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Sustainability of additions based on suspicion, conjecture and surmises.

During the course of inquiry while making assessments, an AO brings on record certain material, which may either be relevant or irrelevant, or partly relevant or partly irrelevant to the issue in hand. While making addition on that issue, it may be possible that the AO is influenced by some irrelevant or non-existent fact.
The Hon’ble Apex Court in Dhirajlal Girdharilal v CIT [1954] 26 ITR 736 (SC) observed that where it is impossible to say as to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding, then such a finding is vitiated because of the use of inadmissible material.
Therefore, in cases where finding of the Court is arrived at on the basis of irrelevant material, non-existent fact or on presumption, then such finding will not stand the test of appeal. The present article surveys various views of the Courts as to what extent the finding of the AO/Court will survive or not survive, if such finding is based on conjectures, surmises, presumptions, imaginations, suspicions or on irrelevant or unsupported facts and to what extent they have followed the decision of the Hon’ble Apex Court in Dhirajlal Girdharilal v CIT

Prakhar Kalaniauthor

Prakhar Kalani (B.Com, ACA, DISA), Partner at Kalani Gattani & Co. Prakhar Kalani is a Qualified Chartered Accountant . contact him @

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