Smt. Manasi Mahendra Pitkar Vs ITO (ITAT Mumbai)
In a significant ruling for Assessment Year 2011-12, the Income Tax Appellate Tribunal (ITAT) Mumbai Bench has deleted additions totaling ₹27,36,500/- made as unexplained cash credits under Section 68 of the Income Tax Act, 1961, against Shri Mahendra Chintaman Pitkar and Smt. Manasi Mahendra Pitkar (husband and wife). The Tribunal’s decision hinged on the non-applicability of Section 68 to bank passbooks and the acceptance of the assessee’s explanation regarding the source and utilization of the funds for critical medical treatment.
Case Background:
The dispute arose when the Assessing Officer (AO) noted cash deposits amounting to ₹29,53,500/- in a joint bank account held by Shri Mahendra Chintaman Pitkar and his wife, Smt. Manasi Mahendra Pitkar, with Thane Janata Sahakari Bank during the Financial Year 2010-11. The AO sought an explanation for the nature and source of these deposits.
Shri Mahendra Pitkar, who was employed with the Municipal Corporation of Greater Mumbai, explained that his wife, Smt. Manasi Pitkar, was suffering from ‘multiple sclerosis,’ a severe and costly medical condition requiring imported medicines costing approximately ₹2.5 lakhs per month (₹30 lakhs annually). He stated that, being a salaried employee with limited resources, he received these amounts from his father, father-in-law, son, and numerous other relatives and friends as contributions for her treatment. He further explained that all payments for medicines were made by cheque to a licensed dealer, necessitating the consolidation of funds into a single bank account to ensure timely payments.
