RENU SHARMA, LUDHIANA,LUDHIANA vs. JAO THE INCOME TAX OFFICER WARD-7(1), LUDHIANA, LUDHIANA

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ITA 78/CHANDI/2026Status: DisposedITAT Chandigarh07 July 2026AY 2023-20245 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to discharge the burden of proof to explain the source of expenditure. The significant mismatch between salary income and credit card payments, coupled with the lack of evidence, justified the addition.

What were the facts?

The assessee, a salaried individual earning approximately Rs. 18,000 per month, made credit card payments totaling Rs. 18,67,623. Despite opportunities, the assessee failed to provide evidence explaining the source of these funds.

What were the issues?

Whether the addition on account of unexplained credit card expenditure is justified when the assessee failed to provide evidence of the source of funds.

Which sections of the Income-tax Act were involved?

Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENCH, ‘SMC’ CHANDIGARH

Before: SHRI LALIET KUMAR

For Appellant: Shri Rohit Garg, CA
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr.DR
Hearing: 25.06.2026Pronounced: 07.07.2026

The assessee is in appeal before the Tribunal against the order of the Commissioner of Income Tax (Appeals) NFAC [in short ‘the CIT (A)’] dated 13.11.2025 passed for assessment year 2023-24.

2.

The assessee has raised the following grounds of appeal :

ITA No.78/CHD/2026 A.Y.2023-24 2 1. That the Ld. CIT(A) has erred in dismissing the appeal of the assessee and confirming the addition of Rs. 1867623/- u/sec 69C of the Act on account of alleged unexplained expenditure. 2. That the appellant has sufficient and reasonable cause for not submitting the submission during the course of appellate proceedings. 3. That the Ld. CIT(A) has erred in not considering the evidences as filed by the appellant during the course of assessment proceedings u/s 143(3) on account of purchase of diesel and petrol from the different petrol pumps and the additions made by the Ld. Assessing Officer is deserved to be deleted. 4. Notwithstanding the above said ground of appeal, the Ld. CIT(A) having not decided the appeal on merits of the case, the order of the CIT(A) in confirming the order of Assessing Officer deserves to be set aside. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.

3.

The Ld. Authorised Representative submitted that the authorities below were not justified in making the addition of ₹18,67,623/- under section 69C of the Income-tax Act, 1961 on account of payments made towards credit card bills. It was contended that the assessee is a salaried individual and had made the impugned transactions through her credit card. It was argued that the Assessing Officer as well as the Ld. CIT(A) failed to appreciate the explanation furnished by the assessee and the surrounding circumstances. It was further submitted that the addition had been made merely on presumptions without bringing any cogent material on record to establish that the expenditure represented unexplained income of the assessee. The Ld. AR, therefore, prayed that the addition sustained by the Ld. CIT(A) be deleted.

ITA No.78/CHD/2026 A.Y.2023-24 3 4. Per contra, the Ld. Departmental Representative strongly relied upon the orders of the Assessing Officer and the Ld. CIT(A). It was submitted that despite repeated opportunities, the assessee failed to furnish any documentary evidence to establish the source of payments made towards the credit card bills aggregating to ₹18,67,623/-. The Ld. DR further submitted that the assessee was admittedly drawing a salary of only about ₹18,000/- per month and was not in a financial position to incur expenditure of such magnitude unless the source thereof was satisfactorily explained. It was also pointed out that there was substantial delay in filing the appeal before the Ld. CIT(A), which reflected the negligent conduct of the assessee. It was, therefore, prayed that the orders of the authorities below be upheld and the appeal of the assessee be dismissed.

5.

We have heard the rival submissions and carefully perused the material available on record, including the orders of the authorities below. The undisputed facts emerging from the record reveal that the assessee is a salaried employee drawing a salary of approximately ₹18,000/- per month. During the year under consideration, however, payments aggregating to ₹18,67,623/- were made towards the credit card bills. The burden to establish the source of such expenditure squarely lay upon the assessee.

ITA No.78/CHD/2026 A.Y.2023-24 4 Despite sufficient opportunities afforded by the Assessing Officer as well as by the first appellate authority, the assessee failed to produce any cogent documentary evidence explaining the source of the funds utilised for making the impugned credit card payments. No evidence has been placed before us either to demonstrate the availability of funds or to establish the genuineness and source of the expenditure incurred. Mere denial of the addition without substantiating the source of expenditure cannot discharge the statutory burden cast upon the assessee under the provisions of the Act.

6.

We also find that there exists a glaring mismatch between the admitted salary income of the assessee and the magnitude of the expenditure incurred through the credit card. A salaried employee earning approximately ₹18,000/- per month could not reasonably explain payments exceeding ₹18.67 lakh during the relevant previous year in the absence of any credible evidence regarding the source thereof. The assessee has utterly failed to reconcile this substantial discrepancy.

7.

Another aspect which cannot be overlooked is that the appeal before the Ld. Commissioner of Income-tax (Appeals) was filed with a substantial delay. Even thereafter, the assessee failed to effectively prosecute the appeal or produce the necessary material in support of the claim. Such conduct further militates against the

ITA No.78/CHD/2026 A.Y.2023-24 5 case of the assessee and demonstrates lack of diligence in pursuing the statutory remedies.

8.

Considering the totality of the facts and circumstances of the case, we are of the considered opinion that the assessee has completely failed to discharge the burden cast upon her to explain the source of the expenditure reflected in the credit card payments. We, therefore, find no infirmity in the order of the Ld. CIT(A) confirming the addition made by the Assessing Officer. The findings recorded by the authorities below call for no interference. Accordingly, the appeal filed by the assessee is dismissed. 9. In the result, the appeal of the assessee stands dismissed. Order pronounced on 07 t h July,2026.

Sd/-

(LALIET KUMAR) JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

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