TaxTMI 
TaxTMI 
2020 (8) TMI 592
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....return of income already filed for the A.Y. 2011-12 may be treated as return in response to the notice u/s 148. Subsequently, the AO issued the notice u/s 143(2) and called for the explanation of the assessee as to why the sum of Rs. 40,00,500/- deposited in ICICI bank account on 03.04.2010 should not be considered as unexplained cash credit and brought to tax. 3. In response to the notice, the assessee filed explanation stating that the said sum was deposited by Jindath Jewellers in his account and the same amount was withdrawn by them on the same day and thus explained that the amount was not belonged to him but belonged to Jindath Jweellers therefore, requested to drop the proceedings u/s 148 and not to make any addition in his assessment. 4. Not being impressed with the explanation of the assessee, the AO made the addition of Rs. 40,00,500/- u/s 68 of the Act. 5. Against the order of the AO, the assessee went on appeal before the CIT(A) and challenged the order of the AO on merits as well as on technical grounds stating that the notice issued u/s 148 is bad in law. The Ld.CIT(A) confirmed the addition and also upheld the validity of issue of notice u/s 148. 6. Against which....
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....oks of accounts but did not make any entry in the books of accounts. The amounts were deposited in the bank accounts, but not made relevant entry. Hence, the Ld.AR argued that since the assessee did not make any entry in the books of accounts, the AO is not permitted to make the addition u/s 68. The issue with regard to deposits made in the bank account, whether to be brought to tax u/s 68 or not was considered by the coordinate bench of ITAT Mumbai in Mehul V.Vyas Vs. Income Tax Officer (supra) and held that the amounts found credited in the bank pass book or bank statement cannot be considered to be books maintained by the assessee in any previous year as understood for the purpose of section 68 of the Act. For the sake of clarity and convenience, we extract para No.8 of the cited order which reads as under : "5. We have heard the Id. Authorized representatives of both the parties, perused the orders of the lower authorities as well as the material produced before us. We will first deal with the objection raised by the Id. A.R as regards the addition of Rs. 10,53,000/- which was made by the A.O under Section 68 of the 'Act', in respect of the cash deposit in the bank ac....
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.... bank, but the same in no way can be held to be the 'books' of the assessee. We have given a thoughtful consideration to the scope and gamut of the aforesaid statutory provision, viz. Sec. 68, and are of the considered view that an addition made in respect of a cash deposit in the 'bank account' of an assessee, in the absence of the same round credited in the 'books of the assessee' maintained for the previous year, cannot be brought to tax by invoking the provisions of Section 68. That our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bombay) wherein the Hon'ble High Court has held as under: - "As the Tribunal has pointed out, it is fairly well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not of trustee and beneficiary. Applying this principle, the pass book supplied by the bank to its constituent is only a copy of the constituent's account In the books maintained by the bank. It is not as if the pass book is maintained by the bank as the agent of....
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....gned addition deserves to be deleted. I hold so" We further find that a similar view had also been arrived at in a 'third member' decision of the Tribunal in the case of Smt. Madhu Raitani Vs. ACIT (2011) 10 .taxmann.com 205 (Gauhati) (TM), as well as by a coordinate bench of the Tribunal in the case of ITO, Barabanki Vs, Carnal Kumar Mishra (2013) 33 taxamann.com 610 (Lucknow Trib.) Thus in the backdrop of the aforesaid facts of the case read in light of the settled position of law, we are of the considered view that the addition made by the A.O in respect of the cash deposit of Rs. 10,53000/-(supra) in the bank account of the assessee by invoking Section 68 has to fail for the very reason that as per thejudgment of the Hon'ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra), a bank pass book or bank statement cannot be considered to be a 'book' maintained by the assessee for any previous year, as understood for the purpose of Section 68 of the Act. Therefore, on this count itself the impugned addition Rs. 10,53,000/- deserves to be deleted. 10.1. While delivering the decision, the Coordinate Bench relied on the decision of Hon'ble Bombay ....