2016 (10) TMI 692

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....td. and Dena Bank Ltd. The AO inquired into the sources of these deposits and, thereafter, added the same as unexplained sources u/s 68 of the Act in his order passed u/s 143(3) on 3.3.2014. The assessee carried the matter in appeal without success. Further aggrieved, the assessee is before us. 3. After hearing the rival contentions, I find that admittedly, the assessee does not maintain any books of account. Under these circumstances, no addition can be made u/s 68 of the Act as held in the following case laws:- i) The Hon'ble Bombay High Court in the case of CIT, Pune vs. Bhaichand H Gandhi 141 ITR 67, held as follows:- "Income-Cash Credit-Bank Pass book is not a book maintained by assessee or under his instructions - cash credit....

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....ot apply in this case for the simple reason cheque received from Mr.Pankaj Jain has been deposited in her bank account in this regard. The ITAT was of the opinion that balance sheet/statement of the affairs cannot be equated to books of account because a pass book of the bank cannot be treated as a book of account of the assessee because this is proved by the banker, which is given to its customer and is only a copy of the customer‟s account in the books maintained by the bank. The bank does not act as an agent of the customer nor can it be said that the banker maintains the pass book under instructions of the customer (assessee) the relationship between the banker and customer is one of the debtor and creditor only. Therefore, a cash....

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....the Act. Now the question arises whether the passbook issued by the bank with regard to the accounts of the assessee can be termed to be the books of the assessee for the purpose of section 68 of the Act. This issue was examined by the Hon'ble Bombay High Court in the case of CIT vs. Bhaichand N. Gandhi (supra) and while answering the question i.e. whether on the facts and circumstances of the case, the Tribunal was justified in holding that cash credit for the previous year shown in the assessee's bank passbook issued to him by the bank, but not shown in the cash book maintained by him for that year does not fall within the ambit of section 68 of the Act and as such the sum so credited is not chargeable to income tax as the income ....

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....aintained 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." 8. In the case of Anand Ram Ratiani vs. CIT (supra), the Hon'ble Gauhati High Court has also held that perusal of section 68 of the Act shows that in relation to expression "books", the emphasis is on the word "assessee" meaning thereb....