Income Tax Officer-Ward-4(2), Kolkata, Kolkata V. M/s Magnum Commercial limited, Kolkata

ITA 2741/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4643 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 10-12-2013
• Court: TRIBUNAL
• Keywords: Bonafide mistake
• Section: 142(1)

Judgement Text

I.T.A. NO. 2741/KOL./2013 ASSESSMENT YEAR: 2003-2004 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 2741/KOL/ 2013 ASSESSMENT YEAR: 2003-2004 INCOME TAX OFFICER,................................ ............................APPELLANT WARD-4(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. MAGNUM COMMERCIAL LIMITED,.................... ..............RESPONDENT 4A, N.C. DUTTA SARANI, KOLKATA-700 001 [PAN: AACCM 2819 G] APPEARANCES BY: SHRI SALLONG YADEN, ADDL. CIT, SR. D.R., FOR THE DEPARTMENT SHRI RAJEEVA KUMAR, A.R., FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JUNE 23, 2016 DATE OF PRONOUNCING THE ORDER : JUNE 29, 2016 O R D E R PER SHRI S.S. VISWANETHRA RAVI :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV, KOLKATA DA TED 26.08.2013 FOR THE ASSESSMENT YEAR 2003-04. 2. THE ONLY ISSUE IN THIS APPEAL IS THAT A TYPOGRAP HICAL MISTAKE IS ENTERED WRONGLY IN RESPECT OF VALUATION OF SHARES A S RS.4,17,800/- INSTEAD OF RS.41,78,700/- IN NOTES ON ACCOUNTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND OPENING ST OCK AND CLOSING STOCK OF SHARES AT RS.4,17,800/- AND RS.5,71,050/- RESPEC TIVELY FROM THE NOTE C OF SCHEDULE 11 OF ACCOUNTS. THE ASSESSEE CLAIME D DEDUCTION OF I.T.A. NO. 2741/KOL./2013 ASSESSMENT YEAR: 2003-2004 PAGE 2 OF 4 RS.36,07,650/- UNDER THE HEAD INCREASE/DECREASE IN CLOSING STOCK IN THE PROFIT & LOSS ACCOUNT, THEREBY THE ASSESSING OFFICE R WAS OF THE VIEW THAT THE INCOME OF RS.37,60,900/- WAS ESCAPED ASSESSMENT . IN THIS REGARD, NOTICE UNDER SECTION 142(1) WAS ISSUED. IN RESPONSE TO SUCH NOTICE, THE LD. A.R. APPEARED AND PRODUCED THE RELEVANT BANK ST ATEMENT BEFORE THE ASSESSING OFFICER AND ALSO SUBMITTED THAT THE MISTA KE HAS ARISEN DUE TO TYPOGRAPHICAL ERROR IN NOTE C IN NOTES OF ACCOUNTS OF THE AUDITED BALANCE- SHEET. THE FIGURES SHOW IN NOTE C TYPED AND CORRE CT FIGURE AS UNDER:- FIGURES TYPED CORRECT FIGURES PARTICULARS AS ON 31.03.2003 PARTICULARS AS ON 31.03.2003 SHARES AMOUNT SHARES AMOUNT OPENING STOCK 4 , 17 , 800 / - OPENING STOCK 41 , 78 , 700 / - 3. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENT ION OF THE ASSESSEE IN TAKING THE CORRECT VALUE OF SHARES AT RS.41,78,7 00/-. ACCORDINGLY, RS.37,60,900/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESESE. 4. AS AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEA L BEFORE THE LD. CIT(APPEALS) AND CONTENDED THAT THE ASSESSING OFFIC ER ADDED SUCH AMOUNT ON CERTAIN FIGURES OF OPENING STOCK REFLECTE D IN THE NOTES OF ACCOUNTS, WHICH WERE ANNEXED TO THE BALANCE-SHEET. FURTHER THE ASSESSEE SUBMITTED THE ACTUAL VALUE OF STOCK AND ACTUALLY DE CREASED BY RS.36,07,650/- BUT IN THE SCHEDULE 11 AT PART C O F NOTES OF ACCOUNTS, THE OPENING STOCK WAS REFLECTED IN INCREASE OF VALUE OF STOCK BY RS.1,53,250/- (RS.5,71,050/- MINUS 4,17,800/-) AND SUCH DISCREPAN CY WAS CAUSED ON ACCOUNT OF TYPOGRAPHICAL ERROR IN PART C OF NOTES OF ACCOUNTS. CONSIDERING THE SAME, THE LD. CIT(APPEALS) OBSERVED THAT THE MISTAKE IN THE NOTES OF ACCOUNTS MADE BY THE AUDITOR WAS A BON AFIDE MISTAKE AND ACCORDINGLY DELETED THE SAID ADDITION. THE RELEVANT PORTION IS REPRODUCED HEREIN BELOW:- 4.2 I HAVE EXAMINED THE ASSESSMENT ORDER AS WELL A S THE WRITTEN SUBMISSION FILED BY THE A.R. OF THE APPELLA NT. IT IS CLEAR FROM PARA NO.3 OF THE ASSESSMENT ORDER THAT W HEN I.T.A. NO. 2741/KOL./2013 ASSESSMENT YEAR: 2003-2004 PAGE 3 OF 4 THE MISTAKE WAS POINTED OUT BY THE A.O., THE APPELL ANT HAD DULY SUBMITTED HIS REPLY VIDE LETTER DT.4.12.20 08, PUTTING THE BLAME ON A TYPOGRAPHICAL ERROR. SUPPORT ING CERTIFICATION OF THE AUDITOR WAS ALSO AVAILABLE WIT H THE A.O. WHEREIN THE AUDITOR HAD CERTIFIED THAT OPENING STOCK VALUE WAS WRONGLY WRITTEN IN THE NOTES OF ACCOUNTS AS RS.4,17,800/- INSTEAD OF RS.41,78,700/- . THE A.O. HAS ALSO CERTIFIED ON THE VERY FIRST PAGE OF H IS ASSESSMENT ORDER THAT THE A.R. OF THE APPELLANT HAD PRODUCED BOOKS OF ACCOUNTS WHICH WAS EXAMINED ON A TEST CHECK BASIS. THE A.O DID NOT MENTION ANY DISCREPANCY IN STOCK BASED ON THE BOOKS OF ACCOUNTS OF THE APPELLANT. THE ONLY REASONING GIVEN BY THE A.O. FOR REJECTING THE APPELLANT'S SUBMISSION MADE THROUGH L ETTER DT.4.12.2008 IS THAT THE EXPLANATION IS NOT ACCEPTE D. NO REASON HAS BEEN GIVEN AS TO WHY THE EXPLANATION OF THE APPELLANT WAS NOT ACCEPTED EVEN WHEN NO DISCREPANCY IN THE STOCK POSITION WAS NOTICED IN THE BOOKS OF ACCO UNTS OF THE APPELLANT. UNDER THESE CIRCUMSTANCES, I AM O F THE VIEW THAT THE ACTION OF THE A.O. TO MAKE ADDITION O F RS.37,60,900/- ON THE BASIS OF STOCK IS NEITHER JUS TIFIED NOR BASED ON ANY EVIDENCE. THE MISTAKE IN THE NOTES OF ACCOUNTS MADE BY THE AUDITOR WAS BONA FIDE MISTAKE AND THIS HAS BEEN ACCEPTED BY THE AUDITOR. ADDITION ON THIS ACCOUNT IS DELETED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PER USED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. D.R. RELIED O N THE ASSESSING OFFICERS ORDER AND THE LD. A.R. RELIED ON THE ORDER OF THE L D. CIT(APPEALS). WE FIND THE TYPOGRAPHICAL ERROR IN PART C WHICH WAS PLACE D FOR OUR CONSIDERATION AT PAGE 12 OF THE PAPER BOOK. IT IS SEEN THAT THE V ALUE OF OPENING STOCK AS ON 31.03.2003 AT RS.4,17,800/- AND THE VALUE OF CLO SING STOCK AS ON 31.03.2002 AT RS.41,78,700/-. WE ALSO FIND THAT THE SAME MISTAKES IN FIGURE WAS BROUGHT TO THE NOTICE OF THE ASSESSING O FFICER VIDE SUBMISSION DATED 04.12.2008 SHOWING THE FIGURES TYPED AND CORR ECT FIGURES BUT HOWEVER, THE ASSESSING OFFICER DID NOT CONSIDER THE SAME AND WENT ON TO ADD RS.37,60,900/- TO THE INCOME OF THE ASSESSEE. W E ARE OF THE VIEW THAT THE LD. CIT(APPEALS) EXAMINED THE SAME IN DETAIL AN D FOUND SATISFIED THAT IT IS A BONAFIDE MISTAKE OF TYPOGRAPHICAL ERROR, WH ICH WAS ACCEPTED BY THE AUDITOR VIDE HIS CERTIFICATE IN THIS REGARD. THEREF ORE, WE FIND NO MERIT IN I.T.A. NO. 2741/KOL./2013 ASSESSMENT YEAR: 2003-2004 PAGE 4 OF 4 THE APPEAL FILED BY THE REVENUE. ACCORDINGLY, THE S OLE GROUND RAISED BY IT IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 29 TH , 2016. SD/- SD/- (M. BALAGANESH) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER KOLKATA, THE 29 TH DAY OF JUNE, 2016 COPIES TO : (1) INCOME TAX OFFICER, WARD-4(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. MAGNUM COMMERCIAL LIMITED, 4A, N.C. DUTTA SARANI, KOLKATA-700 001 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOLKA TA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.