2004 (6) TMI 266 - AT - Income Tax

Unexplained credits in bank account - HELD THAT - The assessee has sold investment made in shares. Necessary details as called for have been filed. On going through the assessment order it is observed that nothing wrong or incorrect in the documents and information submitted by the assessee was found. The assessee has made sale of shares and has received payment in the normal course by account payee cheque. All the facts are borne on record and accordingly the assessee has discharged his onus. On the other hand, the AO has not brought any material in support of his allegation that the transaction was not genuine. The mere reliance on the statement of third parties who were never examined by the AO himself cannot be held to be sufficient to come to the finding that the transaction was not genuine and moreso when there are other material and evidence to support the transaction. It is settled law that suspicion howsoever strong cannot take the place of legal proof as has been held by the Hon'ble Supreme Court in the case of Uma Charan Shaw Ors. vs. CIT 1959 (5) TMI 11 - SUPREME COURT . In this case, the AO has not brought any evidence which can even remotely suggest that the material placed before him was unreliable, suffered from defects or were inconsistent. The learned Departmental Representative also could not point out any infirmity in the findings given by the CIT(A) as well as the documents and evidence filed in support of the transaction. Accordingly, I do not find any scope to interfere in the findings of the learned CIT(A), deleting the addition. In the result, Revenue's appeal stands dismissed.

Summary

Issues involved: Appeal against deletion of addition made under section 68 of the IT Act, 1961 for unexplained credits in assessee's bank account.

Summary:
The assessment was reopened based on information received regarding alleged false long-term capital gain transactions. The AO concluded the reported shares transaction was not genuine, adding the credited amount in the bank account as unexplained credit. The CIT(A) deleted the addition, stating the AO failed to prove the transaction was bogus and shifted the onus improperly. The Revenue appealed, arguing the CIT(A) wrongly shifted the onus. The assessee provided evidence supporting the share transactions, including purchase and sale details, which were accepted in previous assessments. The AO relied on third-party statements without concrete evidence, leading to the deletion of the addition by the CIT(A). The Tribunal upheld the CIT(A)'s decision, noting the lack of evidence supporting the AO's claim of non-genuineness, emphasizing that suspicion cannot replace legal proof. The Revenue's appeal was dismissed.