TaxTMI 
TaxTMI 
2025 (1) TMI 1289
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.... of sixteen appeals preferred by four assessees. The appeals preferred by the assessees are directed against sixteen orders of the CIT(A), Chennai, all dated 29.11.2024. The relevant assessment years are 2019-20 to 2022- 23. Common issue is raised in these appeals. Hence, they were heard together and are being disposed off by this consolidated order. 2. The solitary issue raised is whether the CIT(A) was justified in confirming the addition made by the AO u/s. 2(24)(iv) of the Income Tax Act, 1961 (hereinafter the 'Act') inspite of the fact that company in which the assessee is a Director has already disallowed the credit card payment being personal in nature u/s. 37(1) of the Act. We shall narrate the facts in ITA Nos.3089/CHNY/2024 to ....
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....148 of the Act and the additions made are as under:- Particulars 2019-20 2020-21 2021-22 2022-23 Assessment completed u/s 147 r.w.s. 143(3) 147 r.w.s. 143(3) 147 r.w.s. 143(3) 143(3) Return of income filed u/s. 139(1) of the Act Rs.4,40,14,220/- Rs/1,90,09,250/- Rs.99,91,010/- Rs.1,26,43,470/- Return of income filed in response to notice u/s. 148 Rs.4,40,14,220/- Rs.1,90,09,250/- Rs.99,91,010/- - Addition towards credit card payment u/s. 2(24)(iv) Rs.28,29,702/- Rs.20,92,543/- Rs.19,21,825/- Rs.22,80,572/- 4. Aggrieved by the assessments completed for assessment years 2019-20 to 2022-23, the assessee preferred appeals before the First Appellate Authority. The CIT(....
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....tor as perquisite u/s. 2(24)(iv) of the Act. 7. We have heard rival submissions and perused the material on record. The addition u/s. 2(24)(iv) of the Act in the hands of the assessee-Director amounts to double taxation for the following reasons: i) The Company, has already disallowed the personal expenses under Section 37(1) of the Act in its computation of income for the relevant assessment years and paid the applicable taxes. ii) The addition made by the AO results in taxing the same expenditure in the hands of both the Company and the assessee, which is contrary to the principle that an amount cannot be taxed twice. iii) The provisions of Sections 2(24)(iv), 17(2)(iv), and 28(iv) of the Act are not applicab....
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....e impugned order erred in confirming the addition made by the assessing officer towards credit card payments u/s 2(24)(iv) of the Act. As mentioned earlier, the company had already disallowed the credit card payments related to personal in nature under section 37[1] of the Act as agreed by the assessee before the DDIT[investigation] during the course of the search. The action of the assessing officer and CIT(A) amounts to double taxation, once in the hands of the company and then in the hands of the assessee. 10. We find that the issue is squarely covered in favor of the assessee by the order of the ITAT, Chennai Bench, in the case of ACIT Vs. Shri Ali Asgar Shamsuddin in ITA No.242/Mds/2014 (order dated 05.12.2004) which followed the or....
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....ands of the company. 13. In the instant case, it is an undisputed fact that the company had agreed before the DDIT[Investigation] and disallowed the credit card payments being personal in nature u/s. 37(1) of the Act while filing the return of income of the company for the assessment years under consideration. Once, the company, did not claim the credit card payments being personal in nature as business expenditure while computing the business income, (due to disallowance made by the company), the aforesaid credit card payment relating to personal in nature cannot be taxed again in the hands of the assessee-director as income u/s. 2(24)(iv) of the Act. 14. The assessing officer himself has observed that during post search proceedings,....