PCIT Vs Bipin Babu Agarwal (Allahabad High Court)
The Allahabad High Court dismissed the Revenue’s Income Tax Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Agra Bench, dated 28.03.2025 for Assessment Year 2017-18. The Tribunal had dismissed the Revenue’s appeal against the order of the Commissioner of Income Tax (Appeals), Kanpur, dated 28.06.2022, which had accepted the explanation furnished by the assessee concerning cash sales of Rs. 9,00,04,277/- made at the time of demonetisation.
The assessee was a trader in gold and silver jewellery and ornaments. On 08.11.2016, the date of demonetisation, the assessee disclosed cash sales amounting to Rs. 9,00,04,277/-. The Assessing Authority disbelieved the disclosed cash sales. The issue was considered by the CIT (Appeals) and subsequently by the Tribunal.
The appellate authorities recorded categorical findings that the cash sales were supported by sale invoices duly recorded in the assessee’s books of accounts. The stock register also supported the sales disclosed by the assessee. Further, the sales had been recorded in the returns filed under the UP VAT Act, 2008.
Before the High Court, the Revenue sought interference with the Tribunal’s order. After hearing the Revenue’s counsel and perusing the record, the High Court found no good ground to interfere. The Court noted that the CIT (Appeals) and the Tribunal had examined the issue and found supporting material for the assessee’s explanation. According to the Court, no adverse material had been found by the appellate authorities to disbelieve the explanation furnished by the assessee.
The High Court observed that the findings were findings of fact based on material and evidence on record and did not call for interference. It further observed that merely because suspicion may exist, that alone could not be sufficient for the Revenue authorities to base their conclusions. In the absence of evidence supporting the grounds pressed by the Revenue, the appeal was found to lack merit.
Accordingly, the Allahabad High Court dismissed the Revenue’s appeal. No order as to costs was made.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Amit Mahajan learned counsel for the revenue-appellant and perused the record.
2. Present Income Tax Appeal has been filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal “DB” Bench, Agra passed in ITA No. 156/Agr/2022, dated 28.03.2025 for the Assessment Year 2017-18. By that order, the learned Tribunal has dismissed the revenue’s appeal arising from the order of the Commissioner of Income Tax (Appeals) Kanpur, dated 28.06.2022 whereby the explanation furnished by the assessee with respect to cash sales amounting to Rs. 9,00,04,277/- at the time of demonetisation, has been accepted.
3. Having heard learned counsel for revenue and having perused the record, we find no good ground to offer any interference in the present appeal. The assessee is a trader in gold and silver jewellery and ornaments. At the time of demonetisation, it disclosed cash sales amounting to Rs. 9,00,04,277/-, on 08.11.2016. That was disbelieved by the Assessing Authority. The CIT Appeals and the Tribunal had examined the issue and returned categorical finding that the cash sales were supported by sale invoices duly recorded in its books of accounts. The stock register supported the sales disclosed by the assessee. The returns were filed under UP VAT Act, 2008. The entire sales were recorded therein. In short, no adverse material was found by the appeal authority to disbelieve the explanation furnished by the assessee.
4. The above are findings of fact based on material and evidence on record and may not call for interference by this Court. Merely because suspicion may exist, it may not be sufficient for the revenue authorities to base their conclusions thereon. In absence of evidence to support the grounds being pressed, the appeal lacks merit and is accordingly dismissed. No order as to costs.
