No Addition for Deposits up to Rs. 250,000 during Demonetization by Salaried Person: ITAT deletes Addition against Cost Accountant [Read Order]

While deleting an addition against a Cost Accountant, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the same cannot be made against an Individual who is earning income from salary filing return of income has deposited amount of Rs.2,30,000/- during demonetization period, as per the relevant CBDT circular.

The assessee is a qualified professional (ICWA). The main source of income of the appellant is a salary income and the appellant is regularly filing ITR. For the concerned assessment year, the appellant had filed the ITR declaring a gross total income of Rs. 5,13,458/-. In the year under consideration the appellant has also deposited a cash in his bank account amounting to Rs.2,30,000/-. The AO observed that the source of the deposit was not explained and therefore, made an addition.

The assessee, in its defense, relied on an Instruction issued by the Central Board of Direct Taxes, in the case of an Individual, wherein it was clarified that no further verification is required to be made if total cash deposit is up to Rs.2,50,000/-. It was therefore, contended that in the case of present assessee who is an Individual earning income only from salary then addition made by the Assessing Officer and confirmed by the ld. CIT (Appeals) cannot be held as sustainable and valid in law.

Shri Chandra Mohan Garg, Judicial Member observed that “Instruction No. 1.1 to a logical conclusion that when the CBDT Circulars clearly provide, no further clarification and verification is required to be made in the case of an Individual who is earning income from salary filing return of income has deposited amount of Rs.2,30,000/- during demonetization period. Therefore, addition made by the Assessing Officer and confirmed by the ld. CIT (Appeals) cannot be held as sustainable as the same is clearly against the Instruction issued by the CBDT. Therefore, sale ground of appeal of the assessee is allowed.”

To Read the full text of the Order CLICK HERE

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