Azhar Ali Khan, New Delhi vs Department Of Income Tax

Azhar Ali Khan Vs. ITO 95, Johri Farm Ward - 41(1) Noor Nagar Extn., Okhla New Delhi New Delhi ADNPK6765C (Appellant ) (Respondent)

Appellant by : Shri B.R.R.Kumar, Sr. D.R. Respondent by : Shri K.Sampath, Adv.

Date of Hearing : 22.04.2015 Date of Pronouncement : 05.06.2015

ORDER . 2 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

Per N.K.Saini, A.M :

These cross appeals by the department and the assessee are directed

against the order dated 02/05/2013 of CIT(A) - XXX, New Delhi.

2. In the appeal of the department in ITA No. 4518/Del/2013. Only

effective ground has been raised in this appeal read as under :-

"On the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in :

"Deleting the following additions of Rs. 39,00,000/- on estimate basis by ignoring the evidence given by the assessee before the women cell, police Authorities and statement of claims that he has spent Rs. 51 lakhs on account of marriage of his daughter."

3. In the cross objection no. 402/Del./2013 the assessee has raised the

following ground:-

"On the facts and in the circumstances of the case the CIT(A) erred in sustaining an addition of Rs. 1 lakh in the assessed income which being arbitrary and superfluous must be deleted."

4. From the above grounds it would be clear that the only issue

agitated by both the parties relates to the deletion / sustenance of the

addition made by the AO on account of expenses relating to marriage of

the daughter of the assessee.

5. Facts of the case in brief are that the AO received Tax Evasion

Petition (TEP) along with list of expenditure incurred by the assessee on

the marriage of his daughter held in November 2005. Since there was

evidence in the shape of statement given by the assessee and his . 3 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

daughter before the Women Cell, Delhi Police wherein expenditure

incurred on the occasion of marriage was mentioned at Rs. 50, 62,370/-.

Therefore the AO after recording the reasons reopened the assessment

and issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter

referred as the Act). In response to the said notice, the assessee

submitted that the return of income already filed on 2.9.2009 may be

treated as filed in response to the notice u/s 148 of the Act.

6. The AO during the course of assessment proceedings asked the

assessee to file various details including details of amounts spent on the

marriage of his daughter along with source of funds. The assessee vide

letter dated 31.10.2011 submitted as under :-

"That the assessee had done marriage of his daughter Mohsina Khan in November, 2005 but her relations with her husband and in-laws got with Crime Branch and his daughter gave list of articles given at the time of marriage along with jewellery etc. Being her father, the assessee had to join her in her fight and in anguish gave list of items given, expenditure incurred on marriage etc. This was stated by him of an amount of Rs. 51 lakhs. This was manipulated inflated one as guided by the lawyers. The assessee being govt. servant had no capacity to spend that much. The marriage was solemnized at Shehnai Banquet Hall, Asif Ali Road, N. Delhi. The marriage was attended by 200 persons and was a simple occasions. An amount of Rs. 60 to 70,000/- was spent on the function. The assessee gave gold jewellery weighing 20 to 22 tolas to her and in laws. The said jewellery was purchased by him much earlier from time to time as and when he saved money from his salary. Copies of some of the receipts/bills of jewellery purchased are enclosed herewith. When, the criminal proceedings start, one has to go as per the advice of the lawyers and when the situation goes to the extent of separation, as a natural human being and a father of a daughter whose life was ruined by her in . 4 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

laws, one wants to give trouble to other party also and in that feeling the said list was prepared as suggested by the counsel and submitted."

7. The AO again asked the assessee to show cause and explain

the source of real expenditure incurred during the marriage of his

daughter and to explain whether any revised estimate had been

produced before the crime branch or any authority. The AO also asked

the assessee to give a real estimate of expenditure head-wise in the

following format :-

ITEM Expenditure as stated Real estimate earlier Jewellery 20,37,500

Barat Kharcha 5,00,000

Cloth accessory 20,24,870 &household & silver Utensils Electronics items 5,00,000

Total 50,62,370(+)

+ Copy of lsit as submitted earlier before the crime branch is

enclosed."

8. The assessee vide reply dated 12.12.2011 stated as under :-

"1. As has already been stated by my counsel Shri Suresh Batra, Advocate vide letter dt. 31.10.2011 submitted before you in Paragraph 7 that the statement given by him and his daughter in Women Cell, Delhi Police was false and manipulated as guided by the lawyers attending the case. The only correction in the said letter is that he has mentioned that the said statement was given before Crime Branch. It was not crime branch but Women Cell, Delhi Police.

. 5 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

2. That you have required the real estimate of expenses incurred at the time of marriage. It is given as follows :-

Item Expenditure as stated earlier Real estimate Before Women Cell Jewellery 2037500 1,40,000 Barat Kharcha 5,00,000 80,000 Cloths accessory 2024870 50,000 & household & Silver Utensils Electronic items 500000 Nil

As has been stated earlier that jewellery was purchased earlier from time to time as per copies of bills submitted before you. Rest of the expenses of Rs. 130000/- was made out of the savings of the assessee at home and out of the savings made by his wife form household expenses. No revised estimate was given before the Women Cell or any other authority. The estimate given before the Women Cell should not be relied upon because it was a manipulated one, given under anguish and under abnormal circumstances.

Daughter has gone back to her respective home, is happily living with her husband. Now the relations between them and both the families are smooth and normal. No one has got any complaint against each other.

3. That this statement is duly signed by me and I confirm and say that averment made by my counsel in his letter dt. 31.10.2011 is correct and true except that the statement was given before the Women Cell and not Crime Branch.

4. That the matter has been settled and withdrawn in Court. Copy of withdrawal letter and order of the Court is enclosed herewith."

9. The AO was not satisfied from the reply of the assessee and

considered the expenditure incurred for marriage as per statement

given before the Women Cell, Delhi Police at Rs. 50,62,370/-. The AO

by keeping in view the status of the family of the assessee and . 6 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

considering this fact that the purchased jewellery might have been from

savings of earlier years and that the gifts were received during the

occasion of marriage considered Rs. 10,62,370/- from explained

sources and remaining expenditure to the tune of Rs. 40,00,000/-

(Rs.5062370-Rs. 1062370) from unexplained sources and made the

addition of Rs. 40,00,000/- to the income of the assessee u/s 69 C of

the Act.

10. Being aggrieved the assessee carried the matter to the Ld. CIT

and furnished written submission dated 25.4.2013 stating herein as

under :-

"In connection with the hearing of appeal in the above mentioned case,

it is respectfully submitted as under :-

"1. The assessee retired from M.C.D. on 31.5.2006. Brief facts of the case are that in November, 2005, he married his daughter Mohsina Khan with one Shri Abid Ahmed. Due to some disputes between her and his husband and in laws, she left her husband's home and filed a complaint with Crime Branch. Since, she was mentally upset and was of the view that she won't be able to spend life with the husband and on the advice of lawyers, gave a list of items given during the marriage and expenses incurred on marriage. The figures given were on very high side and exorbitant and inflated one. Lawyers suggested that if you give inflated figures, you will get much less of it as is the practice in dowry cell/crime branch. The appellant had no choice, being father of a girl who was harassed by her husband and in laws, had to join fight with his daughter and endorsed the list of dowry etc. given by her to the tune of Rs. 51 lakh approx. which is manipulated and inflated one. This was just a allegation to give some lesson to the inlaws so that they come to some compromise table and life of his daughter is not further ruined and the couple unite some way or the other.

. 7 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

2. That the learned Income Tax Officer in his Assessment order has held that the statements recorded by the Police have legal sanctity since the expenditure was admitted by the assessee and his daughter. In this connection, the appellant would like to take a imaginary case so that we may come to conclusion whether the statement made before the Police cannot be accepted as an evidence. The example is as under :-

i) Suppose a thief has entered into my house and has taken away a sum of Rs.50,000/- in cash, jewellery worth Rs.2 lakhs.

While he was running away with the said cash and jewellery, I got up and I tried to take back my articles. He injured me badly and ran away. I recognized him and filed a complaint with the Police. Thief is known to me. Since, he has tried to harm me, injured me badly, taken away my jewellery worth Rs.2 lakhs and cash of Rs. 50,000/-. To harass him, I have made statement in the Police that the thief ran away with cash of Rs.15 lakh and jewellery worth Rs.20 lakhs. During interrogation, I got back my correct valuables and I withdrew the case, the case was compromised and allegations retracted. Now, since I have stated that the thief went away with cash of Rs.15 lakhs and jewellery of Rs.20 lakhs which was later on retractred and case compromised. The Income tax department came to know of my false original statement has made addition in my income only on the ground that I had once stated the same before the Police. Had I stated 2 crore, whether the Income tax department is empowered legally to add the said Rs. 2 crore straight away or the Income tax department is to prove the said income beyond reasonable doubt to take tax from a citizen.

3 That case of the appellant is not different from some imaginary example. Marriage of the daughter was at the verge of dissolution and the case was filed in Women Cell. The appellant, being a human, father of a girl who came back to him leaving her husband's home. Hopes of reunion were remote. The counsel suggested that since reunion appears not possible, let's file a list that such heavy expenditure was incurred, the appellant and his daughter prepared the said false list of Rs.51 lakhs approx. and submitted. During the pendency of the said proceedings, due to mediation of relatives, the compromise reached, both the parties admitted their mistakes and decision to withdraw the allegations made against each other. The same was done and daughter was sent back to the husband's home. When the entire case is withdrawn, where is the necessity of file revised estimate before . 8 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

the Women Cell. The Id. Income tax Officer has based his addition that no such revised estimate was given before the Women Cell. An estimate is given to take back the money from in laws. When the daughter is going back to her husband's home, what was to be taken back and what for a revised estimate was required to be submitted. When the entire case is withdrawn, the said statement also stands withdrawn. There was no need to specifically withdraw the statement mentioning Rs.51 lakhs expenditure.

4. That it is further pertinent to mention that in the preceding year in December, 2004, the appellant had done marriage of her another daughter Tabassum and a sum of Rs.50,000/- was spent on the marriage. The said case has also been done u/s 143(3) in scrutiny and expenses of Rs.50,000/- were accepted by the Id. Income Tax Officer. The appellant has four daughters. No father would like to discriminate on the expenses to be incurred on the marriages of his daughters to that extent. If one year back only Rs.50,000/- were spent, in one year after a person who is a govt. employee, from where he would bring Rs.50 lakhs to spend on marriage. The appellant has 4 daughters only and all the daughters are equally to parents. Therefore, it appears unfair to spend Rs.50,000/- on one marriage and Rs.50 lakhs on another in a time gap of one year. Copy of assessment order for A.Yr.2005-06 is not available with the appellant. The same shall be submitted after getting certified copy from the department. Your honour may call the records of A.Yr.2005- 06 and can verify the same fact from the ward file of the department also.

5. That copies of order dt. 16.9.11 of Pooja Talwar, MM/Mahila Court, statement of petitioner Mohsina Khan,daughter and an application dt. 7.9.11 for withdrawal of complaint are enclosed herewith.

6. That a letter in original from Shri Abid Ahmed, son in law of the appellant with whom the entire disputes arose is enclosed herewith. He has categorically stated that there were no truths in RTI application and it was just reaction to FIR filed by his wife and the appellant. He has admitted that there is no truth in the complaint filed with IT department by him. He has also stated that he can always appear before the Income Tax Authorities as and when asked to do so to make a statement that the complaint filed by him was false and it was filed to give some pains to the appellant since he had given an extra exorbitant list of expenditure and dowry given at marriage.

. 9 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

In addition to the above, the appellant would like to give some more evidence and copises of judgements on which he relies in support of the submissions given herein. For the purpose, it is requested that the matter may kindly be adjourned for about 15 days and Oblige."

11. The assessee further submitted vide submissions dated

25.04.2013 as under :-

1.That the appellant joined M.C.D. as Section Officer in 1970. As a result of seniority, he was promoted as Asstt.Engineer, then to Executive Engg., then as Superintending Engineer and he retired as Director, Deptt. Delhi Jal Board, M.C.D. in May,2006. Now, he is living retired life and is getting pension of Rs.22975/-. He has 5 daughters and no son. In the earlier letter dt. 25.4.13, it was wrongly mentioned that the appellant has 4 daughters. In fact, he has 5 daughters out of which 4 are married.

2. Details of daughters of the appellant, their qualifications, positions of their husbands and amount spent of their marriages is given as under:-

i) Eldest daughter Sheeba Khan is B.Tech from Aligarh. She was married to one Nishad Faisal in the year 1989. An amount of Rs.50 to 75,000/- was spent on her marriage and jewellery between 8 to 10 tolas was given to her. It was a simple occasion. Her husband is Lecturer in AMU University, Aligarh.

ii) Second daughter namely Shabana Khan has done B.U.M.S. from Delhi. She was married in the year 2000 with one Musharaf Ali Khan in the year 2000. Her husband is working as Asstt. Engineer in N.H.P.C. Her marriage was only a simple occasion and an amount not exceeding Rs.1 Lakh was spent on function. Jewellery of 8 to 10 tolas was given to her. No investment was made on jewellery at the time of marriage. Some was lying with the wife of appellant, purchased from time to time and was gifted by near relatives.

iii) 3rd daughter namely Tabassum was married in 2004. She is also B.Tech. from AMU Aligarh. Her husband Shri Rais Ahmed.

An amount of Rs.50 to 75000/ was spent on her marriage which was a very simple occasion. Case relevant to this particular period was also reopened u/s 148, the assessment completed u/s 143(3) at the returned income. Question with regard to expenditure incurred on marriage was specifically asked in the query, and details of expenses were given. Copy of reply and . 10 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

affidavit dt. 15.9.10 filed during the course of assessment for A.Yr.2005-06 is given alongwith copy of Asstt. Order for A.Yr.2005-06.

iv) 4th daughter namely Mohsina Khan was married in Nov.2005, the relevant year under appeal before your honour. As has already been stated and details of expenditure given during assessment proceedings that it was a simple occasion. The said details are not being repeated for the sake of brevity. Mohsina Khan is B.U.M.S. from Jamia, Delhi and is also M.B.A., Her husband Abid Ahmed is in pvt. Service at Bangalore.

v) 5th youngest daughter namely Zenab Khan is B.Tech. aged 26 is unmarried and is in find of some job.

vi) Wife of appellant namely Smt. Durdana is housewife.

3. In our community of mohamdans, it is never a big show in marriages. The appellant concentrated on the education of their daughters and since his daughters are well educated, their marriage was never a problem for him. Marriages were done in a very low profile manner and amount spent on their education was considered as value and their marriages done in good families.

4. That whether it is possible that in the year 2004, the appellant is spending Rs.75000/- in marriage of one daughter, may spend Rs.50 lakhs in the year 2005 in the marriage of another daughter. No father can do so. Expenses incurred to the tune of Rs.75000/- has been accepted In the preceding year.

5. As regards the financial status of the appellant it is submitted that he is the only earning member in the family. He too has only pension income plus Income from monthly income schemes on investment of Rs.21 lakhs done when he received pension funds, gratuity etc. in May,2006 at the time of retirement. Copies of returns filed for the last 4 years along with computation of income are enclosed herewith. He has 2 bank accounts, one with P.N.B. Maharani Bagh, New Delhi where the pension amount is credited every month and other account is with Dena Bank, Connaught Circus, N. Delhi where a small pension of RS.1041/- is credited every month. Copies of the said pass books for the last 3 years are enclosed herewith. Perusal of the pass book would reveal that the appellant withdraws the amount of pension almost every month since that is source of his livelihood. Apart from these 2 accounts, the appellant does not maintain any other bank account anywhere. He has no F.D., never invested in any property anywhere. He has got one residential house at 95, Johri Farm, Noor Nagar Extension, Okhla New Delhi which is in . 11 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

the name of his wife Smt. Durdana, purchased in 1995 for Rs.1,50,000/-. Copy of documents of purchase are enclosed herewith. It is still unregularized colony. It was constructed till 1998. It is MG. 200 sq. yards and constructed till 1998 in instalments. Details regarding the said property were also given in the assessment proceedings for A.Yr.2005-06 in the shape of affidavit dt.15.9.10, copy of which is enclosed herewith. The appellant has got N.S.Cs. worth Rs.5 lakhs which he has been able to save since that is required to save income tax every year. The same have duly been shown every year and rebate u/s 80-C taken in the returns. All this can lead what worth the appellant has. He could not even dream spending Rs.50 lakhs odd on one marriage.

6. That the amount of Rs.50 lakhs odd, the list submitted to the Police was merely a Statement of Claims. It was neither a statement of fact, nor declaration nor statement of truth but only a claim lodged at the particular time when he was very much mentally upset since his daughter was harassed by her in laws. It was just out of anger and annoyance with an intention to give some pains to the in laws of daughter who was being harassed.

7. That The Indian Evidence Act, 1872 defines what is proved and what is disproved in Section 2 which is as under:-

PROVED:- A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.

DISPROVED:- A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers it non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist.

NOT PROVED:- A fact is said not to be proved when it is neither proved nor disproved.

8. That now coming back to the appellant's case, a statement of claims was given. No decision on it was taken. No inference was drawn by the Court. The case was withdrawn by both the parties. It did not reach to the stage of witnesses and conclusion. When, a matter remained undecided, the said list of dowry etc. cannot be taken as an admission or evidence under Income Tax assessment.

. 12 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

9. That an affidavit of the appellant that whatever factual position has been stated in written submissions dt. 25.4.2013 and 30.4.2013 are true and correct.

It is hoped that the submissions given above will show your honour that what is done by the Id. Income Tax Officer is wrong, unjustified, illegal and addition of Rs.40 lakhs made in the case shall be deleted in its entirety."

12. The Ld. CIT(A) after considering the submissions of the assessee

deleted the addition of Rs. 39,00,000/- and sustained the addition of Rs.

1,00,000/- by observing as under :-

"5. I have perused the assessment order, grounds of appeal, written submission and discussed the matter with the AR of the appellant very carefully. The AO had made an addition of Rs.40 lacs u/s 69C of the I.T. Act on estimation of expenditure towards marriage of fourth daughter of the appellant in the F.Y. 2005-06. The case is heard and discussed with the appellant and his AR Sh. Suresh Batra, advocate, who also represented the case before the AO.

The case was re-opened u/s 148 of the I. T. Act on a tax evasion petition received where due to dispute between the bride and bridegroom a complaint had been filed before the Women Cell, Delhi Police and on anger the son-in-law of the appellant filed the petition for a divorce and the appellant, i.e. father of the bride filed FIR also and matter went to Women Cell of Delhi Police for getting justice and re-union of the marriage. After 5- 6 months the family settled a matter out of court and they lived happily as on today. The appellant had given the explanation of expenditure made in the marriage and also given his written submission on 25.04.2013 & 30.04.2013 which was reproduced as above.

The appellant joined as a Section Officer in 1970 and rosed to the level of Director, Delhi Jal Board, MCD and retired in May, 2006. The F.Y. 2005-06 is about the retirement year in which the appellant gets marriage to his fourth daughter. The appellant narrates his background of financial and social status in his 30th April, . 13 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

2013 letter very clearly. He has given marriage to his third daughter at a cost of Rs.75,000/- in the year 2004. He had given good education to all five daughters and still one daughter is unmarried. In muslim community education is not that developed to girls. However, considering the financial condition and his retired pension of Rs.20,000/- p.m. at present, the expenses on marriage cannot be made more than RS.2.5 lakhs for the fourth daughter's marriage. Since he had some past savings and jewellery and utensils, personal effect etc. I make an addition of RS.1,00,000/- on estimate basis towards the marriage expenses of appellant's fourth daughter u/s 69C of the I.T. Act. The total income assessed after this appellate order will be Rs.3, 15,010/- and the balance amount of RS.39,00,000/- will be deleted."

13. Now, the department is an appeal against the relief of Rs.

39,00,000/- and the assessee is in appeal against the sustenance of

addition of Rs. 1,00,000/- . The Ld. DR strongly supported the order of

the AO and reiterated the observations made in the assessment order

dated 19.12.2011. In his rival submissions, the Ld. Counsel for the

assessee reiterated the submissions made before the authorities below

and further submitted that the AO had taken the amount of marriage

expenses only on the basis of statement recorded by the officers of

Women Cell, Delhi Police which was merely statement of claim but not

statement of truth, it was just out of anger and annoyance with an

intention to give some pains to the in-laws of daughter who was being

harassed. It was contended that later on son in law of the assessee

wrote a letter to the department stating that the complaint filed by his . 14 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

father-in-law was false and exorbitant, list of items given on marriage as

dowry was mentioned and in turn he also filed the complaint to the

Income Tax Department which was false. The Ld Counsel for the

assessee further submitted that in the earlier year income of the assessee

was accepted u/s 143(3) of the Act at Rs. 2,60,504/-. It was stated that

no expenses were incurred from the other sources on the marriage of the

daughter. Therefore, the addition sustained by the Ld. CIT(A) was not

justified .

14. We have considered the submissions of both the parties and

carefully gone through the material available on the record. In the

present case, it is noticed that the assessee was having five daughters

and had given good education to all of them. He claimed to have

spent an amount of Rs. 50 to 75,000/- and jewellery between 8 to 10

tolas on the marriage of her eldest daughter in 1989 which is not

doubted by the department, for the 2nd daughter, he claimed to have

spent about Rs. 1,00,000/- and given jewellery of 8 to 10 tolas in the

year 2000, the said spent amount was also not doubted. For the third

daughter the assessee claimed that expenses of Rs. 50 to 75,000/-

were incurred on account of marriage in 2004. Those were also not

doubted and accepted while framing the assessment u/s 143(3) of the

Act. The 4th daughter was married in November, 2005 but some . 15 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

dispute arose with the in-laws and the assessee filed a complaint to

the Women Cell of Police, on the basis of the said complaint, the AO

presumed that the assessee might have incurred an expenses of Rs.

50,62,370/-. However nothing was brought on record to substantiate

that the said expenditure was in fact incurred by the assessee. The

assessee later on clarified to the AO that actual expenses for cloth

accessories and Barat Kharcha were at Rs.50,000/- and Rs.80,000/-

respectively and jewellery worth Rs. 1,40,000/- purchased in earlier

years was given. The said explanation appears to be plausible

considering the expenses incurred by the assessee on the occasion of

the marriages of his other daughters in the earlier years. Therefore, we

are of the view that the AO was not justified in making the addition of

Rs.39 lacs and the Ld. CIT(A) also sustained the addition of Rs.

1,00,000/- on estimate basis without bringing any material on record.

In our opinion when the ld. C.I.T.(A) had accepted that the assessee

had some past saving and jewellery & utensils, personal effects etc.,

the addition of Rs. 1 lac on estimate basis was not justified.

15. We, therefore, considering the total fact of the case deem it

appropriate to delete the addition sustained by the Ld. CIT(A).

16. In the result, appeal of the department is dismissed and that of

the assessee is allowed.

. 16 ITA No. 4518/Del/2013 C.O. No. 402/Del/2013

(Order pronounced in the open court on 05th June, 2015.)

Sd/- Sd/- (A.T.Varkey ) (N.K.Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated 5th June, 2015 B.Rukhaiyar

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR