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Facts
The assessee challenged the addition of Rs. 1,92,648/- made by the AO and confirmed by the CIT(A) on account of alleged unexplained medical expenses for the treatment of Late Sh. Parasram Kukreja. The assessee claimed these expenses were incurred by his wife, Smt. Saroj Jain, and recorded in her books.
Held
The Tribunal held that the CIT(A) was incorrect in confirming the addition. The medical expenses of Rs. 1,92,648/- were found to be covered by the Rs. 2.50 lacs medical expenses recorded in the capital account of Smt. Saroj Jain, supported by documentary evidence.
Key Issues
Whether the addition of Rs. 1,92,648/- for medical expenses is justified when the same is explained by the wife's books of accounts and supported by evidence.
Sections Cited
69C, 139(1), 153A, 132(4), 132(4)
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “A” JAIPUR
Before: DR. MITHA LAL MEENA, ACCOONTANAT M EMEBER & DR. S. SEETHALAKSHMI, JUDICIAL MEMEBER
Assessee by: SHRI P.C. PARWAL, C.A. Revenue by: SHRI RAJESH OJHA, CIT-DR : 15/07/2025 Date of Hearing Date of Pronouncement: 11/09/2025 ORDER Per: Dr. M. L. Meena, AM:
This appeal by assessee is directed against the order of the Commissioner of Income Tax, Appeal Udaipur-2 [hereinafter referred to as “the CIT(A)”] dated 27.02.2025 for the assessment year 2014-15 challenging therein the addition of Rs. 1,92,648/- u/s 69C of IT Act on account of alleged unexplained medical expenses for medical treatment of Late Sh. Parasram Kukreja. only issue disputed is the confirmation of the addition of Rs.1,92,648/- u/s 69C of IT Act by the Ld. CIT (A) on account of alleged unexplained medical expenses for medical treatment of Late Sh. Parasram Kukreja. The ld. counsel for the assessee submitted that the Ld. CIT(A) was not justified in brushing aside the explanation of assessee that these medical expenses were incurred by his wife Smt. Saroj Jain which has been duly recorded in her books of accounts.
The Ld. AR explained the facts of the case sating that the assessee derives income from director's remuneration, rent, interest and agricultural income and he had filed the return declaring total income of Rs.9,85,590/- u/s 139(1) of the Act on 31.07.2014. Consequent to a search conducted on the assessee on 18.04.2018, the same income as declared in the original return was filed in response to notice u/s 153A of the Act.
The Ld. AR explained that in the search, Exhibit 26 of Annexure AS being a file relating to an accident of appellant was found. The assesse in reply to Q. No.25 of his statement admitted that he incurred Rs.3.50 lacs on medical treatment of late Sh. Parasram Kukreja which is offered for tax.
However, in post search proceedings assessee filed a retraction letter along with affidavit (APB, Pgs. 14-19) where it was stated that the expenditure of Rs.2.50 lacs were declared in the return filed by Smt. Saroj Jain w/o assessee. During the course of assessment proceedings, The AO ₹ has accepted that Smt. Saroj Jain has shown medical expenses of 2.50 lakhs in her capital account but observed that the incurred expenditure which was claimed as medical expenses of Rs.2.50 lacs might be incurred in other expenditure which was claimed as medical expenses and thus made addition of Rs.3.50 lacs u/s 69C of the Act.
From the impugned order, it is noted that the Ld. CIT(A) at Pg 10-12 has observed that assessee has furnished documentary evidences to established that admission made during search was under the incorrect impression of facts. The assessee admitted before the AO that the total expenditure incurred is Rs.1,92,648/- which is also supported by the certificate issued by Sudha Hospital, Kota dt. 24.08.2013 of Rs.1,88,318/-.
However, the claim of assessee that entire expenditure was made by his wife was not stated in the statement recorded u/s 132(4) of the act. The AR argued that it is proved beyond doubt that expenditure recorded in books of Smt. Saroj Jain is related to the treatment of Parasram Kukreja. Therefore, the Ld. CIT (A) was not justified in confirming the addition to the extent of Rs. 1,92,648/- He pleaded that the addition may be deleted. statement given u/s 132(4) of the Act is sacrosanct and credible evidence.
The Ld. CIT (DR) submitted that the contents of the documents are unambiguous and clear. The payment of cash of Rs. 1,92,648/- is accepted by the appellant. The transaction of cash was a past event which already took place as per the seized document. The date of transaction is noted on the seized document. It cannot be said that the addition is based on the statement recorded u/s 132(4) of the Income Tax act. The statement is corroborated by the seized documents which are found from the premise of the assessee. The acceptance by the assessee during the search was only reconfirmed of the transaction. But the failed to rebut the contention of the appellant that the said medical expenditure stands explained as duly accounted for in the books of the wife of the assessee with corroborative evidence.
Thus, the limited issue before us is whether the expenditure of Rs.1,92,648/- found in the seized annexure is covered by the medical expenses of Rs.2,50,000/- shown in the capital account of Smt. Saroj Jain or not. In this context, it is noted that Sh. Parasram Kukreja was severely injured in an accident by a car driven by Smt. Saroj Jain w/o assessee and therefore Smt. Saroj Jain borne the entire expenditure of medical treatment Kota during post search investigation with the support of an affidavit dt.
16.08.2018 where assessee retracted from his statement u/s 132(4) of the Act.
On perusal of the aforesaid affidavit, we find that it has been explained at para 10 of the said affidavit that as per Exhibit 26, the expenditure incurred on medical facility was Rs.1,92,648/- but Smt. Saroj Jain in her capital account has declared medical expenses of Parasram Kukreja at Rs.2.50 lacs. In support of the same copy of return and capital account of Smt. Saroj was filed (APB, Pgs. 10-13). This affidavit was not controverted by the lower authorities.
The Hon'ble Supreme Court in case of Mehta Parikh & co. vs. CIT 30 ITR 181 at Pg 187 held that the rejection of affidavit filed by assessee is not justified unless the deponent has either been discredited in cross examination or has failed to produce other supporting evidence when called upon to do so. It is further noted that in the capital account of Smt. Saroj Jain, against the medical expenses, the name of Parasram Kukreja is also mentioned in the bracket. Therefore, in our view, the Ld. CIT(A) was incorrect in holding that assessee has not explained how the transaction of Rs.1,92,648/- is linked to the transaction of Rs.2.50 lacs noted in the capital Rs.1,92,648/- is covered by the medical expenses of Rs.2.50 lacs recorded in the capital account of Smt. Saroj Jain.
Accordingly, we hold that the decision of the Ld. CIT (A) in confirming the addition Rs.1,92,648/- on account of medical expenses is perverse to the facts on record and as such deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced as on 11/09/2025 in accordance with rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.