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Facts
The assessee filed its return of income declaring ₹2,64,330. The case was selected for scrutiny due to high cash in hand and late filing. An addition of ₹14,12,101 was made as unexplained investment.
Held
The tribunal held that the discrepancy in cash in hand was due to a genuine clerical mistake where the bank balance was erroneously clubbed with cash. The assessee substantiated the bank balance with documentary evidence.
Key Issues
Whether the addition of ₹14,12,101 as unexplained investment is justified when it arose due to a clerical mistake in reporting cash and bank balances.
Sections Cited
143(3), 69, 143(2), 142(1)
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Income Tax Appellate Tribunal, ‘SMC’ BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2015-16 Tapan Kr. Shaw………….………..……..…………………....Appellant 331, R.B. C Road, Gorifa, Naihati, W.B 743166 [PAN: BVUPS8924F] vs. ITO, Ward-51(3), Kolkata…………....…..………………….…..... Respondent Appearances by: Shri Anil Kochar, Adv., appeared on behalf of the appellant. Shri Ranu Biswas, ACIT-Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 30, 2025 Date of pronouncing the order : July 31, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals), Kolkata, dated 08.12.2017 for the Assessment Year 2015–16.
Brief facts of the case are that the assessee filed its return of income for A.Y. 2015–16 declaring total income of ₹2,64,330. The case was selected for scrutiny assessment under Section 143(3) of the Income-tax Act, 1961, primarily due to high cash in hand shown in the balance sheet as compared to the preceding year and late filing of return after 07.11.2016. The assessee is engaged in trading business. Notices under Sections 143(2) and 142(1) were issued. The Authorized Representative appeared and submitted various documents during assessment proceedings. During the course of assessment, it was Tapan Kr. Sh aw noticed that the assessee failed to reconcile the total cash in hand and cash at bank of ₹40,25,110 reflected in the balance sheet. Out of this, a sum of ₹14,12,101 remained unexplained. Consequently, the Assessing Officer treated the same as unexplained investment and added it to the assessee’s total income under Section 69.
Aggrieved by the order of assessing officer assessee filed appeal before the Ld. CIT(A), who confirmed the addition of ₹14,12,101 on the ground that the assessee could not substantiate its claim with adequate documentation. The appeal was thus dismissed.
Dissatisfied with the above order the assessee is in appeal before this tribunal. At the time of hearing, it was submitted that there was a delay of 271 days in filing the appeal before the Tribunal. A condonation application was filed along with reasons for the delay. After considering the explanation, we are satisfied that there was reasonable cause for the delay. Hence, the delay is condoned, and the appeal is admitted for hearing on merits.
At the time of hearing Ld. AR contended that due to a clerical mistake while filing the return, the figure of ₹40,25,110 was wrongly shown under “Cash in hand” by clubbing both Bank balance: ₹38,56,636 and Cash in hand: ₹1,63,874. Thus, the entire amount appeared under cash in hand, whereas it actually included bank balance which was separately reflected in the bank account statement as on 31.03.2015. It was further submitted that this mistake occurred inadvertently and not with any intention to conceal facts. The assessee has placed on record the relevant bank statements clearly showing a balance of ₹38,56,636, which tallies with the closing figure claimed. The error was due to oversight and should not have been treated as unexplained.
Tapan Kr. Sh aw 6. On the other hand, ld. DR did not raise any objection to such submission made by the assessee before the bench.
We have heard the rival contentions and perused the material available on record. It is evident that the discrepancy in cash in hand arose due to a genuine clerical mistake by the person who prepared the return, whereby the bank balance was erroneously clubbed with cash in hand. The assessee has duly substantiated the bank balance by furnishing the bank statement, and there is no evidence on record to suggest that the amount was unexplained or unaccounted. Considering the explanation offered and the documentary evidence placed on record, we are of the view that the addition of ₹14,12,101 as unexplained investment is not justified. The same deserves to be deleted. In view of the above, we direct the Assessing Officer to delete the addition of ₹14,12,101 made under Section 69 of the Act.
In the result, the appeal of the assessee is allowed. Kolkata, the 31st July, 2025.