Section 68 addition cannot rest on bank credits alone when no books of account are maintained.

Section 68 of the Income-tax Act applies only where a credit is found in the assessee's own books of account. Credits appearing solely in a bank passbook or bank statement do not satisfy that statutory condition, and the provision cannot be invoked where the assessee maintains no books and was not required to maintain them. The ITAT Delhi applied this principle and distinguished contrary authorities relied on by the Revenue on facts or on precedent hierarchy. The addition based only on bank credits was therefore unsustainable and was deleted in favour of the assessee.

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Issues: Whether an addition under section 68 of the Income-tax Act, 1961 could be sustained on credits found only in the assessee's bank account where the assessee did not maintain books of account and was not required to maintain them.

Analysis: The relevant addition arose from credits in the bank statement of an individual assessee who had no business income and had returned income under other heads. The statutory precondition for section 68 is a credit entry in the assessee's books of account. The bank passbook or bank statement is not the assessee's books of account, and where no books are maintained, section 68 cannot be invoked merely because credits appear in the bank account. The jurisdictional precedent holding that a bank passbook does not constitute books of account was applied, and the contrary authorities relied on by the Revenue were distinguished on facts or by precedent hierarchy.

Conclusion: The addition under section 68 was held to be unsustainable and was directed to be deleted, in favour of the assessee.

Ratio Decidendi: Section 68 applies only when a credit is found in the assessee's own books of account; credits appearing solely in a bank passbook or bank statement do not satisfy that statutory condition where no books are maintained.

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