Principal Commissioner of Income Tax-32 v. Sanjay Dhokad

1. FACTS OF THE CASE

Revenue challenged deletion of Rs.4,99,27,664 under section 69C from civil contractor Sanjay Dhokad’s AY 2010-11 income. The AO relied on 21 suppliers listed as suspicious by the Sales Tax Department, non-responses and enquiries. CIT(A) and ITAT accepted the documentary transactions and payments. The assessment date is repeatedly 25 February 2013; paragraph 6 alone prints 2003.

Source: PDF pp.2–5, paragraphs 2–7

2. DISCUSSION BY THE COURT

The appellate findings included accepted books and profits, payments credited to suppliers through account-payee cheques, and documentary evidence not discredited by the AO. The third-party statements were not furnished for rebuttal or cross-examination. The High Court required section 69C satisfaction to rest on the assessee’s material rather than unproved statements not put to him.

Source: PDF pp.8–12, paragraphs 11–15

3. JUDICIAL DECISION

The Court upheld application of Nikunj Eximp and distinguished NRA Iron and Steel on its investigation and evidential facts. The concurrent finding was that Dhokad had satisfactorily discharged the initial burden of proving the transactions’ genuineness.

Source: PDF pp.12–15, paragraphs 16–18

4. OUTCOME

No proposed substantial question of law arose. Revenue’s section 260A appeal was dismissed without costs, leaving deletion of the Rs.4,99,27,664 addition intact. No percentage substitution or penalty adjudication was ordered.

Source: PDF p.15, paragraphs 18–19

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Banking evidence was part of a larger record

The result rests on accepted accounts and business results, supplier details and realised payments, together with the AO’s failure to discredit that evidence. It does not establish that payment by cheque alone proves every disputed purchase; the concurrent factual findings are central.

Source: PDF pp.8–11, paragraphs 11–13

External intelligence must be tested against the transaction

A suspicious-dealer listing can prompt inquiry, but the Court did not accept it as sufficient proof of these purchases being bogus. The absence of supplied statements and an opportunity to meet them mattered alongside the documentary evidence; the ruling is not a prohibition on using properly tested third-party material.

Source: PDF pp.10–12, paragraphs 13–15

Distinguish the authority by its evidence

NRA Iron and Steel was distinguished because detailed investigation and an opportunity to meet adverse evidence were material there. The source itself mentions section 69C on page 12 and section 68 on page 13 in describing that precedent; that inconsistency should not become a new rule equating the two provisions.

Source: PDF pp.12–13, paragraph 16

The appeal’s limits matter

The Court found no substantial question arising from the concurrent findings and sustained deletion in full. It did not prescribe a universal profit percentage for disputed purchases. Defence supplies and Rs.1.33 crore discussed in the quoted Nikunj passage are facts of that precedent, not Dhokad’s transactions.

Source: PDF pp.14–15, paragraphs 17–19