TMI Blog2018 (3) TMI 1669X X X X Extracts X X X X X X X X Extracts X X X X ..... unt also. - Addition to be deleted - decided in favour of assessee. - ITA No. 7097/Mum/2013 - - - Dated:- 23-3-2018 - Shri G.S.Pannu And Shri Ravish Sood, JJ. Appellant by : Ms. Aasifa Khan, A.R Respondent by : Shri Rajesh Kumar Yadav, D.R ORDER Ravish Sood, The present appeal filed by the assessee is directed against the order passed by the CIT(A)-17, Mumbai, dated 04.10.2013, which in itself arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short Act‟) dated 31.12.2009 for A.Y 2005- 06. The assessee had assailed the order of the CIT(A) before us by raising the following grounds of appeal:- 1. The Learned Income Tax Officer 17(1)1 Mumbai erred in the adding of unexplained cash credit u/s.68 of Income Tax Act ₹ 6,84,000/- and C.I.T (Appeal) erred in confirming the addition. 2. The Learned Income Tax Officer 17(1)1 Mumbai erred and assess the total income ₹ 6,86,010/- order u/s.143 of Income Tax Act.1961. 3. The Learned Income Tax Officer 17(1) 1, Mumbai has not gone through the facts and the circumstances of the case properly. 4. The Learned Income Tax Off icer has to go throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42(1) on 12.02.2008 may be treated as the return of income filed in response to the notice issued under Sec. 148. Subsequently, the A.O issued a notice under Sec. 142(1), dated 20.07.2009 calling upon the assessee to furnish certain specific information in respect of his income and the investments made during the year under consideration. 3. The issue involved in the present case lies in a narrow compass. The A.O on the basis of the AIR information gathered that the assessee has purchased an immovable property during the year, viz. A.Y 2005- 06 for a total consideration of ₹ 40,00,000/-. The assessee on being called upon to furnish documentary evidence in respect of the source of investment made in the acquisition of the property, submitted that he along with three other persons, viz. (i). Mr. Asif Ksam Supariwala; (ii). Mrs Khadija Usman Patel; and (iii).Mr. Salim Usman Patel, each having equally share, had purchased a Flat No. 202 on the 2nd floor of Sarkar Tower-III, Mazagaon, Mumbai for a total consideration of ₹ 40,00,000/-. The assessee explaining the source of his share of investment of ₹ 10,00,000/- made towards the purchase of the aforesaid property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using the submissions filed by the assessee before him called for a remand report from the A.O. The A.O in his remand report submitted that though during the course of the proceedings a letter was issued to the assessee and also information under Sec. 133(6) was called from Mrs. Khatija Usman Patel in respect of the unsecured loans, but however, no reply was received from the assessee. The A.O in his remand report observed that as not only the identity and creditworthiness of the party from whom loan was received was not proved, but rather, the fact that the assessee had not shown any agricultural income in his return of income filed for the year under consideration thus proved to the hilt that the assessee had no agricultural land in possession. The A.O further submitted in his report that during the course of the assessment proceedings the assessee on being called upon to explain the source of his share of investment of ₹ 10,00,000/- made in purchase of the property, viz. Flat no. 202 on the 2nfd floor of Sarkar Tower-III, Mazagaon, Mumbai, had claimed that he had received an unsecured loan of ₹ 4 lac from Mr. Aasif Supariwala, ₹ 2 lacs as unsecured loan from M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st and was purely receiving his income from agricultural activities and had no other source of income. It was brought to the notice of the CIT(A) that the assessee who was deaf and dumb had no other source of income except from agricultural activities and was totally dependant on his family and relatives for his livelihood. It was submitted before the CIT(A) that the amount of ₹ 6,84,000/- which was deposited in his bank account was as a matter of fact amounts received as loans from the relatives and the name of the assessee was stated in the purchase agreement only for the sake of convenience, as the assessee was absolutely dependant on his aforesaid relatives. 5. The CIT(A) after deliberating on the contentions raised by the assessee before him was however not persuaded to be in agreement with the contentions of the assessee. The CIT(A) held a conviction that now when the assessee while explaining the source of investment of ₹ 10,00,000/- made towards his share in the aforesaid property, viz. Flat No. 202 on the second floor, Sarkar Tower-III, Mazagaon, Mumbai, had stated that Mr. Asif Supariwala had made payment of ₹ 4,00,000/- directly to the builder on his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on his family and relatives had no other source of income except for income from agricultural activities, therefore, the lower authorities had gravely erred in treating the cash deposit in the bank account as his undisclosed income for the year under consideration. It was the contention of the ld. A.R that the lower authorities without dislodging or disproving the claim of the assessee that he was absolutely dependant on his family members for his livelihood, had however on the basis of whimsical observations drawn adverse inferences in his hands and most arbitrarily made an addition of ₹ 6,84,000/- as the unexplained income of the assessee. Per contra, the ld. Departmental Representative (for short D.R‟) relied on the orders of the lower authorities. 7. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We shall first deal with the objection raised by the Id. A.R as regards the addition of ₹ 6,84,000/- made by the A.O under Section 68 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the 'bank account' of an assessee cannot be construed as a credit in the 'books of the assessee‟ for the very reason that the bank account‟ cannot be held to be the 'books of the assessee‟. Though it remains as a matter of fact that the bank account‟ of an assessee is the account of the assessee with the bank or in other words the account of the assessee in the books of the bank, but however, the same in no way can be held to be the books of the assessee‟. We have given a thoughtful consideration to the scope and gamut of the aforesaid statutory provision, viz. Sec. 68 and are of the considered view that an addition made in respect of a cash deposit in the 'bank account' of an assessee, in the absence of the same found credited in the books of the assessee maintained for the previous year, cannot be brought to tax by invoking the provisions of Section 68. That our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of Commissioner of Income-tax Vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bom), wherein the Hon'ble High Court had observed as under: - As the Tribunal has point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k 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 ₹ 6,84,000/- deserves to be deleted. 9. Alternatively, we have further deliberated on the contentions advanced by the ld. A.R on merits to support her contention that no addition even otherwise in the backdrop of the facts of the case was called for in the hands of the assessee. We may herein observe that the contention raised before the lower authorities as well as before us by the ld. A.R that the assessee being a deaf and dumb person was absolutely dependent on his family and except for income from agricultural activities had no other source of income, had not been dislodged or disproved by the revenue till date. We further find that now when the assessee during the course of the assessment proceedings had placed on record copies of the extract of the register in Form 7 and 12 as a proof of ownership of agricultural land by him, therefore, the lower authorities merely on the basis of premature observations could not have summarily rejected the said c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tally dependent on his relatives for his livelihood, therefore, despite the fact that the explanation of the assessee that the source of the cash deposit was out of his sole source of income from agricultural activities or the amounts received from his relatives (which had been accepted by the relatives) might not have found favour with the A.O, but however, it could safely be concluded that he could not had earned an amount of ₹ 6,84,000/- during the year under consideration. We thus are of a strong conviction that in the backdrop of the facts of the case the addition of ₹ 6,84,000/- even otherwise also could not have been validly made in the hands of the assessee. We thus not persuaded to subscribe to the aforesaid addition of ₹ 6,84,000/- in the hands of the assessee on merits, therefore, direct the deletion of the same on the said count also. 10. We thus in terms of our aforesaid observations set aside the order of the CIT(A) and quash the addition of ₹ 6,84,000/- made in the hands of the assessee. 11. The appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in the open court on 23.03.2018 - - TaxTMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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