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2016 (10) TMI 692 - ITAT DELHI

2016 (10) TMI 692 - ITAT DELHI - TMI - Deposits from unexplained sources addition u/s 68 - Held that:- The assessee does not maintain any books of account. Under these circumstances, no addition can be made u/s 68 of the Act. - Even otherwise, the alternative contention of the assessee that the peak credit has to be taken into account by considering both the bank accounts has much force. On a perusal of the cash credit of the peak submitted by the assessee, the addition cannot be sustained. .....

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ring income of ₹ 1,69,630/-. The assessee had deposited a total amount of ₹ 39,76,168/- in two bank accounts during the year i.e., ICICI Bank Ltd. and Dena Bank Ltd. The AO inquired into the sources of these deposits and, thereafter, added the same as unexplained sources u/s 68 of the Act in his order passed u/s 143(3) on 3.3.2014. The assessee carried the matter in appeal without success. Further aggrieved, the assessee is before us. 3. After hearing the rival contentions, I find th .....

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- cannot be treated as income of that previous year - I.T.Act, 1961 Sec.68. When moneys are deposited in a bank the relationship that is constituted between the banker and the customer is one of debtor and creditor and not of trustee and beneficiary. The pass book supplied by the bank to its constituent is only a copy of the constituent s account in the books maintained by the bank. It is not as if the pass book is maintained by the bank as the agent of the constituent nor can it be said that th .....

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not chargeable to tax as income of the assessee of that previous year. ii) The Hon Ble Delhi High Court in the case of CIT vs. Ms.Mayawati reported in 338 ITR 563 (Del) held as follows:- As the ITAT has come to the conclusion that Section 68 has no applicability to the facts of the present case as the assessee is not maintaining any books of accounts. If that be so Section 68does not apply in this case for the simple reason cheque received from Mr.Pankaj Jain has been deposited in her bank accou .....

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of the customer (assessee) the relationship between the banker and customer is one of the debtor and creditor only. Therefore, a cash credit appearing in assessee‟s pass book relevant to a particular previous year, in a case where the assessee does not maintain books of account, does not attract the provisions of Section 68. Keeping in view the above in the instant case neither the gifts relating to immovable property can be covered under Section 68 nor the gift of ₹ 2 lacs received .....

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7. The aforesaid provisions of section 68 of the Act can only be invoked where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory. In that eventuality, the said sum so credited may be charged to income-tax as the income of the assessee of that previous year. Meaning thereby maintenance of .....

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and circumstances of the case, the Tribunal was justified in holding that cash credit for the previous year shown in the assessee's bank passbook issued to him by the bank, but not shown in the cash book maintained by him for that year does not fall within the ambit of section 68 of the Act and as such the sum so credited is not chargeable to income tax as the income of the assessee of that previous year, their Lordships of the Hon'ble Bombay High Court categorically held that passbook .....

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he previous year for such an income would be the ordinary financial year. Even under the provisions embodied in s.68 of the said Act it is only when any amount is found credited in the books of the assessee for any previous year that the section will apply and the amount so credited may be charged to tax as the income of that previous year, if the assessee offers no explanation or the explanation offered by him is not satisfactory. As the Tribunal has pointed out, it is fairly well settled that .....

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