SHRI AAMIR RASHID , SRINAGAR V. INCOME TAX OFFICER WARD- (3)1, SRINAGAR

ITA 421/ASR/2019

AI Insights

The case involves an appeal by Sh. Aamir Rashid against the order of the Commissioner of Income Tax (Appeals)-1, Amritsar, which confirmed an addition of Rs. 594,864/- to the appellant's income for the Assessment Year 2009-10. The addition was initially made by the Assessing Officer under section 144 of the Income Tax Act, treating the credit card payments as unexplained income. The appellant, a student at the time, claimed that the payments were funded by his parents, government employees, to support his education. The CIT(A) rejected the appeal ex-parte, and the Tribunal found that the revenue authorities did not sufficiently investigate the source of the funds claimed by the appellant.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 114607 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-12-2022
• Assessment Year: misc
• Appeal Filed On: 05-01-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 421/Asr/2019 Assessment Year: 2009-10 Sh. Aamir Rashid S/o Abdul Rashid Khan H.No. 212, Sector-B, Gulbahar Colony, Srinagar [PAN: AUSPR 7239N] Vs. Income Tax Officer, Ward 3(1), Srinagar (Appellant) (Respondent) Appellant by: None Respondent by: Smt. Ratinder Kaur, Sr. DR Date of Hearing: 06.12.2022 Date of Pronouncement: 21.12.2022 ORDER Per Dr. M. L. Meena, AM: The present appeal has been filed by the assessee against the order dated 15.03.2019 passed by the ld. Commissioner of Income Tax (Appeals)-1, Amritsar in respect of Assessment Year 2009-10. TA No. 421/Asr/2019 Aamir Rashid v. ITO 2 2. None appeared for the assesse. Considering the nature of the issue of credit card payments of Rs 594,864/-, we decided to hear the ld. DR on the matter to dispose of the appeal. 3. The AO completed the assessment u/s 144 of the act making the addition of Rs 594,864/- on account of payment made by credit card by the assessee treating as its unexplained income. 4. In the appeal, the Ld. CIT(A) had confirmed the addition by rejecting the appeal ex-parte qua the assessee by observing as under: “----------- In the appeal proceedings the notice of hearing was issued on 24.9.2018, 11.2.2019, and 26.2.2019 but the assessee did not appear in response to these notices either personally or through his AR and did not furnish any written submission in support of his grounds of appeal. Therefore the appeal- is decided ex-parte on the basis of material on record. Decision- As per assessment order, the assessee had made payments by credit cards amounting to Rs 594,864/- during the AY 2009-10 but the assessee had not filed any return of income for the said assessment years u/s 139 of the act and u/s 148 of the act. In the assessment proceedings the assessee was asked to explain the sources of payments amounting to Rs 594,864/- by credit cards, in response to which assessee replied that he was undergoing higher studies and during the said year the parents of the assessee who are government employees have transferred all the deposit entries in the saving bank account of the assessee in order to meet the expenditure incurred on his studies. That the assessee does not have his own income and there is no taxable income of the assessee. When the assessee was a student and he was stating that the payments by credit cards amounting to Rs 594,864/- were made by him out of deposits in his saving bank account being transferred by the parents of the assessee, who are government employees, in order to meet the expenditure incurred on the TA No. 421/Asr/2019 Aamir Rashid v. ITO 3 studies of the appellant, it was a satisfactory explanation and it was open to the AO to verify the sources of transfer of funds to the tune of Rs 595,864/- by the parents of the assessee in their cases rather than the assessee who was a student. However, the appellant had not furnished any evidence of transfer of funds to the tune of Rs 594,864/- in the saving bank account of the assessee from his parent’s bank accounts before the AO or in the assessment proceedings, and therefore the source of payment by credit card to the tune of Rs.594,864/- by the assessee remained unexplained and accordingly the addition of Rs.584,864/- is confirmed.” 5. Heard the Ld. DR and perused the material facts on record. Undisputedly, the appellant made payment of Rs 594,864/- by credit card during the Assessment Year 2009-10. It is discussed by the Ld. CIT (A) that in the assessment proceedings the assessee had replied that the assessee was undergoing higher studies and during the said year the parents of the assessee who are government employees have transferred all the deposit entries in the saving bank account of the assessee in order to meet the expenditure incurred on his studies and that the assessee does not have his own income and hence there is no taxable income of the assesse and that the AO observed from the reply of the assessee that he could not give evidences in respect of the funds transferred from his parent’s accounts. Accordingly, the Ld. CIT(A) held that the appellant had not furnished any evidence of transfer of funds to the tune of Rs 594,864/- in the saving bank account of the assessee from his parent’s bank TA No. 421/Asr/2019 Aamir Rashid v. ITO 4 accounts before the AO, in the assessment proceedings, and therefore the source of payment by credit card to the tune of Rs.5,94,864/- by the assessee remained unexplained and accordingly the addition of Rs.5,84,864/- is confirmed by an ex-parte order. 6. It is evident from the above that the revenue authorities the AO and the Ld. CIT (A) passed order ex-parte qua the assesse, but neither of them have mention the factum of date of issue and service of notice, on the assessee, so to bring on record the evidence that the assesse did not comply, rather it is discussed in the assessment order that the assesse has filed a reply stating therein that the disputed amount was received form his parents who are govt. employees, for the purpose of higher studies. In order to disprove the claim of the appellant the revenue authorities ought to have brought on record the corroborative material evidence to controvert the assesse reply of the factual evidence of source of money transferred from parents account who were govt. employees by way of conducting necessary enquiries from the bank and the employer of the parents. In our view, the order of the Ld. CIT(A) confirming the finding of the AO passed in mechanical and arbitrary manner which is perverse to the facts on record. Accordingly, we hold that the amount of the payment of Rs 594,864/- by credit card during the Assessment Year 2009-10 stands explained as being TA No. 421/Asr/2019 Aamir Rashid v. ITO 5 transferred to its saving bank account by the parents, in order to meet the expenditure on his studies. 7. Thus, the addition of Rs. 594,864/- made on account of payment made by credit card is deleted. Order pronounced in the open court on 21.12.2022 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr/PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order