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TMI Blog2019 (9) TMI 1513X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to exemption must be established by those who seek it, the onus therefore lies on the assessee. In order to claim the exemption from payment of income tax, the assessee had to put before the Income Tax authorities proper materials which would enable them to come to a conclusion. AO must keep in mind that the onus of proving the exemption rests on the assessee. If the AO does have any evidence to the contrary, it is to be put to the assessee for his rebuttal. The internal communications of the Revenue are evidences for drawing an opinion on possible wrong claims but they are not the final evidence. AO shall require the assessee; to establish who, with whom, how and in what circumstances the impugned transactions were carried out etc., to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was rigged and manipulated for the sole purpose of conversion of unaccounted income into apparently genuine income and claiming the same as an exempt income and hence required the assessee to show cause as to why the amount claimed as an exempt income be not taxed etc. After considering assessee's reply etc., completed the assessment primarily based on the investigation report and rejected the assessee's exemption claim. Aggrieved, the assessee filed an appeal before the CIT(A). The Ld CIT(A) dismissed the appeal. Aggrieved against that order, the assessee filed this appeal. 3. It was submitted by ld.AR that the issue in this appeal is against the action of the ld. CIT(A) in confirming the additions made by the Assessing Officer in treatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind that the onus of proving the exemption rests on the assessee. If the AO does have any evidence to the contrary, it is to be put to the assessee for his rebuttal. The internal communications of the Revenue are evidences for drawing an opinion on possible wrong claims but they are not the final evidence. This Tribunal in the case of Kanhaiyalal & Sons (HUF) v. ITO in I.T.A. No. 1849/Chny/2018 dated 06.02.2019, has remitted back the matter to the file of the Assessing Officer for reconsideration. This Tribunal has observed at para 4 of its order as under:- 4. We heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative also. Admittedly, the Assessing Officer disallowed the claim of the assessees on the basis of the information s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA Nos. 2786 & 2787/Mds/2017 dated 03.05.2018. The relevant portions from that order is extracted as under :- 9. A perusal of the facts in the present case admittedly given room for suspicion. However, assessments are not to be done on the basis of mere suspicion. It has to be supported by facts and the facts are unfortunately not forthcoming in the Assessment Order, in the order of the Ld.CIT(A) nor from the side of the assessee. The main foundation of the assessment in the present case is the statement of one Shri Ashok Kumar Kayan who has admitted to have provided bogus Long Term Capital Gains to his clients. The said Shri Ashok Kumar Kayan also allegedly seems to have provided the assessee's name and PAN as one of the beneficiarie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er at Para No.7.1 shows that in the Written Submissions, the assessee states that he has purchased 15000 shares of M/s. BPL from M/s. ABPL, Kolkata. However, in Para No.8.3, it is mentioned that the assessee in good faith has purchased the shares of M/s. BPL from a sub-broker in his friends circle. What is the true nature of the transaction? From whom did the assessee actually purchase the shares? Did the assessee take possession of the shares in its physical form? In Para No.8.1 of the Assessment Order, it is mentioned that the assessee is an investor and has been regularly trading in shares. If this is so, does the demat account show such transactions being done by the assessee or is this the only one of transaction. Thus, clearly the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue from Shri Ashok Kumar Kayan cannot be used as an evidence against the assessee in so far as the statement has not been given to the assessee nor has Shri Ashok Kumar Kayan been provided to the assessee for cross-examination. However, the assessee shall prove the transaction of the Long Term Capital Gains in respect of which the assessee has claimed the exemption u/s.10(38) by providing all such evidences as required by the AO to substantiate the claim as also by producing the persons through whom the assessee has undertaken the transaction of the purchase and sale of the shares which would include the sub-broker, friend and the broker through whom the transaction has been done, before the AO for examination. 13. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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