Appeal Details
Counselvise Citation
[2014] 140 COUNSELVISE.COM (IT) 81863 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-10-2014
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
08-10-2014
Assessment Year
2008-2009
Appeal Filed On
03-10-2012
Judgement Text
ITA NO. 5110/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI R.S. SYAL ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER I.T.A. NO. 5110 /DEL/ 12 A.Y. : 2008 - 09 ABHIT SUD, 2-A, SHANKARACHARYA MARG, CIVIL LINES, NEW DELHI. (PAN AOGPS 7293P) VS. DCIT, CIRCLE - 6 (1) C.R. BUILDING, NEW DELHI- 110 002. (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V.K. BINDAL, CA , SHRI SANJEEV BINDAL, CA DEPARTMENT BY : Y . K A KKAR, DR O R D E R PER GEORGE GEORGE K, JM 1. THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DIRECTED AGAINST THE ORDER OF THE CIT (A)-IX, NEW DELHI, DATED 26.06.2012. TH E RELEVANT ASSESSMENT YEAR IS 2008-09 . 2. THE ASSESSEE HAS, IN HIS GROUNDS OF APPEAL, RAISED TWO MAIN ISSUES WHICH ARE LISTED AS UNDER: (1) THAT THE CIT (A) WAS ERRED IN SUSTAINING THE AD DITION OF RS.10 LAKHS MADE U/S 68 OF THE ACT BY THE ASSESSING OFFICER; & (2) THAT THE CIT (A) WAS NOT JUSTIFIED IN CONFIRMIN G THE ADDITION OF RS.27,25,352/- OUT OF RS.32.25 LAKHS MADE BY THE AO FOR THE EXPENSES INCURRED BY THE ASSESSEE THROUGH HIS CREDIT CARD. 3. BRIEFLY STATED, THE FACTS OF THE ISSUES ARE AS FOLLOWS: THE ASSESSEE, AN INDIVIDUAL AND DIRECTOR OF MAYAR INDIA LIMITED , FURNISHED HIS RETURN OF INCOME FOR THE AY UNDER DISPUTE, ADMITTIN G A TOTAL INCOME OF RS.21,80,380/- WHICH WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT AND, SUBSEQUENTLY, TOOK UP FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE AO, AMONG OTHERS, ITA NO. 5110/DEL/2012 2 NOTICED THAT THE ASSESSEE HAD DEPOSITED CASH OF RS. 10 LAKHS TO HIS BANK ACCOUNT. THE AO HAD ADDED THE SAME AS UNEXPLAINED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. FURTHER, IT WAS NOTICED BY THE AO THAT THE AS SESSEE HAD MADE A TOTAL PAYMENTS OF RS.38,46,653/- THROUGH HIS CREDIT CARD OF AMERIC AN EXPRESS BANK LTD. AFTER HAVING CONSIDERED THE DETAILS OF PAYMENTS FURNISHED BY THE ASSESSEE, THE AO HAD ADDED A SUM OF RS.32,25,392/- AS INCOME OF THE ASSE SSEE IN THE ABSENCE OF ANY COGENT EXPLANATION FURNISHED BY THE ASSESSEE. HE HAD, FURTHER, STATED THAT FROM FORM 16 ISSUED BY BOTH THE COMPANIES, IT WAS ASCERT AINED THAT THESE AMOUNTS HAVE NOT BEEN REFLECTED AS PERKS OR INCOME IN THE HANDS OF THE ASSESSEE. ACCORDING TO AO AS THESE EXPENSES WERE PERSONAL IN NATURE (27,25 ,392 PAID BY MAYAR HEALTH RESORTS LTD. AND RS. 5,00,000/- PAID BY MAYER INDIA LTD. ) AND THEREFORE, IT WAS CONSIDERED AS INCOME IN THE HANDS OF THE ASSESSEE A ND, ACCORDINGLY, ADDED BACK IN THE TOTAL INCOME OF THE ASSESSEE. IT WAS, FURTHER, OBSERVED THAT SUD FAMILY IS CONTROLLING ALL THE COMPANIES IN THE MAYAR GROUP WH ICH ARE VERY CLOSELY RELATED AND, THUS, THERE WAS NO DIFFICULTY IN CONCLUDING THAT AS TO WHY THE ASSESSEE HAD GOT PAYMENTS OF RS.27,25,392/- AND RS.5,00,000/- FROM M AYAR HEALTH RESORTS LTD AND MAYAR INDIA LTD RESPECTIVELY AGAINST HIS CREDIT CAR D EXPENSES. HE HAD, FURTHER, HELD THAT THE PAYMENTS RECEIVED BY THE ASSESSEE/PAID ON HIS BEHALF BY THE TWO COMPANIES AGAINST HIS PERSONAL EXPENSES ARE TAXABLE AS HIS IN COME SINCE HE HAS RECEIVED THE SAME FROM THE COMPANIES WHICH HE CONTROLS AS DIRECT OR / SHARE-HOLDER, IN THE GARB OF BUSINESS PROMOTION EXPENSES WHEREAS THE EXPENSES AR E PURELY OF PERSONAL NATURE. 4. AGGRIEVED, THE ASSESSEE TOOK UP THE ABOVE ISSUES, BEFORE THE CIT (A). AFTER DUE CONSIDERATION OF THE CONTENTIONS PUT -FORTH BY THE ASSESSEE AS RECORDED IN THE IMPUGNED ORDER, THE CIT (A) HAD CONFIRMED BO TH THE ADDITIONS FOR THE FOLLOWING REASONS, NAMELY: (A) ADDITION OF RS.10,00,000/- : 4.4. (ON PAGE 8)..THE CASE OF THE APPELLANT IS THAT HIS WIFE RECEIVED A GIFT OF RS.11,51,000/- IN CASH FROM HER FATHER IN THE MONTH OF JANUARY, 2007, OUT OF WHICH, AN AMOUNT OF RS.10,00,000/- WAS GIFTED BY HER TO TH E APPELLANT IN THE MONTH OF AUGUST, 2007. IF THE EXPLANATION OF THE APPELLANT WERE TO BE ACCEPTED, IT IMPLIES THAT HIS WIFE WHO RECEIVED A GIFT OF RS.11,51,000/- IN C ASH IN THE MONTH OF JANUARY, 2007 KEPT THE SAME WITH HER IN CASH FOR ABOUT THE NEXT E IGHT MONTHS BEFORE GIFTING IT TO HIM. THIS PROPOSITION OF THE APPELLANT THAT HIS WI FE KEPT THE GIFT WITH HER IN CASH FOR ABOUT EIGHT MONTHS IS IMPROBABLE/HARD TO BELIEF. I F THE GIFT IS GENUINE, THE RECIPIENT WOULD DEPOSIT IT IN HIS/HER BANK ACCOUNT SOON THERE AFTER. OTHERWISE, AS PER THE ITA NO. 5110/DEL/2012 3 NORMAL HUMAN BEHAVIOUR ONE WOULD SURELY SPEND THE M ONEY AND NOT KEEP IT IN CASH FOR SUCH A LONG PERIOD OF ABOUT EIGHT MONTHS IN ANY CASE. EQUALLY DIFFICULT TO BELIEVE IS THE PROPOSITION THAT HIS FATHER-IN-LAW WHO IS AL LEGEDLY A REGULAR INCOME-TAX PAYEE HAVING THE CAPACITY TO GIFT AN AMOUNT LIKE RS.11,51 ,000/- WOULD GIFT SUCH A HUGE AMOUNT IN CASH. IN MY CONSIDERED OPINION, IF THE F ATHER-IN-LAW HAD THE CAPACITY TO GIT A SUBSTANTIAL AMOUNT LIKE RS.11,51,000/-, HE WO ULD SURELY DO SO BY CHEQUE AND CERTAINLY NOT BY CASH. 4.5. IN SUPPORT OF HIS CONTENTION, THE APPELLANT CO ULD ONLY FURNISH AFFIDAVIT OF HIS WIFE CONFIRMING THE GIFT AND COPIES OF THE TWO GIFT DEED S. HOWEVER, IN THE GIVEN FACTS AND CIRCUMSTANCES, SUCH AFFIDAVIT / GIFT DEEDS APPEAR N OTHING MORE THAN SELF-SERVING DOCUMENTS AND, THEREFORE, IN MY CONSIDERED OPINION, THEY CANNOT BE RELIED UPON. 4.1. IN RELATION TO THE RELIABILITY OF THE AFFIDAVIT / GIFT DEEDS FURNISHED BY THE ASSESSEE, THE CIT (A) HAD RELIED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. NOVA PROMOTERS &FINLEASE (P) LTD REPORTED IN 342 ITR 169 (DEL) AND, ACCORDINGLY, HELD THAT - 4.6 (ON PAGE 9)..SINCE THE APPELLANT HAS NOT BE EN ABLE TO SATISFACTORILY EXPLAIN THE SOURCE OF THE CASH OF RS.10,00,000/- DE POSITED IN HIS BANK ACCOUNT AND THE DOCUMENTS IN SUPPORT FILED BY HIM LACK RELIABIL ITY, THE LD. AR (SIC) AO HAD RIGHTLY TREATED THE SAME AS HIS UNEXPLAINED INCOME. (B) CREDIT CARD EXPENSES : 5.6.(ON PAGE 12).AS PER THE ASSESSMENT ORD ER, THE LD. AO HAS RECORDED A FINDING THAT THE APPELLANT ALONG WITH HI S FATHER, NAMELY SRI AJIT SUD AND BROTHER SRI ASHIT SUD IS CONTROLLING MAYAR GROUP OF COMPANIES AS THE PROMOTER/ DIRECTOR. ADMITTEDLY, THE APPELLANT INCURRED EXPENS ES TOTALLING TO RS.38,62,333/ THROUGH HIS CREDIT CARD, OUT OF WHICH, THE PAYMENTS AMOUNTING TO RS.32,25,392/- WERE MADE BY THE TWO GROUP COMPANIES NAMELY, M/S. MAYAR INDIA LTD AND M/S. MAYAR HEALTH RESORTS LTD. THE LEARNED AO HAS ALSO RECORD ED A FINDING AS PER THE ASSESSMENT ORDER THAT THE EXPENSES INCURRED THROUGH CREDIT CARD ARE OF THE NATURE OF PERSONAL EXPENSES OF THE APPELLATE. THOUGH AS PER THE NARRATION OF SUCH EXPENSES, THE TWO COMPANIES HAVE RECORDED THAT THE SAID EXPEN SES ARE BUSINESS PROMOTION EXPENSES, BUT, SUCH NARRATION IS HIGHLY MISLEADING AS FROM THE DETAILS IT CAN BE SEEN THAT THE EXPENSES ARE CLEARLY PERSONAL IN NATURE AN D THE TWO COMPANIES HAVE TRIED TO GIVE THEM A COLOUR OF BUSINESS EXPENDITURE. DURING THE APPELLATE PROCEEDINGS, THE LEARNED AR REITERATED HIS CONTENTION THAT THE EXPEN SES WERE INCURRED BY THE APPELLANT ON BEHALF OF THE TWO COMPANIES BEING BUSINESS PROMO TION EXPENSES AND WERE THEREFORE BORNE BY THE SAID TWO COMPANIES. THE APP ELLANT ALSO SUBMITTED THAT OUT OF THE ABOVE, AN AMOUNT OF RS.5,00,000/- WAS PAID OUT OF THE IMPREST ACCOUNT OF THE FATHER OF THE APPELLANT, NAMELY, SRI A K SUD AND WA S DEBITED IN THE BOOKS OF ACCOUNTS OF THE COMPANY AS HIS UNSECURED LOAN. 5.7. IN ORDER TO VERIFY THE CONTENTION OF THE APPEL LANT THAT THE EXPENSES OF RS.27,25,392/- WERE INCURRED ON BEHALF OF MAYAR HEA LTH RESORTS LTD AND WERE IN THE NATURE OF BUSINESS PROMOTION EXPENSES AND WERE, THE REFORE, NOT TAXABLE IN HIS HANDS, THE LD. AR WAS REQUIRED TO FURNISH HE DETAILS OF SU CH EXPENSES MENTIONING THE DATES, ITA NO. 5110/DEL/2012 4 AMOUNTS, PURPOSE AND THE PLACE OF INCURRING THE EXP ENDITURE. THE LD. AR VIDE ORDER SHEET NOTING DATED 15.6.2012 WAS, FURTHER, REQUIRED TO ESTABLISH THE NEXUS OF THE EXPENSES INCURRED THROUGH THE CREDIT CARD WITH THE BUSINESS. DESPITE REPEATED OPPORTUNITIES, THE APPELLANT DID NOT ESTABLISH SUCH NEXUS WHICH IN MY CONSIDERED OPINION IS CRUCIAL TO DECIDE ABOUT THE TAXABILITY O F THE AMOUNT UNDER CONSIDERATION. THE APPELLANT ONLY FILED DETAILS OF EXPENDITURE INC URRED THROUGH THE CREDIT CARD, ON- GOING THROUGH WHICH IT IS SEEN THAT SUCH EXPENSES W ERE INCURRED IN VARIOUS HOTELS AND RESTAURANTS, IN VARIOUS STORES LIKE GUCCI AND D RISHTI, IN CINEMA HALLS, OPTICIANS AND JEWELLERY, CLOTH AND COSMETIC SHOPS ETC., AND A RE, THEREFORE, CLEARLY HIS PERSONAL EXPENSES. THUS, THE PAYMENT OF EXPENSES BY THE COM PANY ON BEHALF OF THE APPELLANT CLEARLY ACQUIRES THE NATURE OF INCOME IN HIS HANDS AS PER THE PROVISIONS OF SECTION 17(1)(IV) READ WITH SECTION 17(2)(IV) OF THE ACT. ELABORATELY QUOTING THE PROVISIONS OF S. 17 OF THE ACT, THE CIT (A) HAD HELD THAT - IN VIEW OF THE PROVISIONS OF THE LAW, I HOLD THAT NOT ONLY THE AMOUNT OF RS.27,25,392/- PAID BY MAYAR HEALTH RESORTS LTD IS THE INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION. THE FACT THAT FBT ON THE SAID AMOUNT WAS PAID DOES NOT COME TO THE RESCUE OF THE APPELLANT AS MERE PAY MENT OF FBT CANNOT ABSOLVE THE APPELLANT FROM PROVING THE FACT THAT THE AMOUNT PAI D BY THE COMPANY WAS NOT FOR HIS INDIVIDUAL BENEFIT BUT WAS BUSINESS EXPENDITURE OF SUCH COMPANY. UNDER THE CIRCUMSTANCES, I UPHOLD THE ADDITION OF RS.27,25,39 2/- IN THE HANDS OF THE APPELLANT. THE APPELLANTS CONTENTION THAT THE SAME WERE IN TH E NATURE OF BUSINESS PROMOTION EXPENSES AND WERE INCURRED ON BEHALF OF THE COMPANY REMAINED UNSUBSTANTIATED. 5. AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE US W ITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE LEARNED A R REITERATED MORE OR LESS WHAT HAS BEEN REPRESENTED BEFORE THE AUTHORITIES BELOW. IN FURTHERANCE, IT WAS CONTENDED THAT THE DONOR [THE ASSESSEES WIFE] IN HER AFFIDAV IT/GIFT DEED HAD CLEARLY AFFIRMED THAT THE SUBJECT GIFT WAS MADE TO HER HUSBAND [THE ASSES SEE] OUT OF HER OWN SOURCES AND GIFT RECEIVED FROM HER FATHER. IT WAS, THEREFORE, PLEADED THAT THE CIT (A) WAS NOT JUSTIFIED IN COMING TO A CONCLUSION THAT THE ASSESS EE HAD NOT BEEN ABLE TO SATISFACTORILY EXPLAIN THE SOURCE OF THE CASH OF RS .10 LAKHS DEPOSITED IN HIS BANK ACCOUNT AND THAT THE DOCUMENTS FURNISHED LACK RELIA BILITY. WITH REGARD TO THE CLAIM OF CREDIT CARD EXPENSES AGGREGATING TO RS.27.25 LAKHS, THE LEARNED AR SUBMITTED THAT THE CIT (A) WAS GROSSLY ERRED IN SUSTAINING THE STA ND OF THE AO BY MISTAKENLY OBSERVING THAT THE PAYMENTS OF RS.27.25 LAKHS BY MA YAR RESORTS LTD IN CONNECTION WITH THE EXPENSES INCURRED BY THE ASSESSEE THROUGH HIS CREDIT CARD WERE PURELY PERSONAL IN NATURE. IT WAS ARGUED, THE CIT (A) HAD FAILED TO NOTICE THE VERY FACT THAT THE PAYMENT WAS REIMBURSED BY MAYAR RESORTS LTD WA S NOTHING BUT THE EXPENSES INCURRED BY THE ASSESSEE ON ITS BEHALF. TO BUTTRES S HIS ARGUMENT, THE LEARNED AR FURNISHED, AMONG OTHERS, THE COPIES OF (I) AFFIDAVI T/GIFT DEED OF MRS.YASHA SUD; (II) GIFT ITA NO. 5110/DEL/2012 5 DEED BETWEEN THE DONOR (MRS SUD) AND HER FATHER; (I II) DETAILS OF PAYMENTS MADE FOR CREDIT CARD TO AMERICAN EXPRESS BANK LTD ETC., IN T HE FORM OF A PAPER BOOK. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE STAND OF T HE AUTHORITIES BELOW ON BOTH THE COUNTS ON THE PREMISE THAT THE ASSESSEE HAD FAILED TO BRING ANY DOCUMENTARY EVIDENCE ON RECORD TO SUPPORT HIS CASE. IT WAS, TH EREFORE, PLEADED THAT NO INTERVENTION OF THIS HONBLE BENCH IS CALLED FOR AS THERE IS NO INFIRMITY IN THE FINDINGS OF THE CIT (A) ON BOTH THE ISSUES UNDER DISPUTE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIALS ON RECORD AND ALSO THE COPIES OF (I) THE AFFIDAVIT/GIFT DEED OF MRS YASHA SUD AND (II) GIFT DEED BETWEEN MRS YASHA SUD AND HER FATHER. THE ISSUES RAISED BY THE ASSESSEE ARE DEALT WITH CHRONOLOGICAL LY AS UNDER: 6.1. ADDITION OF RS.10,00,000/- : IT WAS THE CASE OF THE ASSESSEE THAT HIS WIFE RECEI VED A GIFT OF RS.11.51 LAKHS IN CASH FROM HER FATHER AT THE TIME OF HER MARRIAGE IN JANU ARY, 2007, OUT OF WHICH A SUM OF RS.10 LAKHS IN CASH WAS GIFTED BY HER TO THE ASSESS EE IN AUGUST 2007. IT WAS, THEREFORE, CONTENDED THAT THE IDENTITY AND CAPACITY OF THE CREDITOR TO MAKE SUCH A GIFT AND THE GENUINENESS OF THE SAME HAS SINCE BEEN EXPL AINED, THE ADDITION OF THE SUBJECT AMOUNT IN THE HANDS OF THE ASSESSEE WAS AGA INST THE SPIRIT OF THE PROVISIONS OF S. 68 OF THE ACT. HOWEVER, THE ASSESSEE HAD, IN FACT, FAILED TO EXPLAIN THAT IF THE GIFT OF RS.10 LAKHS WERE TO BE GENUINE, WHAT PROMOT ED EITHER OF THE ASSESSEE OR HIS WIFE TO KEEP SUCH AN ENORMOUS CASH ON HAND FOR ALMO ST SEVEN MONTHS WHEN, AS CONCEDED BY THE ASSESSEE HIMSELF, THE ASSESSEE AND HIS WIFE WERE MAINTAINING A JOINT SAVING BANK ACCOUNT IN PUNJAB NATIONAL BANK. IT WAS ALSO MOST UNLIKELY AND IMPROBABLE THAT ANY PRUDENT BUSINESSMAN, LIKE THE A SSESSEE, WOULD HAVE VENTURED TO RETAIN SUBSTANTIAL CASH TO THE EXTENT OF RS.10 L AKHS ON HAND FOR SUCH A LONG PERIOD OF SEVEN MONTHS. AS RIGHTLY POINTED OUT BY THE CIT (A), IN NORMAL HUMAN BEHAVIOUR, NO ONE WOULD HAVE KEPT SUCH A LARGE AMOUNT OF CASH ON HAND FOR A PERIOD OF MORE THAN SEVEN MONTHS. AS ADMITTED BY THE ASSESSEE, TH E ASSESSEES FATHER-IN-LAW BEING AN INCOME-TAX ASSESSEE HAVING A TAXABLE INCOM E OF RS.1.65 CRORES COULD NOT HAVE VENTURED TO GIFT A SUM OF RS.11.51 LAKHS IN CA SH TO HIS DAUGHTER. HIS [THE ASSESSEES FATHER-IN-LAW] STATEMENT OF COMPUTATION OF INCOME [REFER: PAGES 26 TO 30 OF PB] ALSO DOESNT THROUGH ANY LIGHT OF THE ALLEGE D CASH GIFT OF RS.11.51 LAKHS TO HIS ITA NO. 5110/DEL/2012 6 DAUGHTER AT THE TIME OF HER MARRIAGE AS ALLEGED BY THE ASSESSEE. MOREOVER, THE ASSESSEES FATHER-IN-LAW BEING A BUSINESSMAN AND AN INCOME-TAX ASSESSEE WOULD NOT HAVE DREAMT OF GIFTING SUBSTANTIAL AMOUNT OF RS .11.51 LAKHS IN CASH RATHER THAN BY ISSUANCE OF A CHEQUE. 6.1.1. WE HAVE ALSO DULY PERUSED THE COPIES OF THE AFFIDAVIT / GIFT DEEDS PURPORTED TO HAVE BEEN EXECUTED BY THE ASSESSEES W IFE AND HIS FATHER-IN-LAW. HOWEVER, IN THE PARTICULAR FACTS AND CIRCUMSTANCES OF THE ISSUE, AS RIGHTLY HIGHLIGHTED BY THE CIT (A) IN HIS IMPUGNED ORDER UNDER DISPUTE, SUCH AFFIDAVIT / GIFT DEEDS WERE NOTHING BUT SELF-SERVING DOCUMENTS AND, THEREFORE, IN OUR VIEW, THEY CANNOT COME TO THE RESCUE OF THE ASSESSEE. MOREOVER, THE ASSESSEE S WIFE IN HER AFFIDAVIT AVERRED THAT THE SAID GIFT HAS BEEN MADE BY ME OUT OF MY OWN SOURCES AND GIFT RECEIVED BY ME FROM MY FATHER . HOWEVER, SHE, BEING A HOME MAKER, SHE HAD NOT EXP LAINED HER INCOME FROM OWN SOURCES. 6.2. TAKING ALL THE FACTS AND CIRCUMSTANC ES OF THE ISSUE AS DELIBERATED UPON IN THE FORE-GOING PARAGRAPHS AND ALSO IN CONSONANCE WI TH THE JUDGMENT OF THE HONBLE DELHI HIGH COURT (SUPRA) WITH REGARD TO THE RELIABI LITY OR OTHERWISE OF AFFIDAVIT, WE ARE OF THE VIEW THAT THERE IS NO INFIRMITY IN THE FINDI NG OF THE CIT (A) ON THE ISSUE WHICH REQUIRES OUR INTERVENTION. IN A NUT-SHELL, THIS IS SUE IS DECIDED AGAINST THE ASSESSEE. IT IS ORDERED ACCORDINGLY. 7. CREDIT CARD EXPENSES : IT WAS THE ASSERTION OF THE ASSESSEE THAT THE EXPEN SES WERE INCURRED BY HIM ON BEHALF OF THE COMPANY BEING BUSINESS PROMOTION AND, THEREFORE, RIGHTLY BORNE BY THE SAID COMPANY. HOWEVER, THE AO TOOK A DIVERGENT VIE W THAT SUD FAMILY WAS CONTROLLING ALL THE COMPANIES OF MAYAR GROUP WHICH WERE ADMITTEDLY CLOSELY RELATED TO EACH OTHER. HE HAD, THEREFORE, HELD THAT THE PA YMENTS RECEIVED BY THE ASSESSEE / PAID ON HIS BEHALF BY THE COMPANY AGAINST HIS PERSO NAL EXPENSES WHICH HE CONTROLS AS DIRECTOR/SHARE HOLDER, IN THE GARB OF BUSINESS P ROMOTION EXPENSES WHEREAS THE EXPENSES WERE PURELY PERSONAL IN NATURE. ON VERIFI CATION OF THE DETAILS FURNISHED, THE CIT (A) HAD NOTICED THAT SUCH EXPENSES INCURRED WER E IN VARIOUS HOTELS, RESTAURANTS, STORES LIKE GUCCI AND DRISHTI, CINEMA HALLS, OPTICI ANS, JEWELLERY, CLOTH, COSMETIC SHOPS ETC., AND, THEREFORE, CAME TO A CONCLUSION TH AT THEY WERE THE PERSONAL EXPENSES OF THE ASSESSEE. IN PURSUANCE OF THE PR OVISIONS OF S. 17(1)(IV) R.W.S. ITA NO. 5110/DEL/2012 7 17(2)(IV) OF THE ACT, THE CIT (A) HAD CONFIRMED THE ADDITION TO THE EXTENT OF RS.27,25,392/-. ON SCRUTINISING THE DETAILS OF EXP ENSES INCURRED THROUGH THE CREDIT CARD [ SOURCE: PAGES 97 TO 100 OF PB], AS RIGHTLY O BSERVED BY THE CIT (A) IN HIS IMPUGNED ORDER, WE CAME ACROSS THAT MOST OF THE EXP ENSES INCURRED BY THE ASSESSEE WERE, ADMITTEDLY, IN THE NATURE OF PERSONA L/PLEASURE/RECREATION SUCH AS IN CASCADE/MUSIC WORLD, HOTELS, DISNEYLAND ETC., FURT HERMORE, THE ASSESSEE HAD FAILED TO BRING ON RECORD ANY CREDIBLE DOCUMENTARY EVIDENC E(S) TO JUSTIFY THAT THE EXPENSES WERE, IN FACT, IN THE NATURE OF BUSINESS PROMOTION OF M/S. MAYAR HEALTH RESORTS LIMITED. IN THE ABSENCE OF ANY SUCH TANGIBLE DOCUM ENTARY PROOF TO CONTROVERT THE FINDINGS OF THE CIT (A) WHO HAD SUSTAINED THE STAND OF THE AO ON THIS ISSUE, WE ARE OF THE VIEW THAT THERE IS NO OTHER ALTERNATE BUT TO UPHOLD THE REASONING OF THE CIT (A) ON THE ISSUE. IT IS ORDER ACCORDINGLY. 8. IN THE RESULT , THE ASSESSEES APPEAL IS DISMISSED. SD/- SD/- [R. S. SYAL] [GEORGE GEORGE K] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 22 ND OCTOBER, 2014 VEENA COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES
