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TMI Blog2021 (9) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... g the addition of Rs. 12,23,000/-, pertaining to alleged unexplained cash deposits and bank, brushed aside the submissions made by assessee and the sources available thereto in a casual and summary manner. 4. The learned CIT(A) ought to have known that the very invoking of section 68 of the I.T.Act is not correct since the section 68 cannot be invoked for deposits made in the bank account. 5. The learned CIT(A)erred in confirming the addition made by AO to the tune of Rs. 1,75,000/- as unexplained cash credit, pertaining to investment in firm towards capital, though it was explained that the same was made out of available cash. 6. For these and other reasons that are to be urged at the time of hearing of the case, it is the prayer of the assessee that the orders passed u/s.143(3)of the I.T.Act are against the provisions of law, facts of the case, therefore, the same are to be quashed in the interest of justice. 2.1. During the pendency of appeal proceedings the assessee raised the additional ground as follows : 1. The Assessing Officer committed error in invoking the provisions of section 68 of the I.T.Act while making the addition pertaining to alleged unexplained cash de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash credits in the books of accounts for which the source was not explained. As per section 68, cash credits made in the books of accounts for which the assessee could not explain the source to the satisfaction of the AO, required to be brought to tax u/s 68 of the Act. In the instant case, the deposits were made in the bank account. As per the settled issue, the bank deposits required to be made addition u/s 69 but not u/s 68 of the Act. The bank passbook or bank statement does not amount to the books of accounts of the assessee. This view is supported by the number of decisions. The coordinate bench of ITAT Delhi 'A' in the case of Babbal Bhatia in ITA Nos.5430 & 5432/Del/2011 dated 08.06.2018 held that the bank is different from books of accounts of the assessee and credit in the bank account of the assessee cannot be construed as credit in the books of accounts of the assessee. For the sake of clarity and convenience, we extract relevant part of the order of the Tribunal in para No.16 to 19 which reads as under : 16. The coordinate Bench in the case of Om Prakash Sharma 2256/DEL/2009 has held as under: "9. Coming to the merits of the case, undisputedly, the addition of 913 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can it be said that the pass book is maintained by the bank under the instructions of the constituent In view of this, the Tribunal was, with respect, justified in holding that the pass book supplied by the bank to the assessee 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" 18. The Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Ms. Mayawati reported in 338 ITR 563 [DEL] has held as under: "As the ITAT has come to the conclusion that Section 68 has no applicability to the facts of the present case as the assessee is not maintaining any books of accounts. If that be so Section 68 does not apply in this case for the simple mason cheque received from Mr.Pankaj Jain has been deposited in her bank account in this regard The ITAT was of the opinion that balance sheet/statement of the affairs cannot be equated to books of account because a pass book of the bank cannot be treated as a book of account of the assessee because this is proved by the banker, which is given to its customer and is only a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce. 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 cannot be considered to be books maintained by the assessee in any previous year as understood for the purpose of section 68 of the Act. For the sake of clarity and convenience, we extract para No.8 of the cited order which reads as under : "5. We have heard the Id. Authorized representatives of both the parties, perused the orders of the lower authorities as well as the material produced before us. We will first deal with the objection raised by the Id. A.R as regards the addition of Rs. 10,53,000/- which was made by the A.O under Section 68 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bombay) wherein the Hon'ble High Court has held as under: - "As the Tribunal has pointed out, it is fairly well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not of trustee and beneficiary. Applying this principle, the pass book supplied by the bank to its constituent is only a copy of the constituent's account In the books maintained by the bank. It is not as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 made by the A.O in respect of the cash deposit of Rs. 10,53000/-(supra) in the bank account of the assessee by invoking Section 68 has to fail for the very reason that as per the judgment of the Hon'ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra), a bank pass book or bank statement cannot be considered to be a 'book' maintained by the assessee for any previous year, as understood for the purpose of Section 68 of the Act. Therefore, on this count itself the impugned addition Rs. 10,53,000/- deserves to be deleted. 10.1. While delivering the decision, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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