Cash Deposits Made During Demonetization Is No Basis For Addition U/s 68, Without Rejecting Audited Books Of Account: Delhi ITAT
Pankaj Bajpai
2 April 2024 11:30 AM IST
On finding that the authorities have not considered the history of the assessee and not even rejected its books of accounts, the New Delhi ITAT deleted the addition sustained by the CIT(A) u/s 68 of the Income Tax Act. The ITAT found that the addition was made u/s 68 on account of huge cash deposits made during demonetization period. The Bench of the ITAT comprising of Yogesh...
On finding that the authorities have not considered the history of the assessee and not even rejected its books of accounts, the New Delhi ITAT deleted the addition sustained by the CIT(A) u/s 68 of the Income Tax Act.
The ITAT found that the addition was made u/s 68 on account of huge cash deposits made during demonetization period.
The Bench of the ITAT comprising of Yogesh Kumar U.S. (Judicial Member) and B.R.R. Kumar (Accountant Member) observed that “The audited books of accounts of the assessee has not been rejected and the sales of the assessee has not been disturbed, then the Revenue Authorities are precluded from making any addition. Even after observing that the cash deposits of the Assessee was much lower than the previous year, the CIT(A) has not given any valid reason to sustain the addition.” (Para 7)
As per the brief facts of the case, the Assessee's return was selected for scrutiny, wherein AO completed the assessment by making an addition u/s 68. On appeal, the CIT(A) sustained the order passed by the AO while considering past trends of the appellant of regularly depositing cash received in the bank account.
The Bench noted that the AO while making the addition held that despite showing huge cash deposits during the year under consideration, the assessee has not offered any valid explanation.
The Bench observed that the onus is on the Assessee to substantiate the source and nature of the cash deposit made during the period of demonization but the Assessee has failed to do so.
The Bench further observed that the CIT(A) while deciding the issue has specifically observed that the assessee was maintaining books of account which were duly audited and the said books of accounts were not rejected by the AO.
The Bench found that the cash deposits of the assessee up to December 2016 were much lower than the cash deposits up to December 2015.
Therefore, on finding that the order passed by the CIT(A) was erroneous, ITAT allowed the assessee's appeal.
Counsel for Appellant/Taxpayer: Nitin Gulati
Counsel for Respondent/Department: Amit Katoch
Case Title: Shivam Industries verses ACIT
Case Number: ITA No.1612/Del/2021
