SRI P KARUNAKAR ALVA,BANGALORE vs. INCOME TAX OFFICER, WARD-15(1), BANGALORE

The assessee has raised various grounds in this appeal. However, the only issue arises for my consideration and adjudication is whether the CIT(A) is justified in confirming the disallowance made by the AO on account of credit card payment amounting to Rs.4,35,511/- for want of source of payment.

Aggrieved by the action of the AO, the assessee filed an appeal before the CIT(A) and submitted that the assessee was acting as a consultant to M/s.Vijay Krishna Estates Pvt. Ltd. (‘VKEP’ for short) run by the family members of the assessee. The assessee was advised to incur the prescribed business development expenditure on behalf of VKEP. Thus, the assessee submitted that the credit card due amounting to Rs.6,35,511/- was discharged by VKEP through their current account No.925/100 maintained with Syndicate Bank, Mangalore. In support of his explanation, the assessee also furnished the details and evidence showing the payment made by VKEP in respect of the credit card of the assessee. The CIT(A) did not accept the evidence produced by the assessee being additional evidence for want of proper application of the same. Accordingly, the CIT(A) confirmed the addition made by the AO.

Now, the learned AR of the assessee has submitted that the assessee has shown the statement regarding payment of Shri P.Karunakar Alva Page 3 of 5 dues of credit card was made from the bank account of VKEP from its bank account. However, the CIT(A) has refused to accept the evidence on the ground that the assessee has not moved a proper application. Thus, the learned AR of the assessee has submitted that the additional evidence filed by the assessee before the CIT(A) may be admitted and the matter may be remitted to the record of the AO for examination of the evidence filed by the assessee in support of the claim. The assessee has also filed an application for admission of the additional evidence along with additional evidence from pages 4 to 10 of the paper book.

On the other hand, learned departmental representative has vehemently opposed admission of the additional evidence and submitted that the assessee has failed to produce any record despite due opportunity was given by the AO in support of the claim. He has relied upon the orders of the authorities below.

Having considered the rival submissions as well as the relevant material on record, it is noted that the assessee produced additional evidence in the form of certificate from VKEP, copy of return of Smt.Vasanthi K Alva, wife of the assessee to show that the expenses in question were incurred by the assessee for and on behalf of the said company and the credit card dues were repaid from the account of the said company. The learned AR of the assessee has submitted that that the evidence produced

The other grounds raised by the assessee are consequential to the issue and the same are accordingly also set aside to the record of the AO in similar terms.

In the result, the appeal of the assessee is allowed for statistical purposes.