NEERAJ SHRIDHAR,GURGAON V. INCOME TAX OFFICER, GURGAON

ITA 1327/DEL/2025

AI Insights

The case involves Neeraj Shridhar, a salaried employee, who appealed against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The appeal was initially time-barred by 184 days, but the Tribunal condoned the delay based on the assessee's medical records and affidavit. The core issue was the addition of Rs.19,12,651/- to the assessee's income, which the Assessing Officer claimed was unexplained credit card expenditure. The assessee argued that the credit card was used by his friend’s company for business-related expenses, and the company reimbursed the credit card bills. The Tribunal found the assessee's explanation plausible and supported by affidavits and certificates from the company, leading to the decision to allow the appeal and delete the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361235 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR
• Assessee Lawyers: ANSHUL GUPTA; CHARTERED ACCOUNTANT
• Keywords: Condonation of delay; Set aside
• Section: 133(6)

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.1327/िदʟी/2025 (िन.व. 2017-18) ITA No.1327/DEL/2025 (A.Y.2017-18) Neeraj Shridhar, 1424-A, Maruti Vihar, Gurgaon, Haryana 122001 PAN: BAMPS-7225-J ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward-3(1), HSIIDC Building Vanijya Nikunj, Udhyog Vihar, Phase-V, Gurgaon, Haryana 122001 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Anshul Gupta, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Manoj Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 21/05/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 21/05/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)/Additional/Joint Commissioner of Income Tax (Appeals)-8, Delhi (hereinafter referred to as 'the CIT(A)') dated 30.06.2024, for assessment year 2017-18. 2. The appeal is time barred by 184 days. The assessee has filed a petition for condonation of delay supported by an affidavit and Medical records. After perusal of same, I am satisfied that delay in filing of appeal is not intentional, but is for the 2 ITA No.1327/Del/2025 (AY 2017-18) reasons stated in the condonation petition which appears to be bonafide. Hence, delay in filing of appeal is condoned and appeal is admitted for hearing on merits. 3. Shri Anshul Gupta, appearing on behalf of the assessee submits that the assessee is a salaried employee and had filed his return of income declaring total income of Rs.3,11,470/- on 04.08.2017. The case of the assessee was selected for limited scrutiny under CASS to verify large payments made for credit card purchase including cash payments. In assessment proceedings the assessee explained before the AO that during Financial Year 2016-17 the assessee's credit card was used by one of his friend to set up his business. Substantial business related payments were made by his friend/company floated by his friend M/s. Southy Hospitality & Services P. Ltd. His friend made payment of credit card bills to the extent credit card was used for business purpose. The Assessing Officer (AO) disbelieved the submissions made by the assessee as at that time no corroborative evidence was furnished by the assessee before the AO. Thus, the AO made addition of Rs.19,12,651/-. The assessee carried the issue in appeal before the CIT(A), but remained unsuccessful. Hence, this appeal by the assessee. The ld. AR of the assessee placed on record an affidavit sworn in by Umakant Padha authorized by Board Resolution of M/s. Southy Hospitality & Services P. Ltd. wherein it has been stated that the credit card of Mr. Neeraj Shridhar was used by the company for making payments of electricity bills and some other purchases and credit card bills were paid by the company through bank account also placed on record a certificate from the company confirming that assessee’s credit card was used for paying companies petty expenditure and utility bills. The ld. AR thus prayed for deleting the addition. 3 ITA No.1327/Del/2025 (AY 2017-18) 4. Per contra, Shri Manoj Kumar representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. 5. Both sides heard, orders of the authorities below examined. The short issue in appeal is with regard to addition of Rs.19,12,651/- on account of credit card payments. The AR for the assessee reiterated the submissions as were made before the lower authorities with regard to use of credit card and the payments. In support of assessee’s submissions, the AR for the assessee has furnished an affidavit of one Umakant Padha duly authorized by Board Resolution of M/s. Southy Hospitality & Services P. Ltd. The relevant contents of the affidavit reads as under:- “1. That our company was into business of Operating Restaurant in Various Places in Delhi NCR. 2. That during the setup period i.e. 2016-2018 we have used Mr. Neeraj Shridhar's Credit Cards for making payments of our Electricity Bills & Some other Purchases. 3. He offered his credit card on friendly node to facilitate some liquidity and credit period since being a new company, liquidity problem was there. 4. That we had made payment of his credit cards for the usage done by us through our account & though our Franchise Account namely M/s Emphasis having PAN No. BBXPM6091C. 5. That through credit cards of Mr. Neeraj Shridhar, we had made payments for electricity bills, Some Electrical Goods & some Groceries/Ration and payments of those Credit Card Dues for our purchases were done by us and those payments does not include any finance part of Mr. Neeraj Shridhar. 6. Mr. Neeraj Shridhar has voluntarily offered us his cards for such usage out of his will to help us in getting some credit through his credit cards. 7. That total Amount utilized by us During the F.Y. 2016-17 was approx. 19,00,000 & that in F.Y. 2017-18 was approx. 78,00,000. Our affidavit is restricted & Limited to above stated amount only.” 4 ITA No.1327/Del/2025 (AY 2017-18) 6. In addition to above, the assessee has also filed a certificate dated 01.07.2019 from the aforesaid company i.e. M/s. Southy Hospitality & Services P. Ltd. confirming the stand of assessee. The same reads as under: “This is to certify that Mr.Neeraj Shridhar has used his credit card for paying company's petty expenditures and utility bills. And same has been reimbursed from the company. This is on account of expenditure of the company.” 7. Similar submissions were made by the assessee before the AO. The AO made no effort to verify submissions of assessee by issue of notice u/s. 133(6) of the Act to the company to verify contention of the assessee. 8. Considering entire facts of the case and the documents placed on record, the explanation furnished by the assessee for large payments made for use of credit card is plausible, hence, accepted. Thus, addition of Rs.19,12,651/- is directed to be deleted. In the result, impugned order is set aside and appeal of the assessee is allowed. Order pronounced in the open court on Wednesday the 21st day May, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 21.05.2025 NV/- ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. 5 ITA No.1327/Del/2025 (AY 2017-18) BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "