CIT Vs Supreme Industries Ltd. (Bombay High Court)
Bombay High Court has dismissed an appeal filed by the Income Tax Department, upholding a decision by the Income Tax Appellate Tribunal (ITAT) that rejected the department’s claim of a ₹33 lakh unexplained cash payment by Supreme Industries Ltd. for a land purchase. The High Court observed that the Tribunal’s finding was based on a thorough consideration of evidence, concluding that the seized document alone was insufficient to prove the alleged cash transaction.
The case originated from a search and seizure operation conducted by the Income Tax Department on Supreme Industries Ltd. and its directors on May 29, 2001. During the search, officers seized a document containing notations such as “Payment mode Cheque 65.00, Cash 33.00, 98.00,” along with rates per square yard and meter and “Rate offered.”
Based on this seized document, the Assessing Officer concluded that the entry of “Cash 33.00” represented an unexplained cash payment of ₹33 lakhs for the purchase of a property in Vasai. The officer treated this amount as an unexplained investment and therefore undisclosed income under Section 69 of the Income Tax Act, 1961, adding it to the company’s income for the block period 1/4/1999 to 29/5/2001 in the assessment order dated September 26, 2008.
