PRASANTHI MACHA, WARANGAL vs. ACIT., CIRCLE -7(1), HYDERABAD
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Income Tax Appellate Tribunal, Hyderabad ‘SMC‘ Bench, Hyderabad
Before: Shri R.K. Panda, Vice-
आदेश/ORDER
This appeal filed by the assessee is directed against the order dated 27/12/2023 of the learned CIT (A) NFAC, relating to A.Y.2017-18.
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) NFAC in confirming the addition of Rs.13,27,915/-made by the Assessing Officer u/s 68 of the I.T. Act.
Facts of the case, in brief, are that the assessee is an individual and engaged in the profession of medicine. She filed
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her return of income on 26.06.2018 declaring total income of Rs.27,18,970/-. The return was selected for scrutiny for the following reasons: i) Large cash deposit during demonetization and abnormal increase in sales with decrease in profitability compared to preceding previous year. Accordingly, statutory notices u/s 143(2) and 142(1) were issued and served on the assessee. From the various details furnished by the assessee, the Assessing Officer noted that the assessee has deposited an amount of Rs.14,63,114/- in various bank accounts held by her during the demonetization period. However, he noted that the cash balance as on 8.11.2016 was Rs.1,41,585/- whereas the assessee has deposited cash of Rs.14,69,500/- in demonetized currency between the period 8.11.2016 to 30.12.2016. In absence of any explanation given by the assessee to explain the source of Rs.13,27,915/-, the Assessing Officer made addition of the same u/s 68 of the I.T. Act.
In appeal, the learned CIT (A) confirmed the addition made by the Assessing Officer by observing as under: “6. FINDINGS & DECISION 6.1 I have gone through the Assessment Order and submissions of the appellant. The AO has carried out additions to tune of Rs. 13,27,915/- being cash deposited which was unexplained cash credit u/s 68 of the IT Act, 1961 for the year under consideration. 6.2 The AO has stated that during the course of the assessment proceedings, the appellant has deposited cash of Rs. 14,69,500/- into his bank accounts during the course of demonetization period (09.11.2016 to 31.12.2016), Further it was noted from the cash book of the appellant that the cash balance at the end of the day on 08.11.2016
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was Rs. 1,41,585/- The appellant was asked to furnish the explanation for the difference amount of Rs. 13,27,915/- (14,69,500-1,41,585). However, the appellant was failed to comply the same. 6.3 It is noted from the submissions furnished before the appellate proceedings that the appellant has stated that the appellant is a doctor by profession and running a hospital in the name of "M/s Prashanthi Hospital and a Pharmacy during the year under consideration. 6.4 Further the appellant has stated that cash were deposited out of gross receipts from Inpatients, Outpatients, Lab and Pharmacy sales, However, the appellant has not stated about his cash balance as on 08.11.2016 was of Rs. 1,41,585/-. The appellant has cash balance as on 8.11.2016 of Rs. 1,41,585/- then how could the appellant be deposited to the tune of Rs.14,69,500/-. Therefore, the contention of the appellant is not found to be acceptable.
6.5 In view of the above, I am of the considerate view that the reason mentioned for the appellant's claim by the appellant is not satisfied. Therefore, the addition made to the tune of Rs. 13,27,915/- by the AO is upheld. 6.6 Accordingly, all grounds of the appeal are dismissed.”
Aggrieved with such order of the learned CIT (A) NFAC the assessee is in appeal before the Tribunal.
The learned Counsel for the assessee submitted that the assessee has accepted old demonetization notes on account of pharmacy sales, lab collection and in and out patient collection. The entire professional income has already been offered to tax and all professional receipts are supported with appropriate documentary evidence which were filed before the learned CIT (A) NFAC during the appeal proceedings. However, learned CIT (A) NFAC without considering the various submissions made by the assessee has upheld the addition made by the Assessing Officer.
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He submitted that the Ministry of Finance issued notification in connection with demonetization of specified bank notes vide notification dated 8.11.2016 for making payments in Govt. Hospitals and Pharmacies in Govt. Hospitals. On 9.11.2016 another notification was issued for making payments to all pharmacies on proof of doctor’s prescription and proof of identity. He submitted that the assessee has maintained daily case register as per Form No.3C as per Rule 6F.Relying on various decisions, he submitted that the addition made by the Assessing Officer and sustained by the learned CIT (A) NFAC is liable to be deleted. The learned Counsel for the assessee also relied on various decisions.
The learned DR, on the other hand, relied on the orders of the Assessing Officer and learned CIT (A) NFAC.
I have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. I find the AO in the instant case made addition of Rs. 13,27,915/- u/s 68 of the I.T. Act being the cash deposited during demonetization period in specified bank notes on the ground that the assessee was not able to explain the nature and source of the same. I find the learned CIT (A) NFAC sustained the addition made by the Assessing Officer the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the learned Counsel for the assessee that the assessee is running a hospital dealing especially in the high-risk pregnancy, general surgery for women, high end new born intensive care (premature new born babies)
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and out patient pediatric consultation. The amount so deposited in the bank account in specified bank notes are already disclosed in the return of income and offered to tax. It is also his submission that all professional receipts are supported with proper documentary evidence. Although all these documents were produced before the learned CIT (A) NFAC, however, he has not considered the same. It is also his argument that the notification dated 8.11.2016 was issued for making payments in govt. hospital and pharmacies in govt. hospitals, whereas another notification dated 9.11.2016 was issued for making payment to pharmacies on proof of doctors’ prescription and proof of identity. It is also his contention that the assessee maintained daily case register in Form No.3C as per Rule 6F which gives the name of the patient, nature of professional services rendered to the patient, date of receipt and fee received etc. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate with evidence to his satisfaction regarding the nature and source of such cash deposits during the demonetization period. While doing so, the Assessing Officer shall keep in mind the notification dated 9.11.2016 issued by the Govt. of India. The Assessing Officer shall decide the issue as per fact and law after giving reasonable opportunity of being heard to the assessee. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
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In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 20th March, 2024. Sd/- (R.K. PANDA) VICE-PRESIDENT
Hyderabad, dated 20th March, 2024 Vinodan/SPS Copy to: S.No Addresses 1 Smt. Prasanthi Macha, No.7-3-94 Machili Bazar, Brahmanawada, Hankonda 506101 2 ACIT Circle 7(1) Signature Towers, Kondapur, RR Distt. 500084 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File
By Order
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