Kannadasan Vs DCIT (ITAT Kolkata)
When Figures Are Misunderstood, Additions Fail: Tribunal Rewrites Entire Assessment- CIT(A) Misread Balance Sheet: ITAT Deletes Entire Sundry Creditor Addition – Huge Additions of ₹89.89L & ₹6.59Cr Collapse After Reconciliation Before ITAT Kolkata
AO made addition of ₹89,89,366 alleging unexplained increase in sundry creditors. CIT(A) deleted this but wrongly added ₹14,54,029 by comparing total current liabilities in the audited balance sheet with only sundry creditors figure in ITR. Tribunal held CIT(A) completely misconstrued facts: ₹19,15,43,325 shown in ITR represented total current liabilities comprising sundry creditors ₹19,00,89,296 + outstanding liabilities ₹14,53,938, matching the balance sheet. No difference existed. Addition deleted in full.
AO also added ₹6,59,44,937 as difference between receipts in Form 26AS & ITR. CIT(A) partly sustained by estimating 10%. Tribunal noted Assessee explained 90% of difference through multi-year reconciliation showing cumulative variation of only ₹47,44,089. AO had accepted net profit at 2.52%. Tribunal held income should be estimated at 4% of the reconciled difference, directing addition of only ₹1,89,763. Appeal partly allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 24.06.2025 for the AY 2014-15.
