AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 1061
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.... Karta of HUF and running whole-sale trade in cloth in the name and style of "M/s.Himanshu Fabrics". For the Asstt.Year 2012-13, the assessee has filed return of income on 30.9.2012 declaring total income of Rs.9,19,240/-. The return was processed under section 143(1) of the Income Tax Act, 1961 ("the Act" for short), and thereafter taken for scrutiny assessment and notice under section 143(2) was issued on 8.8.2013. As per the Annual Information Report available with the Department, it was seen that the assessee has made cash deposit to the tune of Rs.1,09,30,500/- in the saving bank account at Oriental Bank of Commerce (for short "OBC Bank") on various dates. Therefore, the assessee was requested to furnish details of such cash deposits, and explain source thereof with corroborative evidence and copy of bank account. The assessee filed its written submissions stating that the transactions recorded in the OBC bank are not part and parcel of the regular business account of M/s.Himanshu Fabrics, which is involved in wholesale trading of grey fabrics/cloth as Karta of HUF. Simultaneously, the assessee was also doing retail trading of such type of cloth of grey fabrics in very small q....
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.... the assessment year under consideration." 8. The AO has considered submissions given by the assessee and held that the assessee failed to prove genuineness of the cash credit. Merely stating that cash deposits were from cash sales of its retails business and withdrawal by cheques from the bank account for the purchases made were not sufficient to establish the genuineness of the transaction. There must be some supporting documents which related to particular transactions and prove and justify the genuineness of the transaction. Mere entries of sales and purchase in the books of accounts of the assessee were not enough to justify the cash credits. Thus, the AO held that the assessee has not proved the onus casted upon him, and therefore treated the cash deposits as cash introduced from undisclosed sources and made addition of Rs.1,09,30,500/- to the total income of the assessee and demanded tax thereon. 9. Aggrieved against the same, the assessee filed appeal before the ld.CIT(A). The assessee claimed that the AO has erred in making addition of the withdrawal amount in the bank account as the income of the assessee. The AO failed to consider that the closing stock offered as addi....
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....l turnover of unaccounted business the AO has rightly pointed out that assessee has failed to establish his unaccounted business to prove the source of the cash deposits and there are no withdrawals from the bank account to establish the theory of peak payments. 4.6. The contentions of the appellant that the provisions of Section-68 is not to the case of the assessee as bank account is not part of any book of accounts is not acceptable. The AO has found cash deposits in the bank account of the assessee and the assessee was failed to prove the nature and source of these deposits therefore the AO has made the addition of cash deposits as cash introduced from undisclosed sources to the total income of the assessee. Considering the above discussion, the AO is justified in making the addition of Rs.1,09,30,500/- and the same is confirmed. Thus, the ground of appeal are dismissed." 11. Aggrieved against appellate order, the assessee is before the Tribunal raising the following grounds of appeal: "1. The Id CIT(Appeals) has erred both in law and on facts in confirming an addition of Rs. 1,09,30,500/- in respect of gross amounts of total deposits on various dates in the bank account....
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....crores on wholesale basis wherein proper books of accounts were being maintained. However, the assessee made small unaccounted trading transactions to the tune of Rs.1.09 crores, and the same were being reflected in the OBC Bank account. During the survey operation conducted in the assessee's business premises on 9.1.2014, survey team could not find any excess cash or unaccounted stock. However, the assessee offered a disclosure of Rs.51,21,318/- related to the unaccounted investment in stock for which there was no entry in the books of accounts of the assessee. In his submission dated 5.3.2015, the assessee himself submitted that cash deposits in OBC Bank pertained to the transaction of his retail business other than the wholesale business. This statement of the assessee was disbelieved by the AO. According to the AO, there must be some supporting evidence which related to the particular transaction in order to justify the genuineness of the transaction. Thus, the assessee has failed to establish nature and source of cash deposits of Rs.1,09,30,500/- made in the saving bank account with OBC Bank and not substantiated by furnishing concrete evidence thereof. Therefore, the cash dep....
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....dgment in the case of CIT Vs., Bhaichand H. Gandhi, 141 ITR 67 wherein it has been held that where money are deposited in a bank, the relationship that is constituted between the banker and the customer is one of the debtor and creditor and not of trustee and beneficiary. The passbook 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, if the pass book is maintained by the bank as the agent of constituent or it can be said that the passbook is maintained by the bank under the instruction of the constituent. Hence, the passbook supplied by the bank to the assessee cannot be regarded as book of the assessee i.e book maintained by the assessee or under his instruction. Thus, the AO erred in adding the amount of Rs.1.09 crores reflected in the assessee's bank account which is not a book maintained by the assessee, and therefore, addition under section 68 of the Act cannot be made. 15. Per contra, the ld.DR appearing for the Revenue strongly supported orders of the lower authorities, and pleaded that no interference is called for in this matter. 16. We have given our thoughtful consideration and perused th....