Satish Kumar Soin v. C.i.t., Ludhiana

ITA No. 182 of 2004 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Satish Kumar Soin Versus C.I.T., Ludhiana ITA No. 182 of 2004 Date of Decision: 9.11.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.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 dated3.5.2005 for determination of the following substantial question of law:- “Whether on the facts and in the circumstances ofthe case, the Tribunal was correct in law in holdingthat the marriage expenses could not be explainedfrom the amount surrendered under Section 132(4) ofthe Income-tax Act, 1961?” 2.Put shortly, the facts as narrated in the appeal are that theappellant is an individual and member of HUF headed by his father Sh.Walaiti Lal and being a joint family, he managed all the family andfinancial affairs. The assessee filed his return on 31.3.1995 for the assessment year 1994-95 declaring an income of Rs.84,520/-. Thesearch and seizure operation was conducted at the business andresidential premises of the family on 2.6.1994 and jewellery belongingto various family members was seized. During the course of saidoperation, Shri Walaiti Lal surrendered an amount of Rs.17,75,000/- inhis statement under Section 132(4) of the Income Tax Act, 1961 (inshort “the Act”) in the name of his family concerns and in his own name.The Assessing Officer has observed that the assessee had solemnizedthe marriage of his daughter and the expenses regarding that wereneither out of the withdrawals of capital account from his businessconcerns nor from bank account or any other disclosed sources ofincome. The marriage expenses were estimated at Rs.5,00,000/- andafter giving the credit on account of jewellery and other gifts frommaternal uncle's family and shagun, an addition of Rs.3,75,000/- wasmade by the Assessing Officer as unexplained expenditure. Feelingaggrieved, the assessee filed an appeal before the Commissioner ofIncome Tax (Appeals) [in short “the CIT (A)”] who deleted the additionmade by the Assessing Officer. Against the order of the CIT (A), thedepartment went in appeal before the Tribunal who partly allowing theappeal held a sum of Rs.1,35,500/- to be unexplained. Hence, thepresent appeal by the assessee. 3.We have heard learned counsel for the parties and haveperused the record. 4.Learned counsel for the assessee submitted that since theconclusion of the Tribunal is based on suspicion and irrelevantconsideration, 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 ofIncome-Tax, Delhi (Central) [1980] 126 ITR 48 (Del), Commissionerof Income-Tax, Patiala v. Ram Sanehi Gian Chand [1972] 86 ITR724 (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 revenuesupported the order passed by the Tribunal. 6.We have given our thoughtful consideration to therespective submissions of learned counsel for the parties. The Tribunalwhile rejecting the plea of the assessee in para 16 had recorded asunder:- 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 ofIncome-Tax, Delhi (Central) [1980] 126 ITR 48 (Del), Commissionerof Income-Tax, Patiala v. Ram Sanehi Gian Chand [1972] 86 ITR724 (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 revenuesupported the order passed by the Tribunal. 6.We have given our thoughtful consideration to therespective submissions of learned counsel for the parties. The Tribunalwhile rejecting the plea of the assessee in para 16 had recorded asunder:- “A perusal of the above statement reveals that Sh.Walaiti Lal has stated that the amount disclosed hasbeen utilized for repair and renovation of the house,investment in jewellery and silver utensils, IndiraVikas Patra, Kissan Vikas Patra, personal effect likehousehold articles and other movable assets andother discrepancies found in the books of account.Part of the disclosure has been indicated to be onaccount of household expenses. Whereas theinvestment in jewellery has been stated by Sh.Walaiti Lal, there is no mention of marriage expensesindicated by him in the statement recorded u/s 132(4). In assessment years 1993-94 and 1994-95, theamount disclosed by Sh. Walaiti Lal was introduced in the books of account and debited to the suspenseaccount. It was only in assessment year 1996-97that the utilization of the disclosed amount wasindicated before the Revenue Authorities. Themarriage expenses not having been indicated by Sh.Walaiti Lal in the statement recorded under Section132(4), we are of the view that the credit of suchexpenses having been taken by Sh. Walaiti Lal, headof the group for the first time in assessment year1996-97, it to be considered as after thought. In thedetails of marriage expenses, reproduced elsewherein this order, there is investment of Rs.25,000/- in thepurchase of jewellery. Since Sh. Walaiti Lal hasstated in the statement u/s 132(4) that the disclosedamount has also been utilized in the investment injewellery in the names of various persons, we are ofthe view that a sum of Rs.25,000/- can be consideredto be covered under the disclosure made by Sh.Walaiti Lal. This leaves a sum of Rs.1,35,500/- asunexplained. The addition to the extent, in our view,is warranted in the case of the assessee. The sameis 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 ofthe assessee did make a mention with regard to marriage expenseswhich might have been incurred by him on the marriage of the daughter of the assessee when the statement was recorded under Section 132(4)of the Act. The findings, as noticed above, were not shown to beerroneous or perverse in any manner. 8.Learned counsel for the assessee though made efforts forreappraisal of the evidence which does not fall within the domain ofSection 260A of the Act. Further, the reliance by the learned counselfor the assessee is totally misplaced on the judgments mentionedabove. The said judgments were rendered on individual fact situationinvolved therein and the learned counsel was unable to refer to anyproposition of law on which he has placed reliance by citing judgments.Thus, these judgments do not advance the case of the assessee, in anymanner. Accordingly, the substantial question of law is answeredagainst the assessee and in favour of the revenue. 9.The appeal stands dismissed. (AJAY KUMAR MITTAL) JUDGE November 9, 2010gbs (ADARSH KUMAR GOEL)JUDGE