2014 (1) TMI 18 - AT - Income Tax

Rectification of mistake - Held that - There was nothing on record to show that any submission was made on behalf of the assessee at the time of hearing to the effect that there was no agreement between the assessee and M/S CEAT Tyres Ltd - No opportunity was given to the assessee in this regard to establish its case of such waiver - The issue was restored for fresh adjudication - Partly allowed in favour of petitioner.

Summary

Issues involved:
Rectification of mistake alleged in the common order of the Tribunal related to the deletion of interest receivable on advance paid by the assessee to M/s Ceat Tires Ltd.

Detailed Analysis:

1. Rectification of Mistake:
The assessee filed miscellaneous applications seeking rectification of a mistake in the common order of the Tribunal related to the deletion of interest receivable on advance paid to M/s Ceat Tires Ltd. The counsel argued that there was no agreement between the assessee and Ceat Ltd., and the AO's finding based on the agreement was factually incorrect. The Tribunal had decided against the assessee, setting aside the CIT(A)'s order and confirming the addition made by the AO. The assessee sought rectification under section 254(2) based on the mistake apparent from the record.

2. Arguments and Decision:
The DR opposed the applications, stating that the Tribunal had already considered all aspects of the matter. The Tribunal noted that the interest was receivable by the assessee on advance paid to M/s Ceat Tires Ltd. as per the agreement. However, the bench expressed the view that the matter should go back to the AO to ascertain if the assessee had decided to waive the interest. The Tribunal decided against the assessee based on a civil suit filed by the assessee against Ceat Tires Ltd., leading to a mistake in the order. The Tribunal rectified the mistake by deleting certain paragraphs and emphasized the importance of the accrual of income and the waiver of rights to receive income.

3. Decision on Remand:
The Tribunal decided to restore the matter to the file of the AO for fresh consideration to determine if the interest receivable on advance paid to M/s Ceat Tires Ltd. was waived by the assessee during the relevant year. The Tribunal set aside the CIT(A)'s order on the issue and directed the AO to decide afresh after giving the assessee an opportunity to be heard. The Tribunal treated the relevant grounds of the Revenue's appeal as allowed for statistical purposes.

4. Conclusion:
The miscellaneous applications of the assessee were partly allowed by the Tribunal, indicating a rectification of the mistake in the order related to the taxability of interest receivable on advance paid by the assessee. The decision highlighted the importance of proper verification of agreements and the accrual of income for tax assessment purposes.