Loading judgment…
Facts
The assessee, a cinematographer, made cash payments for credit card bills totaling Rs. 5,99,553. The Assessing Officer (AO) added this amount as unexplained income under section 69A of the Income Tax Act. The CIT(A) restricted the addition to Rs. 5,99,553 but did not allow the explanation.
Held
The Tribunal accepted the assessee's explanation that the cash used for credit card payments was withdrawn by his wife (then fiancée) for their upcoming marriage expenses, including jewellery purchases. Although there was no direct correlation between the wife's withdrawals and the payments, the Tribunal considered the small amount of payment and the husband-wife relationship.
Key Issues
Whether the cash payments made towards credit card bills, which were claimed to be sourced from the wife's withdrawals for marriage expenses, constitute unexplained income.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI AMIT SHUKLA & SHRI RATNESH NANDAN SAHAY
O R D E R Per: Ratnesh Nandan Sahay, Accountant Member: 1. This appeal has been filed by the appellant against the Order of the Ld. CIT (Appeals) passed u/s. 250 of the Income Tax Act [the ‘Act’ in short] vide DIN & Order No. ITBA/APL/S/250/2023-24/1058793123(1) Dated 15/12/2023 for the Assessment Year 2017-18.
2 Mr. Amit Suresh Kodoth 2. Following grounds of appeal have been raised by the appellant: “Based on the facts and in the circumstances of the case, Amit Suresh Kodoth (hereinafter referred to as the Appellant) craves leave to prefer an appeal against the order dated 15th December, 2023 passed by the Commissioner of Income-tax (Appeals) AddI/JCIT (A)-5, Kolkata (hereinafter referred to as the 'learned CIT(A)'] under section 250 of the Income-tax Act, 1961 (hereinafter referred to as the 'Act'), on the following grounds, each of which are without prejudice to one another. On the facts and in the circumstances of the case and in law the learned CIT(A) has: Addition under section 69A of the Act for cash deposited in Bank 1. erred in affirming the action of the learned AO of making addition to the extent of Rs.5,99,553/- under section 69A of the Act with regards to cash deposited for payment of Credit card bills as unexplained money, 2. erred in not appreciating the submission made by the assessee that the said cash was sourced by his wife ('fiancee' then) of the assessee. The Appellant craves leave to add, amend, delete, rectify, substitute and modify any of the aforesaid grounds or add a new ground or grounds at any time before or at the time of hearing before the Hon'ble Income-tax Appellate Tribunal.”
The facts of the case, in brief, are that the assessee is a cinematographer and working on multiple platforms like films, T.V. commercial, music videos and shots. During the assessment year under consideration, the assessee has shown ‘Income from business 3 Mr. Amit Suresh Kodoth and profession’ and also ‘Income from other sources.’ During the course of assessment proceedings, the AO noticed that the assessee had made following payments in cash against the outstanding amounts due on his credit cards: - Date Credit Card Name Amount 28/08/2016 Standard Chartered Credit Card 1,00,000 17/09/2016 Standard Chartered Credit Card 3,25,000 18/10/2016 Standard Chartered Credit Card 49,453 01/09/2016 SBI Credit Card 55,100 03/10/2016 SBI Credit Card 55,000 25/10/2016 HDFC Credit Card 15,000 Total 5,99,553
The Assessing Officer then asked the assessee to explain the source of these cash payments. In response to that, the assessee submitted that he had made cash payments of Rs.4,74,453/- on different dates against outstanding dues of the credit card of Standard Chartered Bank. However, as per the information received from AIR, the assessee had made cash payment of Rs.5,17,000/- through the same credit card of Standard Chartered Bank. The Ld. AO, therefore, concluded that the total credit card payment made by the assessee was at Rs.6,42,100/-. The Ld. AO, therefore, added a sum of Rs.6,42,000/- 4 Mr. Amit Suresh Kodoth as the income of the assessee u/s. 69A of the Income Tax Act. Aggrieved by the addition made by the Ld. AO, the assessee filed appeal before the Ld. CIT(A).
The Ld. CIT(A), however, restricted the addition to Rs.5,99,553/- on the ground that the assessee had made cash payment of Rs.5,99,553/- only against his credit card dues and couldn’t explain the source of that cash deposits. 6. Aggrieved by the order of the Ld. CIT(A) this appeal has been filed. During the appellate proceedings before us, the appellant submitted as under: - I. Details of Jewellery purchased using Credit Cards: Sr. Date of Purchases from Credit Card Amount in No. Purchase used for Rs. purchases 1. 12-Aug-16 Kalyan Jewellers HDFC 1,20,100 2. 12-Aug-16 Abharan Jewellers Standard 2,10,000 Chartered 3. 12-Aug-16 Bhima Jewellers SBI 7,250 4. 12-Aug-16 Kalyan Jewellers SBI 25,000 5. 13-Aug-16 Bhima Jewellers HDFC 27,000 6. 15-Aug-16 Manubhai Gems Pvt. Ltd. HDFC 1,18,000 7. 15-Aug-16 Manubhai Gems Pvt. Ltd. Standard 1,30,000 Chartered 8. 07-Sep-16 Kundan Jewellers Standard 29,000 Chartered Total 6,66,350 II. Details of Cash withdrawal from Wife Revathi Amit Kodoth In this regard, the details of cash withdrawn by my Wife from her account are as under: Sr. Date of Withdrawal Bank Name Amount in Rs. No. 1. 19-Aug-16 Citi Bank 4,00,000 2. 17-Sep-16 Canara Bank 3,70,000 3. 03-Oct-16 Canara Bank 2,00,000 4. Total 9,70,000 III. Details of cash used for Credit Card Payments In this regard, the details of cash deposited into Credit Cards for clearing the Credit Card dues are as under: Sr. No. Date of Deposit Credit Card Amount in Rs. 1. 20-Aug-16 Standard Chartered 1,00,000 u 2. 31-Aug-16 SBI 55,100 r 3. 17-Sep-16 Standard Chartered 3,25,000 t 4. 03-Oct-16 SBI 55,000 h 5. 18-Oct-16 Standard Chartered 92,000 e 6. 25-Oct-16 HDFC 15,000 r 7. Total 6,42,100
The appellant has taken the plea that he was going to get married and had purchased jewellery from the above places and made payment out of the cash withdrawn by his wife (the then fiancée) and the purchases made through credit cards of Standard Chartered Bank, SBI and HDFC 6 Mr. Amit Suresh Kodoth amounting to Rs.6,42,100/- were paid out of cash deposits made by his wife. The D.R., on the other hand, relied on the order of the Ld. AO and the Ld. CIT(A).
We have considered the rival submission and it is found that though, there is no direct correlation between the amount withdrawn from the accounts of the wife of the assessee and the payments made by her against the credit cards due, yet considering the small amount of payment and the relationship between husband and the wife, the explanation offered by the assessee is accepted. Accordingly, the addition made by the AO is deleted. 9. In the result, the appeal is allowed. Order pronounced in the open court on 25.07.2024.