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2019 (9) TMI 1513 - AT - Income TaxBogus LTCG - Exemption u/s.10(38) denied - HELD THAT:- As noticed that the assessee has not been given a fair opportunity to prove the genuineness but the assessment has been made primarily based on the evidences collected by the Revenue in the course of the investigation conducted by them on the brokers / share broking entities etc. This is not permissible. This being so, in the interests of natural justice, the issue of the genuineness of the transactions require re-adjudication. Since, the right to exemption must be established by those who seek it, the onus therefore lies on the assessee. In order to claim the exemption from payment of income tax, the assessee had to put before the Income Tax authorities proper materials which would enable them to come to a conclusion. AO must keep in mind that the onus of proving the exemption rests on the assessee. If the AO does have any evidence to the contrary, it is to be put to the assessee for his rebuttal. The internal communications of the Revenue are evidences for drawing an opinion on possible wrong claims but they are not the final evidence. AO shall require the assessee; to establish who, with whom, how and in what circumstances the impugned transactions were carried out etc., to prove that the impugned transactions are actual, genuine etc. The assessee shall comply with the AO’s requirements as per law. The AO is also free to conduct appropriate enquiry as deemed fit. The Assessing Officer shall also bring on record the role of the assessee in promoting the company and relationship of the assessee with other promoters, role of the assessee in inflating the price of shares, etc. as had been held in the case of Kanhaiyalal & Sons (HUF) [2019 (2) TMI 1640 - ITAT CHENNAI]. The AO shall furnish adequate opportunity to the assessee on the material etc to be used against it and on appreciation of all the aspects, the AO would decide the matter in accordance with law. - Appeal of assessee allowed for statistical purposes.
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