Sh. Sanjeev Kumar Malhotra, Pathankot V. The Income Tax Officer, Pathankot

ITA 532/ASR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5609 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 19-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHABIR HANDOO LD
• Assessee Lawyers: SUDARSHAN KAPOOR LD
• Keywords: Initiation of penalty proceedings
• Section: 142(1); 234B; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 532(ASR)/2015 ASSESSMENT YEAR:2011-12 SH. SANJEEV KUMAR MALHOTRA PROP. M/S. TILAK RAJ SANJEEV KUMAR, H.O. SHANT VIHAR COLONY, PATHANKOT. PAN:AAWPM-5724D VS. THE INCOME TAX OFFICER, WARD-6(3), PATHANKOT. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUDARSHAN KAPOOR (LD. ADV.) RESPONDENT BY: SH. SHABIR HANDOO (LD. DR) DATE OF HEARING : 22.02.2017 DATE OF PRONOU NCEMENT: 05.05.2017 ORDER PER N. K. CHOUDHRY (JM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, AMRITSAR, DATED 05.08.2015, FOR ASST. YEAR:2 011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (I) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)-II, AMRITSAR HAS, IN VIEW OF FACTS & CIRCUMSTANCES OF THE CASE, GROSSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.42,58,243/- WH ICH WAS MADE BY THE A.O. TO THE DECLARED INCOME. THE ADDITION MADE AND U PHELD IS UNJUST, UNLAWFUL AND EXORBITANTLY EXCESSIVE. (II) THAT THE SUBMISSIONS MADE, EXPLANATIONS GIVE N AND AFFIDAVIT FILED ON RECORD HAVE NOT BEEN PROPERLY CONSIDERED AND JUDICI ALLY APPRECIATED AND THE ADDITION HAS BEEN WRONGLY MADE AND UPHELD. (III) THAT IN ANY CASE, THE PROPER OPPORTUNITY OF H EARING WAS NOT ALLOWED AND THE ADDITION MADE AND UPHELD IS ILLEGAL AND BAD IN LAW. (IV) THAT INTEREST U/S.234B HAS BEEN WRONGLY CHARGE D AND THE PENALTY PROCEEDINGS U/S.271(L)(C) HAVE ALSO BEEN WRONGLY IN ITIATED. I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 2 3. THE BRIEF FACTS OF THE CASE IN ACCORDANCE TO ASSESSMENT ORDER ARE AS UNDER: RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,3 0,240/- WAS FILED BY THE ASSESSEE ON 29-09-2011 AND SAME WA S PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT 1961 AT A SAME INCOME ON 22-12-2011. THE CASE OF THE ASSESSEE WAS SELECTE D FOR SCRUTINY THROUGH CASS ( AST MODULE) DURING THE FINANCIAL YEA R 2012-13 ON THE REASONS TO EXAMINE THE SOURCE OF CASH DEPOSITS MADE AT RS. 42,20,000/- IN HIS SAVING BANK ACCOUNTS I. E. RS. 2 0,00,000/- IN HIS SAVING BANK ACCOUNT NO.3486000100124625 AND RS.22,20,000/- IN HIS SAVING BANK ACCOUNT NO.384600 0100201216 MAINTAINED WITH THE PUNJAB NATIONAL BANK MOHAN MAR KET, PATHANKOT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. STATUTORY NOTICE OF HEARING WA S ISSUED TO THE ASSESSEE ON 01-08-201 UNDER SECTION 143(2) OF THE I NCOME-TAX ACT 1961, DULY SERVED UPON THE ASSESSEE THROUGH SPEED P OST VIDE THIS OFFICE DISPATCH NO. 1590 DATED 01-08-2012 AS WELL A THROUGH NOTICE SERVER OF THIS OFFICE ON 03-08-2012 , FIXING THE CA SE FOR HEARING ON 09 TH AUGUST, 2012. IN RESPONSE THERETO, SHRI KULDIP MAL HOTRA ADVOCATE ATTENDED T' ASSESSMENT PROCEEDINGS ON BEHA LF OF THE ASSESSEE AND SOUGHT AN ADJOURNMENT. THE CASE OF THE ASSESSEE WAS ACCORDINGLY ADJOURNED TO SINE DIE TILL ISSUANCE OF STATUTORY NOTICES AS WELL AS DETAILED QUESTIONNAIRE. SUBSEQUENTLY STATUT ORY NOTICES OF HEARING WERE ISSUED UNDER SECTIONS 142(1) AND 143(2 ) OF THE INCOME- TAX ACT 1961 ALONG WITH DETAILED QUESTIONNAIRE ON 0 2-07-2013, DULY SERVED UPON THE ASSESSEE ON 09-07-2013, FIXING THE CASE FOR HEARING ON 11-07-2013. IN RESPONSE THERETO SH. KULDIP MALHO TRA, ADVOCATE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TI ME AND INFORMATION /DETAILS/DOCUMENTS REQUISITIONED DURING THE COURSE OF ASSESSMENT PROCEEDINGS , WERE FILED BY HIM AND PLAC ED ON RECORDS . AS PER ORDER SHEET ENTRY DATED 25-02-2014, THE ASSE SSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNT ALONG WITH RELEVANT VOU CHERS FOR I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 3 EXAMINATION ON 03-03-2014. THE ASSESSEE FAILED TO P RODUCE BOOKS OF ACCOUNT ALONG WITH RELEVANT VOUCHES FOR EXAMINATION . IN THE LIGHT OF THE ABOVE, THE CASE OF THE ASSESSEE HAS ACCORDINGLY BEEN DISCUSSED WITH THE ASSESSEE'S COUNSEL. HOWEVER IN RESPONSE TO SUMMONS ISSUED U/S.131 OF THE I. T. ACT ON 14-03-2014 DULY SERVED UPON ASSESSEE ON THE SAME DAY THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNTS ALONG WITH RELEVANT VOUCHERS AND SAME HAVE BEEN EXAMINED ON TEST CHECK. THE ASSESSEE , DURING THE FINANCIAL YEAR RELEV ANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, DEALS WITH SAL E AND PURCHASE OF SUGAR AT GRAIN MARKET, DAMTAL ( HIMACHAL PRADESH ) WITH HIS HEAD OFFICE AT SHANT VIHAR, PATHANKOT,HAS SHOWN GROSS PR OFIT OF RS. 11,25,385/- AS AGAINST SALE PROCEEDS OF RS.8,25,26, 032/- YIELDING RATE OF PROFIT @ 1.36 %. AS DISCUSSED ABOVE, THE AS SESSEE WAS FOUND TO HAS MADE CASH DEPOSITS OF RS.42,20,000/- AS PER ANNUAL INFORMATION REPORT IN HIS SAVING BANK ACCOUNTS MAIN TAINED WITH PUNJAB NATIONAL BANK ,MOHAN MARKET PATHANKOT DURIN G THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDE R CONSIDERATION, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. BANK STATEMENTS OF FOLLOWING SAVING BANK ACCOUNTS WERE REQUISITIONE D UNDER SECTION 133(6) OF THE INCOME-TAX ACT 1961 AND AFORESAID BAN K FURNISHED THE COPY OF SAVING BANK ACCOUNT. ..................... . THE ASSESSING OFFICER FINALLY CONCLUDED AS UNDER: AFTER TAKING INTO CONSIDERATION THE AFORESAID FACTS IT IS EVIDENT THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCES OF HUGE CASH DEPOSITS MADE IN THE PUNJAB NATIONAL BANK IN HIS AF ORESAID SAVING BANK ACCOUNTS AMOUNTING TO RS.42,20,000 AND INTERES T PAID/ACCRUED THEREON FOR RS.38,443/- AND SAME STAND S UN- EXPLAINED UNDER SECTION 68 OF THE INCOME TAX ACT 19 61. AS ADMITTED IN HIS STATEMENT RECORDED ON 19.03.2014 THE ASSESSE E HAS CATEGORICALLY ADMITTED THAT HE HAS NOT SHOWN HIS CA SH DEPOSITS OF I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 4 RS.42,20,000/- IN THE BOOKS OF ACCOUNTS OF M/S. TIL AK RAJ SANJEEV KUMAR WHICH IS A PROPRIETARY CONCERN OF THE ASSESSE E AND PRODUCED NO CORROBORATIVE EVIDENCE OF PAST SAVINGS AS CLAIME D BY THE ASSESSEE WAS PRODUCED BY HIM DURING THE COURSE OF A SSESSMENT PROCEEDINGS. SO, I HEREBY MAKE AN ADDITION OF RS.42 ,58,443/- ON ACCOUNT CASH DEPOSITS OF RS.42,20,000/- DEPOSITED B Y THE ASSESSEE IN HIS AFORESAID SAVING BANK ACCOUNTS AND INTEREST PAID/ACCRUED THEREON AT RS.38,443/-, MAINTAINED WITH THE PUNJAB NATIONAL BANK, MOHAN MARKET, PATHANKOT AS REFERRED SUPRA DURING TH E RELEVANT FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDE R CONSIDERATION BY TREATING THE SAME AS UN-EXPLAINED CASH DEPOSITS AS WELL AS INTEREST OF RS.38,443/- NOT DISCLOSED BY THE ASSESS EE IN HIS RETURN OF INCOME. I AM SATISFIED THAT THE ASSESSEE HAS CONCEA LED HIS TRUE PARTICULARS OF HIS INCOME, PENALTY PROCEEDINGS UNDE R SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 ARE HEREBY IN ITIATED SEPARATELY FOR CONCEALING HIS TRUE PARTICULARS OF HIS INCOME B Y ISSUING PENALTY NOTICE UNDER THE AFORESAID SECTION READ WITH SECTIO N 274 OF THE INCOME-TAX ACT 1961. 4. FEELING AGGRIEVED BY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL BE FORE THE LD. CIT(A), WHO ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER: AFTER CONSIDERING THE ABOVE FACTS AND THE STATEMEN T OF THE ASSESSEE RECORDED BY THE AO, THE AO HELD THAT IT WA S EVIDENT THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCES OF C ASH DEPOSITS MADE IN THE ABOVE BANK ACCOUNTS AND INTEREST PAID/A CCRUED THEREON AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE U/S 68 OF THE ACT. IN THE APPEAL PROCEEDINGS THE ASSESSEE SUBMITTED T HAT- THE ASSESSEES FATHER SH MANOHAR LAI HAD DIED ON 03-12- 2000 LEAVING I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 5 BEHIND FOUR CHILDREN I.E., THE ASSESSEE AND HIS THR EE SISTERS NAMELY MANJU, NEERU AND SEEMA. THEIR MARRIAGES HAD BEEN PE RFORMED DURING LIFE TIME OF ASSESSEE S FATHER SHRI MANOHAR LAI. THE ASSESSEE WAS THE ONLY SON AND HIS FATHER AND HIS GRAND MOTHE R WERE LIVING WITH HIM. THE ASSESSEES FATHER HAD ALREADY SOLD MO ST OF THE ANCESTRAL JEWELLERY AND THE BALANCE WAS USED FOR TH E MARRIAGE OF ASSESSEES SISTER. BUT ALL THE CASH AVAILABLE WITH HIM AND AVAILABLE WITH ASSESSEES GRAND MOTHER REMAINED AT HOME WHIC H CAME TO THE POSSESSION OF THE ASSESSEE AFTER DEATH OF HIS GRAND MOTHER ON 14- 12-2004. THE ASSESSEE HAD NOT USED THE CASH FOR HIS BUSINESS BUT ULTIMATELY, ALL THE OLD CASH AVAILABLE IN THE FAMIL Y WAS DEPOSITED BY HIM IN THE BANK ACCOUNTS ON DIFFERENT DATES. THE TO TAL DEPOSITS OF RS42,20,000/- MADE IN THE TWO BANK ACCOUNTS DURING PREVIOUS YEAR RELEVANT FOR A Y 2011-12 WERE OUT OF PAST FAMILY SA VINGS AND WERE NOT ASSESSEES INCOME OF THE PREVIOUS YEAR. THEREFORE THE APPELLANT HAD TRIED TO EXPLAIN THE SO URCE OF CASH DEPOSITED IN HIS SAID BANK ACCOUNTS IN PUNJAB NATIO NAL BANK THROUGH THE CASH AVAILABLE WITH HIS FATHER SH MANOH AR LAI AT THE TIME OF HIS DEATH AND THE CASH AVAILABLE WITH HIS G RANDMOTHER WHO DIED ON 14-12-2004 WHICH HAD REMAINED AT HOME, AND WAS RECEIVED BY HIM AFTER THE DEATH OF HIS GRANDMOTHER. THE APPE LLANT EXPLAINED THAT HE DID NOT USE THE CASH FOR THE PURPOSE OF HIS BUSINESS AND ULTIMATELY ALL THE OLD CASH AVAILABLE WITH THE FAMI LY WAS DEPOSITED IN THE BANK ACCOUNTS ON DIFFERENT DATES. HOWEVER THE APPELLANT HAS NOT FURNISHED ANY EVIDENC E OF THE GENERATION OF CASH EXPLAINED BY HIM AS ABOVE THROUG H FACTS AND FIGURES AND EVIDENCE. THE APPELLANT HAD ALSO NOT SU BMITTED ANY EVIDENCE OF THE AMOUNT CLAIMED TO HAVE BEEN RECEIVE D BY HIM FROM HIS LATE FATHER AND LATE GRANDMOTHER ON 14-12-2004. THE TIME GAP I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 6 BETWEEN 14-12-2004 AND THE FINANCIAL YEAR UNDER CON SIDERATION IS QUITE LONG AND IT IS NOT UNDERSTANDABLE WHY THE ASS ESSEE DID NOT DEPOSIT THE HUGE AMOUNT OF CASH OF RS.42,58,243/- I N HIS BANK ACCOUNTS IN EARLIER YEARS IF THE SAID CASH WAS AVAI LABLE WITH HIM. THE APPELLANT HAS NOT FURNISHED ANY EXPLANATION IN THIS REGARD. MOREOVER, THE APPELLANT IN HIS STATEMENT RECORDED O N 19-03-2012 BY THE AO DURING ASSESSMENT PROCEEDINGS HAD ADMITTED T HAT NO DETAILS ARE AVAILABLE WITH HIM REGARD TO HIS PAST SAVINGS A S WELL AS PAST SAVINGS OF HIS WIFE. ACCORDINGLY IN VIEW OF THE ABOVE DISCUSSION IT IS H ELD THAT THE SOURCE OF CASH DEPOSITS OF RS20,00,000/- IN HIS SAV ING BANK ACCOUNT NO. 3486000100124625 AND RS 22,20,000/- IN HIS SAVI NG BANK ACCOUNT NO. 3846000100201216 MAINTAINED IN PUNJAB N ATIONAL BANK, MOHAN MARKET, PATHANKOT HAVE REMAINED UNEXPLA INED AS THE APPELLANT COULD NOT FURNISH ANY EVIDENCE TO EXPLAIN THE SOURCE THEREOF EVEN IN THE APPEAL PROCEEDINGS AND THEREFOR E THE ADDITION U/S 68 OF THE ACT IS CONFIRMED. THE GROUND OF APPEAL NO.3 IS AGAINST THE CHARGING O F INTEREST U/S 234B AND PENALTY PROCEEDINGS U/S 271(L)(C) OF T HE ACT. THE CHARGING OF INTEREST U/S 234B OF THE ACT IS MANDATO RY BUT CONSEQUENTIAL IN NATURE AND THEREFORE THE AO WAS JU STIFIED IN CHARGING THE INTEREST U/S 234B WHICH IS UPHELD. AS REGARDS THE INITIATION OF PENALTY PROCEEDINGS U/S 271(L)(C) OF THE ACT, SINCE NO APPEAL LIES BEFORE THE CIT(A) AGAINST INITIATION OF PENALTY PROCEEDINGS UNDER THIS SECTION, THEREFORE THE GROUND OF APPEAL IS DISMISSED. 5. FEELING AGGRIEVED BY THE SAID ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE PREFERRED THE INSTANT APPEAL ON THE GROUNDS MENTIONED IN PARA-2 OF THE ORDER. I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 7 6. IN ADDITION TO THE GROUNDS ALREADY RAISED, THE ASSESSEE ALSO PRAYED FOR RAISING THE ADDITIONAL GROUNDS WHICH IS ENU MERATED AS UNDER: THAT EVEN ON THE BASIS OF STATED FACTS THE ADDITIO N MADE U/S 68 OF THE INCOME TAX ACT WAS ILLEGAL AND BAD IN LAW AND THE L D. ASSESSING OFFICER HAD GROSSLY ERRED IN LAW IN MAKING ADDITION OF RS.4 2,58,243/- U/S.68 OF THE INCOME TAX ACT,1961. 7. BEFORE PROCEEDING WITH THE CASE ON MERIT, WE FEEL IT APPROPRIATE TO DECIDE THE PRAYER OF THE ASSESSEE QUA RAISING THE ADDI TIONAL GROUND AS THE ASSESSEE HAS SUBMITTED THAT IT IS PURELY LEGAL GROUN D AND NO NEW FACTS ARE REQUIRED FOR ADJUDICATING THE ISSUE, BECAUSE THE FACTS ARE ALREADY ON RECORD, THEREFORE, THE SAME MAY KINDLY BE ALLOWED TO BE RAISED. 8. ON THE CONTRARY, THE LD. DR DOES NOT RAISE ANY OBJECTION. AS TH E ASSESSEE IS NOT RAISING THE GROUND WHICH GOES CONTRARY TO THE MATERIAL ON RECORD, THEREFORE, IN OUR CONSIDERED OPINION BECAUSE THE ADDITIONAL GROUND GOES TO THE ROOT OF THE CASE, THEREFORE, WE DO NOT HAVE ANY HESITATION TO ALLOW THE ASSESSEE TO RAISE THE ADDITIONAL GROUND IN ADDITION TO THE GROUNDS ALREADY RAISED. 9. FIRST, WE WILL ADJUDICATE THE ADDITIONAL GROUND AS IT IS PURELY LEGAL IN NATURE. 10. IN SUPPORT OF THE ADDITIONAL GROUND, THE LD. CO UNSEL OF THE ASSESSEE SUBMITTED THAT FROM THE FACTS FOUND BY THE ASSESSING OFFICER, IT IS CLEAR THAT THE SAVING BANK ACCOUNTS MAINTAINED WI TH PNB, PATHANKOT ARE NOT THERE IN THE BOOKS OF ACCOUNT MAINTA INED BY THE ASSESSEE. HOWEVER, THE A.O HAD FOUND THAT THE CASH DEPOSITS IN THOSE TWO ACCOUNTS AMOUNTING TO RS.42,20,000/- AND INTEREST PA ID/ ACCRUED I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 8 THEREON TO THE TUNE OF RS.38,443/- REMAINED UNEXPLAI NED U/S 68 OF THE I. T. ACT. FURTHER, THE LD. AR ALSO RELIED UPON THE FOLLOWING JUDGMENTS. (I) CIT, POONA VS. BHAICHAND H. GANDHI 141 ITR 67 (B OM.) (II) MS. MAYAWATI VS. DCIT (ITAT DELHI A BENCH) 11 3 TTJ 178. (III) SMT. MANASI MAHENDRA PITKAR VS. I.T.O., 1(2), 7 3 TAXMAN 68 FURTHER, THE LD. AR SUBMITTED THAT ADDITION MADE U/S 68 OF THE I.T. ACT IS NOT ONLY ILLOGICAL BUT ALSO BAD IN LAW, TH EREFORE, THE SAME IS LIABLE TO BE DELETED. THE LD. AR FURTHER PLACED HIS R ELIANCE UPON A DECISION OF AMRITSAR BENCH IN THE CASE OF SMT. VIJAY KALI A, VS. ACIT, IN IT(SS)A NO.15(ASR)/2005 AND EMPHASIZED THAT IF THE AP PEAL IS ALLOWED ON LEGAL GROUND THEN IT IS NOT NECESSARY TO DECIDE THE O THER GROUNDS ON MERIT. 11. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT E XPLANATION OFFERED BY THE ASSESSES WAS THOROUGHLY CONSIDERED BY BOTH THE AUTHORITIES AND AFTER CONSIDERING THE SAME, REASONED ORD ERS HAVE BEEN PASSED BY THE AUTHORITIES BELOW. 12. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCE S OF THE CASE AND ALSO ORDERS AND DOCUMENTS AS AVAILABLE ON RECORD. WE FEEL IT APPROPRIATE TO REPRODUCE SEC.68 OF THE I.T. ACT. 68: 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. FROM THE INGREDIENTS OF SEC. 68, IT REFLECTS THAT WHER E ANY SUM IS FOUND CREATED IN THE BOOKS OF ACCOUNTS OF ASSESSEE MAINTAI NED FOR ANY PREVIOUS YEAR, MEANING THEREBY, ANY SUM HAS TO BE CREDITED IN THE I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 9 BOOKS OF ASSESSEE MAINTAINED BUT NOT EVEN OTHERWISE FOR A PPLICATION OF SECTION 68 OF THE INCOME TAX ACT. IN THE CASE OF CIT, POO NA VS. BHAICHAND H. GANDHI 141 ITR 67 (BOM.) (SUPRA) , THE CO URT WAS DEALING WITH SEC.68 OF THE I.T. ACT AND HELD THAT A CA SH CREDIT FOR PREVIOUS YEAR SHOWN IN THE ASSESSEE BANK PASS BOOK BUT NOT SHOWN IN THE CASH BOOK MAINTAINED BY THE ASSESSEE FOR THAT YEAR, D OES NOT FALL WITHIN THE AMBIT OF SEC.68 OF THE I. T. ACT. THEREFOR E, THE SUCH SUM SO CREDITED IS NOT CHARGEABLE TO TAX AS THE INCOME OF THE A SSESSEE OF THAT PREVIOUS YEAR. FURTHER IN THE CASE OF MS. MAYAWATI VS. D CIT (ITAT DELHI A BENCH) 113 TTJ 178 (SUPRA) THE COURT CONSIDER ED THE APPLICABILITY OF THE SEC. 68 OF THE I.T. ACT AND WAS P LEASED TO HELD AS UNDER: 20. WE ARE ALSO OF THE OPINION THAT S. 68 HAS NO APPLICABILITY TO THE FACTS OF PRESENT CASE AS THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. I F THAT BE SO S. 68 DOES NOT APPLY IN HER CASE FOR THE SIMPLE REASON THAT THE CHEQUE RECEIVED FROM SH. PANKAJ JAIN HAS BEEN DEPOSITED IN HER BANK ACCOUNT. IN THIS REGARD WE ARE ALSO OF THE OPINION THAT BALA NCE SHEET/STATEMENTS OF AFFAIRS CANNOT BE EQUATED TO BOOKS OF ACCOUNTS BECAUSE 'IN TRADITIONAL TERMS BOOKS MEANS A COLLECTION OF SHEETS OF PAPER BOUND TOGETHER WITH THE INTENTION THAT SUCH BINDING SNAIL BE PERMANENT AND PAPERS USED ARE KEPT COLLECTIVELY IN ONE VOLUME. IT CAN I ALSO BE ASSUMED THAT IT CONNOT ES THE CONTENTION THAT IT SHOULD SERVE AS A PERMANENT RECORD.' THIS IS THE FINDING OF THE HON'BLE JUDGES OF THE BOMBAY HIGH COURT IN SHERATON APPARELS VS. ASSTT. CIT (2002) 175 CTR (BOM) 651: (2002) 256 ITR 20 (BOM). 20.1 FURTHER, IN P. RAM NATH AIYARS LAW LEXICON 20 02 EDITION P. 233/234 A BOOK HAS BEEN DEFINED AS UNDER : 'A TREATISE, WRITTEN OR PRINTED ON ANY MATERIAL AND PUT TOGETHER IN ANY CONVENIENT FORM. ANY PRINTED LITERA RY COMPILATION; A COLLECTION OF SHEETS BOUND TOGETHER CONTAINING MANUSCRIPT ENTRIES OR INTENDED TO CONTAI N SUCH ENTRIES; THE NAME OF SEVERAL IMPORTANT PAPERS PREPA RED IN THE PROGRESS OF A CAUSE, ALTHOUGH ENTIRELY WRITTEN AND NOT AT ALL IN THE BOOK FORM.' I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 10 20.2 FURTHER, THE HON'BLE HIGH COURT IN THE CASE OF C IT VS. BHAICHAND H. GANDHI (1983) 141 ITR 67 (BOM) HELD THA T BANK PASS BOOK IS NOT A BOOK MAINTAINED BY THE ASSE SSEE OR UNDER HIS INSTRUCTIONS BY THE BANK. WHERE CASH C REDITS FOR PREVIOUS YEARS ARE SHOWN IN ASSESSEE'S BANK PAS S BOOK THEN THEY CANNOT BE TREATED AS INCOME OF THE ASSESS EE WITHIN THE MEANING OF S. 68. 20.3 SIMILAR IS THE DECISION IN THE CASE OF SAMPAT AUTOMOBILES VS. ITO (2005) 96 TTJ (JD) 368. 20.4 THEREFORE, A PASS BOOK OF THE BANK CANNOT BE TREATED AS A BOOK OF ACCOUNT OF THE I ASSESSEE BECAUSE THIS IS P ROVIDED BY THE BANKER, WHICH IS GIVEN TO ITS CUSTOMER AND I S ONLY A | COPY OF THE CUSTOMER'S ACCOUNT IN THE BOOKS MAINT AINED BY THE BANK. THE BANK DOES NOT ACT AS AN AGENT OF T HE CUSTOMER NOR CAN IT BE SAID THAT THE BANKER MAINTAI NS THE PASS BOOK UNDER THE INSTRUCTIONS OF THE CUSTOMER (T HE ASSESSEE). 20.5 THE RELATIONSHIP BETWEEN THE BANKER AND CUSTO MER IS ONE OF DEBTOR AND CREDITOR ONLY. THEREFORE, A CASH CREDIT APPEARING IN ASSESSEE'S PASS BOOK RELEVANT TO A PARTICULAR PR EVIOUS YEAR, IN A CASE WHERE THE ASSESSEE DOES NOT MAINTAI N BOOKS OF ACCOUNT, DOES NOT ATTRACT THE PROVISIONS O F S. 68. FROM THE CUMULATIVE READING OF THE SEC.68 AND THE JU DGMENTS CITED(SUPRA) IT IS CLEAR THAT MERE DEPOSITS OF MONEY IN THE BANK IF NOT FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FO R ANY PREVIOUS YEAR DOES NOT COME WITHIN THE PURVIEW OF SEC. 68 OF THE I.T. ACT. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENTS AN D INDEPENDENTLY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT HAVE ANY HESITATION TO HOLD THAT IMPUGNED ORDER PASSED BY T HE LD. CIT(A) DOES NOT STAND IN THE EYES OF LAW BECAUSE ASSESSMENT ORDER ITSELF IS NOT ONLY BAD IN LAW BUT ALSO AGAINST THE SETTLED PRIN CIPLE OF LAW AS IN THE INSTANT CASE ADDITION CANNOT BE MADE U/S 68 OF THE I.T. ACT. THEREFORE, ON THE AFORESAID ANLYZATION THE ADDITION IS DELETED. CONSIDERED THE CASES RELIED UPON BY THE ASSESSEE AND INDEPENDENT FACTS AND CIRCUMSTANCES OF THE CASE, WE FEEL IT I TA NO. 532(ASR)/2015 ASST. YEAR: 2011-12 11 APPROPRIATE, IF WE PROCEED WITH THE CASE ON THE MERIT THEN IT SHALL AMOUNTS TO FUTILE EXERCISE. ON THE AFORESAID OBSERVATIONS THE APPEAL OF THE ASSESSEE I S ALLOWED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.0 5.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05.05.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER