Vinay Kumar Modi vs Commissioner Of Income Tax
2004 Latest Caselaw 665 Del

JUDGMENT

B.C. Patel, C.J.

Admit.

1. The question raised by learned counsel for the appellant is that the finding is perverse inasmuch as the Tribunal has confirmed the finding recorded by the CIT(A) without any material on record.

2. At the request of learned counsel for the parties, we have taken up the matter for final disposal.

3. The AO, for the asst. yr. 1990-91, made the assessment order, a copy of which is produced on record. The AO assessed the assessed's income for the asst. yr. 1990-91 at Rs. 18,89,432. He made an addition of Rs. 7,00,000 which was reduced by the CIT(A) to Rs. 3,50,000 which has been confirmed by the Tribunal.

4. We have gone through the record, that is to say, the orders made by the AO, CIT(A) and the Tribunal. The AO asked the assessed to explain the details of expenditure incurred during the marriage of the son of the assessed. The assessed submitted details at p. 26 of the paper book divided into several heads from (a) to (j) and pointed out that a sum of Rs. 3,14,440 was spent. However, the AO, without any material, made the assessment order disbelieving the figures and has added on estimation a sum of Rs. 7,00,000.

5. The assessed pointed out that as per the bill of the caterer, 600 persons have taken snacks at the reception at Modi Nagar. When the caterer's bill itself had been produced to show that 600 guests were served, it was highly improper to say that more than 5,000 people had participated in the function. Further, the officer making assessment has observed that "there was no mention of dinner in the invitation card but it can be concluded that the dinner must have been served during the function". There is no evidence about the dinner. The function was in the evening from 6.30 p.m. to 7.30 p.m. No inquiry is made by the AO in this behalf.

6. Though the AO observed that "ghazal programme was held, no payment for sound system was made nor any payment for dinner was made though it 'must have been' served when the ghazal programme went on till midnight" and estimated the expenditure to the tune of Rs. 2,50,000. He did not believe that the amount shown towards expenditure on food, rent, furniture and sound system to the tune of Rs. 31,590, was just and proper. The AO again observed as under :

"Expenses are also incurred on the guests who must have come from all over the country and stayed during the marriage function."

7. Rs. 2,50,000 as sundry expenses have been shown without any evidence whatsoever in this regard. When the assessed produced before the AO, the details of the amount spent, then in that case, without any material, it was not proper to doubt the same. There must be some evidence to come to a conclusion. There is nothing to indicate that the AO made enquiries from the printer who printed the invitation cards or the persons who made arrangements at New Delhi or at Modi Nagar for tents, furniture, etc. There is nothing to show that the AO recorded the statement of the persons who served the dinner to 600 persons. There is nothing to show that there was any enquiry made in this behalf. For the ghazal performance, amount is indicated, yet, on estimation the AO has proceeded to assess the assessed. There is specific entry with regard to the charges for stay of the artist who performed the programme, sound system and ghazal performance yet, the AO without any further enquiry on his whims and fancies, disbelieved the assessed. We find that the AO has assumed that at least 5,000 persons must have attended the function. We find at several places, the AO has used the expression--"must have been" or "must be"--, this clearly displays that the assessment was based on nothing but surmise and conjecture. There is long distance to be travelled between "may be" and "must be". Here, without moving an inch, the finding is recorded. One could have understood if an enquiry had been made and thereafter the conclusion was recorded.

8. No doubt, the CIT(A) has reduced the addition to some extent, however, on what material lie has reduced the addition is not indicated and on what material the amount is confirmed is also not clear. The Tribunal has confirmed the addition, which has been made by the CIT(A). As the Tribunal, being the final authority to record the finding of facts on appreciation of evidence, has failed to discharge its duties, we are interfering as the conclusion is perverse. Under the circumstances, the answer is required to be given in favor of the assessed and against the Revenue by holding that the findings recorded by the Tribunal are perverse and are quashed and set aside. The matter is remanded to the Tribunal for disposal of the appeal in accordance with law within a period of eight weeks. The appeal stands allowed accordingly.