TaxTMI 
TaxTMI 
2024 (11) TMI 318
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.... with impounded material were forwarded to the Assessing Officer. Accordingly, the case was selected for scrutiny and notice u/s 148 of the Act was issued and served on the assessee on 29.03.2012. Accordingly, notice u/s 143 (2) of the Act was issued and served on the assessee. Ld. AR of the assessee appeared from time to time and filed the relevant information as called for. 4. The Assessing Officer considered the income declared by the assessee and statements on oath recorded during the course of survey proceedings, analysed materials impounded and information received from FT & TR, the assessment was finalized by the Assessing Officer by observing as under. Assessing Officer observed that during survey proceedings on 15.04.2010, data from the mobile of assessee was extracted from which it was found that assessee had credit card details of many of his relatives. These details include the card number, type of card, etc.. These information's were sufficient for the assessee to use the credit cards for his personal expenses, source of which were not disclosed in its books of account for tax purposes. The Assessing Officer observed that all these credit cards are issued by internati....
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.... Mere submission of the assessee cannot be accepted as evidence and proof and the assessee failed to discharge the onus of proving in this regard. It is alleged that his wife is an NRI, hence is staying abroad either in US or UK and while the assessee is maintaining their credit cards in India and making the payments accordingly. The assessee has not shifted the burden of proof to Department as he has failed to produce those persons who are supposed to confirm on oath with relevant documentary evidences regarding owning up of the ownership of the credit cards found in the possession of the assessee during the survey proceedings. The claim of the assessee is based on oral evidence which is not accepted in the Income Tax proceedings, hence are liable to be treated as asset of the assessee. During the year, the assessee has made huge payments through these credit cards as has been gathered from enquiries collected, hence the expenses incurred are liable to be treated as unexplained expenditure u/s 68 of the Act because the source of the expenditure is not explained. Accordingly, the Assessing Officer proceeded to make the addition u/s 69C of the Act by converting the amount of foreign....
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....to notice u/s 143(2) of the Act. 10. With regard to addition u/s 69C and 68 of the Act, ld. CIT (A) sustained the additions with the following observations :- "4.1 I have considered the facts of the case, basis of additions made by AO and submissions of the appellant. As it can be seen from the assessment order that the aforesaid credit cards were detected during the survey proceedings u/s 133A of the IT Act having evidentiary value of the material found. The onus was on the appellant to explain that why he was in possession of these credit cards having knowledge of each and every entry & transactions and being capable of using these credit cards regularly for his own personal purposes. Since the appellant was using these credit cards, onus was on him to explain the source of funds available in these credit cards and usage of those funds wholly and exclusively by relevant person, if not by him. He failed to give any such documentary evidence or produce the persons in whose name the credit cards were opened to establish that these cards were actually belonged to those persons and funds available in those cards also belonged to them only. The appellant also failed to explain the s....
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.... it cannot be applied for scrutinizing. 2. Without prejudice to the above, the Ld. Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs. 5,12,85,8951- u/s. 69C of the I.T. Act, 1961 on account of alleged unexplained expenditure incurred by the appellant through 14 credit cards in the assessment year under consideration. 2.1 The Ld. Commissioner of income-tax (Appeals) failed to appreciate that the credit cards mentioned in the reasons recorded, 12 credit cards did not belong to the appellant and they were never found in the possession of the appellant ( except two credit cards). 2.2 The Ld. Commissioner of Income-tax (Appeals) failed to appreciate that 12 of the 14 credit cards, the impugned credit cards never belonged to the appellant nor were found in his possession nor the department has been able to establish that the transaction in respect of these credit cards was made by the appellant. 2.3 The Ld. Commissioner of Income-tax (Appeals) failed to appreciate that in respect of 2 credit cards payment was made by the wife of the appellant, who is an Non Resident Indian, out of her own funds and no part of it was borne by the appellant. 2.4 The Ld. ....
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....elhi High Court in PCIT vs. Meenakshi Overseas Pvt. Ltd. (2017) 395 ITR 677 (Delhi) dated 26.05.2017 and he brought to our notice page 680 of the decision wherein similar case of information received from DIT (Inv.) with regard to accommodation entries. The Assessing Officer proceeded to issue notice u/s 148 of the Act after taking approval from ACIT wherein similar reasons for the plea of income escapement was recorded and then he brought to our notice page 684 of the decision. The Hon'ble High Court has observed that one would have expected the Assessing Officer to point out what he found when he went through the information and what in such information led him to prove that the income has escaped assessment. They observed that the same was absent. He submitted that the fact in the present case is exactly similar on the above observation of Hon'ble High Court. Further, he relied on the decision of Hon'ble Delhi High Court in Well Trans Logistics India Pvt. Ltd. vs. Addl. CIT 2024 Hon'ble High Court Online Del 6149. He brought to our notice page 7 of the decision wherein similar reasons were recorded for issue of notice u/s 148 wherein Assessing Officer has merely considered t....
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....case of the assessee. He further submitted that in this case, the Assessing Officer issued 143(2) notice to the assessee and in response, ld. AR of the assessee appeared on behalf of the assessee from time to time and the same fact was already recorded in the assessment order itself. 17. Ld. DR further submitted that all the credit cards were found in the mobile of the assessee and the assessee was using those credit cards. He submitted that the presumption is that the tangible material belongs to the assessee and the assessee has not provided any detail before the Investigation Wing at the time of survey nor before the Assessing Officer. He relied on the findings of the ld. CIT (A) that assessee has not provided any details except names on the credit cards. 18. In rejoinder, ld. AR for the assessee submitted that para 3.3 of the appellate order wherein ld. CIT (A) observed that the contentions of the assessee that the Assessing Officer should have made independent enquiry and examined the transactions before recording the reasons are also misplaced. He submitted that this observations is against the decision of Hon'ble Delhi High Court and further he submitted that ld. CIT (A) c....
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....the information forwarded by the Investigation Wing was not reflected anywhere in the information available with the Assessing Officer. Therefore, the Assessing Officer has no option but to reopen the assessment to make further investigation. Accordingly, the Assessing Officer also issued notice u/s 143(2) of the Act to collect the information. In response only, ld. AR of the assessee attended the proceedings and submitted the relevant information. Therefore, the submissions of the assessee and relying on the decision of Hon'ble Delhi High Court are distinguishable to the facts on record. Accordingly, grounds raised by the assessee are dismissed and also we observed that ld. CIT (A) has elaborately discussed the above points and rightly dismissed the grounds raised by the assessee. 20. With regard to merits of addition made by the Assessing Officer, we observed that assessee was found with the information in his mobile relating to several credit cards in US $ and UK Pound which belongs to assessee, his friends/relatives including his wife. Since the information relating to these credit cards are in the mobile of the assessee, as the assessee was able to utilize the same without th....