2017 (11) TMI 1071 - AT - Income Tax

Determination of the source of marriage expenditure incurred by the assessee on the marriage of her daughter - explanation to gifts received and gold brick in gift - Held that - The assessee has explained the source of such expenditure in terms of Kanyadan received from close relatives amounting to ₹ 23.86 lacs, value of gifts received worth ₹ 25.91 lacs and bank withdrawals of ₹ 9 lacs from assessee s own bank account. The ld CIT(A) has examined the entries in the assessee s bank account and confirmation and other details received from close relatives and has given a finding that the assessee has discharged the primary onus of explaning the source of kanyadan receipts of ₹ 23.86 lacs from close relatives. The findings of the ld CIT(A) remain uncontroverted before us and the same are hereby confirmed. Similarly, the findings of the ld CIT(A) regarding various gifts (except gold brick) received on the occasion of marriage and gifted to her daughter, given the nature of the gifts, social and family status of the assessee involved, the same was found acceptable by the ld CIT(A) and we hereby confirm the same. Regarding gift of gold brick worth ₹ 11.10 lacs what we find is that the affidavit has been submitted by the assessee and not by either the so called donor (wife of the assessee) or by the donee (daughter of the assessee). Further, nothing has been brought on record in terms of will or gift deed by late Shri Musaddi lal (the original donor). In absence of any will or gift deed by the original donor and the fact that both the donor and the donee as so claimed have not submitted and filed any affirmative statement confirming such transaction as a gift transaction, the assessee s contentions remain unsubstantiated and therefore, cannot be accepted. In the result, we affirm the findings of the ld CIT(A) and dismiss the ground of appeal taken by the assessee. Regarding estimated expenditure of ₹ 8.25 which the AO assumed to have been incurred on the occasion of the marriage, the AO has accepted the withdrawal of ₹ 9 lakhs from the assessee s bank account on the occasion of the marriage, it is reasonable to hold that the assessee would have incurred the marriage expenditure out of such withdrawal. Therefore, we donot see any infirmity in the order of the ld CIT(A) who has deleted the addition of ₹ 8.25 lakhs in the hands of the assessee. - Decided against assessee Unexplained advances - Held that - Regarding advance of ₹ 30 lacs, merely the fact that the transaction has happened through banking channel and a confirmation has been filed is not sufficient to discharge the initial onus cast on the assessee to establish the identity, genuineness of the transaction and creditworthiness of the person from whom the money has been received during the year. The AO has specifically asked the assessee to furnish a copy of agreement to sell or sale deed that has been executed during the course of assessment proceedings to examine the genuineness of the transaction so claimed by the assessee by way of advance against land, however, nothing has been brought on record in this regard either during the assessment or the appellate proceedings. Further, nothing has been brought on record to demonstrate the creditworthiness of the person who has advanced the money to the assessee. We therefore set-aside the findings of the ld CIT(A) and confirm the addition of ₹ 30 lacs so made by the AO in this regard. Regarding addition of 41.52 lacs, the ld CIT(A) has returned a finding that an amount of ₹ 40,38,162/- pertains to earlier years and is brought forward from the previous years and the same cannot be brought to tax under section 68 of the Act. The remaining amount of ₹ 3.5 lakh was received from Smt. Deepmalika, who is daughter of the assessee and an existing income tax assessee and ₹ 1,64,093/- was received from M/s Shankar & Co which is proprietary concern of the appellant himself. We donot see any infirmity in the said findings of the ld CIT(A) and the same are hereby confirmed. In the result, ground no. 2 of revenue s appeal is partly allowed.

Summary

Issues Involved:
1. Sustaining the addition of ?11,10,000/- by CIT(A) despite the assessee's explanation.
2. Restricting the addition of ?58,02,000/- to ?11,10,000/- by CIT(A) on account of marriage expenses.
3. Deleting the addition of ?71,52,255/- made by the AO on account of advance against land and cash creditors.

Issue-wise Detailed Analysis:

1. Sustaining the addition of ?11,10,000/- by CIT(A) despite the assessee's explanation:
The assessee filed a return declaring an income of ?1,05,850/-. The AO reopened the assessment based on an FIR by the assessee's daughter, stating that ?58,77,000/- was spent on her marriage. The AO added ?58.05 lacs to the assessee's income due to unexplained expenses. The CIT(A) considered the assessee's submissions and found that ?23.86 lakhs expended by close relatives were justified and deleted this addition. However, the CIT(A) sustained the addition of ?11,10,000/- for a gold brick, as no credible evidence was provided. The Tribunal upheld this finding, noting the lack of evidence like a will or gift deed and unsubstantiated contentions by the assessee.

2. Restricting the addition of ?58,02,000/- to ?11,10,000/- by CIT(A) on account of marriage expenses:
The AO's addition of ?58.05 lacs included ?23.86 lakhs from family contributions, ?25.91 lakhs for gifts, and ?8.25 lakhs for marriage expenses. The CIT(A) deleted the addition of ?23.86 lakhs, recognizing contributions from family members with supporting documents. The CIT(A) also deleted ?8.25 lakhs, considering the assessee's bank withdrawals. The Tribunal confirmed these deletions, agreeing with the CIT(A)'s reasoning. However, the Tribunal upheld the addition of ?11,10,000/- for the gold brick due to insufficient evidence.

3. Deleting the addition of ?71,52,255/- made by the AO on account of advance against land and cash creditors:
The AO added ?30 lakhs for an advance against land and ?41,52,255/- for unsecured loans. The CIT(A) deleted these additions, noting that ?30 lakhs was received through banking channels with confirmation, and ?40,38,162/- of the loans were carried forward from previous years. The Tribunal agreed with the CIT(A) on the deletion of ?41,52,255/- but reinstated the addition of ?30 lakhs, citing insufficient evidence of the transaction's genuineness and the creditor's creditworthiness.

Conclusion:
The Tribunal dismissed the assessee's appeal and partly allowed the revenue's appeal. The addition of ?11,10,000/- for the gold brick was sustained due to lack of evidence. The deletion of ?23.86 lakhs and ?8.25 lakhs for marriage expenses was upheld. The addition of ?30 lakhs for advance against land was reinstated, while the deletion of ?41,52,255/- for cash creditors was confirmed.