TMI Blog1983 (3) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the ITO the returned income was short by Rs. 10,000. On the query made by the ITO to explain the discrepancy the assessee wrote a detailed letter on 25th January, 1980 a copy of which is in the paper book. Inter alia, it is contended that there was business expenditure amounting to Rs. 9,354 which through mistake could not be claimed. It was stated that there was mistake in totalling and if the expenditure is considered then the different would hardly be or Rs. 646 and in such a business such difference is probable. The ITO after considering the contentions of the assessee allowed expenses of Rs. 3,000. Thus, the ITO was of the view that a sum of Rs. 10,000 was the income of the assessee from undisclosed sources and the same was adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt. According to him, the said income was not disclosed in the profit and loss account, but it was taken directly to the balance sheet. Thus, the AAC added a sum of Rs. 3,568 as income of the assessee from undisclosed sources. 4. Before the Tribunal the first contention of the appellant was that the addition of Rs. 10,000 in crossing account is uncalled for. The ld. counsel gave more or less same explanation which was given before the authorities below. It was contended that the expenses to the tune of Rs. 9,354 were left over by mistake and they were not claimed in the trading account but they were wrongly included in the profit and loss account and balance sheet. Such expenses are wholly and exclusively for the purpose of the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. 5. After hearing the parties I am of the view that the claim of Rs. 1,500 was wrongly disallowed. For petty expenses vouchers are not obtained. It is not the case of the department that all the expenses were not wholly and exclusively for the purpose of the business. So, in the absence of the vouchers, the claim cannot be disallowed. So, the disallowance of Rs. 1,500 is uncalled for and the same is deleted. 6. The other contention of the assessee s ld. counsel was that the AAC was wrong in making the addition of Rs. 3,568. According to the ld. counsel, the ld. AAC never gave opportunity before making the addition. Such addition was never made by the ITO. Under the circumstances the addition may be deleted. According to the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Inter alia, it was contended that the explanation given by the assessee was substantiated with the documentary evidence, i.e. production of books of accounts. The assessee has all along been under the impression that he is entitled to claim deduction of expenses to the extent of Rs. 9,354. By over-sight the said claim was not made. In any view of the matter, it was contended that the omission was not deliberate. The ld. AAC was not satisfied with the said contention. According to him, the finding of the ITO was quite correct. 10. Before the Tribunal it was contended that the ld. AAC was wrong in sustaining the order of the ITO imposing penalty of Rs. 10,000 u/s. 271(1)(c) of the Act. According to the ld. counsel, penalty proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record to prove that the explanation given by the assessee was false. Thus it was contented that the imposition of penalty is uncalled for. 11. The ld. Departmental representative supported the order of the AAC. According to him, the mistake, in question, was intentional and the assessee consciously disclosed less income at Rs. 10,000. Thus, it was submitted that the finding of the AAC is quite correct. 12. I have heard the parties and perused the entire evidence on record. In the penalty order the ITO pointed out as under : "During the course of assessment proceedings it was noticed that the credit balance to the extent of Rs. 10,000 was shown less due to totalling mistake." It means the contention of the assessee has been accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e examined from another point of view. If the expenditure which was not claimed by the assessee may be claimed to the extent of Rs. 9,354 there would hardly be difference of income of Rs. 646. Such expenditure was also duly recorded in the books maintained in the ordinary course of the business. According to the assessee, such expenses are allowable as revenue expenditure. It is different matter that such expenditure were not allowed by the department. 15. If all the aforesaid facts and the explanation of the assessee are taken into consideration in their entirety, it would be clear that there were preponderance of probabilities which would go to show that the mistake in drawing closing balance was unintentional and bona fide. Such mistak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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