“preponderance of probability”

Judicial DoctrinesEvidenceEvidence547 judgments

The decision most relied on for preponderance of probability is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on preponderance of probability

Sumati Dayal v. CIT

214 ITR 801 · 1995 · Supreme Court

1,967

citing judgments

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.

CIT v. Durga Prasad More

82 ITR 540 · 1971 · Supreme Court

1,579

citing judgments

Tax authorities must judge evidence using the test of human probabilities and consider the apparent as real until there are reasons to believe it is not. They can rely on circumstantial evidence and the preponderance of probabilities to determine the genuineness of transactions.

CIT v. P. Mohanakala

291 ITR 278 · 2007 · Supreme Court

525

citing judgments

The Supreme Court emphasized that in the absence of concrete rebuttal by the assessee, circumstantial evidence holds significant weight, applying the doctrine of preponderance of probability, particularly when assessing undisclosed income or unexplained cash credits.

PCIT v. Krishna Devi

126 Taxmann.com 80 · 2021 · High Court

249

citing judgments

The genuineness of share transactions, particularly those generating long-term capital gains, cannot be rejected solely based on general investigation reports, third-party statements, or a mere increase in share price, when the assessee provides comprehensive documentary evidence, without the Revenue bringing substantial evidence to the contrary.

CIT v. Jamnadevi Agarwal

328 ITR 656 · 2010 · High Court

230

citing judgments

When faced with allegations of bogus long-term capital gains from penny stocks, the Assessing Officer must discharge the onus of proving that the assessee's transactions were not genuine. The assessee can rely on the principle of preponderance of probability, and the Revenue must present substantial evidence to establish that the transactions were a colourable device or that the assessee was an entry operator.

Mukesh R.Marolia v. Addl. CIT

6 SOT 247 · 2006 · ITAT

139

citing judgments

The department must substantiate its allegations of a bogus long term capital gain scheme; if not substantiated, the addition made by the Assessing Officer for purported bogus LTCG derived from the purchase/sale of shares cannot be sustained. An assessee's claim for long term capital gains exemption on share transactions should be allowed where documentation supports the transactions.

Delhi in Suman Poddar v. Income Tax Officer 99

112 Taxmann.com 330 · 2019 · Supreme Court

138

citing judgments

Exemption under Section 10(38) is not allowable for long-term capital gains arising from bogus share transactions involving penny stocks or manipulative dealings. The Income Tax Department can establish such a case based on the preponderance of probabilities where there is no genuine financial worth.

CIT v. Daulat Ram Rawatmull

103 ITR 344 · 1976 · High Court

citing judgments

The assessee is not required to prove the source of the source of funds, nor the origin of the origin of the funds. The onus is discharged if the identity of the creditor and the actual receipt of money are proved.

Judgments citing preponderance of probability

Shri Likha Saaya, Nirjili vs. Income Tax Officer, Ward- North Lakhimpur., Lakhimpur

In the result, both the appeals of the assessee are allowed

ITA 50/GTY/2021[2011-12]Status: DisposedITAT Guwahati06 Nov 2025AY 2011-12

Bench: S/Shriand Rajesh Kumarand Manmohan Dasita Nos.49 & 50/Gty/2021 Assessment Years : 2010-11 & 2011-12 Shri Likha Saaya S/O. Shri Likha Vs. Ito, Ward-North, Lakhimpur Heli, P-Sector, P.O. Nirjuli, Borah Complex, D.K.Road, North District Papumpare, Arunachal Lakhimpur, Lakhimpur, Assam- Pradesh-791109 787001 Pan/Gir No. (Appellant) .. ( Respondent) Assessee By : Sarala Agarwal. Ar Revenue By : Shri Kausik Ray, Jcit

For Appellant: Sarala Agarwal. ARFor Respondent: Shri Kausik Ray, JCIT

Section 10(26)Section 143(1)Section 143(2)Section 144

assessee as such. Therefore, the reasoning given by the ld. CIT(A) for sustaining the addition by relying on the theory of preponderance of probability and various others unfounded reasons which have lacking any genuinity or correlation of the facts. Ld. P a g e 8 | 23 ITA No.48 & 50/GTY/2021

Shri Likha Saaya, Nirjili vs. Income Tax Officer, Ward- North Lakhimpur., Lakhimpur

In the result, both the appeals of the assessee are allowed

ITA 49/GTY/2021[2010-11]Status: DisposedITAT Guwahati06 Nov 2025AY 2010-11

For Appellant: Sarala Agarwal. ARFor Respondent: Shri Kausik Ray, JCIT

Section 10(26)Section 143(1)Section 143(2)Section 144

Saloni Girrajkishor Agrawal, Mumbai vs. Income Tax Officer, Ward - 25(1)(1), Mumbai

In the result, both the appeals of the assessee are allowed

ITA 3234/MUM/2024[2013-14]Status: DisposedITAT Mumbai04 Nov 2025AY 2013-14

Bench: Justice (Retd.) C. V. Bhadang & Shri Prabhash Shankarsaloni Girrajkishor Agrawal V/S. Income Tax Officer, Ward 1601/1602, Green Acre, बनाम –25(1)(1),Kautilya Bhavan, Lokhandwala Complex, Andheri Bandra Kurla Complex, (West), Mumbai – 400 053, Bandra (East), Mumbai – Maharashtra 400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Anupa1692D Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Prakash Jhunjhunwala, ARFor Respondent: Shri Swapnil Choudhary, (Sr. DR)

Section 10(38)Section 143(3)Section 148Section 68

present appeals before us. 14. As already noted above, Ld. CIT(A) dealt with extensive literature on the concept of preponderance of probability and other doctrines to dismiss the appeal of the assessee. According to us, the theory of preponderance of probability is applied to weigh the evidence of either

Smt. Satyawati Marwaha Through Legal Heir Sh, Chander Sheikhar Marwaha, Jalandhar vs. Assistant Commissioner of Income Tax, Jalandhar

In the result, the appeal for Asstt

ITA 347/ASR/2024[2015-16]Status: DisposedITAT Amritsar30 Oct 2025AY 2015-16

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Dasgupta

For Appellant: Sh. Ashray Sarna, C. A

Section 10(38)Section 132Section 144Section 144rSection 147Section 148Section 151Section 250(6)Section 68

appellant has not been able to discharge the onus cast on it. The findings of the AO are based on strong surrounding circumstances, preponderance of probability and human conduct in light of analysis of modus 8 I.T.A. Nos. 346 & 347/Asr/2024 Assessment Years: 2014-15 & 2015-16 operandi of broker ... show that the assessee has been named in the report, and the AO has proceeded on basis of presumption and assumption and on preponderance of probabilities . 21. We further note that the assessee has indulged in regular trading activity of various scripts during the same period , through the same broker

Smt. Satyawati Marwaha Through Legal Heir Sh. Chander Sheikhar Marwaha, Jalandhar vs. Assistant Commissioner of Income Tax, Jalandhar

In the result, the appeal for Asstt

ITA 346/ASR/2024[2014-15]Status: DisposedITAT Amritsar30 Oct 2025AY 2014-15

Bench: Sh. Manoj Kumar Aggarwal & Sh. Udayan Dasgupta

For Appellant: Sh. Ashray Sarna, C. A

Section 10(38)Section 132Section 144Section 144rSection 147Section 148Section 151Section 250(6)Section 68

DCIT CC-6(1), Mumbai, Bkc Mumbai vs. Rucha Consultancy LLP, Pune

ITA 2488/MUM/2025[2016-17]Status: DisposedITAT Mumbai30 Oct 2025AY 2016-17

Bench: Hon’Ble Shri Sandeep Gosain & Shri Girish Agrawal

Section 132Section 250Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL

Naranji Rajaram Dave, Porbandar vs. Income-Tax Officer, Ward-2(3), Porbandar, Gujarat

In the result, the appeal of the assessee is allowed

ITA 822/RJT/2024[2017-18]Status: DisposedITAT Rajkot29 Oct 2025AY 2017-18

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकरअपीलसं./Ita No. 822/Rjt/2024 ("नधा"रणवष"/Assessment Year: (2017-18) Naranji Rajaram Dave, Income Tax Officer, Wd -2(3), Vs. Porbandar-360575 17, 17 Naranji Rajaram Dave, Suttar Vada, Porbandar, Suttar Vada, Porbandar-360575 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Acjpd8823B (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri Sagar Shah, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 133(6)Section 139Section 143(2)Section 143(3)Section 250Section 60

inflated cash sales and cash advance sales to explain the source of unaccounted money deposited, which is not found true applying theory of preponderance of probability in the assessee`s case. Based on these facts and circumstances, the learned CIT(A), sustained the addition made by the assessing officer

Dilip Jawaharlal Varyani, Pune vs. DCIT Circle-8, Pune

In the result, appeal of the assessee is partly allowed

ITA 643/PUN/2025[2011-12]Status: DisposedITAT Pune28 Oct 2025AY 2011-12

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकरअपऩलसं. / Ita No.643/Pun/2025 निर्धारणवषा / Assessment Year:2011-12 Dilip Jawaharlal Varyani, V The Dy.Commissioner Of S.No.9/2B, Cts No.905, S Income Tax, Circle-8, Vaibhav Vihar, Near Vikram Pune. Vihar, Pimpri, Pune – 411017. Pan: Acapv0521H Appellant/ Assessee Respondent / Revenue Assessee By Shri Sarad Vaze, Ca – Ar Revenue By Shri Ramnath P Murkunde, Irs–Dr Date Of Hearing 12/08/2025 Date Of Pronouncement 28/10/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Delhi Passed Under Section 250 Of The Income Tax Act, 1961 Dated 19.06.2024 For The A.Y.2011-12 Emanating From The Assessment Order Under Section 143(3)Of The Income Tax Act, 1961, Dated 26.03.2014. The Assessee Has Raised The Following Grounds Of Appeal :

Section 143(3)Section 250Section 68

note that Assessee had received contract from Municipal Corporation. The total receipts for A.Y.2011-12 were Rs.13,99,53,070/-. It is beyond the preponderance of probability that the Assessee who is engaged into carrying out such a huge contract do not maintain any documents related to Direct Expenditure on Labour

DCIT-CC-6(1), Mumbai, Bkc, Kautilya Bhawan vs. Prashant Prakash Nilawar, Pune

In the result, the appeal of the Revenue, being ITA

ITA 2896/MUM/2025[2022-23]Status: DisposedITAT Mumbai28 Oct 2025AY 2022-23

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

For Appellant: 1.1. On the facts and circumstances of the case and in law

Section 69ASection 69BSection 69C

were duly reflected in the books of Rucha Group LLP. This statement was never contradicted or found false. Hence, applying the doctrine of preponderance of probability against such unrefuted evidence was both improper and inequitable. 19. The learned counsel also stressed that the Department cannot pick and choose which part

Prashant Prakash Nilawar, Pune vs. ACIT Circle-6(1), Nariman Point Mumbai

In the result, the appeal of the Revenue, being ITA

ITA 2318/MUM/2025[2022-23]Status: DisposedITAT Mumbai28 Oct 2025AY 2022-23

For Appellant: 1.1. On the facts and circumstances of the case and in law

Section 69ASection 69BSection 69C

DCIT CC-8(2), Mumbai vs. Niru Dhiren Shah, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 4294/MUM/2025[2022-23]Status: DisposedITAT Mumbai27 Oct 2025AY 2022-23

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankardeputy Commissioner Of Income V/S. Niru Dhiren Shah Tax, Central Circle – 8(2) बनाम 3Rd Floor, Flat No. 35, Jolly Room No. 658, 6Th Floor, Maker Apartment, No. 3 Aayakar Bhavan, M.K. Road, 119, Cuffe Parade, Colaba, Churchgate, Mumbai –400020, Mumbai – 400 005, Maharashtra Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aanps7632R Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Dr. K. Shivaram, Sr. Adv. & Ms. Neelam JadhavFor Respondent: Shri Leyaqat Ali Aafaqui, (Sr.AR)

Section 132Section 143(3)Section 69Section 69A

plausible explanation from the assessee for the undervaluation of the property, the Assessing Officer rightly invoked the provisions of section 69A based on preponderance of probability and circumstantial evidence? 4. Whether, under the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting the addition without ... Niru Dhiren Shah, Mumbai from the Department of Registration & Stamps, Maharashtra), establishing a cash component on the preponderance of probability. The ld.CIT(A) ignored this corroboration, erroneously requiring direct involvement. It is contented that hon’ble Rajasthan High Court in Giriraj Pugalia v. Assistant Commissioner of Income Tax, dated

Hemant Naresh Agarwal, Surat vs. Assistant Commissioner of Income Tax, Central Cir. 4, Surat

In the result, appeal of assessee is dismissed

ITA 170/SRT/2023[2020-21]Status: DisposedITAT Surat24 Oct 2025AY 2020-21

Bench: Shri Dinesh Mohan Sinha & Shri Bijayananda Prusethआ.(खो और ज).सं /It(Ss)A No.68 & 70/Srt/2023 Assessment Years: 2015-16 & 2018-19 (Physical Court Hearing) Deputy Commissioner Of Hemant Naresh Agarwal बनाम/ Income-Tax, Central Circle-4, 701, Shree Shyam Awas, Bhatar Vs. Surat Room No.508, 5Th Floor, Road, Near Vidhya Bharti School, Aayakar Bhawan, Majura Surat-395 010 Gate, Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Auppa 9003 J (अपीलाथ"/Appellant) (""थ" /Respondent) आयकर अपील सं./Ita.No.170/Srt/2023 Assessment Year: 2020-21 Hemant Naresh Agarwal Assistant Commissioner Of बनाम/ 701, Shree Shyam Awas, Bhatar Income-Tax, Central Circle-4, Vs. Road, Near Vidhya Bharti School, Surat, Aaykar Bhawan, Surat-395 010 Majura Gate, Surat-395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Auppa 9003 J (अपीलाथ"/Appellant) (""थ" /Respondent) िनधा"रती की ओर से /Assessee By Shri Kiran K. Shah राज" की ओर से /Revenue By Shri Mukesh Jain, Cit-Dr & Shri Kevin Langaliya, Ca सुनवाई की तारीख/Date Of Hearing 18/09/2025 उद्घोषणा की तारीख/Date Of Pronouncement 24/10/2025

Section 143(3)Section 250Section 292CSection 69

erred in deleting the addition made by the Assessing Officer ignoring the principles of “Human Probability Test” i.e, preponderance of probabilities which is applicable for income tax proceedings. 6. On the facts and in the circumstances of the case and in law the Ld. CIT(A)-4 ought to have ... erred in deleting the addition made by the Assessing Officer ignoring the principles of “Human Probability Test” i.e., preponderance of probabilities which is applicable for Income Tax proceedings. 8. On the facts and in the circumstances of the case and in law the Ld. CIT(A)-4 ought to have

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Chitravel Vetrimaran, Chennai

ITA 905/CHNY/2025[2019-20]Status: DisposedITAT Chennai22 Oct 2025AY 2019-20

Section 132Section 142(1)Section 143(2)Section 153ASection 153CSection 250Section 271D

transaction, formal accounting was not expected. The sworn statement during the search provided clarity. Based on the evidence and the principle of the preponderance of probability, it was inferred that the assessee repaid the loan using the source of which could not be explained. 6.3.4 The AO after rejecting ... with the AO to substantiate such transactions with concrete evidence, which was not done. The AO based the assessment on the doctrine of preponderance of probability, assuming the loose sheets to be valid evidence of cash transactions. The appellant contends that this doctrine cannot be the sole basis for creating

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Chitravel Vetrimaran, Chennai

ITA 904/CHNY/2025[2017-18]Status: DisposedITAT Chennai22 Oct 2025AY 2017-18

Section 132Section 142(1)Section 143(2)Section 153ASection 153CSection 250Section 271D

M/S Rarity Agencies Limited, Kolkata vs. ITO, Ward 9(1), Kolkata

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

ITA 2341/KOL/2024[2015-16]Status: DisposedITAT Kolkata21 Oct 2025AY 2015-16

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 10(38)Section 143(3)Section 250Section 68

where the earning per share was almost nil, and therefore it does not stand the test of reasoning and defies all principle of preponderance of probability. I find that the AO has drawn the conclusion from various factors like the balance sheet, profit and loss a/c of Unishire Urban Infra ... para 651 I.T.A. No.: 2341/KOL/2024 Assessment Year: 2015-16 M/s. Rarity Agencies Limited. 3. The test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation of the provisions of the Income-tax Act. In such a circumstance, the conclusion

DCIT(Central Circle)-3(3), Mumbai vs. Juicy International Pvt. Ltd. (Now Known As Avaada Ventures Pvt. Ltd.), Mumbai

ITA 4388/MUM/2024[2013-14]Status: DisposedITAT Mumbai16 Oct 2025AY 2013-14

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

Section 131Section 250

onus' is a continuous process in the evaluation of evidence. If the evidence on record weighs in favour of the appellant [based on preponderance of probability which is the standard of proof required in income tax assessments] or that the explanation put forth cannot be said to be completely unsatisfactory ... onus' is a continuous process in the evaluation of evidence. If the evidence on record weighs in favour of the appellant [based on preponderance of probability which is the standard of proof required in income tax assessments] or that the explanation put forth cannot be said to be completely unsatisfactory

Sameer Shah (HUF), 1 "Swapneel", Opp. Gurudatatrey Temple Palace Road vs. Income Tax Officer, Ward 1(3), Jamnagar, Gujarat

In the result, appeal filed by the assessee is allowed

ITA 248/RJT/2025[2013-14]Status: DisposedITAT Rajkot14 Oct 2025AY 2013-14

Bench: Dr. Arjun Lal Saini. आयकरअपीलसं./Ita No.248/Rjt/2025 "नधा"रणवष" / Assessment Year: (2013-14) (Hybrid Hearing) Sameer Shah (Huf), Vs. The Ito Ward 1(3), 1 “Swapneel”, Opp. Jamnagar - 361001 Gurudatatrey Temple, Palace Road, Jamnagar - 361008 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aawhs3749E (Appellant) (Respondent)

For Appellant: Shri Sagar Shah, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR

Section 144BSection 147Section 250

Section 250 is bad in law as well as on facts by upholding the addition originally made by merely relying on concept of PREPONDERANCE OF PROBABILITY and the judgements based on the same. In such a manner, every gain earned by any genuine investor will be within this scope ... accommodative or not genuine is merely the pre-determined mind set of the FAO as well as NFAC based on the concept of PREPONDERANCE OF PROBABILITY, which is not appropriate in present case, as the matter under consideration is backed by the third-party documentary evidence proving the genuineness

Pramila Agarwal, Jaipur vs. The Income Tax Officer Ward-2(5), Jaipur

In the result, the appeal of the assessee is allowed

ITA 531/JPR/2025[2011-12]Status: DisposedITAT Jaipur10 Oct 2025AY 2011-12

For Appellant: Shri Tarun Mittal, C.AFor Respondent: Shri Gorav Avasthi, JCIT

Section 10(38)Section 147Section 148Section 68

ever strong may be but cannot be the basis of addition except for some material evidence on record. The theory of 'preponderance of probability' is applied to weigh the evidences of either side and draw a conclusion in favour of a party which has more favourable factors in his side

Income Tax Officer, Jaipur vs. Renu Agarwal, Jaipur

In the result, appeal of the Revenue is dismissed

ITA 502/JPR/2025[2015-16]Status: DisposedITAT Jaipur30 Sept 2025AY 2015-16

For Appellant: Shri Shailesh Mantri, C.AFor Respondent: Mrs. Anita Rinesh, JCIT, Sr.DR

Section 143(3)Section 250Section 68

justified in rejecting the claim of the assessee on the basis of theory of surrounding circumstance, human conduct and preponderance of probability without bringing on record any relevant legally admissible evidence against the assessee. For the said proposition we rely on the judgment of the Special Bench of Mumbai Bench

Sant Lal Aggarwal, Haryana vs. ACIT, Central Circle-18, New Delhi

ITA 2243/DEL/2022[2017-18]Status: DisposedITAT Delhi30 Sept 2025AY 2017-18

Bench: Shri Anubhav Sharma & Shri Krinwant Sahayassessmentyear:2017-18

Section 143(3)Section 69A

under: “10. Appellant has taken the plea that he likes to keep cash with him rather than in Bank. Applying the concept of preponderance of probability, this is not logical why a person should withdraw the cash and keep it with him particularly when he is living in big city