2003 (10) TMI 607

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..... ng income for Rs. 61,245. The assessment was completed under section 143(3) on 29-3-1990 in which the addition on account of work in progress was made for Rs. 71,515 alongwith other additions and assessed at Rs. 2,45,785 by the Assessing Officer. The above assessment was agitated in the first appeal before the Ld. CIT(A). The LD. CIT(A) deleted the addition on account of interest on F.D.R. and expenses claimed and confirmed the addition of Rs. 71,512 on account of work in progress, Rs. 10,700 on account of closing stock in trading account and Rs. 77,325 on account of cash difference in balance sheet. 2. In the second appeal in the Ld. Bench of this Tribunal, the Ld. Bench in ITA No. 173/JAB/93 passed the order dated 13-3-1995 setting as .....

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..... f the assessee submitted that work in progress for Rs. 71,515, it is bills receivable against sale which was not received during assessment year is wrongly debited in the books of account i.e. trading account by the mistake of accountant having no proper knowledge of accounting. It relates to the payment of bills receivable and not work in progress. It is the mistake of accountant for making wrong entry, therefore, for the mistake of others assessee should not be penalised whereas the Assessing Officer has pointed out in the order page 2 "it is perhaps due to improper knowledge of accounts" shows the admitted facts that accountant was not having proper knowledge of accounts. In addition to Assessing Officer observed that the assessee has .....

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..... Officer, the accountant of the assessee was not having proper knowledge of the accounts. Therefore, the entry is made in wrong head i.e. instead of bill receivable account as asset; he has shown in trading account as work in progress. We feel there is wide misconception about the impact of this wrong entry in the books of account. Going by the facts relating to this wrong entry in sequential order, it can be observed that there is no adverse impact of the entry on the income shown by the assessee. The Assessing Officer has taken into account only the aspect, which appeared on the debit side of trading account. We noted the contention of the assessee that there is also an equal amount credited in trading account under the head Bills Rece .....

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