TaxTMI 
TaxTMI 
2021 (1) TMI 13
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....riod relevant to the assessment year under appeal is Rs. 16,00,000/-. The assessee filed his return of income under section 44AD and hence, did not maintain books of account. In scrutiny assessment proceedings the Assessing Officer on the basis of AIR report observed that there were cash deposits amounting to Rs. 11,20,000/- in the bank account of assessee maintained with Bank of India. The Assessing Officer issued show cause notice to explain the deposits. The assessee vide letter dated 13/05/2016 explained that the deposits were made from savings of earlier years from wood/tiles contract work and supply of building material. Explaining the reason for deposit of cash in bank account the assessee submitted that the assessee had purchased....
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....- Trib.) (4) Kokarre Prabhakara vs. ITO, ITA 1239/Bang/2019 DoD 11/09/2020 2.2. The ld. Authorized Representative of the assessee asserted that although the provisions of section 68 does not apply where the return has been filed on presumptive basis under section 44AD of the Act, where the assessee is not maintaining books of account, notwithstanding, the assessee has fully explained source of cash deposits in the bank. 3. Per contract, Ms. Smita Verma, representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. The ld. Departmental Representative strongly opposing the ground raised by the assessee in appeal pointed that these grounds were never raised before the CIT(A)....
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.... of income on the basis of presumptive income under section 44AD of the Act? The ld. DR has opposed admission of new ground at second appellate stage. 7. The new ground raised by the assessee challenging action of the Assessing Officer in invoking provisions of section 68 of the Act in absence of books of account goes to the root of validity of addition made u/s 68. The new ground raised by the assessee is legal in nature and hence, can be very well raised even at second appellate stage. The facts and documents to decide the ground are already available on record and no new documents are required to be adduced to decide this legal issue. The coordinate Bench in the case of Manasi Mahendra Pitkar vs. ITO (supra) under similar set of facts....
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....he written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device;" The definition of books under the Act is inclusive. A perusal of the definition shows that the same does not include bank passbook or bank statement. A conjoint reading of above provisions would thus lead to the conclusion that the addition u/s 68 can be made only where any amount is found credit in the books as defined u/s 2(12A) of the Act maintained by the assessee. 10. The Hon'ble Bombay High Court in the case of CIT vs. Bhaichand N. Gandhi (supra) upholding the decision of Tribunal concluded that bank passbook does not constitute books as envisaged under u/s 68 of the Act. The relevant extract of the....
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....nly if any sum is found credited in the books maintained by the assessee for any previous year and the assessee fails to offer valid explanation for credit of such sum in the books or explanation offered is rejected by the Assessing Officer. In other words maintains of books by the assessee is sine qua non for making addition u/s 68 of the Act. Since section 44AD does not obligates the assessee to maintain books, the provisions of section 68 cannot be invoked where the assessee has filed return of income under the provisions of section 44AD of the Act without maintaining books of account. 13. The Hon'ble High Court of Gauhati in the case of Anand Ram Raitani vs. CIT reported as 223 ITR 544 has held that existence of books of account is a....