TMI Blog2017 (4) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the nature and source of the cash deposit in her bank account, but rather it remains as a matter of fact that substantial material was placed on record by the assessee to fortify the genuineness and veracity of his aforesaid explanation. We find that the explanation of the assessee had been dislodged by the A.O merely on the basis of doubts, surmises and conjectures, which we are afraid cannot form a basis for making an addition in the hands of the assessee. - Decided in favour of assessee. - I.T.A. No.727/Mum/2013 - - - Dated:- 7-4-2017 - SHRI D. KARUNAKARA RAO, AM AND SHRI RAVISH SOOD, JM For The Appellant : Shri Narayan Atal For The Respondent : Ms. Pooja Swaroop ORDER PER RAVISH SOOD, JM: The present appeal is directed against the order passed by the CIT(A)-11, Mumbai, dated 13.12.2012, which in itself arises from the assessment order passed by the A.O under Sec. 143(3) r.w.s. 147 of the Income-tax Act,1961 (for short Act ), dated 30.12.2010. The assessee has raised the following grounds of appeal before us:- 1. The Learned Commissioner of Income-tax (Appeals-11 erred in confirming the addition of ₹ 10,53,000/- under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was reopened under Section 147 and a notice under Sec.148, dated 17.06.2009, was issued and served on the assessee. 3. That during the course of the assessment proceedings the A.O called upon the assessee to put forth an explanation as regards the nature and source of the cash deposit of ₹ 10,53,000/- in her aforesaid Saving Bank account. The assessee in compliance to the aforesaid query submitted before the A.O that with the money left by her deceased husband and the income generated by her from Grauh Udyog for the last many years, she had accumulated savings out of which she had advanced interest bearing loans to different persons. It was submitted by the assessee that knowing well that she was at the fag end of her life, she decided to give her accumulated savings as a loan to her son Mr. Mehul V. Vyas, and to facilitate the same had deposited the amount of ₹ 10,53,000/- out of the accumulated cash available with her in the aforesaid Saving bank account. The assessee further furnished with the A.O the bifurcated details of the source of deposit of the amount of ₹ 10,53,000/- in her aforesaid bank account, as under:- Opening ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiation of the reassessment proceedings, as well as the framing of the assessment under Section 143(3) r.w.s 147. We have given a thoughtful consideration to the contentions of the Ld. A.R in context of the aforesaid additional grounds of appeal and are not impressed with the same. We find that the A.O on the basis of information received from the office of the CIT(CIB) that cash aggregating to ₹ 10,53,000/-(supra) was deposited by the assessee in her bank account, thus, after deliberating on the material available before him, formed a bonafide belief that the income of the assessee chargeable to tax had escaped assessment. We are thus of the considered view that in light of the well established nexus between the material available on record and the formation of the belief by the A.O that the income of the assessee had escaped assessment, the fundamental requirement for assumption of jurisdiction by the A.O u/s 147 stood duly satisfied, and thus no infirmity can be related to the initiation of the aforesaid proceedings by the A.O. We further find that it neither emerges from the body of the assessment order, nor any averment had been made by the Ld. A.R before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O under Sec. 68 did not fall within the four corners of the additions which could be made under the said statutory provision, therefore the same being absolutely devoid of any force of law, thus could not be sustained and was liable to be vacated. 7. Alternatively, the Ld. A.R adverting to the merits of the case therein submitted that though the complete details as regards the source of the cash deposit of ₹ 10,53,000/- in the bank account of the assessee were furnished with the A.O along with supporting documentary evidence, however the latter had proceeded with most arbitrarily and without appreciating the explanation of the assessee in respect of the nature and source of the aforesaid cash deposit, which as claimed by the Ld. A.R stood duly substantiated on the basis of substantial material that was placed on his record, had made an addition of the said amount as an unexplained cash credit under Section 68 in the hands of the assessee. It was further submitted by the ld. A.R that the CIT(A) had in a mechanical manner upheld the assessment framed by the A.O. The Ld. A.R in order to fortify his contention that the complete details along with supporting documentary evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, which thereafter had been sustained by the CIT(A). It was submitted by the ld. D.R that the appeal of the assessee was devoid of any force and was liable to be dismissed. 8. We have heard the ld. Authorized representatives of both the parties, perused the orders of the lower authorities as well as the material produced before us. We will first deal with the objection raised by the ld. A.R as regards the addition of ₹ 10,53,000/- which was made by the A.O under Section 68 of the Act , in respect of the cash deposit in the bank account of the assessee. We find substantial force in the contention of the ld. A.R that an addition under Section 68 can only be made where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee either offers no explanation about the nature and source as regards the same, or the explanation offered by him in the opinion of the assessing officer is not found to be satisfactory. That before adverting further, we herein reproduce the relevant extract of the aforesaid statutory provision, viz. Section 68, which reads as under: - Cash Credits. Where any sum is found credited in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held as under: - As the Tribunal has pointed out, it is fairly well settled that 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. Applying this principle, 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 the pass book is maintained by the bank under the instructions of the constituent. In view of this, the Tribunal was, with respect, justified in holding that the pass book supplied by the bank to the assessee in the present case could not be regarded as a book of the assessee, that is, a book maintained by the assessee or under his instructions. In our view, the Tribunal was justified in the conclusions at which it arrived. We find that the aforesaid view of the Hon ble jurisdictional High Court had thereafter been followed by a SMC of the ITAT Mumbai bench in the case of Smt. Manshi Mahendra Pitkar Vs. ITO 1(2), Thane (2016) 73 taxmann.c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he very reason that as per the judgment of the Hon ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra) , a bank pass book or bank statement cannot be considered to be a book maintained by the assessee for any previous year, as understood for the purpose of Section 68 of the Act. Therefore, on this count itself the impugned addition ₹ 10,53,000/- deserves to be deleted. 9. Even otherwise, we find that the explanation rendered by the assessee in respect of the nature and source of the cash deposit of ₹ 10,53,000/-(supra) in her bank account has been disbelieved by the lower authorities without establishing any credible infirmity or fallacy in the substantial material which was made available on record by the assessee. We are of the considered view that the assessee had not only put forth an explanation in respect of the nature and source of the cash deposit of ₹ 10,53,000/-(supra) in her bank account, but rather it remains as a matter of fact that substantial material was placed on record by the assessee to fortify the genuineness and veracity of his aforesaid explanation. We find that the explanation of the assessee had been dislodged by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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