The Income Tax Appellate Tribunal (ITAT), New Delhi Bench deleted addition as cash deposited during demonetization period does not exceed threshold limit.
In course of assessment proceedings, the Assessing Officer noticed that during the demonetization period, assessee, Amar Singh had deposited cash of Rs.2,48,000 in his account maintained with Canara Bank. Therefore, he called upon the assessee to explain the source of such cash deposit.
In reply, assessee submitted that an amount of Rs.2,00,000 was withdrawn from his account held with Canara Bank and Punjab National Bank for investment in house. However, due to demonetization, assessee could not utilize the same. Hence, redeposited in the bank account. Assessing Officer, however, was not fully convinced with the submission of assessee.
Though, the AO accepted the source of cash deposit of Rs.25,000, however, the AO didn’t accept the source of the balance amount of Rs.2,23,000. Accordingly, he added back the amount of Rs.2,23,000 to the income of assessee under Section 69A of the Act. The addition made was also sustained by learned Commissioner (Appeals).
The Counsel appearing for the assessee, Shweta Bansal submitted that as per CBDT Instruction No.3/2017 dated 21.02.2017, in case of an individual having no business income, no verification is required to be made, if the total cash deposits during the demonetization period is up to Rs.2.50 lakhs.
A Division Bench consisting of G S Pannu, President and Saktijit Dey, Judicial Member observed that “In the facts of the present appeal, undisputedly, assessee is a salaried person having no business income. Further, the cash deposited during the demonetization period, does not exceed the threshold limit of Rs.2.50 lacs in terms with the CBDT Instruction noted above. The CBDT instruction being beneficial to assessee, has to be applied. In view of the aforesaid, we delete the addition of Rs.2,23,000 made under Section 69A of the Act.”
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