2000 (1) TMI 1000 - AT - Income Tax

Summary

Issues:
1. Addition of undisclosed marriage expenses for assessment year 1985-86.
2. Addition of deposits in minors' savings bank accounts for assessment year 1987-88.

Issue 1: Addition of undisclosed marriage expenses for assessment year 1985-86:
The case involved a dispute regarding the addition of Rs. 60,000 as undisclosed marriage expenses for the assessment year 1985-86. The Assessing Officer added this amount as undisclosed expenditure based on a search operation that revealed documents suggesting a marriage at the assessee's residence. The CIT(A) confirmed the addition after considering the standard of living of the assessee and his family. However, the assessee contended that the addition was arbitrary and ad hoc. The CIT(A) estimated the total marriage expenses at Rs. 80,000, considering various factors, and confirmed the addition of Rs. 60,000. The ITAT observed that the marriage took place in the previous year relevant to the assessment year 1984-85 and, therefore, the addition made in the assessment year 1985-86 was not valid. Additionally, the ITAT found that there was no concrete evidence to prove that the assessee alone bore the entire marriage expenses, indicating that the expenditure was shared among family members. The ITAT also noted that the CIT(A) had made factual errors in assessing the household expenses and the probable expenditure on jewellery. Ultimately, the ITAT concluded that the addition of Rs. 60,000 was not justified and should be deleted.

Issue 2: Addition of deposits in minors' savings bank accounts for assessment year 1987-88:
The second issue pertained to the addition of Rs. 3,750 on account of deposits in the savings bank accounts of minors, treated as income from undisclosed sources for the assessment year 1987-88. The Assessing Officer attributed the deposits to the assessee and added them as undisclosed income. The CIT(A) rejected the assessee's contention that the deposits came from the minor children's declared money, stating that there was no supporting evidence. The ITAT upheld the CIT(A)'s decision, noting the lack of evidence to prove that the minors had their own funds for the deposits. Consequently, the ITAT dismissed the appeal for the assessment year 1987-88.

In conclusion, the ITAT allowed the appeal for the assessment year 1985-86, directing the deletion of the addition of undisclosed marriage expenses. However, the ITAT dismissed the appeal for the assessment year 1987-88, upholding the addition of deposits in minors' savings bank accounts as income from undisclosed sources.