Undisclosed income u/s 68 - Genuineness of Gift - Held that - It was found that though the bank pass book is not a book maintained by the assessee for the purpose of Section 68, it made no difference whether Section 68 and Section 69 of the Act would be applicable. The assessee is a wholesale cloth merchant doing the business under the name of Shri Ganesh Traders, which was maintaining the accounts. The accounts stood audited under Section 44AB of the Act in respect of the business as well as personal accounts, which were compiled as final accounts in the form of combined profit and loss account, capital account and personal balance sheet and reflected the capital investments in Shri Ganesh Traders. The assessee had produced these accounts before the Assessing Officer and thus the Tribunal opined in its majority opinion of the Accountant Member and the 3rd Member that Section 68 would be attracted and that even if Section 69 is referred to, the addition was justified under any of these two Sections as the sum was found credited in the books of assessee maintained for the previous years - both the Accountant Member and the 3rd Member have expressly recorded in their orders that they have not gone into the merits of the additions. The 3rd Member also observed that he has refrained himself from getting into the merits of the additions although learned counsels, who appeared, presented certain case laws, which were relevant for deciding the issue on merits. The Accountant Member and the 3rd Member, after having decided the question of law, should have considered the question of genuineness of gifts, which was pressed by the counsel appearing for the assessee. The assessee has lost the right of second appeal on the question of genuineness of gifts, on its merits - Tribunal erred in law in dismissing the appeal only on the ground that since the 3rd Member had agreed with the Accountant Member, the appeal deserves to be dismissed. The question of genuineness of gifts in view of the opinion of the 3rd Member was not considered on merits and was thus still open and on which the Tribunal did not give any decision - matter remanded back. - Decided in favour of assessee............................... Income Tax - Case Law
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