Case Law Details
Dipak Parmar Vs ITO (ITAT Surat)
ITAT Surat held that purchase of credit cards by making cash payments without providing explanation with regard to nature and source of money is liable to be added under section 69A of the Income Tax Act.
Facts- Assessee filed return of income for AY.2017-18 on 10.11.2017, declaring total income at Rs.2,78,400/-. The assessee had made cash payment towards credit card purchases of Rs.6,16,142/-. AO asked the assessee to explain the source of the above cash payments. The AO also issued show cause notice which was not replied to by the Therefore, the AO held that the amount of cash payment of Rs.6,16,000/- remained unexplained and constitutes income of the assessee u/s 69A of the Act. He also held that tax on this income will be charged u/s 115BBE of the Act. CIT(A) dismissed the appeal of assessee. Being aggrieved, the present appeal is filed.
Conclusion- Held that in the present case, assessee has purchased the credit cards by making cash payments. It is, therefore, clear that assessee was owner of money (cash) which was used to make credit card purchases. However, he has not explained the nature and source of acquisition of such money, being cash, of Rs.6,16,142/-. The AO has added the same u/s 69A of the Act due to non-compliance by assessee to the statutory notices as well as the show cause notice. The CIT(A) has rightly confirmed the addition because assessee did not attend before him or filed any written submission in support of the grounds raised before him. Before us also, the assessee has not filed any written submission in support of the grounds raised by him. As discussed earlier, provisions of section 69A of the Act are clearly attracted to the facts of the instant appeal. Hence, the order of CIT(A) is upheld and appeal of the assessee is dismissed.
FULL TEXT OF THE ORDER OF ITAT SURAT
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 18.12.2023 by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18.
2. The grounds of appeal raised by the assessee are as under:
“1. The Ld. CIT(A) erred in partially confirming the order of the AO making and addition u/s 69A of Rs.6,16,142/-.
2. Any other ground which may be urged before or during the time of hearing of the appeal.”
3. At the outset, it may be stated that none appeared for the assessee on the dates of hearing fixed on 30.05.2024, 18.07.2024, 09.09.2024 and 18.11.2024. Hence, it is clear that adequate opportunity of hearing was granted to the appellant, but he has neither attended the hearings nor filed any written submission in support of the grounds raised in appeal. We are, therefore, of the view that no useful purpose will be served in prolonging the litigation. The appeal is, accordingly, decided on the basis of materials available on record.
4. Brief facts of the case are that assessee filed return of income for AY.2017-18 on 10.11.2017, declaring total income at Rs.2,78,400/-. The assessee had made cash payment towards credit card purchases of Rs.6,16,142/-. The Assessing Officer (in short, ‘AO’) asked the assessee to explain the source of the above cash payments. The AO also issued show cause notice which was not replied to by the Therefore, the AO held that the amount of cash payment of Rs.6,16,000/- remained unexplained and constitutes income of the assessee u/s 69A of the Act. He also held that tax on this income will be charged u/s 115BBE of the Act.
5. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) issued 7 notices as per the details at para 4 of the appellate order. There was no response of the assessee to any of the notices. The assessee did not also file any written submission. Therefore, the CIT(A) was of the opinion that appellant is not willing to pursue the appeal. Accordingly, the CIT(A) decided the appeal based on materials available on record. He has given the decision in para 5.3, 5.4 and 5.5 of the appellate order. The CIT(A) observed that there was no compliance of notices before AO as well. He also observed that assessee failed to explain the source of cash payment of Rs.6,16,000/- towards credit card purchases; hence, the impugned amount constitutes income in the hands of the assessee u/s 69A of the Act. The CIT(A) also relied on the order of Hon’ble Punjab & Haryana High Court, in case of Anil Goel vs. CIT, 306 ITR 212 (P & H) wherein relying on the earlier decision of the High Court in case of Popular Engineer Co. vs. ITAT, 248 ITR 577 (P & H), it was held that elaborate reasons need not be recorded by the CIT(A) as has been done by the AO. The reasons are required to be clear and explicit indicating that the authority has considered the issue in controversy. If the appellate / revisional authority has to affirm such an order, it is not required to give separate reasons, which may be required in case the order is to be reversed by the appellate / revisional authority. Accordingly, the CIT(A) dismissed the appeal of assessee.
6. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. As stated earlier, neither any Authorized Representative of assessee attended before us nor any written submission was filed in support of the grounds raised in the appeal. It may be stated that there is only one effective ground i.e., addition of Rs.6,16,142/- u/s 69A of the Act. On the other hand, Learned Senior Departmental Representative of the revenue supported the orders of lower authorities. The assessee had made cash payments for credit card purchases e., Rs.3,37,650/- with RBL Bank Ltd., Rs.1,66,492/- with SBI Cards and Payment Services Pvt. Ltd. and Rs.1,12,000/- with City Bank. Both AO and CIT(A) issued several notices but assessee chose not to respond to the notices nor file any written submission. Provisions of section 69A of the Act are clear. Where the assessee is found be the owner of any money, bullion, jewellery or other valuable articles and such money etc. are not recorded in the books of account, if any, maintained by him of any source of income and the assessee offers no explanation about the nature and source of acquisition of the money etc., or the explanation offered by him, is not satisfactory, in the opinion of AO, the money and the value of bullion, jewellery or other valuable articles may be deemed to be the income of the assessee for such year. In the present case, assessee has purchased the credit cards by making cash payments. It is, therefore, clear that assessee was owner of money (cash) which was used to make credit card purchases. However, he has not explained the nature and source of acquisition of such money, being cash, of Rs.6,16,142/-. The AO has added the same u/s 69A of the Act due to non-compliance by assessee to the statutory notices as well as the show cause notice. The CIT(A) has rightly confirmed the addition because assessee did not attend before him or filed any written submission in support of the grounds raised before him. Before us also, the assessee has not filed any written submission in support of the grounds raised by him. As discussed earlier, provisions of section 69A of the Act are clearly attracted to the facts of the instant appeal. Hence, the order of CIT(A) is upheld and appeal of the assessee is dismissed.
7. In the result, the appeal of the assessee is dismissed.
Order is pronounced in the open court on 19/11/2024.
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