Umacharan Shaw & Bros. v. CIT

37 ITR 271Supreme Court of India1959#112 most cited

What is Umacharan Shaw & Bros. v. CIT authority for?

An income tax assessment or addition cannot be sustained solely on the basis of suspicion, surmises, or conjectures, as strong suspicion does not amount to proof. The revenue authorities must rely on concrete evidence and material to frame an assessment.

567

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2013 to 2026.

Also referred to as

Umacharan Shaw & Bros. v. CIT · suspicion not proof · no addition on surmises · conjectures and suspicion · burden of proof income tax · Section 68 cash credits · Section 132(4) statement · assessment without evidence · Section 37(1) business expenditure · genuineness of transaction

Sections most often in play

Section 143(3)Section 132Section 132(4)Section 147Section 68Section 148Section 153ASection 69C

Issues it is cited on

price riggingdumb documentssection 132(4a)statement under section 132(4)bogus long term capital gainsection 292cretracted statementloose paperson-moneybogus ltcgsection 132(4)penny stock

Judgments citing Umacharan Shaw & Bros. v. CIT

Dy Commissioner of Income Tax, Noida vs. M/S Allure Developers Private Limited, Delhi

In the result, appeal of the Revenue in ITA No

ITA 4108/DEL/2025[2021-22]Status: DisposedITAT Delhi26 Nov 2025AY 2021-22

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

Section 132Section 139(1)Section 143(2)Section 148Section 37Section 41Section 68Section 69Section 69ASection 69C

…heques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act. 41. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure guess without reference to any evidence or material. The assessment cannot be framed only on bare…

Deputy Commissioner of Income Tax Central Circle 1 Noida, Noia vs. M/S Ajay Realcon Pvt. Ltd., Noida

In the result, appeal of the Revenue in ITA No

ITA 3560/DEL/2025[2020]Status: DisposedITAT Delhi26 Nov 2025

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

Section 132Section 139(1)Section 143(2)Section 148Section 37Section 41Section 68Section 69Section 69ASection 69C

…heques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act. 41. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure guess without reference to any evidence or material. The assessment cannot be framed only on bare…

Deputy Commissioner of Income Tax Central Circle 1 Noida, Noida vs. M/S Allure Developers Pvt. Ltd, New Delhi

In the result, appeal of the Revenue in ITA No

ITA 3559/DEL/2025[2020]Status: DisposedITAT Delhi26 Nov 2025

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

Section 132Section 139(1)Section 143(2)Section 148Section 37Section 41Section 68Section 69Section 69ASection 69C

…heques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act. 41. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure guess without reference to any evidence or material. The assessment cannot be framed only on bare…

Deputy Commissioner of Income Tax Central Circle 1 Noida, Noida vs. M/S Allure Developers Private Limited, Noida

In the result, appeal of the Revenue in ITA No

ITA 3558/DEL/2025[2019]Status: DisposedITAT Delhi26 Nov 2025

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

Section 132Section 139(1)Section 143(2)Section 148Section 37Section 41Section 68Section 69Section 69ASection 69C

…heques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act. 41. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure guess without reference to any evidence or material. The assessment cannot be framed only on bare…

Deputy Commissioner of Income Tax Central Circle 1 Noida, Noida vs. M/S Ace Residency Pvt. Ltd, Ghaziabad

In the result, appeal of the Revenue in ITA No

ITA 3493/DEL/2025[2021]Status: DisposedITAT Delhi26 Nov 2025

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

Section 132Section 139(1)Section 143(2)Section 148Section 37Section 41Section 68Section 69Section 69ASection 69C

…heques/RTGS in favour of the Assessee. Therefore, Appellant has duly discharged the burden casted upon it u/s 68 of the Act. 41. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure guess without reference to any evidence or material. The assessment cannot be framed only on bare…

Assistant Commissioner of Income Tax, Central Circle-3(1), Kolkata vs. Rajshri Iron Industries Private Limited, Kolkata

In the result, both the appeals of the Revenue are dismissed

ITA 2388/KOL/2024[2013]Status: DisposedITAT Kolkata21 Nov 2025

Bench: Shri Rajesh Kumar, Am & Shrisonjoy Sarma, Jm

For Appellant: Shri Soumitra Choudhury, ARFor Respondent: S/Shri Praveen Kishore &
Section 147Section 148Section 148ASection 69C

…ills Ltd. v. CIT 26 ITR 775 (SC), Lalchand Bhagat Ambica Ram v. CIT 37 ITR 288 (SC), CIT v. East Coast Commercial Co. Ltd.63 ITR 449 (SC) and Anil Tibrewala v. ITO(2004) 1 SOT 90 (Mum); CIT v. Daulatram Rawatmull 53 ITR 574 (SC); Umacharan Shaw & Bros. v. CIT 37 ITR 271 (SC); Pr. CIT v. Ajay Surendrabhai Patel(2016) 69 taxmann.com 309 (Guj.). 24. It is further submitted that the findings of the AO in the concluding portion of the order of assessment (Page-28) was as follows: ……there is no iota of evidence in assessee's submission that it has no nexus with the Majee group. lt should have been also considered that…

Assistant Commissioner of Income Tax, Central Circle-3(1), Kolkata vs. Rajshri Iron Industries Private Limited, Kolkata

In the result, both the appeals of the Revenue are dismissed

ITA 2385/KOL/2024[2018]Status: DisposedITAT Kolkata21 Nov 2025

Bench: Shri Rajesh Kumar, Am & Shrisonjoy Sarma, Jm

For Appellant: Shri Soumitra Choudhury, ARFor Respondent: S/Shri Praveen Kishore &
Section 147Section 148Section 148ASection 69C

…ills Ltd. v. CIT 26 ITR 775 (SC), Lalchand Bhagat Ambica Ram v. CIT 37 ITR 288 (SC), CIT v. East Coast Commercial Co. Ltd.63 ITR 449 (SC) and Anil Tibrewala v. ITO(2004) 1 SOT 90 (Mum); CIT v. Daulatram Rawatmull 53 ITR 574 (SC); Umacharan Shaw & Bros. v. CIT 37 ITR 271 (SC); Pr. CIT v. Ajay Surendrabhai Patel(2016) 69 taxmann.com 309 (Guj.). 24. It is further submitted that the findings of the AO in the concluding portion of the order of assessment (Page-28) was as follows: ……there is no iota of evidence in assessee's submission that it has no nexus with the Majee group. lt should have been also considered that…

Jsm Oilfields Services Pvt. Ltd, New Delhi vs. Deputy Commissioner of Income Tax, New Delhi

In the result, appeal of the assessee is allowed

ITA 4093/DEL/2024[2013-14]Status: DisposedITAT Delhi21 Nov 2025AY 2013-14

Bench: Shri Sudhir Kumar & Shri Manish Agarwal[Assessment Year : 2013-14] Jsm Oilfields Services Pvt.Ltd., Vs Dcit, Farm No.14, 8Th Avenue, Radhey Circle-13(1), Mohan Drive, Gadaipur, New Delhi New Delhi-110017. Pan-Aabcj1500C Appellant Respondent Appellant By Shri Anil Jain, Adv. Respondent By Shri Om Parkash, Sr.Dr Date Of Hearing 26.08.2025 Date Of Pronouncement 21.11.2025

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

…nt worth int eh shape of their reserves and surpluses which proves the creditworthiness and genuineness of the transactions. 15. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure guess without reference to any evidence or material. The assessment cannot be framed only on bare…

Aabid Ali Khan, New Delhi vs. ACIT Central Circle 26, New Delhi

The appeal of the assessee is dismissed

ITA 1714/DEL/2024[2017-18]Status: DisposedITAT Delhi14 Nov 2025AY 2017-18

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year : 2017-18 Aabid Ali Khan, Vs. Acit, 2016, First Floor, Cc-26, Bank Street, Karol Bagh, New Delhi. Delhi – 110 005. Pan: Agqpk0737J

For Appellant: Shri Sanjesh Jarwani, CAFor Respondent: Shri Jitender Singh, CIT-DR
Section 142(1)Section 144Section 153ASection 69A

…e the amount actually seized by the Police is arbitrary and beyond jurisdiction. Most importantly, the entire conclusion of the AO rests on suspicion and conjecture rather than evidence, which is impermissible in law as held in Umacharan Shaw & Bros. vs. CIT (37 ITR 271, SC). Having furnished affidavits and supporting bank details, the appellant discharged the initial burden, and the Department's failure to make further enquiries cannot be a ground for sustaining the addition. 4. Ld. DR However, relied the impugned orders and submitted that criminal court has in fact held that appellant’s claim is not verifiable…

Sri Srinivasa Educational & Charitable Trust, Bangalore vs. DCIT, Central Circle-2(3), Bengaluru

ITA 940/BANG/2025[2021-22]Status: DisposedITAT Bangalore13 Nov 2025AY 2021-22

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri M.V Prasad, CA & Shri KS Rajendra KumarFor Respondent: Shri Muthu Shankar, CIT &
Section 12ASection 132Section 132(3)Section 143(3)Section 153ASection 153BSection 25Section 250Section 8

…the finding is based purely on suspicion and general allegations, which cannot be a substitute for proof. He relied on the settled principle laid down by the Hon’ble Supreme Court in Dhakeswari Cotton Mills Ltd 26 ITR 775 (SC)., Umacharan Shaw & Bros. v. CIT (37 ITR 271, SC), and Daulatram Rawatmull v. CIT (53 ITR 574, SC), has held that no addition can be made merely on the basis of surmises and conjectures. 46.8 In the light of these submissions, the learned AR prayed to delete the addition of ₹25,52,00,000/- and hold that there is no evidence of diversion of trust funds for repayment of cash loans. 46.9 On the…

Sri Srinivasa Educational & Charitable Trust, Bangalore vs. DCIT, Central Circle-2(3), Bangalore

ITA 939/BANG/2025[2020-21]Status: DisposedITAT Bangalore13 Nov 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri M.V Prasad, CA & Shri KS Rajendra KumarFor Respondent: Shri Muthu Shankar, CIT &
Section 12ASection 132Section 132(3)Section 143(3)Section 153ASection 153BSection 25Section 250Section 8

…ged that the finding is based purely on suspicion and general allegations, which cannot be a substitute for proof. He relied on the settled principle laid down by the Hon’ble Supreme Court in Dhakeswari Cotton Mills Ltd 26 ITR 775 (SC)., Umacharan Shaw & Bros.37 ITR 271 (SC), and Daulatram Rawatmull 53 ITR 574, that no addition can be made merely on the basis of surmises and conjectures. 46.8 In the light of these submissions, the learned AR prayed to delete the addition of ₹25,52,00,000/- and hold that there is no evidence of diversion of trust funds for repayment of cash loans. 46.9 On the other hand, the lea…

Arvind Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

In the result, all appeals filed by the assessee are allowed

ITA 2274/CHNY/2024[2018-19]Status: DisposedITAT Chennai07 Nov 2025AY 2018-19
Section 131Section 132

…itted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third part…

Arvind Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

In the result, all appeals filed by the assessee are allowed

ITA 2273/CHNY/2024[2017-18]Status: DisposedITAT Chennai07 Nov 2025AY 2017-18

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

For Respondent: Mr.M. Murali, CIT
Section 131Section 132

…ted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third pa…

Arvind Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

In the result, all appeals filed by the assessee are allowed

ITA 2272/CHNY/2024[2016-17]Status: DisposedITAT Chennai07 Nov 2025AY 2016-17

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

For Respondent: Mr.M. Murali, CIT
Section 131Section 132

…ted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third pa…

Arvind Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

In the result, all appeals filed by the assessee are allowed

ITA 2271/CHNY/2024[2015-16]Status: DisposedITAT Chennai07 Nov 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

For Respondent: Mr.M. Murali, CIT
Section 131Section 132

…ted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third pa…

Arvind Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

In the result, all appeals filed by the assessee are allowed

ITA 2270/CHNY/2024[2014-15]Status: DisposedITAT Chennai07 Nov 2025AY 2014-15

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

For Respondent: Mr.M. Murali, CIT
Section 131Section 132

…ted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third pa…

Masilamani Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

In the result, appeals filed by the assessee(s) are allowed

ITA 2269/CHNY/2024[2018-19]Status: DisposedITAT Chennai07 Nov 2025AY 2018-19

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

For Respondent: Mr.M. Murali, CIT
Section 131Section 132Section 132(4)

…itted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third part…

Masilamani Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

ITA 2267/CHNY/2024[2016-17]Status: DisposedITAT Chennai07 Nov 2025AY 2016-17
Section 131Section 132Section 132(4)

…itted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third part…

Masilamani Nandagopal, Chennai vs. ACIT, CC-3(1), Chennai

ITA 2265/CHNY/2024[2014-15]Status: DisposedITAT Chennai07 Nov 2025AY 2014-15
For Appellant: Mr.B. Ramakrishnan, CAFor Respondent: Mr.M. Murali, CIT
Section 131Section 132Section 132(4)

…itted to have received back cash in lieu of bogus advances made by M/s Binny Limited. It is settled in law that that suspicion however strong it may be, cannot take the place of proof or evidence as held by the Supreme Court in Uma Charan Shaw & Bros. v. CIT (37 ITR 271). Any addition(s) to income must be based on cogent, credible, and corroborated evidence. We find that, the case made out by the AO in the satisfaction note was actually based on his own subjective notion which did not emanate from any material seized in the course of search from the premises of M/s Binny Limited. Even the statements of third part…

Asha Burman, New Delhi vs. ACIT Circle 46(1), New Delhi

In the result, appeals of the Assessee are partly allowed for

ITA 544/DEL/2024[AY 2017-18]Status: DisposedITAT Delhi04 Nov 2025

Bench: Shri Challa Nagendra Prasad & Shri Avdhesh Kumar Mishraआ.अ.सं/.I.T.A Nos.539 To 544/Del/2024 िनधा"रणवष"/Assessment Years:2012-13 To 2017-18 बनाम Asha Burman Acit, 4Th Floor, Punjabi Bhawan, Vs. Circle 46(1), 10, Rouse Avenue, New Delhi. Drum Shape Building, Ito, Pan No.Aaepb0966C New Delhi. अपीलाथ" Appellant ""यथ"/Respondent

Section 143(3)Section 24

…of the property nor has put any query about the physical inspection. Assessee’s contention Assumption that whole building is let out - wrong 5. It is a settled position of law that the suspicion, however, so great may be cannot substitute the actual facts. • 37 ITR 271 (SC) Umacharan Shaw & Bros. vs. CIT 5.1 The Assessing Officer has failed to carry out the directions as issued by the IT AT in its order dated 14th August 2019 which is binding on the Assessing Officer in proper perspective. In the fresh assessment order, the Assessing Officer has only supported the finding of his predecessor in original order da…