Typographical Error In Mentioning Incorrect Amount Of Expenses In Form 3CD Doesn't Permit AO For Any Addition To Assessee's Income: Chennai ITAT

The 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 hearing and complete details which are available is only supportive of the order of the CIT(A). Hence, we find 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/-”. (Para 7)

As per the brief facts of the case, the assessee, an individual carrying on the business as a trader in wearing apparels, filed his return and assessment was completed determining 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 made for the purpose of business. As there was no satisfactory reply or explanation with the evidences, the Assessing Officer added both the amounts claimed to the returned income of the assessee and assessed accordingly.

The Bench found that due to typographical error in form 3CD, the total commission or brokerage expenses for financial year 2017-2018 has been disclosed at Rs.2,19,38,339/- which is incorrect figure and which incorrectly entered due to typographical error.

The Bench also noted that the profit and loss account, form No.3CB, Income Tax Return for assessment year 2018-19 clearly reflects that amount entered in form 3CB of Rs.2,1938,339/- is wrongly entered and the correct figure is Rs.1,45,83,780/-.

The DR only stated that the certificate issued by the Chartered Accountant clarifying typographical error can be verified by the Assessing Officer and requested that the matter be resorted back to the file of the Assessing Officer for limited verification, added the Bench.

Hence, the ITAT deleted the addition and answered in favour of assessee.

Counsel for Appellant/ Assessee: J. Vamini

Counsel for Respondent/ Revenue: D. Hema Bhupal

Case Title: Shri. Palanisamy Senthil kumar verses ITO

Case Number: ITA No. 1601/CHNY/2023

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