Vangapandu Prem Kumar, Kakinada V. The Income Tax Officer, Ward-1, , Kakinada

ITA 269/VIZ/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2923 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 10-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINI CHANDRAN SR
• Keywords: Unexplained cash credit; Gift; Additional evidence; Assessment record; Set aside
• Section: 234B; 205; 201; 73; 13; 69; 10; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM (THROUGH WEB - BASED VIDEO CONFERENCING PLATFORM) . , . . , BEFOR E SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 269 /VIZ/20 19 ( / A SSESSMENT Y EAR : 201 4 - 201 5 ) VANGAPANDU PREM KUMAR D.NO.42 - 3 - 1 SRI VENKATESWARA GARMENTS TILAK STREET, MAIN ROAD KAKINADA [P AN : A BXPV9304L ] VS. INCOME TAX OFFICER WARD - I, KAKINADA ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI, AR / RESPONDENT BY : S MT U.MINI CHANDRAN, SR.AR / DATE OF HEARING : 23 .0 9. 2020 / DATE OF PRONOUNCEMENT : 23.11.2020 / O R D E R PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE ASSESSE E AGAINST THE ORDER OF THE COM MISSIONER OF INCOME TAX ( APPEALS ) - 6, HYDERABAD IN A PPEAL NO. 1052 3/ 2 0 1 8 - 19/A3/CIT(A) - 6 DATED 14 .03.20 19 FOR THE ASSESSMENT YEAR (A.Y.) 20 1 4 - 1 5 . 2 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO SUSTAINING THE ADDITION OF RS.33,34,000/ - OUT OF TOTAL ADDITION MADE BY THE ASSESSING OFFICER (AO) AMOUNTING TO RS.37,3 4,000/ - U/S 68 OF THE INCOME TAX ACT, 1961 (IN SHORT AC T. 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 T O 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 SUS TAINING THE ADDITION OF RS.33,34,000/ - OUT OF TOTAL ADDITION OF RS.37,34,000/ - MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT TOWARDS ALLEGED UNEXPLAINED CASH CREDITS . 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN SUSTAINING TH E INTEREST CHARGED U/S 234A AND U/S 234B OF THE ACT. 5. ANY OTHER GROUNDS MAY BE URGED AT THE TIME OF HEARING 2.1 . DURING THE APPEAL HEARING THE ASSESSEE FILED PETITION FOR ADMISSION OF ADDITIONAL GROUNDS AS UNDER: 1 . WHETHER ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER IS JUSTIFIED IN MAKING ADDITION U/S 68 OF THE INCOME TAX ACT ) 1961 IN RESPECT OF DEPOSITS IN BANK ACCOUNTS OF THE APPELLANT AS THE PROVISIONS OF S.68 ARE NOT APPLICABLE TO CREDITS IN A BANK ACCOUNT WHICH CANN OT BE REGARDED AS A BOOK OF ACCOUNT OF THE APPELLANT? 2. WITHOUT PREJUDICE TO THE ABOVE, WHETHER THE ASSESSING OFFICER IS JUSTIFIED IN MAKING ADDITION TOWARDS UNEXPLAINED DEPOSITS IN THE TWO BANK ACCOUNTS THAT WERE ALREADY DISCLOSED IN THE BOOKS OF ACCOUN T, WHEN THE ASSESSING OFFICER IGNORED THE BOOK RESULTS AND ASSESSED THE INCOME ON ESTIMATE BASIS? 3 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 2.2 . ADDITIONAL GROUND NO.1 IS RELATED TO THE VALIDITY OF ADDITION MADE UNDER SECTION 68 IN RESPECT OF THE DEPOSITS MADE IN THE BANK ACCOUNT . T HE LD.AR ARGUE D THAT THE ADDITION MADE U/S 68 IS UNSUSTAINABLE, SINCE , THE DEPOSITS WERE MA DE IN THE BANK ACCOUNTS BUT NO T IN THE BOOKS OF ACCOUNTS . ACCORDING TO THE LD.AR, THE BANK DEPOSITS ARE NOT PERMISSIBLE TO BE BROUGHT TO TAX U/S 68, SINCE , SECTION 68 REFERS TO THE ENTRIES THAT ARE MADE IN THE BOOKS OF ACCOUNTS FOR WHICH THE ASSESSEE FAILS TO OFFER SATISFACTORY EXPLANATION. THE LD.AR FURTHER SUBMITTED THAT THE ADDITIONAL GROUNDS ARE LEGAL GROUNDS WHICH GO TO THE ROOT OF THE ASSESSMENT AND NO FRESH ENQUIRY OR MAT ERIAL IS REQUIRED TO ADJUDICATE THE GROUND S AND THE ENTIRE MATERIAL IS AVAILABLE IN THE ASSESSMENT RECORDS, THEREFORE, REQUESTED TO ADMIT THE ADDITIONAL GROUND AND ADJUDICATE THE SAME. WE HAVE HEARD BOTH THE PARTIES AND FIND THAT THE ADDITIONAL GROUNDS AR E LEGAL GROUNDS AND NO FRESH INFORMATION IS REQUIRED, HENCE, THE ADDITIONAL GROUNDS ARE ADMITTED. 3. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS MADE THE CASH THE DEPOSITS TO THE EXTENT OF RS.37,34,000/ - IN THE BANK ACCOUNT MAINT AINED WITH ANDHRA BANK A/C NO.03031101000028234 , KAKINADA BRANCH. THE ASSESSEE FURTHER EXPLAINED BEFORE THE AO THAT THE 4 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA SOURCE OF CASH DEPOSITS WAS OUT OF AGRICULTURAL INCOME OF THE ASSESSEE AND THE FAMILY MEMBERS . THE ASSESSEE EXPLAINED THAT THE HE HA D RE CEIVED 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 PA ID DATE 1. V.UMA DEVI 2AC. EUCALYPTUS TREES RS.2,90,000/ - 09.11.2013 2. V.PREM KUMAR 3 AC - DO - RS.5,00,000/ - 18.11.2013 3. V.BALA RAM 3 AC. - DO - RS.5,00,000/ - 24.11.2013 4. PADMA AC.0.95 CENTS - DO - RS.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 - RS.3,45,000/ - 01.12.2013 6. UMA DEVI AC 1.15 CENTS MANGO TREES, NEEM AND OTHER TREES RS.2,00,000/ - 27.03.2014 THE ASSESSEE SUBMITTED THAT THE CASH DEPOSITS ARE SOURCED FROM L OANS FROM FRIENDS AND RELATIVES TO THE TUNE OF WAS RS.23.35 LAKHS , T HE SUM OF RS.11 LAKHS WAS FROM THE DRAWINGS OF ASSESSEES CAPITAL ACCOUNT AND THE BALANCE SUM OF RS.4 LAKHS WAS SOURCED FROM AGRICULTURAL INCOME. THE AO DID NOT BELIEVE THE CONTENTION OF THE ASSESSEE WI TH REGARD TO LOANS OF RS.23.35 LAKHS, DRAWINGS OF RS.11 LAKHS AND AGRICULTURAL INCOME OF RS.4 LAKHS AND TREATED THE ENTIRE SUM OF RS.37,34,000/ - AS UNEXPLAINED CASH CREDIT AND ACCORDINGLY ASSESSED THE SAME AS INCOME U/S 68 OF THE ACT. 5 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 4. AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) ALLOWED THE RELIEF OF RS.4,00,000/ - AS AGRICULTURAL INCOME AND THE BALANCE AMOUNT OF RS.33.34 LAKHS WAS CONFIRMED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 5. AGAINST WHICH THE ASSESSEE IS I N APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD.AR SUBMITTED THAT THE ASSESSEE HAS TAKEN LOANS AND GIFTS FROM THE FAMILY MEMBERS AND THE DETAILS OF WHICH WERE MENTIONED IN PARA 3 OF THIS ORDER. THE LD.AR FURTHER STATED THAT THE ASSESSEE HA D THE CAPI TAL BALANCE OF RS.26 LAKHS, OUT OF WHICH RS.11 LAKHS WERE USED FOR DEPOSITING IN BANK ACCOUNT. THUS, THE LD.AR SUBMITTED THAT SOURCE OF ENTIRE CASH DEPOSITS WERE EXPLAINED BY THE ASSESSEE, HENCE, THERE IS NO CASE FOR MAKING THE ADDITION, ACCORDINGLY, REQUE STED TO DELETE THE ADDITION. THE LD.AR ALSO SUBMITTED THAT THE AO MADE THE ADDITION U/S 68 OF INCOME TAX ACT WHICH IS AGAINST THE CREDITS FOUND IN THE BOOKS OF ACCOUNTS , W H E REAS IN THE INSTANT CASE, THE DEPOSITS WERE MADE IN THE BANK ACCOUNT, BUT NOT IN TH E BOOKS OF ACCOUNTS. THE LD.AR ARGUED THAT THE BANK ACCOUNT STATEMENT OR PASS BOOKS ARE NOT THE BOOKS OF ACCOUNTS, HENCE, THE AO IS NOT PERMITTED TO MAKE ADDITION U/S 68. THUS, T HE LD.AR ARGUED THAT ON LEGAL GROUND ALSO, THE ADDITION IS UNSUSTAINABLE. 6 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 6. ON THE OTHER HAND, THE LD.DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND ARGUED THAT THE ASSESSEE HAS NOT CONSIDERED THE DEPOSITS MADE IN THE BANK ACCOUNT WHILE PREPARING THE BOOKS OF ACCOUNTS, HENCE, ARGUED THAT THE AO HAS RIGHTLY MADE TH E ADDITION, HENCE REQUESTED TO UPHOLD THE ORDER OF THE AO AND NO INTERFERENCE IS CALLED FOR. THE LD.DR FURTHER SUBMITTED THAT MERELY BECAUSE THE AO MADE THE ADDITION U/S 68 INSTEAD OF 69, THE ADDITION SHOULD NOT BE DELETED ON TECHNICAL GROUNDS. IT REMAIN S THAT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE, THEREFORE, REQUESTED TO UPHOLD THE ORDER OF THE LD.CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. AS OBSERVED FROM THE ORDERS OF THE LOWER AUTHORITIES, THE DEPOSITS WERE MADE IN THE BANK ACCOUNT REPRESENTING ANDHRA BANK ACCOUNT NO.030310100028234 AND THE ADDITION WAS MADE U/S 68 OF THE ACT. THE ASSESSEE HAS CHALLENGED THE ACTION OF THE AO IN MAKING T HE ADDITION U/S 68 IN RESPECT OF CASH DEPOSITS. THEREFORE, WE, TAKE U P 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 7 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA TAX. FOR T HE 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 A ND 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 - C OMPANY SHALL BE DEEMED TO BE NOT SATISFACTORY, UNLESS (A) THE PERSON, BEING A RESIDENT IN WHOSE NAME SUCH CREDIT IS RECORDED IN THE BOOKS OF SUCH COMPANY ALSO OFFERS AN EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH SUM SO CREDITED; AND (B) SUCH EXPLAN ATION IN THE OPINION OF THE ASSESSING OFFICER AFORESAID HAS BEEN FOUND TO BE SATISFACTORY: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRST PROVISO SHALL APPLY IF THE PERSON, IN WHOSE NAME THE SUM REFERRED TO THEREIN IS RECORDED, IS A VENTURE CAPITAL F UND OR A VENTURE CAPITAL COMPANY AS REFERRED TO IN CLAUSE (23FB) OF SECTION 10 . FROM PLAIN READING OF SECTION 68, WHAT IS TO BE MADE ADDITION AND WHAT IS TO BE BR OUGHT TO TAX U/S 68 IS THE CREDITS MADE IN THE BOOKS OF ACCOUNTS, FOR WHICH THE ASSESSEE FAILED TO OFFER EXPLANATION. AS PER PARA NO.4.1 OF THE ASSESSMENT ORDER , THE AO FOUND THAT THE DEPOSITS WERE MADE IN SAVINGS BANK ACCOUNT WITH ANDHRA BANK AND THE S AME WAS NOT TAKEN IN TO ACCOUNT IN BOOKS OF ACCOUNTS, THUS, IT IS CLEAR THAT THE DEPOSITS MADE IN THE BANK ACCOUNT WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS. THEREFORE, THE AO OUGHT TO HAVE CONSIDERED THE ADDITION U/S 69 INSTEAD OF 68. AS 8 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA DISCUSSED EARLI ER, THE DEPOSITS MADE IN THE BANK ACCOUNT ARE NOT TO BE TAX ED U/S 68 OF THE ACT AND THE CORRECT COURSE OF ACTION IS TO TAX THE SAME IS U/S 69 OF THE ACT. ON SIMILAR FACTS, THIS TRIBUNAL IN THE CASE OF SMT.ASHA SANGHAVI VS. INCOME TAX OFFICER IN I.T.A. NO.3 3/VIZ/2019 DATED 15.11.2019 HELD THAT THE CASH DEPOSITS REQUIRED TO BE BROUGHT TO TAX U/S 69, BUT NOT U/S 68 OF THE ACT. FO R THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THIS TRIBUNAL WHICH READS AS UNDER : 10. WE HAVE HEA RD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE AO MADE THE ADDITION OF RS.1,22,29,000/ - REPRESENTING CASH DEPOSITS MADE IN THE BANK ACCOUNT U/S 68 OF THE ACT. SECTION 68 ALLOWS THE AO TO MAKE ADDITION FOR THE SUMS CREDITED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE FOR WHICH THE ASSESSEE FAILS TO OFFER SATISFACTORY EXPLANATION WITH REGARD TO SOURCE. IN THE INSTANT CASE, THE ASSESSEE IS MAINTAINING THE BOOKS OF ACCOUNTS BUT DID NOT MAKE ANY ENTRY IN THE BO OKS OF ACCOUNTS. THE AMOUNTS WERE DEPOSITED IN THE BANK ACCOUNTS, BUT NOT MADE RELEVANT ENTRY. HENCE, THE LD.AR ARGUED THAT SINCE THE ASSESSEE DID NOT MAKE ANY ENTRY IN THE BOOKS OF ACCOUNTS, THE AO IS NOT PERMITTED TO MAKE 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 BOO K 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 UN DER : 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 RS.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 A NY 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 9 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 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 ASSESS EE 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 PROVISION CAN ONLY BE MADE WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN A SSESSEE MAINTAINED FOR ANY PREVIOUS YEAR. THUS, THE VERY SINE QUA NON FOR MAKING OF AN ADDITION UNDER SECTION 68 PRESUPPOSES A CREDIT OF THE AFORESAID AMOUNT IN THE 'BOOKS OF AN ASSESSEE' MAINTAINED FOR THE PREVIOUS YEAR. WE NOT BEING OBLIVIOUS OF THE SETT LED POSITION OF LAW THAT A STATUTORY PROVISION HAS TO BE STRICTLY CONSTRUED AND INTERPRETED AS PER ITS PLAIN LITERAL INTERPRETATION, AND NO WORD HOWSOEVER MEANINGFUL IT MAY SO APPEAR CAN BE ALLOWED TO BE READ INTO A STATUTORY PROVISION IN THE GARB OF GIVIN G EFFECT TO THE UNDERLYING INTENT OF THE LEGISLATURE, THUS CONFINING OURSELVES WITHIN THE REALM OF OUR JURISDICTION, THEREIN CONSTRUE THE SCOPE AND GAMUT OF THE AFORESAID STATUTORY PROVISION BY ACCORDING A PLAIN MEANING TO THE LANGUAGE USED IN SEC. 68. WE ARE OF THE CONSIDERED VIEW THAT A CREDIT IN THE 'BANK ACCOUNT' OF AN ASSESSEE CANNOT BE CONSTRUED AS A CREDIT IN THE 'BOOKS OF THE ASSESSEE', FOR THE VERY REASON THAT THE BANK ACCOUNT CANNOT BE HELD TO BE THE 'BOOKS' OF THE ASSESSEE. THOUGH IT REMAINS AS A MATTER OF FACT THAT THE 'BANK ACCOUNT' OF AN ASSESSEE IS THE ACCOUNT OF THE ASSESSEE WITH THE BANK, OR IN OTHER WORDS THE ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE BANK, BUT THE SAME IN NO WAY CAN BE HELD TO BE THE 'BOOKS' OF THE ASSESSEE. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE SCOPE AND GAMUT OF THE AFORESAID STATUTORY PROVISION, VIZ. SEC. 68, AND ARE OF THE CONSIDERED VIEW THAT AN ADDITION MADE IN RESPECT OF 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 HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. BHA ICHAND N. GANDHI (1983) 141 ITR 67 (BOMBAY) WHEREIN THE HONBLE 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 AN D THE CUSTOMER IS ONE OF DEBTOR AND CREDITOR AND 10 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 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 WHIC H 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.) W HEREIN 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 MEANIN G OF SECT/ON 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 FAIL WITHIN THE AMBIT OF SECTION 68 OF THE ACT. UNDER SECTION 68 OF THE ACT, IT IS ONLY WH EN AN AMOUNT IS FOUND CREDITED IN THE ACCOUNT BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR THAT THE DEEMING PROVISIONS OF SECTION 68 OF THE ACT WOULD APPLY IN THE CIRCUMSTANCES MENTIONED THEREIN. NOTABLY, SECTION 68 OF THE ACT WOULD COME INTO PLAY ONLY IN A SITUATION 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE ........... '. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI BHAICHAND GANDHI (SUPRA) HAS APPROVED THE PROPOSITION THAT A BANK PASS BOOK MAINTAINED BY THE BANK CANNOT BE REGARDED A S A BOOK OF THE ASSESSEE FOR THE PURPOSES OF SECTION 68 OF THE ACT. FACTUALLY SPEAKING, IN THE PRESENT CASE, ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND SECTION 68 OF THE ACT HAS BEEN INVOKED BY THE ASSESSING OFFICER ONLY ON THE BASIS OF THE BANK PASS BOOK. THE INVOKING OF SECTION 68 OF THE ACT HAS TO FAIL BECAUSE AS PER THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI BHAICHAND N. GANDHI (SUPRA), THE BANK PASS BOOK OR BANK STATEMENT CANNOT BE CONSTRUED TO BE A BOOK MAINTAINED BY T HE ASSESSEE FOR ANY PREVIOUS YEAR AS UNDERSTOOD FOR THE PURPOSES OF SECTION 68 OF THE ACT. THEREFORE, ON THIS ACCOUNT ITSELF THE IMPUGNED ADDITION DESERVES TO BE DELETED. I HOLD SO' 11 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA WE FURTHER FIND THAT A SIMILAR VIEW HAD ALSO BEEN ARRIVED AT IN A 'THIRD M EMBER' DECISION OF THE TRIBUNAL IN THE CASE OF SMT. MADHU RAITANI VS. ACIT (2011) 10 .TAXMANN.COM 205 (GAUHATI) (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 RS.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 CONS IDERED 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 RS.10,53,000/ - DESERVES TO BE DELETED. 10.1. WHILE DELIVERING THE DECISIO N, THE COORDINATE BENCH RELIED ON THE DECISION OF HONBLE 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 INS TANT CASE, THOUGH THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNTS, THE CASH DEPOSITS MADE IN THE BANK ACCOUNT WERE NOT FOUND CREDITED IN THE BOOKS OF ACCOUNTS. THE ENTIRE TRANSACTIONS WERE MADE OUTSIDE THE BOOKS OF ACCOUNTS. IN THE ABSENCE OF ANY FINDING WITH REGARD TO CASH DEPOSITS RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THE ADDITION MADE BY THE AO U/S 68 IN RESPECT OF CASH DEPOSITS MADE IN THE BANK ACCOUNT ARE UNSUSTAINABLE. DURING THE APPEAL HEARING, THE LD.DR DID NOT BRING ANY OTHER DECISI ON TO SUPPORT THE REVENUES CONTENTION THAT THE CASH DEPOSITS MADE IN THE BANK ACCOUNT TO BE BROUGHT INTO THE PURVIEW OF SECTION 68 OF THE ACT. THE CASE LAW RELIED UPON BY THE LD.DR IN THE CASE OF SACHDEVA (SUPRA) THOUGH RELATED TO SALE OF JEWELLERY AND T HE FAILURE OF THE ASSESSEE TO PROVE THE GENUINENESS OF SALE, IT WAS NOT RELATED TO THE ADDITION U/S 68. THE CASE LAW RELIED UPON BY THE LD.DR IS DISTINGUISHABLE AND DOES NOT HELP THE REVENUES CASE. SINCE THE FACTS ARE IDENTICAL TO THE DECISION OF MEHUL V .VYAS (SUPRA), RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE COORDINATE BENCH OF ITAT, MUMBAI, WE HOLD THAT THE ADDITION MADE BY THE AO U/S 68 IN RESPECT OF CASH DEPOSITS MADE IN THE BANK ACCOUNT IS UNSUSTAINABLE, ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 12 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA 7.1. SINCE THE FACTS ARE SIMILAR, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE COORDINATE BENCH OF ITAT IN THE CASE OF ASHA SANGHAVI (SUPRA), WE HOLD THAT THE ADDITION MADE U/S 68 IN RESPECT OF DEPOSITS MADE IN THE BANK ACCOUNT IS UNSUSTAINABLE, HENCE, DELETED. THE ASSESSEE ALSO EXPLAINED THAT THE FAMILY IS HAVING AGRICULTURAL HOLDINGS OF 48.60 ACRES AND THE ENTIRE DEPOSITS WERE MADE OUT OF AGRICULTUR AL INCOME OF THE FAMILY MEMBERS WHICH WAS RECEIVED IN THE FORM OF LOANS / GIFTS, THUS, THE ASSESSEE HAS ARGUED THE CASE ON MERITS ALSO. S INCE , WE HAVE DELETED THE ADDITION, HOLDING THAT THE ADDITION U/S 68 UNSUSTAINABLE , WE CONSIDER IT IS NOT NECESSARY TO ADJUDICATE THE GROUNDS ON MERITS AND OTHER GROUNDS RAISED BY THE ASSESSEE . ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD N OVEMBER 2020. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 23.11.2020 L.RAMA, SPS 13 I.T.A. NO. 269 /VIZ/20 19 , A.Y.20 1 4 - 1 5 VANGAPANDU PREM KUMAR , KAKINADA / COPY OF THE ORDER FORWARDED TO : - 1. / THE ASSESSEE VANGAPANDU PREM KUMAR , D.NO.42 - 3 - 1 , SRI VENKATESWARA GARMENTS , TILAK STREET, MAIN ROAD , KAKINADA 2 . / THE REVENUE INCOME TAX OFFICER , WARD - I, KAKINADA 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX - 2, VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 6, HYDERABAD 3 . , , / DR, ITAT, VISAKHAPATNAM 4 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM