SHRI SHIV SHANKER GUPTA,LUCKNOW vs. INCOME TAX OFFICER- IV(4), LUCKNOW
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that Section 68 of the Income Tax Act applies only to sums credited in the books of account. Since the assessee was not maintaining books of account, the addition made under Section 68 based on bank statement entries was not sustainable.
What were the facts?
The assessee, who did not maintain books of account and filed return under section 44AF, had cheque deposits in his bank account. The Assessing Officer made an addition of Rs. 4,21,100/- under section 68 of the Income Tax Act based on these bank entries.
What were the issues?
Whether an addition under Section 68 of the Income Tax Act can be made for unexplained credits appearing in bank statements when the assessee does not maintain books of account.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- National Thermal Power Co. Ltd. v. CIT5,834 citing229 ITR 383 · 1998 · SC
Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’, LUCKNOW
Before: SHRI T. S. KAPOOR
I.T.A. No.673/Lkw/2018 Assessment year:2006-07 1
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘SMC’, LUCKNOW
BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER
ITA No.673/Lkw/2018 Assessment year:2006-07
Shri Shiv Shankar Gupta, Vs. Income Tax Officer-IV(4), 69, Ram Nagar, Aishbagh, Lucknow. Lucknow. PAN:ADGPG1373D (Appellant) (Respondent)
Appellant by Shri B. P. Yadav, Cost Accountant Respondent by Shri Ajay Kumar, D.R. Date of hearing 05/09/2019 Date of pronouncement 06/09/2019
O R D E R PER T. S. KAPOOR, A.M.
This is an appeal filed by the assessee against the order of learned CIT(A)-2, Lucknow dated 29/08/2018 pertaining to assessment year 2006- 2007.
At the outset, Learned A. R. invited our attention to the fact that there has occurred a delay of 11 days in filing the appeal and in this respect our attention was invited to the affidavit duly signed by the advocate of the assessee wherein he has stated that due to ill health of his wife, the filing of appeal got delayed. Learned A. R. stated that in view of these facts and circumstances, the delay may be condoned and the appeal of the assessee may be heard on merits. Learned D. R. had no objection to condonation of delay. I, having found the reason for delay in filing the appeal reasonable, condoned the delay and asked Learned A. R. to proceed with his arguments.
I.T.A. No.673/Lkw/2018 Assessment year:2006-07 2
Learned A. R. submitted that he has taken an additional ground of appeal, which is purely a legal issue and which is coming out of the facts of the case. The additional ground taken by the assessee reads as under:
“The Assessing Officer erred on facts and in law in making addition of Rs.4,21,100/- u/s 68 of the I.T. Act by treating the cheque deposits in the bank account as unexplained cash credits despite the fact that the appellant does not maintain books of account and therefore, the charging of section 68 cannot be pressed into service.”
Learned counsel for the assessee submitted that in view of the judgment of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT 229 ITR 383 (SC), the additional ground may be admitted and adjudicated. Learned D. R. had no objection to the admission of additional ground and therefore, Learned A. R. was asked to proceed with his arguments on the additional ground.
Learned A. R. stated that it is undisputed that the assessee was not maintaining any books of account and Assessing Officer has made an addition of Rs.4,21,100/- on the basis of entries found in the bank statements of the assessee u/s 68 of the Act, which is not permissible as the provision of section 68 clearly states that any amount credited in the books of account can only be added as per the provisions of section 68 of the Act. Learned A. R. further stated that assessee had received all unsecured loans through cheques and in this respect filed copy of bank statement highlighting the entries of receipt of cheques. The learned A.R. placed his reliance on the order of Hon'ble Patna High Court in the case of CIT Bihar vs. Bihari Bros (P) Ltd for the proposition that once the assessee had received unsecured loans through cheques and assessee submitted the details of creditors, the assessee is deemed to have discharged its onus.
I.T.A. No.673/Lkw/2018 Assessment year:2006-07 3
Learned D. R., on the other hand, placed his reliance on the orders of the authorities below.
I have heard the rival parties and have gone through the material placed on record. I find that assessee had filed return of income declaring income of Rs.71,530/-. The assessee is engaged in dealing of batteries of motor vehicle and had declared a turnover of Rs.17,95,807/- on which profit of Rs.1,48,154/- was offered to tax. The return was filed under the provisions of section 44AF of the Act, which establishes that the assessee was not maintaining books of account. I further find that the Assessing Officer has made an addition of Rs.4,21,100/- out of various cheques credited in the bank account of the assessee. The assessee during the course of assessment proceedings had filed confirmations regarding receipt of unsecured loans from these persons. I further find that these additions were made on the basis of entries in the bank statement as the assessee was not maintaining any books of account. The addition u/s 68 can only be made if any unexplained sum is found credited in the books of account of the assessee. Here is a case where the sum was not found credited in the books of account and therefore, the addition made u/s 68 is not sustainable and hence the order of learned CIT(A) is reversed and the appeal of the assessee is allowed. Since we have adjudicated the additional ground taken by the assessee, the remaining grounds do not call for any adjudication.
In the result, the appeal of the assessee stands allowed.
(Order pronounced in the open court on 06/09/2019)
Sd/. ( T. S. KAPOOR ) Accountant Member
Dated:06/09/2019 *Singh
I.T.A. No.673/Lkw/2018 Assessment year:2006-07 4
Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow
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