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Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC”, HYDERABAD
Before: SHRI K.NARASIMHA CHARY
आदेश / ORDER This appeal is filed by the assessee challenging the order dated 12/12/2022 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Krishna Mohan Thiriveedhi (“the assessee”) for the assessment year 2013-14. 2. Brief facts of the case are that the assessee is an individual, deriving income by earning commission on pulses. For the assessment year 2013- 14, he filed his return of income on 27/03/2014 declaring an income of Rs. 2,47,140/-. Learned Assessing Officer, however, made an addition of Rs. 2,49,258/- on account of the amount spent using the credit card insofar as this appeal is concerned, besides another addition. On this aspect,
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according to the learned Assessing Officer, though the assessee stated to have incurred such expenditure for family expenses and his father reimbursed the same, no documentary evidence was produced by them and, therefore, the same cannot be accepted. 3. On this aspect learned CIT(A) is also of the opinion that the submissions made by the assessee do not carry any force and the plea taken by the assessee that the expenses met by him through credit card were reimbursed by his father, is only an after thought. Learned CIT(A), therefore, refused to delete this addition. Assessee is, therefore, before me in this appeal insofar as this addition of Rs. 2,49,258/-. 4. It is the submission of the learned AR that the assessee submitted before the learned Assessing Officer that the expenses relating to his family maintenance were met by using the credit card and such expenses were reimbursed by his father. Assessee also produced a confirmation letter from his father before the learned Assessing Officer. 5. Learned DR vehemently argued that the authorities below rightly observed that neither the explanation offered by the assessee nor the confirmation letter issued by the father of the assessee, is supported by any document to show that the father of the assessee was receiving any such rents or any other funds are available in his custody. He, therefore, submits that for want of evidence as to the sources of funds, authorities are justified in making the addition under section 69C of the Income Tax Act, 1961 (‘the Act’) and sustaining the same. 6. I have gone through the record in the light of the submissions made on either side. Insofar as these facts of assessee pleading incurring the family expenses through the credit card or his father reimburse the same, and the father filing the confirmation letter are concerned, absolutely there is no dispute. As a matter of fact, learned Assessing Officer recorded in his order that the family expenses met by the assessee through his credit
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card are said to have been reimbursed by his father and to that extent, confirmation letter was produced. Having observed thus, the learned Assessing Officer went on to say that neither the assessee nor his father submitted any documentary evidences duly explaining the sources of funds for incurring this expenditure.
On a perusal of the confirmation letter submitted by the assessee, I find that in the confirmation letter, the father of the assessee had stated that he was receiving rents to an extent of Rs. 80,000/- per annum for the last ten/twelve years, and prior to that he had the source of income by way of business in ground nut oil. It was open for the learned Assessing Officer to examine the father of the assessee to know the truth of this statement made in the confirmation letter. However, for the reasons best known to the learned Assessing Officer, he did not think it fit to call the father of the assessee to verify this fact, but at the same time, did not doubt the veracity of the confirmation letter.
The impugned amount of Rs. 2.49 lakhs per annum comes to about Rs. 22,000/- per month and according to me, this amount tallies with the probable monthly family expenditure of the assessee. As a matter of fact, the learned Assessing Officer does not suspect the nature of expenditure being the family expenses. His only observation is to the effect that with reference to the documentary evidence shall be produced for such source. For such purposes, assessee produced confirmation letter from his father and it was available to the learned Assessing Officer to verify the source by sending it to the father of the assessee. 9. Having regard to the quantum of amount involved in this matter and the explanation offered by the assessee, viewed in the light of the confirmation letter produced by the assessee before the learned Assessing Officer himself, I am of the considered opinion that there is nothing more to suspect in this matter. Family expenses to the tune of Rs. 22,000/- or
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the financial capacity of the father of the assessee to reimburse the same are not such huge as to send this matter back to the file of learned Assessing Officer for re-verification due to smallness of the amount. I, therefore, accept the explanation of the assessee. Accordingly, I allow the grounds of appeal raised by the assessee and direct the learned Assessing Officer to delete the addition made. 10. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on this the 16th day of March, 2023. Sd/- (K. NARASIMHA CHARY) JUDICIAL MEMBER
Hyderabad, Dated: 16/03/2023
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