This error happens when your server already has a DNS zone for the domain or the record was added previously to the DNS zone file. You will want to ensure that the DNS zone file is removed, or the specific DNS zone record is modified so that you can add the domain or record.
To remove the zone entirely you can do this under:
"WHM » Home » DNS Functions » Delete a DNS Zone"
To modify the zone, you can do this under:
"WHM » Home » DNS Functions » Edit DNS Zone"