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TMI Blog2010 (12) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... of specific records maintained by the company and stock exchange showing the claimed transaction of shares having not taken place, the Hon'ble ITAT was justified in law in deleting the addition simply on the plea that the Deptt. had not allowed opportunity to the assessee to cross examine the share broker through whom the assessee claimed to have carried out the transaction" 2. Return of the assessee for the year in question was processed under section 143(1) of the Act. The assessee claimed exemption of Rs. 7,92,232 under section 54F of the Act as capital gain from purchase of shares by him for Rs. 47,313.75 on 21-3-1995 which were sold for Rs. 8,43,587.50 on 22-6-1996. After initial assessment, information was received that the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to prove the genuineness of the transaction. Further instance relied upon against the assessee that this was the only transaction of the assessee for dealing with the shares in which the assessee made a huge profit from the shares of an unknown company through an unknown broker and profit was treated as exempted income on account of investment in construction of a house. Coupled with the denial of the transaction by the company and failure of the assessee to rebut the material with which he was confronted, it was held that transaction could not be held to be genuine. Reliance was also placed on the judgment of the Supreme Court in Sumati Dayal v. CIT [1995] 214 ITR 801/80 Taxman 89 for holding that the test of human probabilities coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the genuineness of the transactions in purchase and sale of shares. 12. In Kirpa Ram Ramji Dass, Jalandhar v. ITO 14 TLR 553 (Asr. Trib.), a copy is placed at pages 31 to 40 of the assessee's paper book ("APB", for short), it was held that it was not the onus on the assessee to prove the correctness in support of the entries of the credits appearing in his books of account; that in proceedings under section 143, for regular assessment, the onus is on the assessee to prove the genuineness of the entries in the books of account, but when the assessment is reopened under section 147, the onus shifts to the Revenue, that under section 147, it is the Assessing Officer who claims that the income has escaped and, therefore, the onus in the reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an effective manner so as to provide the assessee with an opportunity to rebut the same for cross examination; that it was upon the Revenue to produce it before the assessee so that the assessee got an opportunity to controvert the statement contained therein with reference to the material in his possession; that admittedly no such effort ever had been made by the Revenue; and that, therefore, to put the onus on the assessee to produce such parties for cross-examination was not tangible in the eye of the law. 14. In CIT v. Pradeep Kumar Gupta 207 CTR (Delhi) 115 (copy filed on record), where the reopening was based on the statement of a third party, the Hon'ble Delhi High Court held that it was mandatory for the Revenue to produce such pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that department did not produce the share broker for cross-examination by the assessee. It was wrongly assumed that burden of proving that the transaction was not genuine was on the department while infact the exemption of tax was claimed by the assessee placing reliance upon the transaction of capital gains. It was for the assessee to establish that such transaction had taken place as the transaction is in the knowledge of the assessee. The assessee could substantiate the genuineness of the transaction by positive evidence including evidence of transfer of shares. The information about transaction not being genuine was adequate for reassessment and after assessment was reopened, the amount introduced by the assessee as consideration for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er by leading evidence or from the circumstances on record. In absence of positive evidence of the assessee, the Assessing Officer, by applying test of human probabilities can draw an inference of money being undisclosed income of the assessee. Reference may be made to judgments of Hon'ble the Supreme Court in CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349, CIT v. Durga Prasad More [1969] 72 ITR 807 and CIT v. P. Mohanakala [2007] 291 ITR 278/161 Taxman 169. In the present case, the Assessing Officer has, inter alia, relied upon the following circumstances against the assessee :- (i) Transaction being solitary transaction of purchase and sale of shares resulting in huge amount of profit; (ii) Transaction of assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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