Delhi High Court
Commissioner Of Income Tax vs Mahesh Kumar on 20 August, 2010
Author: Manmohan
#14-15
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
14.
+ ITA 1191/2010
COMMISSIONER OF INCOME TAX ..... Appellant
Through: Ms. Sonia Mathur,
Advocate
versus
MAHESH KUMAR ..... Respondent
Through: None
AND
+ ITA 1192/2010
15.
COMMISSIONER OF INCOME TAX ..... Appellant
Through: Ms. Sonia Mathur,
Advocate
versus
MAHESH KUMAR ..... Respondent
Through: None
% 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:
CM 14504/2010 IN ITA 1191/2010
Allowed, subject to all just exceptions.
ITAs 1191/2010, 1192/2010
1. The present two appeals have been filed under Section 260A of
Income Tax Act, 1961 (for brevity "Act, 1961") challenging the order
dated 25th June, 2009 passed by the Income Tax Appellate Tribunal (in
short "Tribunal") in ITA Nos. 1785/Del/2008 and 1042/Del/2008, for
the Assessment Year 2004-2005.
2. It is pertinent to mention that by the impugned order, the appeal
of the assessee was allowed whereas cross-appeal of the revenue was
dismissed. Since both the appeals have been decided by a common
judgment, the present appeals are also being disposed of by a common
order.
3. The relevant fact of the present case are that the respondent-
assessee had purchased two properties bearing Plot Nos. 218 and 219 in
Block B, Sector 8, Bagdolla residential Scheme, Dwarka, Delhi for
` 2,00,000/- and ` 3,00,000/- respectively.
4. On 7th October, 2004, a search operation was conducted on the
respondent-assessee's premises. No incriminating document or
material was found or seized during the search operation in respect of
aforesaid two plots purchased by the respondent-assessee. However,
the Assessing Officer referred these two plots for valuation under
Section 142A of the Act, 1961.
5. On the basis of the valuation report submitted by the District
Valuation Officer (in short "DVO"), the Assessing Officer made an
addition of ` 19,48,200/- in respondent-assessee's income. Upon an
appeal being filed by the respondent-assessee, the Commissioner of
Income Tax (Appeals) reduced the addition of ` 7,34,460/-.
6. Upon appeals being filed by the respondent-assessee as well as
by the revenue, the Tribunal deleted the entire addition made by the
Assessing Officer on the basis of the valuation report submitted by the
DVO. In fact, the Tribunal in its impugned order has held as under :-
"6. After hearing both the sides at length, we are of the
view that during the search operation, no material in respect
of the investment in the plots referred to Valuation Officer
was found and seized. There was no evidence gathered
during the search operation that assessee has invested more
than the value declared in the registered sale deed. The
comparable instances taken by the Valuation Officer were
situated far away from the location of these plots. These plots
are located in Sector-8 of Dwarka and were also having not
only locational disadvantage but also the development of that
area was not as well developed as the comparable instances
taken by the Valuation Officer for the property situated in
Janak Puri and Vikas Puri, New Delhi. There was also
disadvantage in respect of noise and disturbances which the
Valuation Officer himself has noted that the properties are
situated near the airport and railway track......"
7. Ms. Sonia Mathur, learned counsel for the revenue submitted that
the Tribunal was not justified in deleting the addition of
` 19,48,200/- under Section 69 of the Act, 1961 on account of
unexplained investment made by the respondent-assessee with respect
to purchase of two plots at Dwarka. She further submitted that the
Tribunal had erred in law in holding that the reference made to the
Valuation Officer under Section 142A of the Act, 1961 was not
justified.
8. 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 Vs. ITO,
131 ITR 597, CIT Vs. Shakuntala Devi, (2009) 316 ITR 46 and ITA
No. 482/2010 decided by this Court on 5th May, 2010).
9. 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.
10. Moreover, in the present case, no evidence much less
incriminating evidence was found as a result of the search to suggest
that the assessee had made any payment over and above the
consideration mentioned in the registered sale deeds. In any event, the
final fact finding authority, namely, the Tribunal has arrived at a
finding that the instances of the sale taken into account by the Valuation
Officer were not comparable as they were situated far away from the
location of the plots purchased by the respondent-assessee.
Consequently, we find that no substantial question of law arises in these
two appeals which, bereft of merit, are dismissed in limine.
MANMOHAN, J
CHIEF JUSTICE
AUGUST 20, 2010/rn
