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Facts
The assessee filed her return for AY 2017-18 declaring income of Rs.1,74,500. The Assessing Officer (AO) observed credit card payments of Rs.17,53,484 and made an addition of the same amount. The assessee contended that the actual credit card payments were Rs.9,81,875, of which Rs.7,82,500 was paid by her brother from his business account.
Held
The Tribunal found that Rs.1,99,375 of the credit card payments were sufficiently explained by the assessee's salary income. However, the issue of Rs.7,82,500 paid by the assessee's brother was restored to the AO for verification, as these new facts were not presented before the lower authorities.
Key Issues
Whether the entire credit card payments are to be treated as unexplained expenditure, and whether additional evidence regarding payments made by a third party should be admitted and verified.
Sections Cited
143(3), 250, 143(2), 142(1), 133(6), 69C, 44AD, VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 30.04.2025 of National Faceless Appeal Centre (NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 09.12.2019 passed u/s.143(3) of the Act.
Assessee has raised the following grounds of appeal:
“1. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred: i. In holding that the assessee had made credit card payments totalling to Rs.17,53,484 based on ITS data when the assessee's payments as per credit card statements actually amounted to Rs.9,81,875. ii. In refusing to admit on record additional documentary evidence during appellate proceedings on the ground that in the appeal memo in Form no 35, the appellant had mentioned 'NO' with regard to additional evidence other Gurpreet Kaur than evidence produced before the AO in the assessment proceedings. iii. In failing to duly appreciate the facts and documentary evidence produced by the appellant in support of her case in appellate proceedings and taking an adverse view that credit card payments to the extent of Rs.16,87,484 were unexplained expenditure u/s 69C of the IT Act, 1961. Prayer: The appellant pleads for direction to restore the matter to the file of the CIT(A)/AO to decide the case on merits after providing the appellant with an opportunity to properly explain the facts of the case and make submissions in the interest of justice.
2. The appellant craves leave to, add to, alter, amend, modify or withdraw any or all grounds of appeal.”
Brief facts of the case are that the assessee is an individual and filed the return of income for A.Y. 2017-18 on 26.07.2017 declaring income at Rs.1,74,500/-. Case selected for Limited Scrutiny through computer-assisted scrutiny selection (CASS) for verification of Credit card payments followed by validly serving of notices u/s.143(2) and 142(1) of the Act. During the course of assessment proceedings, ld. Assessing Officer based on the information has observed that credit card bill payment of Rs.17,53,484/- has been made by the assessee. Partial details were submitted and was also stated that major portion of the credit card payments were incurred by assessee’s brother Mr. Bhupinder Singh who is running a Transport business. There was no compliance from the side of Mr. Bhupinder Singh against the notice issued u/s.133(6) of the Act. Ld. Assessing Officer concluded the proceedings making addition of Rs.17,53,484/-. Income assessed at Rs.19,27,990/-.
Aggrieved assessee preferred appeal before ld.CIT(A) and stated that the actual amount of credit card payments under the name of the assessee are only Rs.9,81,875/- and not Gurpreet Kaur Rs.17,53,484/-. It was also submitted that out of Rs.9,81,875/- sum of Rs.7,82,500/- are the payments made by the assessee’s brother from his vehicle hire charges business account and is duly reflected in its income-tax return and books of account. Details of payment made by the assessee’s brother were also placed but ld.CIT(A) only accepted the source of payment made by the assessee’s brother through banking channel at Rs.1,16,000/-. For the remaining amount of Rs.16,37,484/-, the addition has been sustained.
Now the assessee is in appeal before this Tribunal assailing the impugned order.
Ld. Counsel for the assessee submitted that as per the credit card statement the total payments made during F.Y. 2016-17 are Rs.9,81,875/-. That Ld. Assessing Officer may be directed to verify this contention because the amount of Rs.17,53,484/- is incorrect. So far as the credit card used by assessee’s brother for his vehicle hire charges business at Rs.7,82,500/-, he submitted that since the assessee’s brother has moved outside India he could not reply to the notice issued by ld. Assessing Officer. He stated that affidavit given by assessee’s brother Mr. Bhupinder Singh has been placed at pages 101 and 102 wherein he stated that payment of Rs.7,82,500/- has been made by him. He submitted that income-tax return and financial statements of Mr. Bhupinder Singh are also available on record and the same can be verified by ld. Assessing Officer.
On the other hand, ld. Departmental Representative supported the order of ld.CIT(A).
I have heard the rival contentions and perused the record placed before me. The first grievance of the assessee is that ld. Gurpreet Kaur Assessing Officer has taken the wrong figures of credit card payments at Rs.17,53,484/- because the correct figure as per the credit card statement is Rs.9,81,875/-. In support of this contention, bank statements as well as credit card statements have been filed by the assessee which are part of the paper book running into 114 pages. This contention of the Ld. Counsel for the assessee needs to be verified at the end of ld. Jurisdictional Assessing Officer and if found to be correct, ld. JAO should examine the source of credit card payment of Rs.9,81,875/-. Therefore, this issue is restored to the file of ld. JAO for necessary verification of actual amount of credit card payment appearing in the name of assessee for the impugned assessment year. Ld. JAO shall grant proper opportunity of hearing to the assessee.
Coming to the next issue about the details of credit card payment of Rs.9,81,875/-, it is stated before me that out of Rs.9,81,875/- the payments made from the bank account of assessee are only to the tune of Rs.1,99,375/- and the same deserves to be treated as explained as the assessee is earning salary from Wipro Ltd. as Software Engineer. I have gone through the bank statement and the details of salary income and I am satisfied that the assessee has sufficient funds to explain the source of credit card payment of Rs.1,99,375/-. Remaining portion of the credit card payment of Rs.7,82,500/- has been paid from the bank account of the assessee’s brother Mr. Bhupinder Singh. From perusal of paper book page 103, I observe that Mr. Bhupinder Singh has furnished the income-tax return for A.Y. 2017-18 declaring gross income of Rs.4,80,000/- u/s.44AD of the Act. After claiming deduction under Chapter VIA total income declared at Rs.4,31,000/- and against the tax liability tax deducted at source on the vehicle hire charge payments totalling Gurpreet Kaur to Rs.15,254/- has been claimed. As per the profit and loss account of Mr. Bhupinder Singh, the transport receipts are Rs.33,54,490/- and total indirect expenses are at Rs.28,74,489.83 which includes the alleged sum of Rs.7,82,500/-. However, since these details were not filed before the ld. Assessing Officer as well as ld.CIT(A), I deem it appropriate that these new facts about the income-tax return of Mr. Bhupinder Singh and payments made by him for the credit card issued in the name of assessee needs to be verified at the end of ld. Jurisdictional Assessing Officer. Accordingly, this issue of verification of credit card payment of Rs.7,82,500/- from the assessee’s brother account which is alleged to be incurred for business purposes also restored to the file of ld.JAO as per the directions and observations made hereinabove. Resultantly, addition of Rs.1,99,375/- stands deleted and the grounds raised for the remaining addition are hereby allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on this 22nd day of July, 2025.