9911796707
TMI Blog2021 (1) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 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. Maintaining 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. As in the case of Anand Ram Raitani vs. CIT [ 1996 (8) TMI 95 - GAUHATI HIGH COURT ] has held that existence of books of account is a condition precedent for invoking the provisions of section 68 by the Assessing Officer. The Tribunal in the case of Madhu Raitani [ 2010 (10) TMI 905 - ITAT GAUHATI ] held that if books of account are not maintained by the assessee, the provisions of section 68 cannot be invoked. The Tribunal further held that bank passbook cannot be considered as books of account. Thus no add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition can be made u/s 68 of the Act in absence of any credit entry in the books. The ld. Authorised representative of the assessee contended that bank passbook/statement does not constitute books of account. To support of his submissions, he placed reliance on the following decisions: (1) CIT vs. Bhaichand N. Gandhi 141 ITR 67 (Bom.) (2) Madhu Raitani vs. ACIT, 10 taxmann.com 206 (Guwahati)(TM) (3) Manasi Mahendra Pitkar vs. ITO 160 ITD 605 (Mumbai Trib.) (4) Kokarre Prabhakara vs. ITO, ITA 1239/Bang/2019 DoD 11/09/2020 2.2. The ld. Authorized Representative of the assessee asserted that although the provisions of section 68 does not apply where the return has been filed on presumptive basis under section 44AD of the Act, where the assessee is not maintaining books of account, notwithstanding, the assessee has fully explained source of cash deposits in the bank. 3. Per contract, Ms. Smita Verma, representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. The ld. Departmental Representative strongly opposing the ground raised by the assessee in appeal pointed that these grounds were never raised before the CIT(A). The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion raised by the ld. DR is rejected. The new ground raised by the assessee before the Tribunal being legal in nature is admitted for adjudication on merits in the light of decision rendered by Hon ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT reported as 229 ITR 383. 8. Before proceeding further to decide this issue it would be imperative to refer to the relevant provisions of section 68 of the Act. The same are reproduced herein under: 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: A bare perusal of section 68 of the Act makes explicitly clear that the addition can be made under the section if, any sum is found credited in the books maintained by the assessee. That is the books should be that of the assessee. 9. The books or books of account have been defined in section 2(12A) of the Act. The same reads as under:- 2(12A) books or books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the case of Anand Ram Raitani vs. CIT reported as 223 ITR 544 has held that existence of books of account is a condition precedent for invoking the provisions of section 68 by the Assessing Officer. The relevant extract of the judgement is as under: We have gone through section 68 of the Act. The Assessing Officer before invoking the power under section 68 of the Act must be satisfied that there are books of account maintained by the assessee and the cash credit is recorded in the said books of account and if the assessee fails to satisfy the Assessing Officer, the said sum so credited has to be charged to income-tax as the income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
