2020 (3) TMI 209 - AT - Income Tax

Rectification of mistake apparent from record u/s 254 - Addition of undisclosed receipt - assessee has contended that since there is no dispute in nature of deposits, suggestion of learned Counsel of the assessee that 8% of suppressed transport receipt should be adopted as income - HELD THAT - Addition of undisclosed receipt by the Assessing Officer was confirmed by learned CIT(A) and therefore the same was confirmed by the ITAT in the aforesaid appeal. Assessee s contention that only 8% thereof should have been brought to tax as income and the ITAT has erred in not accepting the same is seeking review of the order not permissible under the Act.

Summary

Issues:
1. Rectification of mistake apparent from record in the order of ITAT related to deposits not co-related with business receipts for A.Y. 2010-11.
2. Dispute over the nature of deposits as undisclosed receipt or suppressed transport receipt.
3. Contention regarding the addition of undisclosed receipt and the proposal to tax only 8% of the same as income.

Analysis:

1. The appellant filed a Miscellaneous Application seeking rectification of a mistake apparent from the record in the ITAT order for A.Y. 2010-11 related to deposits of &8377; 1,28,86,704 not co-related with business receipts. The CIT(A) upheld the Assessing Officer's decision that the deposits constituted undisclosed receipts. The ITAT, after due examination, upheld the addition of the undisclosed receipts as income, emphasizing that the burden of proof lies on the assessee to establish non-taxability. The appellant failed to provide supporting evidence to rebut the authorities' findings, leading to the dismissal of the rectification request.

2. The appellant contended that the ITAT erred in categorizing the amount as undisclosed receipt, citing the Assessing Officer's reference to it as suppressed transport receipt and the CIT(A)'s mention of it as suppressed sale. The appellant argued that since the nature of deposits was undisputed, the proposal to tax 8% of suppressed transport receipt as income should have been accepted. However, the Departmental Representative argued against the review of the order under section 254(2) of the I.T. Act, stating that the ITAT had already confirmed the addition of the undisclosed receipt.

3. The ITAT, after careful consideration, noted that the addition of undisclosed receipt was confirmed by both the Assessing Officer and the CIT(A), leading to its affirmation in the appeal. The appellant's proposal to tax only 8% of the undisclosed receipt as income was deemed impermissible under the Act, as it sought a review of the order that had already been upheld. Consequently, the Miscellaneous Application was dismissed, and the order was pronounced in court on 15.1.2020.

This detailed analysis highlights the legal intricacies involved in the judgment regarding rectification of mistakes, the nature of deposits, burden of proof, and the permissibility of seeking a review under the I.T. Act.