M/S. SAI MEDISOULTION PRIVATE LIMITED ,MUMBAI V. ITO CIRCLE -3, THANE

ITA 4716/MUM/2025

AI Insights

Sai Medisolution Pvt. Ltd. appealed against the order of the National Faceless Appeal Centre, which had confirmed the addition of 1,77,05,155 as unexplained cash deposits under section 69A of the Income-tax Act, 1961. The company argued that these deposits were from legitimate hospital receipts, supported by audited accounts and detailed patient records. The Tribunal noted that while the initial assessment did not consider these documents, they were now presented and capable of verification. The matter was remanded back to the Assessing Officer for a thorough examination of the new evidence provided.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 835553 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 25-07-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: NILESH JOSHI
• Keywords: Condonation of delay; Business income; Opportunity of being heard; Reassessment proceedings; Recovery proceedings
• Section: 147; 148; 144; 142(1); 145

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.4716/Mum/2025 (Assessment Year :2014-15) Sai Medisolution Pvt. Ltd., 10/11, Floor-1 Plot No.12/14, Hansraj Damodar Building Sundarlal Bahl Marg Goa Street, Ballard Estate Mumbai- 400 038 Vs. Additional / Joint / Deputy / ACIT/ITO(NFAC), Delhi PAN/GIR No.AANCS0297B (Appellant) .. (Respondent) Assessee by Shri Nilesh Joshi Revenue by Shri Hemanshu Joshi, Sr. DR Date of Hearing 04/02/2026 Date of Pronouncement 11 /02/2026 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against the order dated 11/07/2024 passed by the National Faceless Appeal Centre, Delhi, for the quantum assessment framed under section 147 read with section 144 of the Income-tax Act, 1961 for the assessment year 2014-15. Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 2 2. In the various grounds of appeal, the assessee has challenged the validity of reopening under section 147 as well as the addition of ₹1,77,05,155/- made under section 69A on account of cash deposits in its bank accounts. At the outset, it is noticed that the appeal has been filed with a delay of about ten months. In the application for condonation of delay supported by an affidavit, it has been stated that the main key person and Managing Director of the assessee-company was not keeping well during the relevant period and, further, that the assessee was not aware of the passing of the appellate order as it was not being assisted by any professional to regularly monitor the ITBA portal. It has been explained that the order of the learned CIT(A) came to the assessee’s knowledge only when recovery proceedings were initiated by the Tax Recovery Officer/Assessing Officer. Having regard to the reasons stated in the condonation petition and the accompanying affidavit, and being satisfied that there was no deliberate lapse or laches on the part of the assessee in not filing the appeal within the prescribed period, the delay of ten months is condoned in the interest of justice and the appeal is admitted for adjudication. 3. The brief facts qua the issue involved are that the assessee- company had opened a hospital during the relevant financial year and filed its return of income on 30/11/2014 declaring a loss of ₹2,41,55,663/-. Information was received through the ITBA system from the office of ITO Ward 16(2)(4) that, during the assessment proceedings in the case of Shri Gautam S. Nadkarni, who was a Director of the assessee-company, it was observed Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 3 that there were substantial cash deposits aggregating to ₹1,77,05,155/- in the bank accounts of the assessee-company. Based on this information, the assessee’s case was reopened and notice under section 148 was issued on 31/03/2021. 4. During the reassessment proceedings, notices under section 142(1) dated 18/11/2021 were issued calling for various details, the particulars of which are incorporated in the assessment order at pages 3 to 5. According to the Assessing Officer, the assessee did not initially furnish replies to the said notices; however, thereafter, a further notice under section 142(1) was issued, in response to which the assessee submitted that it was incorporated for running the business of a multi-specialty hospital in the name of “Neway Chemist” at Kavesar, Thane. It was further submitted that the accounts were duly audited and that along with the reply, computation of income, profit and loss account, balance sheet and other details were furnished. The assessee also stated that it maintained a regular cash book reflecting daily closing balances. 5. In so far as the source of cash deposits was concerned, it was categorically stated by the assessee that the deposits were made out of cash collected from patients against bills raised by the hospital from time to time and also out of withdrawals made from the banks. It was specifically explained that the bills raised on patients were duly recognised as sales in the regular books of account. The Assessing Officer, however, observed that the assessee had not furnished relevant supporting details such as Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 4 the cash book and copies of bank account statements and, on that basis, treated the entire cash deposits of ₹1,77,05,155/- as unexplained money and brought the same to tax under section 69A of the Act. 6. The learned CIT(A) confirmed the addition after observing and holding as under:- “7. I have considered the assessment order. Statement of Facts submitted by the appellant along with Form 35 and the material on record and find that the AO has given complete reasoning in the assessment order for making an addition of Rs 1,77,05,155/- under the provision of the IT Act 1961 for the Financial Year 2013- 14 relevant to Assessment Year 2014-15. As per assessment order, the appellant company was running the business of Multi- specialty Hospital in the name and style of \"Neway Hospital\" registered and situated at B-14/44, Vijay Nagar Annex, Ghodbandar Road, Kavesar, Thane and earned business income during the relevant year As per the information received, during the assessment proceedings in the case of one Shri Gautam S. Nadkanri who was director in the said company, it was observed that there were cash deposits made totalling to Rs. 1,77,05,155/- in the bank accounts of the appellant company during the year under consideration. During the assessment proceedings, on analysis of return of income of the appellant, the Ld. AO observed that there were cash deposits totalling to Rs. 1,77,05,155/- made in the two bank accounts of the appellant company during the FY 2013-14, but the same was not in tune with the activities of the appellant company and also could not be properly explained. The Ld. AO relied that the deposits were not commensurate with the activities of the appellant as there were total receipts of Rs. 2,02,39,982/-however, cash in hand was Rs. 6,26,098/- only. During the assessment proceedings, the appellant failed to explain about the cash deposits ie. Rs. 1,77,05,155/-along with any supporting documents before the AO, hence the same were remained unexplained in the hand of the appellant. Therefore, the amount of unexplained cash deposits ie. Rs 1,77,05,155/- was added back in the income of the appellant by the AO treating the Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 5 same as Income from unexplained sources under the provision of section 69A of the IT Act 1961. 7.1 Even during the appellate proceedings, the appellant failed to furnish any reply/documentary evidences in respect of its appeal filed Despite being provided ample opportunities in the appellate proceedings, the appellant could not file any reply/evidences in respect of grounds of appeal as well as statements of facts. Therefore, in the absence of any reply/evidence, I have no option but to confirm the addition of Rs.1,77,05,155/- under the provision of the IT Act 1961, made by the A.O in the assessment order as discussed above. Further, the AO is hereby also directed to give the credit in respect of carry forwarding the loss as after making the adjustment of above said addition as per law.” 7. Before us, the learned counsel for the assessee submitted that, in reply to the notices issued by the Assessing Officer, the assessee had furnished the entire audited accounts as well as detailed particulars of IPD and OPD patients and the amounts received from them during the year, clearly evidencing that the cash deposits represented hospital receipts duly recorded in the books of account. Month & Year IPD Income OPD Income Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Total Gross Total 942,601.00 1544,688.30 23,19,967.20 22,40,136.58 1844,428.38 17,12,549.52 20,40,618.35 27,08,682.59 29,28,091.08 1,81,91,763.00 1,00,453.00 2,96,155.00 2,73,218.00 2,76,661.50 2,76,192.00 2,54,528.00 2,34,935.00 2,20,848.00 2,26,328.00 21,59,318.50 2,03,51,081.00 Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 6 8. It was further submitted that, apart from the above, the assessee had maintained and produced contemporaneous documentary evidence, including cash book and bank statements, along with in-patient discharge registers and OPD patient records. The copies of these documents, running into more than 82 pages, have been filed before the Tribunal.  Cash Book Summary along with Cash book  Bharat Cooperative Bank statements  Axis Bank statements  ICICI Bank statement  Saraswat Bank Statement  IPD(In patient Discharged Register)  Inauguration Card  Certificate of Registration 9. On the strength of the aforesaid material, the learned counsel submitted that the entire source of the cash deposits stood fully explained, as the fees received from various patients were clearly evidenced from the patient registers, audited cash book and corresponding bank statements. 10. On the other hand, the learned Departmental Representative submitted that none of these detailed documents were furnished before the Assessing Officer during the reassessment proceedings and, therefore, contended that the matter should be restored to the file of the Assessing Officer for proper verification. Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 7 11. We have carefully considered the rival submissions and perused the material available on record in the light of the findings recorded by the authorities below. The addition in the present case has been made under section 69A of the Act on the premise that the cash deposits aggregating to ₹1,77,05,155/- found in the bank accounts of the assessee remained unexplained. The foundation of such an addition rests on the assumption that the assessee failed to establish the nature and source of the said deposits to the satisfaction of the Assessing Officer. 12. At the outset, it is an undisputed position emerging from the record that the assessee is a private limited company which commenced the business of running a multi-specialty hospital during the relevant previous year. It is also not in dispute that the assessee maintained regular books of account, which were duly audited, on the basis of which the profit and loss account and balance sheet were prepared and filed. Significantly, there is no finding by the Assessing Officer or the first appellate authority rejecting the books of account under section 145 of the Act, nor is there any adverse observation pointing out any inherent defect, inconsistency, or manipulation in the maintenance of such books. 13. The assessee has disclosed gross receipts from hospital operations exceeding ₹2.02 crores during the year. In support of the said receipts, the assessee has furnished detailed summaries of IPD and OPD income, patient-wise registers, cash book Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 8 maintained on a day-to-day basis, and bank statements reflecting deposits made from time to time. The IPD and OPD registers, as placed on record, contain contemporaneous particulars such as bill registration number, name of the patient, bill amount raised, amount deposited, balance collected, and the mode of receipt, whether in cash or through banking channels. These records, read conjointly with the cash book, demonstrate a clear trail of cash collections from patients being recorded in the books and thereafter deposited into the bank accounts. 14. The month-wise details of IPD and OPD collections further reveal that a substantial portion of the receipts was in cash and largely comprised of relatively small amounts. Such a pattern of receipts is neither unusual nor implausible in the case of a hospital or medical establishment, particularly during the initial phase of its operations, where outpatient consultations and emergency services often involve cash payments. When these contemporaneous records are examined holistically, they prima facie lend credence to the explanation of the assessee that the cash deposits represent hospital fees collected from patients and duly recorded as revenue in the regular books of account. 15. The Assessing Officer has proceeded to treat the entire cash deposits as unexplained primarily on the ground that the assessee did not furnish the relevant supporting documents during the reassessment proceedings. However, the existence of such documents and their maintenance as part of the regular accounting system of the assessee is not in dispute. The assessee Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 9 has now placed before the Tribunal voluminous documentary evidence, including cash book, multiple bank statements and patient registers, all of which are capable of verification and reconciliation. Once the assessee demonstrates that it has maintained proper books of account and contemporaneous records explaining the source of cash deposits, the rigour of section 69A cannot be mechanically applied without first undertaking a proper examination of such material. 16. In our considered view, the material on record prima facie establishes that the source of the cash deposits is attributable to fees collected from patients, duly recorded in the cash book and supported by IPD and OPD patient details. At the same time, since these documents were admittedly not examined by the Assessing Officer at the assessment stage, and since the verification of such records falls within the domain of the fact- finding authority, it would be appropriate, in the interest of justice, to restore the matter to the file of the Assessing Officer for a limited and focused verification. 17. Accordingly, while we hold that the source of cash deposits stands prima facie explained on the basis of the records produced, the issue is restored to the file of the Assessing Officer to verify the cash book, bank statements and IPD/OPD patient registers and to ascertain whether the cash deposits are duly reflected in the regular books of account and are referable to disclosed hospital receipts. The Assessing Officer shall carry out this verification after affording due opportunity of being heard to Printed from counselvise.com ITA No.4716/Mum/2025 Sai Medisolution Pvt. Ltd. 10 the assessee and shall decide the issue in accordance with law. The scope of verification shall remain confined strictly to the source and recording of the impugned cash deposits. 18. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced on 11th February, 2026. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 11/02/2026 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "