2019 (7) TMI 376 - AT - Income Tax

Rectification u/s 254 - additional evidence was not to be admitted by CIT(A), then there was no point in seeking the remand report of the AO on assessee s submissions whether any mistake is apparent from the record or not? - HELD THAT - As relying on KUSHALBHAI RATANBHAI ROHIT OTHERS VERSUS THE STATE OF GUJARAT 2014 (5) TMI 488 - SUPREME COURT it is clear that until and unless the order is signed and sealed cannot be treated as final and as per wisdom of the Court, in certain circumstances the order can be recalled and altered to a certain extent, even if it was dictated in the Open Court. Hence, the contention of the assessee to the effect that the Bench had shown their mind to remand the case to the file of the Ld. CIT(A) and therefore the rectification of the order is necessary, is not sustainable. Asseeee except to reiterating the issues already raised in written submission, could not raise any new/additional issue specifically which remained un-adjudicated. From the peculiar facts and circumstances, the question arises as to where the Court has passed the elaborate order while disposing of the contentions of the assessee on the basis of written submission and/or oral submissions, the order can be rectified. In our view the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the co-ordinate Bench or whether some incidental fact which appears on record has not been noticed by the Tribunal in its judgment. If on a fair reading of the judgment of the Co-ordinate Bench, it appears that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, then the decision of the Co-ordinate Bench, is not liable to be interfered with, unless, of course, the conclusions arrived at by the Bench are perverse. As it is also well settled that only glaring and mistake apparent on the face of the record alone can be rectified but not otherwise permissible under Sec.254(2) of the Act. A mistake must exist and the same must be apparent from the record, which is not apparent in this case, hence we do not have any hesitation to dismiss the application of the Assessee. Miscellaneous Application filed by the Assessee stand dismissed.

Summary

Issues Involved:

1. Recalling the order dated 25.10.2017.
2. Admissibility of additional evidence under Rule 46A.
3. Merits of the case concerning the addition of ?15,86,371/-.
4. Disallowance of ?50,000/- out of various expenses on an ad hoc basis.
5. Scope of rectification under Section 254(2) of the Income Tax Act.

Detailed Analysis:

1. Recalling the Order Dated 25.10.2017:
The assessee filed a Miscellaneous Application seeking the recall of the order dated 25.10.2017, arguing that the Hon'ble Bench had initially indicated that the case would be remanded to the file of CIT(A) to admit additional evidence. However, the final order dismissed the appeal on the main ground of the addition of ?15,86,371/-.

2. Admissibility of Additional Evidence under Rule 46A:
The assessee contended that the CIT(A) should have admitted the additional evidence and decided the issue afresh. The Hon'ble Bench had earlier accepted this argument but dismissed the appeal in the final order. The Tribunal, however, affirmed the CIT(A)'s rejection of the additional evidence, noting that the assessee had 17 opportunities during the assessment proceedings but failed to cooperate or provide the necessary evidence. The CIT(A) concluded that the assessee did not demonstrate any sufficient cause for not producing the evidence earlier.

3. Merits of the Case Concerning the Addition of ?15,86,371/-:
The Tribunal reviewed the merits of the case and upheld the addition of ?15,86,371/-. The assessee initially claimed that the cash deposits were security advances from 81 persons but later changed the explanation to advances received from property buyers. The Tribunal found inconsistencies and a lack of credible evidence supporting the assessee's claims. The Tribunal noted that the assessee failed to provide any receipts or proof of the alleged property transactions and deemed the explanations as concocted stories and malafide claims.

4. Disallowance of ?50,000/- Out of Various Expenses on an Ad Hoc Basis:
The Tribunal partially allowed the assessee's appeal on this ground. It noted that the assessee claimed expenses totaling ?2,00,524/-, including interest and depreciation. The Assessing Officer had disallowed ?50,000/- due to the lack of documentary evidence. The Tribunal found this disallowance excessive and restricted it to ?7,500/-, being 10% of the claimed expenses.

5. Scope of Rectification under Section 254(2) of the Income Tax Act:
The Tribunal emphasized the limited scope of rectification under Section 254(2), which allows for correcting mistakes apparent from the record but not for reviewing or revising the order. The Tribunal cited various judgments to support this interpretation, including the Supreme Court's ruling in Master Construction Co. (P.) Ltd. v. State of Orissa and CIT vs. Karam Chand Thapar & Br. P. Ltd. The Tribunal concluded that the assessee's application did not reveal any apparent mistake in the original order and thus did not warrant rectification.

Conclusion:
The Tribunal dismissed the Miscellaneous Application filed by the assessee, finding no apparent mistake in the original order that warranted rectification. The Tribunal upheld the addition of ?15,86,371/- and partially allowed the appeal concerning the disallowance of expenses, restricting it to ?7,500/-.

Order Pronounced:
The order was pronounced in the open Court on 23.04.2019.