Asha Sanghavi, Rajahmundry v. Income Tax Officer, Ward-2, , Rajahmundry

ITA 33/VIZ/2019 | 2011-2012
Pronouncement Date: 15-11-2019 | Result: Allowed

Appeal Details

RSA Number 3325314 RSA 2019
Assessee PAN AWFPS2816R
Bench Visakhapatnam
Appeal Number ITA 33/VIZ/2019
Duration Of Justice 9 month(s) 15 day(s)
Appellant Asha Sanghavi, Rajahmundry
Respondent Income Tax Officer, Ward-2, , Rajahmundry
Appeal Type Income Tax Appeal
Pronouncement Date 15-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 15-11-2019
Last Hearing Date 21-03-2019
First Hearing Date 21-03-2019
Assessment Year 2011-2012
Appeal Filed On 30-01-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM . . . BEFORE SHRI V. DURGA RAO JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH ACCOUNTANT MEMBER ./ I.T. A.NO. 33 /VIZ/201 9 ( / A SSESSMENT Y EAR : 20 1 1 - 1 2 ) SMT.ASHA SANGHAVI D.NO.7 - 22 - 12 NANDEPU HEIGHTS T.NAGAR RAJAMAHENDRAVARAM [ PAN : A WFPS2816R ] VS. INCOME TAX OFFICER WARD - 2 RAJAMAHENDRAVARAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI AR / RESPONDENT BY : S HRI D .MANOJ KUMAR DR / DATE OF HEARING : 0 6 . 1 1 . 201 9 / DATE OF PRONOUNCEMENT : 15 . 1 1 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS ) [CIT(A)] RAJAMAHENDRAVARAM IN I.T.A. NO. 10671/2014 - 15 DATED 09 . 11 .201 8 FOR THE ASSESSMENT YEAR (A.Y.) 20 11 - 12. 2 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 2. IN THE APPEAL THE ASSESSEE HAS RAISED SEVEN GROUNDS IN TOTAL . G ROUND NO.1 AND 7 ARE GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 3. GROUND NO.2 IS RELATED TO THE VALIDITY OF ISSUE OF NOTICE U/S 143(2) OF THE INCOME TAX ACT 1961 (IN SHORT ACT). DURING THE APPEAL HEARING THE LD.AR DID NOT PRESS THIS GROUND T HEREFORE GROUND NO.2 IS DISMISSED AS NOT PRESSED. 4. GROUND NO.3 4 AND 5 ARE RELATED TO THE ADDITION OF RS.1 22 29 000/ - MADE BY THE AO U/S 68 TREATING THE CASH DEPOSITS MADE IN BANK ACCOUNTS OF THE 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 W AS 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 S TEEL CITY COMMODITIES PRIVATE LIMITED VISAKHAPATNAM WHICH RESULTED IN A LOSS OF RS.55 767/ - . THE AO FURTHER NOTICED THAT DURING 3 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 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 ASSESSEE FILED THE REPLY EXPLAINING THE SOURCES AS UNDER : IN THIS CONNECTION IT MAY BE SUBMITTED THAT THE SOURCES FOR THE ABOVE CASH DEPOSITS IN THE ABOVE BANKS TO PAY COMMODITY / SECURITY TRADING LOSSES ARE : 1 ) GIFT RECEIVED OF RS.6 80 000/ - AND 500 GRAMS OF GOLD VALUING RS.8 00 000/ - ON 01.04.2011 FROM VARUN SANGHAVI HE IS THE SON OF THE ASSESSEE. A ) THE SOURCES OF CASH BEING SAVINGS OUT OF TUITION & INTEREST INCOME AND A STATEMENT OF ACCOUNTS HAVE BEEN ENCLOSED HERE. B ) THE SOURCE OF GOLD ORNAMENTS BEING INHERITED GOLD FROM MR.VAGTVARMAL SANGHAVI (GRNAD FATHER) ON MARCH 18 2 008. C ) VARUN SANGHAVI WAS NOT LIABLE FOR FILING INCOME TAX AS THE INC OME LEVELS AS PER THE INCOME TAX ACT 1961 WERE BELOW BASIC EXEMPTION TILL F.Y.2010. D ) VARUN SANGHAVI WAS NOT LIABLE TO FILE WEALTH TAX RETURNS AS THE NET WEALTH AS PER WEALTH TAX ACT 1957 REMAINED BELOW THE CHARGEABILITY LEVELS. E ) I AM HEREBY ENCLOSING A COP Y OF UNREGISTERED GIFT DEED. 2) 6 250 GMS GOLD ORNAMENTS RECEIVED ON 25.04.2010 FROM INHERITANCE FROM MRS SUMATHI SANGHAVI MOTHER - IN - LAW OF THE ASSESSEE. A) MRS SUMATHI SANGHAVI DIED ON 09.03.2010 AND AS PER HER ORAL WILL IT GOT THE POSSESSION OF THE GOL D ORNAMENTS ON 24 TH APRIL 2010. B) MRS. SUMATHI SANGHAVI INHERITED THE GOLD FROM HER LINEAL ASCENDANTS. 3) I HAVE SOLD AWAY MY TOTAL GOLD ORNAMENTS OF 6 750 GRAMS FOR RS.1 22 29 000/ - (THE AVERAGE PRICE OF SALES BEING 1 811.7 PER GRAM) 4 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 4) I HAVE FURNISHED THE SOURCES OF CASH IN THE BELOW TABLE : SOURCES AMOUNT APPLICATION AMOUNT CASH GIFT FROM VARUN SANGHAVI 6 80 000 CASH DEPOSITS IN PAY COMMODITY LOSSES 1 29 09 000 SALE OF GOLD 1 22 29 000 TOTAL 1 29 09 000 TOTAL 1 29 09 000 6.2. THE AO ON RECEIPT OF REPLY FROM THE ASSESSEE REQUESTED TO FURNISH THE EVIDENCE FOR SALE OF GOLD AND CASH GIFT ALONG WITH DOCUMENTARY EVIDENCES. IN RESPONSE TO WHICH THE ASSESSEE FILED LETTER DATED 19.03.2014 ENCLOSING SALE BILLS ON WHITE PAPER SLIPS WITH T HE INITIALS OF THE BUYERS WITHOUT EVEN FURNISHING THE NAMES AND ADDRESS ES OF THE BUYERS . IN SPITE OF GIVING OPPORTUNITIES THE ASSESSEE FAILED TO FURNISH THE EVIDENCES FOR RECEIPT OF GIFTS AND FOR SALE OF GOLD. THEREFORE THE AO TREATED THE ENTIRE AMOUNT OF RS.1 29 09 000/ - DEPOSITED IN THE BANK ACCOUNT AS UNEXPLAINED CASH CREDIT AND ACCORDINGLY MADE THE ADDITION U/S 68 OF THE ACT. 7. AGAINST THE ORDER OF THE AO THE ASSESSEE WENT ON APPEAL BE FORE 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 5 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM CONFIRMATIONS WERE OBTAINED BY THE ASSESSEE ALONG WITH THEIR INCOME TAX RETURNS AND THE BANK STATEMENTS . B UT THE ASSESSEE FAILED TO PRODUCE THE BUYERS OF T HE 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 F OR 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 M ADE 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 THE ADDITION U/S 68 HENCE ARGUED THAT ANY AMOUNT FOUND CREDITED IN THE BANK PASSBOOK CANNOT BE TREATED AS UNEXPL AINED CASH CREDIT U/S 68 . THE ASSESSEE RELIED ON THE DECISION OF ITAT MUMBAI TRIBUNAL B BENCH IN THE CASE OF MEHUL V. VYAS VS. INCOME TAX OFFICER IN (2017) 164 TTD 0296 (MUMBAI) WHEREIN THE BOMBAY TRIBUNAL PLACING RELIANCE ON THE DECISION OF CIT VS. BHAI CHAND N.GANDHI (1983) 141 ITR 67 (BOMBAY) HAS HELD THAT THE ADDITION MADE IN RESPECT OF BANK DEPOSITS U/S 68 IS UNSUSTAINABLE. 6 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 8.1. THE SECOND PROPOSITION MADE BY THE LD.AR IS THAT IN THE INSTANT CASE THE ASSESSEE HAD FILED CONFIRMATION LETTERS B EFORE THE LD.CIT(A) FROM THE BUYERS OF THE GOLD WITH A CLEAR ADDRESS AND PAN THUS ESTABLISHED THE IDENTITY AND THE GENUINENESS OF THE TRANSACTION AND DISCHARGED THE BURDEN OF THE ASSESSEE. T HE AO HAS DIRECTED THE ASSESSEE TO PRODUCE THE PERSONS WHICH IS BEYOND THE LIMITATION OF THE ASSESSEE. HAVING FURNISHED THE CONFIRMATION LETTERS WITH A CLEAR ADDRESS AND PAN THE LD.AR ARGUED THAT IT IS FOR THE DEPARTMENT TO CONDUCT ENQUIRIES AND TO DISPROVE THE CLAIM OF THE ASSESSEE TO MAKE THE ADDITION . THOUGH THE ENTIRE MATERIAL WAS PLACED BEFORE THE AO THE AO DID NOT MAKE ANY ENQUIRIES AND BROUGHT ANY EVIDENCE TO CONTROVERT THE SUBMISSION OF THE ASSESSEE THUS ARGUED THAT NO ADDITION IS WARRANTED U/S 68 OF THE ACT. ACCORDINGLY REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. 8.2. THE THIRD PROPOSITION MADE BY THE LD.AR IS THAT THE ASSESSEE HAS INVESTED THE ENTIRE SUMS CREDITED IN THE BANK ACCOUNT FOR THE PURPOSE OF TRADING THE COMMODITIES THROUGH MULTI COMMODITY EXCHANGE OF INDIA LIMITED THROUGH STEEL CITY COMMODITIES PRIVATE LTD. AND HAD INCURRED THE LOSS OF RS.1 29 69 131/ - . THE ASSESSEE ALSO SUBMITTED THE DATE WISE PROOF AND THE COPIES OF THE STATEMENT S OF STEEL CITY COMMODITIES. THEREFORE ARGUED THAT EVEN IF IT IS PRESU MED THAT THE DEPOSITS MADE IN THE BANK 7 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM ACCOUNT REQUIRED TO BE TREATED AS UNEXPLAINED CASH CREDITS THE SAME REQUIRED TO BE SET OFF AGAINST THE LOSS INCURRED BY THE ASSESSEE THUS THE INCOME RESULTS INTO NIL INCOME. THEREFORE ARGUED THAT IN ANY CASE THE RE IS NO JUSTIFICATION FOR MAKING THE ADDITION OF RS.1 22 29 000/ - TO THE RETURNED INCOME. HENCE REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO. 9. ON THE OTHER HAND THE LD.DR ARGUED THAT THE ASSESSEE HAS NOT DE CLARED 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 LOS S 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 8 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM BUYERS OF THE GOLD THOUGH OPPORT UNITY WAS GIVEN TO THE ASSESSEE. T HEREFORE ARGUED THAT THE ASSESSEE FAILED TO PRO VE 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 SUBMITTED THAT THE ASSESSEE CLAIMED TO HAVE SOLD THE GOLD OF 6 750 GRAMS WORTH RS.1 22 29 000/ - . THE ASSESSEE IS NOT A WEALTH TAX ASSESSEE THEREFORE IT PROVES THAT THE ASSESSEE DID NOT OWN THE GOLD OF 6 750 GRAMS HENCE THE QUESTION OF SALE OF GOLD DOES NOT ARISE. THE LD.DR RELIED ON THE DECISION OF 45 TAXMAN.COM 224 SACHDEVA VS. ITO WARD - 1(1) FARIDABAD AND PUNJAB & HARYANA HIGH COURT. IN THE CIRCUMSTANCES THE ADDITION MADE BY THE AO U/S 68 REQUIRED TO BE UPHELD. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE THE AO MADE THE ADDITION OF RS.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 I N THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE FOR WHICH THE ASSESSEE FAILS TO OFFER SATISFACTORY EXPLANATION WI TH REGARD TO SOUR CE. IN THE INSTANT CASE THE ASSESSEE IS MAINTAINING THE BOOKS OF ACCOUNTS BUT DID NOT MAKE ANY 9 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM ENTRY IN THE BOOKS OF ACCO UNTS. THE AMOUNTS WERE DEPOSITED I N THE BANK ACCOUNTS BUT NOT MAD E 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 REGAR D 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 S TATEMENT CANNOT BE CONSIDERED TO BE BOOK S 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. W E 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 'ACT' IN RESPECT OF THE CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE WE FIND SUBSTANTIAL FORCE IN THE CONTENTION OF THE ID. A.R THAT AN ADDITION UNDER SECTION 68 CAN ONLY BE MADE WHERE ANY SUM IS FO UND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE EITHER OFFERS 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 SA TISFACTORY 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 10 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 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 T O BE READ INTO A STATUTORY PROVISION IN THE GARB OF GIVING EFFECT TO THE UNDERLYING INTENT OF THE LEGISLATURE THUS CONFINING OURSELVES WITHIN THE REALM OF OUR JURISDICTION THEREIN CONSTRUE THE SCOPE AND GAMUT OF THE A FO RESAID STATUTORY PROVISION BY ACCOR DING 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 A CCOUNT' 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 FORTIF IED BY THE JUDGMENT OF TH E HONBL E 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 T HE 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 ACC OUNT IN THE BOOKS MAINTAINED BY THE BANK. IT IS NOT AS IF THE PASS BOOK IS MAINTAINED BY THE BANK AS THE AGENT OF THE CONSTITUENT NOR 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.' WE FIND THAT THE AFORESAID VIEW OF THE HON'BLE JURISDICTIONAL HIGH COURT HAD THEREAFTER BEEN FOLLOWED BY A 'SMC OF THE ITAT MUMBA I BENCH IN THE CASE OF SMT. MANSHI MAHENDRA PITK AR 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 11 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM SECTION 68 OF THE ACT WOULD COME INTO PLAY ONLY IN A SITUATION 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSE E ........... '. THE HON'BLE BOMBAY HIGH CO UR T IN THE CASE OF SHRI BHAICHAND GANDHI (SUPRA) HAS APPROVED THE PROPOSITION THAT A BANK PASS BOOK MAINTAINED BY THE BANK CANNOT BE REGARDED AS A BOOK 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 B O OK 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 .TAXMA N N . COM 205 (GAUHATI) (TM) AS WELL AS BY A COORDINATE BENCH OF THE TRIB UNAL 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 AC COUNT 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' M AINTAINED 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 THE COORDINATE BENCH RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND N.GANDHI (SUPRA). SIMILAR VIEW WAS TAKEN BY THE COORDINATE BENCH OF ITAT DELHI IN THE CASE OF SMT BABBAL BHATIA IN TS - 306 - ITAT - 2018. IN THE INSTA NT CASE THOUGH THE ASSESSEE HAS MAINTAINED THE BOOKS OF 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 W ITH REGARD TO 12 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 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 REVENUES 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 S ACHDEVA (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. T HE CASE LAW RELIED UPON BY THE LD.DR IS DISTINGUISHABLE AND DOES NOT HELP THE REVENUES 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 T HE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOWED. 10.2. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE CASH DEPOSITS MADE IN THE BANK ACCOUNT ARE NOT PERMISSIBLE TO MAKE THE A DDITION U/S 68 OTHER ALTERNATE GROUND S AND PROPOSITIONS MADE BY THE ASSESSEE ARE NOT CONSIDERED FOR ADJUDICAT ION . 13 I.T.A. NO . 33 /VIZ/201 9 A.Y.20 1 1 - 1 2 ASHA SANGHAVI RAJAMAHENDRAVARAM 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH NOVEMBER 2019 S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 15 . 1 1 .2019 L.RAMA SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - SMT.ASHA SANGHAVI D.NO.7 - 22 - 12 NANDEPU HEIGHTS T.NAGAR RAJAMAHENDRAVARAM 2 . / THE REVENUE - INCOME TAX OFFICER WARD - 2 RAJAMAHENDRAVARAM 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX RAJAMAHENDRAVARAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) RAJAMAHENDRAVARAM 5 . / DR ITAT VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT VISAKHAPATNAM