Satya Pal Shiv Kumar Vs ACIT, Circle-47(1), New Delhi

Parties Involved

Facts Summary

The assessee, M/s Satya Pal Shiv Kumar, a partnership firm, filed the return of income for AY 2017-18 declaring taxable income at Rs. 5,80,82,670/-. The case was selected for complete scrutiny, particularly examining large cash deposits during demonetisation. The assessee firm is engaged in trading and manufacturing packing and dispatch of chewing tobacco and perfumery products. During the year under consideration, the assessee deposited significant amounts in bank accounts. The Assessing Officer (AO) issued notices to explain the source of these deposits and called for details of cash deposits and sales. The AO observed a significant increase in cash sales in November 2016, which was disproportionate compared to previous and subsequent years. The AO concluded that the books of accounts did not present a true and fair picture and rejected them, adding the difference as unexplained cash credit under section 68 of the Income Tax Act, 1961.…

Legal Issues

• 1. Whether the cash sales of the assessee stand the test of human probabilities.
• 2. Whether the books of accounts were rightly rejected by the AO.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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