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 367,514 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 68 Section 143(3)Section 147 Section 148 Section 142(1)Section 115BBE Section 69C Section 69A

Read the full judgment

Issues it is cited on

price rigging colourable device preponderance of probability bogus ltcg penny stock section 10(38)entry operator addition under section 68 addition u/s 68 genuineness of the transaction accommodation entry share application money

Judgments citing Sumati Dayal v. CIT

M/S Globus Real Infra Pvt. Ltd., New Delhi vs. DCIT, New Delhi

ITA 2920/DEL/2017[2013-14]Status: DisposedITAT Delhi18 Mar 2021AY 2013-14

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ACIT, New Delhi vs. M/S. Star Light Consumer Electronics Pvt. Ltd., New Delhi

ITA 6070/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ACIT, New Delhi vs. M/S. Superstar Agency Pvt. Ltd., New Delhi

ITA 5832/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ACIT, New Delhi vs. M/S. Sur Buildcon Pvt. Ltd., New Delhi

ITA 5831/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S Stylish Construction Pvt. Ltd., New Delhi

ITA 5744/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S. Sukhna Real Estate Pvt. Ltd., Ghaziabad

ITA 5742/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S. Sukhna Steel Pvt. Ltd., New Delhi

ITA 5741/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S. Sunlight Tour and Travels Pvt. Ltd., Sahibabad

ITA 5740/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S. Sintex Consumers Electronics Pvt. Ltd., Delhi

ITA 5736/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S. Supreme Placement Services Pvt. Ltd., New Delhi

ITA 5650/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

ITO, New Delhi vs. M/S Angel Cement Pvt. Ltd., Ghaziabad

ITA 4691/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Mar 2021AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

…wanath Prasad (1968) against these 72 ITR 194 (SC) companies(Page 38 – • CIT V Hero Cycles Pvt Ltd. CIT(A) order) • CIT V Stepwell Industries Ltd  The reasons given by AO and Others. are very generic in nature • SumatiDayal V CIT (1995) and not backed by any 214 ITR 801 (SC) concrete evidence(Page 38 • CGT V Dr. George Kuruvilla – CIT(A) order). (1969) 74 ITR 328 (SC)  There was no cash deposit • CIT V Joseph John (1967) 67 in the bank accounts of ITR 74 (SC) the parties from share • RB Seth Champa Lal Swarup capital received(Page 38 – V CIT (1965) 60 ITR 493 (SC) CIT(A) order). • CIT V R Venkataswamy Naidu (19…

A.C.I.T., Circle-6(2), Kolkata vs. M/S Overtop Marketing Pvt. Ltd., Kolkata

ITA 686/KOL/2019[2015-16]Status: DisposedITAT Kolkata15 Mar 2021AY 2015-16

Bench: Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 131Section 68

…case laws the Hon’ble courts have opined that it is important to examine the surrounding circumstances to determine the nature of transaction. 6. Thereafter he discussed the case of McDowell & Co. Ltd. v. CIT [1985] 154 ITR 148 and Sumati Dayal v. CIT (1995) 214 ITR 801 (SC) and other case laws and he held as under: “4.11 Thus, it is clear from the discussion made above that the various companies from whom loan/advances was received during the financial year 2014-15 and the corresponding transactions made with them by the assessee company are lacking identity (As all the lender companies as mentioned above are…

Nish Developers Pvt. Ltd., Mumbai vs. DCIT- CC- 6(3), Mumbai

In the result, all the appeals of the assessee except ITA

ITA 3131/MUM/2018[2010-11]Status: DisposedITAT Mumbai12 Mar 2021AY 2010-11

Bench: Shri Rajesh Kumar & Shri Ram Lal Negi

For Appellant: Shri Rakesh Joshi, A.RFor Respondent: Shri P.C. Chhotaray

…IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “B”, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA No.3490, 3523, 2514, 3524 & 3525/M/2018 Assessment Years: 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16 Jt. CIT (OSD) M/s. Nish Developers, CC-6(3), 101-B, B-wing, R. No.1926, Mittal Court, Vs. 19th Floor, Nariman Point, Air India Building, Mumbai -400 021 Nariman Point, PAN: AACCN1457H Mumbai - 400021 (Appellant) (Respondent) ITA Nos.3131, 3129, 3130, 2440, 3103 & 3127/M/2018 Assessment Years: 2010-11, 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16 M/s. Nish Deve…

Nish Developers Pvt. Ltd., Mumbai vs. DCIT - CC -6(3), Mumbai

In the result, all the appeals of the assessee except ITA

ITA 3129/MUM/2018[2011-12]Status: DisposedITAT Mumbai12 Mar 2021AY 2011-12

Bench: Shri Rajesh Kumar & Shri Ram Lal Negi

For Appellant: Shri Rakesh Joshi, A.RFor Respondent: Shri P.C. Chhotaray

…IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “B”, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA No.3490, 3523, 2514, 3524 & 3525/M/2018 Assessment Years: 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16 Jt. CIT (OSD) M/s. Nish Developers, CC-6(3), 101-B, B-wing, R. No.1926, Mittal Court, Vs. 19th Floor, Nariman Point, Air India Building, Mumbai -400 021 Nariman Point, PAN: AACCN1457H Mumbai - 400021 (Appellant) (Respondent) ITA Nos.3131, 3129, 3130, 2440, 3103 & 3127/M/2018 Assessment Years: 2010-11, 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16 M/s. Nish Deve…

Late Shri Ganpat Singh, L/H Bikram Singh, Rewari vs. ITO, Ward-1, Rewari

ITA 2880/DEL/2019[2009-10]Status: DisposedITAT Delhi03 Mar 2021AY 2009-10

Bench: Shri R.K. Pandaasstt. Year 2009-10

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri Frat Khan,Sr. DR

Section 142(1)Section 143(2)Section 147Section 148Section 68

…er, the AO was not satisfied with the explanation given by the assessee. Rejecting the various explanations given by the assessee and following the decision of Hon’ble Supreme Court in the case of Sumati Dayal vs. Commissioner of Income Tax reported in (1995) 214 ITR 801, Kale Khan Mohammad Hanif vs. CIT reported in 1963 50 ITR 1 and various other decisions, the AO finally made addition of Rs. 8,90,000/- being the peak balance of Rs. 8,90,000/- on 17.04.2008. 4. Before the Ld. CIT(A) the assessee apart from challenging the validity of reassessment proceedings challenged the addition on merit. However, the Ld. CIT…

ITO 8 (2)(1), Mumbai vs. Bhairav Steel Enterprises Pvt. Ltd., Mumbai

In the result, the appeal filed by the revenue is hereby dismissed

ITA 4126/MUM/2019[2009-10]Status: DisposedITAT Mumbai01 Mar 2021AY 2009-10

Bench: Shri M. Balaganesh, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.4126/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2009-10) Ito 8(2)(1) बिधम/ Bhairav Steel Enterprises Room No.259/A,2Nd Floor, Pvt. Ltd. Vs. Aayakar Bhavan, M. K. 10, Kanti Nagar, A/30, Road, Mumbai-400020. Rajgruhi, Behind J. B. Nagar, Andheri Kurla Road, Andheri (E), Mumbai- 400059. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacb9118K (अपीलाथी /Appellant) (प्रत्यथी / Respondent) .. Revenue By: Shri Rajendra Joshi (Dr) Assessee By: Shri Rajiv Khandelwal सुनवाई की तारीख / Date Of Hearing: 03/12/2020 घोषणा की तारीख /Date Of Pronouncement: 01/03/2021 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 25.03.2019 Passed By The Commissioner Of Income Tax (Appeals) -16, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2009- 10. 2. The Revenue Has Raised The Following Grounds: -

For Appellant: Shri Rajiv KhandelwalFor Respondent: Shri Rajendra Joshi (DR)

Section 143(2)Section 148

…rson who makes the claim and not on the Revenue as being made out by the Ld. AR in his submission. While dealing with the issue of deciding the burden of proof, Hon'ble Supreme Court in the cases of CIT Vs. Durgaprasad More 82 ITR 540 and Sumati Dayal Vs. CIT 214 ITR 801 has held that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not real and that taxing authorities are entitled to look into surrounding circumstances to find out the reality and the matter has to be considered by applying the test of human probabilities. The Hon’ble court also held th…

DCIT CC 8(1), Mumbai vs. M/S Jainam Investments, Mumbai

In the result, appeals filed by the revenue are hereby dismissed

ITA 4474/MUM/2019[2016-17]Status: DisposedITAT Mumbai25 Feb 2021AY 2016-17

For Appellant: Shri Suchek Anchaliya (AR)For Respondent: Shri Rahul Raman (DR)

Section 143(1)Section 148Section 68

…at they ITA. Nos.4286 & 4474/Mum/2019 A.Ys. 2011-12 & 2016-17 are also entitled to look into the substance by overlooking the form. For these propositions, the Ld CIT-DR relied upon the decisions rendered by Hon'ble Supreme Court in the case of Sumati Dayal (214 ITR 80) (SC) and Durga Prasad More (82 ITR 540 (SC). 8 The Ld CIT-DR then took us through the financial statements relating to various lenders in order to show that they shared common addresses. He also took us through the copies of bank statements relating to the lenders in order to show to us that the moneys were transferred to the bank account of the…

M/S Shailesh Jain HUF, Mumbai vs. ITO 19 (3)(3), Mumbai

ITA 6068/MUM/2019[2014-15]Status: DisposedITAT Mumbai16 Feb 2021AY 2014-15

Bench: Shri Rajesh Kumar & Shri Amarjit Singhm/S. Shailesh Jain Huf, Vs. Ito 19(3)(3), 2Nd Floor, 2405, Panchratna, Opera House, Matru Mandir Bldg., Mama Parmanand Marg, Grant Road, Charni Road, Mumbai-400 007 Mumbai-400 004 Pan/Gir No.Aaihs3182H (Appellant) .. (Respondent) Smt. Kritika Rajendra Jain, Vs. Ito 19(3)(3), 2Nd Floor, 2405, Panchratna, Opera House, Matru Mandir Bldg., Mama Parmanand Marg, Grant Road, Charni Road, Mumbai-400 007 Mumbai-400 004 Pan/Gir No. Agspj9797K (Appellant) .. (Respondent)

Section 10(38)Section 147Section 148Section 68

…to the date of sale which is purportedly through the stock exchange. There is a spectacular gain in price from Rs. 3/-per share to Rs. 93/-per share. This challenges the test of human probability. 5.7.5 The Hon'ble Supreme Court in the case of Sumati Dayal (214 ITR 801 SC ) and Durga Prasad More ((1971) 82 ITR 540 SC ) has held that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not real and that the taxing authorities are entitled to look into the surrounding circumstances to find out the reality and the matter has to be considered by applying the…

Mantram Commodities Pvt. Ltd., Faridabad vs. ITO Ward 1(5), Faridabad

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

ITA 6170/DEL/2019[2015-16]Status: DisposedITAT Delhi12 Feb 2021AY 2015-16

Bench: Shri R.K. Pandaassessment Year: 2015-16 Mantram Commodities Pvt. Ltd., Vs Ito, Ff-9, Vishnu Place, Ward 1(5), Near Neelam Flyover, Faridabad. Sector-20B, Faridabad. Pan: Aahcm9517C (Appellant) (Respondent) Assessee By : Shri Rajiv Saxena, Advocate Revenue By : Shri Rovin Rawal, Addl.Cit Date Of Hearing : 21.01.2021 Date Of Pronouncement : 12.02.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Orders Dated 29Th March, 2019 Of The Cit(A), Faridabad, Relating To Assessment Year 2015-16. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Private Limited Company & Has Not Conducted Any Business Activity During The Relevant Assessment Year. It Filed Its Return Of Income On 10Th September, 2015 Declaring The Total Income At Rs.1,64,750/-. The Ao, During The Course Of Assessment Proceedings, Noted That The Assessee Company Has Received Rs.42 Lakhs As Share Premium During The Year On Issue Of 60000 Shares At A Premium Of Rs.70/-. He Noticed That The Shares Have Been Allotted On 31St March, 2015 To The Following Companies/Persons:- Name Of Person, No. Of Nominal Premium Amount Of Total Amt. Paid Shares Value Per Per Premium(Rs.) Including Share(Rs.) Share(Rs.) Premium(Rs.) Gangashiv 33125 10 70 2318750 2650000 Contractors Pvt. Ltd. 26875 10 70 1881250 2150000 Amar Shree Industries Pvt. Ltd. Total 60000 4200000 4800000

For Appellant: Shri Rajiv Saxena, AdvocateFor Respondent: Shri Rovin Rawal, Addl.CIT

Section 11USection 133(6)Section 143(3)Section 56(2)(viib)Section 68

…Rejecting the various explanations given by the assessee and following the decisions of the Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More reported in 82 ITR 540, McDowell & Co. Ltd. vs. CTO (1985) 154 ITR 148 and 2 Sumati Dayal vs. CIT (1995) 214 ITR 802, the AO made addition of Rs.48 lakhs to the total income of the assessee u/s 68 of the IT Act. While doing so, the AO further observed that since the addition on account of share premium and share capital has already been made u/s 68 of the Act, no separate addition is being made u/s 56(2)(viib) of the Act. While holding so, he rejected the calcu…

Dabur Invest Corp, New Delhi vs. JCIT, Range-46, New Delhi

In the result, appeal of the assessee is partly allowed

ITA 8058/DEL/2018[2015-16]Status: DisposedITAT Delhi11 Feb 2021AY 2015-16

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishi(Partially Through Video Conferencing) Dabur Invest Corp, The Joint Commissioner Of Vs. 4Th Floor, Punjabi Bhawan, 10, Income Tax , Rouse Avenue, New Delhi Range-46, Pan: Aaadfd2529G New Delhi (Appellant) (Respondent)

For Appellant: Shri M. P. Rastogi, AdvFor Respondent: Shri G. C. Srivastava, Adv

Section 143Section 4

…ngly valid but is a feigned or counterfeit transaction entered into for ulterior motive where the apparent is not real. Thereafter, she referred to the celebrated decision of the honorable Supreme Court in case of Durga Prasad More [82 ITR 540], Sumati Dayal [214 ITR 801] and McDowell & Co [154 ITR 148] and held that the option price is not a liability and has been wrongly treated so by the appellant in its books. Such a treatment is obviously a colorable device to escape tax liability and hoodwink the tax authorities. According to her, the option price is in fact, in the nature of recurring income that melds wit…