Sh. Bimal Jain, Ludhiana V. ACIT, Ludhiana

ITA 724/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9009 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: BIMAL JAIN
• Keywords: Gift; Document seized; Documents seized
• Section: 69C; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.724/CHD/2016 (ASSESSMENT YEAR : 2003-04) SH.BIMAL JAIN PROP. VS. THE A.C.I.T., M/S MAGIC PAINT INDUSTRIES, CENTRAL CIRCLE-I, INDRA MARKET GILL ROAD, LUDHIANA. LUDHIANA. PAN: AAZPJ9730H (APPELLANT) (RESPONDENT) APPELLANT BY : BIMAL JAIN RESPONDENT BY : SHRI BHIM SINGH, DR DATE OF HEARING : 03.11.2016 DATE OF PRONOUNCEMENT : 04.11.2016 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, LUDHIANA DATED 16.3.2016 RELATING TO ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE ADDITION OF RS.1,05,000 MADE ON ACCOUNT OF UNEXPLAINED MARRIAGE EXPENSES. 2 3. THE ONLY ISSUE IN THE PRESENT APPEAL IS REGARDING THE ADDITION OF RS.1,05,000/- MADE ON ACCOUNT OF UNEXPLAINED MARRIAGE EXPENSES. 4. BRIEF FACTS RELATING TO THE ISSUE ARE THAT SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 196 1 (IN SHORT THE ACT) WAS CONDUCTED AT THE RESIDENTI AL PREMISES OF THE ASSESSEE ON 12.10.2006. DURING THE COURSE OF SEARCH, THE STATEMENT OF THE ASSESSEE WAS RECORDED IN WHICH QUESTION NOS.22 TO 24 WERE ASKED REGARDING ACADEMIC QUALIFICATION OF THE DAUGHTERS A ND THEIR MARRIAGES. DUE REPLY WAS GIVEN BY THE ASSESS EE IN WHICH HE STATED THAT HIS ELDER DAUGHTER GOT MARR IED IN 2002, WHILE THE YOUNGER ONE GOT MARRIED IN 2006 . THE ASSESSEE ALSO SUBMITTED THAT BOTH WERE PROFESSIONALLY QUALIFIED, THE ELDER ONE BEING A SOF TWARE ENGINEER AND THE YOUNGER ONE A DOCTOR. THE ASSESSE E ALSO GAVE DETAILS OF THE MARRIAGES OF BOTH THE DAUGHTERS, THE VENUE WHERE THE MARRIAGE TOOK PLACE AND THE APPROXIMATE AMOUNT SPENT ON THE MARRIAGES O F BOTH THE DAUGHTERS BEING RS.2 LACS EACH. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE WAS SPECIFICALLY ASKED TO FURNISH THE DETAILS OF THE TOTAL EXPENSES INCURRED ON THE MARRI AGE OF HIS ELDER DAUGHTER, IN RESPONSE TO WHICH THE ASSESSEE STATED THAT THE MARRIAGE WAS PERFORMED ON 9.10.2002 AND THE TOTAL EXPENSES INCURRED WAS 3 RS.3,26,000/-, THE SOURCE OF WHICH WAS DETAILED AS UNDER : RS.60,000/- SHRI BIMAL JAIN RS.35,000/- SMT. KRISHANA JAIN(MOTHER) RS.31,000/- BROTHERS OF MOTHER RS.1,00,000/- GIFT BY SH.S.P.BANSAL RS.1,00,000/- SHAGUNS BY FRIENDS & RELATIVES RS.3,26,000/- 6. REGARDING GIFT FROM SHRI S.P. BANSAL, THE ASSESSEE PRODUCED COPY OF AFFIDAVIT DATED 18.12.200 8. THE ASSESSEE FURTHER STATED THAT HIS FINANCIAL CONDITION WAS NOT GOOD DUE TO CLOSE OF COAL BUSINES S AND PAINT BUSINESS TOO WAS AT ITS INITIAL STAGE. T HE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE STATING THAT IT WAS NOT BELIEVABLE THAT TH E ASSESSEE FAMILY HAD INCURRED ONLY RS.95,000/- ON TH E MARRIAGE, WHILE THE REST WAS INCURRED BY HIS RELATI VES. THE ASSESSING OFFICER ALSO REFERRED TO VARIOUS SLIP S AND DOCUMENTS I.E. A-24, FOUND DURING SEARCH WITH REGARD TO THE MARRIAGE EXPENSES INCURRED AND HELD THAT IN VIEW OF THE SAME THE EXPENSES CLAIMED TO HA VE BEEN INCURRED BY THE ASSESSEE IS ESTIMATED TO RS.2 LACS AS AGAINST RS.95,000/- CLAIMED BY THE ASSESSEE . ACCORDINGLY, THE ADDITION OF RS.1,05,000/- WAS MADE TO THE INCOME OF THE ASSESSEE, AS EXPENDITURE OUT O F UNDISCLOSED SOURCES UNDER SECTION 69C OF THE ACT. 7. AGGRIEVED BY THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (APPEALS) WHO UPHELD T HE ORDER OF THE ASSESSING OFFICER HOLDING THAT THE 4 ASSESSING OFFICER HAS MENTIONED BASIS OF ESTIMATING THE EXPENSES AS THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH, WHICH WERE CONFRONTED TO THE ASSESSEE AND ALSO THE STATUS OF THE FAMILY AND, THEREFORE, THE ESTIMATION APPEARED TO BE REASONABLE . THE LD. CIT (APPEALS) ALSO HELD THAT THE ASSESSEE SUBMITTED NO PROOF OF EXPENSES INCURRED BY THE RELATIVES AND SHAGUNS, ETC. RECEIVED IN CASH. HE, THEREFORE, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT. 8. AGGRIEVED BY THE SAME, THE ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE US. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE POINT ED OUT THAT THE ISSUE OF EXPENSES INCURRED ON THE MARRIAGE OF THE DAUGHTERS OF THE ASSESSEE WAS DEALT WITH BY THE I.T.A.T., CHANDIGARH BENCH IN THE CASE OF THE ASSESSEE RELATING TO ASSESSMENT YEAR 2006-07 IN ITA NO.630/CHD/2016 DATED 8.7.2016, WHEREIN THE ISSUE OF EXPENSES INCURRED ON THE MARRIAGE OF YOUNG ER DAUGHTER WAS DEALT WITH. THE LEARNED COUNSEL FOR T HE ASSESSEE POINTED OUT THAT IN THAT YEAR ALSO THE ASSESSING OFFICER HAD ESTIMATED THE EXPENDITURE INCURRED BY THE ASSESSEE WHICH WAS DELETED BY THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE STA TED THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF THE I.T.A.T. IN THE CASE OF THE ASSESSEE FOR ASSESSMEN T 5 YEAR 2006-07 AND ACCORDINGLY, PLEADED FOR NECESSARY RELIEF IN THIS REGARD. 9. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LOWER AUTHORITIES. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS ALSO THE DOCUMENTS AND ORDERS REFERRED TO BEFORE US. ON PERUSAL OF THE ORDER OF THE I.T.A.T. IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2006-07 IN ITA NO.630/CHD/2016 WE FIND THAT THE ISSUE OF ADDITION MADE UNDER SECTION 69C OF THE ACT ON ACCOUNT OF MARRIAGE EXPENSES INCURRED ON THE MARRIAGE OF THE YOUNGER DAUGHTER OF THE ASSESSEE IN THE YEAR 2006 W AS DEALT WITH. THE HON'BLE I.T.A.T. VIDE ITS ORDER DA TED 8.7.2016 HAD DELETED THE ADDITION MADE BY HOLDING THAT THE BASIS OF THE ADDITION WAS THE SLIPS FOUND DURING THE COURSE OF SEARCH, ONE OF WHICH RELATED T O ASSESSMENT YEAR 2005, WHILE THE OTHER CARRIED NO DA TE. THE I.T.A.T. HELD THAT THE TOTAL OF THE EXPENSES AS PER THE DOCUMENTS FOUND AMOUNTED TO RS.4,92,790/-. THE I.T.A.T. FURTHER HELD THAT UNDISPUTEDLY, THE ASSESS EE HAD SOLEMNIZED THE MARRIAGE OF HIS TWO DAUGHTERS, O NE IN 2002 AND OTHER 2006. THE I.T.A.T. FURTHER HELD THAT THE TOTAL EXPENSES SHOWN BY THE ASSESSEE IN BO TH THE MARRIAGES AMOUNTED TO RS.7,27,000/- I.E. RS.3,26,000/- IN ASSESSMENT YEAR 2003-04 ON THE MARRIAGE OF ELDER DAUGHTER AND RS.4,01,000/- ON THE 6 MARRIAGE OF YOUNGER DAUGHTER IN ASSESSMENT YEAR 2006-07. IT WAS FURTHER HELD THAT THE EXPENSES SHO WN BY THE ASSESSEE WERE MORE THAN THAT REVEALED BY THE SEIZED PAPERS AND, THEREFORE, THE EXPLANATION OF TH E ASSESSEE WAS ACCEPTABLE. FURTHER, IT WAS HELD THAT THE ASSESSING OFFICER HAD GIVEN NO BASIS FOR ESTIMATING THE EXPENSES INCURRED OVER AND ABOVE THAT SHOWN BY THE ASSESSEE AND THAT IT WAS MERELY ON THE BASIS OF PRESUMPTION OF THE ASSESSING OFFICER. THE ADDITION MADE WAS, THEREFORE, DELETED IN THE ABSENCE OF ANY SPECIFIC MATERIAL FOUND AGAINST THE ASSESSEE AND IN THE ABSENCE OF ANY BASIS FOR ESTIMATING THE EXPENSES INCURRED. THE RELEVANT FINDINGS OF THE I.T.A.T. AT PARAS 5 TO 7 OF THE ORDER ARE AS UNDER : 5. AFTER CONSIDERING RIVAL CONTENTIONS, I DO NOT FIND ANY JUSTIFICATION FOR MAKING ADDITION OF RS. 1 LAC IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED MARRIAGE EXPENSES. THE ASSESSING OFFICER HAS SPECIFICALLY MENTIONED THAT AS PER ANNEXURE A-24, MARRIAGE EXPENSES RELATING TO THE YEAR 2005 WERE FOUND TO BE RS. 1,33,446/- WHILE THERE ARE SLIPS WHICH DID NOT CARRY THE DATE AND THE TOTAL OF THESE WORK OUT TO RS. 3,59,344/-. 6. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT MARRIAGES OF THE DAUGHTERS OF THE ASSESSEE WERE HELD IN THE PREVIOUS YEAR RELATING TO ASSESSMENT YEAR 2003-04 AND 2006- 07. IT WAS ALSO PLEADED THAT ASSESSEE HAD ALREADY SHOWN TOTAL MARRIAGE EXPENSES OF RS. 7,27,000/- I.E. RS. 3,26,000/- IN ASSESSMENT YEAR 2003-04 AND RS. 4.01.000/- IN ASSESSMENT 7 YEAR 2006-07. THEREFORE, THE MARRIAGE EXPENSES AS PER SEIZED DOCUMENT ARE LESS THAN THE EXPENSES SHOWN BY THE ASSESSEE IN TWO YEARS ON THE MARRIAGE OF DAUGHTERS OF THE ASSESSEE. THE SUBMISSIONS OF THE ASSESSEE HAVE NOT BEEN REBUTTED BY THE AUTHORITIES BELOW IN ANY MANNER. THE CLAIM OF THE ASSESSEE WAS, THUS, SPECIFIC THAT WHEN ASSESSEE PERFORMED MARRIAGE OF HIS TWO DAUGHTERS IN TWO DIFFERENT YEARS, MARRIAGE EXPENSES OF RS. 7,27,000/- WERE SPENT IN TWO MARRIAGES, HOWEVER, AS PER SEIZED PAPERS, THE TOTAL OF THE SAME MARRIAGE EXPENSES WERE CONSIDERED BY THE AUTHORITIES BELOW IN A SUM OF RS. 4,92,790/-. THE CONTENTION OF THE ASSESSEE IS SUPPORTED BY THE FACT THAT IN SOME OF THE SEIZED PAPERS, ASSESSMENT YEAR UNDER REFERENCE WAS MENTIONED BUT IN MAJORITY OF THE SEIZED PAPER, NO DATE WAS MENTIONED. THEREFORE, EXPLANATION OF THE ASSESSEE IS ACCEPTABLE TO THE EXTENT THAT ADDITION IS WHOLLY UNJUSTIFIED. FURTHER, THE ASSESSING OFFICER HAS NOT GIVEN ANY BASIS AS TO HOW HE HAS ESTIMATED RS. 1 LAC MORE EXPENSES ALLEGED TO HAVE BEEN SPENT BY ASSESSEE IN THE MARRIAGE OF HIS SECOND DAUGHTER. IT IS THE PRESUMPTION OF THE ASSESSING OFFICER THAT UNDATED SEIZED PAPER BELONGS TO MARRIAGE EXPENSES OF HIS SECOND DAUGHTER. THE TOTALITY OF THE MARRIA GE EXPENSES OF BOTH DAUGHTERS HAVE NOT BEEN CONSIDERED, SO ON PRESUMPTION, SUCH ADDITION COULD NOT BE MADE. 7. IN THE ABSENCE OF ANY SPECIFIC MATERIAL FOUND AGAINST THE ASSESSEE AND IN THE ABSENCE OF ANY BASIS FOR ESTIMATING ADDITION OF RS. 1 LAC, I AM OF THE VIEW THE ADDITION OF RS. 1 LAC IS WHOLLY UNJUSTIFIED. I, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 1 LAC ON ACCOUNT OF UNEXPLAINED MARRIAGE 8 EXPENSES. FURTHER, THE ASSESSEE MADE ALTERNATE CLAIM THAT ADDITION OF RS. 1 LAC MAY BE SET OFF AGAINST ADDITIONAL INCOME SURRENDERED OF RS. 1 LAC IN THE RETURN OF INCOME. SINCE THE ADDITION ON ACCOUNT OF MARRIAGE EXPENSES HAS BEEN DELETED, THEREFORE, THE ALTERNATE CONTENTION OF THE ASSESSEE HAS BECOME INFRUCTUOUS AND NEED NO FURTHER ADJUDICATION. 11. IT IS EVIDENT FROM THE ABOVE THAT THE ISSUE OF EXPENSES INCURRED ON THE MARRIAGE OF THE ELDER DAUGHTER IN THE IMPUGNED YEAR WAS ALSO COVERED IN T HE ORDER OF THE I.T.A.T. FOR ASSESSMENT YEAR 2006-07 A ND WE FURTHER FIND THAT THE ADDITION MADE IN THE IMPUGNED CASE IS IDENTICAL TO THAT IN ASSESSMENT YE AR 2006-07 HAVING BEEN MADE IN THE ABSENCE OF ANY SPECIFIC MATERIAL FOUND AGAINST THE ASSESSEE AND BE ING A MERE ESTIMATION OF EXPENSES INCURRED. THE ASSESSI NG OFFICER WE FIND HAS RELIED UPON VERY SAME DOCUMENTS I.E. ANNEXURE A-24, WHICH WAS RELIED UPON IN THE CA SE OF THE ASSESSEE FOR ASSESSMENT YEAR 2006-07 ALSO F OR HOLDING THAT THE ASSESSEE HAD INCURRED MORE THAN TH E DECLARED EXPENDITURE ON THE MARRIAGE OF ELDER DAUGHTER. IN VIEW OF HE SPECIFIC FINDING OF THE I. T.A.T. IN THIS REGARD THAT ONE OF THE DOCUMENTS FOUND DURI NG SEARCH RELATING TO MARRIAGE EXPENSES WAS RELATED TO THE YEAR 2005 WHILE THE OTHERS WERE UNDATED AND FURTHER IN VIEW OF THE FACT THAT THE ASSESSEE HAD SOLEMNIZED MARRIAGE OF TWO DAUGHTERS, ONE IN THE YE AR 2002 AND OTHER IN THE YEAR 2006 AND TOTAL OF THE 9 EXPENSES CLAIMED TO HAVE BEEN CLAIMED BY THE ASSESS EE ON THE TWO MARRIAGES BEING MORE THAN THAT FOUND AS PER THE SEIZED DOCUMENTS, THERE WAS NO CASE FOR MAKING ANY ADDITION AT ALL. MOREOVER, IN THE PRESE NT CASE ALSO, WE FIND THAT THE ASSESSING OFFICER HAD ESTIMATED EXPENSES INCURRED OVER AND ABOVE THAT SHOWN BY THE ASSESSEE WITHOUT ANY BASIS AT ALL. WE , THEREFORE, HOLD THAT THE DECISION OF THE I.T.A.T. RENDERED IN THE CASE OF THE ASSESSEE IN ITA NO.632/CHD/2016 (SUPRA), ON THE IDENTICAL ISSUE, SQUARELY APPLIES IN THE PRESENT CASE ALSO, FOLLOWIN G WHICH WE DELETE THE ADDITION MADE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED.[ ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 4 TH NOVEMBER, 2016 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH