2014 (7) TMI 1361 - HC - Income Tax

Transaction of sale of stripes - genuine transaction or not? - addition made by AO under the head of income from other sources - ITAT upholding the findings of the CIT(Appeals) that the transaction of sale of stripes by the respondent-assessee as a genuine transaction - HELD THAT - The laws consistently say that initial burden to establish genuineness of the transaction lies on the assessee first. If the assessee discharges his/its onus then the burden shifts to the Revenue to produce cogent material disproving the evidence adduced by the assessee. The learned Tribunal has taken note of the judgments on the issue including an unreported one of High Court of Jharkhand in Arun Kumar Agarwal (HUF) Others 2012 (8) TMI 398 - JHARKHAND HIGH COURT and also in the case of C.I.T. v. Gobi Textiles Ltd. 2007 (9) TMI 226 - MADRAS HIGH COURT wherein it has been stated the legal position as quoted by us above. Here on fact the learned Tribunal found the assessee has discharged initial burden lies on it. We therefore do not find any element of law to interfere with the impugned judgment and order of the learned Tribunal.

Summary

Issues:
1. Whether the transaction of sale of stripes by the respondent-assessee was genuine for the assessment year 2006-2008.

Analysis:
The judgment pertains to an appeal against the decision in relation to the authenticity of a transaction involving the sale of stripes by the respondent-assessee. The main issue revolved around determining the genuineness of this transaction. The legal principle highlighted was that the initial burden to establish the genuineness of a transaction rests on the assessee. If the assessee successfully proves the authenticity of the transaction, the burden then shifts to the Revenue to provide substantial evidence to refute the assessee's claims. The Tribunal considered various judgments, including one from the High Court of Jharkhand and another from the Madras High Court, to ascertain the legal position on this matter.

The Tribunal found that the assessee had indeed fulfilled the initial burden placed on them to prove the genuineness of the transaction. Consequently, the Tribunal concluded that there was no legal basis to challenge or overturn its decision. As a result, the appeal was dismissed, and no costs were awarded in the case.

In conclusion, the judgment emphasized the importance of the assessee demonstrating the genuineness of a transaction, with the burden of proof initially lying on the assessee. Once the assessee meets this burden, the Revenue must provide compelling evidence to counter the authenticity of the transaction. The decision in this case was based on the Tribunal's assessment that the assessee had successfully discharged their burden of proof regarding the transaction in question, leading to the dismissal of the appeal.