Bhanwar Lal Periwal vs Income Tax Officer Ward 30(1)

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-9, Mumbai [in short ‘the CIT(A)’] dated 26.02.2026, for Assessment Year 2017-18.

The assessee in appeal has assailed findings of the CIT(A) in upholding the addition of Rs.19,45,000/- u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on account of cash deposits in bank during demonetization period.

Shri Salil Kapoor, appearing on behalf of the assessee submits that the assessee is engaged in transport business (Hiring of taxi). The assessee is suffering from cancer, the assessee from time to time has withdrawn cash from his bank account for his treatment. The Id. Counsel referred to bank statements at pages 47 to 66 of the paper book to show withdrawals of the amount from assessee’s bank account. The Id. Counsel submits that after the demonetization of Rs.1000/- and 500/- currency notes, the assessee had deposited entire old currency that was available with him for his treatment in his account with HDFC Bank Ltd. on 15.11.2016 Rs.40,000/-, on 16.11.2016 Rs.9,00,000/- and 03.11.20216 Rs.8,50,000/-. The ld. Counsel submits that the AO disbelieved assessee’s submission with regard to cash in hand. No benefit of earlier withdrawals by the assessee was given by the AO. To substantiate that the assessee is suffering from cancer, the Counsel for the assessee referred to medical reports at pages 67 to 73 of the paper book.

Per contra, Shri Manoj Kumar, representing the Department vehemently defended the impugned order and reiterated findings of the Assessing Officer (AO) and the CIT(A).

Submissions made by rival sides heard, orders of the lower authorities examined. After considering submissions of the assessee, medical reports of the assessee placed on record, I am of considered view that the explanation furnished by the assessee for holding huge cash for the treatment is plausible. It is a well-known fact that cancer treatment involves huge expenditure on medical treatment. The reason for holding huge cash prior to demonetization is accepted and the additions of Rs.19,45,000/- u/s.69A of the Act is directed to be deleted.

In ground no. 2 of appeal, the assessee has assailed that the AO has invoked provisions of section115BBE of the Act. Since, the addition has been deleted ground no. 2 of appeal has become infructuous. In any case, the Hon’ble Madras High Court in the case of SMILE Microfinance Ltd. vs. ACIT, WP (MD) No.2078 of 2022 decided on 19.11.2024 has held that amendment to section 115BBE of the Act would come into effect from 01.04.2017 i.e. relevant to AY 2018-19 onwards. Thus, in the impugned assessment year un-amended provisions of section 115BBE of the Act would apply.

In the result, impugned order is set aside and appeal of the assessee is allowed.