Case Law Details
ITO Vs Dharmesh Hasmukhbhai Mehta (ITAT Ahmedabad)
ITAT Ahmedabad held that a typographical error cannot be a reason to believe that the income of the assessee has escape assessment and hence initiation of proceedings under section 147 of the Income Tax Act is unsustainable.
Facts- The assessee in the CO has challenged the validity of the proceedings initiated u/s. 147 of the Act. The necessary facts are that the assessee in the present case is an individual and engaged in the business of trading of Go and Silver Bullion as proprietor under the name and style of M/s Mahalaxmi Jewellers. In the present case, the proceedings u/s. 147 of the Act, were initiated against the assessee on the reasoning that there was cash deposit in the Bank account maintained with Vijay Bank which was not disclosed in the Income-tax return. AO also observed that there was cash deposit in the bank account of the assessee amounting to Rs. 36,88,15,000/- in the bank account maintained with Vijaya Bank which was in most of the cases immediately transferred through RTGS to another account being undisclosed account. As such, the assessee failed to reconcile the cash deposits in the bank account with cash sales made by it. Based on the above fact, the proceedings were initiated against the assessee under the provision of Section 147 of the Act.
Conclusion- Held that the assessee has justified cash deposit in the bank out of cash sales, but the contention was rejected by the AO on the reasoning that the assessee failed to furnish name, address, PAN, or any identity of the person to whom the sales was made. In this regard, we note that the books of account were duly audited and there was available VAT Audited report u/s. 63 of the VAT Act, no discrepancy has been pointed out by the AO with respect to such documents. As such, the assessee has discharged his onus by submitting the audited financial statement and VAT Audit report for the cash sales made by it. Now, the onus shifted upon the AO to disregard the contention that the cash sales shown by the assessee amounting to Rs. 2,64,27,76,935/- does not represent cash sales. However, AO has not controverted the above contention of the assessee based on the documentary evidence.
Held that there is typographical error in the bank account number mentioned in the Audited Financial Statement vis a vis bank account number recorded by the AO in the reason for reopening. In our considered view merely, a typographical error cannot be a reason to believe that the income of the assessee has escape assessment.
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