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Facts
The assessee's appeal concerns additions made for credit card expenses and disallowed interest on a housing loan. The Assessing Officer (AO) brought to tax Rs. 6,10,729/- as unexplained credit card expenses and disallowed Rs. 46,106/- interest on a housing loan. The CIT(A) confirmed these additions, leading to the present appeal.
Held
The Tribunal held that the credit card expenses to the extent of Rs. 2,72,406/- were explained by credits in the assessee's bank account. The additional amount of Rs. 3,38,683/- was not corroborated and thus, the addition of Rs. 6,10,729/- was directed to be deleted. Regarding the housing loan interest, the Tribunal found it supported by a bank certificate to the extent of Rs. 39,018/-, setting aside the addition.
Key Issues
Whether credit card expenses and housing loan interest claimed by the assessee are duly substantiated with evidence and whether the additions made by the AO and confirmed by the CIT(A) are valid.
Sections Cited
69A, 143(3), 147, 24(b), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI RAHUL CHAUDHARY
Assessment Year : 2012-13 Abhijeet Vijay Ghodinde, Income Tax Officer, A-302, Venezia, Ward-26(1)(1), Off Pashan Sus Road, vs. Room No. 127, Baner, Kautilya Bhavan, Pune-411045 Bandra Kurla Complex, PAN : AIOPG7100K Mumbai-400051 (Appellant) (Respondent) For Assessee : Shri Shashank Mehta For Revenue : Shri Surendra Mohan, Sr.DR Date of Hearing : 28-07-2025 Date of Pronouncement : 30-07-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Ld. Addl./JCIT(A)-3, Kolkata [„Ld.CIT(A)‟], dated 30-07-2024, pertaining to Assessment Year (AY) 2012-13, wherein the assessee has taken the following grounds of appeal:
“1. In the facts and circumstances of the case and in law, the Learned, CIT (Appeals) ADDI/JCIT(A)-3, Kolkatta has erred in confirming the addition under section 69A in respect of credit card expenses Rs. 6,10,729/- and interest on housing loan Rs. 46,106/- without appreciating the legal position that the said section applies only when the assessee is found to be the owner of money, bullion, jewellery or other valuable article or thing.
In the facts and circumstances of the case and in law, the Learned, CIT (Appeals) ADDl/JCIT(A)-3, Kolkatta has erred in confirming the addition under section 69A in respect of credit card expenses Rs. 6,10,729/- and interest on housing loan Rs. 46,106/- even after providing requisite explanations and evidences to substantiate the source of the expenses.
The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.”
2. At the outset, it is noted that there is a delay in filing the present appeal. In this regard, Ld.AR referred to the affidavit submitted by the assessee explaining the reason for delay in filing the appeal due to non- receipt of the impugned order and the fact that it is only on the receipt of the penalty order dt. 26-03-2025 that the assessee came to know that the appeal has been dismissed by the Ld. Addl/JCIT(A). It was submitted that due to non-receipt of impugned order, the assessee could not file the appeal within the statutory time limit. However, as soon as the assessee came to know of the passing of the impugned order, the appeal was filed before the Tribunal. The Ld. DR was also heard, who did not controvert the contents of the affidavit so filed by the assessee. After hearing the both the sides and considering the material available on record, we find that the assessee was prevented by reasonable cause from filing the appeal in time and the delay is hereby condoned.
3. Briefly the facts of the case are that the assessment in this case was completed u/s. 143(3) r.w.s. 147 of the Act wherein the AO brought to tax a sum of Rs. 6,10,729/- as un-explained credit card expenses, has disallowed interest on housing loan amounting to Rs. 46,106/- and determined the assessed income at Rs. 19,98,060/- as against the returned income of Rs. 13,41,220/-. The assessee thereafter carried the matter in appeal who has since sustained the said action of the AO and against the said findings of the Ld. Addl/JCIT(A), the assessee is in appeal before us.
During the course of hearing, the Ld.AR submitted that the assessee is an individual and has reported salary income, income under the head “Income from other sources”, claimed deduction u/s. 24(b) of the Act and has filed his return of income in response to notice u/s. 148 of the Act. It was submitted that the assessee has only one Savings Bank A/c maintained with ICICI Bank, which has been used to pay the credit card expenses and to pay housing loan installments.
It was submitted that the AO has considered a figure of Rs. 2,72,046/- as per the AIR information and Rs. 1,55,478/- and Rs. 1,83,205/- as per CIB Compulsory Code Transactions, resulting in a figure of Rs. 6,10,729/- relating to the credit card expenses. In this regard, our reference was drawn to page No. 19 of the assessee‟s Paper Book, wherein the monthly details of the credit card payments, totaling to Rs. 2,72,045/- has been submitted. It was submitted that it is only the amount of Rs. 2,72,045/-, which was incurred by the assessee through the credit card and the payment thereof has been made from his bank account maintained with ICICI Bank, copy of which has also been placed on record at Pg. Nos. 6 to 13 of the assessee‟s Paper Book. It was accordingly submitted that the source of the credit card expenses has been duly explained by way of the credits in the bank account maintained with ICICI Bank and, therefore, no addition should be made. In this regard it was submitted that the said information was also submitted before the Ld. Addl./JCIT(A), however, he has failed to appreciate the same. It was further submitted that apart from the said expenditure of Rs. 2,72,046/-, the assessee has not incurred any other credit card expenses as so stated by the AO amounting to Rs.3,38,683/- and the same appears to be wrong/incorrect reporting by the ICICI Bank and which could have been verified directly from the ICICI Bank and which has not been done by the AO. It was further submitted that the assessee has no other credit card other than the credit card in respect of which he has incurred an expenditure of Rs. 2,72,046/- during the financial year relevant to the impugned assessment year.
Regarding the disallowance of interest on housing loan, it was submitted that a certificate has been obtained from the bank, which shows that the assessee has incurred interest on housing loan amounting to Rs. 39,018/-, which has been placed at Pg. No. 14 of the Paper Book. It was submitted that the said certificate was not available at the time of filing of return of income. However, the same has been obtained from the bank subsequently on 27-01-2022 and a copy thereof was also filed before the Ld. Addl./JCIT(A), which he has failed to appreciate. It was submitted that given the fact that the said certificate was not available with the assessee at the time of filing of the return of income, the assessee has by mistake claimed a higher deduction amounting to Rs. 46,106/- as against the figure of Rs. 39,018/- and, therefore, to the extent of Rs. 7,088/- the excess claim has been made while filing the return of income. It was accordingly submitted that it is only to an extent of Rs. 7,088/- that the interest on housing loan can be disallowed and as far as the remaining amount of Rs. 39,018/- is concerned, the assessee deserves the necessary relief.
The Ld.DR has been heard, who has relied on the order of the AO. It was submitted that inspite of necessary opportunities provided to the assessee, the assessee has not come forward and provided necessary explanation regarding the sources of the credit card expenses and, therefore, the basis information available on record, the AO has proceeded and made the additions towards un-explained credit card expenses. It was further submitted that regarding the claim of interest on housing loan, again, no documentary evidence was furnished, which resulted in disallowance of interest on housing loan so claimed by the assessee while filing the return of income. He accordingly supported the order and the findings of the AO as well as that of the Addl./JCIT(A).
We have heard the rival contentions and perused the material available on record. As far as credit card expenses amounting to Rs. 2,72,406/-, we find that the said payments have been made through the assessee‟s saving bank A/c maintained with ICICI Bank. Therefore, as far as source of the said expenditure is concerned, the same has been duly explained by way of credits in the bank account maintained with ICICI Bank. As far as the figure of Rs. 3,38,683/- is concerned, the assessee has denied incurring any such expenditure nor there is any material available on record which highlight that the said expenditure has been incurred by the assessee by way of any credit card which has not been disclosed by the assessee nor there are any debits in the bank account maintained by the assessee with ICICI Bank. Therefore, merely basis the information available with the AO, no addition can be sustained as the same remain uncorroborated. In any case, the assessee has denied in terms of holding any other credit card or incurring any other expenditure towards the credit card. In the result, the addition of Rs. 6,10,729/- is hereby directed to be deleted.
As far as the interest on housing loan is concerned, the same is supported by the certificate issued by the ICICI Bank, which is available on record to the extent of Rs. 39,018/- and, therefore, to this extent, the addition so made and sustained by the Addl./JCIT(A) is hereby set aside and the AO is directed to give necessary relief to the assessee and the ground is partly allowed.
In the result, the appeal of the assessee is partly allowed.