ACIT, NCRB, STATUE CIRCLE vs. BALVIR SINGH TOMAR, ADARSH NAGAR

आयकरअपीलीय अधिकरण] जयपुरन्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh jkBkSM+ deys'kt;UrHkkbZ] ys[kk lnL; ,o JhujsUnzdqekj] U;kf;dlnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;djvihy la-@ITA No.283/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2017-18 cuke ACIT, Balvir Singh Tomar, Vs. NCRB, Statue Circle B-4, Govind Marg, Adarsh Nagar, Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:AAMPT 7282 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. G. M. Mehta, CA jktLo dh vksj ls@Revenue by: Sh. Anil Dhaka, CIT lquokbZ dh rkjh[k@Date of Hearing : 26/06/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 16/07/2024 vkns'k@ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM

The captioned appeal has been preferred by the Revenue. The Revenue is feeling dissatisfied by the order of Commissioner of Income Tax (Appeals)-4, Jaipur, passed on 29/12/2023 [here in after (ld. CIT(A))]. Impugned order of the ld. CIT(A) in turn arose from the appeal filed by the assessee-respondent herein challenging order dated 31.12.2019 passed by Assessing Officer-DCIT, Central Circle-01, Jaipu, under section 143(3) of the Income Tax Act, 1961 [ here in after referred as Act],

2 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 2. At the outset , the Bench noted that as per report of the Registry, this

appeal was filed after a delay of 09 days. On this issue, the ld. DR

submitted that though the order of the ld. CIT(A) is dated 29.12.2023 but

the same was received in the office of the PCIT on 12.01.2024 and that the

period of limitation should commence from 12.1.2024. . He further

submitted that the Registry considered the date of the order, and not the

receipt of the order in the office of PCIT, and actually there is no delay in

filing of the appeal.

On the other hand, ld. AR of the assessee did not object to the

abovesaid contention raised on behalf of the appellant-applicant. Based on

this set of facts, the appeal is admitted and considered for disposal on

merits .

grounds: -

“1 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeal) is justified in holding that the appellant is showing substantial amount of cash in hand on a regular basis and was maintaining substantial cash in hand on the eve of demonetization by ignoring the fact that cash deposit in the comparable period i.e. November and December in the immediately preceding year is a relevant factor where assessee has not deposited a single penny and assessee has not furnished any explanation or no logical justification for this variation.

3 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar genuineness of cash deposited during the demonetization period and deleting the addition made by the AO u/s 68 of the Act on account of income of appellant from undisclosed sources amounting to Rs. 3,80,28,500/-.”

assessee is a doctor and earning income from professional consultancy

fees. The assessee filed a return of income for the AY 2017-18 declaring

total income at Rs. 7,84,71,260/-. The case of the assessee was taken up

for“Complete Scrutiny”u/s. 143(3) of the Act based onComputer Assisted

Selection for Scrutiny (CASS) and statutory notice u/s. 143(2) of the Act

was issued through ITBA and served upon the assessee. Information

called for vide questionnaires issued was submitted by the assessee. The

ld. AO noted in the impugned assessment that the information so filed was

examined by him.

The assessee is a Doctor and key person of NIMS Group.

4.1 During assessment proceedings, the ld. AO noted that the assessee

had deposited cash aggregating to Rs. 3,80,28,500/- during the

demonetization period i.e. between 09.11.216 to 30.12.2016 in the form of

Specified Bank Notes (SBNs). The ld. AO called for the comparative chart

of the deposit so made by the assessee of the SBNs in the year under

consideration and compared the same with that of the previous year for

4 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar the same period on the point of deposit of cash. The ld. AO noted from

those details that the deposit of cash was on the higher side in the year

under consideration. Therefore, a detailed show cause notice was issued to

the assessee on 03.12.2019.

In compliance with the said cause notice, assessee filed a detailed

written submission on 19.12.2019. ld. AO noted in the assessment order

that the submission of the assessee was considered but the same was not

acceptable due to the following reasons:

5 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar maintained by most pharmacies. However, in the case of the assessee no such details are available. 6. Medicine is not a seasonal business, the fact that the receipts of the assessee have increased more than 2 times during the year under consideration casts a serious doubt on the genuineness of these receipts. It is evident that there is no major change in the medicine practice of the assessee that could explain this sudden rise in his receipts. 7. It is highly unlikely that even if the receipts of the assessee from his practice and pharmacy had increased then why did the assessee not deposit high amounts of cash in earlier months. 8. In view of the above facts it is evident that assessee has fabricated whole transaction to make it look real and cash so deposited as discussed above is undisclosed income of the assessee. 9. The assessee has submitted that he has cash balance of Rs. 2,53,63,444/- as on 31.03.2016, however the assessee has and furnish any justification for maintaining such huge cash balance. 10. The submission of the assessee that he has received medical practice fee in cash and declared in the return of income as taxable income of Rs. 7,84,71,260/- is not acceptable. The assessee has deposited his unaccounted income in the bank during the course of demonetization. The assessee was aware about the taxation of black money under operation clean money scheme. Therefore, the assessee has wisely declared the higher cash receipts and paid tax @ 30% to avoid the higher tax rates and penal provisions. 11. The assessee has not furnished any justification for increase of gross receipts by 2.75 times. This clearly show that the assessee has declared bogus cash receipts. 12. During the course of search in NIMS group, evidence had emerged that the entire group was engaged in generating out of books cash from both hospital and medical college. Thus, the assessee had to deposit his unaccounted cash in bank during demonetization and he is now attempting to disguise the same as cash generated from medicine practice. 13. In view of the above facts it is evident that assessee has fabricated whole transaction to make it look real and cash so deposited as discussed above is undisclosed income of the assessee.

Based on the above, ld. AO noted that the cash deposited by the assessee

was nothing, but the undisclosed income of the assessee which

6 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar was shown under the garb of cash receipts from the medical consultancy.

Therefore, the cash deposited by the assessee in SBNs for an amount of

Rs. 3,80,28,500/- was added in the total income of the assessee under

section 68 of the Act r.w.s. 115BBE of the Act.

appeal before ld. CIT(A). Ld. CIT(A) considered the contention and the

evidence produced before him, and observed that the income which was

already declared and incorporated by the assessee was deposited in the

bank account and therefore, CIT(A)deleted the addition so made.

Relevant finding of the ld. CIT(A) is reiterated and same reads as under: :

“Decision From the analysis of the relevant facts brought on record by the parties it can be seen that the appellant is a doctor and he is also having a retail shop selling the medicines in his own proprietorship name and the appellant is deriving income in cash from these two sources of income. From the details declared in the income tax returns the income of the appellant both from sale of medicines and from the practice income are increasing from year to year. The appellant has maintained the books of accounts andthe same are audited and the same are not rejected by the Id. AO. In the case of ACIT v. Chandra Surana [2023] 104 ITR (Trib) 503 (ITAT Jai]]) it is held by the Hon'ble ITAT as under:- "The Assessing Officer had not rejected the books of account of the assessee as no material was available with him so to do. Section 68 of the Act is not applicable to sale transactions recorded in the books of account as such sales would already be a part of the income credited to the profit and loss account. The Assessing Officer was not justified in making the addition. The addition was rightly deleted by the Commissioner (Appeals)."

7 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar The appellant has also submitted the judgements that (1) ACIT Vs Gem Stones (2001) XXVI TAX WORLD 511(IP): No addition can be made without rejecting the books of accounts. (ii) ACIT Vs. Pr. Maheshinder Singh (2015) 169 TTT(Chand) (UO)36 when there is no allegation of specific defects in bonk of accounts, nor the AO had pointed out such defect in maintenance of books of account, without bringing any material on record, he was not justified in making additions which were rightly deleted by CIT(A).

The personal and identity details of the patients attended in the medical practice and of the customers at the pharmacy shop are stated to be not required to be maintained under any law and adverse inference cannot be drawn for not furnishing the information which is not required to be maintained as per any law or as per established precedence and custom. Appellant has also explained the nature of primary records maintained with respect to the sale of Medicines and attending the patients in practice of the medical profession. In this regard the submission of the appellant that during the search and seizure action the records maintained by the appellant in this regard were accepted and no adverse inference was drawn merits consideration. Further, the increase on both accounts of incomes is declared even in the periods subsequent to thedemonetization in the same year and in the subsequent years and resultantly larger amount of cash is deposited in bank in the subsequent years. There is no evidence on the record to reject the increase in turnover and increase in income of the appellant over the years. The appellant has also filed the VAT returns with respect to the sale of medicines.

As held in the case of The Income Tax Officer, Ward-1 & TPS, Shivamogga VS M/S. Manasa Medicals, in ITA No.552/Bang/2022, there is no legal requirement that the Doctors prescriptions and identity of the persons purchasing medicines needs to be kept in record to substantiate the cash sales during demonetisation period. Hon'ble ITAT Bangalore has observed as under:-

“13. From the above it is clear that the AO is not questioning the source of the cash deposit since he has recorded a finding that cash sales during the demonetisation period is brought to tax u/s. 68 which makes it clear that it is admitted fact that sales is the source for cash deposits. The revenue is contending that there is a requirement as per the Circular that the Doctors prescriptions and identity of the persons purchasing medicines needs to be kept in record to substantiate the cash sales during demonetisation period. However, from the plain reading of the said Circular, there is no specific mention as contended by the department. Further, the AO did not reject the books of accounts of the assessee and has not brought anything contrary on record to show that cash sales is not the source for the cash deposited during demonetisation period. We are therefore of the opinion that there is no case here for making the addition as unexplained u/s.68. In view of this discussion, we see no reason to interfere with the order of the CIT(A).

8 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 14. In the result, the appeal of the revenue is dismissed".

Further, with respect to the cash deposit, the appellant was having opening cash balance of Rs.2,53,63,444/- which was duly appearing in audited balance sheet as on 31.03.2016 which was submitted online before demonetization. The same thus stood covered by the turnover and income of the immediately preceding year.

In the case of the Assistant Commissioner of Income-tax v. Baldev Raj Charla [2009] 121 TTJ 366 (Delhi) [ITAT], the Hon'ble ITAT has inter-alia observed as under

"27. We have heard the rival submissions and perused the material available on record and have gone through the orders of the authorities below. We find that this explanation of the assessee was found correct that against these five deposits on dated 14th June, 1996, Rs. 31,000; 21st July, 1997, Rs. 1,27,000; 18th Sept 1997, Rs. 22,000; 4th Oct., 1997, Rs. 26,000 and on 7th Nov., 1997, Rs. 52,000 there were sufficient cash withdrawals from AWI and from SIII, Mayapurn, but this addition has been confirmed by learned CIT(A) on the basis that there is time gap between the assessee's withdrawals from his own partnership AWI or from hte own bank. There is finding recorded by the learned AO or by learned CITIA) that apart from depositing these cash into bank as explained by the assessee, there was any other user by the assessee of these amounts and in the absence of that, simply because there was a time gap, the explanation of the assessee cannot be rejected and hence the addition confirmed by the learned CITIA) is not correct. We, therefore, delete the same. This ground of the assessee is allowed. In the case of Gordhan vs. ITO, Ward 1(2), Gurgaon (ITA No. 811/Del/2015 AY: 2011 12), Hon'ble DELHI BENCH 'SMC-2, NEW DELHI ITAT held as under

“11. Applying the proposition as laid down by the Tribunal to the facts of the case, I have to hold that no addition can be made u/s. 68 of the LT. Act on the sole reason that there is a time gap of 5 months between the date of withdrawal from bank account of the cash in question and the redeposit of the same in the Bank Account, unless the AO demonstrates that the amount in question has been used by the assessee for any other purpose. In my view the addition is made on inferences and presumptions, which is bad in law. Hence, the addition in question is deleted and the Appeal of the assessee is allowed.”

Further the turnover of the appellant is increasing regularly and the appellant is regularly depositing cash in bank account. Appellant is showing high cash balance in hand even in subsequent years. The cash balance and business income are reflected in the ITRs which are already filed and available with AO. The cash deposited in bank account before and after the period of demonetization has not been doubted in the assessment order. The main contention in the assessment order in this regard is that cash deposited during the period of demonetization is disproportionately high with respect to the cash deposited in earlier period/similar period of last year. The appellant deposited

9 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar demonetized currency notes in the period (10.11.2016 to 31.12.2016) amounting to Rs.3,80,28,500 which is 47% of the total cash deposited during the year.

In this regard I am inclined to accept the argument of the appellant that he is showing substantial amount of cash in hand on a regular basis even in subsequent periods and he was having large amount as cash in hand as opening balance and his cash turnover is regularly increasing and considering the facts and circumstances he was maintainingsubstantial cash in hand on the eve of demonetization which he had to deposit in the bank account after the announcement of demonetization. The cash deposit in post demonetization period is also substantial and reflects the consistency of depositing. The circumstantial factor regarding the comparison of cash deposit during the demonetization period in the year under appeal vis-a-vis the cash deposit in the comparable period in the immediately preceding year is a relevant factor however the same in itself cannot be the sole basis for making the addition and for disbelieving and disregarding all other facts and documents submitted by the appellant. The appellant was mandatorily required to deposit its entire cash in hand to the extent it comprised of old demonetized 500 & 1000 currency notes into the banks.

The addition has been done in the assessment order considering the comparative factor. No evidences from third party enquiries or verification like under section 1334 are on record in the assessment to rebut the submissions of the appellant. At the same time the appellant has submitted circumstantial as well as documentary facts in support of his grounds of appeal which have been discussed in paragraphs above. There are a number of judgements which say that it is trite law that suspicion howsoever strong cannot take place of a legal proof. The Hon'ble Supreme Court in the case of Sreelekha Banerjee vs. CIT (1963) 49 ITR 112 (SC) has held that "The Department cannot by merely rejecting unreasonably a good explanation, convert good proof into no proof".

Further the income which is already included in the business income has been added. u/s 68 as unexplained cash deposit. The Hon'ble Supreme Court in the case of CIT vs Devi Prasad Vishwnath Prasad (1969) 72 ITR 194 (SC) held that "It is for the assessee to prove that even if the cash credit represents income, it is income from a source, which has already been taxed". The assessee has already offered the sales & practice income for taxation which has been accepted in assessment order and the same income cannot be taxed again when deposited in bank. Further, the books of accounts are audited and no fault was found in the same and the same were not rejected in the assessment order.

Considering the totalities of the facts and circumstances, as per material on record, it is found that explanations of the appellant cannot be rejected and are liable to be accepted. Accordingly, the addition made by the ld. AO is hereby deleted.”

10 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 6. In support of the grounds so raised by the Revenue, ld. DR

vehemently submitted that the assessee deposited a huge sum of money

i.e. an amount of Rs. 3,80,28,500/- which was in the form of the SBNs.

The case was selected for complete scrutiny and based on comparison of

the deposit of cash by the assessee with that of the current year being

higher the same wascorrectly considered as unexplained cash credit as per

provisions of section 68 of the Act.

Ld. DR further submitted that the Assessing Officer asked the

assessee as to why higher cash balance was maintained as on 31.03.2016

and that for an amount of Rs. 2,53,63,444/- the assessee had not given

any justified reason.

The ld. AO noted that the merely because the assessee had declared

higher income, same did not justify the cash deposited by the assessee.

ld. CIT(A) considered the explanation of the assessee that from next

year onward the receipts of the assessee were also on higher side and that

this fact could not be considered to justify the income of the year under

consideration. The ld. DR submitted that the ld. AO has given as much as

13 reasons as to why the addition should not be made. Same have been

relied on by ld. DR. and accordingly he has supported the order of ld. AO.

11 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 7. Per contra, ld. AR of the assessee has supported the findings

recorded in the order of the ld. CIT(A). ld. AR of the assessee also filed a

detailed written submission to support the finding recorded in the order of

the ld. CIT(A). Said written submission reads as under :

Brief facts of case: Beside practice income as medical Doctor, assessee was running proprietorship business of retail sale of medicines under the name and style of M/s. All Care Plus Pharmacy. B/f. cash balance from immediately preceding year (31.03.2016) duly appearing in Return of income for the A.Y. 2016-17 and as per audited statements of a/c. was Rs.2,53,63,444/- which also formed substantial part of demonetized currency notes deposited in bank along with practice income and amount transferred from assessee’s proprietorship. The private practice of the assessee has shown increasing trend in succeeding years. Books of account for assessee’s own practice income and of proprietorship business are audited under sec. 44AB of Income tax Act and were accepted by ld. AO and no provisions of sec. 145(3) of Act were applied. GROUNDS OF APPEAL (Department): Ground No. (1)Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeal) is justified in holding that the appellant is showing substantial amount of cash in hand on a regular basis and was maintaining substantial cash in hand on the eve of demonetization by ignoring the fact that cash deposit in the comparable period i.e. November and December in the immediately preceding year is a relevant factor where assessee had not deposited a single penny and assessee had not furnished any explanation or no logical justification for this variation: In respect of above ground of appeal taken by the Department, we submit para- wise response as under: (1) Deposit of cash in bank not in proportion to preceding year: There is no requirement either under the Income tax Act or under any other laws in India prescribing deposit of cash in bank a/c. in same proportion as was deposited in corresponding periods each year. (2) Limit of keeping cash in hand: No law prescribes any limit for the cash which could be kept in hand. The cash in hand declared and accepted by the ld. AO in immediately preceding as well as in

12 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar succeeding year was as per following details: S. No. Year ended on Asstt. year Cash in hand P.B. Page No. 31st March 2016 1. A.Y. 2016-17 2,53,63,444 6 to 8 31st March 2017 2. A.Y. 2017-18 97,58,099# 9 to 13 31st March 2018 3. A.Y. 2018-19 4,59,30,873* 14 to 18 (# Rs.1,12,84,447/- appearing in I. Tax Return is inclusive of Rs.15,26,348/- with assessee’s proprietorship.,* Similarly, cash of Rs.4,60,32,610/- in I.Tax Return is inclusive of cash with assessee’s proprietorship) (3) Deposit of demonetized currency in bank: It was only when demonetization of currency notes of Rs.1,000/- and Rs.500/- was declared, required assessee to deposit it in bank account otherwise assessee was maintaining substantial cash in hand as per above table. (4) Cash in hand verses deposit in bank: Cash in hand with the assessee was Rs.2.54 crore on 01.04.2016 when there was no demonetization. The cash in hand was reduced to Rs.97.58 lakh on 31.03.2017 after depositing Rs.3.80 crore in form of demonetized notes in his bank a/c. whereas it again jumped to Rs.4.59 crore in subsequent year as the same could not be deposited in bank account. (5) Acceptance of books of a/c. by ld. AO: Ld. AO required cash book (P.B. page No.19 to 36) on the basis of which regular books of A/c were prepared. It was examined by her with help of supporting material but no mistake or defect was noticed or pointed out and for this very reason provisions of sec. 145(3) of Act were not applied in this case. (6) Total deposit of cash in bank during year: Total cash deposited in F.Y. 2016-17 was Rs.9,54,18,670/- (including Rs.3.90 crore in demonetized period), the sources of which are appearing in regular/audited books of account, examined by ld. AO. (7) Acceptance of all credits in cash book but addition was made of debits: While accepting the credit entries in cash book ( professional and other receipts), the debits in name of bank were treated by ld. AO as unexplained under sec. 68 of I.T. Act whereas only unexplained credits could be taxed under sec. 68 of IT Act. For the above reasons, the ground No. (1) raised by the Department is without any basis and support of law and therefore, it is liable to be dismissed.

13 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar

Ground No. (2) Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) is justified in ignoring the fact that the assessee failed to prove the genuineness of cash deposited during the demonetization period and deleting the addition made by the AO u/s. 68 of the Act on account of income of the appellant from undisclosed sources amounting to Rs.3,80,28,500/- Ld. CIT(A) had examined the cash book, audited statements of account and other documents like amount transferred from proprietorship, bank withdrawal, also b/f. cash balance of Rs. 2,53,63,444/- appearing as B/f. cash in cashbook. After examining them, he found the deposits of total demonetized currency of Rs.3,80,28,500/- as genuinely explained out of explained sources. He has also found the so called thirteen allegations made by the ld. AO {from page 3 bottom to page 5 of order u/s. 143(3)} as without any basis and deleted the additions made by ld.AO. This ground of appeal is based on these allegations for which actual position is as under : 1. Sudden increase in practice income from 3.05 cr. to 8.02 crore: There was no sudden increase in income of the assessee from practice as a medical doctor. Practice income in subsequent years when there was no demonetization, was much higher as under: S.No. Asstt. year Gross practice Taxable income P.B. Page No. 1 A.Y. 2016-17 3,04,80,000 2,82,19,770 37 to 42 2. A.Y. 2017-18 8,01,82,200 7,84,71.260 43 to 47 3. A.Y. 2018-19 14,07,45,000 14,92,28,810 48 to 51 4 A.Y. 2019-20 18,27,97,500 19,36,13,540 52 to 55 5. A.Y. 2020-21 25,53,92,500 24,24,81,440 56 to 59

Taxable part of practice income was already found to be accepted by ld. AO which find place at concluding part of order u/s. 143(3) as “Income declared in Return Rs.7,84,71,260” . 2.Cash deposited in same period of preceding year: No legal requirement exist either in Income tax Act or other law in India that cash deposits in bank should be in same proportion which was deposited in preceding year. Otherwise also depositing cash in bank was work of employees of Assessee. Following cash amount was kept and disclosed by the assessee in his Return of income: S. No. Year ended on Asstt. year Cash in hand P.B. Page No.

14 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 31st March 2016 A.Y. 2016-17 1. 2,53,63,444 6 to 8 31st March 2017 A.Y. 2017-18 2. 97,58,099* 9 to 13 31st March 2018 A.Y. 2018-19 3. 4,59,30,873 14 to 18 (*reduced because deposit of demonetized currency notes in bank) However, in case of assessee’s wife (Dr. Mrs. Shobha Tomar, appeal No. ITA 373/JPR/2024 pending hearing before this Hon’ble ITAT )had deposited substantial cash in bank during corresponding period of preceding year but in her assessment u/s. 143(3) for AY 2017-18, total deposit of demonetized currency in her bank a/c. was added u/s. 68 therefore the allegation has not legal basis. 3. Cash deposited in bank higher by 8 times than in AY 2016-17: As submitted in para (2) above, there is no legal requirement that deposit of cash in bank should be in same proportion to that of preceding year. Cash in hand with the assessee was higher in preceding and in succeeding years but when demonetized currency notes were deposited in bank, it was lower in A.Y. 2017-18. 4. Deposit of cash in bank in Nov. & Dec. 2016: After declaration of demonetization, there was no other alternative left with the assessee except to deposit the demonetized currency notes in bank account. Otherwise day to day cash book submitted during hearing, declaring source of deposit in bank was accepted by ld. AO without pointing out any defect or deficiency. 5. Names and address of patients on professional receipts and on sale memo to retail medicine not submitted: Names of patients are very much appearing in computer generated patient register whereas for addresses of patients, like other medical practitioners, no such detail is required nor maintained. After more than 2 years, even if assessee wanted to know the addressed of patients, it was not possible to collect. Same is the position in case of retail sale of medicines in assessee’s proprietorship –M/s. All Care Plus Pharmacy. Retail sellers of medicines mention name of patient, name of Doctor prescribing medicine, name of medicine, its rate and expiry date. Neither Medical Counsel of India (MCI)and any other law require the mentioning address of buyers in invoice of retail medicine sale. The sale is cross verifiable from VAT Returns. 6. Sale of medicine not seasonal – receipts increased: Retail sale in assessee’s proprietorship did not show any increase in turnover in any particular period but were fully matched with VAT returns. Only on instructions to employees, the demonetized currency notes, already lying were transferred to assessee for deposit in bank. 7. Reason for not depositing cash in bank in earlier months: Rs.25,00,000/- was deposited in bank on 02.11.2016 and again Rs.25,00,000/- on 07.11.2016. Otherwise also when there was no requirement in law prescribing any limit to

15 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar keep cash in hand, ld. AO was not justified, without mentioning infringement of law for making such unjustified addition. More so when ld. AO herself had admitted that during the relevant year, assessee had deposited Rs.9,54,18,670/- in his bank account (para 4 at page 4 of Asstt order). 8. Fabrication total transaction to make it a look of real transaction : The allegations so made by ld. AO is without any legal legs to stand with. The very first allegation of intentionally showing higher practice income of Rs.8.01 crore in A.Y. 2017-18 to deposit demonetized currency is incorrect in view of increasing trend in practice income in subsequent years (it was Rs.25.54 crore in A.Y. 2020- 21). After depositing demonetized currency in bank, the cash in hand on 31.03.2017 was lower at Rs.97.98 lakh whereas it was higher at Rs.4.59 crore as on 31.03.2018. 9. For cash balance of Rs.2,53,63,544/- as on 31.03.2016, no justification submitted: Cash balance of Rs.2.54 crore was already disclosed in Return for A.Y. 2016-17 (P.B. 6 to 8)but there was no objection from the Deptt. as it was not in violation of any law. Only on depositing demonetized currency notes (10th Nov. 2016 to 31st Dec. 2016), ld. AO required justification again no violation of any law was pointed out as the same was deposited in bank out of explained sources. 10. Declared taxable income: While accepting the declared taxable income, only for making addition of total deposit of currency in demonetized period, ld. AO has alleged that taxable income of Rs.7,84,71,260/- is not acceptable though at the concluding part of order u/s. 143(3) of Act, returned income was accepted as “Income declared in Return of Income”, 11. Justification for increase in gross receipts by 2.75 times: Professional income received by assessee was declared in return of income on which he has paid income tax and the same was accepted by ld. AO. Professional receipts were still higher as per figures given at page (3) at para (1 hereinabove. 12. Unaccounted money unearthed during search period: It is true that search and seizure action in this case took place on 30th Oct. 2014. However, without examining the assessment records of the assessee for block period, the ld. AO had made such allegation. In a form of table, the returned income and finally assessed income of the assessee in all the individual period of block years was: Asstt. year Returned income Additions. If any Final assessed income 2009-10 2,25,000 Nil 2,25,000 2010-11 13,27,560 Nil 13.27,560 2011-12 7,38,590 Nil 7,28,590 2012-13 9,88,780 Nil 9,88.780

16 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 2013-14 35,98,210 Nil 35,98,210 2014-15 48,96,420 Nil 48.96.420 2015-16 1,11,05,780 2,45,422* 1,13,51,202 (*Addition of Rs.2,45,422/- sustained by Hon’ble ITAT which was in proportion to 1/5th of value of excess jewellery found and valued together) 13. Fabrication of whole transaction to give it look as real transaction: From para (1) to (12), it is proved beyond doubt that the charges so made by the ld. AO were only to justify her unjustified action for the addition of Rs.3,80,28,500/-, for the deposit of demonetized currency notes in assessee’s bank account. Otherwise, the assessee, who is paying high amount of Income tax cannot be considered that he is fabricating his affairs to look them as real. Assessee gets support from the following judicial pronouncements: (1) Anil Verma Vs. Dy. CIT (2019) 201 TTJ (Chand.’A’) 608 (P.B. page No. 60 to 73 ) (2) Pr. CIT Vs. Agson Global (P) Ltd. (2022) 325 CTR (Del)1 (P.B.page No. 74 to 91 ) (3) Asstt. CIT Vs. Chandra Surana (2023) 221 TTJ (JP ‘A’) 515 (P.B. page No.92 to 106 ) (4) Dhanpat Rai Khatri Vs. ITO (2023) 222 TTJ (Jd) 382 (P.B. No. page 107 to 115) (5) Mewar hospital (P) Ltd. Vs. ACIT (2024) 227 TTJ (Jd) 145 (P.B. page No.116 to 180) From facts discussed hereinabove having support of different judicial pronouncements, the second ground of appeal taken by the department is based on misinterpretation of facts of the case and own finding of ld. AO which is liable to be dismissed.”

was also placed on the following evidence / records / decisions:

S.No. Particulars/Short description P.B. 1. Written synopsis in support of grounds of appeal 1 to 5 2. Proof of cash in hand declared in I.Tax Returns at different year 6 to 18 3. Cashbook of Assessee for the period from 01.04.2016 to 19 to 36 4. Taxable income and professional income of Assessee for A.Y. 37 to 42 5. Taxable income and professional income of Assessee for A.Y. 43 to 47 6. Taxable income and professional income of Assessee for A.Y. 48 to 51

17 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 7. Taxable income and professional income of Assessee for A.Y. 52 to 55 8. Taxable income and professional income of Assessee for A.Y. 56 to 59 9. Decision - Anil Verma Vs. Dy. CIT (2019) 201 TTJ (Chad) 608 60 to 73 10. Decision - Pr. CIT Vs. Agson Global (P) Ltd. (2022) 325 CTR (Del) 1 74 to 91 11. Decision - ACIT Vs. Chandra Surana (2023) 221 TTJ (Jp) 515 92 to 106 12. Decision - Dhanpat Rai Khatri Vs. ITO (2023) 222 TTJ (Jd) 382 107 to 13. Decision- Mewar Hospital (P) Ltd. Vs. ACIT (2024) 227 TTJ (Jd) 116 to 14. Monthly cash in hand with the Assessee (year ended on 181 15. Monthly bank deposits 182 16. Monthly practice income of the Assessee 183 17. Decision- ITO Vs Sahana Jeweller Exp. P.Ld. (2024) 228 TTJ (Che) 184 to 18. Decision-ITO Vs. Manasa Medicals, (ITA No. 552/Bang/ 2022) 207 to 215

also runs a pharmacy; that the assessee is a regular tax payers and his

income shows higher trend year to year; that the income which is duly

recorded in the books of accounts is deposited into the bank account; that

the books of accounts are duly audited, but ld. AO without appreciation of

that fact, has made the addition and that too of the income which stands

already recorded in the books of account. As further contended, ld. AO has

not found any defects in the books of account produced and also that

without rejecting those books of accounts the addition made u/s. 68 is bad

in law as well as on facts of the case.

As regards receipt of the pharmacy business, the assessee submitted

record pertaining to deposit of VAT-value added tax in order to justify the

turnover of that business. ld. AR for the assessee strongly objected to the

18 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar observations of ld. AO that the cash deposited in the previous year for the

same period was lower and that of the current year higher, and contended

that this observation cannot be compared in all cases and that too without

appreciation of the fact. Further,. It has been contended that law does not

permit the ld. AO to make the addition merely because the cash deposited

in the year is more as compared to previous year. He further argued that

the books of accounts and records produced by the assessee were

accepted without finding any faults and therefore, the separate addition of

cash deposits u/s. 68 amounts to not only the double addition but also

incorrect as the receipts recorded in the books of account, as arising out of

the disclosed sources, cannot be added again. The 13 allegations / points

of the ld. AO have been discussed and explained before the ld. CIT(A) who

has appreciated the submission of the assessee and has allowed the

appeal of the assessee.

As further submitted, ld. CIT(A) appreciated the income shown as

deposit of cash and that there is no law that where cash deposit is higher

than 8 times than that of the last year, same can be formed basis of an

addition. ld. AR of the assessee submitted that the assessee submitted all

the details related to the income and when that income is added there

cannot be a separate addition as regards the same income which is

19 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar received and deposited into the bank account of the assessee. To drive

home the contention so raised, the ld. AR of the assessee relied upon the

judgments as referred to in the written submission and the paper book filed.

Based on these arguments, the ld. AR of the assessee supported the order

passed by the ld. CIT(A).

on record. Ground no. 1 raised by the revenue is that the assessee was is

showing substantial amount of cash in hand on a regular basis and

maintaining substantial cash in hand on the eve of demonetization by

ignoring the fact that cash deposit in the comparable period i.e. November

and December in the immediately preceding year is a relevant factor where

assessee has not deposited a single penny and assessee has not furnished

any explanation or no logical justification for this variation.

Ground no. 2 raised by the revenue is that the assessee failed to

prove the genuineness of cash deposited during the demonetization and

thus, the ld. CIT(A) erred in deleting the addition made by the AO u/s 68 of

the Act as undisclosed sources amounting to Rs. 3,80,28,500/-.

Brief facts as emerge from the assessment record, are that the

assessee is practicing as a doctor and earns income from professional

20 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar consultancy fees and retail medicines under the name and styles as M/s. All

care Plus Pharmacy. He is key person of NIMS Group. Return of income

declaring a total income at Rs. 7,84,71,260/- was filed by the assessee

which was selected for “Complete Scrutiny”based on computer Assisted

Selection for scrutiny (CASS). In the assessment proceeding the ld. AO

noted that cash aggregating to Rs. 3,80,28,500/- was deposited by the

assessee during the demonetization period i.e. between 09.11.216 t0

30.12.2016 in the form of specified bank notes (SBNs). The ld. AO called

for the comparative chart of the deposit so made by the assessee of the

SBNs in the year under consideration for comparison with that of the

previous year for the same period deposit of cash. He noted that the

deposit of cash by the assessee is higher for the year under consideration

than that of the previous year. Therefore, a detailed show cause notice was

issued to the assessee on 03.12.2019 contending that the assessee

contended before the investigation wing that the source of cash was the

fees received from patients, but same have not been supported by the

details of the patient assessee was directed to substantiate the cash

receipt. The business of pharmacy also records the cash sales, no details

of the same were filed. The ld. AO also noted that the deposit of cash in the

month of November being highest, the assessee was issued show

21 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar cause notice to explain as to why the addition of Rs. 3,80,28,500/- should

not be made as regards the unexplained cash deposits during the year.In

compliance with the said cause notice, assessee filed a detailed written

submission on 19.12.2019. The ld. AO noted that the submission of the

assessee was considered but the same was not acceptable because the

the assessee had shown gross receipts of Rs. 8,01,82,200/- during the year

under consideration. However, during the previous year the assessee had

declared gross receipts of Rs. 3,04,80,000/-. The sudden spike in the gross

receipts had not been explained and same was also unjustified in

comparison to the same period in previous year. The assessee did not

deposit a single penny in the same period of previous year. Further, the

assessee did not furnish any explanation for the sudden spike in the

receipts and the cash deposit in the F.Y 2016-17 was also 8 times higher

than the F.Y. 2015-16. The total cash of Rs. 9,54,18,670/-was deposited in

year under consideration, out of which Rs. 3,80,28,500/- was been

deposited during demonetization. The assessee in the months November

and December received 47% of total cash receipts and in the previous

November and December, the assessee was found to have not deposited

any cash in the bank account. The ld. AO also noted that the records of the

in-house patients and the medicine being taken by these patients, at least

22 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar basic particulars like name, address of the patient are maintained by most

pharmacies. However, in the case of the assessee, no such details were

available. The AO observed that the nature of business or profession is not

a seasonal business and increase in cash casts a serious doubt on the

genuineness of these receipts, when sudden rise in his receipts was not

explained and if that was so it remained unexplained as to what were the

reasons for holding such cash in hand and why did the assessee not

deposit high amounts of cash in earlier months. So, AO observed that all

these were the reasons suggesting that the assessee fabricated the

transactions to make it look real. The reasons for holding of the cash as on

31.03.2016 i.e. an amount of Rs. 2,53,63,444/- was not justified. The

assessee was aware of the taxation of black money under operation clean

money scheme and that is why, he wisely declared the higher cash

receipts and paid tax @ 30% to avoid the higher tax rates and penal

provisions, and that income shown at 2.75 times higher was not justified

and thus amounted to bogus cash receipts.

Search was carried out in the NIMS group, and evidence emerged

that the entire group was engaged in generating out of books cash from

both hospital and medical college. Thus, the assessee had to deposit his

unaccounted cash in the bank during demonetization and he has been

23 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar attempting to disguise the same as cash generated from medicine practice.

These reasons substantiate that the cash deposited by the assessee is

nothing but the undisclosed income of the assessee which was shown

under the garb of cash receipts from the medical consultancy. Therefore,

the cash deposited by the assessee in SBNs for an amount of Rs.

3,80,28,500/- was added in the total income of the assessee under section

68 of the Act r.w.s. 115BBE of the Act.

the ld. CIT(A), who after having considered the arguments and submission

of the assessee, directed to delete the addition of Rs. 3,80,28,500/- made

under section 68 of the Act r.w.s. 115BBE of the Act. While dealing with the

appeal and upon analysis of the relevant facts brought on record, the ld.

CIT(A) considered the source of income earned from the practice as well as

of sales of medicines in his own proprietorship which amounts were

received in cash. These two sources of income were found duly recorded in

the regular books of accounts maintained and produced by the assessee.

The ld. AO did not point any defect in those set of records produced by the

assessee. The ld. AO did not dispute the

24 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar opening cash balance available and declared by the assessee in the ITR

filed by him. The books of accounts so maintained and produced were also

audited by an independent Chartered Accountant. The said books found

without any fault therein, were not rejected by ld. AO. If the books of

accounts maintained were not rejected, the subject addition of the same

income could not be again made . To drive home said point, the ld. CIT(A)

relied upon the decision of the Jaipur bench of ITAT in the case of ACIT v.

Chandra Surana [2023] [ 104 ITR (Trib) 503 (ITAT Jaipur) ]. Based on the

judicial precedent cited before him, ld. CIT(A) also accepted the fact that

addition cannot be made without rejecting the books of accounts and when

there is no allegation of specific defects in maintenance of books of

account, without bringing any material on record, the ld. AO was not

justified in making additions. Based on the evidence placed on record, the

ld. CIT(A) noted that the personal and identity details of the patients who

attended the medical practitioner and of the customers at the pharmacy

shop are not required to be maintained under any law. Thus, adverse

inference cannot be drawn for not furnishing the information which is not

required to be maintained as per any law or as per established precedence

and custom.

25 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar The assessee explained from the primary records maintained with

respect to the sale of Medicines and the patients who attended in practice

of the medical profession, which record was sufficient to accept the income

disclosed and reflected in the books of accounts of the assessee.

There was a search in the NIMS group. During the search and seizure

action, the records maintained by the appellant in this regard were accepted

and no adverse inference was drawn against such records. The ld. CIT(A)

also noted that the increase on both accounts of incomes was declared

even in the period after the demonetization in the same year and in the

subsequent years and resultantly larger amount of cash was deposited in

bank in the subsequent years too.

There is no evidence on the record to reject the increase in turnover

and increase in income of the appellant over the years. The appellant has

also filed VAT returns with respect to the sale of medicines in cash. The ld.

CIT(A) while so holding relied on the decision of The Income Tax Officer,

Ward-1 & TPS, Shivamogga VS M/S. Manasa Medicals, in ITA

No.552/Bang/2022, that there is no legal requirement that the Doctors

prescriptions and identity of the persons purchasing medicines need to be

kept in record to substantiate the cash sales during demonetization period.

26 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar The ld. CIT(A) also considered the fact that the assesseewas having the

opening cash balance of Rs. Rs.2,53,63,444/- and same was disclosed by

the assessee while filling the last year ITR, which was duly appearing in

audited balance sheet as on 31.03.2016 and the same also disclosed.

Before demonetization even that much cash was available with the

assessee. The income offered by the assessee in the subsequent year

shows increasing trend and assessee has been regularly depositing cash

in bank account. The assessee also maintained the high cash balance in

subsequent years also. The cash balance and business income are

reflected in the ITRs which were filed and were available with AO to justify

the hike of cash and income. The cash deposited in bank account before

and after the period of demonetization has not been doubted in the

assessment order. Said receipts were reflected in the books and same

having already been considered the separate addition without rejecting that

book results could not be made against the assessee.

The main contention in the assessment order in this regard was that

cash deposited during the period of demonetization was disproportionately

high with respect to the cash deposited in earlier period/similar period of

last year. The appellant deposited demonetized currency notes in the

period (10.11.2016 to 31.12.2016) amounting to Rs.3,80,28,500 which is

27 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar 47% of the total cash deposited during the year. The ld. CIT(A) has

accepted that perspective, as the assessee is showing substantial amount

of cash in hand on a regular basis even in subsequent periods and he was

having large amount as cash in hand as opening balance and his cash

turnover was regularly increasing. Thus, there no doubt of the assessee

having substantial cash in hand on the eve of demonetization which he had

to deposit in the bank account after the announcement of demonetization.

The cash deposit in post demonetization period is also substantial

and reflects consistency in depositing the cash out of the income received

by the assessee and the same was accepted without any doubt. The

circumstantial factor regarding the comparison of cash deposit during the

demonetization period in the year under appeal vis-a-vis the cash deposit in

the comparable period in the immediately preceding year is a relevant

factor. However, same cannot be the sole basis for making the addition.

The other circumstantial evidence is also to be seen. In this case when the

demonetization was announced, the assessee had no option but to carry

that cash and deposit the same into the bank account to the extent it

comprised of old demonetized 500 & 1000 currency notes. The only

contention raised to make the addition was considering the comparative

factor with that of the previous year with any adverse

28 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar evidence collected by the ld. AO from third party enquiries or verification

like as under section 133(6) are not placed on record in the assessment

proceeding to rebut the submissions of the assessee.

As is clear from the records produced and verified by the ld. CIT(A) he

noted that the assessee submitted circumstantial as well as documentary

evidence in support of the receipts shown. As held in number of cases that

suspicion howsoever strong cannot take place of a legal proof. Hon'ble

Supreme Court in the case of Sreelekha Banerjee vs. CIT (1963) 49 ITR

112 (SC) has held that the Department cannot by merely rejecting

unreasonably a good explanation, convert good proof into no proof". The ld.

CIT(A) relying on apex court decision in the case of CIT vs Devi Prasad

Vishwnath Prasad (1969) 72 ITR 194 (SC) noted that "It is for the assessee

to prove that even if the cash credit represents income, it is income from a

source, which has already been taxed".

It is undisputed that the assessee has already offered the sales &

practice income for taxation which has been accepted in assessment order.

The same was part and parcel of the income already offered and as such

same income again cannot be taxed u/s. 68 of the Act, because the same

consists of the SBNs deposited in bank account. Further, the books of

29 ITA No. 283/JP/2024 ACIT vs Balvir Singh Tomar accounts are audited, and no fault or defects were pointed out to reject the

same.

Thus, based on the discussion and reasons recorded herein above,

we see no infirmity in the order of the ld. CIT(A) . The appeal filed by the

Revenue raising ground nos. 1 & 2 therefore deserves to be dismissed.

Resultantly, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 16/07/2024.

Sd/- Sd/- ¼ujsUnz dqekj½ ¼jkBkSM+ deys'k t;UrHkkbZ½ (NARINDER KUMAR) (RATHOD KAMLESH JAYANTBHAI) U;kf;d lnL;@Judicial Member ys[kk lnL; @Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 16 /07/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- ACIT, NCRB, Statue Circle izR;FkhZ@ The Respondent- Balvir Singh Tomar, Adarsh Nagar, Jaipur 2. vk;djvk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZQkbZy@ Guard File (ITA No. 283/JP/2024) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत