INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Validity - No books maintained by assessee

Assessee's case was selected for scrutiny through CASS and notice under section 143(2) was issued. Subsequently, notices under section 143(2)/142(1) were also not complied with by assessee. Consequently, AO ex parte under section 144 made addition on account of unexplained cash deposits in the bank accounts of assessee maintained with 3 banks. Assessee submitted that he was not maintaining any books of account and therefore, any addition under section 68 was untenable in law as section is applicable only where credits are found in books of account maintained by assessee. Held: As decided in Vijay Kumar, Prop. V.K. Medical Hall C/o Kapil Goel, Adv. v. ITO, Ward-2, Faridabad, in (ITA No. 2483/Del/2015, dt. 27-11-2018) under similar situation section 68 can be applied only where, there are sums found credited in 'books of account' maintained by assessee. No doubt, passbook/bank statement, were maintained by a bank for its customers. Since no books of account were maintained in the ordinary course of business of assessee, no such addition under section 68 wass tenable.

Relied:Smt. Sarika Jain v. CIT, Bareilly & Anr. (2018) 407 ITR 254 (All-HC) : 2017 TaxPub(DT) 1992 (All-HC) CIT v. Dulla Ram, Labour Contractor, Kotkapura in (I.T.A. No. 122 of 1999, dt. 22-10-2013) : 2014 TaxPub(DT) 4683 (P&H-HC) Vijay Kumar Prop. V.K. Medical Hall C/o Kapil Goel, Advocate v. ITO Ward-2 Faridabad. in (ITA No. 2483/Del/2015, dt. 27-11-2018) Zaheer Abdulhamid Mulani v. The ITO, Ward 7 (2), Pune. in (ITA No. 862/PUN/2017, dt. 31-8-2018) Smt. Babbal Bhatia v. The I.T.O Ward 45 (2) New Delhi (2018) 65 ITR (Trib) 532 (Del)) : 2018 TaxPub(DT) 3611 (Del-Trib) and Latif Ebrahim Patel v. ITO-17 (1) (1) Mumbai in (ITA No. 7097/Mum/2013, dt. 23-3-2018)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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