2019 (2) TMI 1879 - AT - Income Tax

Addition u/s 68 for alleged gifts - HELD THAT - We find that the assessee is a member of same group and the alleged gift of 5, 00, 000/- has also been claimed to have been received by the company named Rajat Gems Jewellers Pvt. Ltd. We are therefore inclined to sustain the addition u/s 68 of the Act for the alleged gifts as the assessee failed to explain its source and thus no interference is called for in the finding of Ld. CIT(A). Ground No.1 of the assessee s appeal stands dismissed. Addition u/s 69C - unexplained expenses in marriage - HELD THAT - On going through the submission made by Ld. Counsel for the assessee before the lower authorities as well as the loose papers impounded during the course of search we observe that and list of tentative invitees were 1589 persons but in the very same set of seized documents at item 15 of BS-1 there was invoice dated 18.2.2004 for printing of 1000 invitation card. Further the proof of payment to the caterers were also part of seized records. The addition made by Ld. A.O seems to be merely estimated because other than the list of invitees no other material evidence was unearthed by the search team which could prove that 1589 invitees attended the ceremony. Therefore in absence of no other evidence placed before us by the Revenue authorities and in the given facts and circumstances of the case it will not be justified to sustain the estimated addition u/s 69C of the Act merely on the basis of list of invitees. In the result the addition u/s 69C of the Act stands deleted. - Decided in favour of assessee.

Summary

Issues:
1. Addition of ?5,00,000 under section 68 of the Income Tax Act for alleged gifts.
2. Addition of ?12,19,550 under section 69C of the Income Tax Act for unexplained expenses in marriage.

Issue 1: Addition of ?5,00,000 under section 68 of the Income Tax Act for alleged gifts:

The appeal pertained to the Assessment Year 2004-05 against the orders of the Ld. Commissioner of Income Tax (Appeals)-I. The assessee, an individual, had declared income of ?1,54,998. During assessment proceedings, additions were made for unexplained gift, unexplained marriage gifts, and unexplained expenses in marriage. The Tribunal noted that the alleged gift of ?5,00,000 was claimed to have been received by a company associated with the assessee. The Tribunal referenced a similar case where an addition related to gifts was confirmed. As the assessee failed to explain the source of the alleged gift, the Tribunal upheld the addition under section 68 of the Act, dismissing the appeal on this ground.

Issue 2: Addition of ?12,19,550 under section 69C of the Income Tax Act for unexplained expenses in marriage:

The second issue revolved around the addition of ?12,19,550 under section 69C for unexplained marriage expenses. The Assessing Officer based this addition on the marriage invitation cards and a list of invitees found during a search. The AO estimated the expenses at ?16,00,000 for the number of guests listed. The Tribunal, however, found that the list of invitees was tentative, and no concrete evidence proved that 1589 invitees attended the ceremony. The Tribunal noted that the addition was merely estimated, as other than the list of invitees, no substantial evidence was presented. Consequently, the Tribunal deleted the addition under section 69C, allowing the appeal on this ground.

In conclusion, the Tribunal partly allowed the appeal of the assessee, upholding the addition under section 68 for alleged gifts but deleting the addition under section 69C for unexplained marriage expenses. The general issue raised in ground No.3 was not adjudicated.