Addition u/s 69C for marriage expenses deleted in view of Indian society

Addition u/s 69C for unexplained marriage expenses deleted by ITAT noting that in Indian society, family members contribute to wedding in family

ABCAUS Case Law Citation:
ABCAUS 2709 (2019) (01) ITAT

The assessee had appealed against the order of the CIT(A) in sustaining the addition made by the Assessing Officer (AO) u/s 69C of the Income Tax Act, 1961 (the Act) on account of unexplained expenses incurred on the marriage of his daughter.

The assessee had performed the marriage of his 2nd daughter and it came to the notice of the Assessing Officer that the assessee has spent huge amount for the same.

To verify the sources for the expenditure, the information was called for from the assessee u/s 133(6) of the Act and it was found that there was a huge difference between the expenditure incurred and the source of income.

Therefore, a notice u/s 148 was issued calling for a return of income. The assessee field the return of income in response to the notice u/s 148 of the Act.

 Subsequently, the AO examined the sources explained by the assessee as contribution by his family members. The AO was, however, not convinced with the contentions of the assessee to the extent of contribution received from the 2^nd and 3^rd daughter and taxed the same treating it as unexplained expenditure.

Aggrieved, the assessee preferred an appeal before the CIT(A), who granted only partial relief.

Before the Tribunal, the Assessee submitted that the 2^nd daughter was already working with a private Ltd. company. He submitted that the assessee had furnished the salary slips also and therefore, the CIT(A) should have deleted the addition.

Similarly, with regard to the sum received from 3^rd daughter, it was submitted that she was also working with a firm and she had sufficient sources to make the contribution.

The Tribunal observed that the assessee had explained the sources for the expenditure as contributions from his family members. The AO and the CIT(A) had accepted some of the sources but only with regard to the contributions from daughters, they had confirmed the additions.

The Tribunal opined that it is a known fact that in Indian society, the family members contribute to perform a wedding in the family. Since all the family members of the assessee were working and had independent sources of income, it was not difficult to accept that they had contributed for the wedding.

The Tribunal noted that the assessee had filed the copies of salary slips as evidence and the AO had not found them to be not genuine. The ITAT noticed that the daughters after spending 50% towards domestic use, would have made reasonable savings as a conservative saver.

Therefore, the Tribunal opined that the sources stood properly explained by the assessee. The appeal was accordingly allowed.

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