Document pertaining to earlier year also constitutes record for rectification us 154 and if over-looked it amounts to a mistake apparent on record- ITAT

Document pertaining to earlier year also constitutes record and if the same is over-looked, it amounts to a mistake apparent on record u/s 154 – ITAT

ABCAUS Case Law Citation:
974 2016 (07) ITAT

Assessment Year: 2009-10
Date/Month of Judgment: July 2016

Important Judgments cited:
Sunil Sahni vs. ITO’, 70 ITD 481 (Delhi ITAT)

T.S. Balram ITO Company Circle IV, Bombay vs. Volkart Brothers & Others’, 82 ITR 50 (SC) 

Brief Facts of the Case:
The appellant assessee was an agriculturist having income from rent and bank interest. The assessee had deposited cash in his SB A/c on different dates during the year under consideration. The assessee claimed that out of total cash deposited nearly 50% of cash were deposited was received from his father who had died afterwards. However the assessee failed to prove his claim to the satisfaction of the AO. Accordingly, the AO treated the amount of cash purportedly received from his father as undisclosed income and made an addition.

The assessee filed a rectification petition u/s 154 which was rejected by the AO and also by CIT(A). 

Before the Tribunal, the assessee contended that all the documents, i.e., cash flow statements and bank statements were furnished and the nature of the entries were explained to the AO as amount received from his father. The Bank statement of saving bank account which was a joint account held by the assessee with his father and from which the money had been withdrawn was also filed. 

Observations made by ITAT:
The Tribunal observed that the bank statemenst and cash flow statements show that sufficient funds were available with the assessee. Also the factum of concealment of penalty proceedings was also in favour of the assessee in as much as the proceedings initiated were dropped on considering the facts of the case.

The Tribunal noted that deposits in question were made out of cash in hand and no amount had been received by the assessee from his father on the said dates. However, the narration of the cash flow statement of the joint account of the father, shows them as  funds received by the assessee from his father. Due to this wrong assumption of facts that these funds were withdrawn by the assessee from the joint account the AO as well as the CIT(A) mis-apprehended the facts. 

The Tribunal held that the mistake contended by the assessee was  very much present and this constituted a mistake apparent from the record  rectifiable under section 154 of the Income Tax Act, 1961 as a mistake of calculation having occurred due to over-sight at the time of assessment.

 record for rectification us 154

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