TRICHUR HEART HOSPITAL LIMITED,THRISSUR V. DCIT, CIRCLE 1(1) & TPS, THRISSUR

ITA 915/COCH/2024

AI Insights

Trichur Heart Hospital Ltd., engaged in healthcare services, filed an appeal against the order of the National Faceless Appeal Centre, which confirmed the AO's addition of Rs. 45,74,000 to the hospital's income for AY 2017-18. This amount represented cash deposits in specified bank notes (SBN) during the demonetisation period, which the AO deemed unexplained as the hospital was not authorized to accept such notes post-18.11.2016. The hospital argued that these deposits were from payments for services rendered during emergencies, which were already declared as income. The Tribunal noted the hospital's compliance with a Ministry of Finance notification allowing acceptance of SBN for emergency medical situations and required a detailed examination of the deposits' sources.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47283 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Shree Sanand Textiles industries Ltd. v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: HARIKRISHNANUNNY
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI GEORGE GEORGE K., VP AND SHRI INTURI RAMA RAO, AM ITA No. 915 /Coch/2024 Assessment Year: 2017-18 Trichur Heart Hospital Ltd. .......... Appellant 33/647254, Shakthan Thampuran Nagar Thrissur 680001 [PAN: AABCT1092P] vs. Dy. Commissioner of Income Tax .......... Respondent Circle - 1(1) & TPS, Thrissur Appellant by: Shri Harikrishnanunny, CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 01.04.2025 Date of Pronouncement: 09.04.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 29.08.2024 for Assessment Year (AY) 2017-18. 2. Brief facts of the case are that the appellant is a limited company engaged in the business of running a hospital. The return of income for AY 2017-18 was filed on 03.11.2017 declaring income of Rs. 1,69,95,566/-. Against the said return of income, the assessment was completed by the Assessing Officer (AO) vide order 2 ITA No. 915/Coch/2024 Trichur Heart Hospital Ltd. dated 22.12.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 2,15,69,566/- before set off of the brought forward losses of AY 2016-17. While doing so, the AO made addition of cash deposits in specified bank notes (SBN) during the demonetisation period of Rs. 45,74,000/- on the ground that the appellant was not authorised to accept these SBN from 09.11l.2016. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. The learned counsel for the assessee submitted before us that the appellant had accepted SBN from the customers on emergency situation during period from 09.11.2016 to 20.12.2016 against bills issued to them in respect of health care services and sale of medicine from the pharmacy in the hospital. The amounts so collected from the customers were already offered to tax, which is not disputed. Since the corresponding income was already offered to tax, there is no need to make special addition on account of deposit of money and in this connection he placed reliance on the decision of the coordinate bench in the case of Shree Sanand Textiles industries Ltd. v. CIT in ITA No. 116/Ahd/2014. 6. On the other hand, the learned Sr. DR vehemently opposed the submission made on behalf of the appellant and submitted that the 3 ITA No. 915/Coch/2024 Trichur Heart Hospital Ltd. appellant was not authorised to accept SBN from the patients after 18.11.2016 and, therefore, explanation offered in support of cash deposit cannot be accepted. 7. We have heard the rival contentions and perused the material available on record. The short issue that arises for our consideration is whether the AO was justified in making addition of cash deposits made in SBN during demonetisation period of Rs. 45,74,000/- as unexplained money. During the course of assessment proceedings as well as before the CIT(A), it is asserted that the appellant made the above cash deposit out of the money collected from the patients during demonetisation period. The appellant also filed a notification issued by the Ministry of Finance authorising the hospitals to accept cash in SBN during the demonetisation period on emergency medical situation. However, the lower authorities failed to examine the names of the patients who are admitted in hospital and paid the fees in SBN. Therefore, the matter is restored back to the file of the AO for de novo disposal in accordance with law after providing reasonable opportunity of hearing to the appellant. 8. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 9th April, 2025. Sd/- Sd/- GEORGE GEORGE K. VICE PRESIDENT (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 9th April, 2025 n.p. 4 ITA No. 915/Coch/2024 Trichur Heart Hospital Ltd. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "