Mysore Diagnostic Center Private Limited Vs ACIT (ITAT Bangalore)
Bangalore ITAT Deletes Demonetisation Addition; Recorded Cash Receipts Cannot Be Treated as Unexplained Money
The Bangalore ITAT in Mysore Diagnostic Center Pvt. Ltd. v. ACIT deleted the addition of ₹13.36 lakh made under section 69A in respect of cash deposits during the demonetisation period. The Assessing Officer had treated part of the cash deposits as unexplained on the ground that the assessee had accepted specified bank notes (SBNs) after demonetisation.
The Tribunal noted that the deposits were fully reflected in the assessee’s regular books of account, supported by the cash book, audited financial statements and details of patients/customers from whom receipts were collected. Neither the Assessing Officer nor the CIT(A) pointed out any defect in the books, nor was it alleged that the professional receipts recorded in the accounts were bogus or undisclosed.
ITAT held that merely because the deposits included demonetised currency notes, the amounts could not automatically be treated as unexplained money when the corresponding receipts were duly recorded in the books and offered to tax. Once the books are audited and accepted without adverse findings, addition under section 69A cannot be sustained solely on the basis that specified bank notes were deposited. Accordingly, the entire addition of ₹13,36,573 was deleted and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
