1991 (4) TMI 88 - HC - Income Tax

Summary

Issues:
Assessment of addition of Rs. 13,177 by the Income-tax Officer based on sales without stocks. Agreement by the assessee's representative to the addition of Rs. 10,000. Estoppel against the assessee regarding the addition. Rectification sought by the assessee based on factual aspects and maintenance of accounts. Tribunal's rectification of the earlier order deleting the addition. Jurisdiction of the Tribunal to rectify its order and the need for a clear finding on the merits of the case.

Analysis:
The judgment pertains to a reference made by the Department regarding the assessment year 1969-70 of the assessee. The Income-tax Officer added Rs. 13,177 during the assessment due to sales without stocks and an agreement by the assessee's representative to add Rs. 10,000. The Appellate Assistant Commissioner upheld the addition, emphasizing the agreement made by the representative. The Appellate Tribunal rejected the assessee's contention, citing estoppel as the assessee had agreed to the addition. The Tribunal also found discrepancies in the accounts of the assessee, leading to the dismissal of the appeal.

The assessee filed a rectification seeking to correct the Tribunal's order, presenting factual aspects and details of account maintenance. The Tribunal accepted the affidavit of the chartered accountant, acknowledging an error in the addition of Rs. 10,000 and rectified the order by deleting the entire addition of Rs. 13,177. The Tribunal's decision was based on the professional standing of the chartered accountant and the factual details provided.

Although the jurisdiction of the Tribunal to rectify its order was not a referred question, the Tribunal's rectification was upheld. The Department argued for a clear finding on the merits of the case, but the court deemed the affidavit sufficient evidence. Despite the lack of a specific finding by the Tribunal on the merits, the court upheld the deletion of the addition based on the accepted affidavit and the prolonged litigation period. Consequently, the court answered the question in favor of the assessee, justifying the deletion of the addition without any order as to costs.