Bank Passbook Not Regarded as 'Books of Account’: ITAT Rejects S. 68 Addition Made Without Assessee's Books [Read Order]
The Tribunal concluded that the very basis for applying Section 68 in this instance was lacking, while finding validity in the assessee's reasoning
![Bank Passbook Not Regarded as Books of Account’: ITAT Rejects S. 68 Addition Made Without Assessees Books [Read Order]](https://images.taxscan.in/h-upload/2025/06/30/2056736-bank-passbook-itat-taxscan.webp "Bank Passbook Not Regarded as Books of Account’: ITAT Rejects S. 68 Addition Made Without Assessees Books [Read Order]")
The Income Tax Appellate Tribunal, Delhi Bench held that a bank passbook cannot be treated as ‘books of account’ for the purpose of invoking Section 68 of theIncome Tax Act, 1961. The assessee, Rahul Goel, a small commission agent dealing in plastic scrap, was subjected to an addition of ₹88.91 lakh under Section 68 by the Assessing Officer, who treated cash and cheque deposits...
The Income Tax Appellate Tribunal, Delhi Bench held that a bank passbook cannot be treated as ‘books of account’ for the purpose of invoking Section 68 of theIncome Tax Act, 1961.
The assessee, Rahul Goel, a small commission agent dealing in plastic scrap, was subjected to an addition of ₹88.91 lakh under Section 68 by the Assessing Officer, who treated cash and cheque deposits in the assessee’s bank accounts as unexplained cash credits.
The assessee contended that these deposits represented proceeds received on consignment sales as a commission agent, and that some sums were gifts from close family members to support his business and personal obligations. The CIT(A) upheld the addition without giving any substantial finding beyond repeating the AO’s observations.
While considering the appeal, the Tribunal noted that the entire addition rested on the credits in the bank passbook and that the assessee, having filed returns under Section 44AD, was not required to maintain formal books of account.
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The bench of Khettra Mohan Roy (Accountant member) and Ms. Madhumita Roy (Judicial member) reaffirmed that a bank passbook alone does not constitute the assessee's "books of account," and that any addition made under Section 68 must be rejected if no books include such credits.
The Tribunal concluded that the very basis for applying Section 68 in this instance was lacking, while finding validity in the assessee's reasoning.
As a result, it rejected the ₹88.91 lakh addition and granted the appeal, noting that the AO was unable to treat bank deposits as concealed income under Section 68 in the lack of appropriate books.
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