The ITO 2 (2), V. Shri Ram Kumar Singh Chouhan,

ITA 172/IND/2009

• Counselvise Citation: 17222714 RSA 2009
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 03-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DARSHAN SINGH
• Assessee Lawyers: P M CHOUDHARI
• Keywords: Unexplained expenditure; Corroborative evidences
• Section: 69C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 172/IND/2009 A.Y. 2005-06 INCOME TAX OFFICER 2(2), INDORE APPELLANT VS SHRI RAM KUMAR SINGH CHOUHAN INDORE PAN ADIPC-0700-E RESPONDENT APPELLANT BY : SHRI DARSHAN SINGH, CIT DR RESPONDENT BY : SHRI P.M. CHOUDHARI, CA & ADVOCATE O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE ON TH E GROUND THAT LD. FIRST APPELLATE AUTHORITY WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE IN THE MARRIAGE OF HIS DAUGHTER WI THOUT APPRECIATING THE FACT THAT 1100 GUESTS ARRIVED IN BARAT. 2. DURING HEARING WE HAVE HEARD SHRI DARSHAN SINGH, LEARNED CIT DR AND SHRI P.M. CHOUDHARI, LEARNED ADVOCATE FOR TH E ASSESSEE. THE 2 CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SU PPORT TO THE ASSESSMENT ORDER BY SUBMITTING THAT HUGE MARRIAGE E XPENSES WERE INCURRED BY THE ASSESSEE IN THE MARRIAGE CEREMONY O F HIS DAUGHTER KU. HARSHITA CHOUHAN, THEREFORE, THE ADDITION WAS ARGUE D TO BE JUSTIFIED. A PLEA WAS ALSO RAISED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE IMPUGNED ADDITION WITHOUT ASS IGNING ANY REASON. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSE E STRONGLY DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT THE MAJOR EXP ENSES WERE INCURRED BY SHRI VIRENDRA SINGH BUNDELA, FATHER-IN-LAW OF T HE DAUGHTER OF THE ASSESSEE, WHICH IS SUPPORTED BY AN AFFIDAVIT, THERE FORE, THE IMPUGNED ORDER WAS ARGUED TO BE JUSTIFIED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A RETIRED GOVERNMENT SERVANT. THE DAUGHTER OF THE ASSESSEE WAS GOT MARR IED ON 12.2.2005 WITH SHRI PAVAN BUNDELA SON OF SHRI VIRENDRA SINGH BUNDELA, MINISTER IN THE UP GOVERNMENT AT THE RELEVANT TIME. THERE WAS INFORMATION, GATHERED BY THE DEPARTMENT THAT HUGE EXPENDITURE HA D BEEN INCURRED IN THE SAID MARRIAGE, THEREFORE, THE CASE OF THE ASSES SEE WAS SELECTED FOR SCRUTINY. THE ASSESSEE FILED THE RETURN OF INCOME O N 7.6.2005 DECLARING TOTAL INCOME AT RS.1,64,651/-. THE ASSESSEE WAS ASK ED TO EXPLAIN THE 3 EXPENDITURE AND SOURCE THEREOF WHICH WAS INCURRED I N THE MARRIAGE OF HIS DAUGHTER. THE ASSESSING OFFICER ESTIMATED THE EXPENDITURE AND MADE ADDITION OF RS.1,20,50,000/- VIDE ORDER DATED 27.12.2007 U/S 69C OF THE ACT ON THE BASIS THAT HUGE EXPENDITURE WAS I NCURRED IN THE MARRIAGE OF HIS DAUGHTER. THE SOLE BASIS OF ASSESS MENT MADE BY THE ASSESSING OFFICER IS THE SURVEY REPORT OF ADIT (INV .), INDORE, DATED 8.7.2005 WHICH HAS BEEN INCORPORATED IN THE ASSESSM ENT ORDER. THE SURVEY REPORT IN TURN REFERS TO CUSTOMS AND PRACTIC ES OR THE NEWSPAPER CUTTINGS THAT HUGE EXPENDITURE WAS INCURRED IN THE MARRIAGE. THE ASSESSEE DURING ASSESSMENT PROCEEDINGS STRONGLY DEN IED THE EXPENDITURE AND FURNISHED THE DETAILS OF SUCH EXPEN DITURE ACTUALLY INCURRED BY HIM. IT WAS SPECIALLY CLAIMED THAT THE MAJOR EXPENSES WERE INCURRED BY THE FATHER OF THE BRIDEGROOM WHO ALSO A DMITTED THE EXPENDITURE DURING INQUIRIES MADE BY THE DDIT (INV) , AGRA. HOWEVER, THE ASSESSING OFFICER MADE THE ADDITION OF RS.1,20, 50,000/- U/S 69C IN THE HANDS OF THE ASSESSEE DETERMINING THE TOTAL INC OME AT RS.1,22,14,650/- AGAINST THE RETURNED INCOME OF RS. 1,64,651/-. THE COPIES OF SUBMISSIONS/REPLIES OF THE ASSESSEE ARE A VAILABLE AT PAGES 130 TO 210 OF THE PAPER BOOK. 4. FELT AGGRIEVED BY THE ADDITION MADE BY THE ASSES SING OFFICER, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED COMMISSIONER OF 4 INCOME TAX (APPEALS) WHEREIN DETAILED WRITTEN SUBMI SSIONS WERE FILED. APART FROM THIS, AN AFFIDAVIT OF SHRI VIRENDRASING H BUNDELA WAS ALSO FILED WHEREIN HE CATEGORICALLY ADMITTED HAVING INCURRED L ARGER PART OF THE EXPENDITURE IN THE MARRIAGE. A COPY OF THE REPLY O F SHRI BUNDELA, SUBMITTED TO THE JOINT DIRECTOR OF INCOME TAX, WAS ALSO FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE A SSESSEE ALSO FILED COPIES OF FINANCIAL STATEMENTS AND DETAILS OF EXPEN DITURE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), AFTER CONSIDE RING THE SUBMISSIONS OF THE ASSESSEE AND THE VOLUMINOUS PAPE R BOOK FILED BEFORE HIM, DELETED THE ADDITION MADE BY THE ASSESS ING OFFICER MAINLY ON THE GROUND THAT THE SAID ADDITION WAS NOT SUPPOR TED BY ANY MATERIAL OR EVIDENCE ABOUT THE FACT THAT SUCH EXPENDITURE HA D BEEN INCURRED BY THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT A DETAILED INQUIRY/INVESTIGATION IN RESPECT OF MARRIAGE EXPENS ES WAS CARRIED OUT BY THE ADDITIONAL DIRECTOR OF INCOME TAX (INV.), AGRA, WHO ISSUED SUMMONS TO SHRI BUNDELA. THE COPIES OF THE WRITTEN SUBMISSI ONS OF THE ASSESSEE ALONG WITH THE AFFIDAVIT OF MR. BUNDELA ARE AVAILAB LE AT PAGES 16 TO 31 OF THE PAPER BOOK. IT IS ALSO SEEN THAT THAT CERTAIN F URTHER INQUIRIES WERE MADE BY THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) REQUIRING THE ASSESSEE TO FURNISH RETURNS OF BUNDELA FAMILY R EGARDING PART INCURRING OF EXPENSES BY THEM. IT IS SEEN THAT THE COPIES OF THE REPLY SUBMITTED BY THE ASSESSEE ALONG WITH ANNEXURE ARE A VAILABLE AT PAGES 5 32 TO 102 OF THE PAPER BOOK. ANNEXURE A TO THE REPL Y IS THE REPLY FILED BEFORE THE JOINT DIRECTOR OF INCOME TAX BY SHRI BUN DELA EXPLAINING THE DETAILS AND SOURCE OF EXPENDITURE. THE COPIES OF FI NANCIAL STATEMENTS ARE AVAILABLE AT PAGES 38 TO 75 OF THE PAPER BOOK AND T HE DETAILS OF EXPENDITURE ALONG WITH SUPPORTING EVIDENCE ARE AT P AGES 76 TO 101 OF THE PAPER BOOK. IN VIEW OF THIS FACT, ONCE SHRI BUN DELA, FATHER-IN-LAW OF THE BRIDE, HAS ACCEPTED INCURRING OF EXPENSES ON TR AVELLING AND STAY, ETC. , NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSES SEE THAT TOO ON ESTIMATE BASIS WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD. EVEN THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WERE FORWARDED TO THE ASSESSING OFFICER FOR HER COMMENTS INCLUDING THE AF FIDAVIT FILED BY SHRI BUNDELA. THERE IS A MENTION IN THE IMPUGNED ORDER THAT NO SUBSTANTIAL COMMENTS OR ANY SUPPORTING MATERIAL WAS FURNISHED B Y THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THE ABSENCE OF SUCH MATERIAL/COMMENTS, DELETED THE ADDI TION. ONE OF THE REASONS FOR ADDITION WAS THAT ABOUT 1100 GUESTS ARR IVED IN THE BARAT AND IT IS CUSTOMARY THAT EXPENSES ON ACCOUNT OF MEAL, E TC. ARE MANAGED BY THE BRIDE SIDE. SINCE BUNDELA FAMILY HAS ADMITTED THAT KEEPING IN VIEW THEIR STATUS, THE MAJOR EXPENSES WERE INCURRED BY T HEM, NO ADDITION IS REQUIRED TO BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF PRESUMPTION. THE RATIO LAID DOWN IN THE DECISION F ROM HONBLE DELHI 6 HIGH COURT IN THE CASE OF VIJAY KUMAR MODI VS. CIT; 272 ITR 91 (DEL) SUPPORTS THE CASE OF THE ASSESSEE. BEFORE INVOKING THE PROVISIONS OF SECTION 69C OF THE ACT, THE ASSESSING OFFICER IS EX PECTED TO ESTABLISH THE CONDITIONS PRECEDENT AS TO THE EXISTENCE OF EXPENDI TURE OR UNDER- STATEMENT OF THAT EXPENDITURE WITH SUPPORTING MATER IAL TO JUSTIFY THE ADDITION. IN THE PRESENT APPEAL, THE ADDITION IS BA SED UPON THE NEWSPAPER REPORTS OR HEARSAY. THEREFORE, NO ADDITIO N IS WARRANTED IN THE ABSENCE OF MATERIAL INDICATING UNEXPLAINED EXPENDIT URE OR UNDER- STATEMENT OF EXPENDITURE. MERE IPSE DIXIT OF THE A SSESSING OFFICER ABOUT THE EXPENDITURE IS NOT ENOUGH TO SUSTAIN THE PRESUM ED ADDITION. RATHER THERE MUST BE MATERIAL ON RECORD TO SUPPORT SUCH AD DITION. THE DECISION IN ACIT V. D.S. MEHTA; 102 TTR (JD) 161 FURTHER SUP PORTS THE CASE OF THE ASSESSEE. IDENTICAL RATIO WAS LAID DOWN IN HAKI M BRIJLAL SHARMA VS. ITO; 11 TTJ (DEL) 349 AND ITO V. SURESH CHANDRA KOT HARI; 18 TTJ (JD) 272. THE AFFIDAVIT OF MR. BUNDELA, WHICH REMAINED UNCONTROVERTED, CONSTITUTES A GOOD EVIDENCE ABOUT INCURRING OF EXPE NDITURE BY HIM. SINCE MR. BUNDELA HAS ADMITTED THAT HE INCURRED THE EXPENSES ON TRAVEL, STAY, ETC. OF BARATIES, NO ADDITION IS WARRANTED IN THE HANDS OF THE ASSESSEE. HOWEVER, WE ARE MAKING IT CLEAR THAT IF T HE DEPARTMENT STILL FEELS ABOUT THE UNEXPLAINED EXPENDITURE ON THE ITEM S OWNED BY SHRI VIRENDRA SINGH BUNDELA THEN ACTION COULD HAVE BEEN TAKEN IN HIS HANDS INSTEAD OF ENTIRE ADDITION MADE IN THE CASE OF THE ASSESSEE AS HAS BEEN 7 OBSERVED IN PARA 2.2 (1) (PAGE 11) OF THE IMPUGNED ORDER. CONSEQUENTLY, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER AND CONF IRM THE SAME. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 TH MAY, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 .5.2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE DN/-