Sh. Hemant Chawla, Haridwar V. ITO, Haridwar

ITA 1407/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53011 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-10-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 31-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: S K MONGA
• Keywords: Unexplained expenditure; Gift; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C DELHI) BEFORE SHRI C.L. SETHI AND SHRI SHAMIM YAHYA ITA NO. 1407(DEL)2010 ASSESSMENT YEAR: 1998-99 SH. HEMANT CHAWLA, L/H OF LATE THE I NCOME TAX OFFICER, SH. BHAWANI DAS CHAWLA, C/O S.K. V. WARD 1, H ARIDWAR. MONGA(ADVOCATE), UPHAR 312, GOVINDPURI, HARIDWAR, U.P. (APPELLANT) (RESPO NDENT) APPELLANT BY: SHRI S.K. MONGA, ADVOCATE RESPONDENT BY: SHRI SAL IL MISHRA, SR. DR ORDER PER SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I, DEHRADUN DATED 2.12.2009 AND PERTAINS TO ASSESSMENT YEAR 1998- 99. 2. THE ISSUE RAISED IS THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF ` 5,15,990/- AS UNEXPLAINED EXPENDITURE IN THE MARRIA GE OF THE DAUGHTER OF THE ASSESSEE. 3. IN THIS CASE, THE ASSESSEE, SHRI B.D. CHAWALA SO LEMNIZED THE MARRIAGE OF HIS DAUGHTER ON 6.2.1998 AND BEFORE THE ADIT, SA HARANPUR, IN HIS ITA 1407(DEL)2010 2 STATEMENT DATED 6.8.2003, SHRI B.D. CHAWALA HAD ADM ITTED THAT HE HAS INCURRED EXPENDITURE OF ` 5,70,000/- FOR THE SAME. REGARDING THE SOURCES OF INCURRING SUCH EXPENDITURE HE HAS STATED THAT THE A MOUNTS WERE ARRANGED IN THE FOLLOWING MANNER:- SL. NO. AMOUNT( ` ) MODE NAME & ADDRESS OF THE PERSON 1. 1,50,000 LOAN B.H.E.L. HARDWAR 2. 1,25,000 CASH LOAN SH. KANWAR BHAN TANEJA, PROP.TANEJA CLOTH HOUSE, JWALAPUR,HARDWAR. 3. 1,30,000 CASH LOAN DR. RAMESH CHAWLA, DAYANAND NAGRI, JWALAPUR, HARDWAR 4. 70,000 CASH LOAN LATE SH.JAI DAYAL CHAWLA, AR YA NAGAR, JWALAPUR, HARDWAR. 5. 50,000 CASH LOAN SH. K.C. KAPOOR, 6 RAJNAGAR, JWALAPUR, HARDWAR. 6. 50,000 RECEIPT FROM L.I.C. TOTAL 5,75,000 TOTAL EXPENDITURE 4. REGARDING THE LOAN OF ` 1,50,000/- RAISED BY THE ASSESSEE FROM BHEL HE COULD NOT PRODUCE ANY EVIDENCE IN THIS REGARD BE FORE THE ADIT. 5. AS FAR AS THE LOAN OF ` 1,25,000/- RAISED FROM SHRI KANWAR BHAN TANEJA IS CONCERNED HE HAS BEEN EXAMINED ON OATH BY THE ADIT AND IN HIS STATEMENT HE HAS SUBMITTED THAT THE ASSESSEE IS HIS BROTHER-IN-LAW BUT HE HAS NO BUSINESS TERMS WITH HIM. IT HAS BEEN FURTHER ST ATED THAT HE HAD NOT GIVEN ITA 1407(DEL)2010 3 ANY AMOUNT TO SHRI B.D. CHAWALA, THE ASSESSEE. RE GARDING THE LOAN ADVANCED TO SHRI B.D. CHAWALA, SHRI TANEJA HAS STAT ED THAT NO LOAN HAS BEEN PROVIDED TO SHRI B.D. CHAWALA BY HIM. SHRI B.D. C HAWALA DENIED TO CROSS EXAMINE SHRI TANEJA DURING THE COURSE OF STATEMENT RECORDED ON OATH BEFORE THE ADIT. 6. REGARDING THE LOAN OF ` 1,30,000/- RAISED FROM SHRI RAMESH CHAWALA THE STATEMENT OF SHRI CHAWALA HAS BEEN RECORDED BY THE ADIT AND HE HAS DENIED TO HAVE ADVANCED ANY LOAN TO SHRI B.D. CHAWA LA BEFORE THE ADIT. 7. REGARDING THE LOAN OF ` 70,000/- RAISED FROM SHRI JAI DAYAL CHAWALA, NO EVIDENCE HAD BEEN PRODUCED BEFORE THE LD. ADIT A ND SHRI JAI DAYAL CHAWALA HAS EXPIRED ON 31.07.1997. 8. REGARDING THE LOAN OF ` 50,000/- FROM SHRI S.K. KAPOOR, HE HAS STATED BEFORE THE ADIT ON OATH THAT HE HAS NOT ADVANCED AN Y LOAN TO SHRI B.D. CHAWALA DURING THE YEAR. 9. AS FAR AS THE LOAN OF ` 50,000/- RECEIVED FROM LIC IS CONCERNED, SHRI CHAWALA HAS NOT FILED ANY EVIDENCE BEFORE THE ADIT. ON BEING CONFRONTED WITH THE ABOVE FINDINGS, THE ASSESSEE HAS SUBMITTED BEFORE THE AO REGARDING THE SOURCES OF INVESTMENT IN THE MARRIAGE AS UNDER: - ITA 1407(DEL)2010 4 ` 60,000/- LOAN AGAINST PF FROM BHEL IN JAN.98 BUT N OW THE AMOUNT OF ` 1,50,000/- MENTIONED IN THE STATEMENT. - I DO NOT KNOW I HAD TAKEN THE LOAN IN THE SUBSEQUENT YEAR ALSO, THE EVI DENCE IS AVAILABLE AND FOR LOAN OF ` 60,000/- I AM ENCLOSING THE PHOTOCOPY OF PAY-IN-SLIP OF JAN. 98. THIS LOAN W AS TO BE REPAID IN 60 INSTALMENTS @ ` 1,000/- PER MONTH EACH. THE ORIGINAL PAY-IN-SLIPS IS HEREBY SHOWN AND THE WITHD RAWALS HAVE BEEN MADE ON 15.01.98, 16.01.98, 31.01.98, 03.02.98 AND 12.02.98 ` 20,000/-, ` 3,000/-, ` 5,000/-, ` 15,000/- AND ` 15,000/- RESPECTIVELY. ` 50,000/- THIS REPRESENTS THE AMOUNT RECEIVED ON MAT URITY OF LIC POLICY NO. 466303 I HAD TWO POLICIES , ONE AS MENTIONED ABOVE AND 2 ND POLICY NO.366606 WHICH MATURED IN APRIL 03, THIS CERTIFICATE IS AVAILABLE AND THE PHOTOSTAT COPY IS ENCLOSED HEREWITH. I HAD APPROACHED TO THE LIC DEPARTMENT F OR THE CERTIFICATE OF LIC AMOUNT WHICH MAY MATURE DURING T HE YEAR UNDER CONSIDERATION, BUT I HAVE BEEN TOLD BY THE LI C OFFICE THAT THEY HAVE NO RECORD AFTER 5 YEARS AND THIS FACT IS VERIFIABLE FROM LIC DEPARTMENT. ` 1,25,000/- GOODS PURCHASED FOR MARRIAGE FROM DIFFER ENT SHOPKEEPERS UNDER THE GUARANTEE OF SHRI KANWAR BHAN TANEJA. SH RI KANWAR BHAN TANEJA HAS BEEN CARRYING ON THE BUSINES S OF CLOTHES, HIS CONFIRMATORY LETTER IS ENCLOSED HEREWI TH. ` 1,30,000/- THIS ALSO REPRESENTS THE PURCHASE OF JEW ELLERY, KIRANA ON GUARANTEE OF DR. RAMESH CHAWLA WHO IS REAL BROTHER OF ASSESSEE, HIS CONFIRMATORY LETTER IS ENCLOSED HEREW ITH. ` 50,000/- THIS REPRESENTS THE PURCHASE OF FURNITURE AND THE FURNITURE WAS PURCHASED FROM LOCAL JWALAPUR MARKET ON THE GUARANT EE FOR PAYMENT OF MY FRIEND S.K. KAPOOR AND HIS CONFIRMATO RY LETTER IN THIS CONNECTION IS ENCLOSED HEREWITH. ITA 1407(DEL)2010 5 ` 1,25,000/- THIS AMOUNT HAS BEEN SPENT BY MY MOTHER SMT. DEVAN BAI WHOSE AFFIDAVIT IN ORIGINAL IS ENCLOSED HEREWITH. MY FATHER EXPIRED IN THE MONTH OF JULY, 1997, THE PHOTOCOPY O F THE DEATH CERTIFICATE IS ENCLOSED HEREWITH. HE WAS LIVING WI TH ME AND ALSO HANDED OVER THE MONEY IN HIS LIFE TIME AMOUNT ` 70,000/- TO ME WHICH I HANDED OVER TO MY MOTHER TO KEEP THE SAM E FOR THE MARRIAGE WHICH SHE SPENT THIS MONEY AS WELL AS HER OWN ACCUMULATED FUNDS AS STATED IN THE AFFIDAVIT. THE FATHER HAD GOT THE ENCASHMENT OF KVP THROUGH SBI, ROORKEE. 10. THE AO HAS OBSERVED THAT THE ASSESSEE HAS TRIED TO EXPLAIN THE SOURCES OF ` 5,40,000/- ONLY AS AGAINST ` 5,75,000/- ADMITTED BEFORE THE ADIT. FURTHER THE ASSESSEE HAS CHANGED HIS STAND WHEREIN HE HAS SUBMITTED THAT HE MADE CREDIT PURCHASES ON THE GUARANTEE OF HIS RELAT IVES AND FRIENDS. FURTHER A NEW FACT HAS BEEN BROUGHT OUT THAT HIS OLD MOTHER SMT. DEVAN BAI HAD SPENT ` 1,25,000/- IN THIS MARRIAGE WHICH INCLUDES ` 70,000/- STATED TO BE RECEIVED FROM HIS FATHER ( ` 70,000/- WAS ADMITTED BY THE ASSESSEE IN HIS STATEMENT BEFORE THE ADIT AS GIVEN BY HIS FATHER). IN SUPPORT OF HIS CONTENTION HE HAS FILED AN AFFIDAVIT OF THE MOTHER ALONG WITH THE REPLY. 11. THE AO WAS NOT SATISFIED WITH THE ASSESSEES EX PLANATIONS. HE ONLY ACCEPTED A SUM OF ` 60,000/- WITHDRAWN FROM PF AND ADDED THE BALANCE O F ` ITA 1407(DEL)2010 6 5,15,990/- AS UNEXPLAINED EXPENDITURE OF MARRIAGE. UPON ASSESSEES APPEAL THE CIT(A) CONFIRMED THE AOS ACTION BY HOLDING AS UNDER:- I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE LD. COUNSEL FOR THE APPELLANT AND THE FACTS INDICATED IN THE ASSESSMEN T ORDER AND REMAND REPORT AND THE COUNTER COMMENTS IN RESPECT OF THE R EMAND REPORT RECEIVED FROM THE COUNSEL OF THE APPELLANT. IT IS OBSERVED THAT THE AO IN HIS REMAND REPORT HAS GIVEN A CLEAR-CUT FINDING AS TO WHY THE SOURCES OF FINANCING THE MARRIAGE EXPENSES, CREDIT PURCHASES OF DIFFERENT ARTICLES COULD NOT BE ACCEPTED AND THE CO UNSEL OF THE APPELLANT HAS NOT BEEN ABLE TO REBUT THESE FINDINGS RECORDED BY THE AO. SIMILARLY AS REGARDS THE ADDITIONAL EVIDENCE BY WAY OF NOTING IN THE DIARY AS SAGAN RECEIPT TO THE TUNE OF ` 88,600/-, THE AO HAS ALSO REJECTED THE ADMISSION OF SUCH EVIDENCE UNDER THE P ROVISION OF RULE 46A OF I.T. RULE, 1962, BECAUSE THE APPELLANT, WHEN HE WAS ALIVE AND HIS STATEMENT WAS RECORDED BY ADIT, HE HAD NEVER ME NTIONED ABOUT THE ENTRIES FOUND IN SUCH DIARY INDICATING THE SAGA N MONEY. THEREFORE, IT HAS BEEN RECOMMENDED THAT NO COGNIZAN CE SHOULD BE TAKEN ABOUT RECEIPT OF SUCH SAGAN MONEY IN THE HAND S OF THE APPELLANT. I AGREE WITH THE VIEW TAKEN BY THE AO FOR THE REASO NS MENTIONED IN THE REMAND REPORT AND ACCORDINGLY, I AM NOT IN A POSITI ON TO ADMIT THE ADDITIONAL EVIDENCE BY WAY OF ENTRIES IN THE DIARY INDICATING RECEIPT OF SAGAN MONEY UNDER THE PROVISIONS OF RULE 46A OF I.T . RULE, 1962. I AM ALSO IN AGREEMENT WITH THE AOS VIEW THAT SAGAN MONEY CLAIMED TO HAVE BEEN RECEIVED FROM FRIEND CIRCLES TO THE TUNE OF ` 10,344/- IS ALSO NOT ACCEPTABLE. FURTHER, THE AO HAS BEEN RIGHT TO REJECT THE SOURCES OF ` 80,000/- CLAIMED TO BE WITHDRAWALS MADE DURING THE PERIOD FROM JAN.01 TO JUL. 01 AND MAR.2000 TO JAN. 2001 FROM BA NK ACCOUNT FILED ALONG WITH THE WRITTEN SUBMISSIONS FOR THE SPECIFIC REASONS HIGHLIGHTED IN THE REMAND REPORT. INCIDENTALLY, THE MARRIAGE O F THE SON OF THE APPELLANT WAS ALSO SOLEMNIZED ON 01.02.2000 AND A P ART OF WITHDRAWALS MADE PERTAINED TOWARDS INVESTMENT IN SO NS MARRIAGE ALSO. KEEPING IN VIEW DETAILED OBSERVATIONS MADE IN THE REMAND REPORT AND IN ABSENCE OF PLAUSIBLE EXPLANATION/REBU TTALS AGAINST SUCH ADVERSE FINDINGS RECORDED BY THE AO, I AM NOT IN A POSITION TO ACCEPT THE CONTENTIONS RAISED BY THE COUNSEL OF THE APPELL ANT AND ACCORDINGLY ITA 1407(DEL)2010 7 THE ADDITION MADE IN THE ASSESSMENT ON ACCOUNT OF U NEXPLAINED MARRIAGE EXPENDITURE TO THE TUNE OF ` 5,15,000/- IS HEREBY CONFIRMED AND NO INTERFERENCE IS CALLED FOR IN THIS RESPECT. 12. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APP EAL BEFORE US. 13. WE HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGH T OF THE MATERIAL PRODUCED. BEFORE US THE LEARNED COUNSEL FOR THE A SSESSEE HAS SUBMITTED A STATEMENT SHOWING THE MARRIAGE EXPENSES WHICH IS AS UNDER:- STATEMENT SHOWING THE MARRIAGE EXPENSES OF DAUGHTE R, NAMELY, MS. MEENAKSHI CHAWLA, D/O LATE SHRI B.D. CHAWLA. FUNDS AVAILABLE: 1. ` 1,88,600/- (FROM RELATION AS PER PAPER BOOK ON PAGE NO.6) 2. ` 22,814/- (GIFT FROM FRIEND CIRCLES VIDE PAPER BOO K PAGE NO.14) 3. ` 58,800/- (WITHDRAWAL FROM SBI ACCOUNT NO. 12577 HARIDWAR STATEMENT AND BANK ACCOUNT ENCLOSED PAGE NOS.64& 65. THESE WITHDRAWALS ARE FOR THE PERIOD 15.01.1998 TO 12.02.1998) 4. ` 60,000/- (EXPECTED BY AO AS PER ASSESSMENT ORDER OUT OF PF AS PER PETITION DATED NIL PAGE NO. 33 OF PAPER BOOK ). 5. ` 35,000/- (PERSONAL SAVINGS IN HAND WITH LATE SHR I B.D. CHAWLA AND HIS WIFE WHO EXPIRED ON MARCH, 2002) TOTAL : ` 3,65,214/- ITA 1407(DEL)2010 8 TOTAL MARRIAGE EXPENSES DECLARED BY THE DECEASED AS SESSEE WERE ` 5,40,000/- WHILE AO HAS TAKEN ` 5,75,000/-. ASSESSEE HAD MENTIONED IN PETITION DATED NIL FILED BY THE DECEASED ASSESSEE P LACED ON PAGE NO. 17 PARA NO.3 IN WHICH HE HAD EXPLAINED THAT THE JEWELLERY W AS PURCHASED FOR ` 65,000/- BUT IT IS WRITTEN IN FIR ON HIGHER SIDE ` 1,00,000/-, I.E., PREVAILING RATE AS THE TIME OF LODGING THE FIR. THAT THE TOTAL EXPENSES MAY BE CALCULATED AS ` 5,40,000/- LESS TOTAL MARRIAGE EXPENSES AMOUNT DETAILS ABOVE ` 3,65,214/- FOR WHICH THE PAYMENT HAS TO BE MADE AFTER THE DATE OF MARRIAGE BALANCE ` 1,74,786/- DETAILS OF PAYMENT OF CREDIT PURCHASE OF ` 1,74,786/- ` 40,000/- PAID DURING MARCH, 2000 TO JAN. 2001 TO M /S. NEW LIGHT EMPORIUM KATHERA BAZAR JWALAPUR HARDWAR FOR PURCHAS E OF CLOTHES CERTIFICATE DATED 6.10.2006 PAGE NO. 99 AND GUARANTEED WAS SHRI KANWAR BHAN TANEJA HIS STATEMEN T WAS RECORDED BY THE AO ON PAPER BOOK PAGE NO. 87. THI S AMOUNT HAS BEEN PAID OUT OF WITHDRAWAL FROM SAVING BANK AC COUNT NO. 12577 SBI HARDWAR STATEMENT ATTACHED ON PAGE NO. 24 . ` 40,000/- PAID TO M/S. AMIT JEWELLER SARAFA BAZAR M UJAFARNAGAR DURING THE PERIOD JAN. 2001 TO JULY 2001 CERTIFICATE PLACE D ON PAGE 100 GUARANTEED BY DR. RAMESH CHAWLA. HIS STATEMENT WAS RECORDED BY AO AND PLACED ON PAGE 89 . THIS AMOUN T HAS BEEN PAID OUT OF WITHDRAWAL FROM SAVING FUND ACCOUN T NO. 12577 SBI HARDWAR. STATEMENT ATTACHED AT PAGE 24. ` 39,000/- PAID FOR PURCHASE OF KIRANA GOODS (BALANC E PAYMENT OUT OF WITHDRAWAL FROM NEW BANK OF INDIA ACCOUNT NO. 785 P LACED ON ITA 1407(DEL)2010 9 PAPER BOOK PAGE 63. THE WITHDRAWAL HAS BEEN MADE FROM THE SAID BANK ON 15.4.98 AND 1.5.98. THIS FACT HAS BE EN CONFIRMED BY DR. RAMESH CHAWLA IN HIS STATEMENT PAGE 89 AND R ELEVANT PAGE 91 QUESTION NO. AND ANSWER NO.8. ` 9,800/- PAID TO BALANCE AMOUNT OF LABOUR TO HALWAI OUT OF WITHDRAWAL FROM NBI ACCOUNT NO. 785 PLACED ON PAGE NO.63 DATED 11.3.98. ` 45,986/- PAID DURING THE PERIOD 16.3.1998 TO 1.8.1 998 AGAINST PURCHASE OF UTENSIL AND OTHER MISC. EXPENSES OUT OF WITHDRAW AL FROM STATE BANK OF INDIA HARDWAR ACCOUNT NO. 12577 ON PAPER BO OK PAGE NO.66. THIS FACT HAS BEEN CONFIRMED BY SHRI KANWA R BHAN . THE STATEMENT RECORDED BY THE AO IS PLACED ON PAGE 87 OF PAPER BOOK AS REFERRED IN QUESTION NOS. 3&4. --------------- ` 1,74,786/- ========= 14. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AN D PERUSED THE MATERIAL ON RECORD. AS REGARDS THE FUNDS AVAILABL E IS CONCERNED, THE FIRST ITEM RELATES TO ` 1,88,600/- BEING THE AMOUNT RECEIVED FROM RELATIVES OF THE ASSESSEE. IN OUR CONSIDERED OPINION, THE CREDIBILI TY OF THIS AMOUNT HAS TO BE ACCEPTED. SIMILARLY, ANOTHER GIFT IS FROM FRIEND CIRCLES AMOUNTING TO ` 22,814/-. THESE ARE PAID IN SMALL AMOUNTS AND CON SIDERING THE SOCIAL STATUS OF THE ASSESSEE THIS HAS TO BE ACCEPTED. ` 60,000/- WITHDRAWN FROM PF HAS ALSO BEEN ACCEPTED BY THE AO. A SUM OF ` 58,800/- HAS BEEN STATED TO BE ITA 1407(DEL)2010 10 WITHDRAWN FROM SBI ACCOUNT NO. 12577 HARIDWAR. IN OUR CONSIDERED OPINION, THIS AMOUNT HAS ALSO BEEN PROVED AND IT HA S TO BE ACCEPTED. ANOTHER SUM OF ` 35,000/- BEING PERSONAL SAVINGS IN HAND WITH LATE S HRI B.D. CHAWLA AND HIS WIFE WHO EXPIRED ON MARCH, 2002 . IN OUR CONSIDERED OPINION, THIS SUM ALSO CAN BE ACCEPTED. 15. THEREFORE, WE ACCEPT THE TOTAL SUM OF ` 3,65,214/- AS THE MARRIAGE EXPENDITURE. HOWEVER, THE SUBMISSION OF THE ASSESS EE THAT THERE WERE CREDIT PURCHASES OF ` 1,74,786/-, CANNOT BE ACCEPTED . IT IS BEYOND HUM AN PROBABILITY THAT SUCH SMALL AMOUNTS OF EXPENDITURE WILL BE INCURRED ON CREDIT BASIS AND ALLOWED TO REMAIN SO FOR FEW YEARS. AS WE HAVE CONFIRMED THE ADDITION TO THE EXTENT OF ` 1,74,786/-, WE DELETE THE REST. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.10.2011. SD/- SD/- (C.L. SETHI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21.10.2011. *RM ITA 1407(DEL)2010 11 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR