Sh. Lakhpat Rai, Sangrur V. ITO, W-1, Sangrur

ITA 488/CHANDI/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0424 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 16-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Reason to believe
• Section: 69; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 488/CHD/2019 / ASSESSMENT YEAR : 2015-16 SHRI LAKHPAT RAI, HIND MOTORS STORE, MEHLAN ROAD, SANGRUR VS. THE ITO, WARD-1, SANGRUR ./PAN NO: ABEPR2985G / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE ' ! / REVENUE BY : SH. ROHIT MEHRA, SR.DR # $ % /DATE OF HEARING : 12.09.2019 &'() % / DATE OF PRONOUNCEMENT : 12.09.2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 25.02.2019 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), PATIALA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS), H AS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N REOPENING THE CASE BY ISSUING THE NOTICE U/S 148 OF THE INCOM E TAX ACT, 1961 SINCE THERE WAS NO REASON TO BELIEVE THAT THE INCOME OF THE APPELLANT HAS ESCAPED ASSESSMENT. 2. THAT THE LD. CIT(A), HAS ERRED IN NOT CONSIDERING T HAT THE ASSESSING OFFICER HAS REOPENED THE CASE MERELY ON R ECEIPT OF ITA NO.488-CHD/2019 SHRI LAKHPAT RAI, SANGRUR 2 CERTAIN INFORMATION WITHOUT ANY INDEPENDENT INQUIRY AND APPLICATION OF HIS MIND AND SAME DOES NOT CONSTITUT E VALID REASON TO BELIEVE FOR ASSUMPTION OF JURISDICTION U/ S 147 OF THE ACT. 3. NOTWITHSTANDING THE ABOVE SAID GROUNDS OF APPEAL, T HE LD.CIT(A) HAS ERRED IN RESTRICTING THE ADDITION TO THE TUNE OF RS. 10,00,000/- AGAINST THE ADDITION OF RS. 28,25,0 00/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SO CALLED UNEXP LAINED EXPENDITURE MADE ON THE MARRIAGE CEREMONY OF ASSESS EE'S DAUGHTER U/S 69 OF THE ACT. 4. THAT THE ADDITION OF RS. 10,00,000/- HAS BEEN CONFI RMED AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT THE DETAILED SUBMISSIONS FILED DURING THE COUR SE OF HEARING HAS NOT BEEN CONSIDERED PROPERLY. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. 3. GROUND NOS. 1 & 2 : THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET HAS SUBMITTED THAT AS PER THE INSTRUCTIONS O F HIS CLIENT, HE DOES NOT PRESS GROUND NOS. 1 & 2 OF THE APPEAL, HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. 4. GROUND NO.6 : GROUND NO.6 IS GENERAL IN NATURE, HENCE, NEED NO T TO BE ADJUDICATED. 5. GROUND NOS. 3,4 & 5: VIDE GROUND NOS. 3, 4 & 5, THE ASSESSEE HAS AGITATED THE ACTION OF THE CIT(A) IN CONFIRMING TH E ADDITION OF RS. 10 LACS OUT OF RS. 28.25 LACS MADE BY THE ASSESSING O FFICER ON ACCOUNT OF EXPENDITURE INCURRED BY THE ASSESSEE ON THE MARRIAG E CEREMONY OF HIS DAUGHTER, THE SOURCES OF WHICH REMAINED UNEXPLAINE D. ITA NO.488-CHD/2019 SHRI LAKHPAT RAI, SANGRUR 3 6. THE BRIEF FACTS OF THE CASE ARE THAT THE MARRIAG E OF THE DAUGHTER OF THE ASSESSEE WAS SOLEMNIZED ON 3.12.2014. HOWEVER, THE MARRIAGE WAS NOT GONE WELL AND SOON AFTER THE MARRIAGE, THE DISP UTE OCCURRED BETWEEN THE MARRIED COUPLE. THEREAFTER, ALLEGATIONS AND COU NTER-ALLEGATIONS WERE LEVELLED AGAINST EACH OTHER BY THE ASSESSEES FAMIL Y AND THE FAMILY OF THE IN-LAWS OF THE DAUGHTER OF THE ASSESSEE. THE AS SESSEE FOR THE PURPOSE OF CLAIMING ADEQUATE COMPENSATION FOR HIS DAUGHTER, IN HIS PLAINT BEFORE THE POLICE AND CIVIL / MATRIMONIAL COURTS, ALLEGED THAT THE ASSESSEE HAD INCURRED EXPENDITURE OF RS. 42 TO 45 LACS ON THE MA RRIAGE CEREMONY OF HIS DAUGHTER. THEREAFTER, A COMPLAINT WAS RECEIVED BY THE INCOME-TAX AUTHORITIES IN RESPECT OF THE ABOVE CLAIM OF THE AS SESSEE FOR SPENDING HUGE EXPENDITURE ON MARRIAGE CEREMONY OF HER DAUGHT ER. THE ASSESSING OFFICER TAKING COGNIZANCE OF THE PLEADINGS OF THE A SSESSEE BEFORE THE CIVIL / CJM COURT IN MATRIMONIAL DISPUTE BETWEEN TH E DAUGHTER OF THE ASSESSEE AND HER HUSBAND, ASKED THE ASSESSEE TO EXP LAIN THE SOURCE OF THE AFORESAID EXPENDITURE INCURRED BY THE ASSESSEE ON T HE MARRIAGE CEREMONY OF HIS DAUGHTER. THE ASSESSEE EXPLAINED THAT THE EX PENDITURE WAS INCURRED OUT OF THE SAVINGS MADE RIGHT FROM THE BIR TH OF HIS DAUGHTER, FROM THE GIFTS AND CASH RECEIVED FROM THE RELATIVES AND INVITEES OF THE FUNCTION AND FURTHER JEWELLERY WAS MADE OUT OF THE ANCESTRAL / INHERITED JEWELLERY OF THE FAMILY. APART FROM THAT, THE AMOUN T OF RS. 2 LACS WAS ALSO WITHDRAWN FROM THE BANK ACCOUNT OF THE ASSESSE E. THE ASSESSING OFFICER TAKING NOTE OF THE ABOVE PLEADINGS OF THE A SSESSEE GAVE RELIEF TO THE ASSESSEE OF RS. 21.50 LACS. HE, HOWEVER, MADE THE ADDITION OF RS. ITA NO.488-CHD/2019 SHRI LAKHPAT RAI, SANGRUR 4 28.25 LACS BEING THE EXPENDITURE INCURRED OUT OF TH E UNEXPLAINED SOURCES. 7. IN APPEAL, THE LD. CIT(A) OBSERVED THAT THERE WA S NO EVIDENCE OF INCURRING OF THE SAID EXPENDITURE BY THE ASSESSEE, RATHER, THE ADDITION WAS MADE BY THE ASSESSING OFFICER SOLELY ON THE BAS IS OF THE CERTAIN CLAIMS AND COUNTER-CLAIMS MADE BY THE PARTIES IN MA TRIMONIAL LIGATION BETWEEN THE DAUGHTER OF THE ASSESSEE AND HER HUSBAN D. HE FURTHER NOTED THAT EVEN A SPECIFIC EXPENDITURE ON CAR WAS INCURRE D BY THE IN-LAWS OF THE DAUGHTER OF THE ASSESSEE AND FURTHER CONSIDERIN G THE SOCIAL REALITY, CUSTOMS AND CONSIDERING THAT EVERY FATHER TRIES TO INCUR MAXIMUM EXPENDITURE ON THE MARRIAGE CEREMONY OF HIS DAUGHTE R AND CONTRIBUTION IS ALSO MADE IN RESPECT OF THE SAME BY THE RELATIV ES, FRIENDS AND INVITEES BY GIVING SHAGUN ON THE MARRIAGE CEREMONY, RESTR ICTED THE ADDITION TO RS. 10 LACS. 8. BEING AGGRIEVED BY THE SAID ORDER OF THE CIT(A), THE ASSESSEE HAS COME IN APPEAL BEFORE THIS TRIBUNAL. 9. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. FROM THE FACTS ON THE FILE, IT IS REVEALED THAT THOUGH THE A SSESSEE IN THE MATRIMONIAL LITIGATION / COMPLAINT AGAINST THE HU SBAND OF HIS DAUGHTER AND HER IN-LAWS HAS CLAIMED THAT HE HAD INCURRED HU GE EXPENDITURE ON THE MARRIAGE CEREMONY AND THAT THE IN-LAWS AND HUSB AND OF HIS DAUGHTER SHOULD APPROPRIATELY COMPENSATE HER, HOWEVER, THE RE IS NO RELIABLE EVIDENCE ON THE FILE TO PROVE INCURRING OF SUCH AN EXPENDITURE BY ITA NO.488-CHD/2019 SHRI LAKHPAT RAI, SANGRUR 5 ASSESSEE EXCEPT THE BALD CLAIM MADE BY THE ASSESSEE IN THE COMPLAINT BEFORE THE POLICE AND CJM COURT. EVEN AS PER THE C OMPLAINT RECEIVED BY THE ASSESSING OFFICER, THE ASSESSEE HAD CLAIMED THE INCURRING OF THE FOLLOWING EXPENDITURE BEFORE POLICE / COURT:- MARRIAGE PALACE : RS. 15 LACS CLOTH AND JEWELLERY ; RS. 10 LACS HONDA CAR : RS. 12 LACS OTHER EXPENSES : RS. 3 TO 8 LACS HOWEVER, THE IMPORTANT FACTOR WHICH IS REVEALED IS THAT THE ABOVE CLAIM OF THE ASSESSEE WAS REBUTTED BY THE IN-LAWS OF HER DAUGHTER AND FURTHER IT WAS POINTED OUT THAT THE HONDA CAR AMOUNTING TO RS. 12 LACS WAS NOT GIVEN / PURCHASED BY THE ASSESSEE, RATHER, THE EXPE NDITURE INCURRED ON THE PURCHASE OF HONDA CAR WAS BORNE BY THE FATHER-I N LAW OF THE DAUGHTER OF THE ASSESSEE. THIS FACT ALONE IS SUFFIC IENT TO OBSERVE THAT THE CLAIM MADE BY THE ASSESSEE IS AN EXAGGERATED CLAIM WHEREIN CERTAIN FALSEHOOD IS ALSO INVOLVED, SUCH AS, THE CLAIM OF E XPENDITURE ON HONDA CAR WHICH THE IN-LAWS OF HER DAUGHTER HAVE PROVED TO HAVE BEEN INCURRED BY THEM AND THE RELIEF HAS BEEN GIVEN BY T HE ASSESSING OFFICER IN THIS RESPECT. A CATEGORICAL OBSERVATION HAS BEEN MADE BY THE CIT(A) ALSO THAT NEITHER THE ASSESSEE COULD PRODUCE ANY DO CUMENT ABOUT THE INCURRING OF THE SAID EXPENDITURE NOR THE ASSESSING OFFICER COULD BRING ON RECORD ANY EVIDENCE IN THIS RESPECT. 10. EVEN THE COURT OF CJM, WHEREIN, CERTAIN CRIMINA L PROCEEDINGS HAVE BEEN PENDING, HAS ALSO GIVEN FINDINGS THAT TH E EXPENSE OF AMOUNT ITA NO.488-CHD/2019 SHRI LAKHPAT RAI, SANGRUR 6 OF RS. 12 LACS WAS INCURRED BY THE IN-LAWS OF THE DAUGHTER OF THE ASSESSEE. IT IS WELL KNOWN THAT WHEN MATRIMONIAL D ISPUTES OCCUR, ALLEGATIONS AND COUNTER ALLEGATIONS ARE LEVELED BY THE FAMILIES OF BOTH THE WIFE AND HUSBAND INVOLVED IN MATRIMONIAL DISPUT ES. HIGH CLAIMS ARE MADE OF INCURRING OF EXPENDITURE BY THE BRIDES FAM ILY SO AS TO PUT CLAIM FOR SUFFICIENT MAINTENANCE AND COMPENSATION FROM TH E HUSBANDS FAMILY. SIMILARLY, ALLEGATIONS ABOUT THE CONDUCT OF THE PAR TIES TO THE MARRIAGE ARE LEVELED TO JUSTIFY THEIR RESPECTIVE ACTION. UN DER THE CIRCUMSTANCES, THE MERE CLAIM OF HIGH EXPENDITURE ON MARRIAGE OF HIS DAUGHTER BY THE ASSESSEE, A PART OF WHICH OTHERWISE HAS BEEN PROVED FALSE, IS NOT SUFFICIENT TO TAX THE ASSESSEE AS PER THAT VERSIO N, WHEN, IT HAS NOT BEEN PROVED BY ANY EVIDENCE OR ANY FINDINGS OF THE COURT THAT THE CLAIM MADE BY THE ASSESSEE AGAINST THE IN- LAWS FOR CLAIM OF COMPENSATION OF HIS DAUGHTER IN A MATRIMONIAL DISPUTE IS SACROSANCT. E VEN THE IN-LAWS OF THE DAUGHTER OF THE ASSESSEE HAVE ALSO REFUTED THE CLA IM OF THE ASSESSEE OF INCURRING OF SUCH AN EXPENDITURE. THE ADDITION IN T HIS CASE HAS BEEN MADE BY THE ASSESSING OFFICER WITHOUT INVESTIGATION OF THE REAL FACTS AND WITHOUT POINTING OUT TO ANY ACTUAL EVIDENCES. THE ASSESSING OFFICER DID NOT MAKE ENQUIRIES FROM THE OWNERS OF THE MARRI AGE PALACE, FROM THE SHOPS ETC. FROM WHERE ALLEGEDLY THE CLOTH AND JEWEL LERY WAS PURCHASED FOR MARRIAGE ETC. THIS ADDITION HAS BEEN MADE ON AS SUMPTION AND PERMUTATION MERELY BECAUSE OF THAT THE ASSESSEE HAD PUT AN EXAGGERATED CLAIM IN MATRIMONIAL DISPUTE BEFORE THE CIVIL / MAT RIMONIAL COURT. AS OBSERVED ABOVE THAT SOME OF THE CLAIM PUT BY THE AS SESSEE IS FOUND TO BE ITA NO.488-CHD/2019 SHRI LAKHPAT RAI, SANGRUR 7 FALSE EVEN BEFORE THE CONCLUSION OF THE PROCEEDINGS BEFORE THE CIVIL / MATRIMONIAL COURT. 11. IN VIEW OF THIS, THE ADDITION MADE BY THE INCOM E-TAX AUTHORITIES MERELY AND SOLELY ON THE BASIS OF A DISPUTED CLAIM MADE BY THE ASSESSEE IN MATRIMONIAL DISPUTE OF HER DAUGHTER, CANNOT BE H ELD TO BE JUSTIFIED AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. THE APPEAL OF THE ASSESSEE STANDS ALLOWED. HOWEVER, IT IS MADE CLEAR THAT ANY OBSERVATION MADE ABOVE IN ADJUDICATING THIS TAX APPEAL OF THE ASSESSEE WILL N OT HAVE ANY BEARING IN RESPECT OF ANY MATRIMONIAL PROCEEDINGS AND OTHER CI VIL & CRIMINAL LITIGATION CARRIED OUT BETWEEN THE DAUGHTER OF THE ASSESSEE AND HER HUSBAND. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN C OURT IMMEDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 12. 09.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE