ITAT Visakhapatnam Upholds Telescoping: Rs. 1.25 Cr Marriage Expense Not Taxable in Individual Hands as Income Offered by Group Company
In the case of Datla Vivekananda Raju for AY 2018–19, a search under Section 132 was conducted, and based on incriminating material, the AO made additions of ₹33,00,000/- as unexplained investments under Section 69 and ₹1,25,00,000/- as unexplained expenditure under Section 69C towards marriage expenses.
The CIT(A) deleted both additions after examining additional evidences, calling for a Remand Report, and relying on the jurisdictional ITAT decision in Badam Bhogalinga Swamy v. ACIT. The Revenue contended that the telescoping benefit could not be allowed as the unaccounted income belonged to Vijaynagar Biotech Pvt. Ltd. and not to the assessee personally. However, the ITAT observed that the AO had not disputed the expenditure or the source being from unaccounted income of the company, and no material was found to suggest its application elsewhere. It upheld the CIT(A)’s reliance on the group structure and interlacing of funds among family-owned entities. Thus, the appeal of the Revenue and the cross-objection of the assessee were dismissed.
The copy of the order is as under:
