New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (2) TMI 78 - ITAT CHANDIGARH

2016 (2) TMI 78 - ITAT CHANDIGARH - TMI - Reopening of assessment - marriage expenses and jewellery gifted at the time of marriage - AO referred to the statement given to the police on 09.12.2009 under section 161 CrPC as well as 'Will' of his mother dated 04.07.2002 - Held that:- The re-opening of the assessment only on the basis of verification of the facts is not permissible under the law. The Assessing Officer is not empowered to reopen the assessment nor verify the facts for re-assessment.' .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 161 of CrPC could be tested only at the time of the statement of witness recorded in the court. The statement recorded by Police Officer during investigation is neither given 'on oath' nor it is tested by Cross Examination. According to the law of evidence, such statement is not evidence of the fact stated therein and therefore, it is not considered as 'substantive evidence'. Thus we are of the view Assessing Officer was not justified in re-opening the assessment under section 148 of the A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ithout giving any notice to the assessee for taking any adverse view in this regard, has restricted the benefit of shaguns in a sum of ₹ 6 lacs only. The order of the ld. CIT(Appeals) is, therefore, unjustified and cannot be sustained in law.

It may also be noted here that Assessing Officer without bringing any evidence on record estimated the marriage expenses in a sum of ₹ 25 lacs. Similarly, ld. CIT(Appeals) without any basis or justification or without bringing any ev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on. If the same amount is added to shagun received by assessee in a sum of ₹ 14,13,000/-, no addition of ₹ 8 lacs would sustain because Assessing Officer has himself granted relief to the assessee in a sum of ₹ 14.13 lacs which ld. CIT(Appeals) without any reasons did not consider favourably to the assessee.

The assessee has produced sufficient evidence and material on record to prove 'will' genuinely executed by his mother and through the 'will', the gold ornaments .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

:- 18-11-2015 - BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER For The Appellant : Tej Mohan Singh For The Respondent : Manjit Singh ORDER Bhavnesh Saini, Judicial Member - Both the cross appeals are directed against the order of ld. CIT(Appeals) Chandigarh, dated 28.01.2014 for assessment year 2006-07 (wrongly mentioned 2010-11). 2. In the appeal of the assessee, assessee challenged the initiation of the re-assessment proceedings under section 148 of the Income Ta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ls) in allowing part relief on the additions made on the above grounds relating to marriage expenses and jewellery gifted at the time of marriage. 3. Briefly the facts of the case are that assessee had admitted in his statement given to Police Authorities on 09.12.2009 that he had spent approximately ₹ 45.50 lacs on the marriage of his daughter. In the assessment proceedings, assessee submitted that he had spent a sum of ₹ 10 lacs only on the marriage of his daughter besides jeweller .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

including the amount spent in the engagement and ring ceremony and source of this expenditure and also to furnish the evidence in respect of shagun of ₹ 11,000/- and above. The Assessing Officer questioned the claim of assessee that he had spent only ₹ 3 lacs on dinner arrangements. The Assessing Officer, ultimately, made addition of ₹ 10,87,000/- by estimating the expenditure on marriage at ₹ 25 lacs and giving benefit of shaguns received of ₹ 14.13 lacs. 4. Durin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e is brought on record to support the estimate of ₹ 25 lacs as marriage expenses. It was explained that assessee is a government servant and has source of income. Various family members, friends and relatives have contributed the expenses by offering shaguns in a sum of ₹ 14.13 lacs. The jewellery was gifted by mother of the assessee to his daughter as per 'will' and the valuation of the jewellery as in 2005 was reasonable, therefore, addition of marriage expenses should be d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h is now stated to be expenses incurred on marriage as contributed by various family members, friends and relatives. 6. The ld. CIT(Appeals), considering submissions of the assessee, facts and circumstances of the case and status of the assessee, estimated the marriage expenses in a sum of ₹ 20 lacs, out of which benefit of estimated past savings of ₹ 6 lacs, was given and benefit of ₹ 6 lacs of shaguns was also given and accordingly, addition was maintained in a sum of ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

her of the assessee and value of the jewellery was ₹ 29.3 lacs at the time of marriage. The Assessing Officer was not satisfied with the explanation of the assessee and noted that 'Will' is unregistered and no Letter of Administration has been obtained from the Court. It was also found that the fact of gift of entire jewellery to the grand daughter is unbelievable. The Assessing Officer, therefore, made addition of ₹ 55 lacs on account of unexplained jewellery given in the ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at assessee has not gifted any jewellery to his daughter at the time of her marriage. The jewellery was given as per 'Will' of his mother who has expired on 15.05.2003. Copy of the 'Will' and Death Certificate was filed. It was submitted that the jewellery was given out of the 'Will', therefore, the same would not fall in assessment year under appeal. The jewellery was kept in the custody of Smt. Anju, wife of the assessee which was given to the daughter of the assessee M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is unregistered so it cannot be treated as genuine. Therefore, the Will witnessed by two witnesses is not much relevant. The ld. CIT(Appeals), considering difference in the gold mentioned in the 'Will' and gold jewellery given in the marriage, did not accept contention of the assessee that jewellery at the time of marriage was out of the gift received from the mother of the assessee. The ld. CIT(Appeals), however, accepted the valuation of the jewellery at the time of marriage in 2005 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

148 was valid. The approval of JCIT was also taken. The ld. CIT(Appeals) also noted that the reasons were recorded on the basis of subjective satisfaction of the Assessing Officer, therefore, re-opening of the assessment was held to be valid and accordingly, dismissed this ground of appeal of the assessee. The appeal of the assessee was thus, partly allowed. 11. We have heard ld. Representatives of both the parties and perused the material on record. The ld. counsel for the assessee reiterated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee on 21.11.2009 in which it was explained that in the marriage of complainant, the parents of the complainant and relatives and friends gave gold, silver and diamonds ornaments. List of the items was also enclosed. The ld. counsel for the assessee submitted that there is no requirement in the column of return to disclose marriage expenses. The Assessing Officer in the reasons for re-opening of assessment wanted to verify the marriage expenses and jewellery given to his daughter through t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ision of the Hon'ble Punjab & Haryana High Court in the Case of Paramjit Kaur 311 ITR 38. He has relied upon the order of ITAT Chandigarh in the case of ITO v. Dr. S.S. Chauhan dated 29.03.2012. The ld. counsel for the assessee submitted that statement given to the police is not relevant for re-opening of the assessment. The ld. counsel for the assessee, on merits submitted that assessee submitted list of shaguns given by various friends, relatives and guests on which Assessing Officer d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ddition on account of estimate of marriage expenses was made on surmises and conjectures. No enquiry have been made from any guest or relative who have offered shagun. The ld. CIT(Appeals), without any reasons, reduced the relief granted by the Assessing Officer in respect of 'shagun' of ₹ 14,13,000/- 11(i). The ld. counsel for the assessee further submitted that mother of the assessee executed a genuine 'Will' which was witnesses by the witnesses and attested by Notary Pub .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

39;Will' on the ground of its non registration appears to us to be wholly unwarranted". He has submitted that valuation report of the jewellery at the time of marriage was filed which support value of the jewellery as per 'Will' was ₹ 29.30 lacs. Family jewellery benefit has been correctly given by the ld. CIT(Appeals) of ₹ 6 lacs. He submitted that assessee did not give gift any jewellery to his daughter. The 'Will' is genuine and after death of testator of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

addition in assessment year under appeal could be made. The ld. counsel for the assessee, therefore, submitted that the re-opening of assessment is bad in law and both the additions on merit are also required to be deleted. 12. On the other hand, ld. DR relied upon order of the Assessing Officer and also relied upon decision of the Hon'ble Punjab & Haryana High Court in the case of Jagan Nath Singhal V DCIT 242 ITR 554 and submitted that once information came to the department about unac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ice under section 148 of the Income Tax Act on the basis of information received from DDIT (Investigation), Chandigarh. The Assessing Officer recorded the reasons for re-opening of the assessment. Copy of the reasons dated 13.03.2011 is filed at page 66 of the Paper Book and reproduced as under: "Name of the assessee : Shri Subhash Chander Goyal House No. 737, Sector 7B (Now # 699, Sector 7-B, Chandigarh) PAN ABEPG3737H Assessment year 2006-07 Reasons for initiating proceedings under sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Subhash Goyal has stated that he had incurred approximately ₹ 45-50 lakh on the marriage of his daughter. Besides, it has come to notice that the assessee has gifted jewellery worth ₹ 55 lakh to his daughter at the time of marriage which is stated to be as per Will of assessee's mother. The sources of expenditure incurred on marriage including cost of jewellery gifted by the assessee to his daughter are required to be verified. 1 have, therefore, reasons to believe that approxi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ghter of assessee Ms. Megha was solemnized on 18.11.2005. It is also noted in the reasons that in the statement given to the police on 09.12.2009, assessee has stated to have incurred approximately ₹ 45-50 lacs on the marriage of his daughter. Further, the gift of jewellery of ₹ 55 lacs to his daughter at the time of marriage was stated to be as per 'Will' of assessee's mother. The Assessing Officer in the reasons noted that source of expenditure incurred on the marriage .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e had a reason to believe for escapement of income only after verification of the fact of marriage expenses of daughter of the assessee after verifying the statement made to the police as well as consideration of the 'will'. The re-opening of the assessment only on the basis of verification of the facts is not permissible under the law. The Assessing Officer is not empowered to reopen the assessment nor verify the facts for re-assessment. We rely upon decision of Delhi High Court in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y the Assessing Officer did confirm the apprehension about the harm that a less strict interpretation of the words "reason to believe" vis-a-vis an intimation issued under section 143(1) could cause to the tax regime. There was nothing in the reasons recorded to show that any tangible material had come into the possession of the Assessing Officer subsequent to the issue of the intimation. The notice reflected an arbitrary exercise of the power conferred under section 147". 14. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ebts and the admissibility of the bad debts written off. For mere verification of the claim, power for reopening of assessment could not be exercised. The Assessing Officer in the guise of power to reopen an assessment cannot seek to undertake a fishing or rowing inquiry and seek to verify the claims as if it were a scrutiny assessment." 15. The sole reliance on the statement recorded by the police under section 161 of CrPC on 09.12.2009 itself was wrong because Section 161 of CrPC deals wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is neither given 'on oath' nor it is tested by Cross Examination. According to the law of evidence, such statement is not evidence of the fact stated therein and therefore, it is not considered as 'substantive evidence'. 16. Hon'ble Himachal Pradesh High Court in the case of Smt. Sewaki v. State of Himachal Pradesh 1981 CriLJ 919 held that "It is beyond the pale of controversy that statement made by witness under section 161 of the CrPC during investigation of the case, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

efore, considering the above discussion, it is clear that statements made to the police under section 161 of the CrPC is not substantive evidence. Section 162 of the CrPC imposes a bar on the use of any statement made by any person to Police Officer in the course of investigation at any enquiry or trial in respect of any officer under investigation at the time when such statement was made, except for the purpose of contradicting the witnesses in the manner provided by Section 145 of the Evidence .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assessee filed a copy of the judgment of the Hon'ble Punjab & Haryana High Court in FAO-M No. 234 of 2014 dated 12.12.2014 in which the daughter of the assessee and her husband have settled the matrimonial dispute and some of the conditions for compromise were that parties will move for quashing of the FIR No. 482/2009 under section 498A/406 IPC pending at Jaipur and assessee's daughter will not object in the Court. Another was that the family members of the husband of the assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he investigation. It could be used only for a limited purpose under the law, therefore, reliance placed by the Assessing Officer on such a statement was wholly misplaced for the purpose of recording the reasons for re-opening of the assessment. The Assessing Officer also referred to the 'will' of mother of the assessee through which jewellery was given after death of the testator to Ms. Megha and mother of the assessee expired on 15.05.2003, therefore, after death of the testator if jewe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ial had come into the possession of Assessing Officer subsequent to the issue of intimation under section 143(1) of the Act. The notice under section 148 reflected arbitrarily exercise of power conferred under section 147 of the Income Tax Act. In the reasons recorded by the Assessing Officer for re-opening of the assessment, Assessing Officer stated that he wanted to verify the marriage expenses of the daughter of the assessee. For mere verification of the claim, power for re-opening of the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unjab & Haryana High Court in the case of Jagan Nath Singhal (supra) in which in the divorce proceedings before District Judge, daughter of the assessee filed an affidavit wherein she had stated that her father had spent ₹ 7-8 lac in the marriage. On the basis of this affidavit, the Assessing Officer recorded the reasons for re-opening of the assessment which were held to be justified. We may note that there is difference between affidavit filed in the judicial proceedings as well as s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assessment under section 148 of the Income Tax Act. Resultantly, orders of the authorities below are set aside and quashed. This ground of appeal of assessee is accordingly allowed. 19. As far as the additions on merits are concerned, the Assessing Officer estimated the marriage expenses in a sum of ₹ 25 lacs and has given a benefit of shaguns received by assessee of ₹ 14,13,000/- and made addition of ₹ 10,87,000/-. The assessee has given list of persons who have given shagun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s regard, has restricted the benefit of shaguns in a sum of ₹ 6 lacs only. The order of the ld. CIT(Appeals) is, therefore, unjustified and cannot be sustained in law. If ld. CIT(Appeals) wanted to reduce the benefit extended by the Assessing Officer, it would amount to enhancement of the assessment and as such, ld. CIT(Appeals) is required to give specific notice to the assessee showing his intention to enhance the assessment by reducing the relief already granted by the Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erify the same facts if he was not satisfied with the finding of the Assessing Officer. However, ld. CIT(Appeals) has also did not make any enquiry from any such person and without any basis or justification, disbelieved the receipt of shagun by assessee in a sum of ₹ 14,13,000/-. It may also be noted here that Assessing Officer without bringing any evidence on record estimated the marriage expenses in a sum of ₹ 25 lacs. Similarly, ld. CIT(Appeals) without any basis or justification .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ine the independent witnesses, particularly of the persons who have offered shagun to the assessee at the time of marriage of daughter of the assessee. The Assessing Officer failed to examine any of the guests in this regard as per list given to him. The Assessing Officer did not examine the assessee or his daughter under section 131 of the Income Tax Act nor elicit the truth from them of marriage expenses. No evidence has been brought on record to support the estimate of marriage expenses. No s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sence of anything on record, ld. counsel for the assessee is justified in contending that marriage expenses have been estimated merely on surmises and conjectures. Thus, there is no basis to sustain the orders of authorities below for estimating marriage expenses in a sum of ₹ 20/25 lacs. The ld. CIT(Appeals) gave a benefit of estimated past savings and contributions made by the family members of ₹ 6 lacs for the purpose of restricting part addition. If the same amount is added to sh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

record whether assessee has performed any of such ceremonies which are large in number noted in the assessment order. Therefore, the order of the Assessing Officer was wholly based upon assumptions on certain facts which did not exist. In this case, at the time of hearing of the appeal, the assessment record was available with ld. DR but no tax evasion petition was containing. From the settlement arrived at between the husband and wife before Hon'ble High Court, as noted above, which contai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, what-so-ever to estimate higher marriage expenditure as against the explanation given by the assessee. May be there is some vague explanation given by assessee before Assessing Officer but it would not prove the case of the Assessing Officer to make higher estimate of marriage expenses. 20. Considering the totality of the facts and circumstances noted above, we do not sustain the additions made by the authorities below. We, accordingly, set aside the orders of authorities below and delete the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. It was also attested before Notary Public. Copy of the 'Will' is filed at page 42 along with translated copy in which Smt. Sheela Devi has made 'will' of her entire jewellery and silver utensils in favour of Ms. Megha, daughter of the assessee. It is stated in the 'will' that she will remain owner of the ornaments and silver utensils and after her death, all the ornaments and silver utensils will be given to her granddaughter Ms. Megha. Upto the marriage of Ms. Megha, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n account of custodian of the ornaments and silver utensils have given the physical custody to Ms. Megha at the time of her marriage on 18.11.2005 but she became rightful owner of these ornaments on the death of Smt. Sheela Devi. Therefore, same would not fall in assessment year under appeal i.e. 2006-07. The assessee filed affidavit of both the witnesses before the Assessing Officer along with affidavit of Notary Public who has attested the 'Will' of Smt. Sheela Devi. They have confirme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

'will' was not registered and no probate or Letter of Administration has been obtained. There is no law to prescribe that 'Will' should necessarily be registered. There is also no need in each and every case to obtain probate or Letter of Administration from the Court because when there is no dispute amongst the legal heirs of inheritance of the property through the 'Will'. Thus, the objections of the authorities below are wholly irrelevant and against the provisions of l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version