TMI Blog2019 (11) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... -2019 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri G.V.N.Hari, AR For the Respondent : Shri D.Manoj Kumar, DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Rajamahendravaram in I.T.A.No. 10671/2014-15 dated 09.11.2018 for the Assessment Year (A.Y.) 2011-12. 2. In the appeal, the assessee has raised seven grounds in total. Ground No.1 and 7 are general in nature which does not require specific adjudication. 3. Ground No.2 is related to the validity of issue of notice u/s 143(2) of the Income Tax Act, 1961 (in short Act ). During the appeal hearing, the Ld.AR did not press this ground, therefore, ground No.2 is dismissed as not pressed. 4. Ground No.3, 4 and 5 are related to the addition of ₹ 1,22,29,000/- made by the AO u/s 68, treating the cash deposits made in bank accounts of the assessee as unexplained income. 5. Brief facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) Varun Sanghavi was not liable to file wealth tax returns as the net wealth as per Wealth Tax Act, 1957 remained below the chargeability levels. e) I am hereby enclosing a copy of unregistered gift deed. 2) 6,250 gms gold ornaments received on 25.04.2010 from inheritance from Mrs Sumathi Sanghavi, Mother-in-Law of the assessee. a) Mrs Sumathi Sanghavi died on 09.03.2010 and as per her oral will, it got the possession of the gold ornaments on 24th April 2010. b) Mrs. Sumathi Sanghavi inherited the gold from her lineal ascendants. 3) I have sold away my total gold ornaments of 6,750 grams for ₹ 1,22,29,000/- (The average price of sales being 1,811.7 per gram) 4) I have furnished the sources of cash in the below table : Sources Amount Application Amount Cash gift from Varun Sanghavi 6,80,000 Cash deposits in pay commodity losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned cash credit u/s 68. The assessee relied on the decision of ITAT Mumbai Tribunal , B Bench in the case of Mehul V. Vyas Vs. Income Tax Officer, in (2017) 164 TTD 0296 (Mumbai) wherein the Bombay Tribunal placing reliance on the decision of CIT Vs. Bhaichand N.Gandhi (1983) 141 ITR 67 (Bombay) has held that the addition made in respect of bank deposits u/s 68 is unsustainable. 8.1. The second proposition made by the Ld.AR is that, in the instant case, the assessee had filed confirmation letters before the Ld.CIT(A) from the buyers of the gold with a clear address and PAN, thus, established the identity and the genuineness of the transaction and discharged the burden of the assessee. The AO has directed the assessee to produce the persons, which is beyond the limitation of the assessee. Having furnished the confirmation letters with a clear address and PAN, the Ld.AR argued that it is for the department to conduct enquiries and to disprove the claim of the assessee to make the addition. Though the entire material was placed before the AO, the AO did not make any enquiries and brought any evidence to controvert the submission of the assessee thus argued that no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submitted that the assessee claimed to have sold the gold of 6,750 grams worth ₹ 1,22,29,000/-. The assessee is not a wealth tax assessee, therefore, it proves that the assessee did not own the gold of 6,750 grams, hence, the question of sale of gold does not arise. The Ld.DR relied on the decision of 45 taxman.com 224 Sachdeva Vs. ITO, Ward-1(1), Faridabad and Punjab Haryana High Court. In the circumstances, the addition made by the AO u/s 68 required to be upheld. 10. We have heard both the parties and perused the material placed on record. In the instant case, the AO made the addition of ₹ 1,22,29,000/- representing cash deposits made in the bank account u/s 68 of the Act. Section 68 allows the AO to make addition for the sums credited in the books of accounts maintained by the assessee for which the assessee fails to offer satisfactory explanation with regard to source. In the instant case, the assessee is maintaining the books of accounts but did not make any entry in the books of accounts. The amounts were deposited in the bank accounts, but not made relevant entry. Hence, the Ld.AR argued that since the assessee did not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid amount in the 'books of an assessee' maintained for the previous year. We not being oblivious of the settled position of law that a statutory provision has to be strictly construed and interpreted as per its plain literal interpretation, and no word howsoever meaningful it may so appear can be allowed to be read into a statutory provision in the garb of giving effect to the underlying intent of the legislature, thus confining ourselves within the realm of our jurisdiction, therein construe the scope and gamut of the aforesaid statutory provision by according a plain meaning to the language used in Sec. 68. We are of the considered view that a credit in 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 the same in no way can be held to be the 'books' of the assessee. We have given a thoughtful consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the account books of the assessee for any previous year that the deeming provisions of section 68 of the Act would apply in the circumstances mentioned therein. Notably, section 68 of the Act would come into play only in a situation Where any sum is found credited in the books of an assessee ........... . The Hon'ble Bombay High Court in the case of Shri Bhaichand Gandhi (supra) has approved the proposition that a bank Pass Book maintained by the bank cannot be regarded as a book of the assessee for the purposes of section 68 of the Act. Factually speaking, in the present case, assessee is not maintaining any books of account and section 68 of the Act has been invoked by the Assessing Officer only on the basis of the bank Pass Book. The invoking of section 68 of the Act has to fail because as per the judgment of the Hon'ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra), the bank Pass Book or bank statement cannot be construed to be a book maintained by the assessee for any previous year as understood for the purposes of section 68 of the Act. Therefore, on this account itself the impugned addition deserves to be deleted. I hold so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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