TaxTMI 
TaxTMI 
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?
Sham Transaction
08 Jan 2015 
2 Replies 
1809 Views Asked by
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. (AI Summary)
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. (AI Summary)