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TMI Blog2011 (1) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal ), in ITA No. 55/CHANDI/97, for the block assessment period from 1.4.1986 to 31.10.1996, raising the following substantial questions of law:- i) Whether the ITAT Chandigarh did not err in law in sustaining the addition of Rs.2,30,000/- as 'undisclosed income' of the block period, represented by arbitrary estimate of the expenses incurred in the marriage of assessee's children and Rs.2,00,000/- as household expenditure where such conjectural additions clearly fell out of the definition of undisclosed income as adopted in Chapter XIV B of the Income Tax Act? ii) Whether the Tribunal did not err in law in sustaining the above mentioned additions when there was no material whatsoever found as a result of search to support such additions and additions were simply based on surmises? iii) Whether the Tribunal was justified in law in partially setting aside the assessment and directing the AO to make re-assessment by applying the provisions of Section 145(2) of the I.T. Act, ignoring the mandate and requirements of Section 158BA(3)? iv) Whether the Tribunal while so setting aside the assessment failed to consider that the provisions of section 145(2) as such could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intained by the assessee were not reliable and, therefore, certain estimates had to be made for determining the undisclosed income. The estimates which had been upheld by the Tribunal cannot be said to be perverse as the same are based on material on record. Learned counsel for the revenue relied upon the following observations in the judgment of this Court in Ved Parkash v. Commissioner of Income Tax, [2004] 265 ITR 642 in support of his submissions: Since the books of account maintained by the assessee were not reliable, the assessment had to be made in the light of the material recovered during the search. In this process, some element of estimate was unavoidable. In the appellate jurisdiction under section 260A of the Act, this court normally does not interfere by substituting its own estimate in place of the one of the Tribunal unless it is shown that the estimate of the Tribunal could not possibly be reached. 7. Support was also drawn from the provisions of Section 158BB(2) of the Act which provides that provisions of Sections 68, 69, 69A, 69B and 69C apply to such cases. According to the learned counsel, the assessee had not been able to give any convincing or reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... likely to result in the second marriage being performed on a lesser scale more so when she became a widow within one year of her first marriage. (3) The marriage of Asmita, the other daughter of the assessee, was also performed in the background of the fact that her fiancee died a week before the marriage and the same had to be performed with a different person in hurried circumstances. (4) The aggregate addition made by the AO is purely on estimate and considering normal circumstances as also assuming and presuming the status and background of the assessee as also taking into account the community to which he belonged. A reference has been made to Aggarwal Community in the assessment order to which the ld counsel objected but, in our opinion, any such reference whether inadvertent or motivated does not come in the way of our deciding the issue on merits. (5) No incriminating evidence or documents were found during the course of raid. 29. As against the aforesaid the main facts which favour the revenue's case are:- (1) The break-up of the actual marriage expenses was not furnished to the AO although specifically asked for. (2) For some of the marriages th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- would be fair and reasonable as against Rs.2,00,000/- on the part of the AO. The AO has compared in arriving at the estimate of Rs.25,000/- the expenditure on the marriage of assessee's second son Mr. Harish Singal. In his own case a separate addition of Rs.50,000/- has been made over and above the addition made in the assessee's own case. We would once again stress on the peculiar facts and circumstances in the case of Asmita as also taking into account the point of time at which the marriage was performed. Further, Shri Harish Kumar was married in 1996 when terrorism had disappeared in Punjab as compared to Asmita's marriage in 1992 and, therefore, the expenses of the two marriages cannot be compared. 33. As regards Shri Harish Kumar, the separate addition of Rs.50000/- made in his case will be taken care of while deciding his appeal but insofar as the addition of Rs.40,000/- in the assessee's case is concerned, as against Rs.50,000/- (erroneously mentioned in the ground of appeal), there are two limbs the first on the basis of his statement that Rs.1 lakh had been spent at the time of marriage whereas in the course of the assessment proceedings he came out with a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examining rival contentions, we are of the view that there is some merit in the arguments advanced by the ld. counsel for the appellant. As rightly contended the element of estimate has crept in along with various assumptions and presumptions such as expenses towards social functions on the part of the family, their high standard of living by reference to household goods and foreign tours but we must stress that separate additions have been made on these two items and with which we have already dealt with. Household expenses would take care of food, clothing and certain other connected expenditure since telephone expenses would have been taken care of in the books of accounts of one or the other of the businesses run by the family members. The question of servants, membership of clubs and kitties as also medical expenses is once again on the basis of estimate. The AO asked the assessee to file relevant details itemwise but, in our opinion, such details could not have been furnished the way required by the AO since the search and seizure took place in Oct. 1996 whereas the household expenses asked for pertained to much earlier years beginning assessment year 97-98. Nobody is expect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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