2012 (8) TMI 272 - AT - Income Tax

Addition u/s 69C - addition on account of low household withdrawals - Held that - It is observed that assessee did not furnish the details of household expenses incurred. Even the study expenses of her son in USA were not properly indicated. When all the relevant facts and circumstances including the total family withdrawals and the income declared by the assessee are concerned we find that the contention of the assessee towards household expenses is not capable of acceptance. Addition confirmed - Decided against assessee. Undisclosed income reflected in the form of gift - addition u/s 68 - Held that - In case of gift of 5000 dollars it is found on perusal of the copy of bank statement of donor that there is no withdrawal for 5000 dollars from his account. We therefore uphold the addition. However in case of gift of 10, 000 dollars the same was made through foreign remittance to the assessee hence addition to this extent is deleted - Decided partly in favor of assessee

Summary

Issues:
1. Addition of foreign tour expenses under section 69C of the Act.
2. Addition on account of low household withdrawals.
3. Addition of undisclosed income reflected as a gift.

Analysis:

Issue 1: Addition of foreign tour expenses under section 69C of the Act
The assessee's appeal was against the addition of Rs.2,51,171 made by the AO under section 69C of the Act for foreign tour expenses. The AO found that the air tickets were purchased by the assessee in cash, and no evidence was provided to substantiate that the expenses were borne by her brother. The ITAT upheld the addition of Rs.51,171 for air tickets but reduced the estimated expenditure from Rs.2,00,000 to Rs.1,00,000. The total addition was sustained at Rs.1,51,171.

Issue 2: Addition on account of low household withdrawals
The second ground of appeal was against the addition made by the AO on account of low household withdrawals. The assessee had shown withdrawals of Rs.8,757 for household expenses, but the AO estimated the expenses at Rs.2,00,000 due to lack of details provided by the assessee. The ITAT observed that despite repeated requests, the assessee did not furnish the necessary details, and estimated the household expenses at Rs.1,00,000. The addition was sustained at Rs.91,243.

Issue 3: Addition of undisclosed income reflected as a gift
The last ground of appeal was against the addition of Rs.6,54,344 made by the AO as undisclosed income reflected as a gift. The assessee claimed to have received a gift of 15,000 Dollars, but the AO found discrepancies in the bank statements regarding the gift amount. The ITAT upheld the addition of Rs.2,17,510 for the gift of 5,000 Dollars but deleted the addition of Rs.4.35 lakhs equivalent to 10,000 US Dollars, as it was found to be genuinely received by the assessee based on the evidence provided.

In conclusion, the ITAT partly allowed the appeal, upholding certain additions while deleting others based on the evidence and circumstances presented during the proceedings.