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TMI Blog2019 (3) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case the learned Commissioner of Income-tax (Appeals), Bhagalpur, has failed to appreciate that appellant is only daughter-in-law of her parents-inlaw, therefore all love and affection is concentrate on appellant. 4. For that on the facts and circumstances of the case the learned Commissioner of Income-tax (Appeals), Bhagalpur, has failed to appreciate that gift given by the parents-in-law to the appellant through gift deed. 5. For that any other grounds shall be urged at the time of hearing, if necessary." 3. Amongst above grounds of appeal, the only effective ground is to be decided as to whether the Commissioner of Income-tax (Appeals) justified in confirming the addition made by the Assessing Officer on account of cash gifts to an extent of Rs. 8,68,000 made as unexplained cash credit under section 68 of the Act. 4. Brief facts of the case are that the assessee is an individual and engaged in civil contract work under proprietary concern. The assessee derives her income from civil contract work specifically from the Public Health Department, Government of Bihar, Munger. The assessee filed her return of income declaring of Rs. 2,70,590 on June 29, 2009. Notices u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to controvert the finding of the Assessing Officer in the assessment proceeding. 4. Even though the donors bank accounts indicate withdrawals from bank accounts of Sh Tarini Prasad in financial year 2004-05, it is highly unbelievable that not a single piece of documentary evidence was available with donor for investment in Sahara India. Similarly, there are withdrawals from bank account of Smt. Pratima Kumari in financial year 2001-02, but not a single piece of evidence pertaining to investment in Sahara India was available with her. These facts clearly indicate that the withdrawals by parents-in-laws in earlier financial years 2001-02 and 2004-05 are being taken as supporting evidence for the gifts in financial year 2008-09 without any evidence of fund investment or withdrawals in the intervening periods. Denial of any such investments by these two persons from Sahara India, further support the Assessing Officer conclusion. In view of the above factual circumstances, I have no reason to differ with the finding of the Assessing Officer with regard to the gift of Rs. 8,68,000 and hence the same is hereby confirmed." 6. Before us the learned authorised representative of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trib) and in the case of ITO v. Kamal Kumar Mishra reported in [2013] 33 taxmann.com 610 (Lucknow-Trib) and argued that provisions of section 68 of the Act can only be invoked wherein sum is found credited in the books of account maintained by the assessee and submitted the Assessing Officer did not make any adverse inference for non-maintenance of books of account in view of the profit offered at eight per cent. of gross receipt and referred to para. 2 of assessment order. 7. The learned Departmental representative relied on the order of the both the authorities below. 8. Heard both the parties and perused the material on record. The contention of the learned authorised representative that when the assessee is not required to maintain any books as required under section 44AA(2)(iv) of the Act and the Assessing Officer accepted the profit at eight per cent. as offered by the assessee under section 44AD of the Act. In such circumstances, it was contended that the addition made under section 68 of the Act is illegal and unsustainable and the provisions of section 68 is not applicable to the present facts and circumstances of the case involving the impugned addition. The learned aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 books of the assessee, in which credit entry so found, is a condition precedent for invoking the provisions of section 68 of the Act. Now the question arises whether the passbook issued by the bank with regard to the accounts of the assessee can be termed to be the books of the assessee for the purpose of section 68 of the Act. This issue was examined by the hon'ble Bombay High Court in the case of CIT v. Bhaichand H. Gandhi [1983] 141 ITR 67 (Bom) ; [1982] 11 Taxman 59 (Bom) and while answering the question i.e. whether on the facts 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as those of the individual partner and accordingly the additions made in the hands of the individual partners on the basis of the books of the partnership firm was deleted. 9. In the instant case, it is an undisputed fact that the assessee has not maintained any books of account and whatever credit entries are found by the Assessing Officer, it was from the bank accounts of the assessee in which deposits were made at different point of time. Even the passbook issued by the bank cannot be termed to be the book of the assessee as per the judgment of the hon'ble Bombay High Court Bhaichand N. Gandhi (supra). Therefore, the provisions of section 68 of the Act cannot be invoked on various deposits/credits found recorded in the bank account of the assessee in the absence of books of the assessee maintained for that previous year. 10. The learned Commissioner of Income-tax (Appeals) has adjudicated the issue in the light of the aforesaid judgment and has held that provisions of section 68 of the Act cannot be invoked. Besides, he has also examined the additions made by the Assessing Officer through grounds Nos. 1 to 6 on merit also and has noted that in each and every case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the gift. The hon'ble High Court of Patna in the case of Sarogi Credit Corporation v. CIT reported in [1976] 103 ITR 344 (Patna) observed that the Income-tax Officer's rejection not of the explanation of the assessee but the explanation is regarding the source of income of depositors, cannot by itself lead to any inference regarding non-genuine or fictitious character. Relevant portion of statements of donors summarised by the Assessing Officer is reproduced herein below : Shri Tarni Prasad (Father-in-law) He was Head clerk in 'Bhumi Vikash Bank, Khagaria' having retired in January, 2002. He has stated to have received retirement benefits of about 5 lakhs in part payments, which he has claimed to have deposited in the Jamui Central Co-operative Bank and after withdrawal from time-to-time said amounts have been re-deposited in Sahara India and later on its maturity payments were made as gift to Smt. Indrani Devi. He was asked to furnish evidence in this regard which he expressed his inability to produce by saying that at the time of receiving maturity payment, the certificates were surrendered after putting signature on it and copy of which could not be retaine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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