2019 (11) TMI 1556 - AT - Income Tax

Tribunal Orders Reassessment, Stresses Fair Process and Burden of Proof on Taxpayer for Genuine Transaction Claims.

Shri J. Ashok Kumar & Sons Versus Vs. The Income Tax Officer, Non-Corporate Ward-10 (2), Chennai.

Shri J. Ashok Kumar & Sons Versus Vs. The Income Tax Officer, Non-Corporate Ward-10 (2), Chennai. - TMI Issues involved:1. Validity of addition made by the Assessing Officer regarding Long Term Capital Gain claimed by the assessee.2. Appeal against the order of the Commissioner of Income Tax (Appeals) dismissing the appeal of the assessee.3. Claim of exemption under Section 10(38) by the assessee.4. Assessment based on evidence collected by the Revenue without giving a fair opportunity to the assessee to prove the genuineness of the transactions.Detailed Analysis:1. The assessee appealed against the order of the Commissioner of Income Tax (Appeals) regarding the addition made by the Assessing Officer concerning Long Term Capital Gain claimed. The Assessing Officer concluded that the gains were a colorable device to bring unaccounted cash into the books without paying taxes. The CIT(A) dismissed the appeal based on circumstantial evidence. The Tribunal noted that the assessee should have been given a fair opportunity to prove the genuineness, emphasizing that the onus of proving exemption rests on the assessee. The Tribunal referred to relevant case law and remitted the issue for readjudication to determine the genuineness of the transactions.2. The appeal also challenged the CIT(A)'s decision to dismiss the claim of exemption under Section 10(38). The Tribunal observed that the assessee had not been provided with a fair chance to establish the genuineness of the transactions. The Tribunal emphasized that the burden of proof lies with the assessee to claim exemption from income tax. The Tribunal referred to previous judgments and directed the Assessing Officer to re-examine the issue after giving the assessee an opportunity to substantiate the case.3. The assessment was primarily based on evidence collected by the Revenue during investigations, without allowing the assessee a fair chance to prove the genuineness of the transactions. The Tribunal highlighted the importance of natural justice and the onus on the assessee to establish the right to exemption. The Tribunal directed the Assessing Officer to conduct a thorough inquiry and provide the assessee with the opportunity to present evidence and rebut any contrary evidence. The issue of exemption claim under Section 10(38) was remitted back to the Assessing Officer for re-adjudication.4. The Tribunal emphasized the need for the Assessing Officer to allow the assessee a fair opportunity to prove the genuineness of the transactions and establish the exemption claim under Section 10(38). The Tribunal referred to previous cases with similar issues and directed the Assessing Officer to conduct a detailed examination, considering all aspects and providing adequate opportunity to the assessee. The Tribunal partly allowed the appeal for statistical purposes and remitted the issue for re-adjudication by the Assessing Officer.In conclusion, the Tribunal's judgment focused on the importance of natural justice, the burden of proof on the assessee, and the need for a thorough examination of the genuineness of transactions before making additions or disallowances.