2022 (10) TMI 1094 - AT - Income Tax

Addition of gifts - gifts received by the newly wed couple from the immediate family or relatives - addition made by AO to total income of assessee - Learned counsel submitted that both the authorities failed to appreciate the fact that there is tradition in marriage of a female - Learned counsel submitted that before learned CIT(Appeals) it was stated that loan was received from 14 people, gift received from 101 persons and family relatives - HELD THAT - It is seen from the record that the assessee had filed various evidences in the form of affidavit etc. The learned CIT(A) has brushed aside those evidences without even verifying the veracity of such affidavit. Merely stating that the affidavit was procured subsequent to marriage, in my considered view is not justified. CIT(Appeals) ought to have verified the correctness of the claim of the assessee. Therefore, set aside the impugned order and restore the assessment to the file of the Assessing officer to decide it afresh after considering the evidences placed by the assessee in the form of affidavit and frame the assessment afresh. Grounds raised in this appeal are allowed for statistical purpose.

Summary

Issues:
1. Addition of Rs. 7,46,804 to total income.
2. Failure to appreciate evidence by authorities.

Analysis:
1. The appeal was against the addition of Rs. 7,46,804 to the total income of the assessee. The Assessing Officer had information about expenses incurred by the assessee for purchasing jewelry and other articles. The case was reopened, and the income was assessed at Rs. 9,39,200, higher than the declared income of Rs. 1,92,392. The CIT(Appeals) dismissed the appeal, leading to the appeal before the Tribunal. The counsel argued that the authorities did not properly consider the evidence, including loans and gifts received by the assessee. The Tribunal found that the authorities failed to appreciate the tradition of females receiving gifts at marriage and loans taken by the assessee, and thus set aside the order to reevaluate the evidence and make a fresh assessment.

2. The authorities were criticized for not properly considering the evidence presented by the assessee. The counsel argued that loans were received from multiple sources, gifts were received from various individuals, and expenses were incurred from savings and loans. The Assessing Officer did consider some of these aspects but failed to fully appreciate the evidence. The Tribunal agreed that the authorities did not adequately verify the affidavits and evidence presented by the assessee. The Tribunal set aside the order and directed the Assessing Officer to reevaluate the evidence and make a fresh assessment. The appeal was allowed for statistical purposes.

This judgment highlights the importance of properly considering all evidence presented by the assessee and conducting a thorough assessment based on the facts and circumstances of the case. The Tribunal emphasized the need for authorities to verify the veracity of evidence and not dismiss it without proper evaluation.