TaxTMI 
TaxTMI 
2011 (1) TMI 310
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....learly fell out of the definition of "undisclosed income" as adopted in Chapter XIV B of the Income Tax Act? ii) Whether the Tribunal did not err in law in sustaining the above mentioned additions when there was no material whatsoever found as a result of search to support such additions and additions were simply based on surmises? iii) Whether the Tribunal was justified in law in partially setting aside the assessment and directing the AO to make re-assessment by applying the provisions of Section 145(2) of the I.T. Act, ignoring the mandate and requirements of Section 158BA(3)? iv) Whether the Tribunal while so setting aside the assessment failed to consider that the provisions of section 145(2) as such could not be applied to the determination of income of the period from 1.4.96 to 31.10.96 on a proper interpretation of the applicability of the provisions of Chapter XIVB of the I.T. Act?" 2. The facts necessary for adjudication as narrated in the instant appeal are that the search and seizure operation was conducted on 31.10.1996 at the business and the residential premises of the assessee. During the search proceedings, certain incriminating documents includin....
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.... his submissions: "Since the books of account maintained by the assessee were not reliable, the assessment had to be made in the light of the material recovered during the search. In this process, some element of estimate was unavoidable. In the appellate jurisdiction under section 260A of the Act, this court normally does not interfere by substituting its own estimate in place of the one of the Tribunal unless it is shown that the estimate of the Tribunal could not possibly be reached." 7. Support was also drawn from the provisions of Section 158BB(2) of the Act which provides that provisions of Sections 68, 69, 69A, 69B and 69C apply to such cases. According to the learned counsel, the assessee had not been able to give any convincing or reliable material to show that addition of Rs.2,30,000/- on account of marriage expenses and Rs.2,00,000/- as low household expenses was unjustified. 8. We have given our thoughtful consideration to the respective submissions of learned counsel for the parties and do not find any merit in the submission of learned counsel for the assessee. 9. Examining, whether expenses incurred on the marriage of assessee's children and ....
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....4) The aggregate addition made by the AO is purely on estimate and considering normal circumstances as also assuming and presuming the status and background of the assessee as also taking into account the community to which he belonged. A reference has been made to "Aggarwal Community" in the assessment order to which the ld counsel objected but, in our opinion, any such reference whether inadvertent or motivated does not come in the way of our deciding the issue on merits. (5) No incriminating evidence or documents were found during the course of raid. 29. As against the aforesaid the main facts which favour the revenue's case are:- (1) The break-up of the actual marriage expenses was not furnished to the AO although specifically asked for. (2) For some of the marriages the assessee had not contributed a single pie and withdrawals were made from the accounts of the persons concerned and which were found to be inadequate. (3) It is unbelievable that for the marriage of his son Mahesh Kumar, the assessee's stand was that no expenditure was incurred in view of terrorist activities in Punjab. Whatever may be the situation, some expenditure is definitel....
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.... the peculiar facts and circumstances in the case of Asmita as also taking into account the point of time at which the marriage was performed. Further, Shri Harish Kumar was married in 1996 when terrorism had disappeared in Punjab as compared to Asmita's marriage in 1992 and, therefore, the expenses of the two marriages cannot be compared. 33. As regards Shri Harish Kumar, the separate addition of Rs.50000/- made in his case will be taken care of while deciding his appeal but insofar as the addition of Rs.40,000/- in the assessee's case is concerned, as against Rs.50,000/- (erroneously mentioned in the ground of appeal), there are two limbs - the first on the basis of his statement that Rs.1 lakh had been spent at the time of marriage whereas in the course of the assessment proceedings he came out with a figure of Rs.75,000/-. The ld. counsel for the assessee had argued that the figure of Rs.1 lakh had been given off hand at the time of recording the statement without reference to record and rather than take this figure the amount of Rs.75,000/- actually withdrawn be accepted. The ld. D.R., however, struck to the figure of Rs.1 lakh but after considering rival submissions w....
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.... by reference to household goods and foreign tours but we must stress that separate additions have been made on these two items and with which we have already dealt with. Household expenses would take care of food, clothing and certain other connected expenditure since telephone expenses would have been taken care of in the books of accounts of one or the other of the businesses run by the family members. The question of servants, membership of clubs and kitties as also medical expenses is once again on the basis of estimate. The AO asked the assessee to file relevant details itemwise but, in our opinion, such details could not have been furnished the way required by the AO since the search and seizure took place in Oct. 1996 whereas the household expenses asked for pertained to much earlier years beginning assessment year 97-98. Nobody is expected to keep details or for that matter remember the break-up. In our opinion, it would be fair and reasonable in case an adhoc addition is sustained considering the facts and circumstances stated aforesaid and on which the ld. counsel has strongly relied. The chart in the assessment order pertaining to the addition itself shows that in asses....