TaxTMI 
TaxTMI 
2012 (6) TMI 566
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.... Rs. 2,786/- out of Rs. 13,930/- d. Petrol expenses Rs. 2,238/- out of Rs. 11,192/- 3. That the Commissioner of Income-tax (Appeals) was wrong in confirming in disallowing the gifts received by the assessee Rs. 4,00,000/- of followings : a. Shri Jay Singh Yadav Rs. 2,00,000/- b. Shri Gajanand Goyal Rs. 2,00,000/- as cash credit and to assess as income under section 68 of Income-tax Act by the ld. Income Tax Officer. 4. That the Commission of Income Tax (Appeals) is not justified in holding the order passed by the Ld. I.T.O. is right in charging interest u/s. 234A, 234B, 234C. 5. That the Commissioner of Income Tax (Appeals) is not justified in holding the order by the Ld. I.T.O. is right in initiating the penalty u/s. 27l(l)(c). 6. In any view of the matter and in any case, impugned assessment order is bad in law and against the facts and circumstances of the case. 7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the lime of hearing and all the above grounds are without prejudice to each other....
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....of the ld. AO in making addition of the impugned amount u/s. 68 of the Act. Now, the assessee is in appeal and has raised the above ground. 6. We have heard the rival submissions and have gone through the entire evidences on record. Before we deal with the issue whether the gifts are genuine or not it becomes necessary to deal with the legal question as to whether the impugned amounts can be added u/s 68 of the Act or not. It was argued that the assessee does not maintain any books of account in her individual capacity, but for her proprietorship concern she maintains the books of account. According to her, the gift amounts were received in her individual bank account and do not relate to the books of account of her proprietorship concern. It was argued that when the assessee does not maintain any books of account, no addition can be made u/s 68 of the Act. For that premise, reliance was placed on various judicial pronouncements. On the other hand, the ld. D.R. after fairly conceding that these amounts of gift were received on the passbook of the assessee in her individual capacity and in her this capacity, she does not maintain books of account, further advanced his arguments t....
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....also 'identity' in respect of one of them (i.e. Shri Gajanand Goyal). 3.1 Though the appeal stood argued on merits, as was the case before the authorities below the proposed order by my ld. Brother allows the assessee's claim on the basis that the credits under reference appear in her bank account, and which does not amount to maintenance of books of account, so that the provision of section 68 is not applicable in the facts and circumstances of the case. In this regard, firstly, there is nothing on record to exhibit and neither it was so shown by the ld. A.R. during the course of hearing, with reference to any material on record, that the credits under reference stand deposited in a bank account in respect of which the assessee is not maintaining any account, i.e., that does not stand co-opted in its regular books of accounts; the assessee being a wholesale cloth merchant, doing the said business under trade name Shri Ganesh Traders, maintaining account, which stand duly audited u/s 44 AB of the Act in respect of the said business, as also personal accounts, compiling final accounts in the form of a combined Profit & Loss account; capital account (wherein the profit from the sa....
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....al insofar as the application of s. 68 is concerned. Further, the credit amount does not continue to be deposited in the bank account but stands immediately withdrawn (refer PB pg. 46, 47), so that the amount flows to the assessee's business or its 'regular accounts', i.e., if the 'books of account' are to be construed as only business accounts, even as there is no warrant for the same either in law or in fact. As such, I find no factual basis whatsoever for the allowance of its appeal on this basis. 3.3 Further, notwithstanding and without prejudice to the foregoing, even if for argument sake it is considered that the assessee is not maintaining any books of account, or that the two credits, claimed to be gifts, which stand deposited in its bank account, does not form part of its regular accounts or 'books of account' the maintenance of which is beyond doubt, or did not flow, during the relevant previous year, in its regular accounts, the finding on which would also be necessary to decide the issue on the legal ground as assumed, the fact of the amount(s) having been deposited in the assessee's bank account (assuming it to be, for whatever reason, not a part of its books of acc....
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.... v. ITO [1961] 41 ITR 12 (SC); Laxmi Industries & Cold Storage Co. (P.) Ltd. v. ITO [1971] 79 ITR 248 (All.)]. Also, it is a settled principle of law that in a given case the transaction under reference may fall to be covered under more than one provision of the Act, and which by itself would the of no moment. I state so by way of abundant clarification, and for the sake of completeness of the discussion in the matter, even as the two provisions under reference, i.e., s. 68 or s. 69, are alternative, one (s. 68) becoming applicable under the condition of existence of the books of account, and the other (s. 69) where not so. 4. Finally, as my brother's order does not adjudicate the issue on merits, I also refrain from doing so, as it would be of no consequence; and order by the Division Bench of the Tribunal can only be where the same stands endorsed by both the members constituting the Bench, or in case of a difference of opinion, which would only be, where one is expressed, by majority view, through the procedure as laid down u/s. 255(4) of the Act. As such, even as this issue stood raised by me during the discussion with my ld. Brother, I am constrained not to proceed any furt....
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....ee in respect of the cash credit envisaged for addition under section 68 of the Act by the Assessing Officer. Both the additions stood confirmed on merits by the learned CIT(A). The only ground taken by the assessee in this regard is ground No. 3 as reproduced by me in paragraph No. 2 above. 5. The Division Bench before whom the appeal was posted for hearing heard the assessee on merits and recorded those arguments in paragraph 4 of the order of the learned Judicial Member. Paragraph 5 of the same order of learned JM also acknowledges the fact that the learned CIT(A) has endorsed the reasoning given by the Assessing Officer to assail the genuineness of these gifts and found that CIT(A) confirmed the action of the Assessing Officer in making impugned additions under section 68 of the Act. The order of the learned Accountant Member also confirms that the appeal stood argued on merits as was the case before the authorities below. I may mention here that the decision of the CIT(A) was entirely on merits and not on any legal issue. 6. The learned Judicial Member who took up the case for writing the order for the Bench went to a legal question whether the impugned amounts could be ....
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....s the threshold limit, or only of its business or profession. According to him, it is clear from the record that the bank account under reference forms part of the assessee's business accounts as is evident from the absence of any ground in its respect, both before the Tribunal as well as before CIT(A). According to him, all these shows that the assessee is maintaining books of account. The learned AM further went on to discern the assessee's books and found that the credit amount does not continue to be deposited in the bank account but stood immediately withdrawn so that the amount flows to the assessee's business where regular accounts are maintained. He opined that there was no factual basis whatsoever for allowance of its appeal on this basis. He further justified the addition even under section 69 of the Income-tax Act, support for which was drawn from the decision of the Hon'ble Allahabad High Court in Jauharimal Goel's case (supra) wherein it was clarified that the deposits in the assessee's bank account stood covered under section 69 or section 69A of the Act. According to learned AM, the observations of the Jurisdictional High Court would apply with more force where the b....
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.... find that learned Judicial Member did not even deal with these and went by the legal arguments taken in this regard. In fact, the arguments taken do not find mention even in the order of the CIT(A). I do not know what prompted the learned Judicial Member to record such findings contrary to the records of the assessee. He should have at least elaborated why he wants to accept. The only reason, in my opinion, is that he is able to divide the assessee individual into two capacities, one he calls as 'individual capacity', and other, 'proprietorship business'. According to him, he should have demanded some more evidences and should have at least called for a remand report from the AO. Anyhow, I leave it at that stage. 10. The learned Accountant Member, in my view, has properly appreciated the assessee's transactions and claims about maintenance of the books of account in the light of the prevailing records. 11. Even if the assessee is technically taken to be not maintaining any books of account in relation to the passbook entries, it must be appreciated that the passbook credits have ultimately gone into the books of the assessee by way of credit in capital account as found by th....