SAP MEDICALS PRIVATE LIMITED,HYDERABAD vs. ITO, WARD-3(1), HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri Laliet Kumar, Judicial Member Assessment Year: 2017-18 SAP Medicals (P) Ltd Vs. Income Tax Officer Hyderabad Ward-3(1) PAN:AAMCS4547H Hyderabad (Appellant) (Respondent) Assessee by: Shri K.A. Sai Prasad, CA Revenue by: Shri Vijay Bhaskar Reddy, CIT(DR) Date of hearing: 05/07/2023 Date of pronouncement: 07/07/2023 ORDER

Per R.K. Panda, Vice-President

ITA 128 of 2023 SAP Medicals Private Ltd

5. Subsequently, the learned PCIT examined the record and noted that the assessee has deposited cash of Rs.39,74,500/- during demonetization period. From the details furnished by the assessee as available on record, he noted that the assessee had cash balance of Rs.10,73,295/- as on 8.11.2016 and has accepted Rs.39,74,500/- from its debtors who are all private hospitals which were deposited into his bank account. According to the learned PCIT, the Assessing Officer has accepted the contention of the assessee which is contrary to the extant provisions during the demonetization period. He was of the opinion that the same amount should have been brought to tax. Since the same has not been done, the learned PCIT held that the order passed by the Assessing Officer u/s 143(3) on 17.12.2019 is Page 2 of 5

ITA 128 of 2023 SAP Medicals Private Ltd erroneous and prejudicial to the interest of the Revenue. Accordingly, a notice u/s 263 of the I.T Act dated 15.2.2022 was issued to the assessee asking the assessee to explain as to why the order passed by the Assessing Officer should not be set aside. The assessee explained that the money was accepted in demonetized currency from its debtors due to the prevailing circumstances at that time as they were under the belief that they can accept the demonetized currency. It was further submitted that the Assessing Officer accepted the submission, therefore, addition was not made. It was accordingly requested to drop the proceedings initiated u/s 263 of the I.T. Act.

“4.1 The submissions of the taxpayer that the issue of deposit of demonetized currency into its bank account was accepted by the Assessing Officer is not correct as the same is not borne out of record. Assuming without accepting, even if the same was considered by the Assessing Officer, even then the same is not correct as it is violation of the extant provisions regarding dealing with receipt of demonetized currency, as the same was allowed to specified entities Ike banks, petrol pumps, public transport, government hospitals etc. into which category the tax payer does not fall, therefore, the view of the Assessing Officer will not be legally sustainable. In view of the same, the objections of the taxpayer with-regard to proceedings u/s 263 are rejected. 4.2 Coming to the issue of deposit of Rs.39,74,500/- of money received from its debtors, the sum and substance of the arguments of the taxpayer is that the transactions on the nature of trade transactions. The issue is the taxpayer could have received the money. on transfer from its debtors instead of taking the cash in demonetized notes and depositing the same in its bank account, for which, the reason being given Was that the money was received from the debtors for sales made prior to demonetization period and if it did not accept cash at that point of time, it could not have realized the sale proceeds as most of them would have turned bad debts. ln addition to the above, it also Page 3 of 5

ITA 128 of 2023 SAP Medicals Private Ltd submitted license issued by the Drugs Control Administration, Govt. of Telangana which permits the assessee to sell, stock or exhibit or offer for sale or distribute drugs. Therefore, Therefore, the deposits should be considered for acceptance.

ITA 128 of 2023 SAP Medicals Private Ltd the demonetized period. Accordingly, the grounds raised by the assessee are dismissed.