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TMI Blog2010 (12) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... ference of money being undisclosed income of the assessee - the burden on the assessee which he failed to discharge and, therefore, test of human probabilities could be relied upon to reject the claim of the assessee that income was generated from the source of sale of shares which was exempted from tax under section 54F of the Act. - Decded against the assessee - IT APPEAL NO. 912 OF 2008 - - - Dated:- 22-12-2010 - ADARSH KUMAR GOEL AND AJAY KUMAR MITTAL, JJ. Vivek Sethi for the Appellant. D.K. Goel for the Respondent. ORDER Adarsh Kumar Goel, J. This appeal has been preferred by the revenue under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") against order dated 12-10-2007 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares had taken place. On receiving this information, the Assessing Officer issued a notice under section 148 of the Act for the re-assessment and issued a questionnaire with regard to the claim of the assessee for capital gain. The assessee was confronted with the information received by the assessing officer. The assessee denied that the transaction was sham and claimed the same to be genuine. However, neither the assessee was able to furnish the details of persons to whom shares were sold nor dispute the information that there was no entry in the share register about the transaction in question and also that the alleged broker was not registered with the Kanpur Stock Exchange. In the circumstances, the Assessing Officer held that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-assessment the burden was on the revenue to prove that the transaction was not genuine. The appeal of the revenue against the order of the CIT(A) was dismissed by the Tribunal. It observed : "11. We have heard the parties and have perused the material on record. Undisputedly, the Assessing Officer refused the cross examination of Sh. Satish Goel, proprietor of M/s R.K. Aggarwal Co., to the assessee. He did so, observing inter-alia, that ".....there is no provision for permitting a cross examination of the person, whose statement is recorded during survey or in response to notice under section 131. The burden is rather on the assessee to call upon the share broker in whose name the alleged sales were made to prove the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-96, the Chandigarh Tribunal, vide its order dated 7-10-2004 (copy at APB 41 to 46) held, following Krishin Chand Chela Ram v. CIT 125 ITR 713 (SC) that if any evidence sought to be used against the assessee, is not shown to him and an opportunity to controvert the same is not given to the assessee, that evidence shall not be admitted in support of the addition; that the Income-tax Authorities are bound to accede to the assessee's request and if they did not do so, the addition cannot be sustained in the absence of any other evidence in support of it. 13. In M/s Sanjay Kumar Bansal v. ITO in ITA No. 1476(Delhi)/2004, for the assessment year 1995-96, the SMC-1 Delhi Bench of the Tribunal, vide its order dated 29-10-2004 (copy at APB 42 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is so. The denial of cross examination by the assessee of a statement recorded at the back of the assessee is nothing but violation of the principles of natural justice. ''Audi alteram partem'- hear the other party meaning that nobody shall be condemned unheard. This is the basic dictum of natural justice requiring affording of due opportunity to a party to rebut the material sought to be used against him. This basic principle was not complied with by the Assessing Officer in the present case, which action was correctly rectified by the ld. CIT(A) by virtue of the impugned order. Therefore, finding no error in the action of the ld. CIT(A), we hereby upholding the same. The grievance of the department is, therefore, rejected." We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held by the Hon'ble Supreme Court in Sumati Dayal's case (supra). In these circumstances the mere fact that Satish Goel, proprietor of M/s R.K. Aggarwal Co., the alleged broker was not produced by the department for cross examination did not provide sufficient basis for proving genuineness of transaction by drawing adverse inference against the revenue as held by the CIT(A) and the Tribunal. The reassessment could stand independent of the evidence of Satish Goel in view of failure of the assessee to prove genuineness of his transaction. 5. Learned counsel for the assessee supported the view taken by the CIT(A) and the Tribunal. 6. We have considered the rival submissions. 7. It is well settled that burden of proving genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X
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