2024 (12) TMI 1334

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....resent its case before himself to adjudicate on all ground of appeal. 3. The order of Ld.CIT(A) and Ld. AO is unsustainable in law and therefore needs to be quashed as the addition of Rs. 1,79,639/- u/s 68 rws 115BBE of IT Act is not justified in the case of the assessee not maintaining books of account and who under the provision of Income Tax Act, is not required to maintain books of account. 4. The order of AO is unsustainable in law as the same has been passed without jurisdiction by the AO and Ld.CIT(A) in-spite of specific ground raised failed to appreciate the jurisdictional flaw in assumption of jurisdiction by the AO. 5. The appellant craves leave to add, delete, modify/amend the above grounds of appeal with the permission of the Hon'ble appellate authority." 2. At the time of hearing the Ld. Counsel for the assessee submits that ground nos.2 & 4 are not pressed and ground nos. 1 & 5 are general and need no adjudication. In view of the submission of the Ld. Counsel ground nos. 2 & 4 of grounds of appeal are dismissed as not pressed and since ground nos. 1 & 5 are general in nature they require no adjudication. 3. Coming to ground no. 3 of g....

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....ount does not attract the provisions of section 68 of the Act. 5. On the other hand, the Ld. DR submits that in the case of Janak Goyal Vs. DCIT the coordinate bench of the Delhi Tribunal in ITA Nos.937 & 938/Del/2012 dated 13.05.2019 held that bank account is akin to books of account and, therefore, there is no requirement that the books of account should be maintained by the assessee himself and confirmed unexplained bank deposits u/s 68 of the Act. Ld. DR further submits that even otherwise quoting a wrong section to an addition made is not a fetal action for not sustaining the addition. 6. Heard rival submissions, perused the orders of the authorities below. Perusal of the assessment order suggests that the addition was made based on the credits appearing in the bank statement of the assessee who is an individual filing return in Form ITR-2. The undisputed fact is that the assessee is not into any business and he does not have any income under the head "income from business or profession". The assessee for the assessment year under consideration reported income under the head "house property and capital gains". However, the AO made addition of Rs. 1,79,639/- u/s 68 of the....

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....les and balance amount represents withdrawals made from other banks. 7. The Assessing Officer was of the opinion that the returned income of the assessee does not in any manner justify the claim of receipts of cash from sales and deposits in the bank accounts. 8. The Assessing Officer proceeded by invoking the provisions of section 68 of the Act and made addition of Rs. 56.03 lakhs in assessment year 2010-11, Rs. 84.50 lakhs in assessment year 2011-12 and Rs. 4.50 lakhs in assessment year 2012-13. 9. The assessee carried the matter before the ld. CIT(A) but without any success. 10. Before us, as mentioned elsewhere, the ld. counsel for the assessee vehemently stated that the additions made u/s 68 of the Act is uncalled for as the assessee had made it very clear in the return of income itself that she is not maintaining any books of account. Therefore, making addition u/s 68 of the Act is untenable in law as the said section is applicable only when the credits are found in the books of account of the assessee. In support of his contention, the ld. counsel for the assessee relied upon various judicial decisions which we will discuss later on. ....

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....It is equally true that in the returns of income itself the assessee made it very clear that she is not maintaining books of account. If the revenue authorities were of the view that the returns have not been filed as per provisions of section 44AF of the Act, nothing prevented the officers to treat the return of income as invalid return of income. 15. The Assessing Officer straightaway proceeded by applying the provisions of section 68 of the Act to the cash found deposited in the bank accounts knowing fully well that the assessee was not maintaining any books of account. 16. The coordinate Bench in the case of Om Prakash Sharma 2256/DEL/2009 has held as under: "9. Coming to the merits of the case, undisputedly, the addition of Rs. 913000 was based only on some entries in the bank account of the assessee. The assessee was found not to have maintained any books of account. Now, as correctly observed by the CIT(A), the passbook/bank statement supplied by the bank to the assessee does not amount to a book of account of the assessee. It being only a copy of customers' account in the books maintained by the bank, a bank does not act as an agent of its cus....

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....was justified in the conclusions at which it arrived." 18. The Hon'ble jurisdictional High Court of Delhi in the case of CIT Vs. Ms. Mayawati reported in 338 ITR 563 [DEL] has held as under: "As the ITAT has come to the conclusion that Section 68 has no applicability to the facts of the present case as the assessee is not maintaining any books of accounts. If that be so Section 68 does not apply in this case for the simple reason cheque received from Mr.Pankaj Jain has been deposited in her bank account in this regard. The ITAT was of the opinion that balance sheet/statement of the affairs cannot be equated to books of account because a pass book of the bank cannot be treated as a book of account of the assessee because this is proved by the banker, which is given to its customer and is only a copy of the customer's account in the books maintained by the bank. The bank does not act as an agent of the customer nor can it be said that the banker maintains the pass book under instructions of the customer (assessee) the relationship between the banker and customer is one of the debtor and creditor only. Therefore, a cash credit appearing in assessee's pass book re....

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....ur view, the Tribunal was justified in the conclusions at which it arrived." 21. In the case of Anandram Ratiani, the Hon'ble Guwahati High Court has also held that a perusal of section 68 of the Act shows that in relation to expression "books" the emphasis is on the word 'Assessee' meaning thereby that such books have to be books of the assessee himself and not of any other assessee. 22. It is correct that since no books of account are maintained in the ordinary course of business of the assessee, no such addition u/s 68 of the Act is tenable. 23. Coming to the decisions relied upon by the ld. DR, the first relates to the Special Bench of the Delhi Tribunal in the case of Manoj Aggarwal [supra] which was pronounced on 25.07.2008. As mentioned elsewhere, the judgment of the Hon'ble Delhi High Court in the case of Ms/ Mayawati [supra] is dated 03.08.2011 which means that the judgment of the Hon'ble jurisdictional High Court was not available before the Special Bench. Reliance was also placed on the judgment of the Hon'ble High Court of Bombay in the case of Arun Kumar J. Muchhala [supra], but we find that in that case the assessee t....