TaxTMI 
TaxTMI 
2014 (7) TMI 1312
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....y and the secondary market. During the course of assessment proceedings for the relevant year, initiated by the issue of notice u/s. 143(2) on 23.08.2000, it was called upon to furnish the names and addresses of the subbrokers to whom brokerage exceeding Rs. 50,000/- for the relevant year was paid. Though the assessee submitted the names of the brokers (44) as required, detailing the payments thereto (at a total of Rs. 74,05,267/-), their addresses stood not furnished by it despite a lapse of over six months and several reminders. The same was, accordingly, disallowed as being a bogus payment and, in any case, not subject to verification vide assessment order dated 28.03.2001 (PB pgs.47-63). The assessee furnishing the details, i.e., the names and addresses of the parties to whom the sub-brokerage was claimed to have been paid, save for Rs. 10,51,975/-, the ld. CIT(A) restricted the disallowance to the said amount, deleting as a result the disallowance for the balance of Rs. 63,53,292/- vide his appellate order dated 28.10.2005 (PB pgs. 63-76). In further appeal before the Tribunal, on this state of affairs being brought to its notice, the matter in its view was required to go back....
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....74,05,267/- to Rs. 10,51,975/- without giving any valid reason. 7.1 The AO disallowed the claim of brokerage by observing that neither the details of sub-broker have been filed nor proper vouchers have been filed. The CIT(A) allowed the brokerage paid to the parties, whose addresses were furnished by the assessee. 7.2 The ld DR has stated that no opportunity was given to the AO to verify the correctness of the brokerage paid to the parties, whose addresses were given before the CIT(A); therefore, the matter should be sent back to the file of the AO. On the other hand, the ld. counsel of the assessee stated that though on the basis of details the ld. CIT(A) has allowed relief to the assessee; however, for verification purposes, the matter can be sent to the file of the AO. 8. After considering the submissions and perusing the relevant material on record, we find that the matter should go back to the file of the AO to examine and verify the details filed before the CIT(A) as the ld. AO was not allowed any opportunity for the purpose of verification. Accordingly, we set aside the issue to the file of the AO to pass a fresh order after allowing reasonable opp....
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....respect to confirmations filed and notices issued Notices issued for 22,97,925 Parties attended and stated that old records not available 21,52,226 Parties to whom notice u/s. l33(6) could not be served 1,45,699 22,97,925 Details where confirmations not filed but notices issued Notices issued for 18,71,325 Notices served but parties did not respond l3,98,825 Notices served and party denied having received brokerage 2,25,000 Notices could not be served for 2,47,500 18,71,325' Note 1 Confirmations filed for 25,71,994 Confirmations not filed 26,54,460 Total 52,26,454 Admitted difference (59,103) Amount disallowed 51,67,351 3.5 The issue, as we discern, is with regard to the burden of proof, i.e., on whom lies the onus, and whether the same stands discharged, so that the same, being by its very nature not a static phenomenon but a continuously shifting or vacillating burden, has been shifted to the other. Towards this, our first observation is that the burden u/s.37(1) of the Act is squarely on the assessee in-as-much as it is for it to prove th....
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....sponding agreeably, i.e., with the assessee's record - with the A.O. having not acted upon the same, so that there is no reason or nothing on record to doubt the veracity or the authenticity of the information furnished by the payee. There is no such response in the instant case. As such, irrespective of whether the notices u/s.133(6) stand issued by the A.O. or not (which could again be for the reason of lack of proper address, etc.), the initial onus having not been discharged in its respect, expenditure to that extent, i.e., Rs. 26,54,460/-, stands to be disallowed. We decide accordingly. 3.6.2 We now take up the case where confirmations stand filed. Of the same, the A.O. has not issued notices to party/s, in respect of expenditure for Rs. 2,74,069/-. The initial onus having been discharged by the assessee, so that there is nothing on or brought on record to doubt or rebut the same by the Revenue, the expenditure to that extent is confirmed for being allowed. We decide accordingly. 3.6.3 We may next discuss the implication of the circumstance where notices stand issued by the A.O. (i.e., for Rs. 22.98 lacs). The same could not be served on one party, namely (as stated) Vas....
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.... our clear view, requires further verification to arrive at a conclusion one way or the other as to the veracity of the confirmation/s, besides of the corresponding (brokering) services having been rendered by the payees, and toward which the said expenditure stands claimed. It needs to be appreciated that the instant proceedings are set aside proceeding, so that the terms of the set aside shall continue to obtain, i.e., where and to the extent the matter is not decided either way on the basis of the findings in the set aside proceedings, including before us. The matter is, accordingly, set aside to the file of the A.O. to allow the assessee an opportunity to prove its claim qua the sub-brokerage for Rs. 21,52,226/-. We decide accordingly. 3.7 Before parting with this order, it may also be relevant to state that while one would be generally disinclined to favour a verification process years after the transaction, which in fact has its own limitations, the same cannot be stated or held as a matter of rule, and would be subject to other considerations impinging on the matter, including the peculiar facts and circumstances of the case. Put succinctly, there are legal constraints to....