TaxTMI 
TaxTMI 
2022 (2) TMI 424
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....ting to Rs. 12,13,7002- with ICICI Bank, Tam Taran as his income whereas the said deposits were made by assessee in his own account out of the agricultural activities held in India being the owner of agricultural land. 3. That no service of notice u/s 148 and 142(1) was ever effected on the appellant and such proceedings initiated and assessment completed u/s 144 is illegal and without justification. 4. That no reasonable opportunity was allowed while completing the assessment. 5. That no proper satisfaction has been recorded by the AO while initiating proceedings u/s 147 of the Income Tax Act. These are based on borrowed information. 6. That approval for initiation of proceedings have been granted by the designated officer in a mechanical manner and as such proceedings initiated are bad in law. 7. That the Ld. AO has erred in law and on facts while making addition u/s 68. 8. That even on merits no addition is called for in view of the decision in the case of Gurpal V ITO (2016) 71 taxmann.com 108 (Amritsar) (Trib)." 3. Briefly stated, the case of the assessee was reopened by the Assessing Officer u/s. 147 of the Act, for the....
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....e of the cash deposits in his bank account, therefore, the AO had rightly made an addition of the same to his returned income. 9. We have heard the Ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. AR in order to support his aforesaid claim. We have given a thoughtful consideration to the issue before us and are persuaded to subscribe to the claim of the ld. A.R that as the bank account or bank passbook of an assessee cannot be held as his 'books of account', hence, no addition in respect of a simpliciter cash deposit made in the said account could validly be made under Sec.68 of the Act. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand H. Gandhi (1983) 143 ITR 67 (Bom.). We find that a similar view had been arrived at by a coordinate bench of the Tribunal, viz. ITAT, Mumbai in the case of Mehul V. Vyas Vs. ITO (2017) 764 ITD 296 (Mum), wherein it was observed as under: "8. We have heard the ld. Authorized repres....
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....ued as a credit in the 'books of the assessee', for the very reason that the bank account cannot be held to be the 'books' of the assessee. Though it remains as a matter of fact that the 'bank account' of an assessee is the account of the assessee with the bank, or in other words the account of the assessee in the books of the 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 found 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....
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.... Act has to fail because as per the judgment of the Hon'ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra), the bank Pass Book or bank statement cannot be construed to be a book maintained by the assessee for any previous year as understood for the purposes of section 68 of the Act. Therefore, on this account itself the impugned 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 206 (Gauhati) (TM), as well as by a coordinate bench of the Tribunal in the case of ITO, Barabanki Vs. Kamal 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.l0,53,000/-(supra) in the bank account of the assessee by invoking Section 68 has to fail for the very reason that as per the judgment of the Hon'ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra), a bank pass book or ban....