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Before: Shri V. Durga Rao & Shri G. Manjunatha
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 29.04.2022 relevant to the assessment year 2017-18.
Brief facts of the case are that the assessee filed its return of income for the assessment year 2017-18 on 27. 10.2017 declaring a total income of ₹.8,83,76,930/-. The return filed by the assessee was selected for scrutiny under CASS. Notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was issued on 22.09.2018 and duly served on the assessee. Notice under section 142(1) of the Act was also issued on the assessee. The assessee has filed all the details. On perusal of bank statements, the Assessing Officer has noted that the assessee had deposited cash aggregating to ₹.76,82,500/- in its various accounts held with Tamilnad Mercantile Bank Ltd. during demonetization period in SBN. After considering the submissions of the assessee and verification of sources for the cash deposit, the Assessing Officer allowed cash deposit of ₹.43,88,929/-. Since the assessee could not explain the source for the remaining amount of ₹.32,93,571/-, the Assessing Officer treated the same as unexplained cash deposits of SBN in the hands of the assessee and disallowed under section 69A of the Act. On appeal, the ld. CIT(A) confirmed the disallowance and dismissed the appeal of the assessee.
On being aggrieved, the assessee is in appeal before the Tribunal and raised the following grounds:
1. The learned CIT(A) is not justified in sustaining the addition made by the AO u/s 69A r.w.s. 115BBE of the Act to an extent of Rs.32,93,571/-.
2. The Appellant is operating Hospitals at various places. The Cash deposits totalling to a sum of Rs. 32,93,571/- made during the demonetization period were out of business turnover and income from the same was already offered to tax as business income.
3. It is settled position of law that the income which is already offered to tax cannot be bought within the purview of section 69A r.w.s 115BBE of the Act. The above legal position of law was not taken into account by the CIT(A) while confirming the addition made by the AO.
4. The CIT(A) is not justified in rejecting the reliance placed by the appellant on the decision of ITAT Visakhapatnam in the case of ACIT Vs M/s. Hirapanna Jewellers stating that the facts of the case of the appellant is different from the facts of the case relied upon by the appellant. The CIT(A) failed to consider the legal position deriving from the above mentioned decision i.e. the turnover from the business which is offered to tax cannot be taxed as undisclosed income despite the receipts being accepted in demonetized currency based on mere suspicion but without any material on record. 5. It is also pertinent to point out that the appellant is engaged in medical profession, refusing to accept the demonetized currency would result in undue burden and inconvenience to the patients. 6 In view of the above grounds and other submissions to be made at the time of appeal hearing the addition for a sum of Rs.32,93,571/- to the returned income may be deleted and justice rendered.” 4. On the other hand, the ld. DR has submitted that the assessee has not explained the source with evidences to the extent of disallowance made by the Assessing Officer either before the ld. CIT(A) or even before the ITAT and strongly supported the order passed by the ld. CIT(A).
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the cash deposits of ₹.76,82,500/-, the assessee filed cash book details showing closing cash balance as on 08.11.2016 at ₹.43,88,929/-. However, the assessee could not explain the source for the remaining amount of ₹.32,92,571/- and accordingly, the Assessing Officer treated this amount of ₹.32,93,571/- as unexplained cash deposits of SBN and added to the total income of the assessee. Since the assessee could not explain the source for the cash deposits during demonetization period in SBN, the ld. CIT(A) [NFAC] confirmed the disallowance made by the Assessing Officer. Before the ITAT also the assessee could not explain the source for the cash deposits made during demonetization period. Accordingly, we sustain the order of the ld. CIT(A) [NFAC] and thus, the ground raised by the assessee is dismissed.
In the result, the appeal filed by the assessee is dismissed. Order pronounced on 8th March, 2023 at Chennai.