ITAT Delhi Deletes Rs 60 Lakh Marriage Expenditure Addition for Lack of Evidence

Shobha Ram Vs ITO (ITAT Delhi)

Summary: The Income Tax Appellate Tribunal, Delhi Bench ‘G’, allowed Shobha Ram’s appeal for Assessment Year 2013-14 and deleted an addition of Rs.60,00,000 made under section 69C of the Income-tax Act, 1961, towards alleged unexplained expenditure on his daughter’s marriage. The assessee, a salaried government employee with NTPC, Dadri during Financial Year 2012-13, had been reassessed pursuant to a notice issued under Section 148, followed by an ex-parte assessment order under Sections 144/147. The addition was founded on allegations contained in an FIR and a Tax Evasion Petition arising from a matrimonial dispute. The Tribunal found that the Assessing Officer had not conducted any independent enquiry from the marriage venue, jewellers, car dealer or any other source to verify whether the assessee had actually incurred the alleged expenditure. Holding that an addition could not be sustained merely on an estimate and unsupported allegations in the FIR and TEP, the Tribunal deleted the entire addition and allowed the appeal. The legal challenge to the reassessment proceedings under Sections 147/148 was not separately adjudicated in the extracted final reasoning because the appeal succeeded on merits.

Core Issue: The core issue was whether an addition of ₹60,00,000 under Section 69C could be made towards alleged unexplained marriage expenditure merely on the basis of allegations contained in an FIR and Tax Evasion Petition, without bringing any independent material on record to establish that the assessee had actually incurred such expenditure. The assessee also challenged the reopening under Sections 147/148 on the ground that it was based merely on the FIR and TEP without independent application of mind or tangible material.