The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, ruled that addition made against housewife for having a deposit of Rs.2,40,000/, during demonetization period, is against CBDT Circular.
The aforesaid observation was made by the Delhi ITAT, when an appeal was filed before it by the assessee, as against the order of the CIT(A), New Delhi, relating to Assessment Year 2017-18.
The ground of the assessee’s appeal being that since the assessee had deposited money during demonetization, the A. O. has added the entire amount of cash deposit of Rs. 2,40,000/- and other income, as per the statement of the assessee as income, which is arbitrary, uncalled for, unjustified and based on surmises and conjunctures, it was submitted by, Advocate Shri Arvind Kumar, the Counsel of the assessee that the assessee is a housewife whose income for the year under consideration was below the taxable limit, and that it was therefore that, no return for AY 2017-18 was filed by the assessee.
With the Counsel for the assessee further submitting that as per the CBDT Instruction No.3/2017, dated 21.02.2017, point no.1, no further verification is required to be made if total cash deposit during demonetization period is up to Rs.2,50,000/, he placed his reliance on the order of the ITAT, Delhi in the case of Neeru Jain vs. ITO, to substantiate his submissions.
However, on the other hand, Shri Om Prakash, the Sr DR, supported the orders of the authorities below.
Hearing the opposing contentions of either sides, and thereby perusing the materials available on record, the Delhi ITAT noted:
“On careful consideration of the above submissions, first of all, I may point out that as per the CBDT Instruction No. 03/2017 dt. 21.02.2017, point no. 1 of Annexure in case of individuals (other than minors) not having any business income, no further verification is required to be made if total cash deposit is up to Rs. 2,50,000/-. In case of taxpayers above 70 years of age, the limit is 5.0 Lacs per person. The source of such amount can be either household savings/savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut- off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc.”
“It is a trite law that the CBDT Instruction are binding on the income tax authorities. Therefore, the cash deposited by assessee in his bank account of Rs. 2,40,000/- from her past savings, out of the cash gifts received on marriage and tuition income should not have been brought to tax as per the CBDT Instruction”, C.M Garg, the Judicial Member of the ITAT coram added.
Thus, allowing the assessee’s appeal, the Delhi ITAT held:
“In view of the foregoing discussion, I hold that the Instruction No.1 of CBDT Circular No.03/2017 dated 21.02.2017 provides that no further clarification or verification is required to be made in a case of an individual when the deposited amount during demonetization period is upto Rs.2,50,000/-. In the present case, the assessee who is a housewife having no other source of income has deposited Rs.2,40,000/- during demonetization period. Therefore, in view of the CBDT Circular and the order of ITAT in the case of Neeru Jain vs. ITO (supra), the addition made by the AO and confirmed by the ld.CIT(A) cannot be held as sustainable as the same is clearly against the instructions issued by the CBDT. Therefore, the sole grievance of the assessee is allowed and the AO is directed to delete the addition. In the result, the appeal filed by the assessee is allowed.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
