Explained credit card expenditure defeats section 69C addition where affidavits and identity details support the source.

Credit card payments were alleged to be unexplained expenditure under section 69C, but the assessee supported the payments with affidavits from friends and relatives, together with PAN and Aadhaar details. The material showed that the card was used for their personal expenses and that cash had been returned to the assessee for making the payments. On that evidentiary basis, the source of the payments was treated as explained and the addition as unexplained expenditure was rebutted. The addition under section 69C was deleted.

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Issues: Whether the credit card payments were rightly treated as unexplained expenditure under section 69C of the Income-tax Act, 1961.

Analysis: The assessee furnished affidavits of friends and relatives, along with PAN and Aadhaar details, stating that the credit card was used for their personal expenses and that cash had been returned to the assessee for making the payments. The evidentiary material was accepted as sufficient to establish the source of the credit card payments and to rebut the addition made as unexplained expenditure.

Conclusion: The addition under section 69C was deleted and the issue was decided in favour of the assessee.

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