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Issues:
1. Interpretation of the onus of proof in cases involving transfer of personal assets to evade tax on capital gains. 2. Whether the Appellate Tribunal was justified in not remitting the matter back to the Income-tax Officer for further examination. Analysis: The High Court of Andhra Pradesh addressed an income-tax case where the Revenue sought clarification on two questions related to the transfer of personal assets to evade tax on capital gains. The first question revolved around the onus of proof regarding the genuineness of the transfer, specifically whether the Appellate Tribunal was correct in placing the burden on the Revenue to prove that the transfer was not a device to evade tax. The court referred to a Supreme Court decision emphasizing that if a transfer is a mere ruse to convert assets into money for personal benefit without tax liability, authorities can scrutinize the transaction's genuineness. The court highlighted the need to consider various factors, such as the nature of the partnership and subsequent asset sale, to determine the legitimacy of the transfer. Regarding the second question, the Tribunal had declined to remit the matter back to the Income-tax Officer for further examination despite the Supreme Court's guidance on assessing transfers as potential tax evasion devices. The Tribunal reasoned that the onus to prove the transfer as a device to evade tax lies with the Revenue, and in the absence of prohibited actions by the assessee, the burden does not shift. The court found both questions raised by the Revenue to be legal in nature and directed the Tribunal to refer them for the court's opinion. The judgment concluded by allowing the income-tax case in favor of the Revenue, indicating the significance of correctly establishing the genuineness of asset transfers to prevent tax evasion.
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