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Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
ORDER PER H.S. SIDHU : JM
Assessee has filed this Appeal against the impugned Order dated 24.3.2014 passed by the Ld. CIT(A)-II, New Delhi relevant to assessment year 2006-07 wherein the addition of Rs. 12,02,615/- made by the AO on account of marriage expenditure was upheld.
The brief facts of the case are that Original return was filed declaring income at Rs. 1,77,59,790/- on 28-10-2006 under the head income from Salary, business & profession, capital gain and other sources. In this case search & seizure operation u/s 132 of the LT. Act was conducted in consequence to the warrant of authorization issued by D.I. (Inv)-(II), New Delhi on 04-10-2007 in the residence/business premises of the assessee at H. No. 130, Transport Centre, Ring Road, Punjabi Bagh, New Delhi the related persons/concerns of am Logistics Group of cases. During the course of search & seizure operation cash & jewellery amounting to Rs. 1,37,530/- & 1,58,047/- were found respectively at the residence of the assessee. Shri Ajay Singhal, Prop M/s Om Auto Carrier is also one of the Directors of Om Logistics Group of cases. In response to notice under section 153A of the Income tax Act, 1961, the assessee filed returns uls 153 A dated 04-05-2009 for Rs. 1,77,59,790/-. The statutory notices uls 142(1) & 143(2) along with questionnaire were issued from time to time including detailed questionnaire based on seized documents and other issues related to the icome of the assessee, dated 07-08-2009 and necessary compliance was made by the A.R. of the assessee. The assessee is deriving income from salary, business and profession, the business of logistics and transportation of goods across the country under the name and style of Om Auto Carriers, short term capital gain and income from other sources.
During the year, the assessee has declared gross receipts from business at Rs. 10,37,56,107/- on which profit of Rs. 1,54,05,522/ has been declared giving N.P. ratio of 14.85% as against N.P ratio of 11.12% in the immediate preceding year. Necessary details called for have been filed.
Hence, the trading results are not disturbed. During the course of search operation at the residential premises of the assessee, Annx A-I age no. 39-50 were seized by party A-2 which contained details of expenditure relating to some carriage. The assessee was required to furnish details of the marriage and correlate with the expenditure with drawings made in the relevant period. The assessee has submitted a detailed reply and after considering the same, the AO has complete the assessment at an income of Rs. 1,89,62,400/- and made the addition on account of undisclosed expenditure on marriage amounting to Rs. 12,02,615/- vide his order dated 24.12.2009 passed u/s. 153A/143(3) of the Act.
Aggrieved with the assessment order dated 24.12.2009, the assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order dated 24.03.2014 has dismissed the appeal of the assessee.
Against the impugned order dated 24.3.2014, assessee has filed the Appeal before the Tribunal.
At the time of hearing, Ld. Counsel of the assessee has stated that the AO has made the addition of Rs. 12,02,615/- to the returned income of the assessee alleging that the source of the said amount incurred by the assessee on the marriage of his niece remained unexplained. He further stated that AO has made the addition by holding the expenditure reflected in the seized documents to be made out of undisclosed sources.
He further stated that Ld. CIT(A) sustained the addition in dispute by relying upon the whims and fancies of the AO and by not appreciating the detailed submissions and evidences filed by the assessee and Ld. CIT(A) confirmed the addition by holding that the assessee has not been able to give any cogent and satisfactory explanation with regard to the said expenditure. He further stated that during the assessment and appellate proceedings it was submitted that the documents found during the course of search reflected the expenditure incurred by the assessee on the marriage of his niece and out of the total expenditure incurred on the marriage of his niece, an amount of Rs. 11.50 lacs was incurred by the assessee out of the rawings made from his proprietorship concern M/s OM Auto Carriers and the balance of Rs. 52,615/- was incurred by the parents of his niece. In support of this contention, the assessee duly submitted a copy of its cash flow statement for various years, wherein the withdrawals made for marriage expenses were duly reflected at PB-28 of the PB and the details of the marriage expenses incurred are at Page 29-30 of PB. He further stated that a perusal of the cash flow statement clearly shows that the assessee had an opening balance of Rs. 8,04,661/- during the year, and after making withdrawals for the marriage and for his household expenditure, the closing balance available with the assesee at the year- end was Rs. 4,51,360/-, hence, the assessee had sufficient funds at his disposal, which have been withdrawn by the assessee and utilized for the marriage purpose of his niece and accordingly the expenditure incurred by the assessee was duly explained. In view of the above, he requested to delete the addition in dispute and allow the appeal of the assessee.
On the contrary, Ld. DR relied upon the orders of the authorities below.
We have carefully considered the rival contentions and also perused the orders of the authorities below. Admittedly, during the course of search operation Annexure A-1 Page no. 39-50 were seized which contain the details of marriage expenses incurred by the assessee.
The details of marriage expenses are placed at Page No. 29 of the PB amounting to Rs. 12,02,615/-. The Assessee explained the above expenditure placing the Cash Flow Statement starting from the assessment year 2001-02 to 2007-08 wherein a sum of Rs. 11,50,000/- were shown by the assessee being incurred from his withdrawal on account of marriage of her niece Ms. Rupali. The Cash Flow Statement showed that the assessee was having an Opening Balance of Rs. 8,04,661/- and withdrawal from his Proprietorship concern M/s OM Auto Carrier of Rs. 12.70 lacs and salary wherein the total available cash with the assessee was Rs. 23.33 lacs out of which assesse has incurred marriage expenses of Rs. 11.55 lacs. The AO as well as CIT(A) has rejected the Cash Flow Statement stating that it is not believable. On careful perusal of the Cash Flow Statement, the assessee has shown year- wise Opening Balance available from Assessment year 2001-02 to till Assessment year 2007-08. None of the amount shown in the Cash Flow Statement was found to be incorrect. Therefore, merely discarding the evidences placed by the assessee as unbelievable and thereby sustaining the addition is incorrect. It is also to be noted that assessee has filed his return of income at Rs. 1.78 crores for the assessment year 2006-07.
The amount of withdrawals and generation of cash shown for 7 years by the assessee were not found to be erroneous. Further, merely because the cash is available with the assessee for a longer period, it cannot be said that it is not available with the assese for spending, unless the Revenue could lay hands on any evidences which have been remotely show that cash was used for some other purpose. In the absence of any such positive evidences produced by the AO and also rebutting the Cash Flow Statement of the assessee, the addition in the hands of the assessee is not sustainable. In the result, we are reversing the finding of the lower authorities and direct to delete the addition of Rs. 12,02,615/- which is supported by the Cash Flow Statement of the Assessee.
In the result, the Appeal filed by the Assessee stands allowed.
Order pronounced in the Open Court on 22/11/2017.