2017 (11) TMI 1634 - AT - Income Tax

Rectification of mistakes - valuation of capital asset - substituted the value of sale consideration with the value of sale deed for the purpose of stamp duty - not confronting the assessee regarding application of provisions of section 50C - Held that - AO had not given any opportunity to the assessee regarding this and Ld. CIT(A) has also held that unless the assessee provides any evidence of low rates to show that his property was situated in a manner which would fetch lower rates than other comparable rates in the locality, the Assessing Officer was not bound to consider the same and in the absence of any such evidence or claim, he has upheld the action of Assessing Officer. The assessee before the Hon ble Tribunal vide ground no. 1 has specifically taken up this issue but Hon ble Tribunal has passed the order holding that no fresh evidence was provided by assessee but it has omitted to adjudicate on the specific ground as to whether the Ld. CIT(A) can uphold the addition u/s 50C by substituting apparent consideration with the value as per stamp duty when the assessee was never confronted. Therefore there is a mistake in the order of Hon ble Tribunal as far as ground no. 1 is concerned, and it needs rectification as the specific grievance of assessee has not been adjudicated. As regards ground no. 2, Hon ble Tribunal has not adjudicated this ground of appeal and has wrongly considered the ground no. 2 as second limb of the ground no. 1 and therefore it needs to be adjudicated and therefore there is a mistake in the order of Hon ble Bench. Disallowance of expenditure - Held that - Hon ble Tribunal has discussed this issue at para 7 and has upheld the action of Ld. CIT(A) by concurring with the findings of Ld. CIT(A) that no specific expenditure was shown to have been incurred by the assessee through his bank account. In this regard, we find that the Assessing Officer had made the disallowance by holding that there was no cash withdrawls for making the expenditure. The Ld. CIT(A) on the other hand had held that the assessee had made cash withdrawls from his bank account but he has upheld the disallowance on the basis that the assessee had not shown to have incurred the expenditure through his bank account. Therefore, the Ld. CIT(A) has upheld the disallowance on a different premise and Hon ble Tribunal was requested to adjudicate on this issue as to whether Ld. CIT(A) can confirm an addition on a different premise. From the findings of order of Hon ble Tribunal, we find that Hon ble Tribunal has not given any finding in this respect and has upheld the action of Ld. CIT(A), therefore there is apparent mistake which needs to be rectified. As regards the other mistake, the Ld. AR argued that ground no. 8 was raised specifically and the Hon ble Tribunal was required to adjudicate as to whether the AO without affording proper opportunity and Ld. CIT(A) even after conceding on this issue erred in still upholding the additions and the Hon ble Tribunal has dismissed this ground vide para 14 holding that the ground was general in nature whereas we find that this is not a general ground and it needed adjudication which had skipped the attention of Hon ble Tribunal. In view of these facts and circumstances, we find that mistake has crept in the order of the Hon ble Tribunal - Decided in favour of assessee.

Summary

Issues involved:
1. Rectification of mistakes required in the order of the Tribunal dated 28.02.2014.
2. Application of provisions of section 50C.
3. Disallowance of expenses claimed by the assessee to earn commission income.
4. Adjudication of grounds raised in the appeal regarding the actions of the Assessing Officer and the CIT(A).

Issue 1: Rectification of mistakes required in the order of the Tribunal dated 28.02.2014

The appellant filed a Miscellaneous Application against the Tribunal's order, highlighting three grounds necessitating rectification of mistakes. The first ground pertained to the Assessing Officer substituting the value of sale consideration with the value of sale deed without confronting the assessee, as required by proviso to section 50C. The Ld. AR argued that the Tribunal upheld the action of the CIT(A) without addressing the fundamental dispute and failing to consider if the Assessing Officer provided the necessary opportunity to the assessee. The second ground was not adjudicated by the Tribunal, leading to a request for its adjudication. The third and fourth grounds related to disallowance of expenses claimed by the assessee to earn commission income, where the Assessing Officer disallowed the expenses despite the availability of sufficient withdrawals. The Ld. AR contended that the Tribunal failed to address whether the CIT(A) could confirm the disallowance on a different premise from the Assessing Officer. The Tribunal was also asked to adjudicate on the issue of additions made without proper opportunity, which was dismissed as a general ground, necessitating a recall for readjudication.

Issue 2: Application of provisions of section 50C

The Assessing Officer did not provide the assessee with an opportunity regarding the application of section 50C, and the CIT(A) upheld the action without the assessee providing evidence of low rates for the property. The Tribunal, while acknowledging that no fresh evidence was presented by the assessee, failed to adjudicate on whether the CIT(A) could uphold the addition under section 50C without confronting the assessee. This omission constituted a mistake in the Tribunal's order, requiring rectification.

Issue 3: Disallowance of expenses claimed by the assessee to earn commission income

The Tribunal dismissed the ground raised by the assessee regarding the disallowance of expenses for earning commission income. The Ld. CIT(A) upheld the disallowance on the basis that the expenses were not shown to have been incurred through the bank account, despite the availability of cash withdrawals. The Tribunal did not provide a finding on whether the Ld. CIT(A) could confirm the disallowance on a different premise from the Assessing Officer, indicating an apparent mistake that needed rectification.

Issue 4: Adjudication of grounds raised in the appeal regarding the actions of the Assessing Officer and the CIT(A)

The Tribunal dismissed a specific ground raised by the assessee regarding the actions of the Assessing Officer and the CIT(A) as a general ground, failing to provide the necessary adjudication. This oversight necessitated a recall for readjudication of grounds 1, 2, 3, 4, and 8. The Miscellaneous Application filed by the assessee was allowed, directing the registry to fix the appeal for readjudication on the specified grounds.

This detailed analysis of the judgment highlights the issues raised by the appellant, the arguments presented by both parties, and the Tribunal's findings, emphasizing the need for rectification of mistakes and readjudication of specific grounds for a fair resolution.