The Chennai Income Tax Appellate Tribunal (ITAT) explained that a typographical error in mentioning the incorrect amount of expenses in Form 3CD does not call for any addition by the Assessing Officer to the assessee’s income.
Shri. Palanisamy Senthilkumar, the assessee is an individual carrying on the business as a trader in wearing apparel, filed his return and the assessment was completed determining a total income of Rs.3,88,49,580/-. The addition of Rs. 79,99,559/- was made being payment made to contractors reflected in the audited report amounting to Rs.2,19,38,339/-. The Assessing Officer issued notices to explain the source of commission and brokerage paid amounting Rs.2,19,38,339/- and explain the source of payments made to contractors amounting to Rs.23,19,814/-.
According to the Assessing Officer, expenditure is reflected in the audited report and claimed to have been made for business. As there was no satisfactory reply or explanation with the evidence, the Assessing Officer added both the amounts claimed to the returned income of the assessee and assessed accordingly.
The Bench found that due to a typographical error in form 3CD, the total commission or brokerage expenses for the financial year 2017-2018 has been disclosed at Rs.2,19,38,339/- which is an incorrect figure and incorrectly entered due to a typographical error. The Tribunal also noted that the profit and loss account, form No.3CB, Income Tax Return for the assessment year 2018-19 clearly reflects that the amount entered in form 3CB of Rs.2,1938,339/- is wrongly entered and the correct figure is Rs.1,45,83,780/-.
The two-member Bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) observed that details were available before the CIT(A) at the time of the hearing and available, complete details are only supportive of the order of the CIT(A). It was held that the CIT(A) erred in restricting the addition at Rs.79,99,559/- because the expenditure claimed to have incurred on which the tax is collected is Rs.2,19,38,339/- is wrongly entered in form 3CD and it should have been Rs.1,45,83,780/-.
Hence, the ITAT deleted the addition and answered in favour of the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
