TMI Blog2015 (6) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... ing unable to prove or explain satisfactorily the source of the expenditure. - Decided against assessee. In sum, the facts and circumstances lead to an unmistakable conclusion of the assessee’s father being critically ill, and the assessee’s sister, living far away, showing her concern and responsibility toward her father as well as appreciation for her brother in looking after him - her father, with whom he was staying, and being in a position to, contributing thereto as her moral obligation. We, accordingly, confirm the addition of ₹ 8,85,102/- found credited to the assessee’s capital account in his accounts as his income for the foregoing reasons. - I.T.A. No. 3118/Mum/2013 - - - Dated:- 5-6-2015 - Shri Joginder Singh and Shri Sanjay Arora,JJ. For the Petitioner: Shri Nitesh Joshi For the Respondent : Shri Jitendra Kumar ORDER Per Sanjay Arora, A. M.: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-3, Mumbai ( CIT(A) for short) dated 08.11.2011, dismissing the assessee s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ( the Act hereinafter) for the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , condone the delay and admit the appeal, while imposing cost, which we award at ₹ 10,000/- in favour of the Revenue, to be deposited by the assessee therewith within one month of the receipt of this order. 3. Coming to the appeal, the principal issue raised therein is the maintainability or otherwise in law of the addition by way of unexplained expenditure u/s.69C of the Act in the given facts and circumstances of the case. It would be relevant to recount the facts of the case. The assessee s balance-sheet as at the year-end (31.03.2006/copy on record) reflected a credit of ₹ 8,85,102/- to his capital account. Explaining the background facts, it was submitted during hearing that the assessee s sister, Mrs. Huaping Caroline Chiang, a Canadian national, settled thereat since 1979, was planning to visit India along with her family, as communicated by her to her brother, the assessee, vide letter dated 18.05.2005 (copy on record), also stating of enclosing a draft for US $10000 (Rs.4.4 lacs approx.) along with for preparation of the visit and toward expenses. This was followed by a cheque for US $10000 vide letter dated 25.06.2005. She, however, cancelled the trip in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toward which, or to the extent of its inadequacy, addition u/s. 69C has been sustained in the present case, remains unspecified. True, the source of expenditure has to be explained by the assessee; rather, proving his claim as to source. However, unless the expenditure is quantified, even if by way of an informed estimate, how could the extent of deficiency toward the same, i.e., with reference to the assessee s disclosed/stated source of income, be stated or claimed. There is no material on record to show that the assessee s household expenditure, which has been clarified with reference to the capital account, forming part of the balance-sheet (copy on record), to be at ₹ 6,20,292/- for the year (i.e., as against ₹ 1.56 lacs stated by the ld. CIT(A), which only represents expenditure incurred in cash), i.e., excluding the maintenance charges (Rs.20,004/-) and LIC premium (at ₹ 81,656/-) and, two, in keeping with that incurred in the past, stand disclosed at a lower sum, so as to infer the same being incurred out of undisclosed income. Similarly, there is again nothing to show that the assessee incurred any sum toward the visit of his sister for a few days in Octo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled with a delay of 459 days, i.e., 519 days after the receipt of the impugned order, passed in November 2011, i.e., almost 40 months ago. Coming to the assessee s explanation of the remittance from his sister being a gift, and not toward any expenditure, the said explanation has several gaps and infirmities. The assessee s sister, as apparent from her affidavit/declaration, was not only aware of her father s illness, but in fact planned a visit to Mumbai along with her family to, as stated, see her ailing father, besides meeting the rest of the family. This, again, is indicative of the father being serious, so that she wished to see him as well as desired her family to do so. Two things are, thus, eminent. Firstly, that seeing her ailing father was a predominant consideration for the visit. Two, that the father was ill, perhaps seriously, with not long to survive, for she to have, living far away, planned a visit to Mumbai so as to able to see and meet him. That her family could not finally accompany her is another matter, stated to be for various reasons. Continuing further, why would she then send money to her brother for her visit? What was the expenditure required, or anti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e my father was not keeping good health at the time, in order to spend time in his company, I remained mostly with my brother and his family till I left India on 08/10/2005. That I was worried about the health of my father and therefore as a moral obligation on my part to contribute my bit for his medical treatment I sent to my brother Dr. Hsan Chan Chen an amount of US $8,000 on 21.11.2005 and another amount of US $2000 on 19.12.2005 in the form of gift. Again, two things are manifest in her conduct, taken in totality: an overarching concern for and desire to see her father; having specially planned a visit to see him and, two, to be able to, as his daughter (and being in a position to) contribute toward the cost of his medical treatment. She was not only aware of the nature of the father s illness; its gravity, but also the cost that his medical treatment entailed. The amounts were paid to her brother, with whom, and in whose care, the father was, incurring all the expenditure, and with no expectation for a return back, and which explains the use of the word gift by her, i.e., to contribute to the expenditure on the father s illness as a gift. One could argue, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o relation to the actual amount spent by him for the purpose of my stay and travel in India and also on the medical expenses, if any, on the treatment of my father. In fact, even otherwise, a document where and to the extent internally inconsistent, is to be, to that extent, ignored, and a view, taking a view in harmony with the entirety of the facts and events, as actually transpired, taken or adopted. In our view, therefore, the amounts were clearly remitted toward the father s medical treatment. It could also be argued, as indeed observed by us at the beginning of this order, that the expenditure, for its source to be questioned, should be proved, the onus for which is on the Revenue, while in the present case there is no indication of the expenditure incurred on the fathers illness. True; rather, the onus to establish that the condition/s of taxability is fulfilled, is always on the Revenue (refer: K.P. Varghese vs. ITO [1981] 131 ITR 597 (SC)). So, however, as again clarified therein, as well as in the decision by the hon ble courts, viz. C.K. Sudhakaran vs. ITO [2005] 279 ITR 533 (Ker), the proving of the existence of an investment, etc. (expenditure, in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would constitute a valid ground for including the same as income u/s. 68, that is, separate and distinct from that for being unable to prove or explain satisfactorily the source of the expenditure. That the Revenue has, however, not made two separate additions, as the law admits of, and for which we are sufficiently empowered in law to recommend; there being no estoppel against law (refer, inter alia, Kapurchand Shrimal v. CIT [1981] 131 ITR 451 (SC); Ahmedabad Electricity Co. Ltd. v. CIT [1993] 199 ITR 351 (Bom)(FB)), only goes to its credit, i.e., for being fair. The reason is simple and not far to seek. The Revenue rejects the assessee s explanation of the remittance/s being a gift only for the reason of it being toward the expenditure incurred by the assessee on, inter alia, the father s illness, with we having discountenanced the other areas of expenditure, also considered unexplained by the Revenue. There is thus little scope for the two additions the two getting telescoped one explaining and corroborating the other, providing its proof as it were. The father being seriously ill and under medical treatment; that expenditure was incurred follows as a natural corollary. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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