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TMI Blog2019 (11) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee as unexplained income. 5. Brief facts of the case are that the assessee, an individual, deriving income from house property, interest, commission and other sources has filed her return of income for the A.Y. 2011-12 declaring total income of Rs. 3,10,000/- on 19.07.2011. The case was taken up for scrutiny and notice u/s 143(2) was issued to the assessee. During the course of assessment proceedings, the Assessing Officer (AO) found that the assessee has traded in Metals & Energy in Multi Commodity Exchange of India Limited through 'Steel City Commodities Private Limited', Visakhapatnam which resulted in a loss of Rs. 55,767/-. The AO further noticed that during the previous year relevant to the A.Y.2011-12 (for the period from 06.08.2010 to 31.03.2011), the assessee has invested the amount of Rs. 1,29,09,000/- through the ICICI Bank, Oriental Bank of Commerce, Federal Bank, Barclays bank as per the details given below : (a) ICICI Bank Rs. 56,50,000 (b) Oriental Bank of Commerce Rs. 26,00,000 (c) Federal Bank Rs. 37,80,000 (d) Barclays Rs. 8,79,000 6.1. The AO asked the assessee to explain the source of monies deposited in the bank accounts and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, the assessee went on appeal before the CIT(A) and furnished the additional evidence in the form of confirmation letters from 18 creditors, who stated to have purchased the gold. The Ld.CIT(A) admitted the additional evidence and called for the remand report from the AO. On receipt of the letter from the Ld.CIT(A), the AO directed the assessee to produce the 18 persons from whom the confirmations were obtained by the assessee along with their income tax returns and the bank statements. But the assessee failed to produce the buyers of the gold, therefore, the AO disbelieved the claim of the assessee with regard to sale of gold and accordingly submitted the remand report requesting the CIT(A) to confirm the addition. On the basis of the remand report and the observations made by the AO for non production of the evidence for sale of gold, the Ld.CIT(A) confirmed the addition made by the AO u/s 68 of the Act. Against which the assessee filed appeal before this Tribunal. 8. During the appeal hearing, the Ld.AR argued that the assessee has made the cash deposits in the bank accounts and not made any credit entries in the books of accounts, therefore, the AO ought not to have made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not declared the transactions of Multi Commodities Stock Exchange Ltd. for trading done in respect of Metals and Energy in the return of income. Therefore, argued that there is no case for set off of unexplained income in respect of cash credits against the loss stated to have been incurred by the assessee. 9.1. In respect of the contention of the Ld.AR with regard to addition made u/s 68 of the Act, the Ld.DR submitted that the assessee has made cash deposits in the bank accounts for which the assessee could not explain the sources. Before the AO, the assessee submitted single line confirmation letters without furnishing any details such as address of the buyers. Though the Ld.CIT(A) admitted the additional evidence of confirmation letters, in the remand proceedings, the assessee failed to produce the buyers of the gold though opportunity was given to the assessee. Therefore, argued that the assessee failed to prove the genuineness of the sale of gold or inheritance of gold, therefore, argued that the AO has rightly made addition u/s 68 on account of deposits made in the bank accounts and no interference is called for in the order of the Ld.CIT(A). 9.2 The Ld.DR further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffers 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 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 [Assessing] officer, satisfactory, the sum so credited may be charged to incometax as the income of the assessee of that previous year.......... That a bare perusal of the aforesaid deeming section therein reveals that an addition under the said statutory provision can only be made where any sum is found credited in the books of an assessee maintained for any previous year. Thus, the very sine qua non for making of an addition under Section 68 presupposes a credit of the aforesaid amount in the 'books of an assessee' maintained for the previous year. We not being oblivious of the settled position of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.com 68 (Mumbai Trib.) wherein it was held as under: - I have carefully considered the rival submissions. In the present case the addition has been made by the income tax authorities by treating the cash deposits in the bank account as an unexplained cash credit within the meaning of sect/on 68 of the Act The legal point raised by the assessee is to the effect that the bank Pass book is not an account book maintained by the assessee so as to fail within the ambit of section 68 of the Act. Under section 68 of the Act, it is only when an amount is found credited 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f accounts, the cash deposits made in the bank account were not found credited in the books of accounts. The entire transactions were made outside the books of accounts. In the absence of any finding with regard to cash deposits recorded in the books of accounts of the assessee, the addition made by the AO u/s 68 in respect of cash deposits made in the bank account are unsustainable. During the appeal hearing, the Ld.DR did not bring any other decision to support the revenue's contention that the cash deposits made in the bank account to be brought into the purview of section 68 of the Act. The case law relied upon by the Ld.DR in the case of Sachdeva (supra) though related to sale of jewellery and the failure of the assessee to prove the genuineness of sale, it was not related to the addition u/s 68. The case law relied upon by the Ld.DR is distinguishable and does not help the Revenue's case. Since the facts are identical to the decision of Mehul V.Vyas (supra), respectfully following the view taken by the coordinate bench of ITAT, Mumbai, we hold that the addition made by the AO u/s 68 in respect of cash deposits made in the bank account is unsustainable, accordingly, we set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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