The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) limits a Section 68 addition of Rs 1.80 crore against hospital cash deposit during demonetisation to Rs 5 lakh after considering that the deposits came from higher business turnover from patients.
The Assessing Officer classified the Rs. 1.80 crore deposited in Specified Bank Notes by the taxpayer Jeewan Hospital and Nursing Home Pvt. Ltd. during the demonetisation period as unexplained cash and added this amount to the income under section 68. The CIT(A) later deleted this addition. Subsequently, the revenue filed an appeal before the Income Tax Appellate Tribunal (ITAT).
The representative of the revenue said that the cash deposits were not related to an increase in patient flow and raised concerns about the abnormal rise in cash receipts and cash on hand prior to demonetization.
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The counsel of the taxpayer said that the addition was made without denying the books of account and without supporting proof, relying instead on conjectures and surmises.
The two-member bench, Satbeer Singh Godara (Judicial Member) and Naveen Chandra (Accountant Member), said that, “In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit during the demonetization period as being from higher business turnover from patients. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit has been made out of higher hospital fees cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash deposit, which cannot be ruled out.”
The tribunal found that a lump-sum addition of Rs. 5 lakh was reasonable and appropriate, explicitly stating that this decision should not be considered a precedent.
Additionally, the tribunal instructed the Assessing Officer (AO) to tax the Rs. 5 lakh addition under the normal provisions rather than u/s 115BBE. As a result, the revenue’s appeal was partially permitted.
| Case Title | DCIT Vs Jeewan Hospital and Nursing Home Pvt. Ltd. |
| Case No. | ITA No. 2977/Del/2026 |
| For the Petitioner | Ms Ananya Kapoor, Shri Shashwat Bajpai |
| For the Respondents | Shri Bhogendra Prasad |
| Delhi ITAT | Read Order |
