Sumati Dayal v. CIT

214 ITR 801Supreme Court of India1995#12 most cited

What is Sumati Dayal v. CIT authority for?

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

1,967

judgments rely on this decision, according to BharatTax’s citation analysis of 367,368 Indian tax judgments — from 2010 to 2026.

Also referred to as

Sumati Dayal v CIT · Section 68 · human probabilities · genuineness of transaction · true nature of transaction · accommodation entry · bogus capital gains · penny stock · look behind apparent form · preponderance of probability · colourable device · unexplained loans

Also reported as

80 Taxmann 89125 CTR 124

Sections most often in play

Section 68Section 143(3)Section 147Section 148Section 142(1)Section 115BBESection 69CSection 69A
Read the full judgment

Issues it is cited on

price riggingcolourable devicepreponderance of probabilitybogus ltcgpenny stocksection 10(38)entry operatoraddition under section 68addition u/s 68genuineness of the transactionaccommodation entryshare application money

Judgments citing Sumati Dayal v. CIT

M/S. B.L. Tak and Sons (HUF), Kolkata vs. ITO, Ward - 34(1), Kolkata

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

ITA 2622/KOL/2018[2014-15]Status: DisposedITAT Kolkata14 Mar 2024AY 2014-15

Bench: Shri Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 250Section 68Section 69C

…Sons (HUF) There is no question about the veracity of the documents submitted before the authorities. But the revenue-authority is fully relied on the preponderance of probability as per the order of Hon’ble Apex Court in the case of Sumati Dayal vs. CIT in 214 ITR 801 (SC) and the order of Hon’ble Calcutta High Court in the case of PCIT vs. Swati Bajaj in IA No. GA No/2/2022 and Ors. ITAT/6/2022 & Ors. In [2022] 139 taxmann.com 352 (Cal). But in case of loss, there is no question of the peak increase of the share value and also the assessee is suffering the capital loss by generating the share loss. We fully…

Concentrix Daksh Services India Pvt. Ltd., Gurgaon vs. ACIT, Circle-4(2), New Delhi

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

ITA 485/DEL/2021[2016-17]Status: DisposedITAT Delhi05 Mar 2024AY 2016-17

Bench: Sh. Saktijit Dey, Vice-Dr. B. R. R. Kumar

For Appellant: Sh. Ankul Goyal, AdvFor Respondent: Sh. Rajesh Kumar, CIT(DR)
Section 143(3)Section 92C

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’, NEW DELHI Before Sh. Saktijit Dey, Vice-President Dr. B. R. R. Kumar, Accountant Member ITA No. 485/Del/2021 : Asstt. Year: 2016-17 Concentrix Daksh Services India P. Ltd., Vs ACIT, DLF IT SEZ, Building No. 14, Tower-D, Circle-4(2), 17th Floor, DLF Cyber City, Sector 24 & New Delhi-110002 25A, DLF Phase-III, Gurgaon, Haryana-122002 (APPELLANT) (RESPONDENT) PAN No. AABCD4187D Assessee by : Sh. Ankul Goyal, Adv. Revenue by : Sh. Rajesh Kumar, CIT(DR) Date of Hearing: 06.12.2023 Date of Pronouncement: 05.03.2024 ORDER Per Dr. B. R. R. Kumar, Accountant Member: T…

Dy. Commissioner of Income Tax, Central Circle-3(3), Mumbai vs. M/S. Welspun Steel Ltd, Mumbai

ITA 2169/MUM/2023[2017-2018]Status: DisposedITAT Mumbai29 Feb 2024AY 2017-2018
For Appellant: Shri Madhur Agrawal/Shri Mani
Section 132Section 139(1)Section 143(2)Section 153ASection 19Section 250

…d that it was a colorable device deployed by the assessee to create a notional loss. The AO thus disregarded the transaction and disallowed the loss. For doing so, the AO referred to the decisions of the Hon'ble Apex Court in the cases of Sumati Dayal Vs CIT (214 ITR 801), Durgaprasad More (82 ITR 540), McDowell & Co. Ltd Vs CTO (154 ITR 148) and Vodafone International Holdings BV vs. UOI (204 Taxman 408). The AO also relied upon the decision of Hon'ble Karnataka High Court in the case of Wipro Ltd (50 taxmann.com 421) for disallowing the impugned capital loss. 9. Being aggrieved by the above order of the AO, the…

Alka Dilip Doshi, Mumbai vs. ITO-19(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1837/MUM/2023[2014-15]Status: DisposedITAT Mumbai28 Feb 2024AY 2014-15

Bench: Justice (Retd.) C.V. Bhadang & Shri B.R. Baskaran: A.Y : 2014-15

For Appellant: Shri Dharmesh Shah &For Respondent: Shri Manoj Kumar Sinha
Section 10(38)Section 131Section 143(1)Section 148Section 68Section 69C

…human probabilities and a colourable device adopted by the assessee to show artificial income. In this regard, the AO placed his reliance on the decisions rendered by Hon’ble Supreme Court in the cases of CIT vs. Durga Prasad More (82 ITR 540), Sumati Dayal (214 ITR 801) and McDowell and Co Ltd vs. CTO (154 ITR 148). 6. Accordingly, the AO rejected the claim for exemption u/s 10(38) of the Act and assessed the entire sale consideration of Rs.1,96,08,631/- as unexplained cash credit u/s 68 of the Act. The AO also took the view that the assessee should have incurred expenses in procuring the bogus long term 4 Al…

Shanno Mohammed Yusuf Warsi, Mumbai vs. Income Tax Officer-25(1)(3), Mumbai

In the result, the appeal

ITA 1306/MUM/2023[2013-2014]Status: DisposedITAT Mumbai26 Feb 2024AY 2013-2014

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2013-14

For Appellant: Mr. Pankaj SoniFor Respondent: Mr. Manoj Kumar Singh, Sr. DR
Section 147Section 68Section 69C

…nce is placed on the d, reliance is placed on the decision of Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT decision of Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT decision of Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT 214 ITR 801 (SC). 214 ITR 801 (SC). 18.3.2 Further more in the decision of Hon'ble Supreme Court in the 18.3.2 Further more in the decision of Hon'ble Supreme Court in the 18.3.2 Further more in the decision of Hon'ble Supreme Court in the case of Durga Prasad More vs.CIT 82 ITR 540 (SC), it was held that case of Durga Prasad More vs.CIT 82 ITR 540 (SC), it…

True-Man Consultants Pvt. Ltd., Kolkata vs. ITO, Ward-7(2), Kolkata.

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

ITA 1158/KOL/2023[2012-13]Status: DisposedITAT Kolkata23 Feb 2024AY 2012-13

Bench: Sri Rajpal Yadav & Dr. Manish Borad

Section 131Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 68

…vidence cannot discharge the assessee’s burden to prove a transaction to be true and genuine. Ld. AO just concluded the assessment by placing reliance on various judgments including that of Hon'ble Supreme Court in the case of Sumati Dayal vs. CIT reported in 214 ITR 801 and made the addition u/s 68 of the Act for the alleged unexplained cash credit of Rs. 6.52 Crore received by the assessee towards share capital and share premium. Ld. AO also made disallowance u/s 14A of the Act of Rs. 1,02,350/- observing that the assessee had made investments in equity shares. Income assessed at Rs. 6,53,76,770/-. 4. Aggrieved…

Vsft Quilts & Pillows Pvt. Ltd., (Presently Known As Mallcom vs. Ft Gloves Private Limited ), Kolkatavs.ITO, Ward - 7(2), Kolkata

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

ITA 1215/KOL/2018[2012-13]Status: DisposedITAT Kolkata23 Feb 2024AY 2012-13

Bench: Shri Manish Borad&Shri Anikesh Banerjee]

Section 131Section 142(1)Section 143(3)Section 250Section 68

…up all the criterias as per provision of Section 38 of the Act. But the revenue is agitated the issue “preponderance of probability” which is proved beyond the reasonable doubt and cited the order of Hon’ble Apex Court in the case of Sumati Dayal vs. CIT in 214 ITR 801(SC). The question is raised by the Ld. D.R that the issuance of share in premium @ Rs. 240/- for a loss company is against the human probability and relied on the assessment order. Bu this company which was in loss making that time now is doing business as an export company in Falta Special Economic Zone, West Bengal. The issue was rightly dis…

Vicky Fincom Private Limited., Kolkata vs. ACIT, Cir-5(2), Kolkata.

In the result, ITA No. 1362/KOL/2023 is allowed

ITA 1362/KOL/2023[2015-16]Status: DisposedITAT Kolkata22 Feb 2024AY 2015-16

Bench: Sri Rajesh Kumar & Sri Anikesh Banerjee

Section 143(3)Section 234BSection 250

…Limited. 11. There is no question about the veracity of the documents submitted before the authorities. But the revenue-authority is fully relied on the preponderance of probability as per the order of Hon’ble Apex Court in the case of Sumati Dayal vs. CIT in 214 ITR 801 (SC) and the order of Hon’ble Calcutta High Court in the case of PCIT vs. Swati Bajaj in IA No. GA No/2/2022 and Ors. ITAT/6/2022 & Ors. In [2022] 139 taxmann.com 352 (Cal). But in case of loss, there is no question of the peak increase of the share value and also the assessee is suffering the capital loss by generating the share loss. 12. We ful…

M/S. Brightstar Vincom Pvt.Ltd., 700007 vs. I.T.A, Ward-3(3), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 176/KOL/2023[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.176/Kol/2023 Assessment Year: 2012-13 M/S Brightstar Vincom Pvt. Ltd…..…......................…...……………....Appellant 18/1, 4Th Floor, Room No.48, M.D. Road, Burrabazar, Kolkata-700007. [Pan: Aadcb2082R] Vs. Ito, Ward-3(3), Kolkata........…..........................................…..…..... Respondent Appearances By: Shri Miraj D. Shah, Ar, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : December 14, 2023 Date Of Pronouncing The Order : February 21, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 30.01.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal:

Section 142(1)Section 234Section 250Section 68

…of M/s Star Griha Pvt. Ltd vs ÇIT and M/s, Bisakha Sales Pvt. Ltd.,Kolkata (PAN: AADCB 0527F) .(Appellant)-Vs-CIT(Kol.-I), Kolkata ..(Respondent). The Hon'ble Apex Court in the case of CIT VS Durga Prasad More 82 ITR 540 and in the case of Sumati Dayal vs CIT 214 ITR 801 has expounded that revenue authorities are also supposed to consider the surrounding I.T.A. No.176/Kol/2023 Assessment Year: 2012-13 M/s Brightstar Vincom Pvt. Ltd circumstances and apply the test of human probability. In these cases the transactions though apparent were held to be not real ones. In the light of the above discussion, the entire…

Sh. Vibhav Jain, Ludhiana vs. DCIT, CC-III, Ludhiana

In the result, the ground no

ITA 355/CHANDI/2023[2013-14]Status: DisposedITAT Chandigarh16 Feb 2024AY 2013-14

Bench: SHRI. SANJAY GARG (Judicial Member), SHRI. VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Kusum Bansal, CIT DR
Section 10(36)Section 10(38)Section 143(1)Section 143(2)Section 153A

…broker to make the scheme appearing to be falling within the four corners of law and these documents are incriminating in nature as they have direct bearing on the assessment of correct income of the assessee. Moreover as per the case of Sumati Dayal Vs. CIT 214 ITR 801(SC) even the circumstantial evidence based on pre-ponderance of probability constitute incriminating material enough to make an assessment of income. 5.2 It was further stated by the AO in his remand report that the statement of Shri Suresh Khemka through which the assessee purchased the shares was recorded on oath on 13/03/2015 by the Investigat…

Udayan Grover, Mumbai vs. National Faceless Appeal Centre(NFAC), Delhi

In the result, appeal filed by the assessee is allowed

ITA 2880/MUM/2023[2015-16]Status: DisposedITAT Mumbai07 Feb 2024AY 2015-16

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleudayan Grover V. National Faceless Appeal Centre Panch Mahal Delhi Panch Sristhi Complex {Acit – 26(3), Bkc, Mumbai} Powai, Mumbai - 400072 Pan: Aclpg0572G (Appellant) (Respondent) Assessee Represented By : Shri Vimal Punmiya Department Represented By : Ms. Kavitha Kaushik

Section 10(38)Section 131Section 133(6)Section 142(1)Section 143(2)Section 57Section 68

…ed in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain.” The Income Tax Appellate Tribunal had earlier dismissed the appeal file by Sanjay Bimalchand Jain. B. In the case of Sumati Dayal reported in 214 ITR 801 the Hon’ble Supreme Court had held that matter had to be considered by applying the test of human probabilities. Having regard to the facts and circumstances as elaborately discussed in this order and inference could reasonably drawn that by all human probabilities, it is very difficult to accept that the assessee has done a genuine transaction w…

Komal Agarwal, Mumbai vs. Dy CIT -CC-7(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 645/MUM/2021[2014-15]Status: DisposedITAT Mumbai02 Feb 2024AY 2014-15

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No. 645/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2014-15) Komal Agarwal बिधम / Dcit, Central Circle 7(3) 203, Ugam, N.S Road No.9, Room No 655, 6Th Floor, Vs. Jvpd Scheme, Juhu, Ville Ayakar Bhavan, M.K. Parle (W), Mumbai-400097 Road, Churchgate, Mumbai-400020 स्थधयी लेखध सं/.जीआइआर सं/.Pan/Gir No. : Ahwpr9295B (अपीलार्थी / Appellant) (प्रत्यर्थी / Respondent) ..

For Appellant: Shri Harion TulsiyanFor Respondent: Shri P. D. Chougule
Section 10(38)Section 132Section 68

…in the buyers' bank accounts cannot be attributed to the assessees. No fault can be found with the above finding recorded by the Tribunal. 15. Reliance placed by the counsel for the Revenue on the decision of the apex court in the case of Sumati Dayal [1995] 214 ITR 801 is wholly misplaced. In that case, the assessee therein had claimed income from horse races and the finding of fact recorded was that the assessee therein had not participated in races, but purchased winning tickets after the race with the unaccounted money. In the present case, the documentary evidence clearly shows that the transactions were at…

Vishwanathareddy Chennareddy, Bangalore vs. Income-Tax Officer, Ward-2(2)(7), Bengaluru

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 900/BANG/2023[2017-18]Status: DisposedITAT Bangalore01 Feb 2024AY 2017-18

Bench: SHRI CHANDRA POOJARI (Accountant Member), SMT. BEENA PILLAI (Judicial Member)

For Appellant: Shri Hemasundara Rao P., A.RFor Respondent: Shri Subramanian S., D.R
Section 250Section 251Section 68Section 69A

…ng recitals in documents, it was for that party establishing the truth of those recitals; the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Similarly, in the case of Sumati Dayal Vs. CIT (214 ITR 801) (SC), it was held that in view of section 68 of the Act, where any sum is found credited in the books of accounts of the assessee for in the previous year, the same may be charged to income tax as the income of the assessee of that previous year if that explanation offered by the assessee about the nature and source there of is, in opinion of th…

ACIT, Central Circle-1(1), Hyderabad vs. Ncc Limited, Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 80/HYD/2017[2011-12]Status: DisposedITAT Hyderabad31 Jan 2024AY 2011-12

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…

ACIT, Central Circle-1(1), Hyderabad vs. Ncc Limited, Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 79/HYD/2017[2010-11]Status: DisposedITAT Hyderabad31 Jan 2024AY 2010-11

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…

ACIT, Central Circle-1(1), Hyderabad vs. Ncc Limited, Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 78/HYD/2017[2009-10]Status: DisposedITAT Hyderabad31 Jan 2024AY 2009-10

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…

ACIT, Central Circle-1(1), Hyderabad vs. Ncc Limited, Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 77/HYD/2017[2008-09]Status: DisposedITAT Hyderabad31 Jan 2024AY 2008-09

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…

Ncc Limited, Hyderabad vs. DCIT, Central Circle-1(1), Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 75/HYD/2017[2010-11]Status: DisposedITAT Hyderabad31 Jan 2024AY 2010-11

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…

Ncc Limited, Hyderabad vs. DCIT, Central Circle-1(1), Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 74/HYD/2017[2009-10]Status: DisposedITAT Hyderabad31 Jan 2024AY 2009-10

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…

Ncc Limited, Hyderabad vs. DCIT, Central Circle-1(1), Hyderabad

Accordingly, we delete the same. Thus, this ground is partly allowed

ITA 73/HYD/2017[2008-09]Status: DisposedITAT Hyderabad31 Jan 2024AY 2008-09

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumar

For Appellant: Shri Vijay Mehta, CA &For Respondent: Shri K. Madhusudan, CIT(DR)
Section 143(1)

…as well as other material on record an inference could easily be drawn that the assessee- company paid the percentage of commission amounts as was noted in the seized diaries of Mukesh Sharma. As has been. held by the Supreme Court in the case of Sumati Dayal 214 ITR 801 (1995) SC "This raises the question whether the apparent can be considered as the real. As laid down by this court the apparent must be considered the real until it is shown that there are reasons to believe that the apparent is not the real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the re…