TMI Blog2021 (9) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in the case of Asha Sanghavi [ 2019 (11) TMI 868 - ITAT VISAKHAPATNAM] has taken similar view and held that cash deposits made in the bank account cannot be brought to tax u/s 68. In the instant case, there is no dispute that the deposits were made in the bank account and there were no entries in the books of accounts. The deposits made in Bank account are not permissible to tax u/s 68 - addition made by the AO u/s 68 in respect of cash deposits made in the bank are unsustainable, accordingly deleted. Appeal of the assessee is allowed. - I.T.A.No.518/Viz/2018 - - - Dated:- 23-9-2021 - Shri N.K.Choudhry, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon ble Accountant Member For the Appellant : Shri C.Subrahmanyam, AR For the Respondent : Shri B.Rama Krishna, 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)]-1, Visakhapatnam in ITA No.689/2011-12/ITO-W-1(4), Vsp/2017-18 dated 24.08.2018 for the Assessment Year (A.Y.) 2009-10 . 2. In this case, the assessee filed six grounds originally as follows : 1. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the assessee which is related to the validity of additions made u/s 68 in respect of bank deposits. 4. In the instant case, the assessee filed the return of income declaring total income of ₹ 1,45,510/- on 31.03.2010 and taken up the case for scrutiny under CASS. During the course of assessment proceedings, the AO found that the assessee made cash deposit of ₹ 12,23,000/-. When the assessee was asked to explain the source of deposits, the assessee explained that the source of cash deposits were withdrawals made from M/s Meghana Marketing, in which he was a partner. The AO, not being satisfied with the explanation of the assessee held that the source of cash deposits were not substantiated, hence made the addition u/s 68 of the Act. 5. Against the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition after going through the source and the deposits in detail. 6. Against which the assessee is in appeal before the Tribunal. During the appeal hearing the Ld.AR argued that cash deposits were made in the bank account and the AO is legally not correct in making the addition u/s 68 since no credit was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has rightly placed reliance on 'CIT vs. Bhaichand H. Gandhi', 141 ITR 67(Bom.), 'Sampat Automobile vs. ITO, 96 TTJ(D)368, 'Ms. Mayawati vs. DCIT', 113 TTJ 178(Del.) and 'Sheraton Apparels vs. ACIT', 256 I.T.R. 20(Bom). It is correct that since no books of account are maintained in the ordinary course of the business of the assessee, In the absence of any corroborative evidence to support action u/s 68 of the Act, no such addition is tenable. 17. In the case of Baladin Ram VS. CIT [1969] 7 ITR 427, the Hon ble Supreme Court has held as under: 4. In Baladin Ram v. CIT [1969] 71 ITR 427, it has been held by the Supreme Court that it is now well settled that the only possible way In which income from an undisclosed source can be assessed or reassessed is to make the assessment on the basis that the previous year for such an income would be the ordinary financial year. Even under the provisions embodied in s. 68 of the said Act, it is only when any amount is found credited in the books of the amount so credited may be charged to tax as the income of that previous year, If the assessee offers no explanation or the explanation offered by him is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee maintained for any previous year. Thus, the very sine qua non for making of an addition u/s 68 of the Act presupposes a credit of the amount in the books of the assessee. We are not being oblivious of the settled position of law that the 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. The scope and gamut of the aforesaid statutory provision is to be construed by according a plain meaning to the language used in section 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 of an assessee cannot be held to be 'books' of the assessee. The account of the assessee in the books of the bank is different from the books of the assessee. 8.1 This Tribunal in the case of Asha Sanghavi Vs. ITO in ITA No.33/Viz/2019 has taken similar view and held that cash deposits made in the bank account cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income-tax 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 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 ourse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 regarde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 aside the order of the Ld.CIT(A) and delete the addition made by the AO. Accordingly, the appeal of the assessee is allowed. In the instant case, there is no dispute that the deposits were made in the bank account and there were no entries in the books of accounts. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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