TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1409
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....n record. Considering the same, we are convinced that the assessee was prevented by reasonable and sufficient cause for not filing the appeal on time. Delay is condoned. 3. The assessee has challenged the following additions:- "Addition of Rs. 3,00,00,000/- made under section 68 of the Act is not justified as the Appellant has opted presumptive taxation u/s 44AD of the Act. 1. The ld. NFAC erred in confirming the action of the Ld.A.O. to invoke the provisions of section 68 of the Act of the Income tax Act, 1961 (Hereinafter referred to as the Act) without appreciating the fact that the Appellant has filed his return of income under presumptive taxation as per section 44AD of the Act. Hence, the addition of Rs. 3,00,00,0....
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....use property, income from business and other sources. During the course of the scrutiny assessment proceedings, the AO noticed some loan credit for which the assessee was asked to explain the identity, genuineness of the transactions and capacity of the lender. On receiving no plausible reply, the AO made addition of Rs.3 Crores u/s 68 of the Act which was confirmed by the ld. CIT(A). 5. Before us it was strongly contended that since the assessee has returned income u/s 44AD of the Act thereby opting for presumptive taxation, there is no question of making any addition u/s 68 of the Act. The ld. D/R strongly supported the findings of the AO. 6. We have given thoughtful consideration to the orders of the authorities below. It is an ....
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....ch followed the decision of another Co-ordinate Bench in ITA No. 1183/Mum/2019, and the relevant findings read as under:- "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 ITA NO. 1183/MUM/2019 (A.Y.2014-15) Manasi Mahendra Pitkar vs. ITO (supra) under simila....
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....s and other books, whether kept in the 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 ITA NO. 1183/MUM/2019 (A.Y.2014-15) 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 doe....
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.... 44AD of the Act. 12. As has been observed earlier that addition under section 68 can be made only if any sum is found credited in the books maintained by 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 ....
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....see, the provisions of section 68 cannot be invoked. The Tribunal further held that bank passbook cannot be considered as books of account. Similar view has been taken by the coordinate Bench in the case of Manasi Mahendra Pitkar (supra). 15. The Co-ordinate Bench of the Tribunal in the case of Shri Kokarre Prabhakara vs. ITO(supra), in a similar situation where the assessee had declared income under section 44AD of the Act without maintaining books and the Assessing Officer had invoked the provisions of section 68 of the Act, the Tribunal deleted the addition by placing reliance of various decisions of the Tribunal holding that where the returns are filed on the basis of income declared under section 44A of the Act, there....