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2015 (1) TMI 880 - HC - Income TaxReopening of assessment - unaccounted share capital - ITAT and CIT(A) held that Section 148 did not apply in the facts and circumstances of the case - Held that:- Whilst the revenue could have legitimately relied upon the statement of Mahesh Garg, which sought to implicate the assessee to reopen the assessment proceedings under Section 148, to elevate that into a finding, the A.O. should have carried out some form of independent exercise as to the veracity and genuineness of the transaction furnished by the assessee. In this context, the assessee had furnished sufficient material in the form of identity documents, confirmation by the investors, copies of their return of income and bank statements and copy of the minutes of meeting of the Board of Directors of the investors wherever they happened to be companies. The least that the A.O. was expected to do, in the circumstances, was to seek recourse to his powers and verify the material by calling statement from the banks and also calling the investors by issuing summons under Section 131. Concededly, he did not adopt that course and instead rested content in relying only upon the statement of Sh. Mahesh Garg and found that in the absence of his cross-examination, the assessee did not discharge the onus of proof which lay upon it. As noted by the ITAT in its impugned order, the onus of proof is not a static one and necessarily shifts depending upon the materials placed on record. Lovely Exports (2008 (1) TMI 575 - SUPREME COURT OF INDIA) is authority for the proposition that the initial onus to show the genuineness of the transaction and creditworthiness of the investors is upon the assessee. Once some material is produced, is upto the A.O. to use his powers in the course of judicial proceedings, which he had undoubtedly to undertake. Plainly, in this case, he did not do so. His failure cannot be a ground for this Court to upheld the order of ITAT substantially in law, or even otherwise, on the facts. - Decided in favour of assessee.
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