Addition for Undisclosed Income u/s 69A cannot be made merely on ground of Typographical Errors: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Visakhapatnam Bench has held that addition for undisclosed income under section 69A cannot be made merely on grounds of typographical errors.

The assessee, M/s. Sri Siddi Vinayaka Auto Mobiles is a dealer in automobiles. During assessment proceedings, the Assessing Officer issued notice u/s. 142(1) and without any response from the assessee the AO made addition under section 69A of the cash deposits made by the assessee during the demonetization period. Since the assessee did not submit any details, AO passed the order U/s. 144 of the Act. On appeal, the CIT (A) deleted the additions and aggrieved revenue filed an appeal before the ITAT.

The counsel for the revenue submitted that the assessee did not appear before the AO and hence the order was passed U/s. 144 of the Act. The assessee has produced additional evidence before the CIT(A) but the CIT(A) has not called for the remand report and thereby violating the provisions of section 46A of the IT Rules, 1962.

The counsel for the assessee submitted that the assessee has wrongly mentioned the bank account number while filing the balance sheet before the AO but the assessee has rightly disclosed the balance with the Axis Bank, Guntur bearing No. 38301 in the balance sheet before the Income Tax Authorities. The counsel for the assessee further submitted that the cash deposits are made out of the cash sales of the assessee and have been duly recorded in the books of account and reflected in the profit and loss account of the assessee.

The Coram of Mr. Duvvuru RL Reddy, Judicial Member, and Mr. S Balakrishnan, Accountant Member has observed the peculiar circumstances of assessee’s business cash being received by the dealer in automobiles for making payments to various authorities such as registration charges, insurance, life tax, etc. The cash is collected from the customers as reimbursements and hence it does not form part of the revenue of the assessee. A mere typographical error of the account number of the bank account does not mean that the assessee has not disclosed proper information about the bank account details. The Tribunal has held that “we find no infirmity in the order of the CIT(A) and hence no interference is required”.

Advocate Mr. GVN Hari and Mr. SPG Mudaliar appeared on behalf of the assessee and the revenue respectively.

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