DEPUTY COMMISSIONER OF INCOME TAX, AGRA vs. CHAUHAN MEDICARE PVT LTD, MATHURA

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 174/Agr/2026 Assessment Year: 2017-18 DCIT, Circle -1(1)(1), Room No Vs. Chauhan Medicare Pvt Ltd, N.H. 304, Aayakar Bhawan, Sanjay 2, 101, Milestone, Delhi Agra Place, Agra-282002 Road, Kosi Kalan, Mathura- 281403 PAN : AABCC8147Q (Appellant) (Respondent) Assessee by Shri M.M. Agarwal, C.A. Department by Shri Harsh Siddharth Gautam, Sr (DR)

Date of hearing 23.04.2026 Date of pronouncement 21.05.2026 ORDER

PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 30.12.2025 passed in Appeal No CIT (APPEALS) 1, AGRA/10321/2019-20 by the ld Commissioner of Income Tax, NFAC(Delhi) [hereinafter referred to as the “CIT(A)] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act), for the A.Y. 2017-18, wherein ld CIT(A) has deleted the impugned addition of Rs. 1,36,13,000/- added u/s. 68 r.w.s 115BBE of the Act, vide assessment order dated 09.12.2019 passed u/s. 143(3) of the Act. 2. The brief facts state that respondent assessee Chauhan Medicare Pvt Ltd is a private limited company. The assessee e-filed its return of

ITA No.174/Agr/2026 income on 25.08.2017, declaring total income of Rs. 1,33,02,010/-. Subsequently, the case was selected for scrutiny under CASS for the reason that there was abnormal increase in cash deposit of Rs. 1,36,13,000/- during the demonetization period (from 09.11.2016 to 31.12.2016), as compared to average rate of cash deposit during pre demonetization period. Statutory notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee, seeking assessee to file its response on the proforma submitted by the department. Assessee submitted the required informations on the proforma as desired by the department. Ld assessing officer remarked that this abnormal increase in cash deposit, which is credit entry made in the books, indicating it to be the receipt from the hospital was not acceptable. Ld A.O. treated the entire cash deposit as unexplained and added it in the total income of the assessee u/s. 68 r.w.s 115BBE of the Act, vide assessment order dated 09.12.2019 passed u/s. 143(3) of the Act. 3. Aggrieved, assessee preferred an appeal before ld CIT(A), who held that there was steep increase in cash deposit during the demonetization period as compared to the same period during the preceding year. Ld CIT(A) held that assessee has disclosed said receipts in its books of accounts. Increase in the turnover or cash receipts by itself cannot be a ground for addition, hence, deleted the said addition.

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ITA No.174/Agr/2026 4. Aggrieved, revenue has preferred this appeal on the following grounds: “1. That the CIT(A) has erred in law and on facts in deleting the addition of amounting to Rs. 1,36,13,000/- on account of unexplained credit under section 68. 2. That the CIT(A) has erred in law and on facts in considering the addition of amounting to Rs. 1,36,13,000/- based on suspicion, conjectures or surmise, whereas the Director of the Company, Sh. Dr. Dev Virat Chauhan, had clearly accepted that he had not provided the receipts to the Indoor patients for the treatment. 3. That the CIT(A) has erred in law and on facts in considering the facts that the Director of the Company, Sh. Dr. Dev Virat Chauhan, that during the statement, the Director of the company has stated that some of the details regarding source of cash deposit during demonetization i.e. 09.11.2016 to 31.12.2016, Receipt of outdoor treatment and Receipt of indoor treatment would be provided in two days but during the assessment proceedings receipt of the patients of indoor treatment could not be furnished by the Assessee, which is the basis of addition or Rs. 1,36,13,000/u/s 68 of the I.T. Act. 4. That the appellant craves leave to add or delete or alter or modify any one or more ground (s) of appeal during the appellate proceedings.” 5. Perused the records and heard ld Sr DR for the appellant revenue and ld representative for the respondent assessee. 6. The main point for determination, on the basis of aforesaid grounds raised under appeal, is as to whether ld CIT(A) has erred in deleting the addition, amounting to Rs. 1,36,13,000/- deposited by the assessee during the demonetization period from 09.11.2016 to 31.12.2016?

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ITA No.174/Agr/2026 discharge, amount received and date of receipt running into 137 pages, chart of day to day x-ray receipts, daily collection register, indoor daily case register, indoor patient register daily summary, outdoor patient income summary, pathology income summary, ultrasound income summary, ledger account of doctor’s salary, other salary ledger, salary group summary, ledger of medicine expenses with bills thereof etc. Ld AR submits that the income received during the year under consideration was shown in the return and the supporting documents were also submitted during the assessment proceedings. Ld AR prays to sustain the impugned order and dismiss revenue’s appeal. 8. Ld Sr DR has submitted that the copies of patient’s register at pages 237 to 398 of assessee’s paper book do not mention the name of the hospital. Ld DR supports the assessment order and prays to quash the impugned order. 9. We note that the said cash, deposited in assessee’s bank account are the receipts in accordance with assessee’s book entries. Assessing officer has neither rejected the books of accounts nor disturbed any result thereof. The relevant paras 7.3 to 7.9 of the impugned order are reproduced as under: “7.3 It is seen that assessing officer has mainly raised suspicion on following points: a. Assessee has not maintained proper receipt registers of Outpatient Department (OPD) as well as Indoor Patient Department (IPD) during the impugned year as per Income Tax Rules. 4 | P a g e

ITA No.174/Agr/2026

b. Assessee has not given any receipt of Indoor Treatment during the impugned year. c. Assessee seemed to manipulate indoor treatment registers. d. The percentage increase of cash deposit in bank during demonetization period i.e. 09.11.2016 to 30.12.2016 comparison with the same period in preceding year comes to 1316% which is again an indicator, whereby the explanation offered by the Assessee cannot be believed. e. Total cash deposit during F.Y. 2016-17 has gone up by 265% as compared with previous year i.e. F.Y. 2015-16. This abnormal increase in cash deposit of Year of year comparison also establishes that the credit entry made in the books showing it as receipt from hospital cannot be considered acceptable. 7.4 In the background of above observations made by the Assessing Officer. I have visited all the submissions made by the assessee during the assessment proceedings. It includes medicine expenses, lab sales invoices, indirect expenses, salary, surgical invoices, surgical store receipts receipts, lab sales invoices, x-ray lab receipts, OPD daily and monthly receipts, IPD daily and monthly receipts, daily cases register, cash book, bank account statement, Operation theatre expenses, Pathology lab daily income register, ECG, USG daily receipts register etc. 7.5 It is emanating from the various submissions made by the assessee that it has disclosed the income received during the impugned year in its ITR and the supporting documents as mentioned above have been submitted before the Assessing Officer during the assessment proceedings. 7.6 Assessing Officer has not pin-pointed the defect in the submissions made by the assessee. Assessing Officer has stated that the assessee has not maintained properly the receipt registers of OPD and IPD. However, this is general statement and the specific defect has not been pointed out by the assessing officer. Further, Assessing Officer has stated that the assessee seemed to manipulate the indoor patient register. However, assessing officer has not brought anything on record to support its observation. There has been steep increase in the cash sales during the demonetisation period as compared to the same period during the preceding year. Assessing Officer has concluded that such abnormal increase as hospital receipt cannot be accepted. 7.7 I am of the considered opinion that assessment must be based on evidence, not on suspicion, conjectures or surmises. In the impugned case, assessee has disclosed all the receipts in its books of accounts. Assessee has disclosed total income of Rs. 1,33,02,010/- in its ITR for the impugned year. The increase in cash deposits during the demonetisation period as compared to the same period during the preceding year is steep but the assessee has disclosed such receipts in its books of accounts. In my considered opinion, increase in turnover or cash receipts by itself is not a ground for addition. The Assessing Officer must establish that receipts are bogus, or they represent unexplained money of the 5 | P a g e

ITA No.174/Agr/2026 assessee. In the impugned case, assessing officer has not brought any cogent material on record to prove that receipts are bogus or the cash deposits represent the money other than the receipts in the books of accounts. 7.8 Mere observation that the assessee "seemed to have manipulated" records without bringing any material on record has no evidentiary value. If books are to be disbelieved, the AO must point out specific defects, and invoke section 145(3) by rejecting the books of account. In the present case, no specific instance of manipulation is cited and no corroborative evidence is brought on record. Also, books are not rejected u/s 145(3). Hence, such an observation is purely conjectural and cannot be the basis of addition. 7.9 In this background, I am of the considered opinion that the cash deposits in the bank account are the receipts shown in the books of accounts and hence the addition of Rs. 1,36,13000/- is deleted.” 10. We find that ld CIT(A) has left no stone unturned in concluding that the said cash deposit in assessee’s bank account are the receipts shown in assessee’s books of accounts. The increase in the turnover or cash deposit by itself cannot be a ground for the said addition. We do not find any error or infirmity in the impugned order which is speaking and well reasoned. The aforesaid point is accordingly determined in negative against the appellant revenue and in favour of respondent assessee. The appeal is liable to be dismissed.

Order pronounced on – 21.05.2026

Sd/- Sd/- (S RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 21.05.2026

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ITA No.174/Agr/2026 Aamir Siddiqui, PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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