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2024 (12) TMI 1334 - AT - Income TaxAddition u/s 68 r.w.s. 115BBE - addition of 900 US dollars and 2600 Singapore dollars being credits in the bank account of the assessee of an equivalent Indian currency of Rs. 1,79,639/- considering the credits in the bank accounts as unexplained credits - HELD THAT -Question as to whether the passbook/bank statement constitute books of account so as to treat the credits in such passbook/bank statement as unexplained credit u/s 68 has been decided in the case of M/s Mayawati 2007 (11) TMI 328 - ITAT DELHI-A wherein held that the cash credit appearing in assessee s passbook relevant to a particular previous year in a case where the assessee does not maintain books of account does not attract the provisions of section 68 of the Act. Following this decision in the case of Smt. Babbal Bhatia 2018 (6) TMI 1030 - ITAT DELHI held that no addition u/s 68 of the Act based on the credits appearing in the passbook/bank statement when no books of account are maintained in the ordinary course of the business of the assessee. Addition u/s 68 of the Act in the case of the assessee is not sustainable - Decided in favour of assessee.
Issues Involved:
1. Dismissal of appeal by CIT(A) for non-prosecution. 2. Addition of Rs. 1,79,639/- under Section 68 of the Income Tax Act, 1961. 3. Jurisdictional error by the Assessing Officer (AO). Detailed Analysis: 1. Dismissal of Appeal by CIT(A) for Non-Prosecution: The assessee contended that the order passed by the CIT(A) under Section 250 of the Income Tax Act, 1961, was unjustified as it was dismissed due to non-prosecution. The assessee argued that Section 251 of the Act does not empower the CIT(A) to dismiss an appeal for non-prosecution, and the CIT(A) is required to adjudicate the grounds of appeal before passing an order. However, during the hearing, the assessee's counsel did not press this ground, and it was dismissed as not pressed. 2. Addition of Rs. 1,79,639/- Under Section 68: The primary issue revolved around the addition of Rs. 1,79,639/- under Section 68 of the Income Tax Act, which pertains to unexplained credits. The assessee argued that the addition was unjustified as he did not maintain books of account and was not required to do so under Section 44AA of the Act, given that he had no business income. The credits in question were foreign currency deposits in the assessee's bank account, which the AO treated as unexplained credits. The assessee filed returns using Form ITR-2, applicable for individuals with no business income, further asserting that the bank passbook does not constitute books of account as per Section 2(12A) of the Act. The Tribunal considered the decision of the Jurisdictional High Court in CIT Vs. M/s Mayawati, which held that cash credits in a passbook do not attract Section 68 if no books of account are maintained. The Tribunal also referenced similar decisions, including those of the coordinate bench in Smt. Babbal Bhatia vs. ITO, which supported the assessee's position. The Tribunal concluded that the addition under Section 68 was not sustainable and directed the AO to delete the addition. 3. Jurisdictional Error by the AO: The assessee claimed that the order of the AO was unsustainable due to a lack of jurisdiction. However, this ground was not pressed during the hearing and was dismissed as not pressed. Conclusion: The Tribunal allowed the appeal partly by directing the deletion of the addition under Section 68. The Tribunal did not find it necessary to delve into the merits of the addition, as the legal point was sufficient to resolve the issue. The appeal was pronounced in the open court, and the order was delivered on 18/12/2024.
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