TMI Blog2018 (12) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... f proper assistance by the assessee, constraining him to draw inferences on the basis of the material before/information available with him. Taxability of the impugned sum in the assessee’s hands is dependent on the basic facts, including the transfer of the gas agency itself, yet unascertained, the primary onus to lead which is on the assessee. No fetters are placed on either side, even as the burden to prove his return, and the claims preferred thereby, is on the assessee, who in the present case is in receipt of money [CIT v. Calcutta Agency Ltd. [1950 (12) TMI 4 - SUPREME COURT] and CIT v. R. Venkata Swamy Naidu [1956 (2) TMI 3 - SUPREME COURT]. The AO shall adjudicate afresh, issuing definite findings of fact, in accordance with law, and after allowing the assessee proper opportunity to state his case. The matter, accordingly, setting aside the impugned order, is restored to the file of the AO for the purpose. Revenue’s appeal is allowed for statistical purposes. - I.T.A. No. 363/(Asr)/2011 - - - Dated:- 31-10-2018 - Sh. Sanjay Arora, Accountant Member And Sh. N. K. Choudhry, Judicial Member For the Appellant : Sh. Gautam Deb (D.R.) For the Respondent : Sh. P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required to be produced by the AO, but could not be during the assessment proceedings. The assessee had, without doubt, received the money. The only inference that, therefore, in his view, arises is that the assessee first purchased the gas agency (from Sh. Paramdeep Singh), i.e., at a cost, and then transferred it to another through an agreement (again, at a consideration). The purchase cost, in the absence of any definite information in its respect, was inferred to be the same as the amount at which the agency was sold, i.e., ₹ 80 lacs, which sum was accordingly deemed as the assessee s income by way of unexplained money/investment toward acquisition cost of AGA through GPOA. In appeal, it was explained that the assessee is a man of no means. The nonproduction of Sh. Paramdeep Singh in the assessment proceedings was on account of his being abroad (USA) at the relevant time. The non-production of any corroborative evidence toward the same, viz, passport, etc., was for the reason that the same was not insisted upon by the AO. In fact, the GPOA in the assessee s favour was subsequently revoked by another, also registered, GPOA dated 17/11/2006 in favour of one, Sh. Hal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee owned the gas agency prior to its sale to third parties, i.e., through the GPOA, was the only logical inference to be drawn under the circumstances. The ld. counsel, Sh. P. N. Arora, Advocate, would, on the other hand, take us through the assessee s bank account with Oriental Bank of Commerce (OBC) to show that the payments received by the assessee stand transferred to AGS. Sh. Paramdeep Singh had since revoked the GPOA, so that a direct confirmation from him by the assessee was, under the circumstances, not possible. The impugned order needs to be, under the circumstances, upheld. 5. We have heard the parties, and perused the material on record. 5.1 Our first observation in the matter is that this is the second round before the Tribunal, a fact which unfortunately was not brought to our notice by either side during hearing. This, equally valid for both the parties, is particularly so for the assessee, at whose instance the Tribunal recalled its earlier order (dated 11/9/2012) allowing the Revenue s appeal (vide order dated 16/6/2016, in MA No. 04 /Asr/2013). The tribunal had found it strange that the ld. CIT(A), without there being anything on record to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, as well as the preparation/representation by the Revenue before us, both deplorable. We, accordingly, proceed to adjudicate the matter afresh. 5.2 The first thing that strikes one, as indeed it did the tribunal in the first round, is that there is no confirmation from the owner, Sh. Paramdeep Singh, of having received the sale consideration. The proof of the pudding, as the saying goes, lies in its eating. Rather, if he was in India, i.e., at the relevant time, as appears from the assertion of he having been paid cash by the assessee, without retention, i.e., as received from the three Vendees, where, one wonders, was the need for the assessee to accept the cash, being so only for and on behalf of the owner, i.e., inasmuch as the same could be received directly by the owner. Further, in any case, would be received, as well as tendered by the assessee in discharge of his obligation as an attorney holder, against duly issued receipts , which are conspicuous by their absence. Why, the Vendees themselves would not pay cash without being issued receipt/s by the registered attorney holder. This is precisely why the ld. CIT(A) himself observes that the AO ought to have e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification process ought to have been upper most in the mind of the ld. CIT(A), with the said examination being also an opportunity to clarify all the queries which the AO may have in the matter, and toward which supplementary evidence in the form of bank account/s; the copies of account of AGS; the tax return, etc., as also of the Vendees, could have been called for. Further, in case of any inconsistency, even the Vendees may have to be examined and, in any case, could lead corroborative evidence/s. As such, to say that the transaction is proved without such positive material, the deficiency of which the ld. CIT(A) himself recognizes in fact, an aspect of the matter on which he has our concurrence, as well as in fact of the tribunal in the first round, is wholly incorrect. The assessee being in receipt of money, the consequence of non-proving his claim would not lead to the inference of the transaction being proved, as inferred by the ld. CIT(A). The burden to prove his claims is on the assessee. It is this absence of primary material in the form of confirmation of the transaction and receipt by the owner, Sh. Paramdeep Singh, that led the tribunal (in the first round) to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale (of business), i.e., assuming so, is of no consequence. Rather, the agency having been transferred, why, and for what purpose, we wonder, should Sh. Paramdeep Singh issue another GPOA? The fact of the matter, and the point is, even as stated by the AO, the assessee is a lay man with no stated association/relation with Sh. Paramdeep Singh. There is, further, nothing to show of his experience or expertise in managing or running a gas agency, or in fact even a business. Why would, then, an owner issue a general power of attorney in his favour ? The doubts expressed by the AO in this regard are valid, serious, and credible. In fact, a power of attorney is ordinarily given to manage the affairs of the business, while in the present case the attorney holder realizes the business , the capital asset, to manage which it is given, itself. It is in fact not even shown that the owner was at the relevant time, i.e., entering the agreement to sell and the receipt of payment there-against, not available. Valuation of businesses, itself a highly sensitive and expert job, also requires balancing of interests of the opposing sides, and often the value agreed upon a result of a lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter, thus, whichever way one may look at it, is factually indeterminate . 5.4 The question that next arises is if any income could, in the facts and circumstances of the case, be assessed in the assessee s hands. The assessee s case is primarily based on the GPOA, so that the consideration (for the transfer of the gas Agency) received by him is not in his own right but only as an agent, for and on behalf of another, the owner. However, the assessee s claims of being a layman, with no means and, admittedly, no business experience, with the stated relationship of being an employee (of AGS) being found false, contradict his case of being a genuine power of attorney holder and, thus, the genuineness of the transaction. Be that as it may, if there indeed has been a transfer of the gas Agency during the relevant year, i.e., as per that stated, which could be verified from the registering authority, the truth of the assessee s assertion would stand borne out, and the genuineness of the transaction and, thus, the explanation furnished by the assessee, established. No income in such a case would be assessable in the assessee s hands, i.e., despite our observation as to the GPOA appearin ..... 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