Sree Shanmugar Mills Ltd. v. Commissioner of Income Tax, Punjab

12 ITR 393Reported decision1944#2382 most cited

What is Sree Shanmugar Mills Ltd. v. Commissioner of Income Tax, Punjab authority for?

An assessment cannot be made solely on suspicion or conjecture; there must be credible evidence or material to support it. Assessments based on guesses and surmises are invalid.

48

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2016 to 2025.

Also referred to as

Sree Shanmugar Mills Ltd v Commissioner of Income Tax Punjab · assessment on suspicion · lack of material evidence · conjecture and surmises · undisclosed income assessment · section 23(3) · rule of law

Sections most often in play

Section 68Section 115BBESection 143(3)Section 147Section 148Section 131Section 133ASection 37(1)

Issues it is cited on

section 115beproximate nexussection 91preponderance of probabilityviolation of natural justicecreditworthiness of the creditoraddition under section 68section 148a(d)income-tax officercommissioner (appeals)principal commissioner of income-taxsection 131

Judgments citing Sree Shanmugar Mills Ltd. v. Commissioner of Income Tax, Punjab

Shri Vijay Kumar Shrivastava, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 709/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Ramesh Chandra Parashar, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 708/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Pradeep Kumar Sharma, Dabra vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 707/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Lalta Prasad Choudhary, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 706/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Santosh Kumar Sharma, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 705/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Kamlesh Kumar Choudhary, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 704/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Khemraj Singh Chauhan, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 703/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Sukhdev Singh Dhariwal, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 702/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Shri Sanjay Kumar Sahu, Gwalior vs. The DCIT 1(1), Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 701/IND/2016[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

The ACIT- 1(1), Bhopal vs. Shri Vinod Vaish, Bhopal

In the result these bunch of fourteen appeals of the assessee’s for Assessment Year 2009-10 are partly allowed for statistical purposes

ITA 189/IND/2013[2009-10]Status: DisposedITAT Indore04 Jun 2019AY 2009-10

Bench: Hon'Ble Kul Bharat & Hon'Ble Manish Borad

…must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be a…

Hydroair Tectonics (Pcd) Ltd, Navi Mumbai vs. DCIT Cen Cir 2(1), Mumbai

ITA 3949/MUM/2017[2005-06]Status: DisposedITAT Mumbai30 Jan 2019AY 2005-06

Bench: Shri Joginder Singh () & Shri G Manjunatha ()

Section 132Section 132(4)

…at all. There must be something more than mere suspicion to support an assessment under Section 143(3) of the Act. The rule of law on this subject has been fairly and rightly stated by the Lahore High Court in the case of Sheth Gurmukh Singh v/s. CIT (1944) 12 ITR 393 and the Supreme Court in the case of Dhakeswari Cotton Mills Ltd., v/s. CIT (1954) 26 ITR 775. 3.54 The estimate of turnover and fixation of gross profit rate are two important parameters which affect the assessment. If these are fixed or calculated in such a way that they adversely affect the assessee's case, then he is entitled to know the basis…

Rajkumari Singh, Navi Mumbai vs. DCIT Cen Cir 8, Mumbai

ITA 946/MUM/2016[2005-06]Status: DisposedITAT Mumbai30 Jan 2019AY 2005-06

Bench: Shri Joginder Singh () & Shri G Manjunatha ()

Section 132Section 132(4)

…at all. There must be something more than mere suspicion to support an assessment under Section 143(3) of the Act. The rule of law on this subject has been fairly and rightly stated by the Lahore High Court in the case of Sheth Gurmukh Singh v/s. CIT (1944) 12 ITR 393 and the Supreme Court in the case of Dhakeswari Cotton Mills Ltd., v/s. CIT (1954) 26 ITR 775. 3.54 The estimate of turnover and fixation of gross profit rate are two important parameters which affect the assessment. If these are fixed or calculated in such a way that they adversely affect the assessee's case, then he is entitled to know the basis…

DCIT, New Delhi vs. M/S. Suncity Projects Pvt. Ltd., New Delhi

ITA 5740/DEL/2013[2003-04]Status: DisposedITAT Delhi12 Jul 2018AY 2003-04

Bench: Sh. N. K. Saini, Am & Ms. Suchitra Kamble, Jm

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. S. S. Rana, CIT DR
Section 132Section 143(1)Section 143(3)Section 147Section 153ASection 68

…of Kerala vs. K.T. Shadull AIR 19971627 (SC) " Kishen Chart Chellaram vs. CIT 125 ITR 713 " Sona Electric Co. vs. CIT 152 ITR 507(Del) " Narayan Chandra Baidya vs. CIT (1951) 20 ITR 207 " VOI vs. T.R. Verma (SC) (1959) 882 " Seth Gurumukh Singh vs. CIT (1944) 12 ITR 393 " CIT vs. Eastern Commercial Enterprises (1944) 210 ITR 104 (Cal) 12. It was further submitted as under: “………..Addition of Rs.6,61,00,000/- on account of advance against booking. Your honor at the outset in this respect it is important to mention that the Id. AO has wrongly taken the amounts received from two parties which has lead to an excess ad…

ITO 19(1)(2), Mumbai vs. Babulal U Munot, Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be dismissed

ITA 4506/MUM/2015[2010-11]Status: DisposedITAT Mumbai11 May 2018AY 2010-11

Bench: Shri Rajendra, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.4506/Mum/2015 (निर्धारण वर्ा / Assessment Year: 2010-11) The Ito-19(1)(2), Mumbai, बिधम/ Shri Babulal U Munot 2Nd Floor, Matru Mandir, Prop. M/S. Steel Samrat Vs. (India) Flat No. 1901-A, 19Th Tardeo Road, Mumbai- 400007 Floor, Shreepati Tower, A Wing, Tatya Gharpure Path, Girgaon Mumbai-04 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aftpm5429H (अपीलाथी /Appellant) (प्रत्यथी / Respondent) .. Revenue By: Shri T. A. Khan (Dr) Assessee By: None सुनवाई की तारीख / Date Of Hearing: 26.03.2018 घोषणा की तारीख /Date Of Pronouncement: 11.05.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 15.05.2015 Passed By The Commissioner Of Income Tax (Appeals) -30, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2010- 11. 2. The Revenue Has Raised The Following Grounds: - “(1) Whether, On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Has Erred In Restricting The Addition To The Extent Of 7.5% Of Non-Genuine Purchase Claimed By The Assessee A.Y.2010-11

For Appellant: NoneFor Respondent: Shri T. A. Khan (DR)
Section 133(6)Section 143(1)Section 143(2)Section 69C

…at at!. There must be something more than bare suspicion to support the assessment under section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by the Lahore High Court m the case of Seth Gurmukh Singh v. CIT f1944J 12 ITR 393 . . . ."(782) 41. In the present case we find that the Commissioner of Income-tax (Appeals) as also the Tribunal has recorded a categorical, finding of fact that the applicant did not make purchases to the extent he has shown. The purchases in question have conclusively been provided to be bogus. If the purchases of the gas cylinders have not made…

Kaviraj Construction, Mumbai vs. ACIT 16(3), Mumbai

In the result, appeals filed by the revenue as well as assessee are hereby ordered to be dismissed

ITA 1327/MUM/2015[2010-11]Status: DisposedITAT Mumbai09 Feb 2018AY 2010-11

Bench: Shri G.S. Pannu, Am & Shri Amarjit Singh, Jm

For Appellant: Shri Aditya Ajgaonkar (AR)For Respondent: Shri Saurabh Deshpande (DR)
Section 133(6)Section 143(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL“A” BENCH, MUMBAI BEFORE SHRI G.S. PANNU, AM AND SHRI AMARJIT SINGH, JM I.T.A. Nos. 1326/M/2015 & 1327/M/2015, Assessment Years: 2009-10 & 2010-11 Kaviraj Construction Vs. ACIT 16(3) 10Atul Niwas, 1st Floor, Mumbai R.No. 20/21 7thFloor, Khetwadi Lane, Mumbai. Pin: 400004 स्थायीलेखासं./जीआइआरसं./PAN/GIR No. : AAAFK3860C (Appellant) .. (Respondent) I.T.A. Nos.1190/M/2015 &1191/M/2015, Assessment Years: 2009-10 & 2010-11 ACIT 16(3) Vs. Kaviraj Construction Mumbai 10Atul Niwas, 1st Floor, R.No. 20/21 7thFloor, Khetwadi Lane, Mumbai. Pin: 400004 स्थायीलेखासं./जीआइआरसं./PAN/GIR No.…

Asstt. Commissioner of Income Tax01(2), Raipur (Cg) vs. M/S Ishwar Ispat Industries Pvt. Ltd, Raipur (Cg)

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

ITA 188/BIL/2012[2009-10]Status: DisposedITAT Raipur15 Jan 2018AY 2009-10

Bench: S/Shri N.S Saini & Pavan Kumar Gadaleassessment Year : 2009-2010

For Appellant: NoneFor Respondent: Mrs Shabna Parveen, DR
Section 68

…assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the same. The rule of Law on this subject has been fairly and rightly stated by the Lahore HC in Seth Gurmukh Singh v. CIT (1944) 12 ITR 393 (Lah.) [Dhakeshwari Cotton Mills Ltd. v. CIT (1954) 26 ITR 775, 782 (SC). It was observed by the SC in Dy, Commissioner of Agricultural Income Tax and Sales Tax v. Travancore Rubber and Tea Co. (1967) 20 STC 520 that "in all cases of taxation the burden of proving necessary ingredient laid down by law to justify taxation is upon the authorities."…

Iqbal Ahmed Khalilamed Subedar, Mumbai vs. ITO 22(1)(2), Navi Mumbai

In the result, the appeal of the assessee for the A

ITA 4896/MUM/2015[2008-09]Status: DisposedITAT Mumbai04 Oct 2017AY 2008-09

Bench: Shri C.N Prasad & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 2135/Mum/2013 (नििाारण वर्ा / Assessment Year : 2009-10 ) आयकर अपीऱ सं./I.T.A. No.4896/Mum/2015 (नििाारण वर्ा / Assessment Year : 2008-09)

For Appellant: Shri. S.C. Tiwari & RutejaFor Respondent: Shri B.C.S. Naik(CIT-DR)
Section 143(3)Section 253(3)Section 40A(3)

…“best judgment” assessment is the same both in the case of income-tax assessment as well as in the case of sales tax assessment. ” Reference is also drawn to decision of Hon‟ble High Court of Lahore in the case of Seth Gurmukh Singh v. CIT reported in (1944) 12 ITR 393|(Lah), wherein Justice Mohammad Munir writing his separate judgment held in context of Income-tax Act, 1922 as under: “When an assessee produces books of account either in support of his return or as special evidence on a point specified by the Income-tax Officer, the Income-tax Officer has to examine the books in the same way as he would examine…

Iqbal Ahmaed Khalil Ahmed Subedar, Mumbai vs. ITO 22(1)(2), Mumbai

In the result, the appeal of the assessee for the A

ITA 2135/MUM/2013[2009-10]Status: DisposedITAT Mumbai04 Oct 2017AY 2009-10

Bench: Shri C.N Prasad & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No. 2135/Mum/2013 (नििाारण वर्ा / Assessment Year : 2009-10 ) आयकर अपीऱ सं./I.T.A. No.4896/Mum/2015 (नििाारण वर्ा / Assessment Year : 2008-09)

For Appellant: Shri. S.C. Tiwari & RutejaFor Respondent: Shri B.C.S. Naik(CIT-DR)
Section 143(3)Section 253(3)Section 40A(3)

…“best judgment” assessment is the same both in the case of income-tax assessment as well as in the case of sales tax assessment. ” Reference is also drawn to decision of Hon‟ble High Court of Lahore in the case of Seth Gurmukh Singh v. CIT reported in (1944) 12 ITR 393|(Lah), wherein Justice Mohammad Munir writing his separate judgment held in context of Income-tax Act, 1922 as under: “When an assessee produces books of account either in support of his return or as special evidence on a point specified by the Income-tax Officer, the Income-tax Officer has to examine the books in the same way as he would examine…

ACIT, Meerut vs. M/S Arihant Pulication (India) Ltd., Meerut

The appeals of the Revenue are dismissed

ITA 5405/DEL/2013[2010-11]Status: DisposedITAT Delhi16 Jun 2017AY 2010-11

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

Section 145(3)

…me. Estimates framed without giving the basis for their fixation and without furnishing to the assessee the material on which the rate of gross profit is arrived at or without giving an opportunity to the assessee to rebut it, are bad (62 ITR 528, 26 ITR 775, 12 ITR 393, 19 ITR 102 and 25 ITR 216). 2.8 In light of the above principles, the AO was completely unjustified in rejecting the books of accounts of the assessee and estimating the gross profit at the rate of 35% of the turnover. Firstly, the system of maintaining inventory on the basis of periodical stock inspection rather than on the basis of stock regist…

ACIT, Jaipur vs. Kulsum Malik, Jaipur

In the result, the appeal filed by the Revenue is dismissed

ITA 606/JPR/2016[2009-10]Status: DisposedITAT Jaipur25 Apr 2017AY 2009-10
For Appellant: Shri Vijay Goyal, CA and Shri Gulshan Agarwal, CAFor Respondent: Smt. Pratima Kaushik, CIT - DR fu/kZkfjrh dh vksj ls@

…nform to the rules of natural justice and must proceed without bias- Tin Box Co. Vs CIT 249 ITR 216 (SC). It is also settled law that the AO must act honestly on the material before him and not vindictively, capriciously, or arbitrarily- Gurumukh Singh Vs CIT 12 ITR 393, 427 (FB), Dakeshwari Cotton Mills Ltd Vs CIT 26 ITR 775, 4. We have submitted the parlor wise chart before ld CIT(A) which consist the head to head comparison of expenses recorded on seized material and against which the expenses recorded in regular books of accounts. From the perusal of such chart the ld CIT(A) found that position of expenses as…