2021 (11) TMI 1113 - AT - Income Tax

Rectification u/s 254 - unexplained source of money deposited in the bank account - Sham assessee submitted wherein the confirmation with respect to M/s. Sheela Credit Leasing Limited for payments made by the assessee was submitted, but has been ignored by the bench - HELD THAT - No details of re-payment to M/s. Sheela Credit Leasing Limited has been submitted. Therefore, the bench held that agreement to sell entered into by the assessee with M/s. Sheela Credit Leasing Limited was a sham agreement and it was made just to explain the source of money deposited in the bank account of the assessee. We find that assessee has submitted letter dated 21st June, 2017 wherein assessee referred to the confirmation from that company along with the letter of confirmation dated 31st March, 2019 was also submitted. The above letter was erroneously not considered by the co-ordinate bench. Therefore, to that extent there is an error in the order of the ITAT. The fact shows that the assessee has submitted the details of re-payment. In view of this, the claim of the assessee is found to be correct that assessee has re-paid Rs.8,40,000/- out of the total advance of Rs.15,00,000/- received by the assessee. Even as a material has not been considered by the co-ordinate bench, we hold that there is an error apparent from the record in the order of the ITAT. Thus, the order passed by the bench is recalled. The Misc. application filed by the assessee is allowed.

Summary

Issues:
1. Error in the order of the bench regarding repayment details to M/s. Sheela Credit & Leasing Limited.

Analysis:
The judgment pertains to a Miscellaneous Application filed under Section 254(2) of the Income Tax Act, 1961, related to an assessment year 2006-07. The issue revolved around errors in the order of the bench concerning the repayment details to M/s. Sheela Credit & Leasing Limited. The assessee contended that the bench had erroneously ignored the submission of a letter dated 21.06.2017, which included confirmation of payments made to M/s. Sheela Credit & Leasing Limited. The department, represented by the ld. DR, argued that there was no apparent error in the bench's order.

Upon careful consideration, the tribunal found that the co-ordinate bench had indeed stated that no details of repayment to M/s. Sheela Credit & Leasing Limited were submitted, leading to the conclusion that the agreement to sell was a sham to explain the source of money deposited in the assessee's bank account. However, the tribunal noted that the assessee had submitted a letter dated 21st June, 2017, along with a confirmation letter dated 31st March, 2019, from the company, which were not considered by the bench. This oversight led to the tribunal acknowledging the error in its order. The tribunal found that the assessee had, in fact, repaid Rs. 8,40,000 out of the total advance received. As the material submitted by the assessee was not considered by the bench, the tribunal concluded that there was an error apparent from the record in the order. Consequently, the bench recalled its order, allowed the Miscellaneous Application filed by the assessee, and directed the appeal to be heard in the regular course.

The judgment was pronounced on 11/11/2021 by the tribunal comprising Shri Kul Bharat, Judicial Member, and Shri Prashant Maharishi, Accountant Member. The detailed analysis highlights the importance of submitting all relevant documentation and the tribunal's duty to consider all evidence before making a decision to ensure justice and fairness in tax assessments.