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2022 (12) TMI 165 - AT - Income TaxRectification u/s 154 - not setting off the unaccounted commission income determined by the Tribunal against the commission income offered by the assessee - HELD THAT - CIT(A) has considered the case records of the assessee properly and observed that there was no mistake apparent on record so as to rectify u/s 154 of the Act. Being so, we do not find any infirmity in the order of Ld. CIT(A) and the same is confirmed. Appeal of the assessee is dismissed.
Issues Involved:
1. Whether the CIT(A) was correct in upholding the order passed under section 154 rejecting the assessee's application for rectification. 2. Whether the income declared as business income outside books should be considered as part of the income determined by the Tribunal. 3. Whether the addition made by the AO and sustained by the CIT(A) was justified given the income already declared by the assessee. Issue-wise Detailed Analysis: 1. Rectification under Section 154: The primary issue revolves around the CIT(A)'s decision to uphold the AO's order under section 154 of the Income-tax Act, 1961, which rejected the assessee's application for rectification. The assessee argued that the Tribunal had determined the income from the timber commission business at Rs. 18,53,751/- and since Rs. 10,00,000/- was already included in the return of income, the net addition should be Rs. 8,53,751/-. However, the AO, in the order dated 30/05/2012, did not find any mistake apparent from the records and thus rejected the rectification request. The CIT(A) concurred with this view, and the Tribunal found no infirmity in this decision, confirming the CIT(A)'s order. 2. Inclusion of Business Income Declared Outside Books: The assessee contended that the income of Rs. 10,00,000 declared as business income outside books should be considered part of the income from the timber commission business determined by the Tribunal at Rs. 18,53,751/-. However, the Tribunal noted that the AO had estimated the unaccounted commission income at Rs. 90,00,000/- and added this to the returned income of Rs. 27,13,830/-. The CIT(A) later directed the AO to estimate the commission income at Rs. 56,00,000/-, and the Tribunal ultimately determined the unaccounted income from the commission business to be Rs. 18,53,751/-. The Tribunal did not direct that this amount should be set off against the returned commission income of Rs. 10,00,000/-. Consequently, the Tribunal upheld the AO's decision to not rectify the order as requested by the assessee. 3. Justification of Additions Made: The Tribunal addressed the issue of whether the additions made by the AO and sustained by the CIT(A) were justified, given the income already declared by the assessee. The AO had initially added Rs. 90,00,000/- to the income returned by the assessee, which was later reduced to Rs. 56,00,000/- by the CIT(A). The Tribunal, in its order dated 09/03/2012, further reduced this amount to Rs. 18,53,751/-. The Tribunal clarified that the Rs. 18,53,751/- was to be taken as the unaccounted income from the commission business for the year under consideration. The Tribunal found that the argument of the assessee regarding the inclusion of Rs. 10,00,000/- in the return of income was misplaced and upheld the AO's decision to sustain the addition of Rs. 18,53,751/-. Conclusion: The Tribunal dismissed the appeal of the assessee, confirming the CIT(A)'s order and the AO's decision. The Tribunal found no mistake apparent on record that warranted rectification under section 154 and upheld the addition of Rs. 18,53,751/- as the unaccounted income from the timber commission business. The appeal was dismissed, and the order was pronounced in the open court on 22nd September 2022.
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