| The Tax Publishers2020 TaxPub(DT) 5316 (Bang-Trib) INCOME TAX ACT, 1961
Section 68
Bank statements supplied by bank to assessee could not be regarded as a book of assessee, nor a book maintained by assessee or under his instructions. Further, in terms of section 44AD, there was no necessity of maintaining books of account and production of bills and vouchers and accordingly, 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 - Cash deposits in bank account - Assessee not required to maintain books of account under section 44AD
Assessee had a bank account in ICICI Bank and therein total cash of Rs. 48,57,000 was deposited. Assessee stated that he had availed of jewel loan to the extent of Rs. 12,55,616 and same was withdrawn and deposited into his account. However, with respect to the balance of Rs. 36,01,384 assessee could not substantiate either with evidence or through a cash flow statement. AO considered that assessee had no valid explanations to offer regarding cash deposits other than jewel loan and accordingly, balance of Rs. 36,01,384 was treated as unexplained cash credits and brought to tax under the head 'Income from other sources' by invoking section 115BBE. CIT(A) enhanced addition by Rs. 13 lakhs. Assessee submitted that he filed return of income and offered income under section 44AD by showing 8% of income on turnover and AO accepted this income declared by assessee. Held: The crucial words in section 68 are 'any AO has found any sum credited in books of account of assessee'. When moneys are deposited in bank account, the relationship that is constituted between banker and customer is one of the debtors and creditors, and not of trustee and beneficiary. Applying this principle, the bank statements supplied by bank to its constituent was only a copy of constituent's account in the books maintained by bank. It was not as if the bank statements are maintained by bank as agent of the constituent, nor can it be said that pass book is maintained by bank under the instructions of constituent. Therefore, Bank statements supplied by bank to assessee could not be regarded as a book of assessee, nor a book maintained by assessee or under his instructions. Further, in terms of section 44AD, there was no necessity of maintaining books of account and production of bills and vouchers and accordingly, addition under section 68 of the amount entered only in bank statements was not justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
IN THE ITAT, BANGALORE BENCH
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