ITAT deletes addition of cash deposits made during demonetisation:


ITAT deletes addition of cash deposits made during demonetisation:


Shivam Industries Radheshyam Sharma & Co. Vs ACIT (ITAT Delhi) Appeal Number : ITA No. 1612/Del/2021


  1. Cash deposits were made during the demonetization period for Assessment Year 2017-18. Appeal was filed by the Assessee challenging the order of the Commissioner of Income Tax (Appeals) sustaining certain additions made by the Assessing Officer.
  1. The Assessee, in this case, contested the addition of Rs. 8,00,000/- on account of cash deposits during the demonetization period, arguing that the authorities failed to consider past history, relevant documents, and the overall material available on record. The Assessing Officer (AO) justified the addition by highlighting the failure of the Assessee to provide a valid explanation for the cash deposits.

ITAT Delhi held as below:

  1. The Assessee’s books of account were duly audited and not rejected by the AO. Despite the lower cash deposits and the absence of disruption in sales, the CIT(A) failed to provide a valid rationale for sustaining the addition.
  1. Even after observing that the cash deposits were lower than that of the last year, no valid reasons were given by the CIT(A) to sustain the additions.
  1. Consequently, the addition of Rs. 8,00,000/- was unjustified and same may be deleted.


The copy of the order is as under:

1709102360-SHIVAM INDUSTRIES, 1612.DEL (1)