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Income Tax Appellate Tribunal, ‘C’ BENCH : CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
In this appeal filed by the assessee, it aggrieved on an addition of �.16,06,370/- confirmed by the ld. Commissioner of Income Tax (Appeals)-4, Chennai.
ITA No.693/Mds/2016. :- 2 -:
Assessee has filed this appeal with a delay of four days. 2.
Condonation petition has been filed. Reasons shown for the delay are justified. Delay is condoned. Appeal is admitted
Facts apropos are that assessee had filed return of income for the 3. impugned assessment year disclosing an income of �2,61,530/. It seems Director General of Income Tax (Investigation), Chennai received certain information that assessee was having a bank account with HSBC, Switzerland. Efforts were made by the Assessing Officer to obtain factual details of any account maintained by the assessee or any account in which he was the beneficiary. It seems Assessing Officer was constrained to complete the assessment before obtaining any such information due to limitation period for completing assessment. It is to be noted the assessee had denied having any such account with HSBC. He had also stated that he was never associated with M/s. Sisal Holdings, mentioned in the information provided by the Investigation wing.
However, the Assessing Officer found that assessee was pursuing BSC in Education and Social Policy in USA. Though the assessee argued that expenditure for pursuing education abroad was met by ITA No.693/Mds/2016. :- 3 -:
his own Aunt Smt. Kamal Kumbhani, supporting it by an affidavit, ld. Assessing Officer disallowed it. He was of the opinion that no supporting evidence was filed by the assessee which could show any payment of fees from her account. Assessing Officer held that assessee had not conclusively proved how he met the educational expenditure. Rupee equivalent of US Dollars 30,000/- was added as income of the assessee. The addition came to �13,44,820/-.
In his appeal before the ld. Commissioner of Income Tax 5.
(Appeals), argument of the assessee was that Smt. Kamal Kumbhani had confirmed meeting the expenditure of his study in USA. An undertaking from Smt. Kamal Kumbhani was also filed. However, ld. Commissioner of Income Tax (Appeals) was not impressed. According to him, assessee could not provide bank details of Smt. Kamal Kumbhani and could not prove that she had sufficient funds with her for meeting the educational expenditure. He upheld the addition.
Now, before us, ld. Authorised Representative strongly assailing 6. the orders of the lower authorities submitted that affidavit filed by Smt. Kamal Kumbhani was overlooked for no reason. According to him, addition made was not justified.
ITA No.693/Mds/2016. :- 4 -:
Per contra, the ld. Departmental Representative strongly supported the orders of the authorities below.
We have considered the rival contentions and perused the orders of the authorities below. The proceedings against the assessee was initiated on a reference from Director General of Income Tax (Investigation) that he was holding an account with HSBC, Switzerland or was associated with a concern called Sisal Holdings which was holding an account. However, the final assessment completed however did not carry any addition related to this. The addition made was on educational expenses of the assessee in USA, which assessee claimed to have been met by his aunt Smt. Kamal Kumbhanim. No doubt Assessing Officer has mentioned that assessment was being completed considering constrains of limitations. However, even before ld. Commissioner of Income Tax (Appeals), Revenue was not able to show existence of any account maintained by assessee in HSBC Switzerland or any related entity. Even before us, no such pleading was made by ld. Departmental Representative. Addition was made only for the study expenditure of the assessee in USA which was claimed by the assessee to be met by his aunt in USA unjustified.
Contents of the confirmation provided by the aunt of the assessee
ITA No.693/Mds/2016. :- 5 -: produced before ld. Commissioner of Income Tax (Appeals) is reproduced hereunder:-
‘’Kamal N. Kumbhani 10608 Sunderland Woods Ct., Dayton, OHIO - 45458, United States of America
To whomsoever it may concern
This is to confirm that I Mrs. Kamal Kumbhani residing at 10608 Sunderland Woods Ct. Dayton OH 45458 am a citizen of USA. I have financed the stay and education expenses of my Nephew Mr. Arjun B Kothari I for the financial year 2009-10 when he was pursuing his BSC in Northwestern University, 633, Clark Street, Evanston IL60208, USA. The expenses were met out my earnings in the USA comprising of business income, salaries, interest & dividend etc. The proof of my income in the form of my income tax return filed in the USA is enclosed. Yours sincerely,