2018 (8) TMI 1320 - HC - Income Tax

Addition towards unexplained marriage expenses - Additions u/s 68 towards advance against land and unsecured loans - Held that - additions documents, like sale deed and its confirmation, furnished first time before the Court - The ITAT did not therefore have the advantage to look into those documents and to examine whether or not they would have any bearing on the matter. In view of above, present appeal is disposed of. Impugned judgment dated passed by the ITAT is set aside and the matter is remitted back to the ITAT to examine the matter afresh in the light of aforesaid documents and pass fresh order in the appeal in accordance with law.

Summary

Issues:
Assessment of unexplained marriage expenses, addition under Section 68 of the Income Tax Act, 1961, confirmation of disallowance, evidentiary requirements for explanations, burden of proof, examination of documents by the ITAT.

Analysis:
The appellant-assessee challenged the judgment passed by the Income Tax Appellate Tribunal (ITAT) regarding the addition of ?11,10,000 on account of unexplained marriage expenses and the addition under Section 68 of the Income Tax Act, 1961. The ITAT confirmed the addition of ?11,10,000, citing lack of evidence in the form of a will or gift deed to support the claim that a gold brick was given to the assessee's wife by her father-in-law for the marriage expenses. However, the ITAT reversed the CIT(A)'s decision on the addition of ?30,00,000, stating that the confirmation and banking channel transactions were insufficient to discharge the initial burden of proof.

The appellant's counsel argued that the ITAT erred in doubting the explanation provided for the source of the ?11,10,000, emphasizing the social obligation of the wife to contribute to their daughter's marriage expenses. The counsel contended that the filing of an affidavit should not have been rejected without contrary evidence and criticized the ITAT for not considering historical practices of gifting gold items without formal documents. Additionally, the counsel asserted that the initial burden concerning the ?30,00,000 credit was met by providing confirmation, PAN details, and banking channel evidence.

Regarding the production of the sale deed for the land transaction, the appellant's counsel argued that the ITAT should have requested the document instead of concluding its absence. The counsel submitted the sale deed and confirmation before the High Court, indicating the actual transfer of the land and the connection to the advance received. In response, the respondent's counsel opposed the late submission of documents not presented before the ITAT, limiting their examination.

The High Court set aside the ITAT's judgment and remitted the matter back for reevaluation in light of the newly submitted documents, emphasizing the relevance of the sale deed and confirmation to the case. The appeal was disposed of, directing the ITAT to reconsider the case and issue a fresh order in accordance with the law.