Case Law Details
Madhav Kumar Swarup Vs ACIT (ITAT Delhi)
Introduction: In the case of Madhav Kumar Swarup vs. ACIT, the attribution of credit card expenditure is a central issue. The Assessing Officer (AO) attributed the expenses to the assessee based on the mention of PAN in the credit card transaction. However, the assessee claimed that the credit card did not belong to him. The appeal challenges the addition of Rs. 4,34,168 made by the AO.
Detailed Analysis: The primary contention revolves around the proper attribution of credit card expenses. The AO and CIT(A) relied on the PAN mentioned in the transaction but failed to conduct a thorough inquiry into the ownership and usage of the credit card. The absence of evidence supporting the assessee’s connection with the credit card raises questions about the validity of the attribution.
The bench opines that a mere mention of PAN does not conclusively establish ownership or usage. A more extensive inquiry into the application, issuance, and usage of the credit card is essential. The lack of discussion on evidentiary aspects in the impugned orders underscores the need for a comprehensive examination.
Conclusion: The appeal is allowed, and the impugned orders are set aside. The case is remanded to the Assessing Officer for a fresh determination. A proper inquiry into the ownership and usage of the credit card should be conducted, providing the assessee with an opportunity to present evidence. The attribution of credit card expenses requires a meticulous examination beyond the PAN mention.
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