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| The Tax Publishers2020 TaxPub(DT) 0634 (Bang-Trib) INCOME TAX ACT, 1961
Section 44AD Section 68
Once under special provision under section 44AD exemption from maintaining books of account had been provided and presumptive tax at the rate of 8 per cent of gross receipt itself was the basis for determining taxable income, assessee was under no obligation to explain individual entry of cash deposit in bank especially when there was nothing more than suspicion to support conclusion of AO even otherwise, when moneys are deposited in bank account, the relationship that was constituted between banker and the customer was one of the debtor and creditor and not of trustee and beneficiary. Applying this principle, bank statements supplied by bank to its constituent was only a copy of constituent's account in books maintained by the bank and could not be regarded as book of assessee, nor a book maintained by assessee or under his instructions. As such, addition under section 68 of the amount entered only in bank statements was not justified.
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Income from undisclosed sources - Addition under section 68 - Amount fround credited in bank account - Assessee not liable to maintain books of account in terms of section 44AD
Assessee was having income from contract business, share trading, etc., and offered income under section 44AD. AO noticed certain deposits in assessee's bank account. AO noticed certain deposits in assessee's bank account and made addition under section 68 towards unexplained cash credit.Held: Once under special provision under section 44AD, exemption from maintaining books of account had been provided and presumptive tax at the rate of 8 per cent of gross receipt itself was the basis for determining taxable income, assessee was under no obligation to explain individual entry of cash deposit in bank especially when there was nothing more than suspicion to support conclusion of AO even otherwise, when moneys are deposited in bank account, the relationship that was constituted between banker and the customer was one of the debtor and creditor and not of trustee and beneficiary. Applying this principle, bank statements supplied by bank to its constituent was only a copy of constituent's account in books maintained by the bank and could not be regarded as book of assessee, nor a book maintained by assessee or under his instructions. As such, addition under section 68 of the amount entered only in bank statements was not justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-2014 & 2014-2015
IN THE ITAT, BANGALORE BENCH
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