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2015 (5) TMI 386 - AT - Income TaxReopening of the assessment - unexplained expenditure not supported by any evidence on the marriage ceremony and other ceremonial function of the daughter - Held that - AO had initiated the proceedings u/s. 147 on the basis of the documentary evidence i.e. FIR filed by his daughter and TEP received from the Investigation Wing, which was confronted to the assessee and assessee himself admitted and not pressed on the issue of initiation of proceedings under section 147 of the I.T. Act. In our considered opinion, the AO has rightly issued notice u/s. 148 of the I.T. Act, after making necessary inquiry, in view of the TEP received from the Investigation Wing, New Delhi and after being satisfied found that it is a case where income has escaped assessment. He has also taken due approval from the competent authority, after applying their mind, the notice in dispute has been issued to the assessee. He has also recorded the reasons for such action. The AO has given his clear cut finding and satisfied himself before issuing of notice u/s. 148. The reasons were also provided to the assessee which are not based on mere suspicion and is on the basis of various documentary evidence. Therefore, in our considered opinion, the Ld. First Appellate Authority has also appreciated the relevant provisions as well as the facts of the case and rightly upheld the issuance of notice u/s. 148 of the I.T. Act in the case of the assesse. We are of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A) on the finding given by him on the issue of assumption of jurisidciton u/s. 147 and notice u/s. 148 which is valid and as per law. - Decided against assessee. Unexplained expenditure made on the marriage ceremony of the assessee s daughter under section 69 - Held that - The daughter of the assesse namely Jyoti Kapoor was a victim of dowry harassment by her In-laws including her husband. She has also lodged FIR. The FIR has been registered by Smt. Jyoti Kapoor, D/o of the assessee under section 498A, 406, 506, 323/34 IPC on 7.5.2002 against her husband and other family members. No doubt that the daughter of the assessee has written that her father has incurred a huge expenditure on her marriage, but she has not produced any documentary evidence that huge expenditure has been incurred by her Father, before the police authorities. Assessee being the father, accordingly, remained under mental tension during the dispute between his family and the family of her daughter in law. When the dispute arise between both the parties, it is very much possible to file a complaint by the in-laws cited by the assessee s daughter against the assessee for her harassment and they filed the complaint against the assessee for unexplained, unaccounted expenditure incurred by the assessee on the marriage of his daughter. But they have also not produced any evidence supporting the complaint made by them against the assessee. This generally happen in the quarrel in the matrimonial dispute. Lastly, both the parties mutually seek divorce and the Hon ble High Court of Delhi has awarded ₹ 7 lacs to the assessee s daughter on account of expenditure incurred by the assessee on the marriage of his daughter. Keeping in view of the above, mutual divorce granted by the Hon ble Delhi High Court by awarding ₹ 7 lacs on account of marriage expenditure incurred by the assessee on her daughter s marriage, we are of the considered view that we are unable to hold that assessee has incurred more than ₹ 7 lacs expenditure on the marriage of his daughter for which the assessee has produced all the necessary evidence before the revenue authorities, which has not been properly appreciated by them. The AO had made the addition of ₹ 34,13,000/- under section 69 of the I.T. Act without any basis, based on presumption and assumption, which is not sustainable in the eyes of law, therefore, we delete the addition of ₹ 34,13,000/-, which was wrongly made by the AO and confirmed by the Ld. CIT(A). - Decided in favour of assessee.
Issues Involved:
1. Validity of jurisdiction assumed under Section 147 of the Income Tax Act, 1961. 2. Validity of the notice issued under Section 148 of the Income Tax Act, 1961. 3. Addition of Rs. 34,13,000/- as unexplained expenditure under Section 69C of the Income Tax Act, 1961. Detailed Analysis: 1. Validity of Jurisdiction Assumed Under Section 147: The Assessee contended that the jurisdiction assumed by the Income Tax Officer (ITO) under Section 147 was erroneous as the reasons for reopening were not properly recorded. The Tribunal noted that the assessment was reopened based on information from the Investigation Wing indicating that the Assessee had incurred substantial expenditure on his daughter's marriage, which had escaped assessment. The Tribunal concluded that the Assessing Officer (AO) had validly assumed jurisdiction under Section 147 after recording the reasons and obtaining necessary approvals. The Tribunal upheld that the AO had rightly issued the notice under Section 148 after making necessary inquiries and being satisfied that income had escaped assessment. 2. Validity of Notice Issued Under Section 148: The Assessee argued that the notice under Section 148 was invalid as it was issued without proper recording of reasons. The Tribunal observed that the AO had issued the notice after obtaining necessary approval from the Additional Commissioner of Income Tax and duly serving it to the Assessee. The Tribunal found that the AO had recorded reasons based on documentary evidence, including an FIR filed by the Assessee's daughter and information from the Investigation Wing. The reasons were not based on mere suspicion but on concrete evidence. Therefore, the Tribunal held that the notice under Section 148 was valid and in accordance with the law. 3. Addition of Rs. 34,13,000/- as Unexplained Expenditure: The AO had made an addition of Rs. 34,13,000/- as unexplained expenditure under Section 69C, based on the FIR and information received from the Investigation Wing. The Tribunal analyzed the evidence and found that the AO had not brought any concrete evidence to substantiate the expenditure amount. The Assessee had provided explanations and documentary evidence for various expenditures, which were not properly considered by the AO. a. Roka Ceremony: The AO alleged an expenditure of Rs. 1,89,000/- on the Roka ceremony, but the Assessee provided receipts totaling Rs. 36,087/- and explained the source of funds. The Tribunal found no justification for the addition of Rs. 1,89,000/- and deleted it. b. Sagan Ceremony: The AO alleged an expenditure of Rs. 3,26,000/- on the Sagan ceremony. The Assessee provided receipts for Rs. 94,800/- and explained the source of funds. The Tribunal found the Assessee's explanation satisfactory and deleted the addition. c. Marriage Ceremony: The AO alleged an expenditure of Rs. 25,48,000/- on the marriage ceremony. The Assessee provided receipts and explained an expenditure of Rs. 1,61,000/-. The Tribunal found no evidence to support the AO's claim of Rs. 25,48,000/- and deleted the addition. d. Miscellaneous Expenditures: The AO made an addition of Rs. 3,10,000/- for miscellaneous expenses. The Assessee provided bills and cash memos for Rs. 3,694/-. The Tribunal found the AO's addition baseless and deleted it. e. Jewelry Expenses: The AO added Rs. 5,98,193/- for jewelry expenses. The Assessee provided bank statements and other evidence to explain the source of funds. The Tribunal accepted the Assessee's explanation and deleted the addition. f. Cash for Visa: The AO added Rs. 40,000/- for cash for visa expenses, which was incurred in a different assessment year. The Tribunal found the addition incorrect and deleted it. The Tribunal noted that the Assessee's daughter was a victim of dowry harassment, and the FIR lodged by her mentioned substantial expenditure by her father. However, no documentary evidence was provided to substantiate the huge expenditure claimed. The Tribunal concluded that the AO's addition of Rs. 34,13,000/- was based on assumptions and not supported by concrete evidence. Therefore, the Tribunal deleted the entire addition. Conclusion: The appeal of the Assessee was partly allowed, with the Tribunal deleting the addition of Rs. 34,13,000/- made by the AO and confirmed by the CIT(A). The Tribunal upheld the validity of the jurisdiction assumed under Section 147 and the notice issued under Section 148. The order was pronounced in the Open Court on 24/04/2015.
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