ITO Vs Maheshwari Sales Corporation (ITAT Ahmedabad)
Revenue appealed against the deletion of ₹63.84 lakh added u/s 68 as alleged bogus cash transactions with Kushal Tradelink Ltd., a known accommodation entry provider. AO made the addition based solely on the Investigation Wing’s general findings without producing any direct link between Assessee & the alleged racket, despite Assessee’s audited books showing genuine sales of ₹21 crore through banking channels.
CIT(A) accepted Assessee’s evidence-bills, ledgers, & bank records-& found that AO neither rejected the books of account nor produced independent proof of cash involvement. Relying on CIT v. Vishal Exports Overseas Ltd. (Guj HC), it held that once the sales were already recorded & taxed, a separate addition under s.68 would amount to double taxation.
Tribunal agreed, observing that “suspicion, however strong, cannot take the place of proof”, citing Omar Salay Mohamed Sait v. CIT (37 ITR 151, SC) & Daulat Ram Rawatmull (87 ITR 349, SC). Since AO failed to discharge his onus or conduct any independent enquiry, the addition was rightly deleted.
Held: No evidence of bogus sales or cash exchange; addition u/s 68 rightly deleted. Revenue’s appeal dismissed
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], dated 11/04/2025, passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2018-2019.
