DANISH ALI,MORADABAD vs. ACIT CENTRAL CIRCLE, MORADABAD

The present appeal is filed by the assessee against the order dated 07.08.2019 passed by Ld. Commissioner of Income Tax (A)- III, Lucknow [“Ld.CIT(A)”] in Appeal No.46/DCIT/CC/MBD./CIT(A)- III/Lko./18-19 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of the assessment order dated 30.12.2018 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18.

another sum of Rs. 25,00,000/- withdrawn by the brother of the appellant Mr. Tariq Ali from M/s Vision Exports. The impugned addition tantamount to double taxation. (iii) Provisions of section 69C of the IT Act in terms had no application to the facts of Appellant's case. 2. The appellant craves leave to add one or more grounds of appeal or to alter/modify the existing grounds before or at the time of hearing the appeal.”

3. Heard the contentions of both the parties and perused the material available on record. From the perusal of the orders of the lower authorities, it is seen that assessee has offered additional income of Rs. 55.00 lacs on account of marriage gifts received from friends and relatives at the time of his marriage as income from other sources and filed the lists of the guests. The AO though accept the additional income offered by the assessee however, had invoked the provisions of section 68 of the Act and charge the tax at special rates as provided in section 115BBE of the Act. The ld. CIT(A) after considering the submissions of the assessee accepted his contentions and held the same as income from other sources and set aside the action of AO in applying the provisions of section 68 r.w.s. 155BBE of the Act.

4. Besides this assessee claimed that inadvertently in the return of income, additional income of Rs. 35.00 lacs as unexplained expenditure incurred at the time of his marriage was included in the total income of the assessee and due taxes were paid. However, later it was realized that this amount was claimed as application of funds in fund flow statement wherein the funds were either from bank withdrawal or withdrawal from partnership firms or the income offered for tax thus the amount of Rs.35.00 lacs as offered Page | 2 for tax is double taxation and it was requested to withdraw such additional income. This claim of the assessee was not accepted by the AO as well as by ld. CIT(A).

5. On perusal of the seized documents bearing page Nos. 6-18 of Anx. No. LP-3 of party A-1, as available in paper book pages 39-51 filed by the assessee, it is seen that as per these papers, total sum of Rs. 15,34,000/- was paid to Mr. Manish Malhotra towards the purchases of cloths during the marriage of the assessee as against which in fund flow statement, assessee claimed application of Rs. 35.00 lacs which is evident from page 2 of paper book of the assessee. As observed above, the immediate source of the same is out of withdrawals made by the assessee from the partnership firms, withdrawal by his brother Shri Tariq Ali and income offered for tax on account of marriage gift etc., thus the expenditure incurred on the marriage of the assessee are explained expenditure. Further as observed above, total payment made to designer Mr. Manish Malhotra was of Rs. 15,34,000/- only therefore, the observation of ld. CIT(A) in para 17 of the order is not correct and thus excluded. Since the expenses of Rs. 35.00 lacs is duly supported by the explained sources therefore, the action of AO in invoking the provisions of section 69C of the Act is not correct and therefore, it is held that the expenditure is duly explained.

Order pronounced in the open Court on 27.05.2025.