TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 1274
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....aw & facts. 3. That on the facts & circumstances of the case the Order passed u/s. 147 rw 143(3) dated 22.12.2017 served on 01.01.2018 under the Income Tax Act, 1961 should be declared illegal and bad, both in law & facts. 4. The assessment proceeding in this case should be declared null and void, both in law & facts. Note:- That without prejudice to the above grounds, the following grounds are as under:- 5. That without giving the reasonable and proper opportunity the learned CIT (Appeal) 2 has passed the first appeal order and dismissed the appeal which is quite unjustified and bad, both in law and facts. 6. That on the facts & circumstances of the case the income returned of Rs.7,01,600/- should be accepted in toto. 7. That on the Facts & Circumstances of the case an Addition of Rs.15,58,000/- (Rs. Fifteen Lac Fifty Eight Thousand only) as per Para 6 of Assessment order is quite illegal unjustified and bad, both in law & facts. 8. That the disallowance of Expense u/s 14A as per Para 4 & 5 to the tune of Rs. 45861/- is quite illegal and bad, both in law & facts. 9. That on the facts and circumstances of the case the interest charged should be deleted from the inco....
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....14A of the Act. Accordingly, the A.O on the basis of his aforesaid deliberations vide his order passed u/s.147 r.w.s. 143(3), dated 22.12.2017 assessed the income of the assessee at Rs.23,05,461/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me. 6. I have heard the ld. authorized representatives of 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 them to drive home their respective contentions. 7. The Ld. Authorized Representative (for short 'AR') for the assessee had assailed the orders of the lower authorities on three fold grounds before me, viz. (i) validity of the jurisdiction that was assumed by the A.O for initiating proceedings u/s 147 of the Act and framing the consequential assessment; (ii) validity of the addition made by the A.O u/s 68 of the Act of the simpliciter cash deposits in the assessee's bank accounts; and (iii) sustainability of the addition made by the A....
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....eturn which is Rs.45861, is not allowable. Hence, I have reason to believe that the income of Rs.845861/- (Rs.800000/- + Rs.45861/-) which is chargeable to tax, has escaped assessment within the meaning of Para (b) of Explanation 2 of Section 147 of the I.T Act, 1961. Thus, the case is fit for reassessment u/s.147 of IT Act, 1961 for a.y. 10-11." On a careful perusal of the aforesaid "reasons to believe", I am unable to concur with the claim of the Ld. AR that the proceedings u/s.147 of the Act had been initiated on the basis of vague, uncertain and nonspecific facts. Also, the claim of the Ld. AR that the initiation of the impugned proceedings is not based on a bonafide belief but on a suspicion, does not find favor with me. As per the "reasons to believe", the A.O had on the basis of a bonafide belief that the income of the assessee chargeable to tax had escaped assessment, as was arrived at by him as per clear, certain and specific facts that were available on his record, resorted to proceedings u/s.147 of the Act, viz. (i). the assessee despite absence of any source of liquid funds with him had made cash deposits of Rs. 8 lac in his bank account; and (ii) that the assessee d....
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....ounts as unexplained cash credit u/s.68 of the Act, which, thereafter, had been principally upheld by the CIT(Appeals). It is the claim of the Ld. AR that as the simplicitor cash deposits in the assessee's bank accounts did not form part of its books of accounts, therefore, the same could not have been assessed in its hands as unexplained cash credit u/s.68 of the Act. In sum and substance, it is the claim of the Ld. AR that as the simplicitor cash deposits in the bank accounts cannot be construed as credits in the books of account of the assessee, therefore, no addition could have validly been made by triggering the provisions of Section 68 of the Act. The ld. A.R in support of his aforesaid contention had relied on the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand H. Gandhi (1983) 141 ITR 67 (Mum.) and order of the ITAT, Amritsar in the case of Satish Kumar Vs. ITO (2019) 198 TTJ 114 (Asr). On the basis of his aforesaid contention, it was averred by the Ld. AR that the addition of Rs.15.58 lac (supra) made by the A.O by treating the simplicitor cash deposits in the assessee's bank accounts as unexplained cash credit u/s.68 of the Act could not be s....
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....Cash Credits. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year..........." That a bare perusal of the aforesaid deeming section therein reveals that an addition under the said statutory provision can only be made where any sum is found credited in the books of an assessee maintained for any previous year. Thus, the very sine qua non for making of an addition under Section 68 presupposes a credit of the aforesaid amount in the 'books of an assessee' maintained for the previous year. We not being oblivious of the settled position of law that a statutory provision has to be strictly construed and interpreted as per its plain literal interpretation, and no word howsoever meaningful it may so appear can be allowed to be read into a statutory provision in the garb of giving effect to the underlying intent of the legislature, thus confining ourselves within the r....
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....n followed by a 'SMC' of the ITAT Mumbai bench in the case of Smt. Manshi Mahendra Pitkar Vs. ITO 1(2), Thane (2016) 73 taxmann.com 68 (Mumbai Trib.) wherein it was held as under: - "I have carefully considered the rival submissions. In the present case the addition has been I made by the income tax authorities by treating the cash deposits in the bank account as an unexplained cash credit within the meaning of section 68 of the Act. The legal point raised by the assessee is to the effect that the bank Pass book is not an account book maintained by the assessee so as to fall Within the ambit of section 68 of the Act. Under section 68 of the Act, it is only when an amount is found credited in the account books of the assessee for any previous year that the deeming provisions of section 68 of the Act......... circumstances mentioned therein. Notably, section 68 of the Act in a situation "Where any sum is found credited in the books of an assessee............The Hon'ble Bombay High Court in the case of Shri Bhaichand Gandhi (supra) has approved the proposition that a bank Pass Book maintained by the bank cannot be regarded as a book of the assessee for the purposes of se....
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....red view that the addition of Rs.11,47,660/- made by the A.O under Sec.68 cannot be sustained, and as such is liable to be vacated. We thus set aside the order of the CIT(A) and delete the addition of Rs.11,47,660/- made by the A.O under Sec.68 of the Act." On the basis of my aforesaid observations, I am of the considered view that as the bank accounts of the assessee could not have been held to be the "books of account" of the assessee maintained for any business or profession, therefore, no addition u/s.68 of the Act could have been made in respect of the simplictor cash deposits made in the said bank accounts. I, thus, respectfully following the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand H. Gandhi (1983) 141 ITR 67 (Bom), as well as being in agreement with the order of the division bench of the Tribunal in the case of Mehul V. Vyas Vs. ITO (2017) 764 ITD 296 (Mum) and that of order of the ITAT, Amritsar in the case of Satish Kumar Vs. ITO (2019) 198 TTJ 114 (Asr), is of the view that the addition of Rs.15.58 lac (supra) made by the A.O u/s.68 of the Act cannot not be sustained. Resultantly, the order of the CIT(Appeals) who had upheld the addi....