Failure to explain Credit Card Payments with Supporting Documentary Evidence: ITAT Deletes partial Addition [Read Order]

The Income Tax Appellate Tribunal (ITAT) Hyderabad Bench held that the assessee failed to explain the credit card payments with supporting documentary evidences. Hence, the bench deleted the partial addition.

Sandeep Auraneebadkar, the taxpayer is an individual and has been carrying on the business of audio / video distribution / trading in electronic items, filed the return of Income for Assessment Year 2017-18 declaring total income of Rs.3,86,150/.

The case was selected for scrutiny and therefore the Assessing Officer passed an assessment order and made addition under Section 69 of the Income Tax Act on failure to explain the credit card payments with supporting documentary evidence.

Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) {CIT(A)} who dismissed the appeal. Thus, the assessee filed a second appeal before the tribunal.

Before the tribunal Sameer, counsel for the assessee submitted that the assessee made the credit card payments from his income, past savings, and reimbursement for expenses incurred on behalf of family members only.

It was also contended that the assessee had already furnished details to the AO in response to notice dated 28.10.2019 and 23.12.2019. However, the AO wrongly made additions without properly considering the facts furnished in the reply notices.

B. Ravinder, the Departmental representatives submitted before the tribunal that the assessee has failed to explain the reasons and proof of holding the amount in cash and not depositing his incomes and savings in the bank. The contention of the assessee is not backed by any proof in the form of bank statements.

The tribunal observed that the assessee had failed to explain the credit card payments with supporting documentary evidence.

Thus, the assessee has also failed to provide satisfactory explanations or any documentary evidence like bank statements, for holding such a significant amount in cash and not depositing it in a bank.

The tribunal after reviewing the facts and submissions of the both parties, a Single member bench of Laliet Kumar (Judicial Member) held that due to lack of supporting documentation deleted the partial addition.

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