Mahendra Prakash Pawar Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT), Pune Bench, in the case of Mahendra Prakash Pawar Vs Income Tax Officer (ITO), has deleted the addition of ₹21,69,933/- made under Section 69C of the Income-tax Act, 1961, as unexplained investment for credit card payments. The Tribunal ruled that the assessee successfully explained the source of the cash used to clear the credit card dues.
Factual Background and Assessment
The case pertained to the Assessment Year (A.Y.) 2017-18. The assessee, Mahendra Prakash Pawar, is a salaried employee who filed a return declaring an income of ₹7,93,910/-. The case was selected for Limited Scrutiny under CASS based on “Credit Card payment” details.
The Assessing Officer (AO) observed that the assessee had made total payments of ₹21,69,933/- to three credit cards:
- IndusInd Bank: ₹9,73,444/-
- Syndicate Bank: ₹10,49,989/-
- ICICI Bank: ₹1,46,500/-
- Total: ₹21,69,933/-
The AO noted that the outstanding payments for the IndusInd Bank and Syndicate Bank credit cards were paid in cash. When asked to explain the source of this cash, the assessee stated that the credit cards, though issued in his name, were primarily used by his brother, Mr. Sachin Prakash Pawar, in the course of his transportation business for the purchase of fuel (petrol and diesel). The assessee further submitted that his brother had sufficient, explained funds to make these payments.
