Case Law Details
Jaspal Singh Prop Vs ITO (ITAT Amritsar)
ITAT Amritsar held that mere typographical mistake in mentioning the balance of capital account doesn’t amount to concealment. Accordingly, addition on account of unexplained money unsustainable.
Facts- During the assessment, the accountant of the assessee made a mistake to submit Capital account of the assessee. Due to the typographical mistake the balance of capital account was reduced to amount of Rs. 11 lac. The accountant of assessee wrongly mentioned capital balance amount of Rs.1,56,040/- instead of Rs. 12,56,041/-. The assessee’s claim that the balance was mentioned in the ITR during filing the return. Assessee filed an affidavit with details of ledger to recover the mistake, but the addition was confirmed by the ld. AO amount of Rs. 11 lacs. Aggrieved assessee filed an appeal before the ld. CIT(A). But the assessee was unsuccessful. The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved the assessee filed an appeal before us.
Conclusion- The assessee had made a mistake during the assessment proceedings for wrong submissions of the capital account. But suddenly, the error was rectified and placed the correct one. There is no question of the different presentation of capital account of the assessee amount to Rs.12,56,041/- which was already reflected in the return of the income filed u/s. 139(1). By submitting the evidence, the assessee was trying to establish that the said difference is mere mistake but no concealment. The books of the accounts were produced before the ld. AO. No specific lacuna was found in the books of assessee. The assessee was running as proprietary concern. So, the transfer of funds from individual account to business account had no meaning for levying of the tax in this respect. It is correct that cash account was duly changed during the rectified submission. But this is an internal effect in between the proprietorship business and proprietor himself. Both the Revenue Authorities was not able to prove that undisclosed cash was introduced to establish the capital Rs. 11 lacs which was omitted by the accountant of the assessee. The proper inflow of cash account is undoubtedly matched with cash withdrawals from the personal bank account of the assessee. We interfere in the impugned order of ld. CIT(A). The addition amount of Rs. 11 lac is quashed.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
