2018 (6) TMI 446 - AT - Income Tax

Rectification of mistake - apparent error committed by the Tribunal - principles for exercising powers contemplated in section 254(2) - Procedure for block assessment u/s 158BC - whether diary found during the course of search is to be considered as relatable to the assessee? - Held that - According to the rule of prudence that once the first statement given by a person without any consultancy, the statement given after two years of search is being presumed to be given after due deliberations and consultation - thus Tribunal has appreciated the evidence according to its understanding and taken one of the possible opinions. Bifurcation of total amounts and as to how ₹ 23,43,08,700/- has been treated by the CIT(A) could be assessable in the hands of Manoj Vadodaria in whose case 153-BD proceedings was allegedly pending - Held that - Once the Tribunal has taken into consideration whole amount and appreciated the controversy with that angle, reversed the finding of the ld.CIT(A) then not taking into considering this issue separately, is not an apparent error. It is such a minor aspect which has not influenced the decision making processing. Cognizance of the written submission - Held that - Nothing new is contained in the submissions. It is not something, which if excluded, would change the result or impacted the assessee adversely - thus we are of the view that arguments of the assessee in this respect are devoid of any merit because alleged submissions was one fold of contentions amongst others, and not some discovery of new facts. Failure to take cognizance of various loose papers found at the time of search - Held that - Assessee is trying to point out very minor apparent error i.e. observation of the Tribunal that diary has a single entry ledger account - we do not see that reference to such small aspects would have bearing on the decision making process - these aspects are not to be looked into in a proceeding u/s 254(2) - we are of the view that the assessee has tried to get the order of the Tribunal reviewed in the garb of pointing out apparent mistake, which is not permissible in law - thus we do not find any apparent mistake in the order of the Tribunal - hence both the MAs. are dismissed.

Issues Involved:
1. Presumption under section 132(4) on the diary A/1.
2. Non-discussion about the amount deleted by CIT(A).
3. Written submission of DR not provided to the assessee.
4. Finding of ITAT contrary to the AO's findings.
5. Consideration of statement dated 20/10/2000 of Shri Arvind A. Shah.
6. ITAT's finding on lack of supporting evidence.
7. Onus relating to nine ledger accounts in the diary A/1.
8. Thaltej land as security against the loan.
9. CIT(A) not perusing the case records of Manoj Vadodaria.

Detailed Analysis:

1. Presumption under section 132(4) on the diary A/1:
The Tribunal noted that the diary A/1 found from Shri Arvind Shah's residence was written under the instructions of the assessee. The Tribunal gave preference to the statement recorded under section 132(4) at the time of search over the statement recorded under section 131 in 2002. The Tribunal concluded that there was no apparent error in its order as the statements and evidence were duly analyzed, leading to one of the possible opinions.

2. Non-discussion about the amount deleted by CIT(A):
The Tribunal considered the bifurcation of ?27,32,38,000/- and the deletion of ?23,43,08,700/- by CIT(A). The Tribunal impliedly addressed this issue in its overall finding, reversing the CIT(A)'s decision. The Tribunal concluded that the non-discussion of this specific amount separately did not constitute an apparent error.

3. Written submission of DR not provided to the assessee:
The Tribunal acknowledged the affidavit filed by the assessee claiming that the written submission of the DR was not provided. However, it concluded that the written submission did not introduce new facts and was consistent with the assessment order. Therefore, this did not vitiate the proceedings or constitute an apparent error.

4. Finding of ITAT contrary to the AO's findings:
The Tribunal addressed the issue of whether the diary contained purely sharafi transactions or other types as well. The Tribunal concluded that such minor discrepancies in observations did not impact the decision-making process and did not constitute an apparent error.

5. Consideration of statement dated 20/10/2000 of Shri Arvind A. Shah:
The Tribunal considered the statement recorded under section 132(4) and the subsequent statement under section 131. The Tribunal concluded that the initial statement given at the time of search was more reliable. The Tribunal found no apparent error in its preference for the earlier statement.

6. ITAT's finding on lack of supporting evidence:
The Tribunal noted that the CIT(A) had considered various loose papers and remand reports. However, the Tribunal concluded that the assessee failed to provide corroborative documentary evidence to substantiate its claims. The Tribunal found no apparent error in its conclusion.

7. Onus relating to nine ledger accounts in the diary A/1:
The Tribunal observed that the assessee failed to produce parties related to the nine ledger accounts. The Tribunal concluded that the CIT(A) had overlooked the fact that the addition deleted by CIT(A) did not form part of the nine names. The Tribunal found no apparent error in its conclusion.

8. Thaltej land as security against the loan:
The Tribunal concluded that the Thaltej land was connected to the sharafi business and was used to secure loans. The Tribunal found no apparent error in its conclusion that the CIT(A) had not considered this aspect.

9. CIT(A) not perusing the case records of Manoj Vadodaria:
The Tribunal noted that the CIT(A) could not have considered the assessment records of Manoj Vadodaria as the assessment was completed after the CIT(A) passed the order. The Tribunal concluded that this observation did not constitute an apparent error.

Conclusion:
The Tribunal dismissed both Miscellaneous Applications, concluding that there were no apparent errors in its original order. The Tribunal emphasized that the assessee's attempts to review the order under the guise of pointing out apparent mistakes were not permissible under section 254(2) of the Income Tax Act. The Tribunal's order was pronounced on 6th June 2018.

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