Section 68 cannot apply to bank cash deposits where no books of account are maintained by the assessee.

Cash deposits in bank accounts could not be assessed as unexplained income under section 68 where the assessee maintained no books of account. Section 68 applies only to sums credited in books maintained by the assessee, and a bank passbook or bank statement is not treated as those books for this purpose. As the addition was made solely on cash deposits reflected in bank accounts and there were no regular books in existence, the Tribunal held that section 68 could not be invoked and deleted the addition.

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Issues: Whether cash deposits in bank accounts can be assessed as unexplained income under section 68 of the Income-tax Act, 1961 when the assessee does not maintain books of account.

Analysis: Section 68 applies only to sums credited in the books of account maintained by an assessee. The Tribunal noted that the assessee had no business and maintained no books of account in the ordinary course, while the impugned addition was made solely on cash deposits found in bank accounts. In these circumstances, the bank passbook or bank statement could not be treated as the assessee's books of account for the purpose of section 68. The Tribunal followed its earlier view on the same legal question and held that such deposits could not be brought to tax under section 68.

Conclusion: The addition under section 68 was not sustainable and was deleted in favour of the assessee.

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