MADHURIBEN VYAS (DECD), MUMBAI V. ITO 23(2)(3), MUMBAI

ITA 727/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1377 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Search and seizure; Bonafide belief; Onus to prove; Reassessment proceedings
• Section: 143(3); 68; 148

Judgement Text

P AGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO. 72 7 / MUM/ 2013 ( / ASSESSMENT YEAR: 2006 - 07 ) SHRI MEHUL V. VYAS L/H & REPRESENTATIVE ASSESSEE OF SMT. MADHURIBEN V. VYAS (DECEASED ASSESSEE) / VS. THE ITO 23(2)(3 ) , MUMBAI. ./ ./ PAN/GIR NO. A AJPV 7871 P ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT B Y : SHRI NARAYAN ATAL / RESPONDENT BY : MS. POOJA SWAROOP / DATE OF HEARING : 20 /01 /2017 / DATE OF PRONOUNCEMENT : 07 /0 4 /2017 / O R D E R PER RAVISH SOOD, JM : THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 11, MUMBAI , DATED 13.12.2012, WHICH IN ITSELF ARISES FROM THE ASSESSMENT ORDER PASSED BY THE A.O UNDER SEC. 143(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (FOR SHORT ACT), DATED 30.12 .201 0. THE ASSESSEE HA S RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US : - P AGE | 2 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS - 11 ERRED IN CONFIRMING THE ADDITION OF RS.10,53,000/ - UNDER SECTION 68 OF THE I.T. ACT. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE NECES SARY CONFIRMATIONS WERE FILED BY THE APPELLANT BEFORE THE A.O THEREBY DISCHARGING HER ONUS TO PROVE THE SOURCE OF THE SAID CASH DEPOSITS IN HER BANK ACCOUNT. 3. THE LEARNED CIT(A) ALSO ERRED IN NOT APPRECIATING THE FACT THAT THE OLD RECORDS MAINTAINED BY T HE APPELLANT TILL F.Y. 2005 - 06 WERE NOT AVAILABLE DUE TO THE DELUGE IN MUMBAI DURING JULY 2005 WHICH FACT WAS DULY APPRECIATED BY THE CBDT WHO HAD ISSUED A CIRCULAR DIRECTING NOT TO INSIST ON MATERIAL IN RESPECT OF THE ASSESSMENT YEAR 2006 - 07. 4. THE LEARN ED CIT(A) FAILED TO APPRECIATE THAT THE ADDITIONS MADE BY THE A.O WAS ARBITRARY, BASED ON SUSPICION, SURMISE AND CONJECTURES. TH E APPELLANT CRAVES LEAVE TO ADD, TO ALTER, AMEND OR DELETE ANY OR ALL OF THE GROUNDS OF APPEAL AT ANY TIME. THAT FURTHER DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE ASSESSEE HAD RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE PROCEEDING INITIATED BY ISSUANCE OF NOTICE U/S 148 OF THE I.T. ACT IS INVALID AND BAD IN LAW. P AGE | 3 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 147 OF THE I.T. ACT IS INVALID AND BAD IN LAW. THE APPELLANT CRAVES TO ADD, TO ALTER, TO DELETE AND/OR TO AMEND ANY OF THE ABOVE GROUNDS OF APPEAL A T ANY TIME. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) HAD OBJECTED TO THE ADMISSION OF THE ADDITIONAL GROUNDS OF APPEAL FILED BY THE ASSESSEE. WE HOWEVER FIND THAT AS THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE INVOLVE PURELY A QU ESTION OF LAW BASED ON THE FACTS AVAILABLE ON RECORD, THEREFORE GOING BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LIMITED VS. CIT ( 1998) 229 ITR 383 (SC) , THE SAME ARE ADMITTED. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHO WAS AN AGED LADY (SINCE DECEASED) HAD FILED HER RETURN O F INCOME FOR A.Y 2006 - 07 DECLARING AN INCOME OF RS.1,23,610/ - ON 23.03.2009 . T HAT ON THE BASIS OF INFORMATION RECEIVED FROM THE CIT(CIB) THAT THE ASSESSEE HAD DUR ING THE YEAR UNDER CONSIDERATION MADE A CASH D EPOSIT OF RS.10,53,000/ - IN HER S AVING BANK ACCOUNT WITH PUNJA B AND MAHARASHTRA COOPERATIVE B ANK , BRANCH : BHANDUP , MUMBAI , THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 AND A N OTICE UNDER SEC . 148, DATED 17.06.2009 , WAS ISSUED AND SERVED ON THE ASSESSEE. 3. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O CALLED UPON THE ASSESSEE TO PUT FORTH AN EXPLANATION AS REGARDS THE NATURE AND SOURCE OF THE CASH DEPOSIT OF P AGE | 4 RS.10,53,000/ - IN HER AFO RESAID S AVING B ANK ACCOUNT. THE ASSESSEE IN COMPLIANCE TO THE AFORESAID QUERY SUBMITTED BEFORE THE A.O THAT WITH THE MONEY LEFT BY HER DECEA SED HUSBAND AND THE INCOME GENERATED BY HER FROM GR A U H UDYOG FOR THE LAST MANY YEARS, SHE HAD ACCUMULATED SAVINGS OUT OF WHICH SHE HAD ADVANCED INTEREST BEARING LOANS TO DIFFERENT PERSONS . IT WAS SUBMITTED BY THE ASSESSEE THAT KNOWING WELL THAT SHE WAS AT THE FAG E ND OF HER LIFE , SHE DECIDED TO GIVE HER ACCUMULATED SAVINGS AS A LOAN TO HER SON MR. MEHUL V. VYA S, AND TO FACILITATE THE SAME HAD DEPOSITED THE AMOUNT OF RS.10,53,000/ - OUT OF THE ACCUMULATED CASH AVAILABLE WITH HER IN THE AFORESAID SAVING BANK ACCOUNT . THE ASSESSEE FURTHER FURNISHED WITH THE A.O THE BIFURCATED DETAILS OF THE SOURCE OF DEPOSIT OF THE AMOUNT OF RS. 10,53,000/ - IN HER AFORESAID BANK ACCOUNT, AS UNDER: - OPENING CASH BALANCE RS. 6,85,643/ - ADD: RECEIPTS: INCOME RECEIVED DURING THE RS. 72,000/ - YEAR (GRAUHUDYOG) LOANS GIVEN RECEIVED BACK RS. 2,00,000/ - LOANS RECEIVED IN CASH FROM DIFFERENT PARTIES RS. 2,85,000/ - GIFT RECEIVED FROM FAMILY MEMBERS RS. 1,10,000/ - LESS: DEPOSITED IN BANK RS.10,53,000/ - WITHDRAWALS RS. 30,000/ - CLOSING CASH BALANCE RS. 2, 69,643/ - THE ASSESSEE HAD DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS PLACED ON RECORD SUBSTANTIAL DOCUMENTARY EVID ENCE P AGE | 5 IN FOR M OF SUMMARIZED CASH ANALYSIS TO EXPLAIN THE GENESIS OF THE OP ENING CASH BALANCE , CONFIRMATIONS FROM HER SON , DAUGHTERS AND DAUGHTER IN LAW , ALONG WITH THEIR INCOME TAX CREDENTIAL S , VIZ. COPIES OF INCOME - TAX RETURNS , PAN NOS. ETC, TO SUPPORT THE FACTUM OF GIFTS RECEIVED FROM THEM DURING THE YEAR UNDER CONSIDERATION AND THE PRECEDING YEARS , DETAILS ALONGWITH CONFIRMATIONS OF THE PARTIES FROM WHOM LOANS WERE RECEIVED BY THE ASSESSEE IN CASH DURING THE YEAR UNDER CONSIDERATION , AND THE DETAILS OF THE PERSONS FROM WHOM LOANS HAD BEEN RECEIVED BACK BY HER DURING THE YEAR UNDER CONSIDERATION. TH E A.O HOWEVER NOT F INDING HIMSELF AS BEING IN AGREEMENT WITH THE EXPLANATION OF THE ASSESSEE , THEREIN REJECTED THE SAME AND HELD THE CASH DEPOSIT OF R S . 10,53,000/ - (SUPRA) AS AN U NEXPLAINED CASH CREDIT , AND ADDED THE SAME TO THE RETURNED INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 68 . 4. THAT THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT THEREIN ASSAILED THE SAME BEFORE THE CIT(A) - 11 , MUMBAI. THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS OF THE ASSESSEE SO RAISED BEFORE HIM, THEREIN NOT BEING PERSU ADED TO SUBSCRIBE TO THE SAME , THUS SUSTAINED THE ADDITION S MADE BY THE A.O AND DISMISSED THE APPEAL OF THE ASSESSEE. 5. THAT THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD THUS CARRIED THE MATTER IN APPEAL BEFORE US. THE ASSESSEE BY RAISING THE AFORESAID ADDITIONAL GROUNDS OF APPEAL HAD THEREIN A SSAILED BEFORE US THE INITIATION OF THE REASSESSMENT PROCEEDINGS , AS WELL AS THE FRAMING OF THE ASSESSMENT UNDER SECTION 143(3) R.W.S 147 . WE HAVE GIVEN A THOUGHTFUL P AGE | 6 CONSIDERATION TO THE CONTENTION S OF THE LD. A.R IN CONTEXT OF THE AFORESAID ADDITIONAL GROUNDS OF APPEAL AND ARE NOT IMPRESSED WITH THE SAME. WE FIND THAT THE A.O ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF THE CIT(CIB) THAT CASH AGGREGATING TO RS.10,53,000/ - (SUPRA) WAS DEPOSITED BY THE ASSESSEE IN HER BANK ACCOUNT, THUS , AFTER DELIBERATING ON THE MATERIAL AVAILABLE BEFORE HIM , FORMED A BONAFIDE BELIEF THAT THE INCOME OF THE ASSESSEE CHARGEABL E TO TAX HAD ESCAPED ASSESSMENT. WE ARE THUS OF T HE CONSIDERED VIEW THAT IN LIGHT OF THE WELL ESTABLISHED NEXUS BETWEEN THE MATERIAL AVAILABLE ON RECORD AND THE FORMATION OF THE BELIEF BY THE A.O THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT, THE FUNDAMENTAL REQUIREMENT FOR ASSUMPTION OF JURISDICTION BY THE A.O U/S 147 STOOD DULY SATISFIED, AND THUS NO INFIRMITY CAN BE RELATED TO THE INITIATION OF THE AFORESAID PROCEEDINGS BY THE A.O . WE FURTHER FIND THAT IT NEITHER EMERGES FROM THE BODY OF TH E ASSESSMENT ORDER, NOR ANY AVERMENT HAD BEEN MADE BY THE LD. A.R BEFORE US , WHICH COULD PERSUADE US TO CONCLUDE THAT THE ASSESSMENT FRAMED BY THE A.O U/S 143(3) R.W.S 147 OF THE ACT WAS NOT SUSTAINABLE IN THE EYES OF LAW. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, FINDING NO FORCE IN THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE US, THEREFORE REJECT THE SAME. TH E ADDITIONAL G ROUNDS OF APPEAL NOS . 1 AND 2 SO RA ISED BY THE ASSESSEE BEFORE US ARE THUS REJECTED. 6. THE LD. A.R HAD VIDE G ROUND OF APPEAL NO. 1 THEREIN ASSAILED THE ADDITION OF RS.10,53,000/ - MADE BY THE A.O UNDER SECTION 68 OF THE ACT . DURING THE COURSE OF HEARING OF THE APPEAL IT WAS VEHEMENTLY AVERRED BY THE LD. A.R THAT THE A.O HAD TRAVERSED BEYOND THE SCOP E AND GAMUT OF THE ADDITIONS CONTEMPLATED UNDER P AGE | 7 SECTION 68 AND MADE AN ADDITION OF RS.10,53,000/ - IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED BY THE LD. A.R. THAT AN ADDITION UNDER SECTION 68 COULD BE MADE ONLY WHERE ANY SUM IS FOUND CREDITED I N THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE EITHER FAILS TO OFFER ANY EXPLANATION AS REGARDS THE N ATURE AND S OURCE OF SUCH CREDIT, OR THE EXPLANATION OFFERED BY HIM IS NOT FOUND IN THE OPINION OF THE A.O TO BE SATISFACTO RY . THE LD. A.R SUBMITTED THAT THE ADDITION OF RS.10,53,000/ - HAD BEEN MADE BY THE A.O IN CONTEXT OF THE CASH DEPOSIT MADE BY THE ASSESSEE IN HER SAVING BANK ACCOUNT WITH PUNJAB AND MAHARASHTRA COOPERATIVE BANK, BRANCH :BHANDUP, MUMBAI . THE LD. A.R IN THE BACKDROP OF THE AFORESAID FACT S THEREIN AVERRED THAT THE A.O LO O SING SIGHT OF THE FACT THAT AS THE AFORESAID SUM OF RS.10,53,000/ - WAS NOT FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THEREFORE NO ADDIT ION IN RESPECT OF THE SAID AMOUNT COULD BE MADE UNDER SE CTION 68. IT WAS THUS SUBMITTED BY THE LD. A.R THAT THE ADDITION OF RS.10,53,000/ - MADE BY THE A.O UNDER SECTION 68 OF THE ACT WAS NOT SUSTAINABLE IN THE EYES OF LAW, AND A S SUCH ON THE SAID COUNT ITSE LF THE SAME WAS LIABLE TO BE VACATED. THE L D. A.R IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION THEREIN RELIED ON A HOST OF JUDICIAL PRONOUNCEMENT S INCLUDING THAT OF THE HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BHAI CHAND N. GANDHI (1983) 141 ITR 67 (BOM). THUS IN THE BACKDROP OF HIS AFORESAID SUBMISSIONS IT WAS AVERRED BY THE LD. A.R THAT NOW WHEN THE ADDITION OF RS.10,53,000/ - 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 P AGE | 8 SAME BEING ABSOLUTELY DEVOID OF ANY FORCE OF LAW, THUS COULD NOT BE S USTAINED AND WAS LIABLE TO BE VACATED. 7. ALTERNATIVELY, T HE LD. A.R ADVERTING TO THE MERITS OF THE CASE THEREIN SUBMITTED THAT THOUGH THE COMPLETE DETAILS AS REGARDS THE SOURCE OF THE CASH DEPOSIT OF RS.10,53,000/ - IN THE BANK ACCOUNT OF THE ASSESSEE WERE FURNISHED WITH THE A.O ALONG WITH S UPPORTING DOCUMENTARY EVIDENCE, HOWEVER THE LATTER HAD PROCEEDED WITH MOST AR BITRARILY AND WITHOUT APPRECIATING THE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE NAT URE AND SOURCE OF THE AFORESAID CASH DEPOSIT, WHICH AS CLAIMED BY THE LD. A.R STOOD DULY SUBSTANTIATED ON THE BAS IS OF SUBSTANTIAL MATERIAL THAT WAS PLACED ON HIS RECORD , HAD MADE AN ADDITION OF THE SAID AMOUNT AS AN UNEXPLAINED CASH CREDIT UNDER SECTION 68 IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED BY THE LD . A.R THAT THE CIT(A) HAD IN A MECHANICAL MANNER UPHELD THE ASSESSMENT FRAMED BY THE A.O. THE LD. A.R IN ORDER TO FORTIFY HIS CONTENTION THAT THE COMPLETE DETAILS ALONG WITH SUPPORTING DOCUMENTARY EVIDENCE IN RESPECT OF THE CASH DEPOSIT OF RS.10,53,000/ - (SUPRA) WAS PLACE D ON RECORD DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THEREIN TOOK US TO TH E RELEVANT PAGES OF HIS PAPER B OOK (APB), VIZ. S UMMARY OF CASH ANALYSIS EXPLAINING THE GENESIS OF THE OPENING CASH BALANCE OF RS.6,85,643/ - ( P AGE 15 - 19 ) ; C ONFIRMATIONS ALONG WITH COPIES OF THE INCOME TAX RETURNS OF THE RELATIVES OF THE ASSESSEE , VIZ, MS. SEEMA NARENDRA BHATT (DAUGHTER) , MS. PRITI PHADRAYA JANI (DAUGHTER) , MR. MEHUL VINITKUMAR VYAS (SON) AND MRS. POOJA MEHUL VYAS (DAUGHTER IN LAW) FROM WHOM THE ASSESSEE WAS IN RECEIPT OF GIFTS SINCE THE FINANCIAL YEAR 2002 - 03 ( P AGE 20 - 52 ) ; AND DETAILS OF THE PERSONS FROM WHOM LOANS WERE RECEIVED BY THE P AGE | 9 ASSESSEE DURING THE YEAR ALONG WITH THEIR RESPECTIVE CONFIRMATIONS ( P AGE 53 - 69 ) . IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT AS THE A.O HAD NOT RAISED ANY QUERY IN RESPECT OF THE OLD LOANS WHICH WERE ADVANCED B Y THE ASSESSEE IN F.Y. 2001 - 02 AND WERE RECEIVED BACK DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE RE WAS NO OCCASION F OR THE ASSESSEE TO FURNISH THE DETAILS AS REGARDS THE SAME DURING THE COURSE OF ASSESSMENT PR O CE E DING S . THE LD. A.R HOWEVER IN ORDER TO REMOVE ANY SCOPE OF DOUBT AS REGARDS THE VERACITY OF HIS CLAIM IN CONTEXT OF THE OLD LOAN S WHICH WERE RECEIVED BACK DURI NG THE YEAR UNDER CONSIDERATION, THUS F URNISHED THE COMPLETE DETAILS OF THE PERSONS WHO HAD REPAID THE SAID OLD LOANS DURING THE YEAR UNDER CONSIDERATION, ALONG WITH HIS DULY DEPOSED AFFIDAVIT, DATED 16.01.2017 , FURNISHED BEFORE US DURING THE COURSE OF H EARING OF THE APPEAL . IT WAS THUS SUBMITTED BY THE LD. A.R THAT DESPITE THE FACT THAT COMPLETE DETAILS AS REGARDS THE NATURE AND SOURCE OF THE CASH DEPOSIT OF RS.10,53,000/ - ALONG WITH THE SUPPORT ING DOCUMENTS WERE FURNISHED WITH THE A.O, THE LATTER HOWEVER HAD MOST ARBITRA RILY SCRAPP ED THE SAME AND HAD PROCEEDED WITH IN A WHIMSICAL MANNER AND DRAWN ADVERSE INFERENCES IN THE HANDS OF THE ASSESSEE. P ER CONTRA, THE LD. D.R STRONGLY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND THEREIN SUBMITTED THA T IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION FORTHCOMING ON THE PART OF THE ASSESSEE IN RESPECT OF THE NATURE AND SOURCE OF THE AMOUNT OF RS.10,53,000/ - AS STOOD DEPOSITED IN HER BANK ACCOUNT , THE A.O BEING LEFT WITH NO OTHER ALTERNATIVE , HAD THUS RIGHTLY MADE THE ADDITION OF THE SAME IN THE HANDS OF THE ASSESSEE , WHICH THEREAFTER HAD BEEN SUSTAINED BY THE CIT(A). P AGE | 10 IT WAS SUBMITTED BY THE LD. D.R THAT THE APPEAL OF THE ASSESSEE WAS DEVOID OF ANY FORCE AND WAS LIABLE TO BE DISMISSED. 8. WE HAVE HEARD T HE LD. 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 T HE OBJECTION RAISED BY THE LD. 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 LD. 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 OPINIO N OF THE ASSESSING OFFICER IS NOT FOUND TO BE SATISFACTORY . THAT BEFORE ADVERTING FURTHER , WE 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 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 S UM SO CREDITED MAY BE CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR .. P AGE | 11 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 ASSESSEE M AINTAINED 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 B OOKS OF AN ASSESSEE MAINTAINED FOR THE PREVIOU S YEAR. WE NOT BEING OBLIVIOUS OF THE SETTLED 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 GIVING 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 P L AIN 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 A S 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 BAN K 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 ACCOU NT OF AN ASSESSEE, IN THE ABSENCE OF THE SAME FOUND CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR P AGE | 12 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 HO NBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. BHAI C HAND N. GANDHI (1983) 141 ITR 67 (BOM BAY ) 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 R ELATIONSHIP THAT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF DEBTOR AND CREDITOR AND NOT OF TRUSTEE A N D BENEFICIARY. APPLYING THIS PRINCIPLE, THE PASS BOOK SUPPLIED BY THE BANK TO ITS CONSTITUENT IS ONLY A COPY OF THE CONSTITUENTS ACCOU NT 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 HONBLE JURISDICTIONAL HIGH COURT HAD THEREAFTER BEEN FOLLOWED BY A S MC OF THE ITAT MUMBAI BENCH IN THE CASE OF SMT. MANSH I MAHENDRA PITKAR VS. ITO 1(2) , THANE (2016) 73 TAXMANN.COM 68 (MUM BAI TRIB.) WHEREIN IT WAS HELD AS UNDER: - P AGE | 13 I HAVE CAREFULL Y CONSID ERED THE RIVAL SUBMISSIONS. IN THE PRES ENT CASE THE ADDITION HAS BEEN M ADE BY THE INCOME TAX AUTHORITIES BY TREATING THE CASH DEPOSITS IN THE B ANK ACCOUNT AS AN UNEX PLAINED CASH CREDIT WITHIN THE MEANIN G OF SECTION 68 OF THE ACT. THE LEGAL POINT RAIS ED BY THE ASSESSEE IS TO THE EFFECT THAT THE BANK PASS BO OK IS NOT A N ACCOUNT BOOK MAINTAINED BY THE ASSESS EE SO AS TO FALL WITHIN THE AMB IT OF SECTION 68 OF THE ACT. UNDER SECTION 68 OF THE ACT, IT IS ONLY WHEN AN AMOUNT IS FO UND CREDITED IN THE ACCOUNT BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR THAT THE DEEMING PROVISIONS OF SECTION 68 OF TH E ACT WOULD APPLY IN THE CIRCUMSTANCES MENTIONE D THERE IN. NOTABLY, SECTION 68 OF THE ACT WOULD COME INTO PLAY ONLY IN A SITUATION WHERE ANY SUM IS FOUND CREDI TED IN THE B OOKS OF AN ASSESSEE.. ............ . THE HON BLE BOMBAY HI GH COURT IN THE CASE OF SHRI BHA I CHAND GANDHI (SUPRA) HAS A PPROVED THE PROPOSITI ON THAT A BANK PASS BOOK MAINTAINED BY THE BANK CANNOT BE REGARDED AS A BOOK OF THE ASSESSEE FOR THE PURPOSES OF SECTION 68 OF THE ACT. FACTUALLY SPEAKI NG, IN THE PRESENT CASE, ASSESSEE IS NOT MAINT AINING ANY BOOKS OF ACCOUNT AND SECTION 68 OF THE ACT HAS BEEN INVOKED BY THE ASSESSING OF FICER ONLY ON THE BASIS OF THE BANK PASS B OOK. THE INVOKING OF SECTION 68 OF THE ACT HAS TO FA IL BECAUSE AS PER THE JUDGMENT OF THE HONB LE BOMB AY HIGH COURT IN THE CASE OF SH RI BHAICHAND N. GANDHI (SUPRA), THE B ANK PASS BOO K OR BANK STATEMENT CANNOT BE CONSTR U E D TO BE A BOOK MAINTAIN ED BY THE ASSESSEE FOR ANY PREVIOUS YEAR AS UNDERSTOOD FOR THE P AGE | 14 PURPOSES OF SECTION 68 OF THE ACT. THEREFORE, ON THIS ACCOUNT ITSELF THE IMPUGNED ADDITION DESERVES TO B E DELETED. I HOLD SO. WE F URTHER FIND THAT A SIMILAR VIEW HAD ALSO BEEN ARRIVED AT IN A THIRD MEMBER DECISION OF THE TRIBUNAL IN THE CASE OF SMT. MADHU RAITANI VS. ACIT (2011) 10 TAXMANN.COM 206 (G A U HATI) (TM) , A S WELL AS BY A COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO, BARABANKI VS. KAMAL KUMAR MISHRA (2013) 33 TAXAMANN.COM 610 (LUCKNOW TRIB.) . THUS IN THE BACKDROP OF T HE AFORESAID FACTS OF THE CASE R EAD 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.10,53,000/ - (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 HONBLE BOMBAY HIGH COURT IN THE CASE OF SHRI BHAICHAND N. GANDHI (SUPRA) , A BANK PASS BOO K OR BANK STATEMENT CANNOT B E 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 RS.10,53,000/ - DESERVES TO BE DELETED. 9. EVEN OTHERWISE, WE FIND THAT THE EXPLANATION RENDERED BY THE ASSESSEE IN RESPECT OF THE NATURE AND SOURCE OF THE CASH DEPOSIT OF RS.10,53,000/ - (SUPRA) IN HER BANK ACCOUNT HA S BEEN DISBELIEVED BY THE LOWER AUTHORITIES WITHOUT ESTABLISHING ANY CREDIBLE IN FIRMITY OR FALLACY IN THE SUBSTANTIAL MATERIAL WHICH WAS MADE AVAILABLE ON RECORD BY THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THA T THE ASSESSEE HAD NOT ONLY PUT FORTH AN EXPLANATION IN RES PECT P AGE | 15 OF THE NATURE AND SOURCE OF THE CASH DEPOSIT OF RS.10,53,000 / - (SUPRA) IN HER BANK ACCOUNT, BUT RATHER IT REMAINS AS A MATTER OF FACT THAT SUBSTANTIAL MATERIAL WAS PLACED ON RECORD BY THE ASSESSEE TO FORTIFY THE GENUINENESS AND VERACI TY OF HIS AFORESAID EXPLANATION. W E FIND THAT THE EXPLANATION OF THE ASSESSEE HAD B EEN DISLODGED BY THE A. O MERELY ON THE BASIS OF DOUBTS, SURMISES AND CONJECTURES, WHICH WE ARE AFRAID CANNOT FORM A BASIS FOR MAKING AN ADDITION IN THE HANDS OF THE ASSESSEE. BE THAT AS IT MAY, SINCE WE HAVE ALREADY HELD THAT THE ADDITION IS UNSUSTAINABLE FOLLOWING THE RATIO OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHRI BHAICHAND N. GANDHI (SUPRA), T HEREFORE WE DO NOT DEAL WITH INSTANT ASPECT ANY FURTHER. THAT AS A RESULT OF OUR AFORESAID OBSERVATIONS, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE A.O IS DIRECTED TO DELETE THE ADDITION OF RS.10,53,000/ - MADE UNDER SECTION 68 IN THE HANDS OF THE ASSESSEE. 10. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED I N THE OPEN COURT ON 07 .0 4 .201 7 SD/ - SD/ - (D. KARUNAKARA RAO ) (RAVISH SOOD) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 07 .0 4 .2017 PS ROHIT KUMAR P AGE | 16 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / D.R, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASS TT.REGISTRAR) , / ITAT, MUMBAI