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Facts
For AY 2021-22, the assessee's income was assessed higher under Section 143(1) than returned, as capital expenditure of ₹2,63,20,476 was inadvertently shown as income in the tax audit report. The assessee rectified this mistake by revising the report. The Ld. CIT(A) allowed the assessee's appeal, deleting the addition, a decision which the Revenue challenged before the Tribunal, with a condoned delay of 167 days.
Held
The Tribunal agreed with the Ld. CIT(A) that the addition resulted from a genuine inadvertent mistake by the assessee in the tax audit report, which was correctly rectified. The Tribunal found no merit in the Revenue's appeal and upheld the order of the Ld. CIT(A).
Key Issues
Whether the addition made under Section 143(1) due to an inadvertent error in reporting capital expenditure as income in the tax audit report should be sustained, and whether the Ld. CIT(A) was correct in deleting this addition.
Sections Cited
143(1), 56(2)(vi), 237
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
(Assessment Year:2021-22) Income Tax Officer Asok Kumar Jain Aaykar Bhawan, 39, RN Tagore 23, Shahid Surya Sen Road, Road, Berhampore, Murshidabad, Berhampore, Murshidabad, Vs. West Bengal-742101 West Bengal-742101 (Appellant) (Respondent) PAN No. AEVPJ2710YH Assessee by : Shri Gaurav Agarwal, AR Revenue by : Shri Sanjib Kumar Paul, DR Date of hearing: 04.09.2025 Date of pronouncement: 15.09.2025 O R D E R Per Rajesh Kumar, AM:
This is an appeal preferred by the Revenue against the order of the ADDL/ JCIT (A), Thiruvanantpuram (hereinafter referred to as the “Ld. CIT(A)”] dated 21.08.2024 for the AY 2021-22.
At the outset, we observe from the appeal folder that there is a delay of 167 days in filing the appeal by the department for which a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approvals from the competent authorities in the hierarchy, which took quite a long-time and accordingly, the delay has occurred and may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing.
2. The only issue raised by the assessee is against the double addition by the ld. AO / CPC.
2.2. In the appellate order, the ld. CIT (A) allowed the appeal of the assessee by holding and observing as under: - “1. The Appeal was filed by the appellant on 07-11-2022 for the AY 2021-22 against the Order of CPC AO passed u/s 143(1) of I.T Act, 1961 on 22-07-2022 and served on 28-10-2022. In this case, an amount of Rs 26320480/- was added whereas the appellant claimed as capital receipts. The break up of the capital receipt is shown as under:
1. 1.
1. Total capital as at 31-03-2021 of Rs 271808762.28 2. Less opening capital as at 01-04-2020 of Rs 243033242.51”
3. Total addition in capital account during the year 01-04-2020 to 31-03-2021 of ₹28775519.77 4. Less income offered to tax while filing ITR(note-1) of Rs 38,91,800.74 Capital Receipts of Rs 24883719.03 Details of Capital receipts 1. Capital receipts of Rs 2488371.03 Therefore, the appellant was liable to tax on the remaining capital receipt of Rs 724369. The appellant mentioned that he inadvertently had shown capital receipt of Rs 26320481 in point no. 16 of tax audit report instead of Rs 24883719/-. Therefore, the balance amount addition of Rs 1436761 is deleted. In the result, the appeal is allowed.” 2.3. After hearing the rival contentions and perusing the appellate folder, we find that this was a genuine mistake on the part of the assessee which was duly corrected by the ld. CIT (A).Therefore, we do not find any merit in the appeal of the revenue and same is dismissed as by upholding the order of the ld. CIT (A).
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 15.09.2025.