1. For the assessment year 1966-67, the following question has been referred to us as a result of the order of this court dated May 28, 1974, passed in I.T.C. No. 7 of 1973, under s. 256(2) of the I.T. Act, 1961 :
'Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that a sum of Rs. 10,000 computed as having been expended on the marriage of a son, over and above the sum disclosed by the assessed, is the income of the assessed from undisclosed sources ?'
2. The accounting year relevant to this assessment year ended on June 30, 1966. the assessed was a partner of a firm, M/S. Ushnak Mal Mool Chand, Karol Bagh, New Delhi. The assessed's son was married on November 16, 1965. The assessed claimed that the marriage expenses were Rs. 9,000 out of which Rs. 4,000 were met by gifts from friends and relations, while Rs. 5,000 were met by withdrawal from the firm on November 20, 1965. The ITO took the view that the exact amount of expenditure was not satisfactorily explained, and, hence, an additional expenditure of Rs. 10,000 was added to the income. This was on estimate.
3. On appeal, the AAC deleted the addition on the ground that there was no sufficient, cogent and convincing evidence. On further appeal by the Department to the Tribunal, it was contended that the assessed's income varied from Rs. 40,000 to Rs. 50,000 annually, and hence, the expenditure must be more than Rs. 9,000 on the marriage. It was claimed by the assessed that economy had been exercised in the matter of expenditure and there was austerity following the Pakistan aggression of 1965. On an examination of the facts, the Tribunal held that there were some shortcomings in the statement of the assessed. These were as follows :
'He was not prepared even to give the name of the goldsmith through whom the gold ornaments were reconditioned. He could not even tell the name of the printing press where the invitation card were printed, nor could be remember the printing charges paid to the printers. While admitting that crockery was arranged by one Ashok, he was not willing to divulge his address. He did not even remember from where the groceries and other stores were purchased for the marriage and the reception. He did not want to commit himself about the time when the money was withdrawn from the firm for the marriage. To say the least, the attitude of the assessed clearly betrayed his guilty intentions. Moreover, there are inherent contradictions in his statement and the position take up by him. He has continuously harped on the claim that the expenditure was incurred in cash continuously harped on the claim that the expenditure was incurred in cash before the marriage whereas the main that the expenditure was incurred in cash before the marriage. The learned representative for the assessed before us sought to embellish the claim by referring to the assessed's wife's pin money and even to the Pakistan aggression. The whole thing appears to us to be a some-what awkward attempt at disguising what really was the expenditure which was incurred in connection with the marriage. In the circumstances, the addition made by the Income-tax Officer seems to us to be more than justified.'
4. The conclusion of the Tribunal was that the addition of Rs. 10,000 was not unreasonable or excessive considering the facts of the case.
5. The main contention on behalf of the assessed is that there is no material to show that there was any excess expenditure over and above what had been claimed to have been met by the assessed.
6. Reference was made to the judgment of his High Court in Yadu Hari Dalmia v. CIT : 126ITR48(Delhi) . That was a case in which a sum of Rs. 10,000 had been added to the income of the assessed on account of expenditure on his own marriage.
7. The High Court had given the benefit of the doubt to the assessed. It has been held that an estimate without details will not be upheld in all circumstances and some definite basis should be given for arriving at the amount of the excess as expenditure. But the court also observed that if the estimate is moderate one, it will not be set aside merely because fuller details were not given. We think that this case is somewhat different the case before us. When an amount is added to the income on account of expenditure on the assessed's marriage, it seems some what unusual because normally such expenditure is incurred by the father or the joint family. A noteworthy part of that judgment is as follows (p. 62) :
'Assuming that, as we have held, the marriage expenditure amounted to Rs. 21,500 (and not Rs. 11,500 only), the extra expenditure could have been met out of the undisclosed income of the assessed's father or of the joint family and there is no reasonable ground for drawing an inference that the extra expenditure should have come out of the assessed's income from disclosed sources.'
8. This was the main reason for striking out the addition in that case. Keeping in view the normal course of events, the expenditure on the marriage of the assessed's son must have been incurred by the assessed himself in the present case and we have, thereforee, to see whether the estimate of Rs. 10,000 is unjustified because it is lacking in details or is otherwise excessive.
9. Another case referred to was B. C. Paul v. CIT : 136ITR395(Cal) , relating to income from horse racing. We do not really find any connection between this case and the present.
10. In CIT v. Durga Prasad More : 82ITR540(SC) and Homi Jahangir Gheesta v. CIT : 41ITR135(SC) , there are observations regarding inference of facts to be drawn in particular circumstances. But we do not think that these cases are material for deciding the present case.
11. The question we have to consider is, whether there is any material to hold that the expenditure as disclosed by the assessed was such that an inference could be drawn that the expenditure was really more. There is really no positive evidence regarding excess expenditure, but an inference can be drawn that the circumstances have not been fully disclosed on account of what the Tribunal has found. A passage from the Tribunal's order has been reproduced above. It does appear to reveal that the full facts were not disclosed by the assessed regarding the expenditure.
12. It is quite possible for a marriage to be performed with very small expenditure even if the assessed is a wealthy man. It depends on; the nature of the marriage and the manner in which it is performed. It, thereforee, becomes material to find out what were the functions held in connection with the marriage. The assessment order has the following passage :
'The assessed has given evasive answers about the number of invitation cards printed and the place of printing, addresses of the persons from whom crockery, etc., were hired and the name of the goldsmith who prepared the ornaments. It was, however, admitted that about 300 persons attended the reception which took place on November 17, 1965. Regarding jewelry and cloth presented to the bribe and the bridegroom, it was explained by the assessed that old family ornaments were presented but clothe valued about Rs. 2,000 was purchased in cash from M/s Ushnak Mal Mool Chand, New Delhi. In this connection it is pertinent to note that the marriage took place on November 16, 1965, and the reception on November 17, 1965, whereas the sum of Rs. 5,000 has been withdrawn from the firm on November 20, 1965. It is not understood as to how the assessed could make purchase of clothe in cash and how he could meet other expenses including the reception. It is a matter of common knowledge that most of the expenses have to be done before marriage. The statement of the assessed contradicts the facts on record. The only inference that could be drawn under the circumstances is that the sum of Rs. 5,000 withdrawn subsequent to the marriage has been spent for meeting various outstanding liabilities which come to notice only after the marriage and the same could be the case for amounts received as gifts, if any, on the marriage occasion.'
13. It cannot be said that the conclusion of the ITO is wholly correct, because it is equally possible for the expenditure to be met afterwards, for instance, if bills are submitted by various parties for reception and other purchases. The real question to be determined is whether Rs. 5,000 would be the expenditure or Rs. 15,000 as estimated by the ITO.
14. Basically, the exact expenditure or even a proper estimate of expenditure would only be in the knowledge of the assessed. If the assessed chooses to give evasive answers, then the ITO can drawn an adverse inference regarding the suppression of material facts. He can also take into account what might be the reasonable expenditure on a marriage of this type. It was take into account the fact that 300 persons attended the reception and we take into account the fact that there must be lights and other arrangements for such a reception and we also take into account the fact that gifts, etc., would be presented to the bride and bridegroom, it cannot be said that the sum of Rs. 10,000 is an overestimate. At these marriages, surely there are cash gifts from other relations which partly meet the marriage expenses and if these are taken to be Rs. 4,000 and the cash withdrawal at Rs. 5,000, we have a total of Rs. 9,000 as disclosed by the assessed. However, considering normal circumstances, Rs. 9,000 seems to be inadequate to meet the expenditure on the reception, the marriage as well as the gifts to the bride and the bridegroom. thereforee, there was justification for making the addition. How much that addition should be is a question of fact. We do not think that we have any material to hold that the addition should be less than Rs. 10,000 over and above the sum of Rs. 9,000.
15. In the circumstances, we would answer the question referred to us in favor of the Department and against the assessed. We would hold that the Tribunal was legally justified in making the addition of Rs. 10,000 on an estimate basis. Even if this is an excess estimate, we are in no better position to make a smaller or larger estimate. We would, thereforee, answer the question referred to us in the affirmative and in favor of the Department. However, we would leave the parties to bear their own costs.