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TMI Blog2017 (4) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... We are of the considered view that the assessee had not only put forth an explanation in respect of the nature and source of the cash deposit in her bank account, but rather it remains as a matter of fact that substantial material was placed on record by the assessee to fortify the genuineness and veracity of his aforesaid explanation. We find that the explanation of the assessee had been dislodged by the A.O merely on the basis of doubts, surmises and conjectures, which we are afraid cannot form a basis for making an addition in the hands of the assessee. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 147 and a notice under Sec.148, dated 17.06.2009, was issued and served on the assessee. 3. That during the course of the assessment proceedings the A.O called upon the assessee to put forth an explanation as regards the nature and source of the cash deposit of ₹ 10,53,000/- in her aforesaid Saving Bank account. The assessee in compliance to the aforesaid query submitted before the A.O that with the money left by her deceased husband and the income generated by her from Grauh Udyog for the last many years, she had accumulated savings out of which she had advanced interest bearing loans to different persons. It was submitted by the assessee that knowing well that she was at the fag end of her life, she decided to give her accumulated savings as a loan to her son Mr. Mehul V. Vyas, and to facilitate the same had deposited the amount of ₹ 10,53,000/- out of the accumulated cash available with her in the aforesaid Saving bank account. The assessee further furnished with the A.O the bifurcated details of the source of deposit of the amount of ₹ 10,53,000/- in her aforesaid bank account, as under:- "Opening cash balance ₹ 6,85,643/- Add: Receipts: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in her bank account, thus, after deliberating on the 'material' available before him, formed a bonafide 'belief' that the income of the assessee chargeable to tax had escaped assessment. We are thus of the considered view that in light of the well established nexus between the 'material' available on record and the formation of the belief by the A.O that the income of the assessee had escaped assessment, the fundamental requirement for assumption of jurisdiction by the A.O u/s 147 stood duly satisfied, and thus no infirmity can be related to the initiation of the aforesaid proceedings by the A.O. We further find that it neither emerges from the body of the assessment order, nor any averment had been made by the Ld. A.R before us, which could persuade us to conclude that the assessment framed by the A.O u/s 143(3) r.w.s 147 of the 'Act' was not sustainable in the eyes of law. We thus in the backdrop of our aforesaid observations, finding no force in the additional grounds of appeal raised by the assessee before us, therefore reject the same. The additional Grounds of appeal Nos. 1 and 2 so raised by the assessee before us are thus rejected. 6. The ld. A.R had vide Ground of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee were furnished with the A.O along with supporting documentary evidence, however the latter had proceeded with most arbitrarily and without appreciating the explanation of the assessee in respect of the nature and source of the aforesaid cash deposit, which as claimed by the Ld. A.R stood duly substantiated on the basis of substantial material that was placed on his record, had made an addition of the said amount as an unexplained cash credit under Section 68 in the hands of the assessee. It was further submitted by the ld. A.R that the CIT(A) had in a mechanical manner upheld the assessment framed by the A.O. The Ld. A.R in order to fortify his contention that the complete details along with supporting documentary evidence in respect of the cash deposit of ₹ 10,53,000/-(supra) was placed on record during the course of the assessment proceedings, therein took us to the relevant pages of his 'Paper Book' (APB), viz. 'Summary of cash analysis' explaining the genesis of the Opening cash balance of ₹ 6,85,643/- (Page 15-19); Confirmations along with copies of the income tax returns of the relatives of the assessee, viz, Ms. Seema Narendra Bhatt (daughter), Ms. Priti Phadr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 68 of the 'Act', in respect of the cash deposit in the bank account of the assessee. We find substantial force in the contention of the ld. A.R that an addition under Section 68 can only be made where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee either offers no explanation about the nature and source as regards the same, or the explanation offered by him in the opinion of the assessing officer is not found to be satisfactory. That before adverting further, we herein reproduce the relevant extract of the aforesaid statutory provision, viz. Section 68, which reads as under: - "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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained by the bank as the agent of the constituent, nor can it be said that the pass book is maintained by the bank under the instructions of the constituent. In view of this, the Tribunal was, with respect, justified in holding that the pass book supplied by the bank to the assessee in the present case could not be regarded as a book of the assessee, that is, a book maintained by the assessee or under his instructions. In our view, the Tribunal was justified in the conclusions at which it arrived." We find that the aforesaid view of the Hon'ble jurisdictional High Court had thereafter been 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in respect of the nature and source of the cash deposit of ₹ 10,53,000/-(supra) in her bank account has been disbelieved by the lower authorities without establishing any credible infirmity or fallacy in the substantial material which was made available on record by the assessee. We are of the considered view that the assessee had not only put forth an explanation in respect of the nature and source of the cash deposit of ₹ 10,53,000/-(supra) in her bank account, but rather it remains as a matter of fact that substantial material was placed on record by the assessee to fortify the genuineness and veracity of his aforesaid explanation. We find that the explanation of the assessee had been dislodged by the A.O merely on the basis of doubts, surmises and conjectures, which we are afraid cannot form a basis for making an addition in the hands of the assessee. Be that as it may, since we have already held that the addition is unsustainable following the ratio of the judgment of the Hon'ble Jurisdictional High Court in the case of Shri Bhaichand N. Gandhi (supra), therefore we do not deal with instant aspect any further. That as a result of our aforesaid observations, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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