Burden of Proof

Burden of proof

What is meant by saying that the Evidence Act is not applicable to the proceedings under the Income-tax Act is that the rigour of the rules of evidence contained in Evidence Act is not

Burden of proof
..applicable,

but that does not mean that if the taxing authorities are desirous of invoking the provisions of that Act in proceedings before them, they are not prevented from doing so.

Burden of proof

If a fact has to be proved, the person whose interest it is to prove it, should adduce

some evidence, however slight, upon which a Court could find the fact

Burden of proof

As the facts decide the taxability /non taxability of the amount /person-inquestion,so, it is necessary that burden should discharged by the party claiming taxability or otherwise .

Burden of proof
Doctrine - party who desires to move the Court must prove facts -is subject to two exceptions-

i)He is not required to prove such facts as are especially within the

knowledge of the other party.

ii)He is not required to prove the allegations in respect of which there is any

presumption of law or of fact.

Burden of proof

*The

burden of proof lies on the party substantially asserting it not upon the party who denies it. It is diffucult to prove a negative.

Burden of proof

So, if a party in possession of best evidence withholds it the court draws an adverse inference against him Notwithstanding that the onus of proof does not lie on him.

Burden of proof

In such cases party cannot rely on abstract doctrine of onus of proof Or On the fact that he was not called upon to produce it in such a case.

Burden of proof

Similarly, the plaintiff can not take advantage of the weakness of the defence. The plaintiff case must stand or fall upon the evidence adduced by him

Burden of proof

In issue regarding bonafide and genuine /sham -bogus transaction, the burden of proof would be on the party alleging it to be sham.Similarly, burden of

establishing mala fide is very heavy on the person who alleges it.

Burden of proof

Fraud ,like any other charges of criminal offence, whether made in Criminal or Civil Proceedings must be established beyond

reasonable doubt by the person alleging it.

Burden of proof
S.106.

When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.

Burden of proof
Facts *Property

purchased by wife of the assessee while he was abroad. *AO made addition. *Tribunal deleted addition as he had not discharged his Burden. AO should have proved with help of facts and figures that the investment was made by the assessee.

Burden of proof
In our judgment,the Tribunal went wrong in the above direction and that too erroneously changing the onus of proof...Certain facts

by their very nature can only be known by a person and in regard thereto the burden can not be shifted
to Revenue (223 ITR 550: 142 Taxtion 602-Ker.)

Burden of proof
S.110 - When

the question is whether any person is owner of anything of which he is shown to be in possession, the burden of proving that he is not the owner is on the person who affirms that he is not the owner.

Burden of proof

This is based on the well known principle that possession is prima facie proof of ownership.

All that section 110 of the Evidence Act does is that it embodies a salutary principle of common law jurisprudence which could be attracted to a set of circumstances that satisfy its condition.

Burden of proof S.114 -The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the

facts of the particular case.

Burden of proof

Sections 104 to 113 direct on whom burden of proof will lie. No option is given to the court as to whether it will presume the fact or not.

Presumption

Sec.114 is a permissive and not a mandatory section. Court may refuse to raise a presumption in a particular case although

such a presumption might have been properly raised in other cases.

Presumption

Sec. permits the court to raise a presumption with regard to oral evidence as well as documentary evidence.

Presumption

A presumption is not evidence or proof. It may shift the burden of proof, and it may be rebutted not only by evidence but also by presumption of law or fact.

A presumption is an inference of fact drawn from other known or proved facts. It is a rule of law under which courts are authorized to draw a particular inference from a particular fact.

Presumption

Presumptions may be either of law or fact, and when of law may be either conclusive or rebuttable but when of fact are always rebuttable. Mixed presumption are those which are partly of law and partly of fact.

Presumption

Rules of presumption are deduced from enlightened human knowledge and experience and are drawn from the connection, relation and consideration of facts and circumstances.

Presumption

May presume leaves it to the discretion of the court to make the presumption according to the circumstances of the case.
(287 ITR 209- SC)

Presumption Shall presume leaves no option with the court not to make the presumption. The court is bound to take the fact as proved until evidence is given to disprove it. In this sense such presumption is also rebuttable.

Presumption
Conclusive proof gives an artificial probative effect by the law to certain facts. No evidence is

allowed to be produced with a view to combatting that effect. In this sense, this is an

irrebuttable presumption.

Presumption
Sumati Dayal(214 ITR 801:1995 AIR SC 2109: 125 CTR 124: 80 Taxman89:125Taxation 446)

Assessee claimed to have won horse races on 13 occasions out of which ten winnings were

from jackpots and three were from treble events.

Presumption

(Enlightened human knowledge and experience principle) .A jackpot is a stake of five events in a single day and one can believe a regular and experienced punter clearing a jackpot occasionally.

Presumption
but the claim of the assessee of having won a number of jackpots in three or four seasons not merely at one place but at three different centres- Madras, Bangalore and Hyderabad appeared, prima facie, to be wild and contrary to statistical theories and experience of frequencies and probabilities. .

Presumption . settlement Commission after considering the surrounding circumstances and applying the test of human probabilities had rightly concluded that the appellant's claim about the amount being her winnings from races was not genuine.

Presumption Sec.132 (4A) raises a presumption that documents found during search belong to the person searched.

Sec.292C provides for presumption as to assets, books of account, etc., found during search/survey operations.

Presumption
(321 ITR 254) ..there

was a presumption that the contents of the document were true, as the document was seized from the premises in the control of the assessee and the document belonged to

presumption ought to have been rebutted by the assessee.

the assessee. ..The

Presumption
. assessee

at the first available opportunity did not deny the existence of the document nor did the assessee at any subsequent stage of appeal or before the court deny the document. The only contention raised was that the transaction was not given effect to.

Presumption Sec.278E provides that for prosecution of the offence under the Act which requires a culpable state of mind on the part of the accused, the court shall presume the existence of such mental state.(254 ITR 388-Del.N K Jain)

Presumption
The rule of evidence thus stands changed by the above section. In the prosecution for an offence under the Act, it is for the accused to

prove his defence, which he can do by cross-examining the prosecution witnesses or by leading defence evidence.

Presumption

magistrate was conscious of the fact that the presumption under section 278E of the Act operated and therefore, at that prima facie stage, the court had to presume the culpable mental state of the accused.
(290 ITR 55 Mad J.Jaylalita-276 CC)

Presumption
Contention raised by the assessee - by filing returns within the time prescribed in the notice u/s.148 he was exonerated from prosecution under section 276CC for not filing the returns within the statutory due date Sec.139(1) of the Act was not tenable. (327.226 Mad)

In view of the presumption under section 278E of the Act of culpable mental state.

Presumption .the burden was on the assessee to show that there was no wilful default. The absence of such mental state could be pleaded by the assessee as a defence and it was for the trial court to decide the issue at the stage of conclusion of trial.

Presumption During a survey operation at the business premises of the assessee excess stock was

found.The AO treated the stock as undisclosed investment of the assessee and made an addition..

Presumption .CIT(A) deleted the addition on the ground that the evidence submitted by the assessee was neither proved by the Assessing Officer to be false or bogus

nor genuineness of the transactions doubted.

Burden of proof

It was held that a presumption taking the stock as sales outside the books was not justified.(319 ITR 396)

Presumption

322.ITR 309 There is no

presumption that the delay in approaching the court is always deliberate.

Presumption 319 ITR 228 AAR -A non-resident Co.agreed to an Indian company a non-exclusive perpetual irrevocable right to use the know-how as well as to transfer the ownership in tread and sidewall designs and patterns required for the manufacture of radial tyres for a lump sum .

Presumption
The documents which were sent through courier were received in India. The delivery of the documents was conditional on Indian Company presenting certain documents to the courier. Indian Company derived the right under the agreement only on the date that they were received in India

Presumption
. the

transfer was not complete till then. In the absence of any material, the reasonable presumption to be drawn was that the delivery of various documents which was an integral part of the agreement signed in India would take place in India.

Presumption If there were funds available both interest-free and overdraft and/or loans taken, then a presumption arises -investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments.

Presumption

When an assessee produces his books of account before AO in support of a return, there is an initial presumption

in his favour that the books have not been fabricated.

Presumption

This presumption is an application of the general presumption which the law raises against misconduct of every kind, including crime, fraud, forgery, dishonesty and fabrication.

Presumption

But when the AO puts in issue before the assessee about truth of an entry in the books, the principle of Section 106 of the Evidence Act commences to operate

Presumption
and

the transaction under reference being a fact peculiarly and solely within the knowledge of the assessee the

onus of proving the correctness of the entry shifts to the assessee.

Presumption
If presumption of accuracy is attached to balance sheet and profit and loss account and not to auditors certificate, then mere production of auditors certificate will not be conclusive. Burden

of proof as to correctness of balance sheet and profit and loss account is on company.

Section 69

Sec.69 is a deeming provision and it cannot be extended to the penalty proceedings. AO can not presume that there is a concealment.

Section 69

There must be an independent finding. Mere rejection of explanation would not be a ground for levying penalty.

(327ITR 477 Mad. Proprty purchased jointly )

Section 69

If assessee refuses to produce account books regarding remittances from foreign branches presumption is that remittances are out of profits

Section 69

The question of burden of proof cannot be made to depend exclusively upon the fact of a credit entry in the name of the assessee or in the name of a third party

Burden of A O Receipts items covered by Charging Sections of taxation laws i.e. Receipt

under consideration is Revenue is to be proved by Revenue.

(125.713 SC T T Transfer matter) (241.363 Mad.bank stt.matter)

Two S C cases of Excise Matters Article /Thing to taxed,if Goods.

Crude PVC & Particular starch (Glucose) are goods in market has to
(Bhor Industries-184.129)

be proved by AO.

(185.87)

The onus lies on the Revenue to bring on record, cogent material/evidence to establish that the trust /charitable institution is hit by the provisions of section 13.

Department has to be specific about the name of the beneficiary and had thereafter to place facts on record to

establish that such a person fell in the category of prohibited persons.

(279.89-All.Kamla Town matter)

Burden is not on the assessee to prove that the debt has gone bad and the deduction can be claimed in the year it is written off in the books of account as irrecoverable. If AO wants to disallow it he has to arrive at a conclusion that the decision was not bona fide. (Oman Int.)

To invoke Sec.40A(2)(a)AO has to prove that expenditure is be excessive or unreasonable having

regard to the fair market value of the goods, services or facilities ..

Burden of proof-Assessee

The burden of proving that a particular income has its origin in a capital source lies upon the assessee, for it is within his particular knowledge to know that fact.

Burden of proof

If he claims that the income is from a specified capital source and fails to prove it, it is not incumbent on the Income-tax Officer to prove that the income is from revenue sources.

Burden of proof

If he accepts that the income is from a revenue source but seeks to claim exemption the burden is again on him to bring it within the four corners of the exemption.

Burden of proof

As per established law -it is for the assessee to prove that the incoming receipt is exempt from taxation.
(1 ITR 182 All.-Intt.Narayandas Mohanlal , 2 ITR 121 Ran.-Bengali Urban 5 ITR 307 Lahore /Security income /Amritsar Produce Exchange.)

Burden of proof

In order to claim an exemption in respect of agricultural income, it is the assessee who has to place before the AO proper material enabling him to come to the conclusion that the it is Agricultural income.

Burden of proof
29 ITR 529 (SC)- ..it

was not for the IT authorities to prove that it was not agricultural income, and that the High Court therefore erroneously placed the burden of proof on the Department *35 ITR 312(SC)- It is for the assessee to prove that the income sought to be taxed is agricultural income ( tree-matter*)

(R Vankataswamy- cows- pasture milk- income = 29.529)

Burden of proof

When the assessee is claims exemption, burden is on him to produce relevant materials and to claim exemption
[w.r.t.sec.10(22)]
(296 .492 Ker- Charitable intitute? )

Burden of proof
Exemption claim u/s. 5(1)(xiv) of G T Act was

Where an assessee claims an exemption under the Gift-tax Act, the burden of proving facts which entitle him to the exemption lies on him.
made by the assessee. SC held
(74.328)

Burden of proof In absence of non-furnishing of particulars by the assessee to claim the benefit u/s. 80-O, the claim could not be accepted,

because burden to prove entitlement of exemption is on the assessee .

(323.151 kar-Wipro)

If a Co-op.soc.claims that it is entitled to deduction u/s. 80P(2) (a) onus is on it to prove that income earned by the society has a direct or proximate nexus or connection with the business of the society.

The burden is on the assessee, which is seeking to claim benefit of exemption to show that it is covered by the said exemption.
(245.616-AP )

Burden of proof

When an assessee claims that a particular expenditure is for the purpose of business, the burden to establish it prima facie lies on the assessee to place on record the material in support of this claim.

Burden of proof Sec.37 deals with the question relating to the allowability of the expenditure incurred for the purposes of business. The onus

of proof is upon the assessee to prove each of the following ingredients -

Burden of proof

(a) the item of expenditure must not be of the nature described under sections 30 to 36 of the Act ; (b) the item of expenditure must not be in the nature of capital or personal expenses of the assessee ;

Burden of proof (c) the expenditure must be laid out wholly and exclusively for the purpose of business or profession. If the assessee fails to satisfy any of these tests, the expenditure claimed is not

allowable. ( 256 ITR 134 Bom- Ramanand Sagar)

Burden of proof
Assessee engaged in the business of printing and publishing of newspapers and periodicals created a charitable trust- with

the object to grant relief and aid to persons affected by natural calamities.

Burden of proof
Assessee

contributed Rs. 26.94 lakhs to the trust and the amount was spent in reconstructing and rehabilitating the victims of the earthquake.

Burden of proof
burden is entirely on the assessee to establish that the amount laid out or expended by the assessee was wholly or exclusively used for the purpose of its business..The mere fact that indirectly the assessee earned goodwill of the victims and the general public.

Burden of proof did not mean that the expenditure incurred by the assessee was wholly or exclusively for business purpose. The contribution made by the assessee would not allowable under section 37(1).
(80G was allowed-284.69 ker.Malayam Manorama)

Burden of proof Mere payment by itself would not entitle the assessee to deduction of expenditure unless the same was proved to be paid for commercial considerations. The

burden of proof is always upon the assessee

Burden of proof ..it is for the taxpayer to establish by evidence that a particular allowance is justified. It is not for the AO to independently collect evidence and prove that

the deduction claimed by the assessee is baseless.

Burden of proof Assessee has to prove that incurred expenditure is for commercial cosideration.In Transport corporation of India matter A P HC upheld the decision of the AO to disallow the payment made on a/c. of Secret commission. (256.701)

Burden of proof Burden is always on the assessee to produce relevant documents to prove embezzlement-the date on
which the assessee detectes the inflated expenses vouchers,circumstances under which he detectes the embezzlement, letter of termination and date of filing of police complaint etc.

Burden of proof
As the assessee was not able to substantiate that sending a person for training abroad was for the benefit of the business of the assessee, so expenditure not deductible ii) Burden

(328.290)

is on the assesee to prove that expenditure on education of director's son / foreign travel of wife of director/medical expense has nexus with assessee's business.

Burden of proof

Regarding purchases made by the assessee from the persons falling under the category under section 40A(2)(b) the burden is upon the assessee to establish that the price paid by it is not excessive or.

Burden of proof
unreasonable.

In cases falling under section 40A(2)(b) it is the duty of the assessee to prove and discharge its burden by leading proper evidence subject to cross-examination by the Department.

(261.258-Bom. Satrunjay- Average cost price of rough diamomds)

Burden of proof

An assessee who claims depreciation has to satisfy the Revenue, that he is entitled for grant of depreciation on items claimed by it. The burden of

proof is on the assessee.

Burden of proof
Facts-

Transaction of sale and immediate lease of heavy machinery to vendor. No registration of sale No identification of machinery Lessor claiming full depreciation
(266ITR 178 KAR)

Burden of proof Burden is not on the assessee to prove that the debt has gone bad and the deduction can be claimed in the year it is written off in the books of account as irrecoverable. If AO wants to disallow it he has to arrive at a conclusion that the decision was not bona fide.

Burden of proof
As against the purchase price disclosed by the assessee in a sale deed ,if AO intends to adopt the purchase price according to stamp duty paid and to hold that the assessee must have paid over and above the purchase price disclosed in the sale deed -burden

is on him to prove that valuation done by State agency for the purpose of stamp duty is the real sale consideration .

Burden of proof
AO was obliged to bring on record positive

evidence supporting the price assessed by the State Government for the purpose of stamp duty. In the absence of any

legally acceptable evidence the valuation done for the purpose of Sec.50C would not represent the actual consideration passed on to the seller. (323 ITR 510 P & H)

Burden of proof
Difference between market value and consideration declared not sufficient to make an addition.Assessee must be shown to have received more than what is declared or disclosed by him as consideratio. Burden of proof lies on Department. (131 ITR 597 SC about Sec.52(2)- deleted Section)

Burden of proof

There is no presumption in law that an amount standing in the name of the wife belongs to the husband the onus of proof in such a case will not be on the assessee....

Burden of proof

but will be on the AO to show by at least some material that the amount standing in the name of the assessee's wife does not belong to her but

belongs to the assessee.

Burden of proof

Onus is on the Co.to prove that it derives 51% or more of its income from production / manufacturing activities and thus is an Industrial Companyentitled for lower tax-rate.(The burden to
prove that the assessee is such a company is on the assessee itself. 258.106 Mad.)

Burden of proof
..since

the assessee had not placed before the taxing authorities a detailed description of the process ...and the assessee had not established that its activities amounted to processes involving production or manufacture, the assessee was not an industrial company. (252 ITR 658 SC)

Burden of proof Onus of proving that assessee is resident of India lies upon the department. But, once his residential status is established or admitted, the onus shifts to him

to prove that he was NRI/NOR,if he claims such status . (300-231 sc)

Burden of proof

Documents furnished to banks or other agencies or statement recorded in some other connection can not form basis for addition or treating an amount a revenue.

recipt.Without

corroborative evidences it is rebuttable presumption.AO has to prove that receipt in question was from unexplained sources.(241 ITR 363- Mad)

Burden of proof But,When an assessee who is required to explain a sum credited in his books as capital, offers an explanation which is false and unbelievable, there is nothing in law which casts the burden of proof on the AO

Burden of proof
..or

the appellate authority to prove by positive evidence that the sum represents income assessable to tax. AO is not prevented from basing his conclusion on circumstantial evidence.

Burden of proof

AO ,not the assessee,has to prove that Single and isolated transaction is Adventure in the nature of trade.In Dalamia Cement
Ltd. matter AO had proved that disputed amount was revenue receipt,so his stand was upheld even by the SC. (105 ITR 633)

Cash Credit/ Unexplained moey/inv/exp

Statutory provision (Sec.68 to 69 C)are merely clarificatory in nature, these sections embody rules of evidence which are even otherwise quite clear.

Cash Credit/ Unexplained moey/inv/exp Sec.68 is recognition of provisions of Evi.Act Sec.106.

.and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory..

Cash Credit/ Unexplained moey/inv/exp

Entries in the books is considered prima facie evidence against the assessee.
AO is not required to produce positive evidence to prove geneuiness of the entries appearing in the Books of the assessee.

Cash Credit/ Unexplained moey/inv/exp Considering circumstantial evidence he can decide the matter. In a case Del HC observed The defence of trade credit set up by the

assessee was against normal human conduct as no petty

supplier/commission agent/fruit vendor would give money four to nine months in advance for supply of vegetables.

Cash Credit/ Unexplained moey/inv/exp

A delicate balance must be maintained while walking the tightrope of sections 68 and 69 of the Act. The burden of proof can seldom be discharged to the hilt by the assessee

Cash Credit/ Unexplained moey/inv/exp

if

the AO harbours doubts of the legitimacy about any transaction, he is empowered, to carry out thorough investigations. But if he fails to unearth any wrong or illegal dealings, he cannot adhere to his suspicions.

Cash Credit/ Unexplained moey/inv/exp

Credibility of the explanation is given preference over materiality of proof in matters relating to cash credit ,as such cases have to be decided on preponderance of probability.

Cash Credit/ Unexplained moey/inv/exp

Canadian Co. lending money to an Indian Co. without security and intt.Transaction was treated as cash deposit up to ITAT.Authorities ignored the letter of the Canadian Co. admitting that it had advanced loan.SC upheld HC order deleting the addition. Prima facie burden was proved. (230.580)

Cash Credit/ Unexplained moey/inv/exp Mere filing of confirmatory letters (187.96) or payment by a/c. payee cheque (200.465)or furnishing details of the creditor(256.331)is not sufficient to prove the basic ingredients of credit (327.178) -

totality of the transaction is taken in to consideration while deciding the onus.

Cash Credit/ Unexplained moey/inv/exp

Similarly in matters of gifts all three basic pre-conditions should be fulfilled.In case of Yashpal (310.75) circumstances to prove love and affection were missing (onus not proved) - but in the case of Suresh kumar kakkar (324.231) gift from mother to a son was found to be genuine (onus discharged)

Cash Credit/ Unexplained moey/inv/exp With regard to the creditworthiness, the

assessee had been able to discharge the onus cast upon him by furnishing the bank statement of his mother (donor) as also the confirmation certificate from the mother confirming the gifts. Once the assessee had discharged the primary onus, which was cast upon the assessee, it was incumbent upon the AO to prove on the basis of cogent evidence.

Cash Credit/ Unexplained moey/inv/exp .that the transaction was not genuine. There was no such evidence. Conjectures and assumptions could not take the place of proof, once the assessee had discharged the primary burden which had been cast upon him. .when the identity and the capacity

were proved beyond doubt and the source of the gifts was the mother, there was no question of making the addition under section 68 of the Act.

Cash Credit/ Unexplained moey/inv/exp

Established law regarding Public Issues of the Cos. *Share application money to be received by way of account payee cheques and through normal banking channels. * Relevant details of the address or PAN identity of the subscriber to be furnished to AO along with copies of the shareholders register, share application forms, share transfer register, etc.,

Cash Credit/ Unexplained moey/inv/exp

*

Shares to be actually allotted

*AO would not be justified in drawing an adverse inference only because the subscriber fails or neglects to respond to its notices *Onus would not stand discharged if the subscriber denies /repudiates transaction

nor should the AO take such repudiation

at face value against the assessee

Cash Credit/ Unexplained moey/inv/exp *If the AO has any doubt about the identity of the share applicants, he should be summoned *Co.concerned cannot be expected to know every detail pertaining to the identity as well as financial worth of each of its subscribers. *Co.must, however, maintain and make

available to the AO for his perusal, all the information contained in the statutory share application documents. (329.271,299.268)

Cash Credit/ Unexplained moey/inv/exp

Once above conditions fulfilled Co.cannot be held responsible to prove whether applicant himself invested the money or some other person had made investment in his name. Burden then shifts to

the AO to establish that such investment has come from the assessee-company itself.

Cash Credit/ Unexplained moey/inv/exp

Sec.68 uses word books of an assessee -it refers to the assessee whose books show the credit entry. Where entries are found in the books of a firm and the assessment is that of an individual Sec. 68 will not apply.

Cash Credit/ Unexplained moey/inv/exp

Income from undisclosed sources, if credited in the books of the assessee, is liable to be assessed u/s. 68,but if such income from undisclosed sources, though invested has not been recorded in his books of account, such investment is liable to be assessed u/s. 69.

Cash Credit/ Unexplained moey/inv/exp

Like cash credits sources of investments are to be proved by the assessee. But,once proved prima facie-burden of proof will shift to Revenue. It can be discharged by the AO by establishing facts and circumstances .

Cash Credit/ Unexplained moey/inv/exp .. from

which a reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received by him /there is understatement or concealment of consideration.
(279.533, 257.94)

Cash Credit/ Unexplained moey/inv/exp

Provisions of section 69A can be applied if an assessee is found to be owner of any money, bullion, jewellery or other valuable article, and same had not been recorded in the books of account

Cash Credit/ Unexplained moey/inv/exp

In order to find out whether the assessee is the owner of the money in terms of section 69A the principle of common law jurisprudence in section 110 of the Evidence Act can be applied. (292.682 SC)

Cash Credit/ Unexplained moey/inv/exp So when assessee was found to be in possession of loose slips it was held that the provisions of section 69A of the Act were not applicable. (294.78) The assessee had duly

explained that these were rough calculations and the assessees explanation had not been rebutted by any material evidence.

Cash Credit/ Unexplained moey/inv/exp

But,when an assessee is found in possession of currency, it is for him to prove that he is not the owner of the currency and it is not for the

Revenue to prove that the assessee is the owner of the currency found in his possession.

Cash Credit/ Unexplained moey/inv/exp

Assessee admitted the possession of the money but denied the ownership of it .In light of Sec.110 of Evi.Act and 132(4A) presumption of IT Act Delhi HC held that provisions of Sec.69 were applicable(285.256)

Cash Credit/ Unexplained moey/inv/exp

Scope and ambit of section 69B and Sec.69C are altogether different. The connotation to the investment appearing in Sec.69B has to be in the context of investment made in some property or any other type of

Cash Credit/ Unexplained moey/inv/exp

..investment and it could not be business expenditure. The word investment contained in section 69B deals with investment in bullion, jewellery or other valuable articles, etc

Cash Credit/ Unexplained moey/inv/exp

For the purpose of Sec. 69 and 69B it is not necessary that the books of account have to be rejected expressly or that it is to be, in express terms, recorded that the books of account are not reliable or the explanation is not satisfactory. It has to be gathered from the order whether AO was satisfied with the explanation or had found that the books were not reliable. It is not the technical terms..

Cash Credit/ Unexplained moey/inv/exp which must appear in the order. It is the substance of the order that the AO was not satisfied with the explanation which is relevant. Where accounts are not reflected in the account books, they can be explained by the assessee, who u/s. 69 is entitled to an opportunity to explain. If in the opinion of

the AO the explanation is not satisfactory, the income can be added. The phraseology of Sec.69 creates a legal fiction.

Section 69B

In order to invoke the provisions of Sec.69B the burden is on the Revenue to prove that the real investment exceeds the investments shown in the books of account of the assessee. (261.664)

Section 69B

Merely on the basis of the fair market value and valuation report no addition can be made u/s.69B ,but on the basis of sufficient material on record some reasonable inference can be drawn and addition can be made as unexplained investment.

Section 69B
After obtaining VR notice was given the assessee to take value of the plot as per VR and comparable cases. Assessee did not give any reason as how she could purchase the property for roughly half the prevalent market rate. In absence of that the only inference was that the she had made unexplained investment.

Addition made u/s.69B was upheld by Raj HC.(226.344)

Section 69B

Statement made by Counsel for assessee in a civil suit about aparticular investment is not enough to discharge burden cast upon AO. Difference between the amount reflected in books and claimed in court is not assessable as unexplained investment (261.664)

Section 69B Addition was made u/s. 69B on account of difference between the closing stock furnished in a statement to the bank for availing of credit facility and that shown in the books of a/cs. Assessee prima facie proved that the statement submitted by it to the bank was on estimate basis and that the..

Section 69B value of the stock was inflated to avail of greater credit from the bank.AO could not rebut the stand taken by the assessee nor could he produce evidence of unexplained investment.Addition deleted by Tribunal was upheld by the Guj.HC.(323.341)

Section 69B
A O found that a ticket of the CSE from Shri A.K.Dey was purchased for Rs. 50,000 by the assessee. AO took the value of the ticket at Rs. 11.5 lakhs and added income of Rs. 11 lakhs as unexplained investment to the income of the assessee.Payment was made to the CSE through normal banking channels.

Delhi HC(290.245) -Burden of proving

the fact of unexplained investment was on the AO.If he had any

Section 69C
doubt in regard to the bona fides of the assessee, nothing prevented him from

exercising his powers under the Act and summoning the record of the Calcutta Stock Exchange and/or directing .to appear before him and produce relevant record in regard to the receipt. The bare
reading of the order of the AO shows that his

conclusion was not based on any record or books of a/cs.

Section 69C

For invoking Sec.69C A.O. should prove that assessee has incurred some expenditure and

that the explanation offered by the assessee about the source of expenditure is not satisfactory.

Section 69C

So, when there was nothing to show that expenditure was in

fact incurred by the assessee

and AO did not bring anything on record in this regard , addition made under 69C was deleted by Delhi HC. (Items such as..

Section 69C
dinner,

gift, projector, slide projector, advertisements in newspapers, magazines and hoardings,) Expewere jotted down in pencilnditure related to advertisements in newspapers was also not verified by the AO.
(311.175 )

Section 69C

It is not the reasonableness of the expenditure that requires satisfactory explanation. It is the source of such expenditure, which needs to be satisfactorily explained u/s.69 C

Section 69C

AO for the purpose of getting himself satisfied about the purported unexplained expenditure under section

69C can not not invoke the powers under section 142A.
(319.276 -Del.)

Deduction claim

Service of Notices

Wherever service of a notice is essential or critical, Sec.27 of the General Clauses Act, 1897 creates a statutory presumption to the effect that if a letter is properly addressed, it must be deemed to have been served.

Service of Notices

It is the established law about the service of notices that the initial onus of service is on the person who alleges service.

Service of Notices

Proper service of notices is the

first condition before demanding tax or seeking compliance from the assessee.So,when an affidavit is filed by him stating that notice was not served on him,burden is

on AO to prove service of notice within time.

Service of Notices A notice was claimed to had been dispatched on October 30, 2002.As per further cliam thereafter it was redirected to the Noida address of the assessee. There was nothing on

record to show on which date this notice was received at the given address of the assessee and on which date it was redirected..

Service of Notices
There

was no presumption under the law that any notice sent by speed post must have been delivered to the assessee within 24 hours. More-over, there was nothing on record to show at whose instance the notice was redirected and sent.

Penalty

For delay in filing returns burden is on assessee to show that there was sufficient cause for delay. It is for the assessee, should he file a belated return, to show reasonable cause for the delay.

Penalty An order imposing a penalty is the result of quasi-criminal proceedings and the burden lies on the

revenue to establish that the disputed amount represents income and that the assessee has
concealed the particulars of his income /

Penalty

has furnished inaccurate particulars. Burden of proof in

a penalty proceeding varies from that involved in an assessment proceedings. In

penalty proceeding AO is bound to consider the matter afresh.

Penalty Expl.5 to Sec.271(1)(c) deals with penalty arising out of search operations. When the assessee does not disclose the income and offer payment of tax in the course of search the assessee is deemed to have concealed particulars of income. (323 ITR 529 ker)

Penalty
Return due on June 30, 1990 and search carried out in Feb.,1990.The assessee not only failed to disclose the income in the course of search but also offered an explanation that the undisclosed income belonged to another person which

was not established by him.

Penalty
In

the circumstances, concealment of income was proved by operation of the presumption available under Expl.5 Sec.271(1)(c) Consequently,

the assessee was liable for penalty .

Benami Transactions

There is no formula or acid test uniformly applicable to decide benami transactions, the question depends predominantly upon the intention of ....

Benami Transactions
...

the person who pays the purchase money. In such matters burden of proof is on the person who asserts that it is a benami transaction.

Benami Transactions

However, if it is proved that the

purchase money came from a person other than the recorded owner
(ostensible owner) there can be a factual presumption at least in certain cases.

Benami Transactions

.depending on the facts, that

the purchase was for the benefit of the person who supplied the purchase money.

This is, of course, a rebuttable presumption.

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