TaxTMI 
TaxTMI 
2024 (7) TMI 645
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....ncome as Gynecology Doctor, appearing in audited books of account, duly examined and accepted without application of provisions of section 145(3) of Act. 2 Ld. CIT(A) was not justified in allowing only partial relief of Rs. 19,00,000/- out of total addition of Rs. 99,96,000/- under sec. 68 of I.T. Act made by the Id. AO by avoiding the fact that from total practice income of Rs. 1,73,27,300/-, major part was deposited in bank a / c after declaration of demonetization of currency notes. 3 Ld. CIT(A) has erred in accepting but not disposing of the ground of appeal in respect of levy of special rate of tax under sec. 115BBE of I.T. Act for the debit side of cash book (deposits in bank a/c) whereas credit side i.e. receipts from practice income was accepted as genuine." 3. Succinctly, the fact as culled out from the records is that the assessee e-filed her return of income on 07.11.2017 declaring total income at Rs. 1,74,96,020/- for the AY 2017-18. The case of the assessee was selected manually for scrutiny as per instruction no. 4/2018 dated 20.08.2018 for cash deposit during the demonetization, after taking approval from Pr. CIT (Central) Jaipur on 25.09.2018. Notice u/s 143(2)....
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....den jump in practice, (d) evidence also emerge that the group has huge amount of unaccounted cash and thus, the genuineness of the argument of the assessee was not accepted. Based on these observations the ld. AO considered Rs. 99,96,000/- as income as per provision of section 68 of the Act. 4. Aggrieved from the order of the assessment, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: "Decision:- From the analysis of the relevant facts brought on record by the parties it can be seen that the appellant is a doctor. Also, there is no reasonable justification for the sudden spike in cash deposits post demonetization. Appellant has not submitted any evidences/documents regarding higher cash balance other than the cash book prepared by the appellant. During the appellate proceedings the appellant has submitted cash book on 25.02.2021 and further submitted the cash book on 22.02.2024. On perusal of both cash book it is found that there are differences in consultancy fees mentioned in both cash book on number of occasions and thus not reliable. Further, on perusal of cash....
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....t." (emphasis supplied) It is further observed in this case by the Hon'ble Supreme Court as under:- In the present case, the assessee claimed that the high denomination notes were a part of the cash balance at the head-office. The Income-tax Office found that at first the cash on hand was said to be Rs. 1,62,022, but on scrutiny, it was found to be wrong. Indeed, the assessee himself corrected it before the Appellate Assistant Commissioner and stated there that the balance was Rs. 1,21,875. Ordinarily, this would have prima facie proved that the assessee might have kept a portion of this balance in high denomination notes. But the assessee failed to prove this balance, as books of the assessee did not contain entries in respect of banks. Though cash used to be received from banks and sent to the various places where works were carried on and vice versa, no central account of such transfers was disclosed. There was also no account of personal expenses of the assessee and he had failed to prove why such large sums were kept on hand in one place when at each of the places where work was carried on, there were banks with which he had accounts. T The Appellate Assistant Commis....
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....t the same time, regarding the observation of the assessment order that the appellant did not produce the details of the patients etcetera is held to be not crucial as no such particular statutory record is required to maintained as noting in this regard is highlighted in the assessment order. And there is no prescribed method of verification by any medical authority from time to time. As per the same analogy, the record referred by the appellant before the Id. AO in this regard to support the practice income cannot be relied. The documents produced stated as patient registers are computer printed, having first names only and having running serial number and running registration number. There is no mention of time of visit. There is no link back of patients who visit second time or further times which is very common in gynecology. In view of the detailed discussion the registers are not reliable. Similar issue had arisen in the case of another individual of the group. However the facts of such case are different from the present case. Illustratively, the relative figures and patterns of opening cash balance, income after the subject year, cash as reported in ITRS, VAT returns, ca....
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....sited in bank account. The Hon'ble Supreme Court of India pronounced order in the case of Commissioner of Income Tax, Salem Vs. K. Chinnathamban bearing appeal No. [2007] 162 Taxman 459 (SC)/[2007] 292 dated 24.07.2007 had held that: "Whether onus of proving source of deposit primarily rests on persons in whose names deposit appears in various banks Held, Yes; Whether since assessee had failed to show that amount in question did not represent his income, Department was justified in treating same as assessee's income under section 69A Held Yes." The Hon'ble High Court of Kerala pronounced in the case of K. V.Mathew Vs. Income Tax Officer, Ward-2(3), Range-2, Ernakulam bearingOrder No. [2014] 42 taxmann.com 571 (Kerala) Appeal No. 95 of 2012dated 04.10.2013 had held that: "A huge amount was found deposited in savings bank account of assessee, which he claimed to have been received from his sister in Italy-He, however, failed to furnish any proof-No cash flow statement was filed Whether since amount in savings bank account of assessee remained unexplained, Assessing Officer was justified in making addition under section 69A Held, Yes [Para 4] [In faovur of Revenu....
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....and allowed relief of remaining addition of Rs. 19,00,000/-. GROUNDS OF APPEAL: GROUND No. (1): Ld. CIT(A), has erred in law and on facts in sustaining addition of Rs. 80,96,000/- out of total addition of Rs. 99,96,000/- for the deposits of demonetized currency notes in bank a/c. from explained sources i.e. out of b/f. cash balance and from practice income as Gynecology Doctor, appearing in audited books of account, duly examined and accepted without application of provisions of section 145(3) of Act . Ld. CIT(A) was not justified sustaining addition of Rs. 80,96,000/- out of Rs. 99,96,000/- made by ld. AO for bank deposits in period of demonetization of currency notes more so when the receipts or sources of cash appearing in cashbook (P.B. page 6 to 32) were accepted as genuinely explained. From other point of view, the extra sources for bank deposits in current year, if compared to the deposits of preceding year can be explained by way of following four tables: TABLE "A" (reduction in cash - at year end ) S. No. Cash in hand as on Amount Paper book page 1. 31st March 2016 18,45,420 33,34, 34A & 34B 2. 31st March 2017 1,48,128 35,36 36A & 36B Extra available c....
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....AO against the assessee and the explanation/factual position is: (1) Deposit of cash through consultancy fee but details regarding patients from whom consultancy received not furnished: At para No. (1) at page (5) ld. AO had admitted that "the assessee has justified the source of cash deposited from cash generated from consultancy fee". Though against the principles of natural justice by allowing single intervening day vide show-cause notice dated 18th December 2019 (P.B. page No.41), ld. AO required from the assessee, the details of patient like their addresses, phone number etc. Two registers for the patients, giving details like date of consultation, name of the patient, registration number, disease, age, gender and fee charged from patient were submitted to ld. AO. Again, no defect or deficiency was pointed out by ld. A.O. but by twisting the facts of case that assessee had not furnished any details of the patient from whom consultancy fee was received, made adverse comment on practice income of Assessee. While accepting bank deposits in remaining part of year, made addition for the bank deposits during demonetization period, though at the concluding part of the Assessment ....
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....rt of such addition is that when source of cash was found by both the lower authorities as explained how and why part cash deposit in bank was treated as unexplained when deposited in bank as demonetized currency and remaining deposits as explained ? (4) Reference of search in case of NIMS Group: It is true that NIMS Group and its Trustees (including the assessee) were subjected to action u/s. 132 of the Income tax Act on 30th October 2014. Though the principles of Resjudicata are not applicable in Income tax proceedings but in assessee's case the additions made by the ld. AO were found to be unjustified by the appellate authorities as per following details: Asstt. year Returned income Additions. If any Final assessed income 2009-10 3,10,370 Nil 3,10,370 2010-11 4,10,570 Nil 4,10,570 2011-12 9,14,930 Nil 9,14,930 2012-13 11,97,520 Nil 11,97,520 2013-14 43,51,000 13,73,372* 43,51,000 2014-15 59,12,620 Nil 59,12,620 2015-16 1,00,81,130 33.62.530** 1,00,81,130 (*Addition of Rs. 13,73,372/- deleted by this Hon'ble ITAT, vide order dated 25.06.2018, ** protective addition of Rs. 30,94,080/- considered by Hon'ble ITSC in case of IMT and Rs .2,68,450/- ....
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....ulars/Short description P.B. Page 1. Written synopsis in support of grounds of appeal 1 to 5 2. Cash book (01.04.2016 to 31.03.2017) 6 to 32 3. Proof of cash in hand as on 31.03.2016 ( Opening on 01.04.2016) 33 to 34B 4 Proof of cash in hand as on 31.03.2017 35 to 36B 5. Taxable income (Ack. of return of income) A.Y. 2016-17 37 6. Taxable income (Ack. of return of income) 2017-18 38 7. Details of deposit of cash in bank from 01.04.2015 to 31.03.2016 39 8 Details of deposit of cash in bank from 01.04.2016 to 31.03.2017 40 9 Show-cause notice dated 18.12.2019 (giving single intervening day) 41 10. Monthly practice income in preceding year (A.Y. 2016-17) 42 11. Monthly practice income y.e.. 31.03.2017 (A.Y. 2017-18) 43 12 Decision - Anil Verma Vs. Dy. CIT (2019) 201 TTJ (Chad) 608 44 to 57 13. Decision - Pr. CIT Vs. Agson Global (P) Ltd. (2022) 325 CTR (Del) 1 58 to 75 14. Decision - ACIT Vs. Chandra Surana (2023) 221 TTJ (Jp) 515 76 to 90 15. Decision - Dhanpat Rai Khatri Vs. ITO (2023) 222 TTJ (Jd) 382 9 1.99 16. Decision- Mewar Hospital (P) Ltd. Vs. ACIT (2024) 227 TTJ ....
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....8 of the Act whereas the ld. CIT(A) has considered the said amount u/s 69A of the Act. The law does not permit to do such change. The ld. AR of the assessee invited our attention to the provision of sections 68 & 69 of the Act. The ld. AR of the assessee also draw our attention to page 26 of the order of ld. CIT(A) wherein the fact has been recorded that the assessee has submitted the patient register and IUI register giving details like date of consultation name of patient age registration number etc. These registers are not found on any fault or any defect in the records so produced. The addition is sustained merely based on the surmises or conjectures and ld. AR of the assessee also submitted that the decision relied upon by the revenue and the ld. CIT(A) are on different facts and are not applicable considering the peculiar facts of the case of the assessee. The contention of the ld. CIT(A) that the assessee has not placed on record any direct verifiable evidence are incorrect. Because the claim of the assessee or deposit of cash is duly supported by the records maintained and submitted in the form of patient register and the receipt of cash book. The cash deposited in to the b....
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....see has shown much decreasing trend. This fact itself suggest that cash book is self-serving document and is not reliable. To drive whom to this contention, he has relied upon the case laws cited in the order of ld. CIT(A) and also following case laws:- S.No . PARTICULARS 1 [1995] 80 Taxman 89 (SC) SUPREME COURT OF INDIA Sumati Dayal v. Commissioner of Income-tax 2 [1958] 34 ITR 807 (SC) SUPREME COURT OF INDIA A. GovindarajuluMudaliar v. Commissioner of Income-tax 3 [1971] 82 ITR 540 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Durga Prasad More 4 [2007] 161 Taxman 169 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. P. Mohanakala 5 [1963] 50 ITR 1 (SC) SUPREME COURT OF INDIA Kale Khan Mohammad Hanif v. Commissioner of Income-tax 6 [2019] 109 taxmann.com 53 (SC) SUPREME COURT OF INDIA NDR Promoters (P.) Ltd.v. Principal Commissioner of Income-tax 7 [1977] 107 ITR 938 (SC) SUPREME COURT OF INDIA Roshan Di Hatti v. Commissioner of Income-tax 8 [1963] 49 ITR112 (SC) SUPREME COURT OF INDIA Sreelekha Banerjee v. Commissioner of Income-tax 9 [2007] 162 TAXMAN 459 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax, Salem v.K. Chinnat....
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....sessee has deposited every month the amount into her bank account and total bank account deposit is almost much with the practice income shown by the assessee. Therefore, the contention of the lower authorities that there is sudden spike in the receipt of the assessee is not correct and is against the evidence placed on record. 10. We have heard the rival contentions and perused the material placed on record. The brief facts of the case as emerges from the record is that the assessee is a Gynecologist by profession. She had also income from investment activity. Return of income declaring total income at Rs. 1,74,96,020/- was filed. The case of the assessee was selected manually for scrutiny for verification of deposit of cash of Rs. 99,96,000/-. Before taking the case for scrutiny manually, approval from Pr. CIT (Central) Jaipur was obtained on 25.09.2018. Notice u/s 143(2) was issued to the assessee on 26.09.2018. The assessee complied with the notices and questionnaire issued during the assessment proceeding and submitted the details called for. The assessee deposited a sum of Rs. 99,96,000/- in her bank account during the demonetization between 09.11.2016 to 30.12.2016 in the f....
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.... not contended that aspect and even the revenue has not raised any appeal or cross objection that the patient register is not filed. The ld. AO based on the details placed on record noted that from April 2016 to October 2016 the assessee has deposited only Rs. 60,31,700/-, whereas the same spiked in November and December to Rs. 99,96,000 as the assessee not in seasonal business. The spike was not considered as the assessee has not given any reason to justify the spike. The ld. AO also noted that the group has a huge amount of unaccounted cash. The ld. AR of the assessee on that aspect that the allegation is general and there is not such addition in the hands of the assessee or in the family of the assessee. The ld. DR did not bring any contrary material on record and the blame of the revenue without any supportive findings. The action of the ld. ld. AO to considered Rs. 99,96,000/- as income as per provision of section 68 of the Act is contrary to the law when he has accepted the book result and the source of cash deposited is already reflected in the audited books of account merely the assessee deposited SBN separate addition is not required. Even otherwise while doing so he has t....
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....account even before the demonetization. As regard the decrease trend in the receipt after demonetization we note that this observation has no force as the receipt compared with the previous year as tabulated here in above and the chart of monthly cash deposited it is evident that every month the assessee has deposited the cash, so the allegation is not correct. In support of the cash deposited the assessee has filed all the supporting evidence about the professional income that she has earned. The ld. CIT(A) noted that the assessee submitted the cash book on 25.02.2021 and on 22.02.2024 that cash book being of two different date he noted that the same was not reliable as the fees mentioned differ, so he stated that it is not reliable. But while commenting on this he remained silent and did not cited any instance. He also does not fit it deem to seek the explanation from the assessee by citing any instance. The ld. DR just mentioned the observation but here the ld. DR did not give to our notice any instance on that aspect of the matter. In the light of this fact the cognizance of that observation is not taken by the bench being without any supportive instance. 12. The bench noted t....
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.... The assessee has every month deposited the cash in her bank account. The cash balance and the professional income offered is duly reflected in the regular books of account of the assessee. The assessee has also substantiated the receipt with the patient register and cash book. No defect whatsoever was found in that records produced by the assessee. The ld. AO as well as the ld. CIT(A) has not doubted the cash recorded in the cash book. The cash which is recorded in the cash book he has been deposited into the bank account of the assessee. The contention is only that there is sudden hike in the cash balance and receipt after the demonetization is less and this was the basis of making the addition. As for that aspect of the matter, the hike in the receipt is not much compared to last year. The difference in the receipt till October if compared with the last it shows same trend. Therefore, the contention made basis if compared with the last year has no basis to arrive at the allegation. Thus, considering the month wise receipt as compared to the previous year, the cash on hand regularly shown by the assessee with that of the cash receipt does not reflect sudden hike. The cash which i....