Rajesh Mundra, Kolkata V. DCIT, Central Circle - XVII, Kolkata, Kolkata

ITA 1672/KOL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9182 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 1997-1998
• Appeal Filed On: 25-08-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S BHA DRA
• Assessee Lawyers: S BANDYOPADHYAY
• Keywords: Unexplained expenditure; Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , . . !' ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] # # # # / I.T.A NO. 1672/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 1997-98 RAJESH MUNDRA VS DEPUTY COMMISSIONER OF INCOME -TAX, (PAN AFLPM 0377 E) CENTRAL CIRCLE-XVII, KOLKAT A. ( )* /APPELLANT ) (+,)*/ RESPONDENT ) FOR THE APPELLANT: SHRI S. BANDYOPADHYAY FOR THE RESPONDENT: SHRI S. BHADRA !- / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A), CENTRAL-1, KOLKATA IN APPEAL NO.65/CC-XVII/CIT(A),C-1/2000-01 VIDE DAT ED 20.07.2010. THE ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-XVII, KOLKATA U/ S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASS ESSMENT YEAR 1997-98 VIDE HIS ORDER DATED 28.03.2000. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION OF MARRIAGE GIFTS TO THE EX TENT OF RS.2,81,663/- MADE BY THE ASSESSING OFFICER. FOR THIS, THE ASSESSEE HAS RAIS ED THE FOLLOWING GROUND NO.2: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOL DING THE DISALLOWANCE ON ESTIMATE OF THE MARRIAGE GIFTS RECEIVED BY THE APPE LLANT FROM DIFFERENT RELATIONS AND OTHER GUESTS TO THE EXTENT OF RS.2,81,663/- AND ADDITION OF THE SAME AS UNEXPLAINED INCOME. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE A SSESSEE HAS DEPOSITED A SUM OF RS.4,79,000/- IN CASH IN ALLAHABAD BANK ON 12.12.19 96. THE ASSESSING OFFICER WAS REQUESTED TO EXPLAIN THE NATURE AND SOURCE OF THE C ASH DEPOSIT. THE ASSESSEE EXPLAINED THAT THIS CASH WAS RECEIVED AS GIFT AMOUNTING TO RS .4,81,663/- ON THE OCCASION OF HIS 2 ITA 1672/K/2010 RAJESH MUNDRA A.Y.97-98 MARRIAGE HELD ON 4.12.1996. THE ASSESSING OFFICER R EQUESTED FOR EVIDENCE IN SUPPORT OF RECEIPT OF CASH GIFT AND THE ASSESSEE HAS FILED THE NAMES OF THE DONORS WITHOUT ADDRESSES OR IDENTIFICATION OR RELATIONSHIP WITH THE ASSESSEE . THE ASSESSING OFFICER IN VIEW OF SOCIAL CUSTOM AND ASSESSEES STATUS, ACCEPTED GIFTS TO THE EXTENT OF RS.2,00,000/- ON ESTIMATE BASIS AND MADE ADDITION OF BALANCE CASH DE POSIT IN BANK OF RS.2,81,663/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO EXACTLY ON SIMILAR FACTS AND AFTER TAKING FURTHER REMAND REPORT, CONFIRMED THE A CTION OF THE ASSESSING OFFICER BY GIVING FOLLOWING FINDING VIDE PARAS 3.2 AND 3.3 OF HIS APPELLATE ORDER AS UNDER: 3.2. I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE LD. A.R, THE REPORT OF THE ASSESSING OFFICER AND THE COUNTER SUBMISSION FILED BY THE AR. THERE IS NO DISPUTE THAT THE ASSESSEE GOT MARRIED ON 04.12.1996 . IT IS ALSO NOT DISPUTED, THERE IS CUSTOM OF MAKING GIFT ON THE OCCASION TO T HE GROOM AND BRIDE. THE QUANTUM OF SUCH GIFT DEPENDS ON THE PREVAILING CUST OM AND SOCIAL STATUS OF THE FAMILY. IN THE MARRIAGE THOUGH THE ASSESSEE HAS CL AIMED THAT HE HAS RECEIVED GIFT OF RS.4,81,663/- BUT NO EXPENDITURE HAS BEEN S TATED TO HAVE BEEN INCURRED ON THE RECEPTION OF THE GUESTS. FURTHER THE TOTAL WI THDRAWAL FOR THE YEAR IS ALSO ONLY RS.20,000/-. MOREOVER THE GIFT RECEIVING AND GIVING IS ALWAYS RECIPROCAL. NO MARRIAGE GIFT HAS BEEN GIVEN BY THE ASSESSEE DUR ING THE YEAR. FURTHER THE DETAILS OF THE DONORS FURNISHED AT THE TIME OF ASSE SSMENT CONTAINS LIST OF 615 DONORS BUT THE LIST SUBMITTED BEFORE THE LD. CIT(A) CONTAINS THE NAME OF 147 DONORS ONLY INCLUDING NAME OF 55 PERSONS HAD ALLEGE DLY GIVEN CASH GIFT OF RS.5000/- OR MORE. 3.3. HENCE TAKING ALL THE FACTS INTO CONSIDERATION , IT IS HELD THAT THE A.O HAS MOST REASONABLY ESTIMATED THE QUANTUM OF THE CUSTOMARY C ASH GIFT THAT MIGHT HAVE BEEN RECEIVED BY THE ASSESSEE AT THE TIME OF MARRIA GE. HENCE NO FURTHER RELIEF CAN BE GRANTED. ACCORDINGLY THE ADDITION OF RS.2,8 1,663/- MADE BY THE A.O AS UNEXPLAINED INCOME IS CONFIRMED AND THE GROUND NO.1 &2 TAKEN BY THE APPELLANT IS DISMISSED. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE MADE SUBMISSIONS THAT A FAIR ESTIMATE CAN BE MADE TAKING INTO SOCIAL CUSTOM AND STATUS OF THE ASSESSEE. LD. DR ALSO STATED THAT ASSESSING OFFICER AS WELL AS CIT(A) BOTH HAVE MADE ESTIMATED ADDITION AND BENCH CAN TAKE A VIEW ON IT. AFTER CONSIDERING THE FACTS IN ENTIRETY, THE SOCIAL STATUS OF THE ASSESSEE, THE CUSTOM PREVALENT IN THE COMMUNITY AND KEEPING IN VIEW THE DETAILS OF GIFT, INCONSISTENCY IN THE LETTERS AS NOTED BY ASSESSING OFFICER DURING REMAND REPORT, WE ESTIMATE THE ADDITION AT RS.1,31,663/- INSTEAD OF R S.2,81,663/- AND DIRECT THE ASSESSING OFFICER TO COMPUTE INCOME ACCORDINGLY. 3 ITA 1672/K/2010 RAJESH MUNDRA A.Y.97-98 5. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING MARRIAGE EXPENSES TO THE EXTENT OF RS.1, 50,000/-. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWING GROUND NO.3: 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDI TION OF THE ALLEGED MARRIAGE EXPENSES IN THE HANDS OF THE APPELLANT TO THE EXTEN T OF RS.1,50,000/-, IN THE FACE OF THE ADMITTED FACT THAT IN THE ASSESSMENT OF THE FATHER OF THE APPELLANT SHRI SURAJ RATAN MUNDHRA, CONSIDERABLE AMOUNT OF SUCH MA RRIAGE EXPENSES STOOD ADDED BACK. 6. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSEES MARRIAGE HAS BEEN SOLEMNIZED, WHEREIN THE ASSESSEE HAS INCURRED EXPEN DITURE ON CATERING, DECORATION, PURCHASE OF JEWELLERY AND WEARING APPARELS AS WELL AS FOOD FOR THE INVITEES. THE ASSESSEE STATED THAT THE TOTAL INVITEES WERE 750 TO 800. THE ASSESSEE CONTENDED THAT THE ENTIRE RECEPTION WAS ARRANGED BY FRIENDS AND RELATI VES AND IT WAS CLAIMED THAT NO JEWELLERY WAS PURCHASED FOR THE OCCASION OF MARRIAG E AND EVEN DECORATION AND FLORAL ARRANGEMENTS WERE DONE BY FRIENDS AND RELATIVES. T HE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS DISCLOSED TOTAL DRAWING DURING THE YEA R AT RS.20,000/- AND EVEN NO MARRIAGE EXPENSES WERE DRAWN FROM THE ACCOUNTS. IN VIEW OF THIS, THE ASSESSING OFFICER ESTIMATED THE MARRIAGE EXPENSES AS UNDER: 1. EXPENDITURE ON RECEPTION OF 800 INVITEES @ RS. 125/- PER HEAD. RS. 1,00,000/- 2. DECORATION RS. 40,000/- 3. PURCHASE OF ORNAMENTS AND WEARING APPARELS RS. 25,000/- 4. ELECTRICAL DECORATION RS. 20,000/ - 5. ACCOMMODATION CHARGES OF THE PLACE OF RECEPTION RS. 10,000/- RS.1,95,000/- THE ASSESSING OFFICER HAS NOT BELIEVED EXPLANATION OF THE ASSESSEE THAT ALL EXPENDITURE ON ACCOUNT OF MARRIAGE WAS DONE BY FRIENDS AND RELA TIVES AS CLAIMED BY THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) RESTRICTED THE EXPENDITURE AT RS.1,50,000/- BY GIVING FOLLOWING FI NDING VIDE PARA 4.2 OF HIS ORDER: THE SUBMISSION OF THE LD. AR THAT THE MARRIAGE EXP ENDITURE AMOUNTING TO RS.2,53,332/- HAS ALREADY BEEN CONSIDERED IN THE HA ND OF THE APPELLANT FATHER IS NOT CORRECT. ADDITION OF RS.2,53,332/- HAS BEEN MA DE IN THE HAND SRI SURAJ RATAN MUNDHRA, FATHER OF THE ASSESSEE ON THE BASIS OF UNACCOUNTED EXPENDITURE NOTED IN THE EXCISE BOOK IDENTIFIED AS SRM-2. FURT HER THE UNACCOUNTED EXPENDITURE PERTAINS TO A.Y 1990-91, 92-93, 94-95 A ND 1997-98. HOWEVER THERE CAN BE A PRESUMPTION THAT THE SOME OF THE UNACCOUNT ED EXPENDITURE RELEVANT FOR ASSESSMENT YEAR 1997-98 MIGHT HAVE BEEN INCURRED ON THE OCCASION OF THE 4 ITA 1672/K/2010 RAJESH MUNDRA A.Y.97-98 MARRIAGE RECEPTION. HENCE CONSIDERING ABOVE AND TH E QUANTUM OF THE UNACCOUNTED EXPENDITURE FOR THE A.Y 97-98 CONSIDERE D IN THE HAND OF SRI SURAJ RATAN MUNDHRA, FATHER OF THE ASSESSEE, THE ADDITION ON ACCOUNT OF THE UNACCOUNTED EXPENDITURE IS RESTRICTED TO RS.1,50,0 00/-. THE APPELLANT WILL GET RELIEF ACCORDINGLY. 7. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. EVEN NOW BEFORE US, CONTENTION OF THE ASSESSE E IS THAT THE EXPENDITURE IS MADE BY FRIENDS AND RELATIVES ON THE ABOVE ITEMS. WE ARE O F THE VIEW THAT IN THE ABSENCE OF ANY EVIDENCE, THAT THESE EXPENDITURE WERE INCURRED BY F RIENDS AND RELATIVES, UNABLE TO ACCEPT THE VERBAL CONTENTION OF THE ASSESSEE. WE ARE OF T HE VIEW THAT THE CIT(A) HAS REASONABLY ESTIMATED THE UNACCOUNTED EXPENDITURE AT RS.1.50 LACS AND WE SUSTAIN THE SAME. THIS ISSUE OF ASSESSEES APPEAL IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 9. ORDER PRONOUNCED IN OPEN COURT ON 31.03.2011 SD/- SD/- . . !' , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED 31ST DAY OF MARCH, 2011 ./ $01 2 JD.(SR.P.S.) !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SHRI RAJESH MUNDRA, C/O ALLIED RESINS & CHEMICALS CO. LTD., 13, CAMAC STREET, KOLKATA-17 2 +,)* / RESPONDENT, DCIT, CENTRAL CIRCLE-SVII, KOLKATA 3 . -$ ( )/ THE CIT(A), KOLKATA 4. -$ / CIT, KOLKATA 5 . => +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, !-$?/ BY ORDER, 1 /ASSTT. REGISTRAR .