SHRI DHIRENDRA KUMAR SINGH, BOKARO V. ITO WARD-3(1), BOKARO

ITA 140/RAN/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1083 (ITAT-RANCHI)
• Duration Of Justice: 4 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide mistake
• Section: 234B; 250; 143(2)

Judgement Text

आयकर अपीलȣय अͬधकरण, “रांची“ Ûयायपीठ रांची IN THE INCOME TAX APPELLATE TRIBUNAL “RANCHI” BENCH, RANCHI (Heard from Kolkata Benches through web-based video conferencing platform) ] ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANISH BORAD, ACCOUNTANT MEMBER I.T.A. No. 140/Ran/2018 Assessment Year: 2015-16 Shri Dhirendra Kumar Singh Turio Bokaro – 829144 PAN: DPFPS5799R Vs Income Tax Officer, Ward-3(1), Bokaro अपीलाथȸ/ (Appellant) Ĥ× यथȸ/ (Respondent) Assessee by : Shri Devesh Poddar, Advocate Revenue by : Shri N.K. Khalkho, Sr. D/R स ु नवाई कȧ तारȣख/Date of Hearing : 11/05/2022 घोषणा कȧ तारȣख /Date of Pronouncement : 26/05/2022 आदेश/O R D E R PER RAJPAL YADAV, VICE PRESIDENT : The present appeal is directed at the instance of the assessee against the order of the learned Commissioner of Income Tax (Appeals) – Hazaribagh, Jharkhand, dated 23/02/2018, passed under Section 250 of the Income Tax Act, 1961 (in short “the Act”), for Assessment Year 2015-16. The grounds of appeal taken by the assessee reads as under:- “1. For that Ld. CIT(A) was not justified in confirming the addition of Rs. 124,02,786/- made by Ld. A.0. as income from other sources. The addition made was factually incorrect and uncalled for. Ld. CIT(A) failed to consider the submissions made by the appellant judiciously and in the mechanical manner dismissed the appeal filed by the appellant. 2. For that the addition of Rs. 124,02,786/- was made on the ground that in the return filed by appellant disclosed capital of Rs. 1,31,18,500/- as against actual capital of Rs. 7,15,714/- as per audit report. The debit balance mentioned in the bank account to the extent of Rs. 1,25,98,775/- was also incorrect. Without appreciating the facts Ld.CIT(A) confirmed the addition made. 3. For that appellants auditor C.A. Sri Shravan Kumar by mistake or for the reasons best known to him mention wrong figures for the balance in the bank I.T.A. No. 140/Ran/2018 Assessment Year: 2015-16 Shri Dhirendra Kumar Singh 2 account of Bank of India. This bank account does not belong to the appellant. Appellant never had such balance in any account. The turnover of the appellant was around 1.15 Crores from trading coal and truck hire charges. The addition made on the basis of incorrect figures which does not exist is unjustified and incorrect. The difference cannot be presumed to be income from other sources. 4. For that the interest U/s 234A and 234B should be charged on returned income and not on assessed income following the decision of Hon'ble Jharkhand High Court. 5. For that other grounds in detail will be argued at the time of hearing.” 2. The brief facts of the case are that the assessee has filed his return of income on 22/03/2016 declaring total income of Rs. 4,96,370/-. The return was selected for scrutiny and a notice u/s 143(2) the Act issued on 01/08/2016. A perusal of the record would show that the auditor of the assessee in the audit report has shown proprietor’s capital as on 31/03/2015 at Rs.1,31,18,500/- whereas the assessee has shown capital as on 31/03/2015 at Rs.7,15,714/-. There was a difference of Rs.1,24,02,786/-. The Assessing Officer confronted the assessee as to why this unexplained capital should not be added to the income of the assessee. In response to the notice, the assessee has filed submission which has been reproduced by the Assessing Officer at page 2 of the assessment order which reads as under:- “In compliance to show cause letter, the assessee has submitted a reply on 14/08/2017 which is reproduced as under : In response to your notices issued to my client have to submit as under :- That first all I on behalf of my client I hereby apprised your kindself that my client is a business doing the business in the name of Dhrirendra Kumar Singh at Turio Bhandaridih Chandrapura Distt- Bokaro. That your assessee have filed income tax return through CA . Mr. Shravan Kumar vide it s MNO.- 306960 and he uploaded form no3CB and 3CD on dated 31/1 0/2015 vide its akn. No, - 103315291220316 along with Profit & Loss a/c and balance sheet of his business. That the ITR form no.4 of the A. Y- 2015-16 your assessee have filed properly according to the balane sheet and profit & Loss a/c of the business but in I.T.A. No. 140/Ran/2018 Assessment Year: 2015-16 Shri Dhirendra Kumar Singh 3 proprietor's capital format box vide its Sl no. 1a , the figure has been mentioned 1,31, 18, 500 in place of Rs. 7,15,714/- owing to inadvertence. That your assessee has not intentionally filed the mismatched figure but it is only clerical mistake which is subject to be rectified. That the balance sheet which has been submitted before you; is self explanatory to the capital's figure. That your assessee is not enhance the capital nor infuse any capital in the business in the aforesaid Asstt. Year- 2015-16. I hope, having furnished the above clarification and evidence to substantiate the truth your kindself would be kind enough to accomplish the scrutiny assessment for the year 2015-16 and further requested to allow the assessee to rectify the same & Oblige" 2.1. The Assessing Officer did not accept this contention of the assessee and made an addition of Rs.1,24,02,786/-. Appeal to the ld. CIT(A), did not bring any relief to the assessee. 3. Before us, the ld. Counsel for the assessee reiterated his contentions as was raised before the revenue authorities. It has been submitted that this is the first year of audit. The auditor had, by mistake made the balance sheet showing a capital of Rs.1,31,18,500/- as on 31/03/2015 as against actual capital of Rs.7,15,714/-. The ld. Counsel for the assessee further drew our attention towards page no. 4 of his written submission and contended that if this balance sheet is perused then it would reveal that the capital mentioned at Rs.1,31,18,500/-, is a wrong figure and to adjust this figure, he made reference to the Bank of India A/c. bearing no. 00151 having a balance of Rs.1,25,98,775/-. The fact is that, this bank account does not belong to the assessee. A letter dt. 31/08/2017, from the Bank Manager, Bank of India is attached at page no. 7 of the paper book, to this effect. In the bank account of the assessee, the balance sheet as on 31/03/2015 was Rs.17,342/-. On the strength of these details, he submitted that there was a bonafide human error and the ld. lower authorities have failed to take note of this fact. I.T.A. No. 140/Ran/2018 Assessment Year: 2015-16 Shri Dhirendra Kumar Singh 4 4. The ld. D/R, on the other hand, was unable to controvert the above factual submission at the end of the ld. Counsel for the assessee. 5. We have duly considered the rival contentions and gone through the record carefully. We find that a bonafide mistake crept in the balance sheet at the end of the auditor. He took the figures from the bank account which does not belong to the assessee for determining the capital balance sheet available in the hands of the assessee. The Assessing Officer failed to verify this aspect in the scrutiny assessment. He ought to have verified the bank account which was used by the auditor for preparing the balance sheet. The assessee has filed an affidavit as well as a certificate from the bank to the effect that the bank account in question maintained in Bank of India bearing A/c no. 00151, does not belong to the assessee with respect to PAN No. DPFPS5799R. 6. On due consideration of the above facts and circumstances, we are satisfied that it is just an error and not unexplained capital which is available in the hands of the assessee which could be added. Hence, we delete the addition of Rs.1,24,02,786/- made by the Assessing Officer and confirmed by the ld. CIT(A). As far as charging of interest is concerned, it is consequential in nature. 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 26 th May, 2022 at Kolkata. Sd/- Sd/- (MANISH BORAD) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 26/05/2022 *SC SrPs I.T.A. No. 140/Ran/2018 Assessment Year: 2015-16 Shri Dhirendra Kumar Singh 5 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आय ु Èत / Concerned Pr. CIT 4. आयकर आय ु Èत)अपील (/ The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध आयकर अपीलȣय अͬधकरण,Ranchi/DR,ITAT, Ranchi 6. गाड[ फाईल /Guard file. आदेशान ु सार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलȣय अͬधकरण ITAT, Ranchi