Mentioning of PAN does not attribute Transaction or Credit to Assessee: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), New Delhi held that mentioning PAN does not attribute transaction or credit to an assessee.

The department, Shri Madhav Kumar Swarup, claimed to have been in possession of an AIR/CIB information that the assessee has purchased units of mutual funds and paid totaling amount of Rs. 31,00,000/-on his residential address. To verify the transaction and source of investment made for the purchase of mutual funds, notice u/s 133(6) of the Income Tax Act, 1961 was issued to the assessee after taking prior approval from the Commissioner of Income Tax (CIT).

Then during assessment proceedings, the Assessing Officer (AO) found that the assessee could not explain the source of investment made during the year except Rs. 3,00,000/- out of Rs. 31,00,000/-. The assessee had explained that the investment made whereby wife Smt. Saroj Rani Swarup with her PAN, the AO however observed that the assessee had unexplained investment an addition of Rs. 28,00,000/- was made. In appeal, the CIT had deleted the addition of Rs. 28,00,000/- but sustained the addition of Rs. 4,34,168/-.

The Tribunal bench comprising of G.S.Pannu, President, and Anubhav Sharma, Judicial Member held that “the AO has attributed the credit card expenditure to assessee while assessee had claimed that card did not belong to him. The AO and the CIT have attributed this expenditure to the assessee as PAN no. of the assessee was mentioned in the use of the credit card. There is no discussion of any evidence in the impugned orders or otherwise on record to show also if the said credit card was otherwise applied, obtained, and used by the assessee only. The matter required a more extensive inquiry into aforesaid aspects which seems to be missing. Only due to mention of PAN, the credit or transaction cannot be attributed to any assessee.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.