Case Law Details
CIT Vs Sadiq Sheikh (Bombay High Court at Goa)
In the present matters, the assessees have failed to discharge the burden of establishing the creditworthiness of the creditors i.e. Siraj Sheikh and Vijay Kumar Rao. The assessees have miserably failed to establish the genuineness of the transaction between said Siraj Sheikh and Vijay Kumar Rao on one hand and the assessees on the other. In fact, there is no reference to any transaction between these apparent sources/creditors and the assessees. These apparent sources at one stage chose to call themselves as ‘conduits’ on behalf of M/s. Prasad Properties to the transaction projected in the agreement dated 22.12.2006. If the apparent sources i.e. Siraj Sheikh and Vijay Kumar Rao are mere conduits as claimed by them, then the creditor or the source is M/s. Prasad Properties. The burden, therefore, lay upon the assessees to establish the capacity of such source i.e. M/s. Prasad Properties and the genuineness of the transactions with M/s. Prasad Properties. The assessees have failed miserably on both these aspects.
In Aravali Trading Co. (supra), the firm of creditors who had advanced the amounts to the assessees had not only admitted to the making of such advances but further, there was material on record to establish the creditworthiness of such creditors. Such creditors were themselves taxpayers who had been assessed for income tax for the relevant years. In these factual circumstances, the court held that the capacity of creditors had been established and therefore the burden was discharged. In contrast, in the present matters, neither is the capacity of Siraj Sheikh and Vijay Kumar Rao nor M/s. Prasad Properties established, even prima facie. The genuineness of the transaction, if any, is also far from established. The material on record suggests that there was no transaction worth the name and the agreement dated 22.12.2006 executed on stamp papers dated 03.04.2000 was nothing but a desperate attempt to create a facade. The ruling in Aravali Trading Co (supra) can, therefore, in no manner, assist the assessees in these matters.
Even according to us, merely pointing out to a source and the source admitting that it has made the payments is not, sufficient to discharge the burden placed on the assessees by Section 68 of the said Act. If this were so, then, it would be sufficient for assessees, to simply persuade some credit- less person or entity to own up having made such huge payments and thereby evade payment of property tax on the specious plea that the Revenue, can always recover the tax from such credit- less source, if possible. To discharge the burden which Section 68 casts upon assessees, at least some plausible explanation is required to be furnished, which must be backed by some reliable evidence. If the circumstances listed above are to be taken into consideration, then, it can hardly be said that the assessees in the present case, has discharged the burden which was cast upon it by Section 68 of the said Act.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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