The Madras High Court held that the onus to prove the genuineness of transaction solely lies on the assessee, mere statutory approvals do not sanctify transaction.
The assessee, M/s.Vishwatej Developers Private Limited had filed their return of income admitting loss and the return was processed under Section 143(1). Thereafter, the case was taken up for scrutiny by the respondent and the assessee responded to the notice issued by the authorities and filed documents and records responding to all the queries raised. However, no order of assessment was passed by the respondent and while so, the notice under Section 143(2) was issued stating that the files have been transferred to him.
The division bench of Justice T.S. Sivagnanam and Justice Sathi Kumar Sukumara Kurup noted that the writ petition was of the year 2011 and was pending before this Court all these years. Under normal circumstances, the Writ Court will not relegate the parties to avail the alternate remedy, as it will be too harsh on the writ petitioner to avail the alternate remedy after nearly 10 years.
However, the court remarked that there was no other option because the entire controversy is factual. The onus is on the assessee to establish the genuinity of the transaction and the source of the investment. To dislodge the findings recorded by the Assessing Officer, a deeper examination into the facts has to be done and such exercise cannot be undertaken in a writ petition.
“The Assessing Officer has gone on record to state that the Dubai company, which was stated to be a Government company, is no longer a Government company on account of the change in the shareholder pattern. To dislodge these findings, the assessee has to necessarily bring in facts and documents to establish their stand and this cannot be permitted to be done in a writ petition. As mentioned above, the onus to prove the identity, the creditworthiness, and genuineness of the transaction is solely on the assessee and merely because statutory approvals have been obtained by the assessee, viz., FIPB and RBI will not sanctify the transaction especially when according to the Assessing Officer they are all unexplained investments,” the court said.
The court heard Mr.P.H.Aravind Pandian, Senior Counsel assisted by Mr.G.Baskar, counsel for the appellant, and Ms.Hema Muralikrishnan, Standing Counsel for the respondents.
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