BACHITTAR SINGH CHANA,LUDHIANA vs. ITO, W-V(1), LUDHIANA

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH’A’, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA No.1682/Chd/2017 Assessment Year: 2001-02

Bachittar Singh Chana Vs. The ITO Prop. M/s Fantas India Ward-V(1), 8023/4, Ranjit Nagar Ludhiana Behind A.T.I, Gill Road, Ludhiana

PAN No. ACDPC5030F

(Appellant) (Respondent)

Assessee By : Shri. Sudhir Sehgal Revenue By : Shri. Kultej Singh Bains

Date of hearing : 10/07/2018 Date of Pronouncement : 11/07/2018

ORDER PER DR. B.R.R. KUMAR, A.M:

The present appeal has been filed by the Assessee against the order of the Ld. CIT(A) dt. 19/09/2017 on the following grounds of appeal:

i) Unexplained expenditure on gold items Rs. 3,13,641/- ii) Unexplained expenditure on Furniture Items Rs. 2,09,529/- iii)Unexplained expenditure in Gents Suits Rs. 20,000/- iv)Unexplained expenditure on Ladies Suits Rs. 50,000/- v)Unexplained marriage palace expenses Rs. 48,800/- vi)Unexplained expenditure on their items Rs. 60,000/-

Total Unexplained expenditures Rs. 7,01,9707-

expenditure

Regarding the Ground No. 3

4.1 The assessee has gifted 125 tolas of gold during the marriage and

explained that the gold purchased in the current assessment year was 4.8 tolas

and the remaining was purchased in the past as well as gifts from relatives

Grandfather etc. It was explained that the quantity of 56 tolas of gold was

converted from the gold belonging to the Mother of the assessee as well as the

Wife of the assessee.

4.2 The Assessing Officer on examination of the jeweler came to the

conclusion that no conversion of gold took place and brought to tax an amount

of Rs. 3,13,641/- on account of 56 tolas of Gold @ 5517/-.

4.3 Before us, the Ld. AR argued that it cannot be totally assumed that the

Mother and Grand Mother of the bride has not contributed anything in gold. It

was argued that as per traditional Hindu rituals and customs the gold passes on

from Mother to Daughter during the marriage. Hence not giving any allowance

out of the 56 tolas of gold gifted by Mother and Grand Mother and treating the

traditional gifts as unexplained and bringing the entire amount to tax cannot be

accepted. It was further argued that since the assessee was in the business of

Automobiles and also his wife is from a fair background a reasonable allowance

for the gifts is to be accorded to.

4.4 Ld. DR relied on the order of the Ld. CIT(A).

4.5 Having gone through the facts on record, it can be conveniently

concluded that at the time of marriage a minimum of 400 gms to 500 gms of

gold can be treated as ‘Sthreedhan’ based on the family background. Hence,

keeping in view the entirety of the facts specific and particular to the instant

case a quantity of 450 gms of gold (equivalent to 38 tolas) is treated as gold

passed on to the bride from Mother and Grandmother. The addition made

equivalent to 12 tolas of gold (@ 5517 ) stands confirmed.

2,09,000/-.

5.1 The Assessing Officer made an addition of Rs. 2,00,000/- on account of

purchase of furniture.

5.2 Regarding the furniture the assessee explains that the furniture has been

purchased on various dates and some purchase bills were also filed before the

Assessing Officer. The assessee has also explains that an amount of Rs. 2,00,000/-

was spent in the F.Y. 2001-02 keeping in view the ongoing marriage disputes.

5.3 Before us the Ld. AR argued that these amounts was spent on account of

furniture purchased post marriage and explained that bank withdrawals amply

prove the fact as per the page no. 14 of the assessment order. It is the common

practice to purchase the required furniture for the girl’s new family after the

marriage and the assessee could show the required withdrawals for such

expenses which can be accepted. Hence, the addition made on account of

furniture of Rs. 2,00,000/- is hereby deleted.

suits of Rs. 20,000/-, on ladies suits Rs. 50,000/- , marriage place expenses Rs.

48,800/- and expenditure on other items of Rs. 60,000/-.

6.1 Based on the articles enlisted in the TEP the assessee has spent an amount

of Rs. 80,000/- on account of gents suits, towels and sweaters. The assessee

submitted before the Assessing Officer that out of the Rs. 80,000/- an amount of

clothes worth Rs. 50,000/- were purchased in the last year and clothing worth Rs.

30,000/- has given by relatives and friends on occasion of the marriage.

6.2 The Assessing Officer has disallowed an amount of Rs. 20,000/- being the

25% of Rs. 80,000/- on adhoc, estimate basis which the Ld. CIT(A) has also

confirmed.

6.3 Regarding the ladies suits, based on the articles enlisted in the TEP the

assessee has spent an amount of Rs. 1,48,000/- on account of ladies suits, shawls

and sweater. The assessee submitted before the Assessing Officer that out of the

Rs. 1,48,000/- an amount of clothes worth Rs. 81,177/- were purchased in the

year 2000-01and clothing worth Rs. 38,633/- were old purchases and Rs. 30,000/-

has been given by the relatives and friends on occasion of marriage.

6.4 The Assessing Officer has disallowed an amount of Rs. 50,000/- on estimate

basis which the Ld. CIT(A) has also confirmed.

6.5 Regarding the marriage place expenses the assessee explained that he

has incurred total expenses of Rs. 1,28,000/- on account of snacks, lunch, cards

and sweets.

6.6 The Assessing Officer estimated an amount of Rs. 1,34,800/- on account

of marriage expenses including lighting and photographs and treated an

amount of Rs. 48,800/- as unexplained.

6.7 Regarding the other items of post marriage items the assessee explains

that he spent Rs. 16,500/- .

6.8 The Assessing Officer estimated Rs. 60,000/- on account of cosmetic kits,

purses, quilts etc.

6.9 Before us, the Ld. AR argued that the amounts have been duly explained

by the assessee before the Assessing Officer and the addition made on estimate

basis without bringing any sought of material on record is liable to be deleted.

He further argued that a large number of items are given as gifts by friends and

relatives to the bride being the daughter of the family as per the traditional

Hindu customs and rituals.

6.10 Ld. DR relied on the order of the lower authorities.

6.11 We have gone through the facts on record and find that the addition on

account of marriage expenses were made purely on estimate basis without

bringing an iota of evidence on record. The assessee’s explanation regarding

the amount spent can be well accepted keeping in view the overall

circumstances of the case. Hence the addition made by the Assessing Officer

on estimate basis is hereby deleted.

Order pronounced in the open Court.

Sd/- Sd/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 11/07/2018 AG Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) The DR 5.