Sham Transaction

[MALAY CHATURVEDI]

How an alleged sham transaction shall be deemed to be legally rebutted?.

or What are the ingredients to prove a alleged sham transaction to prove as genuine transaction ?.

or what constitutes sham transaction?

[Kailash Singhal]

FIRST THING IF TRANSACTION IS SHAM THEN NO POINT LEFT .

IN CASE DEPARTMENT IS TAKING THE VIEW ON THE BASIS OF OTHER PARTY DOCUMENTS, DIARY OR STATEMENT THEN ------DEALER / MFG HAS TO SHOW WEIGHMENT SLIP, CHEQUE PAYMENT DETAILS, BROKER DETAILS -- IF ANY , PRODUCTION DETAILS, FREIGHT PAYMENT, WAY BILL AND ASK FOR CROSS EXAMINATION WITH HOLDER/ OWNER OF DOCUMENTS --- BECAUSE DAIRY OF ONE PARTY SHOWS SOME NAME THEN DEPTT MAY ISSUE SUMMONS TO ALL PARTIES FROM THAT PARTY PURCHASES GOODS REGARDS CA KC SINGHAL, SILVASSA, 9824102121

[MALAY CHATURVEDI]

Mr. Kailash

​Is your response is qua quarry?

AI Summary

Sham transaction rebuttal requires documentary proof and cross examination opportunities to establish genuine commercial activity and intent. Allegations of a sham transaction are rebutted by presenting primary transactional records - weighment slips, payment instruments, broker details, production records, freight payments and waybills - to demonstrate delivery, payment and receipt chains. Where the department relies on third party documents or diaries, the taxpayer should seek cross examination of the document holders to test authenticity and provenance; establishing consistent production and movement records and traceable payments addresses the factual basis for a sham characterization.