Satish Kumar Soin v. C.I.T., Ludhiana

HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. S.K. Mukhi, Advocate for the appellant. Mr. Rajesh Katoch, Advocate for the respondent. AJAY KUMAR MITTAL, J.

1. This appeal was admitted by this Court vide order dated

3.5.2005 for determination of the following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the marriage expenses could not be explained from the amount surrendered under Section 132(4) of the Income-tax Act, 1961?”

2. Put shortly, the facts as narrated in the appeal are that the appellant is an individual and member of HUF headed by his father Sh. Walaiti Lal and being a joint family, he managed all the family and financial affairs. The assessee filed his return on 31.3.1995 for the ITA No. 182 of 2004 -2- assessment year 1994-95 declaring an income of Rs.84,520/-. The search and seizure operation was conducted at the business and residential premises of the family on 2.6.1994 and jewellery belonging to various family members was seized. During the course of said operation, Shri Walaiti Lal surrendered an amount of Rs.17,75,000/- in his statement under Section 132(4) of the Income Tax Act, 1961 (in short “the Act”) in the name of his family concerns and in his own name. The Assessing Officer has observed that the assessee had solemnized the marriage of his daughter and the expenses regarding that were neither out of the withdrawals of capital account from his business concerns nor from bank account or any other disclosed sources of income. The marriage expenses were estimated at Rs.5,00,000/- and after giving the credit on account of jewellery and other gifts from maternal uncle's family and shagun, an addition of Rs.3,75,000/- was made by the Assessing Officer as unexplained expenditure. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [in short “the CIT (A)”] who deleted the addition made by the Assessing Officer. Against the order of the CIT (A), the department went in appeal before the Tribunal who partly allowing the appeal held a sum of Rs.1,35,500/- to be unexplained. Hence, the present appeal by the assessee.

3. We have heard learned counsel for the parties and have perused the record.

4. Learned counsel for the assessee submitted that since the conclusion of the Tribunal is based on suspicion and irrelevant consideration, the same is liable to be set aside. He placed reliance ITA No. 182 of 2004 -3- upon Commissioner of Income Tax, Bihar and Orissa v. S.P. Jain [1973] 87 ITR 370 (SC), Yadu Hari Dalmia v. Commissioner of Income-Tax, Delhi (Central) [1980] 126 ITR 48 (Del), Commissioner of Income-Tax, Patiala v. Ram Sanehi Gian Chand [1972] 86 ITR 724 (P&H) and Commissioner of Income Tax v. K. Sreedharan [1993] 201 ITR 1010 (Ker) in support of his submission.

5. On the other hand, learned counsel for the revenue supported the order passed by the Tribunal.

6. We have given our thoughtful consideration to the respective submissions of learned counsel for the parties. The Tribunal while rejecting the plea of the assessee in para 16 had recorded as under:- “A perusal of the above statement reveals that Sh. Walaiti Lal has stated that the amount disclosed has been utilized for repair and renovation of the house, investment in jewellery and silver utensils, Indira Vikas Patra, Kissan Vikas Patra, personal effect like household articles and other movable assets and other discrepancies found in the books of account. Part of the disclosure has been indicated to be on account of household expenses. Whereas the investment in jewellery has been stated by Sh. Walaiti Lal, there is no mention of marriage expenses indicated by him in the statement recorded u/s 132 (4). In assessment years 1993-94 and 1994-95, the amount disclosed by Sh. Walaiti Lal was introduced ITA No. 182 of 2004 -4- in the books of account and debited to the suspense account. It was only in assessment year 1996-97 that the utilization of the disclosed amount was indicated before the Revenue Authorities. The marriage expenses not having been indicated by Sh. Walaiti Lal in the statement recorded under Section 132(4), we are of the view that the credit of such expenses having been taken by Sh. Walaiti Lal, head of the group for the first time in assessment year 1996-97, it to be considered as after thought. In the details of marriage expenses, reproduced elsewhere in this order, there is investment of Rs.25,000/- in the purchase of jewellery. Since Sh. Walaiti Lal has stated in the statement u/s 132(4) that the disclosed amount has also been utilized in the investment in jewellery in the names of various persons, we are of the view that a sum of Rs.25,000/- can be considered to be covered under the disclosure made by Sh. Walaiti Lal. This leaves a sum of Rs.1,35,500/- as unexplained. The addition to the extent, in our view, is warranted in the case of the assessee. The same is accordingly restored.”

7. The addition of Rs.1,35,500/- was held to be unexplained. Learned counsel for the assessee was unable to show that the father of the assessee did make a mention with regard to marriage expenses which might have been incurred by him on the marriage of the daughter ITA No. 182 of 2004 -5- of the assessee when the statement was recorded under Section 132(4) of the Act. The findings, as noticed above, were not shown to be erroneous or perverse in any manner.

8. Learned counsel for the assessee though made efforts for reappraisal of the evidence which does not fall within the domain of Section 260A of the Act. Further, the reliance by the learned counsel for the assessee is totally misplaced on the judgments mentioned above. The said judgments were rendered on individual fact situation involved therein and the learned counsel was unable to refer to any proposition of law on which he has placed reliance by citing judgments. Thus, these judgments do not advance the case of the assessee, in any manner. Accordingly, the substantial question of law is answered against the assessee and in favour of the revenue.

9. The appeal stands dismissed. (AJAY KUMAR MITTAL) JUDGE November 9, 2010 (ADARSH KUMAR GOEL) JUDGE