SHRI MOHD. IQUBAL, JAIPUR,JAIPUR vs. INCOME TAX OFFICER, JAIPUR

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ITA 209/JPR/2018Status: DisposedITAT Jaipur06 August 2018AY 2008-094 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that withdrawals from the credit card account and salary account sufficiently explained the deposits. The ad-hoc disallowance of 1/3 of the total deposit was found to be without basis.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 83,306/- (1/3 of total credit card bill payment) for AY 2008-09, stating the assessee failed to prove the source of funds used for credit card payments. The CIT(A) confirmed this addition.

What were the issues?

Whether the addition made by the AO on account of credit card payments, without proper appreciation of withdrawals and salary income, is justified. Whether the initiation of proceedings under Section 147 and sanction under Section 151 were valid.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 209/JP/2018

For Appellant: Shri Vikram Gupta &, Shri Prashant Sharma (CA) jktLo dh vksj ls@
Hearing: 30/07/2018Pronounced: 06/08/2018

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; ikWy jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 209/JP/2018 fu/kZkj.k o"kZ@Assessment Years : 2008-09 cuke Mohd. Iqbal ITO Vs. Plot No. 12, Mukund Grah Ward-7(1) House, S.C. Road, Behind City Jaipur Centre, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AARPI4477L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Vikram Gupta & Shri Prashant Sharma (CA) jktLo dh vksj ls@ Revenue by : Smt. Poonam Rai (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 30/07/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 06/08/2018 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. CIT(A)-3, Jaipur dated 20.12.2017 for Assessment Year 2008-09.

2.

In Ground No. 3, the assessee has challenged the sustenance of addition of Rs. 64,940/- being 1/3 payment in credit card totaling to Rs. 194,820/-.

3.

Briefly stated, the facts of the case are that the assessment in this case was completed u/s 147 read with 144 of the Act wherein the AO brought to tax a sum of Rs. 83,306/- being 1/3 of total credit card

2 ITA No. 209/JP/2018 Mohd. Iqubal, Jaipur vs. ITO, Jaipur

bill payment of Rs. 2,40,920/- during the course of financial year 2007- 08 relevant to the impugned assessment year for the reason that the assessee failed to prove/produce supporting documentation that the amount used in payment of credit card was out of current and past savings. The said action of the Assessing Officer was confirmed by the ld. CIT(A) with a direction to verify whether the total cash deposit was Rs. 1,94,820/- or Rs. 2,40,920/-.

4.

During the course of hearing, the ld. AR submitted that the assessee has withdrawn a sum of Rs. 198556/- from his credit card account on various dates during the FY 2007-08 and the assessee has deposited an amount of Rs. 194820/- in his credit card account on various dates. Further, the assessee has earned salary income of Rs. 193923/- net of deduction of Rs. 3450/- from HBL Global Private Ltd. which was regularly withdrawn from his salary account and used for repaying the credit cards dues. It was submitted that the Assessing Officer faired to appreciate withdrawal of cash of Rs. 198556/- from his credit card account and has only considered the deposit of Rs. 240920/- as against actual deposit of Rs. 194820/-. It was accordingly submitted that there is no basis for making the addition of 1/3 the total cash deposit in his credit card account.

5.

The ld DR is heard who has relied on the order of the lower authorities. 6. We have heard the rival contentions and perused the material available on record. It is noted from the credit card statement that there are regular withdrawals and deposits on various dates during the FY 2007-08. As against the withdrawal of Rs. 198556/-, there is deposit of Rs. 194820/- which largely explains the source of deposits. Further,

3 ITA No. 209/JP/2018 Mohd. Iqubal, Jaipur vs. ITO, Jaipur the assessee has also withdrawn his salary at regular intervals from his salary account maintained with HDFC Bank. Thus, withdrawal of cash from his credit card account as well as withdrawal of cash from his salary account sufficiently explained the deposit of cash in his credit card account. Further we do not see any basis for making an adhoc disallowance of 1/3 of total deposit in the credit card account. In light of the same, the addition made by the AO is hereby deleted.

7.

The Ground No. 1 is regarding challenging the initiation of proceedings u/s 147 of the Act and in Ground No. 2, the assessee has challenged the mechanical grant of sanction u/s 151 of the Act. In view of the fact that the addition made by the AO has been deleted, these two grounds have become academic and we donot deem it appropriate to adjudicate the same.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open Court on 09/08/2018.

Sd/- Sd/- ¼fot; ikWy jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 09/08/2018

*Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Mohd. Iqubal, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A)

4 ITA No. 209/JP/2018 Mohd. Iqubal, Jaipur vs. ITO, Jaipur 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 209/JP/2018} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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