PRABAL LAKHOTIA v. ASSISTANT COMMISSIONER OF INCOME TAX
[Citation -2007-LL-0214-2]

Citation 2007-LL-0214-2
Appellant Name PRABAL LAKHOTIA
Respondent Name ASSISTANT COMMISSIONER OF INCOME TAX
Court ITAT
Relevant Act Income-tax
Date of Order 14/02/2007
Assessment Year BLOCK PERIOD 1997-98 TO 2003-04
Judgment View Judgment
Keyword Tags unexplained expenditure • undisclosed income • onus to prove • block period
Bot Summary: First four grounds deal with the single issue regarding the confirmation of addition of Rs. 2,21,680 on the basis of assumed expenditure on the occasion of marriage ceremony of the assessee. On the perusal of the bank account of the assessee, the AO observed that certain amounts were credited on various dates in his bank account which were explained by the assessee as gifts received at the time of marriage. Regarding the expenses incurred by the assessee on his marriage on 3rd Feb., 2001 it was claimed that a sum of Rs. 6,000 was withdrawn on 15th Jan., 2001 and a further sum of Rs. 67,800 was on 2nd Feb., 2001, which were utilized towards marriage expenses. The AO noted that during the course of search, statement of Smt. Savitri Lakhotia, the grandmother of the assessee was recorded, who admitted that an expenditure of Rs. 6 to 7 lakhs was incurred on the marriage of the assessee which was contributed by Shri Om Prakash Lakhotia, the maternal uncle of the assessee who had adopted him. Credit of expenditure incurred out of money received in Bhat ceremony at Rs. 2 lakhs and gifts received by the assessee at Rs. 2,40,520 were allowed and the remaining amount of Rs. 2,95,480 was held to be incurred out of unaccounted income. Further, a sum of Rs. 73,800 shown by the assessee as withdrawals was also reduced from the above amount and the remaining sum of Rs. 2,21,680 was held to be undisclosed income of the assessee. Even if we go by the statement of the grandmother and conclude that the marriage expenditure was between Rs. 6 to Rs. 7 lakhs, the onus to prove the source of such expenditure was on Shri Om Pakash Lakhotia and not on the assessee.


This appeal by assessee is directed against order passed by CIT(A) on 10th Nov., 2005 in relation to block period comprising of asst. yrs. 1997-98 to 2003-04. First four grounds deal with single issue regarding confirmation of addition of Rs. 2,21,680 on basis of assumed expenditure on occasion of marriage ceremony of assessee. Briefly stated, facts of this case are that search action was taken upon assessee along with others under s. 132(1) on 20th Dec., 2002. On perusal of bank account of assessee, AO observed that certain amounts were credited on various dates in his bank account which were explained by assessee as gifts received at time of marriage. It was stated out of total gifts of Rs. 2,04,522, only Rs. 22,320 were received in cash and remaining amount was by way of cheques/drafts. Regarding expenses incurred by assessee on his marriage on 3rd Feb., 2001 it was claimed that sum of Rs. 6,000 was withdrawn on 15th Jan., 2001 and further sum of Rs. 67,800 was on 2nd Feb., 2001, which were utilized towards marriage expenses. AO noted that during course of search, statement of Smt. Savitri Lakhotia, grandmother of assessee was recorded, who admitted that expenditure of Rs. 6 to 7 lakhs was incurred on marriage of assessee which was contributed by Shri Om Prakash Lakhotia, maternal uncle of assessee who had adopted him. AO noted that Shri Om Prakash Lakhotia had not shown any expenditure incurred by him on this occasion. Since marriage was solemnized in Hotel Abhay Days and video recording was seized, he, therefore, took statement of grandmother into consideration and estimated marriage expenses at Rs. 7 lakhs. Credit of expenditure incurred out of money received in Bhat ceremony at Rs. 2 lakhs and gifts received by assessee at Rs. 2,40,520 were allowed and remaining amount of Rs. 2,95,480 was held to be incurred out of unaccounted income. Further, sum of Rs. 73,800 shown by assessee as withdrawals was also reduced from above amount and remaining sum of Rs. 2,21,680 was held to be undisclosed income of assessee. No relief was allowed in first appeal. We have heard both sides and perused relevant material on record. It is noted that except for statement of Smt. Savitri Lakhotia, grandmother of assessee, there is no material/evidence to show that sum of Rs. 6 to 7 lakhs was incurred as expenditure on marriage of assessee. When her statement is taken into consideration it has to be considered in totality. It emerges that apart from asserting incurring of such expenditure, she further stated that expenditure was incurred by Shri Om Prakash Lakhotia, maternal uncle of assessee who had adopted him. There is no reference at all to assessee having spent any expenditure over and above that disclosed by him in his statement. Even if we go by statement of grandmother and conclude that marriage expenditure was between Rs. 6 to Rs. 7 lakhs, onus to prove source of such expenditure was on Shri Om Pakash Lakhotia and not on assessee. Apart from that, there is no reference to any material found during course of search divulging incurring of any unexplained expenditure by assessee on this occasion. In our considered opinion, assessee cannot be saddled with any such liability. By overturning impugned order, we order for deletion of this addition. Last effective ground regarding charging of interest under s. 158BFA(1) is consequential and accordingly allowed. In result, appeal is allowed. *** PRABAL LAKHOTIA v. ASSISTANT COMMISSIONER OF INCOME TAX
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