Bachittar Singh Chana, Ludhiana V. ITO, W-V(1), Ludhiana

ITA 1682/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7504 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 21-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KULTEJ SINGH BAINS
• Keywords: Unexplained expenditure; Gift; Tangible material
• Section: 69C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1682/CHD/2017 ASSESSMENT YEAR: 2001-02 BACHITTAR SINGH CHANA VS. THE ITO PROP. M/S FANTAS INDIA WARD-V(1), 8023/4, RANJIT NAGAR LUDHIANA BEHIND A.T.I, GILL ROAD, LUDHIANA PAN NO. ACDPC5030F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. SUDHIR SEHGAL REVENUE BY : SHRI. KULTEJ SINGH BAINS DATE OF HEARING : 10/07/2018 DATE OF PRONOUNCEMENT : 11/07/2018 ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A) DT. 19/09/2017 ON THE FOLLOWING G ROUNDS OF APPEAL: 1. THAT THE WORTHY CIT(A) HAS ERRED IN UPHOLDING THE A CTION OF THE ASSESSING WITH REGARD TO THE RE-OPENING OF THE CASE U/S 148 OF THE I.T ACT, 1961. 2. THAT THERE WAS NEITHER ANY REASON TO BELIEF NOR ANY TANGIBLE MATERIAL TO SUSTAIN THE FINDING OF THE CIT(A) WITH REGARD TO THE RE-OPENING OF THE CASE U/S 148 OF THE INCOME TAX ACT, 1961. 3. NOTWITHSTANDING THE ABOVE .GROUNDS OF APPEAL T HE ID. CIT(A) UPHOLDING ADDITION OF RS. 701970/- ON ACC OUNT OF SO CALLED UNEXPLAINED EXPENDITURES ON THE MARRIAGE OF HIS DAUGHTER OF THE ASSESSEE BY INVOKING THE PROVISION OF SECTION 69C OF THE INCOME TAX ACT, 1961 AND BY TREATING THE SAME AS UNEXPLAINED E XPENDITURES OF THE ASSESSEE AS UNDER: I) UNEXPLAINED EXPENDITURE ON GOLD ITEMS RS. 3,1 3,641/- II) UNEXPLAINED EXPENDITURE ON FURNITURE ITEMS R S. 2,09,529/- III)UNEXPLAINED EXPENDITURE IN GENTS SUITS RS. 2 0,000/- IV)UNEXPLAINED EXPENDITURE ON LADIES SUITS RS. 5 0,000/- V)UNEXPLAINED MARRIAGE PALACE EXPENSES RS. 48,800 /- VI)UNEXPLAINED EXPENDITURE ON THEIR ITEMS RS. 60, 000/- TOTAL UNEXPLAINED EXPENDITURES RS. 7,01,9707- 2 4. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING TH AT ADDITIONS OF RS. 7,01,9707- HAS BEEN MADE BY THE ASSESSING OFFICER A GAINST THE FACTS AND CIRCUMSTANCES OF THE CASE ON THE BASIS OF GUESS WORK AND IMAGINATION WITHOUT ANY EVIDENCE ON RECORDS. 2. GROUND NO. 1 AND 2 WAS NOT PRESSED AND HENCE NOT BEEN ADJUDICATED. 3. GROUND NO. 3 AND 4 PERTAINS TO ADDITION ON ACCOU NT OF UNEXPLAINED EXPENDITURE REGARDING THE GROUND NO. 3 4. SUB HEAD (I) DEALS WITH EXPENDITURE ON GOLD ITEMS OF RS. 3,13,64 1/-. 4.1 THE ASSESSEE HAS GIFTED 125 TOLAS OF GOLD DURIN G THE MARRIAGE AND EXPLAINED THAT THE GOLD PURCHASED IN THE CURRENT AS SESSMENT YEAR WAS 4.8 TOLAS AND THE REMAINING WAS PURCHASED IN THE PAST AS WELL AS GIFTS FROM RELATIVES GRANDFATHER ETC. IT WAS EXPLAINED THAT THE QUANTITY OF 56 TOLAS OF GOLD WAS CONVERTED FROM THE GOLD BELONGING TO THE MOTHER OF THE ASSESSEE AS WELL AS THE WIFE OF THE ASSESSEE. 4.2 THE ASSESSING OFFICER ON EXAMINATION OF THE JEW ELER CAME TO THE CONCLUSION THAT NO CONVERSION OF GOLD TOOK PLACE AN D BROUGHT TO TAX AN AMOUNT OF RS. 3,13,641/- ON ACCOUNT OF 56 TOLAS OF GOLD @ 5517/-. 4.3 BEFORE US, THE LD. AR ARGUED THAT IT CANNOT BE TOTALLY ASSUMED THAT THE MOTHER AND GRAND MOTHER OF THE BRIDE HAS NOT CONTRI BUTED ANYTHING IN GOLD. IT WAS ARGUED THAT AS PER TRADITIONAL HINDU RITUALS AN D CUSTOMS THE GOLD PASSES ON FROM MOTHER TO DAUGHTER DURING THE MARRIAGE. HENCE NOT GIVING ANY ALLOWANCE OUT OF THE 56 TOLAS OF GOLD GIFTED BY MOTHER AND GR AND MOTHER AND TREATING THE TRADITIONAL GIFTS AS UNEXPLAINED AND BRINGING THE E NTIRE AMOUNT TO TAX CANNOT BE ACCEPTED. IT WAS FURTHER ARGUED THAT SINCE THE ASSE SSEE WAS IN THE BUSINESS OF 3 AUTOMOBILES AND ALSO HIS WIFE IS FROM A FAIR BACKGR OUND A REASONABLE ALLOWANCE FOR THE GIFTS IS TO BE ACCORDED TO. 4.4 LD. DR RELIED ON THE ORDER OF THE LD. CIT(A). 4.5 HAVING GONE THROUGH THE FACTS ON RECORD, IT CAN BE CONVENIENTLY CONCLUDED THAT AT THE TIME OF MARRIAGE A MINIMUM OF 400 GMS TO 500 GMS OF GOLD CAN BE TREATED AS STHREEDHAN BASED ON THE FA MILY BACKGROUND. HENCE, KEEPING IN VIEW THE ENTIRETY OF THE FACTS SPECIFIC AND PARTICULAR TO THE INSTANT CASE A QUANTITY OF 450 GMS OF GOLD (EQUIVALENT TO 3 8 TOLAS) IS TREATED AS GOLD PASSED ON TO THE BRIDE FROM MOTHER AND GRANDMOTHER. THE ADDITION MADE EQUIVALENT TO 12 TOLAS OF GOLD (@ 5517 ) STANDS CON FIRMED. 5. SUB HEAD (II) DEALS WITH UNEXPLAINED EXPENDITURE ON FURNITURE OF RS. 2,09,000/-. 5.1 THE ASSESSING OFFICER MADE AN ADDITION OF RS. 2 ,00,000/- ON ACCOUNT OF PURCHASE OF FURNITURE. 5.2 REGARDING THE FURNITURE THE ASSESSEE EXPLAINS T HAT THE FURNITURE HAS BEEN PURCHASED ON VARIOUS DATES AND SOME PURCHASE BILLS WERE ALSO FILED BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAS ALSO EXPLAINS T HAT AN AMOUNT OF RS. 2,00,000/- WAS SPENT IN THE F.Y. 2001-02 KEEPING IN VIEW THE O NGOING MARRIAGE DISPUTES. 5.3 BEFORE US THE LD. AR ARGUED THAT THESE AMOUNTS WAS SPENT ON ACCOUNT OF FURNITURE PURCHASED POST MARRIAGE AND EXPLAINED THA T BANK WITHDRAWALS AMPLY PROVE THE FACT AS PER THE PAGE NO. 14 OF THE ASSESS MENT ORDER. IT IS THE COMMON PRACTICE TO PURCHASE THE REQUIRED FURNITURE FOR THE GIRLS NEW FAMILY AFTER THE MARRIAGE AND THE ASSESSEE COULD SHOW THE REQUIRED W ITHDRAWALS FOR SUCH EXPENSES WHICH CAN BE ACCEPTED. HENCE, THE ADDITION MADE ON ACCOUNT OF FURNITURE OF RS. 2,00,000/- IS HEREBY DELETED. 4 6. SUB HEAD (III),(IV),(V) AND (VI) RELATES TO UNEXPLAINED EXPENDITURE ON GENTS SUITS OF RS. 20,000/-, ON LADIES SUITS RS. 50,000/- , MARRIAGE PLACE EXPENSES RS. 48,800/- AND EXPENDITURE ON OTHER ITEMS OF RS. 60, 000/-. 6.1 BASED ON THE ARTICLES ENLISTED IN THE TEP THE A SSESSEE HAS SPENT AN AMOUNT OF RS. 80,000/- ON ACCOUNT OF GENTS SUITS, TOWELS A ND SWEATERS. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT OUT OF THE RS. 80,000/- AN AMOUNT OF CLOTHES WORTH RS. 50,000/- WERE PURCHASED IN THE LA ST YEAR AND CLOTHING WORTH RS. 30,000/- HAS GIVEN BY RELATIVES AND FRIENDS ON OCCA SION OF THE MARRIAGE. 6.2 THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS. 20,000/- BEING THE 25% OF RS. 80,000/- ON ADHOC, ESTIMATE BASIS WHICH THE LD. CIT(A) HAS ALSO CONFIRMED. 6.3 REGARDING THE LADIES SUITS, BASED ON THE ARTICL ES ENLISTED IN THE TEP THE ASSESSEE HAS SPENT AN AMOUNT OF RS. 1,48,000/- ON A CCOUNT OF LADIES SUITS, SHAWLS AND SWEATER. THE ASSESSEE SUBMITTED BEFORE THE ASSE SSING OFFICER THAT OUT OF THE RS. 1,48,000/- AN AMOUNT OF CLOTHES WORTH RS. 81,17 7/- WERE PURCHASED IN THE YEAR 2000-01AND CLOTHING WORTH RS. 38,633/- WERE OL D PURCHASES AND RS. 30,000/- HAS BEEN GIVEN BY THE RELATIVES AND FRIENDS ON OCCA SION OF MARRIAGE. 6.4 THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS. 50,000/- ON ESTIMATE BASIS WHICH THE LD. CIT(A) HAS ALSO CONFIRMED. 6.5 REGARDING THE MARRIAGE PLACE EXPENSES THE ASSES SEE EXPLAINED THAT HE HAS INCURRED TOTAL EXPENSES OF RS. 1,28,000/- ON AC COUNT OF SNACKS, LUNCH, CARDS AND SWEETS. 6.6 THE ASSESSING OFFICER ESTIMATED AN AMOUNT OF RS . 1,34,800/- ON ACCOUNT OF MARRIAGE EXPENSES INCLUDING LIGHTING AND PHOTOGR APHS AND TREATED AN AMOUNT OF RS. 48,800/- AS UNEXPLAINED. 5 6.7 REGARDING THE OTHER ITEMS OF POST MARRIAGE ITEM S THE ASSESSEE EXPLAINS THAT HE SPENT RS. 16,500/- . 6.8 THE ASSESSING OFFICER ESTIMATED RS. 60,000/- ON ACCOUNT OF COSMETIC KITS, PURSES, QUILTS ETC. 6.9 BEFORE US, THE LD. AR ARGUED THAT THE AMOUNTS H AVE BEEN DULY EXPLAINED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND TH E ADDITION MADE ON ESTIMATE BASIS WITHOUT BRINGING ANY SOUGHT OF MATERIAL ON RE CORD IS LIABLE TO BE DELETED. HE FURTHER ARGUED THAT A LARGE NUMBER OF ITEMS ARE GIVEN AS GIFTS BY FRIENDS AND RELATIVES TO THE BRIDE BEING THE DAUGHTER OF THE FA MILY AS PER THE TRADITIONAL HINDU CUSTOMS AND RITUALS. 6.10 LD. DR RELIED ON THE ORDER OF THE LOWER AUTHOR ITIES. 6.11 WE HAVE GONE THROUGH THE FACTS ON RECORD AND F IND THAT THE ADDITION ON ACCOUNT OF MARRIAGE EXPENSES WERE MADE PURELY ON ES TIMATE BASIS WITHOUT BRINGING AN IOTA OF EVIDENCE ON RECORD. THE ASSESSE ES EXPLANATION REGARDING THE AMOUNT SPENT CAN BE WELL ACCEPTED KEEPING IN VI EW THE OVERALL CIRCUMSTANCES OF THE CASE. HENCE THE ADDITION MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS IS HEREBY DELETED. 7. AS A RESULT THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11/07/2018 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR