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2015 (4) TMI 333 - HC - Income TaxReceipt in alleged repayment of the dues of the assessee and a receipt of sale of shares both in cash - ITAT deleted the addition - Held that - The judgement of the Assessing Officer and the CIT(A) disclose in no uncertain terms that the evidence including steps which the assessee could have taken were not resorted to. Therefore, the Assessing Officer was entitled in law to draw an adverse inference which is authorized by Section 114(g) of the Evidence Act which permits a presumption as follows That evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it; For the reasons aforesaid, we are of the opinion that the judgement under challenge cannot be sustained and, therefore, judgement of the Tribunal is set aside. The judgement of the CIT(A) that AO has rightly held that There is no material on record to show that cash of ₹ 21,55,950/- was received on sale of share. Similarly, there is no evidence on record to show that cash of ₹ 10,61,834/- was received from M/s. M L Dhingra & Associates. Confirmation from the said party was not filed before the AO is restored. - Decided against assessee.
Issues:
1. Whether the addition of a sum on account of a receipt in alleged repayment of dues and a receipt of sale of shares in cash was correctly deleted by the Income Tax Appellate Tribunal. 2. Whether the Assessing Officer was justified in treating the receipts as income of the assessee. 3. Whether the burden of proof was discharged by the assessee regarding the source of cash deposits. Analysis: 1. The High Court analyzed the appeal against the Income Tax Appellate Tribunal's decision to delete the addition of sums related to alleged repayment of dues and sale of shares in cash. The Tribunal held that once the assessee produced details of the transactions, the burden shifted to the Revenue to prove otherwise. The Court noted that the Revenue contended the Tribunal's order was contrary to the statute. The Court emphasized that the explanations provided by the assessee were not satisfactory to the Assessing Officer, leading to the addition of the amounts as income. The Court ultimately found that the Tribunal's decision was not sustainable, and the CIT(A)'s judgment was restored. 2. The Court examined whether the Assessing Officer was justified in treating the receipts as income of the assessee. The respondent-assessee argued that explanations were furnished, and if the Assessing Officer was not satisfied, he should have conducted further inquiries. However, the Court noted that the evidence, including steps that the assessee could have taken to prove the transactions, were not presented. The Court referred to Section 114(g) of the Evidence Act, which allows for an adverse inference when evidence that could be produced is withheld. Consequently, the Court found that the Assessing Officer was entitled to draw an adverse inference due to the lack of evidence from the assessee. 3. Regarding the burden of proof on the source of cash deposits, the Court highlighted that the assessee did not discharge this burden satisfactorily. The Court pointed out that the assessee could have produced essential documents such as sold notes for the shares sold through a broker and could have applied for summons to examine relevant parties involved in the transactions. By failing to provide such evidence within his power, the assessee did not meet the standard required by law to satisfy the Assessing Officer. The Court distinguished previous judgments cited by the respondent's counsel, emphasizing the specific circumstances of the case at hand. In conclusion, the High Court set aside the Tribunal's judgment and restored the CIT(A)'s decision based on the assessee's failure to discharge the burden of proof regarding the source of cash deposits and the lack of satisfactory evidence presented during the assessment proceedings.
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