Dharmesh Dinesh Shah Vs ACIT (ITAT Mumbai)
ITAT Pulls Up AO for Ignoring Evidence – ₹31.61 Lakh Credit Card Addition Sent Back for Fresh Verification
In a relief to the assessee, the Mumbai ITAT set aside an addition of ₹31.61 lakh made u/s 68 towards alleged unexplained credit card payments after observing that the AO and CIT(A) failed to properly examine the evidences furnished by the assessee. The Tribunal restored the matter back to the AO for fresh verification.
The assessee, who was the Managing Director of a travel company engaged in air ticketing, visa and travel-related services, was subjected to reassessment proceedings based on information relating to credit card transactions aggregating to ₹31.61 lakh. The AO treated the payments as unexplained cash credits u/s 68 and taxed them under section 115BBE, alleging that the assessee failed to prove the source of payment.
Before the Tribunal, the assessee explained that the credit cards were used predominantly for official business expenses of the company, including booking of domestic and international air tickets, visa charges and travel-related payments. Monthly credit card statements were submitted to the company, and the company directly made payments to the banks. Personal expenses, wherever incurred, were separately borne by the assessee from his own account.
The assessee further demonstrated that copies of bank statements, credit card statements, and certified ledger account titled “Credit Card (Dharmesh)” in the books of the company had already been furnished during assessment proceedings to establish that the impugned payments were made by the company itself.
The ITAT observed that the dispute essentially required only a factual verification of records and reconciliation of payments from the bank statements and company books. It found that the evidences filed by the assessee were not properly appreciated either by the AO or by the CIT(A).
Accordingly, in the interest of justice and fair play, the Tribunal restored the entire matter back to the AO for fresh examination after granting adequate opportunity to the assessee to furnish supporting documents. The appeal was thus allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
