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TMI Blog2018 (4) TMI 1866X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, and not in any books of the assessee for the year under consideration. In the backdrop of the aforesaid settled position of law, the addition made by the A.O in respect of the cash deposits of ₹ 8,51,400/- in the bank accounts of the assessee by invoking Section 68 has to fail, for the very reason that as per the judgment in the case of of CIT Vs. Bhaichand N. Gandhi [ 1982 (2) TMI 28 - BOMBAY HIGH COURT] a bank pass book or bank statement cannot be considered to be a 'book' maintained by the assessee for any previous year for the purpose of Section 68 of the Act. Therefore, on this count itself the impugned addition deserves to be deleted. As quashed the addition on the ground that no such addition could have been validly made u/s 68 of the Act, therefore, we refrain from adverting to the grounds wherein the assessee had assailed on merits the additions sustained by the CIT(A). - ITA No. 7712/Mum/2012 - - - Dated:- 25-4-2018 - SHRI RAVISH SOOD AND SHRI N.K.PRADHAN, JJ. Appellant by : Shri R.S. Khandelwal, A.R Respondent by : Shri V. Justin, D.R ORDER RAVISH SOOD, J. The present appeal filed by the assessee is directed ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,400/- in his bank account during the year under consideration. The assessee explaining the nature and source of the cash deposits placed on record a cash flow statement. The A.O on a perusal of the cash flow statement observed that the assessee had claimed that the cash deposits made in his bank account comprised of, viz. (i). opening cash balance on 01.04.2006 : ₹ 2,50,000/-; (ii). cash gift received from his wife :₹ 2,50,000/-; and (iii).cash withdrawals from his bank account redeposited in the bank :₹ 7,55,000/-. It was thus the claim of the assessee that he had a total cash of ₹ 12,55,000/- available with him, out of which an amount of ₹ 12,37,400/-was deposited in the banks and the balance amount of ₹ 17,600/- remained with him as cash in hand. 4. The A.O after deliberating on the aforesaid contentions of the assessee, called upon him to substantiate along with supporting evidence the following three transactions on the basis of which the availability of cash in hand was claimed by him :- Sr. No. Date Particular Amount 1. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the same were barely sufficient to meet out the day to day expenses of the assessee and his wife. However, the A.O observing that as the wife of the assessee was also earning, therefore, agreed to availability of accumulated cash savings of ₹ 1,00,000/- with the assessee, as against his claim of ₹ 2,50,000/-. The A.O thus made an addition of ₹ 1,50,000/- as an unexplained cash credit under Sec. 68 in respect of the cash deposit made in the bank account, which was claimed by the assessee to have been sourced from his opening cash balance. (B) Cash gift from wife: ₹ 2,50,000/- The A.O observed that it was beyond comprehension that the wife of the assessee was an educated lady who had remained in government service would had kept so much of cash at home, all the more when she had a bank account and would not be available at home during the day time because of her job. The A.O was also not impressed with the claim of the assessee that the small cash withdrawals made by his wife in the period spread over 2004 to 2006 explained the availability of cash to the extent of ₹ 2,50,000/- with her during the year under consideration. However, the A.O was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with the same and dismissed the appeal. 7. The assessee being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. The ld. Authorized Representative (for short, A.R ) for the assessee, at the very outset of the hearing of the appeal submitted that the total cash deposits made by the assessee in his bank accounts during the year under consideration aggregated to ₹ 12,31,400/-. It was submitted by the ld. A.R that the assessee had claimed availability of cash in hand of ₹ 12,55,000/- during the year, as under:- Sr. No. Particulars Amount 1. Opening cash balance of ₹ 2,50,000/- 2. Cash gift received from wife ₹ 2,50,000/- 3. Cash withdrawals from the banks (as worked out by the A.O in respect of all the bank accounts of the assessee) ₹ 7,55,000/- The ld. A.R taking us through the Cash flow statement at Page 2 of the Paper book of the assessee (for short, APB ) submitted that the assessee whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by the ld. A.R that the accumulated savings to the said extent in the hands of a 64 years old person who had been working for the last 45 years was totally justified, and as such had wrongly been rejected by the A.O. The ld. A.R further submitted that keeping in view the fact that the wife of the assessee had retired from a government job, therefore, there was no reason for the A.O to have scrapped the availability of cash in hand of ₹ 2,50,000/- with her. It was submitted by the ld. A.R that the assessee in order to justify the availability of cash in hand with his wife had substantiated the same by placing on record the copy of her bank account, which revealed cash withdrawals of ₹ 2,44,000/- made by her during the period May, 2005 to February 2006. The ld. A.R further submitted that the assessee had furnished with the CIT(A) an affidavit of his wife, in which it was clearly deposed by her of having given a cash gift of ₹ 2,50,000/- to the assessee, alongwith the source of the same. The ld. A.R submitted that now when the wife of the assessee Smt. Shraddha Shrikant Sawant had admitted of having gifted an amount of ₹ 2,50,000/- out of her salary income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e additions of ₹ 8,51,400/- made by the A.O under Sec. 68 did not fall within the four corners of the additions which could be made under the said statutory provision, therefore, the same being absolutely devoid of any force of law, thus, could not be sustained and were liable to be struck down . 10. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities as well as the material placed on record. We will first deal with the objection raised by the Id. A.R as regards the validity of the additions aggregating to ₹ 8,51,400/- made by the A.O under Section 68 of the 'Act', in respect of the cash deposits 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 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. The relevant extract of the aforesaid statutory provision, viz. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble High Court of Bombay in the case of CIT Vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bombay) wherein the 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the A.O is in respect of the cash deposits in the bank accounts of the assessee, and not in any books of the assessee for the year under consideration. We thus are of the considered view that in the backdrop of the aforesaid settled position of law, the addition made by the A.O in respect of the cash deposits of ₹ 8,51,400/- in the bank accounts 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 of CIT Vs. Bhaichand N. Gandhi (1983) 141 ITR 67 (Bombay), a bank pass book or bank statement cannot be considered to be a 'book' maintained by the assessee for any previous year for the purpose of Section 68 of the Act. Therefore, on this count itself the impugned addition ₹ 8,51,400/- deserves to be deleted. 13. That as we have quashed the addition of ₹ 8,51,400/- on the ground that no such addition could have been validly made under Sec. 68 of the Act, therefore, we refrain from adverting to the grounds wherein the assessee had assailed on merits the additions sustained by the CIT(A). 14. The appeal of the assessee is allowed in terms of our aforesaid o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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