Case Law Details
Shivam Industries Radheshyam Sharma & Co. Vs ACIT (ITAT Delhi)
The case of Shivam Industries Radheshyam Sharma & Co. Vs ACIT, adjudicated by ITAT Delhi, revolves around the addition of cash deposits made during the demonetization period for Assessment Year 2017-18. The appeal filed by the Assessee challenges the order of the Commissioner of Income Tax (Appeals) sustaining certain additions made by the Assessing Officer.
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.
However, upon appeal, the Commissioner of Income Tax (Appeals) (CIT(A)) partially upheld the addition, considering factors such as past trends, audited books of account, and the overall decline in cash sales during the relevant period. While the CIT(A) recognized the lower cash deposits compared to the previous year and the regular maintenance of audited books of account, a partial addition of Rs. 8,00,000/- was sustained.
The ITAT Delhi scrutinized the decision of the CIT(A) and observed that 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. Consequently, the ITAT Delhi concluded that the addition of Rs. 8,00,000/- was unjustified and ordered its deletion.
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