2015 (10) TMI 796 - AT - Income Tax

Rectification of mistake - mistake of facts in the order of the Hon ble ITAT as that addition on the issue involved has been confirmed on substantive basis in the case of Shri Sendhabhai M Desai (individual). The same is however not so as the addition has been deleted by Ld. CIT(A) - Held that - We have noted that the alleged mistake, if any, had not emanated from the order of the Tribunal. In fact, learned CIT(A) in his order in the case of the AOP has made an observation that the concerned CIT(A) in the case of Sendhabhai M. Desai, Individual, has confirmed the addition. In fact that was the source of the mistake. The impugned mistake, if at all, did not attribute to Tribunal. Moreover, the matter was decided not only because of that reason but it was decided on the merits of the case. It is clear that a finding was given in the case of the Individual that the impugned addition was merely on surmises and conjecture. While computing the brokerage income, the AO had estimated the same and that too found to be on presumption. Therefore, a question was raised during the course of hearing that in a situation when a substantive addition could not be upheld in the hands of the individual then how it is possible to uphold a protective addition pertaining to the same income. The impugned income was once deleted on merits from the hands of the Individual, therefore on those very reasoning that very addition was deleted by the Appellate Authority from the hands of the AOP. Even, the Respect Co-ordinate Bench has examined all those aspects on merits and thereupon after analyzing few case laws have came to the conclusion that the AOP was not in existence and therefore, the addition was wrongly made. Even, if we consider the grievance of the Revenue Department that the Tribunal has committed a mistake by wrongly recording a fact about the confirmation of addition in Individual capacity by learned CIT(A), but then simultaneously other fact shall also remain intact that the Tribunal has given a finding that the AOP was not in existences and hence the addition was improper. Moreover, the alleged wrong fact had emanated from the order of learned CIT(A), therefore, the mistake, if any, was a mistake of learned CIT(A) and not the Tribunal. The impugned order of the Tribunal has been passed after due consideration of the facts and circumstances of the case, therefore, need not to be disturbed; because any tinkering may tantamount to review of the order which is not permissible u/s.254(2) of IT Act. The Misc. Application of the Revenue Department is hereby dismissed.

Summary

Issues:
1. Incorrect recording of addition confirmation in the individual case by the Tribunal.
2. Validity of protective basis addition in the case of AOP.
3. Existence and assessment of AOP based on seized material.
4. Mistake attribution in the order of the Tribunal.

Analysis:
1. The Misc. Application by the Revenue Department challenged the Tribunal's order based on the incorrect recording of the addition confirmation in the individual case. The Revenue argued that the Tribunal mistakenly believed the addition was confirmed in the individual case when, in fact, it was deleted by the CIT(A). The Revenue sought the recall of the Tribunal's order based on this error.

2. The respondent-assessee contended that the Tribunal's decision was correct. The Tribunal had analyzed whether the AO was justified in making a protective basis addition in the AOP's case. It was found that the AOP's existence was not established, and no assessment could be made without evidence of the AOP's existence. The Tribunal concluded that the protective addition in the AOP's case was improper due to the lack of evidence supporting the AOP's validity.

3. The Tribunal noted that the seized material did not belong to the individual in question and that a substantive assessment had been made in the individual's case, leading to the deletion of the addition. The Tribunal found it difficult to believe in the validity of the AOP's existence, as the assessee denied its existence, and no evidence supported it. Therefore, the Tribunal dismissed the Revenue's claim that the protective addition should have been confirmed on a substantive basis.

4. The Tribunal clarified that any mistake in the order did not originate from its decision but from the CIT(A)'s observation in the individual case. The Tribunal's decision was based on the merits of the case, including the finding that the impugned addition was speculative and not supported by evidence. The Tribunal upheld its decision, stating that any error was not attributable to it and that disturbing the order would amount to impermissible review under the IT Act.

In conclusion, the Tribunal dismissed the Revenue's Misc. Application, affirming its decision based on the lack of evidence supporting the AOP's existence and the speculative nature of the impugned addition. The Tribunal's order was upheld, emphasizing that any error in recording the addition confirmation in the individual case did not warrant a recall of the decision.