2008 (12) TMI 32 - HC - Income Tax

High Court upholds Tribunal decision on jewellery sale authenticity, shifts onus to Revenue

Commissioner of Income Tax, Chandigarh-II Versus Sh. Harbans Lal Sarna

The High Court dismissed the Revenue's appeal under Section 260A of the Income Tax Act, upholding the Tribunal's decision regarding the genuineness of the ... Search and seizure – assessee claimed sale of jewellery as source of income, which was alleged to be un-disclosed income - AO did not accept the explanation of the assessee - I.T.A.T. holding that assessee had discharged his onus of explaining genuineness of the sale of jewellery to M/s RKE - finding of the Tribunal is a finding of fact based on appreciation of evidence and material on record – revenue’s appeal is dismissed Issues:1. Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.2. Dispute regarding the genuineness of the sale of jewellery to a company.3. Assessment of un-disclosed income and search and seizure operations.4. Shift of onus from assessee to revenue.5. Comparison with similar transactions in other cases.6. Tribunal's finding as a finding of fact.Analysis:1. The appeal was filed by the Revenue under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh. The substantial question of law proposed to be raised was whether the Tribunal was justified in holding that the assessee had explained the genuineness of the sale of jewellery to a company, despite evidence gathered by the Department suggesting otherwise.2. The dispute revolved around the assessee claiming the sale of jewellery as a source of income, which was initially considered as undisclosed income discovered during a search and seizure at the residence of a company director. The Assessing Officer and CIT (A) did not accept the explanation provided by the assessee, but the Tribunal found the explanation to be genuine based on the evidence presented.3. The Tribunal emphasized that the onus shifted to the revenue to disprove the assessee's case after receiving material confirming the transaction from the company director. Despite investigations and search operations, the revenue failed to provide adequate evidence against the assessee. The Tribunal highlighted the acceptance of similar transactions in other cases, further supporting the genuineness of the sale.4. The Tribunal's decision was based on a thorough evaluation of the evidence and material on record, leading to a finding of fact. The High Court, after hearing the arguments from the Revenue, concluded that no substantial question of law arose from the Tribunal's findings and dismissed the appeal.In conclusion, the judgment upheld the Tribunal's decision, emphasizing the importance of evidence and the shift of onus to the revenue to disprove the assessee's explanation. The comparison with similar transactions in other cases further strengthened the assessee's position, leading to the dismissal of the Revenue's appeal by the High Court.