INCOME TAX vs. RAMESH KAKKAR

ITA/1550/2010HC Delhi07 October 20102 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the primary burden of proof to establish understatement or concealment of income lies with the revenue. It is only after the revenue discharges this burden that reliance can be placed on the valuation provided by the DVO. Furthermore, the Court reiterated its previous finding that the DVO's opinion, in isolation, does not constitute information and cannot be relied upon without rejecting the assessee's books of account. Applying this established legal principle, the Court found the present appeal to be devoid of merit. Consequently, the appeal was dismissed.

What were the facts?

The Commissioner of Income Tax (Appellant) filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated September 8, 2009, passed by the Income Tax Appellate Tribunal (Tribunal). The Tribunal's order pertained to Assessment Year 2005-2006. The Assessing Officer had made an addition to the respondent-assessee's income based solely on a report from the Department of Valuation Officer (DVO). The respondent-assessee was represented by None, while Ms. Rashmi Chopra appeared as Standing Counsel for the Appellant.

What were the issues?

1. Whether the addition made by the Assessing Officer to the assessee's income solely on the basis of the DVO's report is sustainable in law, considering the burden of proof on the revenue and the evidentiary value of a DVO's report (Section 260A of the Income Tax Act, 1961). Assessee's Contention: No specific contentions are recorded for the assessee as none appeared. The judgment relies on a previous ruling concerning the DVO's report. Revenue's Contention: The revenue, through the Assessing Officer, made an addition based on the DVO's report. The appeal challenges the Tribunal's decision to set aside this addition.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

#4 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 1550/2010

THE COMMISSIONER OF INCOME TAX

..... Appellant Through: Ms. Rashmi Chopra, Standing Counsel

versus

RAMESH KAKKAR

..... Respondent

Through: None

Date of Decision: 7th October, 2010

CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN

Whether the Reporters of local papers may be allowed to see the judgment?

To be referred to the Reporter or not?

Whether the judgment should be reported in the Digest?

MANMOHAN, J

The present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity, “Act”) challenging the order dated 8th September, 2009 passed by the Income Tax Appellate Tribunal (in short “Tribunal”) in ITA No. 1178/Del/2009, for the Assessment Year 2005- 2006. 2. In the present case, the Assessing Officer has made an addition in the respondent-assessee’s income solely on the basis of DVO’s report. However, in Commissioner of Income Tax Vs. Shri Bajrang Lal 2010:DHC:5037-DB

Bansal, ITA No. 182/2010 decided on 20th August, 2010, this Court has held that it is settled law that the primary burden of proof to prove under-statement or concealment of income is on the revenue and it is only when such burden is discharged that it would be permissible to rely upon the valuation given by the DVO. It has been further held that in any event, the opinion of the DVO, per se, is not an information and cannot be relied upon without the books of account being rejected. 3. Keeping in view the aforesaid mandate of law in Shri Bajrang Lal Bansal (supra), the present appeal, being bereft of merit, is dismissed.

MANMOHAN, J

CHIEF JUSTICE

OCTOBER 07, 2010 rn 2010:DHC:5037-DB

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