The Income Tax Appellate Tribunal (ITAT) Delhi bench observed that difference in the opening stock and closing stock of assessee arised due to the clerical mistake of Filing Income Tax Return. Therefore the bench upheld the deletion of addition. Assessee, Roshan Lal Sharma, is an individual in the business of manufacturing and export of garments. Assessee filed his return for Assessment year 2011-12 and for Assessment year 2012- 13 by declaring income of Rs. 11,27,066/- and Rs. 13,80,340/- respectively. Both the cases were selected for scrutiny through CASS. The reason given for selection in AY 2012-13 was “difference in the opening stock figure of the current year with the closing stock figure of the previous year”.
Thereafter, a notice was issued to assessee but he did not respond hence it led to ex parte order along with made addition of Rs. 76,09,453/- being difference between opening stock of Assessment year 2012-13 and closing stock of the preceding Assessment year 2011-12. Aggrieved by the order assesee filed an appeal before the CIT(A), who allowed the appeal of the assessee and deleted the addition.
Thereafter the revenue filed an appeal against the CIT(A) order before the tribunal. Ratnesh Gupta, Counsel for the assessee argued that the difference is nothing but due to clerical mistake in filing the ITR. Moreover Due to this, Assessment Year 2013–2014 was also under examination. This disparity was explained to the AO, but the AO made no additions to this issue in Assessment Year 2013–2014. Vivek Vardhan, Counsel for Revenue supported the decision of the assessing officer.
It was observed that on account of difference in opening stock of the current year and closing stock of the preceding year, the CIT(A) has accepted the explanation offered by the assessee before him and deleted the addition. After considering the facts submitted and circumstances, the two member bench of Dr. B R R Kumar (Accountant Member) and Astha Chandra (Judicial Member) upheld the deletion of additions by the CIT(A) and observed that the difference in opening stock and closing stock of assessee had arisen due to the clerical mistake of Filing Income Tax Return. Therefore, the bench dismissed the appeal of the revenue.