RAJEEV SHARMA,PUNE vs. INCOME TAX OFFICER, INDORE

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ITA 837/IND/2024Status: DisposedITAT Indore11 November 2025AY 2012-134 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal decided to remand the issue of the addition of Rs. 10,34,615/- on account of credit card payments to the file of the Assessing Officer (AO) for fresh adjudication. The reasoning was based on the assessee's submission that these payments were for the employer's business and were reimbursed, and that the assessee possessed documentary evidence. The Revenue did not object to this course of action. The Tribunal directed the AO to verify the assessee's evidences judiciously. The ratio decidendi is that where an assessee claims expenses were incurred for an employer and subsequently reimbursed, and the revenue does not object to verification, a remand for fresh adjudication with verification of evidence is appropriate. The Tribunal allowed the appeal for statistical purposes.

What were the facts?

The assessee, Rajeev Sharma, is an individual who did not file a return of income for Assessment Year (AY) 2012-13. The Assessing Officer (AO), ITO-5(2), Indore, initiated reassessment proceedings under Section 147/144 of the Income-tax Act, 1961, based on information regarding financial transactions. Notices issued by the AO under Sections 148 and 142(1) remained uncomplied with, as did a show-cause notice under Section 144. Consequently, the AO passed an ex-parte assessment order on 18.12.2019, determining the total income at Rs. 1,57,01,670/-. The assessee appealed to the CIT(A)-NFAC, Delhi, who remanded six out of seven additions back to the AO for fresh adjudication but sustained one addition of Rs. 10,34,615/- on account of credit card payments. The assessee is now appealing to the ITAT against the sustained addition.

What were the issues?

1. Whether the addition of Rs. 10,34,615/- on account of credit card payments, sustained by the CIT(A), is valid, turning on the characterization of these payments as income of the assessee from other sources (Revenue's contention) or as business expenses reimbursed by the employer (Assessee's contention), and relating to Section 68 of the Income-tax Act, 1961. Assessee's Contention: The assessee argued that the credit card payments totaling Rs. 10,34,615/- were made for the business affairs of his employer and were subsequently reimbursed by the employer. He claimed to possess documentary evidence to support this. The assessee requested that this issue also be remanded to the AO for fresh adjudication, noting that the AO had not yet passed orders on other remanded issues. Revenue's Contention: The Revenue, through the Senior Departmental Representative, did not object to the issue being remanded to the AO for adjudication.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148,Section 142(1),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Sachin Kumar, AR
For Respondent: Shri Sanjeev Bhagat, Sr. DR
Hearing: 04.11.2025Pronounced: 11.11.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by order of first-appeal dated 30.09.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 18.12.2019 passed by learned ITO-5(2), Indore [“AO”] u/s 144/147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal on the grounds as mentioned in Form No. 36.

2.

The background facts leading to present appeal are such that the assessee-individual did not file any return of AY 2012-13. The AO, on the basis of information in possession, noticed certain financial transactions having been made by assessee during the previous year 2011-12 relvant to AY 2012-13. Accordingly, the AO sought verification from assessee vide a letter but the same remained uncompiled by assessee. Ultimately, the AO recorded reason and after taking approval from prescribed authority, issued notice dated 28.03.2019 u/s 148 to initiate proceeding of section 147 against assessee. Thereafter, the AO issued notices u/s 142(1) to assessee.

However, the notice u/s 148 as well as 142(1) were remained uncompiled.

Therefore, the AO issued show-cause notice u/s 144 also but the same also remained uncompiled by assessee. Finally, the AO completed assessment vide ex-parte order u/s 144 after making seven (7) types of additions on different counts and determining total income at Rs. 1,57,01,670/-.

Aggrieved, the assessee carried matter in first-appeal whereupon the CIT(A) remanded six types of additions to the file of AO for a fresh adjudication after verification of assessee’s evidences, however he has sustained one addition of Rs. 10,34,615/- on account of credit card payments. Now, the assessee has come in next appeal before us assailing the order of CIT(A) to the extent it relates to sustenance of addition of Rs. 10,34,615/-.

3.

Ld. AR for assessee narrated the facts that the assessee was an employee of a company and the assessee incurred expenses of Rs. 10,34,615/- on payments by way of/through credit cards for the business

Page 2 of 4 affairs of employer and the same were later reimbursed by assessee’s employer. However, the AO has treated the same as income of assessee from other sources which is wrong. Ld. AR submitted that the assessee is having all documentary evidences to satisfy the AO about such nature of payments and reimbursements by employer. Therefore, this issue must also be remanded to the file of AO. Ld. AR pointed out that the AO has not yet passed order of afresh adjudication as directed by Ld. CIT(A) for six (6) types of additions and hence there is no harm if the issue of credit card payments is also remanded to the AO. Ld. DR for revenue does not have any objection if the issue is remanded to AO. Therefore, we remand the issue of addition of Rs. 10,34,615/- to the file of AO for adjudication afresh after necessary verification of the evidences of assessee. Needless to mention that the AO shall considered assessee’s submission judiciously.

4.

Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 11/11/2025

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