Raju Rajesh Vs ITO (ITAT Bangalore)
In the case of Raju Rajesh vs. ITO (ITAT Bangalore), the tribunal addressed the addition of ₹12 lakh under Section 68 of the Income Tax Act, related to cash deposits during the demonetization period. The assessee, engaged in the sale and service of computer peripherals, had deposited ₹12 lakh in Specified Bank Notes (SBNs) between November 9, 2016, and December 31, 2016. The Assessing Officer (AO) deemed the deposits as unexplained, citing a lack of authorization to accept SBNs post-demonetization. This addition was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)], who ruled that the source of the cash deposits remained unverified.
However, the ITAT reversed the addition, accepting the assessee’s explanation that the deposits originated from accounted sales reflected in the books of accounts. It noted that neither the AO nor the CIT(A) had disputed the sales records provided by the assessee, which established a clear nexus between sales and the deposits. The tribunal emphasized that since the sales had been disclosed and taxed, no further addition could be justified. Consequently, the ITAT directed the deletion of the ₹12 lakh addition while dismissing unrelated grounds. This decision reinforces the principle that documented and taxed business transactions should not lead to further additions without specific irregularities.
