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2016 (3) TMI 79 - ITAT JAIPUR

2016 (3) TMI 79 - ITAT JAIPUR - TMI - Unexplained expenditure U/s 69C on daughter’s marriage - loose paper found during the course of search, in which the details of marriage expenses of assessee’s daughter Rubi, which was solemnized on 06/7/2007 had been recorded by the assessee - Held that:- he assessee has not correlated with evidence that there is source of ₹ 10 lacs and this amount was received for common expenditure. The assessee also claimed ₹ 3,78,000/- from Smt. Rukmani Gatt .....

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f recording statement U/s 132(4) of the Act, the assessee had not made any reference of income of the Rubi. Therefore, we do not find any reason to intervene in the order of the ld CIT(A). - Decided against assessee

Addition out of car insurance, conveyance and telephone expenses - Held that:- Assessing Officer has not specifically pointed out any personal use but estimated disallowance has been made, which is also appears to be higher side. Accordingly, we restrict this disallowance .....

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der:- 1. The ld CIT(A) has erred in facts and in law in confirming the addition of ₹ 15,28,384/- out of the additions of ₹ 19,41,200/- made by A.O. on account of alleged unexplained expenditure U/s 69C pm daughter s marriage. He has further erred in: (a) Taking the expenditure on marriage of daughter at ₹ 21.47 lacs as against ₹ 16.14 lacs incurred by assessee including that relating to daughter of Shri Anand Prakash. (b) Not allowing the credit of contribution made by fa .....

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tion of ₹ 19,41,200/- U/s 69C of the Income Tax Act, 1961 (in short the Act) on account of daughter s marriage. The assessee has income from other sources. He filed return on 18/12/2008 declaring total income of ₹ 1,43,780/-. The case was scrutinized U/s 143(3) of the. The ld Assessing Officer observed that a search and seizure operation U/s 132 of the Act was carried out by the department at the instance of the assessee on 14/3/2008. During the course of search proceedings, books of .....

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ssing Officer had reproduced the contents of the seized material, which is related to the Sagai expenses, Ganguar expenses, marriage expenses and other things purchase for brother in law and sister in law of his daughter and total details of expenses had been shown under these heads at ₹ 17,16,400/-. The ld Assessing Officer further reproduced the details of source of expendigure incurred in the marriage expenses in the name of Jai Shree Ganesh wherein total expenditure had been shown at & .....

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wal for marriage expenses. This is an afterthought and devoid of merits. (b) As Cash Extract seized during the course of search on 14.03.2008, contain date wise sources of fund and description of various expenses incurred for daughter Ruby's marriage on 06.07.2007 does not find ₹ 10.00 lacs receipt from Shri Anand Prakash Agarwal as per the page- 13 extract reproduced earlier in this order, which mentions the sources of funds for expenditure in the marriage as under: From Sh. Kamal Ji .....

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ther marriage of daughter of Sh. Anand Prakash Agarwal but the cash extract seized does not show any common expenses incurred for two marriages but expenses only relates to assessee's daughter Ruby. (d) The assessee has produced personal cash account and also prop, concern M/s. International Emerald Perusal produced are not supported by vouchers. Scrutiny of cash account revealed that assessee has made drawings only ₹ 15,000/- on marriage expenses and the rest expenses for marriage has .....

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ng cash ₹ 7,85,000/- without knowing what was inside the envelope. As and when the assessee was requiring cash the assessee requested Sh. Sunil Gattani to given the envelope back which he gave back. Taking into fact and circumstances it is unbelievable that such huge amount has been taken without the other party knowledge. The contention and submission has been carefully considered which is an afterthought and concocted story that the assessee has received and amount of ₹ 12,85,000/- .....

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atter before the learned CIT(A), who had partly allowed the appeal by observing as under:- 5.4 I have carefully considered the submissions of the appellant as also the findings of the AO. It may be noted that during the course of search proceedings, documents were found and seized indicating details of various expenses incurred on the marriage of daughter of assessee organized on 6.7.2007. During the course of search, statement of the appellant was recorded on 14.3.2008 and in his statement when .....

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the marriage of his daughter namely Ruby on 6.7.2007 and that as per these pages total expenditure of ₹ 1716400/- was incurred. The appellant further admitted that on page 10 the details of expenses incurred on the Engagement ceremony of his daughter solemnized on 1.7.2007 are seized. The AO has referred to specific detail on each page i.e. page no. 10, 9 & 8 and these indicate that such expenses have been incurred on various items like clothes, sweets, gold ornaments, utensils and de .....

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urther contended that ₹ 10 lacs was received from Sh. Anpnd Prakash Agarwal whose confirmation was also filed during the assessment proceedings and that the daughter of the assessee herself being famous artist, painter and advertisement designer also incurred certain expenses. It was also stated that father-in-law of the assessee Sh. Manik Chand Gattani also incurred ₹ 163500/- which was drawn from bank account. However the AO was not convinced with the explanation of the appellant. .....

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o marriages, one of assessee s daughter and another marriage of daughter Sh. Anand Prakash Agarwal, the AO observed that the cash extract seized during the course of search does not show any common expenses incurred for two marriages and that in the seized document expenses specific to the assessee are only recorded. As regards another contention of the assessee that an amount of ₹ 12.85 lacs was received from Sh. Sunil Gattani for which the assessee also filed an affidavit stating that Sh .....

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0/- was treating as unexplained expenditure u/s 69C of IT Act. On the other hand appellant s case is that the marriage expenditure taken by the AO at ₹ 21.47 lacs on the ba.sis of page 13 of Annex. A-l is incorrect in as much as the paper record the amount lying with various persons for incurring the expenditure and total available fund as per this paper for ₹ 16.47 lacs. It is further stated that the amount of ₹ 5 lacs received from the in-laws of the daughter of the assessee .....

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amounting to ₹ 2260216/- as under: Sl. No. Amount Contribution made by 1 190800 Jugal Kisho Nawal 2 15000 Assessee 3. 1,63,600/- Manak Chand Gattani 4. 10,00,000/- Anand Prakash Agarwal 5. 100000 Gifts 6. 3,78,000/- Rukmani Gattani 7. 3,12,816/- Assessee s wife 8. 1,00,000/- Daughter Ruby It may be noted that the marriage of the daughter of the appellant was solemnized on 6.7.2007 and subsequent to such function action u/s 132 of IT Act was carried out on 14.3.2008. There is no dispute on .....

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marriage of his daughter. It was also stated that such documents were maintained/ written by wife of the appellant. It is a settled law that the statement recorded u/s 132(4) is having valid evidentiary value. Moreover the appellant has never retracted to his statement in respect of incurring of expenditure. There is nothing on record which may indicate that such statement was recorded under duress. First of all it may be stated that the appellant has given almost contradictory statement in resp .....

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llate proceeding such expenditure was stated to be for ₹ 1614398/-. During assessment proceedings availability of fund/ receipt of money was also shown from one Sh. Sunil Gattani that too for ₹ 12.85 lacs including cash of ₹ 7.85 lacs but no such source was stated during appellate proceedings. These facts indicated that the appellant s explanation in respect of source of marriage expenses was always of differing and contradictory nature. With this background the other issues an .....

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age which is evident from the same paper. It is accordingly stated that even if the amount recorded on this paper is considered as expenditure the total of such amount should be 16.47 lacs and not 21.47 lacs as the remaining ₹ 5 lacs are shown to be recorded on the same paper as received from the in-laws of the daughter. As regards this objection it may be noted that there is no dispute that the amount of ₹ 5 lacs is shown to be received from the in-laws of the daughter but the fact .....

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the AO and against such total expenditure of ₹ 1614398/- the appellant was having total availability of funds amounting to ₹ 2260216/-. As regards the claim of the appellant at total expenditure incurred was ₹ 1614398/- such claim has already been rejected and therefore the total expenditure incurred by appellant remains at ₹ 21.47 lacs. The genuineness of such available fund as claimed by the appellant in the written submission is being examined and discussed as under. T .....

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f Sh. Manak Chand Gattani was filed. On careful consideration of such explanation and perusal of confirmation as also the bank statements filed by Sh. Manak Chand Gattani it is noted that Sh. Manak Chand Gattani is pensioner getting pension of ₹ 6500-7000 approximately and having his bank account with SBBJ, Makrana and perusal of such account indicate that the appellant was having very nominal balances in such account. In fact the available balance in such account has rarely exceeded ͅ .....

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e Particulars Amount 14.5.06 6002061011300037309 15000 15.5.06 6002061011300037309 15000 20.5.06 6002061011300037309 15000 20.5.06 6002061011300037309 15000 22.5.06 6002061011300037309 15000 23.5.06 6002061011300037309 15000 24.5.06 600206 L011300037309 13600 18.1.07 6002061011300037309 15000 3.7.07 6002061011300037309 15000 1.11.07 6002061011300037309 15000 17.11.07 6002061011300037309 15000 This will indicate that the substantial amount is not shown to be withdrawn nearer to the date of the ma .....

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; 10 lacs from Sh. Anand Prakash Agarwal, it is stated that Sh. L. N. Mundra is having two sons namely Rahul and Rohit and marriage of Rahul was performed with the daughter of the assessee and that marriage of Rohit was performed with the daughter of Sh. Anand Prakash Agarwal. It is further stated that both these marriages were solemnized on 6.7.2007 at Issarda Palace, Jaipur and expenditure on the marriage function was shared equally by the assessee and Sh. Anand Prakash Agarwal where the arran .....

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he expenditure of ₹ 21.47 lacs was only in respect of marriage expenses of the daughter of appellant. In fact nature of expenses recorded on page 8, 9, 10 and 13 very clearly indicate that such expenses were not of common nature and these expenses were of very specific nature pertaining to the appellant only. In this background even if ₹ 10 lac has been withdrawn by Sh. Anand Prakash Agarwal, it cannot be said and believed that such amount of ₹ 10 lacs was incurred against such .....

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consideration of relevant fact including the seized document it is noted that there is mention of reception for 1500 members and it is also accepted fact that on such social customs certain gifts are given. If the function was arranged for approximately 1500 persons therefore receipt of gifts to the extent of Rs. one lacs should not be doubted. Therefore availability of such amount can be considered and credit can be given. As regards availability of ₹ 378000/- from Sh. Rukmani Gattani gra .....

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as there the evidence of selling the same and getting ₹ 378000/- should be available. However no such documents have been filed. Smt. Rukmani Gattani is stated to have expired in June, 2005 and it is not known as to when the said jewellery exactly handed over to the appellant or the daughter of the appellant. Prima facie such submission is of unbelievable nature and therefore credit is given for such amount. It is also stated that the assessee s wife who is a regular income tax assessee wa .....

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Therefore availability of funds cannot be doubted. Such availability is also in close vicinity to the date of marriage. Further during search there is no contradictory evidence which may indicate that appellant s wife has incurred such available funds in any other manner. Therefore availability of funds to such extent is to be accepted and expenditure to such extent is to be treated as explained. As regards availability of ₹ 1 lac which is stated to be contributed by the daughter of the a .....

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ac when statement was recorded u/s 132(4). Therefore such submission is also prima facie an afterthought. Keeping in view facts and circumstances discussed above, the source of funds amounting to ₹ 618616(190800+15000+100000+312816) can only be considered to be of explained nature. Accordingly out of total addition of ₹ 1941200/- addition of ₹ 412816/- (312816+100000) is deleted and addition of ₹ 1528384/- is confirmed. The ground of appeal is partly allowed. 4. Now the a .....

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received from various persons towards marriage expenses plus ₹ 1 lacs received on account of gift is noted. Thereafter, an amount of ₹ 5 lacs is noted on this paper as received from Byaiji i.e, father in-law of the daughter of assessee. The utilization of this amount of ₹ 5 lacs is also noted on the paper. Therefore, ₹ 5 lacs cannot be considered as marriage expenditure of the assessee. Further expenditure of ₹ 1 lacs is met out of the gift received. Hence, the net .....

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no dispute that the amount of ₹ 5 lacs is shown to be received from in laws of the daughter but he did not allow the credit of this amount from the total amount of ₹ 21.47 lacs noted on this paper by simply stating that even if the amount is shown to be received from in laws it has to be explained properly which the assessee has not explained. Therefore, once a finding is given on the basis of the paper that ₹ 5 lacs is received from the in laws for incurring the expenditure, e .....

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the expenditure incurred on marriage is ₹ 16,14,398/- for which source was explained. As against this, on Pg 7-8 of Annexure A-1, estimated amount of marriage expenditure is noted at ₹ 17,16,400/- and as per Pg 13 of Annexure A-1 , it is noted at ₹ 16,47,000/-. The AO/CIT(A) have accepted the source to the extent of ₹ 6,18,616/-. (1,90,800+15,000+1,00,000+3,12,816). The explanation of the assessee in respect of the remaining expenditure of ₹ 10,28,384/- (1647000-618 .....

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nak Chand Gattani is pensioner getting pension of ₹ 6500-7000 approx. The perusal of his bank account shows that he is having very nominal balances in his account. Further, most of the withdrawn was made either before the date of marriage or subsequent to the date of marriage. Moreover during the course of search no such amount was stated to have been received from him. No material is brought on record by any of the lower authorities to negate the confirmation. The contribution made by Sh. .....

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ion was shared equally by assessee and Sh. Anand Prakash Agarwal. The arrangement was managed by the assessee. For incurring the common expenditure Sh. Anand Prakash Agarwal send ₹ 10 lacs to the assessee. The assessee has also filed the affidavit and the copy of the bank account from where Anand Prakash Agarwal withdrawn the amount and given to assessee for common expenditure. Thus the source to the extent of ₹ 10 lacs is fully explained. There is no dispute on the fact that both th .....

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believed that such amount of ₹ 10 lacs was incurred against such expenditure of ₹ 21.47 lacs. It is not disputed that Sh. Anand Prakash Agarwal has made withdrawal of ₹ 10 lacs from his bank account on the occasion of marriage of her daughter. However, the explanation of the assessee that this amount was partly utilized for incurring common marriage expenditure has not been accepted only on assumption and presumption even when it is the fact on record that the marriage functio .....

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ingly as per her will Sh. Manak Chand Gattani handed over the jewellery to assessee on the occasion of marriage having present value of ₹ 378000/-. Copy of will, letter and affidavit by Sh. Manak Chand Gattani confirming handing over the jewellery was filed to the AO. No such facts were stated during the course of search in the statement by the appellant. The submission appears to be an afterthought. Even if such jewellery was there the evidence of selling the same and getting ₹ 3,78 .....

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evidence is brought on record by any of the lower authorities to disprove the genuineness of the will and affidavit of Sh. Manak Chand Gattani s/o of Smt. Rukmani Gattani. Therefore, the credit of ₹ 3,78,000/- be directed to be allowed. 4. Daughter Ruby ₹ 1,00,000/ The daughter of assessee is artist painter & logos and advertisement designer. She is having income of approximately ₹ 1 lacs each year. Out of her income also some of the expenditure was incurred. Her income was .....

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; 1 lac when statement u/s 132(4) was recorded. Therefore, submission is an afterthought. The small savings in the hands of daughter Ruby cannot be denied when the fact of she being an artist painter & logos and advertisement designer is not disputed. Therefore, the credit of ₹ 1,00,000/- be directed to be allowed against the total marriage expenditure incurred by the assessee. In view of above, the addition of ₹ 15.28,384/- confirmed by CIT(A) is unjustified and the same be dele .....

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at ₹ 21.47 lacs whereas as per assessee s submissions, it was ₹ 16.47 lacs. The assessee s claimed that ₹ 5 lacs received by the assessee from Byaiji (father in law of the daughter of the assessee) but the assessee has not submitted any confirmation from the father in law of the daughter of the assessee before the lower authorities as well as before us. When father in law has withdrawn these sums from his regular books of account. The credit of ₹ 1 lac, which was met out .....

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ere was a common marriage ceremony on that date i.e. marriage of both sons of Sh. L.N. Mundra was also solemnized on 06/7/2007 and common expenses were shared equally by the assessee and Shri Anand Prakash Agarwal and he sent ₹ 10 lacs for his share. But whatever expenses calculated by the Assessing Officer was related to only his daughter s marriage. The assessee has not correlated with evidence that there is source of ₹ 10 lacs and this amount was received for common expenditure. T .....

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