Unexplained expenditure under section 69C was deleted after affidavits and identity records proved the source of credit card payments.

Credit card payments were alleged to be unexplained expenditure under section 69C of the Income-tax Act, 1961, but the assessee supported the source with affidavits of friends and relatives, along with PAN and Aadhaar details, showing that the card was used for their personal expenses and cash was returned for payment. That material was accepted as sufficient to explain the source of the payments, and the assessee's explanation was treated as credible. The evidentiary burden was therefore regarded as discharged, and the section 69C addition was directed to be deleted.

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Issues: Whether the addition made as unexplained expenditure under section 69C of the Income-tax Act, 1961 on credit card payments was sustainable in the absence of satisfactory proof of source.

Analysis: The assessee produced affidavits of friends and relatives, supported by PAN and Aadhaar details, to show that the credit card was used for their personal expenses and that cash was returned to the assessee for making the payments. The material placed on record was accepted as sufficient to explain the source of the credit card payments. On that basis, the explanation offered by the assessee was found to be credible and the evidentiary burden was held to have been discharged.

Conclusion: The addition under section 69C was not justified and was directed to be deleted in favour of the assessee.

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