9911796707
TMI Blog2020 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... Sunder Singh, Accountant Member For the Appellant : Shri G.V.N.Hari, AR For the Respondent : Smt U.Mini Chandran, Sr.AR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-6, Hyderabad in Appeal No.10523/2018-19/A3/CIT(A)-6 dated 14.03.2019 for the Assessment Year (A.Y.)2014-15. 2. All the grounds of appeal are related to sustaining the addition of ₹ 33,34,000/- out of total addition made by the Assessing Officer (AO) amounting to ₹ 37,34,000/- u/s 68 of the Income Tax Act, 1961 (in short 'Act. The assessee filed appeal with the following grounds: 1. The order of the Learned Commissioner of Income Tax (Appeals), Hyderabad is contrary to the facts of the case and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) ought to have admitted the additional evidence filed by the appellant and called for remand report. 3. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of ₹ 33,34,000/- out of total addition of ₹ 37,34,000/- made by the assessing officer u/s 68 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers. The assessee explained that the he had received the loans from V.Uma Devi, V.Bal Ram, Padma and Rambabu for purchase of Eucalyptus and other trees as mentioned in the confirmation letters as per the details mentioned hereunder : S. No. Name of the lender Extent of land Produce purchased Amount paid Date 1. V.Uma Devi 2Ac. Eucalyptus trees ₹ 2,90,000/- 09.11.2013 2. V.Prem Kumar 3 Ac -do- ₹ 5,00,000/- 18.11.2013 3. V.Bala Ram 3 Ac. -do- ₹ 5,00,000/- 24.11.2013 4. Padma Ac.0.95 cents -do- ₹ 5,00,000/- 26.11.2013 Rambabu Ac 0.78 cents -do- Uma Devi Ac. 1.30 cents -do- 5. Uma Devi 2 Ac -do- ₹ 3,45,000/- 01.12.2013 6. Uma Devi Ac 1.15 cents Mango trees, neem and other trees ₹ 2,00,000/- 27.03.2014 The assessee submitted that the cash deposits are sourced from loans from friends and relatives to the tune of was ₹ 23.35 lakhs, the sum of ₹ 11 lakhs was from the drawings of assessee's capital account and the balance sum of ₹ 4 lakhs was sourced from agricultural income. The AO did not believe the contention of the assessee with regard to loans of ₹ 23.35 lakhs, drawings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The assessee has challenged the action of the AO in making the addition u/s 68 in respect of cash deposits. Therefore, we, take up first the additional ground relating to validity of addition u/s 68. As per section 68, the sum found credited in the books of account maintained by the assessee, for which no explanation is offered by the assessee required to be brought to tax. For the sake of clarity, we extract relevant part of the section 68 which reads as under : Cash credits. 68. 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 : Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition u/s 68. The issue with regard to deposits made in the bank account, whether to be brought to tax u/s 68 or not was considered by the coordinate bench of ITAT Mumbai in Mehul V.Vyas Vs. Income Tax Officer (supra) and held that the amounts found credited in the bank pass book or bank statement cannot be considered to be books maintained by the assessee in any previous year as understood for the purpose of section 68 of the Act. For the sake of clarity and convenience, we extract para No.8 of the cited order which reads as under : "5. We have heard the Id. Authorized representatives of both the parties, perused the orders of the lower authorities as well as the material produced before us. We will first deal with the objection raised by the Id. A.R as regards the addition of ₹ 10,53,000/- which was made by the A.O 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 Id. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a cash deposit in the 'bank account' of an assessee, in the absence of the same round credited in the 'books of the assessee' maintained for the previous year, cannot be brought to tax by invoking the provisions of Section 68. That our aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bombay) wherein the Hon'ble High Court has held as under: - "As the Tribunal has pointed out, it is fairly well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not of trustee and beneficiary. Applying this principle, the pass book supplied by the bank to its constituent is only a copy of the constituent's account In the books maintained by the bank. It is not as if the pass book is 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 pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hati) (TM), as well as by a coordinate bench of the Tribunal in the case of ITO, Barabanki Vs, Carnal Kumar Mishra (2013) 33 taxamann.com 610 (Lucknow Trib.) Thus in the backdrop of the aforesaid facts of the case read in light of the settled position of law, we are of the considered view that the addition made by the A.O in respect of the cash deposit of ₹ 10,53000/-(supra) in the bank account of the assessee by invoking Section 68 has to fail for the very reason that as per the judgment of the Hon'ble Bombay High Court in the case of Shri Bhaichand N. Gandhi (supra), a bank pass book or bank statement cannot be considered to be a 'book' maintained by the assessee for any previous year, as understood for the purpose of Section 68 of the Act. Therefore, on this count itself the impugned addition ₹ 10,53,000/- deserves to be deleted. 10.1. While delivering the decision, the Coordinate Bench relied on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Bhaichand N.Gandhi (supra). Similar view was taken by the coordinate Bench of ITAT, Delhi in the case of Smt Babbal Bhatia in TS-306-ITAT- 2018. In the instant case, though the assessee has main ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
