A Mumbai taxpayer who declared annual income of just Rs 6.30 lakh found himself facing a tax addition after the Income Tax Department noticed that he had paid credit card bills worth Rs 27.65 lakh in a year, including nearly Rs 14 lakh in cash.

The tax department treated the cash payments as unexplained money and added the amount to his income under Section 69A of the Income Tax Act.

However, after examining income tax returns, bank statements and other evidence submitted by the taxpayer and his family members, the Income Tax Appellate Tribunal (ITAT) granted substantial relief and deleted a large part of the addition.