The Amritsar Bench of Income Tax Appellate Tribunal ( ITAT ) has held a mere mistake in declaring fund transfer between proprietorship business and proprietor would not warrant addition.
During the assessment the accountant of the assessee, Jaspal Singh Propmade a mistake to submit the Capital account of the assessee. Due to the typographical mistake the balance of the capital account was reduced to an amount of Rs. 11 lacs. The accountant of the assessee wrongly mentioned the capital balance amount. 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 AO amount of Rs. 11 lacs.
Sudhir Sehgal on behalf of the assessee submitted soon the assessee found the mistake and rectified copy was filed before AO.Further the assessee also filed an affidavit of the accountant of the assessee and himself regarding the said clerical mistake on the part of the accountant and requesting the AO for accepting the correct capital account.
Kanchan Garg,appeared on behalf of the revenue.
The Division bench of M. L. Meena, (Accountant Member) and S.H Anikesh Banerjee, (Judicial Member) allowed the appeal holding that it was a mere mistake not a concealment.
“Both the Revenue Authorities were 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,” the Bench further observed.
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