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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 182/2010
COMMISSIONER OF
INCOME TAX ..... Appellant
Through: Ms. Rashmi Chopra with
Mr. Chandramani Bhardwaj,
Advocates
versus
SHRI BAJRANG LAL BANSAL ..... Respondent
Through: Mr. Ashwani Taneja with
Ms. Poonam Ahuja, Advocates
% Date of Decision: 20th August, 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? No
3. Whether the judgment should be reported in the Digest? No
MANMOHAN, J:
1. The present appeal has been filed under Section 260A of Income
Tax Act, 1961 (for brevity “Act, 1961”) challenging the order dated 31st
March, 2009 passed by the Income Tax Appellate Tribunal (in short
“Tribunal”) in IT(SSA) No. 262/Del/2004, for the block period 1st
April, 1989 to 17th December, 1999.
2. The relevant facts of the present case are that a search was
conducted at the respondent-assessee’s residence by the Income Tax
ITA 182/2010 Page 1 of 4
Department. While unexplained cash of ` 68,943/- and FDR of
` 54,943/- was found during the search, no evidence was found
suggesting a higher valuation for the property bearing No. A-156, New
Friends Colony, New Delhi. However, the Assessing Officer solely on
the basis of report of the District Valuation Officer made an addition of
` 99,33,000/- under Section 69B of the Act, 1961 on account of
undisclosed investment.
3. The Commissioner of Income Tax (Appeals) deleted the addition
by relying upon the decision of the Supreme Court in K.P. Varghese
Vs. ITO, 131 ITR 597.
4. The Tribunal upheld the aforesaid deletion by observing as
under:-
“6. The deletion of addition of Rs. 99,33,000/- made on
account of valuation difference also cannot be made in the
absence of any evidence found in the course of search
because undisclosed income in the block assessment is to be
computed on the basis of material found in the search
proceedings and the valuation report was admittedly not
during the course of the search and was obtained as by the
department subsequent thereto. No records thereon can be
made on the same for treating the difference as income of the
assessee. The order of the CIT(A) in deleting the same by
following the decision in the case of K.P. Varghese, reported
supra is perfectly justified and is accordingly upheld.”
5. Ms. Rashmi Chopra, learned counsel for the revenue submitted
that the Tribunal had erred in law in deleting the addition of
` 99,33,000/- as undisclosed income of the respondent-assessee under
Section 69B of the Act, 1961.
ITA 182/2010 Page 2 of 4
6. 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. (See K.P. Varghese (supra), CIT
Vs. Shakuntala Devi, (2009) 316 ITR 46, CIT Vs. Manoj Jain, 287
ITR 285 and ITA No. 482/2010 decided by this Court on 5th May,
2010).
7. 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–which has not been done in the present case. The
Supreme Court in its order dated 19th October, 2009 in Civil Appeal
No. 6973/2009 has held as under:-
“Delay condoned.
Leave granted.
In the present case, we find that the Tribunal decided the
matter rightly in favour of the assessee inasmuch as the
Tribunal came to the conclusion that the Assessing Authority
(AO) could not have referred the matter to the Departmental
Valuation Officer (DVO) without books of accounts being
rejected. In the present case, a categorical finding is
recorded by the Tribunal that the books were never rejected.
This aspect has not been considered by the High Court. In
the circumstances, reliance placed on the report of the DVO
was misconceived.
For the above reasons, the impugned judgment of the High
Court is set aside and the order passed by the Tribunal stands
restored to the file. Accordingly, assesee succeeds.
Civil Appeal is allowed. No order as to costs.”
ITA 182/2010 Page 3 of 4
8. Further the Supreme Court in its order dated 16th February, 2010
in Civil Appeal No. 9468/2003 has held as under:-
“Having examined the record, we find that in this case, the
Department sought reopening of the assessment based on the
opinion given by the District Valuation Officer (DVO).
Opinion of the DVO per se is not an information for the
purposes of reopening assessment under Section 147 of the
Income Tax Act, 1961. The AO has to apply his mind to the
information, if any, collected and must form a belief thereon.
In the circumstances, there is no merit in the Civil Appeal.
The Department was not entitled to reopen the assessment.
Civil appeal is, accordingly, dismissed. No order as to costs.”
9. Moreover, in the present case, no evidence much less
incriminating evidence was found as a result of the search to suggest
that the respondent-assessee had made any payment over and above the
consideration mentioned in the return of the respondent-assessee.
10. Consequently, no substantial question of law arises in the present
appeal, which is dismissed in limine.
MANMOHAN, J
CHIEF JUSTICE
AUGUST 20, 2010
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ITA 182/2010 Page 4 of 4