TMI Blog2021 (1) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... where the returns are filed on the basis of income declared under section 44A of the Act, there cannot be any application of section 68 of the Act. Thus, in the back drop of the facts, relevant provisions of the Act and case laws discussed above, no addition under section 68 can be made in the instant case. We find merit in ground raised by the assessee in appeal. - ITA No. 1183/MUM/2019 - - - Dated:- 28-12-2020 - Vikas Awasthy, Member (J) For the Appellant : Tanmay Phadke For the Respondents : Smita Verma ORDER Vikas Awasthy, Member (J) This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-3, Thane (in short 'the CIT(A)') dated 18/09/2018 for the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished cash flow statement for the financial year 2013-14. However, the Assessing Officer did not considered the same. 2.1. The ld. Authorized Representative of the assessee submitted that the Assessing Officer has erred in invoking the provisions of section 68 of the Income Tax Act, 1961 (in short 'the Act') in the absence of books of account. As the assessee filed return of income U/s. 44AD of the Act i.e. under presumptive tax scheme, the assessee was not maintaining books of account. No addition can be made u/s. 68 of the Act in absence of any credit entry in the books. The ld. Authorised representative of the assessee contended that bank passbook/statement does not constitute books of account. To support of his submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in nature. 5. Both sides heard. Orders of authorities below and the decisions on which reliance has been placed by the ld. Authorized Representative of the assessee examined. The addition of ₹ 11,20,000/- under section 68 of the Act has been made in the instant case on the basis of unexplained cash deposits in the bank account of assessee. The contention of the assessee is that the cash deposits in bank are from his past savings from business income. To buttress his contentions the assessee purportedly furnished Fund Flow Statement for the impugned assessment year before the Assessing Officer. However, the same was not considered by the authorities below. The assessee has not maintained books and has filed return of income u/s. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue it would be imperative to refer to the relevant provisions of section 68 of the Act. The same are reproduced herein under: 68 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 income-tax as the income of the assessee of that previous year: A bare perusal of section 68 of the Act makes explicitly clear that the addition can be made under the section if, any sum is found credited in the books maintained by the assessee. That is the books should be that of the assessee. 9. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 11. Under the provisions of section 44AD of the Act, where the assessee is engaged in eligible business and has total turnover or gross receipts in the previous year not exceeding ₹ 60,00,000/-, the assessee is eligible to file return of income on the basis of presumptive income @ 8% of total turnover or gross receipts. In the present case undisputedly the assessee has not maintained books and has offered his business income to tax on presumptive basis u/s. 44AD of the Act. The same has been accepted by the Assessing Officer exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax as the income of the assessee of that previous year. The existence of books of account is a condition precedent for invoking of the power. Discharging of burden is a subsequent condition. If the first point is not fulfilled the question of burden of proof does not arise. The Assessing Officer made the assessment by making addition of the amount for which disallowance was claimed Mr. Bhuyan very candidly admits that addition was made in exercise of the power under-section 68 of the Act, therefore, the first condition necessary for invocation of the power is the existence of the books of account. [Emphasised] 14. The Tribunal in the case of Madhu Raitani vs. ACIT (supra) following the decision rendered in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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