Case Law Details
Swan Silk Private Limited Vs ACIT (Karnataka High Court)
The Assessing Officer with regard to claim disallowance of 50% of credit card expenses has held that the assessee has not adduced any evidence that drawings made by the Directors through their personal credit card are in fact, incurred for the purpose of business of the company. Accordingly, the amount has been added back to the income of the assessee. The Commissioner of Income Tax (Appeals) as well as tribunal has further held that no evidence has been adduced by the assessee to show that expenses are incurred for purposes of business by assessee. It is pertinent to note that before the tribunal the assessee had filed the documents with regard to the claims made by the assessee. The tribunal has rejected the aforesaid application on the ground that the documents annexed with the application are neither certified nor have been filed before the tribunal and the Assessing Officer. It has further been held that no application for admission of additional evidence along with documents was filed. Accordingly, it was held by the tribunal that no cognizance can be taken of the document along with the documents filed by the assessee. Thus, in the absence of any document on record, all the authorities have rightly disallowed the credit card expenses of Rs.6,50,921/-.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2010-11. The appeal was admitted by a bench of this Court on the following substantial questions of law:
“(1) Whether the Tribunal was justified in law in upholding the disallowance of credit card expenses of Rs.6, 50,921/- incurred wholly and exclusively in earning the income and consequently passed a perverse order on the facts and circumstances of the case.
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