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2009 (12) TMI 951 - HC - Income TaxUnexplained cash credit - transansaction of shares unexplained - bogus and sham transaction -Addition made as assessee had failed to discharge its onus to prove the genuineness of the transaction - HELD THAT:- We find ourselves in favour of the submission made as the assessee had produced confirmations which would clearly demonstrate it has discharged its initial burden. The identity of M/s. Yadav and Company, by filing their confirmation and their assessment particularly Genuineness of the transaction by pointing out that the assessee had sold shares to M/s. Yadav and Company in the immediately preceding year (which has been accepted by the Department) and that the payment received during the relevant previous year was against the debt due from M/s. Yadav and Company and Creditworthiness of the creditor by pointing out that the amount was received by way of cheques drawn on the bank account. The initial burden thus discharged, it was for the revenue to establish that the transaction in question was bogus. This would be so even if there is a denial by the creditors that the credits were not genuine as held by the Supreme Court in CIT v. Orissa Corpn. (P.) Ltd.1986 (3) TMI 3 - SUPREME COURT] - Mere denial by Yadavs that account in question was not operated by them would not automatically lead to the inference that assessee deposited in the said account and, therefore, it became its unaccounted income. When the premises of M/s. Yadav and Company were searched by the Department in 2002 and the statements of aforesaid two persons were recorded, it is clear that Yadav and Company was very much in existence. More interestingly, M/s. Yadav and Company even assessed to Income-tax. In the case of assessee, the assessment was completed in December, 2003. In such a scenario, it would not have been difficult for the Assessing Officer to find the whereabouts of Yadavs particularly having regard to the statement of the assessee that it had no dealing with M/s. Yadav and Company after assessment year 2000-01 and was thus unaware of its present whereabouts. Live link between the bank account of M/s. Yadav and Company and the assessee has not been established. - Decided in favour of assessee Whether the ITAT should have remitted the matter back to the Assessing Officer, if it was of the view that proper opportunity was not afforded to the assessee? - We feel that there was a bona fide confusion in the mind of the Assessing Officer regarding the onus viz., whether it was obligation of the assessee or the Assessing Officer to produce Sh. O.P. Yadav and Sh. Mohinder Singh Yadav. Therefore, in the interest of justice matter needs to be remitted back to the Assessing Officer to enable him to produce the Yadavs for cross-examination by the assessee. AO shall undertake fresh exercise as per the observations contained in the order of ITAT and this order and addition would be made only if those conditions are satisfied.
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