Shri Gunwant Singh, Patiala V. ITO, Patiala

ITA 341/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5445 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Business income; Documents seized
• Section: 69C; 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 341/CHD/2008 ASSESSMENT YEAR: 2007-08 SHRI GUNWANT SINGH, VS. THE ITO, WARD-1, PATIALA PATIALA PAN NO. AMMPS3243F (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SHRI N.K.SAINI ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), PATIALA DATED 4.1.2011 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORDER PASSED UNDER SECTION 250(6) OF THE I.T. ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE PREMISES OF THE ASSESSEE WAS SURVEYED UNDER SECTION 133A & ON THE BASIS OF CERTAIN DOCUMENTS / ESTIMATES COLLECTED DURING SURVEY AND ON THE BASIS OF HIS OWN ASSUMPTIONS THE ASSESSING OFFICER HAS CALCULATED THE AMOUNT OF EXPENDITURE INCURRED ON MARRIAGE OF HIS SON INSTEAD OF ACTUAL EXPENSES SUBMITTED AND EXPLAINED BY ASSESSEE. 2. THE COMPLETE EXPLANATIONS OF DOCUMENTS SEIZED WERE SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS 2 AND APPEAL PROCEEDINGS BUT THE ASSESSING OFFICER HA S SIMPLY IGNORED AND APPLIED HIS OWN ASSUMPTIONS. 3. THAT THE CIT(A) HAS NOT CONSIDERED THE EXPLANATIONS SUBMITTED BY ASSESSEE AND HAS SIMPLY RELIED ON THE ASSESSMENT OF ASSESSING OFFICER. 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT D URING THE YEAR UNDER CONSIDERATION, SURVEY WAS CONDUCTED U/S 133A OF THE INCOME TAX ACT. CERTAIN DOCUMENTS INCLUDING THE HARD DISK OF THE CO MPUTER WERE TAKEN AWAY BY THE SURVEY TEAM. HOWEVER, AS THE DATA IN T HE HARD DISK HAD BECOME CORRUPT, THE ASSESSEE HAD TO BUILD THE DATA AGAIN FROM THE BANK STATEMENT AND LIST OF SUPPLIERS AND DEBTORS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CERTAIN ADDITIONS WERE MADE ON ACCOUNT OF THE BUSINESS INCOME (LOSS) SHOWN BY THE ASSESSEE. ANOTH ER ASPECT NOTED BY THE ASSESSING OFFICER WAS THE EXPENDITURE INCURRED ON ACCOUNT OF MARRIAGE OF THE SON OF THE ASSESSEE. THE ASSESSEE HAD FURNISHED AN EXPLANATION IN RESPECT OF THE EXPENDITURE INCURRED ON MARRIAGE OF HIS SON ALONG WITH BREAK UP OF EXPENSES AND NAMES OF THE CA TERERS, ETC. THE REPLY OF THE ASSESSEE IS INCORPORATED UNDER PARA 2.5 AT P AGES 5 & 6 OF THE ASSESSMENT ORDER. THE TOTAL EXPENDITURE INCURRED B Y THE ASSESSEE WAS CLAIMED AT RS. 4 LACS, OUT OF WHICH ASSESSEE CLAIME D TO HAVE SPENT RS. 2,50,000/- AND HIS SON HAD CONTRIBUTED RS. 1,50,000 /-. THE ASSESSING OFFICER WAS OF THE VIEW THAT VERSION OF THE ASSESSE E VIS-A-VIS THE TOTAL EXPENDITURE ON THE MARRIAGE OF SON WAS NOT CORRECT AS DURING THE COURSE OF SURVEY, A LIST OF INVITEES WAS FOUND WHICH CONTA INED NAMES OF 191 FAMILIES. AS PER THE ASSESSING OFFICER, THE CATERI NG EXPENSES WERE TO BE ESTIMATED FOR 425 PERSONS AS AGAINST 300 PERSONS DE CLARED BY THE ASSESSEE. FURTHER, A DOCUMENT NO. 38 OF FILE NO.9 WAS FOUND I N WHICH A SUM OF RS. 3 43,250/- WAS INDICATED TO HAVE BEEN PAID TO M/S S UBHASH TEST HOUSE AS AGAINST THE CLAIM OF THE ASSESSEE HAVING PAID RS. 1 5,000/-. THE ASSESSING OFFICER TABULATED THE ESTIMATE OF MARRIAGE EXPENSES AT PAGES 8 & 9 OF THE ASSESSMENT ORDER AND AS PER THE ASSESSING OFFICER T HE TOTAL EXPENDITURE WORKS OUT TO RS. 6,63,700/-. ACCORDINGLY, AN ADDI TION OF RS. 2,63,700/- WAS MADE U/S 69C OF THE INCOME TAX ACT. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFFICER IN THE ABSENCE OF THE ASSESSE E PROVIDING ANY SATISFACTORY EXPLANATION REGARDING THE SAID ESTIMAT ION MADE BY THE ASSESSING OFFICER. 4. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHA LF OF THE ASSESSEE AND WE PROCEED TO DISPOSE OF THE PRESENT APPEAL AFT ER HEARING THE LD. DR FOR THE REVENUE. 5. ON THE PERUSAL OF RECORD AND THE ASSESSMENT ORDE R WE FIND THAT THE BASIS FOR AFORESAID ADDITION OF RS. 2,63,700/- IN T HE PRESENT CASE WAS ON ACCOUNT OF AN ESTIMATION OF MARRIAGE EXPENSES CARRI ED OUT BY THE ASSESSING OFFICER. THE ASSESSEE HAD CLAIMED TO HAV E SPENT RS. 4 LACS ON HIS SONS MARRIAGE AND THE ASSESSING OFFICER HAD EST IMATED THE EXPENDITURE AT RS. 6,63,700/-. THE VERSION OF THE ASSESSEE WA S DISBELIEVED BY THE ASSESSING OFFICER IN VIEW OF THE LIST OF INVITEES F OUND DURING THE SURVEY. THE ASSUMPTION OF THE ASSESSING OFFICER WAS THAT IN VIEW OF THE AFORESAID LIST, THE VERSION OF THE ASSESSEE THAT IT HAD PAID FOR CATERING OF 300 PERSONS WAS DISBELIEVED AND AN ESTIMATE WAS MADE ON ACCOUNT OF 425 PERSONS. THE OTHER EXPENSES CLAIMED BY THE ASSESSEE TO HAVE BEEN SPENT AS MARRIAGE EXPENDITURE WAS ENHANCED IN VIEW THEREOF. HOWEVER, NO EVIDENCE WAS FOUND EITHER DURING THE COURSE OF SURV EY OR THE ASSESSMENT PROCEEDINGS TO ESTABLISH THAT THE ASSESSEE HAD INCU RRED THE EXPENSES OTHER 4 THAN ABOVE EXPENDITURE SHOWN BY THE ASSESSEE, EXCE PT FOR A PAYMENT TO THE TENT HOUSE OF RS. 43,250/- AS AGAINST CLAIM OF RS. 15,000/- MADE BY THE ASSESSEE. THE ADDITION U/S 69C OF THE ACT IS J USTIFIED OR IS WARRANTED IN CASE IN ANY FINANCIAL YEAR, AN ASSESSEE HAS INCU RRED ANY EXPENDITURE AND IF HE DOES NOT OFFER ANY EXPLANATION ABOUT THE SOUR CE OF SUCH EXPENDITURE OR PART THERE OF OR THE EXPLANATION OFFERED BY HIM, IN THE OPINION OF THE ASSESSING OFFICER, IS NOT SATISFACTORY, SUCH AMOUNT OF EXPENDITURE OR PART THEREOF, IS DEEMED TO BE THE INCOME OF THE ASSESSEE FOR THE SAID FINANCIAL YEAR. THE CONDITION TO BE SATISFIED FOR APPLYING T HE PROVISIONS OF SECTION 69C OF THE ACT IS THAT THE ASSESSEE IS TO BE FOUND TO HAVE INCURRED AN EXPENDITURE AGAINST WHICH IT DOES NOT OFFER AN EXPL ANATION OR WHERE THE EXPLANATION OFFERED BY HIM, IN THE OPINION OF THE A SSESSING OFFICER, IS NOT SATISFACTORY. BUT SUCH SATISFACTION OR NON SATISFA CTION IS TO BE BASED ON SOME EVIDENCE. IN THE ABSENCE OF ANY EVIDENCE TO T HE CONTRARY THERE IS NO MERIT IN REJECTING THE EXPLANATION OF THE ASSESSEE AND ESTIMATING THE EXPENDITURE IN THE HANDS OF THE ASSESSEE AND THEREA FTER MAKING AN ADDITION U/S 69 OF THE ACT. IN THE ENTIRETY OF FACTS AND CI RCUMSTANCES, WE RESTRICT THE ADDITION TO RS. 28,250/- (43250-15000) I.E. EXP ENDITURE ON THE TENT HOUSE FOR WHICH THE DOCUMENT WAS FOUND DURING THE C OURSE OF SURVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE. BALANCE ADDITION OF RS. 2,35,450/- (RS. 263,700/- - 28,250/-) IS HEREBY DE LETED. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF MAY, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : MAY, 2011 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH