INCOME TAX vs. MADAN LAL DAWAR

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ITA/1554/2010HC 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 that the DVO's opinion, by itself, does not constitute information and cannot be relied upon without rejecting the assessee's books of account. Applying the mandate of law as established in the case of Commissioner of Income Tax Vs. Shri Bajrang Lal Bansal, the Court found the present appeal to be bereft 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 August 31, 2009, passed by the Income Tax Appellate Tribunal (Tribunal). The Tribunal's order pertained to Assessment Year 1997-1998. 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 appeal was filed against the Tribunal's decision which presumably did not uphold this addition.

What were the issues?

1. Whether the addition made by the Assessing Officer solely on the basis of the DVO's report is sustainable in law, considering the primary burden of proof rests on the revenue? (Question of law, turning on principles of evidence and burden of proof under the Income Tax Act, 1961). Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The revenue argued that the addition made by the Assessing Officer was justified. However, the judgment focuses on the legal principle regarding the DVO's report and the burden of proof, implying the revenue's argument, if any, did not prevail on these grounds. The judgment relies on a previous High Court decision, Commissioner of Income Tax Vs. Shri Bajrang Lal Bansal, ITA No. 182/2010, decided on August 20, 2010.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

#8 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 1554/2010

THE COMMISSIONER OF INCOME TAX

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

versus

MADAN LAL DAWAR

..... Respondent

Through: None

Date of Decision: 7th October, 2010

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

1.

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

2.

To be referred to the Reporter or not?

3.

Whether the judgment should be reported in the Digest?

MANMOHAN, J

CM 17625/2010

Allowed, subject to all just exceptions. ITA 1554/2010 1. The present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity, “Act”) challenging the order dated 31st August, 2009 passed by the Income Tax Appellate Tribunal (in short “Tribunal”) in ITA No. 1908/Del/2006, for the Assessment Year 1997- 1998. 2010:DHC:5034-DB

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 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:5034-DB

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