TMI Blog2020 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant : Shri G.V.N.Hari, AR For the Respondent : Smt U.Mini Chandran, Sr.AR 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)-6, Hyderabad in Appeal No.10523/2018-19/A3/CIT(A)-6 dated 14.03.2019 for the Assessment Year (A.Y.)2014-15. 2. All the grounds of appeal are related to sustaining the addition of ₹ 33,34,000/- out of total addition made by the Assessing Officer (AO) amounting to ₹ 37,34,000/- u/s 68 of the Income Tax Act, 1961 (in short Act. The assessee filed appeal with the following grounds: 1. The order of the Learned Commissioner of Income Tax (Appeals), Hyderabad is contrary to the facts of the case and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) ought to have admitted the additional evidence filed by the appellant and called for remand report. 3. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of ₹ 33,34,000/- out of total addition of ₹ 37,34,000/- made by the assessing officer u/s 68 of the Act towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y members. The assessee explained that the he had received the loans from V.Uma Devi, V.Bal Ram, Padma and Rambabu for purchase of Eucalyptus and other trees as mentioned in the confirmation letters as per the details mentioned hereunder : S. No. Name of the lender Extent of land Produce purchased Amount paid Date 1. V.Uma Devi 2Ac. Eucalyptus trees ₹ 2,90,000/- 09.11.2013 2. V.Prem Kumar 3 Ac -do- ₹ 5,00,000/- 18.11.2013 3. V.Bala Ram 3 Ac. -do- ₹ 5,00,000/- 24.11.2013 4. Padma Ac.0.95 cents -do- ₹ 5,00,000/- 26.11.2013 Rambabu Ac 0.78 cents -do- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, the Ld.DR vehemently supported the orders of the lower authorities and argued that the assessee has not considered the deposits made in the bank account while preparing the books of accounts, hence, argued that the AO has rightly made the addition, hence requested to uphold the order of the AO and no interference is called for. The Ld.DR further submitted that merely because the AO made the addition u/s 68 instead of 69, the addition should not be deleted on technical grounds. It remains that the assessee failed to explain the source, therefore, requested to uphold the order of the Ld.CIT(A). 7. We have heard both the parties and perused the material placed on record. As observed from the orders of the lower authorities, the deposits were made in the bank account representing Andhra Bank account No.030310100028234 and the addition was made u/s 68 of the Act. The assessee has challenged the action of the AO in making the addition u/s 68 in respect of cash deposits. Therefore, we, take up first the additional ground relating to validity of addition u/s 68. As per section 68, the sum found credited in the books of account maintained by the assessee, for which no explanation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 68 of the Act. For the sake of clarity and convenience, we extract relevant part of the order of this Tribunal which reads as under : 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 make any entry in the books of accounts, the AO is not permitted to make the addition u/s 68. The issue with regard to deposits made in the bank account, whether to be brought to tax u/s 68 or not was considered by the coordinate bench of ITAT Mumbai in Mehul V.Vyas Vs. Income Tax Officer (supra) and held that the amounts found credited in the bank pass book or bank statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 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 round 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook 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 We further find that a similar view had also been arrived at in a 'third member' decision of the Tribunal in the case of Smt. Madhu Raitani Vs. ACIT (2011) 10 .taxmann.com 205 (Gauhati) (TM), as well as by a coordinate bench of the Tribunal in the case of ITO, Barabanki Vs, Carnal Kumar Mishra (2013) 33 taxamann.com 610 (Lucknow Trib.) Thus in the backdrop of the aforesaid facts of the case read in light of the settled position of law, we are of the considered view that the addition m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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