Section 68 cannot apply to bank deposits where no books are maintained under presumptive taxation.

Section 68 applies only where a sum is credited in the assessee's books for the relevant year, and a bank passbook or bank statement is not "books of account" within section 2(12A). Where an assessee opts for presumptive taxation under section 44AD and is not required to maintain books, the foundational condition for invoking section 68 is absent. Cash deposits in the bank account, by themselves, cannot be treated as credits in books maintained by the assessee. The addition under section 68 was therefore unsustainable and was deleted in favour of the assessee.

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Issues: Whether an addition can be made under section 68 of the Income-tax Act, 1961 in respect of cash deposits in a bank account when the assessee has filed return under section 44AD without maintaining books of account, and whether a bank passbook or bank statement can be treated as books of account for that purpose.

Analysis: Section 68 applies only where a sum is found credited in the books of the assessee for the relevant previous year. The definition of books of account under section 2(12A) does not include a bank passbook or bank statement. Since the assessee had opted for presumptive taxation under section 44AD and was not required to maintain books, the foundational requirement for invoking section 68 was absent. The cash deposits in the bank could not, by themselves, be treated as credits in books maintained by the assessee.

Conclusion: The addition under section 68 was unsustainable and the issue was decided in favour of the assessee.

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