2007 (3) TMI 418 - AT - Income Tax

Summary

Issues Involved:
1. Maintainability of the Miscellaneous Application (MA) regarding the credit in the State Bank of India (SBI) account.
2. Alleged mistake in the interpretation of unaccounted investment in the La-Mer property amounting to Rs. 50 lakhs.
3. Procedural objections regarding the issuance of notice to the Department.
4. Interpretation of entries in the loose paper seized during the search.
5. Evidentiary value and retraction of the statement made under section 132(4) of the Income-tax Act.
6. Comparison with the case of Shri Sachin Tendulkar for corroborative evidence.

Detailed Analysis:

1. Maintainability of the Miscellaneous Application (MA) regarding the credit in the State Bank of India (SBI) account:
The learned counsel for the assessee contended that the issue about the credit in the SBI account was not referred to the Third Member for opinion. The Revenue inadvertently referred to this issue in the MA, which was not before the Third Member. Consequently, the MA on this issue was deemed not maintainable and dismissed accordingly.

2. Alleged mistake in the interpretation of unaccounted investment in the La-Mer property amounting to Rs. 50 lakhs:
The issue revolved around an addition of Rs. 50 lakhs made for the alleged cash payment for purchasing a flat in the La-Mer building. The father of the assessee initially admitted to the cash payment but later retracted the statement. The Judicial Member deleted the addition, while the Accountant Member confirmed it. The Third Member agreed with the Judicial Member, leading to the ITAT deciding in favor of the assessee. The Revenue contended that the Third Member misinterpreted the entries in the loose paper, leading to a factual error. However, the Tribunal found that the Third Member's interpretation was within the scope of his jurisdiction and did not constitute a mistake apparent from the record.

3. Procedural objections regarding the issuance of notice to the Department:
The Department raised a preliminary technical objection, claiming that the notice of the hearing was not issued to them. The Tribunal found that the notice was issued as per the due procedure, and the technical objection was rejected.

4. Interpretation of entries in the loose paper seized during the search:
The Revenue argued that the Third Member misinterpreted the entries in the loose paper, which indicated a cash payment of Rs. 84 lakhs. The Tribunal found that the Third Member's interpretation was one of the possible views and did not amount to a mistake apparent from the record. The addition was not solely based on the loose paper but also on the comparison with Shri Sachin Tendulkar's case.

5. Evidentiary value and retraction of the statement made under section 132(4) of the Income-tax Act:
The Revenue contended that the Third Member should not have accepted the retraction of the statement by the father of the assessee. The Tribunal found that the Third Member had considered all legal aspects and relevant judgments, including the Supreme Court judgment in Pullangode Rubber Produce Co. Ltd. v. State of Kerala. The retraction was deemed a clarification given during the search proceedings, and the Tribunal upheld the Third Member's decision.

6. Comparison with the case of Shri Sachin Tendulkar for corroborative evidence:
The Revenue argued that the addition was supported by the case of Shri Sachin Tendulkar, who purchased a flat in the same building. The Tribunal found that the Third Member had duly considered the time gap and the fact that the assessee was the original purchaser. The comparison with Shri Sachin Tendulkar's case was not deemed a mistake apparent from the record.

Conclusion:
The Tribunal concluded that the MA filed by the Revenue amounted to a review of the order, which is not permissible under section 254(2) of the Income-tax Act. The Department's MA was dismissed.