BAJRANG LAL MUHAL,GHAZIABAD vs. INCOME TAX OFFICER, WARD 2(1)(5), GHAZIABAD
Facts
The assessee, an employee of a transporter, was subjected to reassessment for AY 2012-13, leading to an addition of Rs. 10,19,550/- under Section 69 for unexplained credit card payments. The assessee contended these payments were for business expenses reimbursed by his employer, but his explanation and employer's affidavit were not adequately considered by the CIT(A).
Held
The Tribunal held that the employer's affidavit and supporting documents, explaining the source of the credit card payments as reimbursements for business-related expenses, appeared genuine. Finding no contrary evidence from the revenue, the Tribunal concluded that the addition made under Section 69 was not sustainable and ordered its deletion.
Key Issues
Whether an addition made under Section 69 for unexplained credit card payments is sustainable when the assessee provides an employer's affidavit and evidence of reimbursements for business expenses.
Sections Cited
Section 147, Section 144, Section 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: MS. MADHUMITA ROY
PER MS. MADHUMITA ROY: JUDICIAL MEMBER:
The instant appeal filed by the assessee is directed against an
order dated 10.06.2023 passed by Commissioner of Income-Tax (A)/
National Faceless Appeal Centre (NFAC), arising out of the order
dated 03.12.2019 passed by the ITO, Ward 2(1)(5), Ghaziabad under
5 ITA No. 3583/Del/2023 Section 147 read with Section 144 of the Income Tax Act, 1961
(hereinafter referred to as ‘the Act’) for Assessment Year 2012-13.
None appeared on behalf of the assessee at the time of call. It
appears from the record that, though, notices were served, no one
represented before us ever. Having no alternative, the matter is
decided ex parte.
The assessee before us works for a Transporter, namely, TCI Co.
made credit card or payment of Rs.10,19,548/-. In the absence of
supporting documents and any explanation with regard to source of
credit card payments furnished by the assessee, reassessment was
completed under Section 147 read with Section 144 of the Act upon
making addition of the entire amount of Rs.10,19,550/- to the total
income of the assessee under Section 69 of the Act. Relevant to
mention that the assessee since having an income around Rs.2,50,000
yearly i.e. below exemption limit did not file the return of income. He
was also looking after the branch office of his employer at UP Boarder
and incurring day to day expenses through his personal credit card for
the running and maintenance of vehicles on behalf of Mr. Dharamvir
Singh which was used to be reimbursed by lump sum deposits in the
5 ITA No. 3583/Del/2023 bank account. The credit card is mainly in respect of payment made to
petrol pump and maintenance of vehicles and other charges as he
books the truck in UP Boarder and used to get the fuel tanks filled on
his own account by paying through his personal credit card as the case
made out by the assessee.
The assessed, before the AO, failed to submit any document and
before the First Appellate Authority, filed an affidavit affirmed by his
employer, namely, Dharambir Singh explaining deposit of
Rs.16,00,000/- in HDFC Bank No.0433100001477. It has been
specifically stated that such amount has been deposited for diesel,
driver own expenses and maintenance of the trucks loaded from UP
Boarder on behalf of the Transporter TCI Company. It is relevant to
mention that letter from Mr. Dharambir Singh confirming the
employment of the assessee before us, engaged in the business of
plying, hiring or leasing goods carriage along with the copy of the
PAN have been duly furnished before the Ld. CIT(Appeals).
However, such explanation rendered by the assessee and the
documents so filed in support of the same is found to have been not
considered in its proper perspective by the Ld. CIT(Appeals) while
5 ITA No. 3583/Del/2023 confirming the addition made by the Assessing Officer. It is noted
that, no contrary evidence is also found to be available with the
revenue department while confirming such addition against the
assessee which needs consideration, particularly, when the explanation
so rendered by the employer of the assessee by way of an affidavit
seems to be genuine. Thus, the addition is found to be not sustainable
in the eyes of law, and thus, deleted.
In the result, the appeal filed by the assessed is allowed.
Order pronounced in the open court on 29/10/2024. Sd/- (MADHUMITA ROY) JUDICIAL MEMBER Dated: 29th October, 2024. Mohan Lal
