|The Tax Publishers2023 TaxPub(DT) 4011 (Kol-Trib)
INCOME TAX ACT, 1961
Where AO made an addition under section 68 on account of unexplained credits shown in balance sheet of assessee; in view of the fact that the assessee inherited certain movable and immovable properties from his uncle and his accountant mistakenly mentioned wrong figures of the same, which was duly explained by the assessee and further, the assessee also submitted revised balance sheet, matter was remanded to the AO with a direction to adopt correct figures and further he was directed to consider the revised balance sheet of the assessee and assess his income accordingly.
Income from undisclosed sources - Addition under section 68 - Unexplained credits shown in balance sheet -
AO made an addition of Rs. 8,04,17,440 under section 68 on account of unexplained credits shown in balance sheet of assessee. It was explained to the AO that the assessee inherited certain movable and immovable properties from his uncle. That among the said properties, there was a FD of Rs. 96,00,000, however, his accountant who was a novice, mistakenly mentioned the figure of the same at Rs. 9,60,00,000. It was further explained that total bank balance inherited by the assessee by way of will from his uncle was Rs. 2,66,46,349, but the accountant wrongly mentioned that figure, which resulted into increase in capital to the extent of Rs. 8.64 crore. It was further explained that the accountant further committed some mistakes in respect of other bank balances and cash in hand and thereby wrongly mentioned the figure in capital of Rs. 8,04,17,440. However, the AO did not accept such explanations observing that the assessee repeated aforesaid increase in capital in his return for subsequent assessment year. On appeal, CIT (A) upheld the addition under section 68. Held: Assessee duly explained mistake in noting figures by his accountant. Further, the assessee duly submitted revised balance sheet also. The explanation of the assessee was rejected on the ground that the assessee repeated the same figures for subsequent assessment year. However, in that respect, the assessee submitted that he was an individual and did not maintain books of account and that his accountant took the figures from last year resulting into repetition of mistake. Considering the same, matter was remanded to AO with a direction to adopt the correct figure of Rs. 96,00,000 on account of FD, instead of Rs. 9,60,00,000 as wrongly mentioned in balance sheet by the accountant of the assessee. Further, the AO was directed to consider the revised balance sheet of the assessee and assess his income accordingly, subject to the condition that the assessee mentioned correct figures in subsequent assessment years and did not take benefit of his own wrong.
FAVOUR : Matter remanded
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