Have Been Filed At The Instance Of The Assessee & Revenue Against The Order Of The Commissioner Of Income Tax (Appeals)–2, Vadodara [Cit(A) In Short] Vide Appeal No.Cab/(A)- 2/387/2014-15 Dated 31/03/2015 Arising In The Assessment Order Passed Under S.143(3) R.W.S.147 Of The Income Tax Act, 1961(Hereinafter Referred To As "The Act") Dated 14/02/2014 Relevant To Assessment Year (Ay) 2008-09. Ita Nos.1659/Ahd/2015 (By Assessee) & Ita No.1689/Ahd/2015 (By Revenue) Sun Pharmaceuticals Industries Ltd. Vs. Acit Asst.Year - 2008-09 2

For Appellant: Shri S.N. Soparkar, ARFor Respondent: Shri R.C. Panday, CIT-DR
Section 143(3)Section 147Section 148Section 40A(2)(b)

…etween the associated enterprises cannot be disturbed even these are not at Arm’s length price. In this regard we find support and guidance from the judgment of Hon’ble Gujarat High Court in the case of Marghabhai Kishabhai Patel & Company Vs. CIT reported in 108 ITR 54 wherein it was held as under: ITA Nos.1659/Ahd/2015 (by assessee) and ITA No.1689/Ahd/2015 (by revenue) Sun Pharmaceuticals Industries Ltd. vs. ACIT Asst.Year - 2008-09 51 In view of the decision of this High Court in CIT v. Keshavlal Chandulal [1966] 59 ITR 120 , unless it has been shown that the transaction in question was a sham one or unless…

ITO, Ward-11(4), Kolkata vs. M/S. Senco Gold Impex Pvt. Ltd., Kolkata

In the result, the appeal of the revenue is treated as partly allowed for statistical purposes

ITA 2194/KOL/2014[2008-2009]Status: DisposedITAT Kolkata25 Oct 2017AY 2008-2009
Section 10ASection 143(3)

…aced on record to the contrary, the Assessing Officer was not justified in holding that the appellant company has not carried out any manufacturing activities at the SEZ unit during the relevant financial year. In Marghabhai Kishabhai Patel & Co. v CIT (1977) 108 ITR 54 (Guj), it has been held that unless the transaction is proved as sham or not bona fide. It is not open to the tax authorities to disregard the figures of transactions shown in the assessee’s books of account. Therefore, in my view, the appellant company fulfilled the conditions laid down for claim of deduction under section 10AA of the Act, the ac…

ITO, New Delhi vs. M/S. Delhi Press Samachar Patra Pvt. Ltd., New Delhi

In the result ground No. 1 of the appeal of the Revenue is dismissed

ITA 1433/DEL/2013[2008-09]Status: DisposedITAT Delhi12 Oct 2017AY 2008-09

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

For Appellant: Shri Manish Kumar, AdvFor Respondent: Shri Anshu Prakash, Sr. DR
Section 143(2)Section 40A(2)Section 40A(2)(b)

…e payment is excessive or unreasonable. The authorities cannot proceed merely on the basis of surmises and conjectures. The Revenue has to place on record evidence as regards excessiveness or unreasonableness. Marghabhai Kishanbhai Patel and Co. v. CIT [1977] 108 ITR 54 (Guj) followed. In the instant case the A.O mechanically disallowed 2% of expenditure holding to be unreasonable without making any enquiry despite the fact that the works were undertaken with the relatives at a lower rates in comparisons to the rates charged by non-relatives. In this context reliance is also placed on the decision of Hon‟ble Punj…

DCIT 8(2), Mumbai vs. Leo Duct Engineers and Consultants Ltd, Mumbai

Appeal of the Revenue is dismissed

ITA 4609/MUM/2014[2010-11]Status: DisposedITAT Mumbai26 Feb 2016AY 2010-11

Bench: The Assessing Officer.

Section 143(1)Section 143(2)Section 40A(2)(b)

…sham or the amounts shown in the books were either actually not paid or the transaction is not 9 I.T.A No.4609/Mum2014 M/s Leo Duct Engineers & Consultants Ltd. bona-fide. Our view find support from the decision in Marghabhai Kishabhai Patel & Company vs CIT 108 ITR 54 (Guj.) relying upon 28 ITR 952 (Mad.), CIT vs Keshavlal Chandulal 59 ITR 120 (Guj.) and Das & Company vs CIT 45 ITR 369 (Pat.). The scope of section 40A(2) is to disallow only unreasonable or excessive payments in computing the income of the assessee. The ratio laid down in TCV Engineering Ltd. vs ACIT (2006) 284 ITR 470 (Mad.) supports our view.…

Margabhai Kisanbhai Patel & Co. v. CIT (108 ITR 54) — Cited in 14 Judgments | BharatTax