ITAT CHANDIGARH BENCH ‘B’
Rajinder Mohan Lal
Vs
Deputy Commissioner of Income Tax
IT APPEAL NO. 578/CHD./2011- [ASSESSMENT YEAR= 2007- 08]
JANUARY 4, 2012
ORDER
Mehar Singh, Accountant Member- The present appeal filed by the assessee is directed against the order dated 19.01.2011 passed by the ld. CIT(A) u/s 250 of the Income-tax Act, 1961 (in short ‘the Act’).
2. In this appeal, the assessee has raised the following Grounds of Appeal:
“1. That the order passed u/s 250(6) by the ld. CIT(A) Chandigarh in Appeal No. 386/P/09-10 dated 19.01.2011 is contrary to law and facts of the case.
2. That in the facts and circumstances of the case, the ld. CIT(A) gravely erred in sustaining the addition of Rs. 21,07,513/- which represented the amount received as shoguns on behalf of his daughter Ms. Radhika Lal at the time of her marriage.
3. That in the facts and circumstances of the case, the ld. CIT(A) gravely erred in sustaining the addition of Rs. 5,50,000/- on account of foreign traveling expenses for alleged personal use of the assessee. No such expenses were incurred by the assessee.
4. That without prejudice to the above, the addition is highly excessive.
5. Any other ground that may be taken up at the time of hearing with the permission of the Hon’ble ITAT Chandigarh.”
3. Ground Nos. 1 & 5 raised by the assessee are general in nature and need no separate adjudication.
4. In Ground No. 2, the assessee challenged the confirmation of addition of Rs. 21,07,513/- by the CIT(A) representing the amount received as ‘shaguns’ on behalf of the assessee’s daughter Ms. Radhika, at the time of her marriage. The ld. ‘AR’ contended that the provisions of Section 56 cannot be applied to the facts of the present case as the gifts were received on the occasion of marriage of daughter of the assessee. He referred to various pages of the Paper Book demonstrating the date of marriage of the assessee’s daughter as also the receipt of gifts from some NRI friends and relatives.
5. Ld. ‘DR’, on the other hand, defended the orders of the lower authorities and categorically stated that the provision of Section 56(2)(vi) of the Act are applicable to the facts of the present case.
6. We have carefully perused the facts of the case, rival submissions and found that the AO made an addition of Rs. 21,07,513/- on account of gifts received from NRI relatives and friends on the occasion of the marriage of assessee’s daughter. The AO afforded opportunity to the assessee to show cause as to why the provisions of Section 56(2)(vi) of the Act may not be invoked in the present case as the gifts have been received by the assessee and not by the daughter of the assessee.
7. In para 2.3 of the assessment order, the AO recorded his categorical findings on the issue, which are reproduced hereunder :
“2.3 In the submission the counsel has submitted that the gifts on account of daughter’s marriage are not to be treated as income from other sources. As per Section mentioned above, any sum of money received on the occasion of the marriage of the individual is not to be included in income from other sources. However, this amount has been received on the occasion of assessee’s daughter marriage and not on the marriage of the assessee, therefore it is to be treated as income from other sources of the assessee. All these payments have been received through cheques and credited in assessee’s account. Therefore the aggregate gifts exceeding Rs. 50,000/- are to be treated as income from other sources. Hence Rs. 21,07,513/- is added to the returned income of the assessee. As the assessee has concealed his income, penalty proceedings u/s 271(1)(c) of the Income-tax Act,1961 are also being initiated.”
8. A perusal of the findings recorded by the AO clearly reveals that the gifts have been received by the assessee and utilized by the assessee. Consequently, ld. AO was of the opinion that such gifts were received through cheque and credited in assessee’s account and consequently, the aggregate gifts exceeding Rs. 50,000/- were treated as income from other sources by the AO u/s 56 of the Act. Such findings of the AO were upheld by the CIT(A). The CIT(A) recorded the findings that the cheques were issued in the name of the assessee and not in favor of the individual i.e. daughter of the assessee, whose marriage was solemnized. The ld. CIT(A) afforded further opportunity to the assessee to adduce evidence to establish his case to the effect that the donors were having credit worthiness and relations existed between the donor and donee. Ld. CIT(A) further recorded that the submission made by the assessee in the matter is purely stereo type and does not prove his case. It was further highlighted by the ld. CIT(A) that the money was never transferred to the account of the assessee’s daughter. The findings of the ld. CIT(A) are reproduced hereunder :
“7. I have considered the rival contentions and material on record and I am inclined to agree with the ld. AO since none of the cheques are in the name of the daughter of the appellant Smt. Radhika Uppal. The counsel argued that the shoguns are never given to the bride but to her parents to which I agree to some extent but that is normally when one attends a wedding, the shoguns are given to the parents who receive the guests. But if someone sends a cheque for the bride, logically it should be in her name.
8. Secondly, I asked the counsel to produce some such evidence which could clinch the issue in his favor, for instance bank entries/ transfer whereby the money credited to appellant’s bank account was transferred to daughter/ spent on her wedding-basically I needed the utilization of these amounts received and secondly I had asked him to give a profile of the appellant, his level and status and his relationship with the donors. For example, how is Nandini Chopra related to the appellant who gifted 5100 USD. The appellant was asked to prove the same in case of the following persons :
