1995 PLP 832 (PTD)

K.C. AGRAWAL, C.J.

The following question has been referred by the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") to this Court for decision: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the claim of the assessee for the income-tax and wealth tax liabilities as claimed by the assessee?" The assessee claimed the deduction of the following liabilities for the assessment year 1971-72: Rs. (a) for Bharatpur firm 2,29,789 (b) for Karauli firm 2,86,609 (c) for Smt. Jigna Bai (deceased) 1,37,871 (d) for Sri Govind Narain (deceased) 12,33,359 (3) for self 3,06,666 For the assessment years 1972-73 and 1974-75, the assessee claimed deduction of liabilities amounting to Rs.20,69,294 and Rs.16,19,294, respectively. While rejecting the case of the assessee, the Income Tax Officer observed for the assessment year 1971-72 as under: "The liabilities are in respect of arrear demands in respect of income tax and wealth tax cases of the -assessee himself and Smt. Jignabai Tiwari; Govind Narain and proportionate liability of taxes in the firms in which the above persons were partners. In the spirit of section 2(m)(iii)(a) and (b), these liabilities cannot be allowed." In appeal, the Commissioner of Income-tax (Appeals) observed for the assessment year 1971-72 as under: "It was admitted by Shri Verma, learned counsel for the appellant, that these liabilities were more than 12 months old and some of them were continuing for the last several years. Moreover, no evidence was produced before me showing that the appellant was liable to pay liabilities in respect of Bharatpur and Karauli firms. Sort. Jigna Bai died in 1969. It is not understood as to how the appellant was liable for her outstanding dues. Shri Govind Narain had died on June 9, 1957. No evidence was shown in support of the claim for his liabilities. Shri Verma was fair enough to admit that the liabilities for taxes were being disputed by the appellant and have been outstanding for more than 12 months from the relevant valuation date. For this reason also, the appellant cannot be allowed any deduction (refer section 2(m)(iii) of the Act)." Similar reason was given for disallowing the deduction for the remaining two assessment years, i.e. 1972-73 and 1974-75. The finding recorded by the Tribunal in the appeal was that the assessee before the first appellate authority had not brought any evidence to establish the claim. As to what was the liability discharged in the instant case was on the assessee. It was his burden to have brought evidence to the satisfaction of the authorities establishing the same. The assessee did not discharge the same. The argument of learned counsel for the petitioner was that, since the dispute was between the Income-tax Department and the assessee, the burden was on the Department also. The burden required proving of a fact is positive and, therefore, if the assessee wanted benefit of a certain deduction or liability discharged, it is for him to bring evidence to prove the same. It is the rule of the law of evidence that of proving a fact which must be exclusively within the knowledge of a party lies on him who asserts it. For the reasons given above, the question is answered against the assessee and in favour of the Department. The Department would be entitled to its costs, which are assessed at Rs.500 (rupees five hundred only) in each case. M.BA./434/T.F. Question answered