· On the basis of information from the CIT that the assessee had made a 'cash deposit' in her saving bank account during the year under consideration, the case of the assessee was reopened and a notice was issued and served on the assessee.
· Assessee placed on record documentary evidence in the form of summarized cash analysis to explain the genesis of cash deposit.
· The AO, not being in agreement with the explanation of the assessee, made an addition of the said cash deposit, treating the same as unexplained cash credit u/s 68 of the Act.
· The CIT(A) has further upheld the order of the AO.
· The Tribunal observed thata bare perusal of the section 68 reveals that an addition under the said provision can only be made where any sum is found credited in the books of an assessee. Thus, the very sine qua non for making of an addition u/s 68 pre-supposes a credit of the amount in the books of an assessee. The Court further stated thata credit in the bank account of an assessee cannot be construed as 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.
· Thus, the Hon’ble Tribunal concluded by holding that in consideration of the provisions of section 68, an addition made in respect of a cash deposit in the bank account of an assessee, in the absence of the same found credited in the books of the assessee, cannot be brought to tax by invoking the provisions of section 68.
For further reading, refer the attachment.
Further Reading