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2020 (3) TMI 570 - AT - Income TaxRectification of mistake u/s 254 - percentage of g.p. of the assessee co. was 3.40% in the assessment year 2007-08 and the same was restricted to 3.30% in case of unaccounted turnover in that year but book result as declared by the assessee co. was neither disturbed by the AO nor by any of the appellate authority - HELD THAT - We are unable to accept this contention of the assessee in view of the finding of fact recorded by the ld. CIT(A) that the facts and circumstances for the assessment year 2007-08 were entirely different from the facts and circumstances of the year under appeal. Hence, the profit adopted for that year cannot mechanically be adopted for the year under appeal as this Tribunal has already considered the facts on record and expressed its view. The case-laws relied upon by the assessee are not applicable to the facts of the present case as the powers of Tribunal u/s 254(2) of the Act for rectification of mistake are not wide enough to revisit consciously taken decision. The assessee by way of present application is seeking review of order, which is not permissible under the law. See Karan Co 2001 (7) TMI 48 - DELHI HIGH COUR , NIRANJAN AND CO. LIMITED 1979 (3) TMI 24 - CALCUTTA HIGH COURT If such prayer is allowed then in every case, where the assessee is not satisfied with the finding of the Tribunal, the MA will be filed. In our considered view, powers u/s 254(2) are very limited which could only be exercised to rectify any mistake or fact apparent from the record. But, where the Tribunal has applied its mind and comes to a particular conclusion then disturbing such finding would tantamount to review the order. Such exercise would even be contrary the scheme of Act as the order of Tribunal is appealable u/s 260A of the Act before the Hon'ble High Court. In view of these facts, the miscellaneous petition filed by the assessee has no merit.
Issues Involved:
1. Recalling of the Tribunal's order dated 28.03.2019. 2. Alleged errors in the CIT(A)'s decision on various additions. 3. Rejection of books of accounts. 4. Estimation of income. Detailed Analysis: 1. Recalling of the Tribunal's Order Dated 28.03.2019: The assessee filed a Miscellaneous Application seeking the recall of the Tribunal's order dated 28.03.2019, arguing that there was an apparent mistake on the record. The Tribunal, however, found that the assessee was essentially seeking a review of the order, which is not permissible under the law. The Tribunal emphasized that powers under Section 254(2) of the Income Tax Act are limited to rectifying apparent mistakes and cannot be used to revisit decisions already made. 2. Alleged Errors in the CIT(A)'s Decision on Various Additions: The Revenue raised several grounds against the CIT(A)’s decision, including: - Restricting the addition made on account of estimated GP. - Deleting additions related to excise duty and VAT tax collected but not paid. - Ignoring incriminating invoices seized during an excise search. - Deleting an addition made on account of unexplained investment. - Ignoring the need for unaccounted working capital to run an unaccounted business. The Tribunal reviewed these grounds and found that the CIT(A) had justified reasons for its decisions, particularly in light of the excise department's findings and subsequent CESTAT order quashing the show cause notice. 3. Rejection of Books of Accounts: The Tribunal upheld the rejection of the books of accounts, agreeing with the CIT(A) that the discrepancies pointed out by the excise authorities were not reconciled by the assessee. The CIT(A) had noted that unaccounted production and sales were admitted by one of the directors, and the discrepancies were not disproved as false or fabricated. Despite the show cause notice being quashed by the CESTAT, the Tribunal found that the rejection of the books was justified based on the material on record. 4. Estimation of Income: The Tribunal addressed the estimation of income, where the CIT(A) had applied a net profit rate of 2.3% on the entire turnover, excluding the turnover determined by the excise authorities. The Tribunal directed the AO to adopt a net profit rate of 3.3% on the turnover, excluding the excise-determined turnover. The Tribunal noted that the facts and circumstances of the assessment year 2007-08 were different from the current year and that the profit rate for the earlier year could not be mechanically applied to the current year. The Tribunal dismissed the assessee's contention that the percentage of GP should be based on the previous year’s findings and emphasized that the facts for the current year were different. The Tribunal also rejected the assessee's argument that the estimation should be based on net profit rather than gross profit, citing several judicial precedents. Conclusion: The Tribunal dismissed the Miscellaneous Application filed by the assessee, stating that the powers under Section 254(2) are limited to rectifying apparent mistakes and cannot be used to review the order. The Tribunal found no merit in the assessee's application and upheld the original order. Order Pronounced: The order was pronounced in the open court on 16.1.2020.
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