Revenue's Burden of Proof: Appellant's Victory in Disputed Purchase Case

The Court ruled in favor of the appellant, holding that the revenue failed to prove the appellant purchased the demand drafts. The Court emphasized the revenue's burden of proof and found discrepancies in the evidence presented. As a result, the impugned orders were quashed, and the appeals were allowed in favor of the appellant.

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Issues:
Challenge to the addition made as unexplained investments on account of demand drafts allegedly purchased in cash.

Analysis:
1. The appellant challenged the addition of unexplained investments made by the Assessing Officer under section 69 of the Income Tax Act, concerning the purchase of demand drafts from two cooperative banks. The CIT(A) confirmed the assessment, leading to appeals before the Tribunal. The Tribunal directed the CIT(A) to verify the investment, prompting the current appeals.

2. The appellant's counsel argued that the revenue failed to prove the money belonged to the assessee, citing a Supreme Court decision emphasizing the burden of proof on the revenue. The counsel highlighted discrepancies in the evidence presented by the Assessing Officer, including a concession by an officer regarding the application forms' inaccuracies.

3. The respondent's counsel supported the impugned orders, stating that the bank manager confirmed the purchase of demand drafts by the assessee's employees. The appellant's failure to provide books of accounts and employee details was noted, with the respondent contending that the bank records supported the revenue's stance.

4. The Court referred to the Supreme Court decision cited by the appellant, emphasizing the revenue's burden to prove its case. The Court found the revenue failed to discharge this burden, especially in light of discrepancies in the evidence and the negative onus placed on the assessee by the CIT(A).

5. Ultimately, the Court held that the revenue did not prove the assessee purchased the demand drafts, leading to a ruling in favor of the assessee. The impugned orders were quashed, and the appeals were allowed in favor of the assessee.

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