2021 (2) TMI 212 - AT - Income Tax

Rectification of mistake - Unaccounted receipts - unexplained cash receipts being amounts received by assessee from Runwal Developers Pvt. Ltd. - CIT(A) restricting the addition by applying gross profit rate of 16% on alleged unaccounted receipt as alleged unaccounted profit earned by the appellant - HELD THAT - We find that the ld. AR placed on record the copy of the Tribunal order in the case of Runwal Developers Pvt. Ltd, for A.Y.2015-16 2020 (11) TMI 448 - ITAT MUMBAI . Tribunal while disposing off the appeal in the case of Runwal Developers Pvt. Ltd. had ultimately remanded the issue to the file of the ld. AO for the purpose of quantification of undisclosed income on the basis of incriminating materials / evidences and examine the availability of cash in the group as a whole. Revenue had preferred this Miscellaneous Application on 20/08/2020, on which date the order of the Tribunal in the case of Runwal Developers Pvt. Ltd., had already been passed and the prayer of the revenue that, appeal in the case of Runwal Developers Pvt. Ltd., had not attained finality is found to be factually incorrect. Hence, we hold that the prayer of the revenue does not fall within the ambit of any mistake apparent from record within the meaning of Section 254(2).Miscellaneous Application of the Revenue is dismissed.

Summary

Issues:
1. Recall of order passed by ITAT in ITA No.688/Mum/2018 dated 10/07/2019 and CO No.171/Mum/2019.

Analysis:
The case involved the scrutiny of the assessee's case for A.Y. 2015-16, where an addition of ?8.70 crores was made as unexplained cash receipts from a developer. The CIT(A) applied a gross profit rate of 16% to determine unaccounted profit at ?1.39,20,000. The ITAT considered whether the addition of ?8.70 crores was justified. The ITAT noted the gross profit earned by the assessee in the past years and directed the AO to delete the addition. The assessee's cross objection challenged the CIT(A)'s decision. The ITAT dismissed the revenue's appeal and the assessee's cross objection, deleting the addition.

The ITAT's order was challenged through a corrigendum application, where the ITAT clarified that the cross objection of the assessee was allowed. The revenue sought to recall the order, arguing that the ITAT did not consider the addition sustained by the CIT(A) and the fact that the developer had not offered the entire on-money amount as unaccounted income. The revenue's application was dismissed as the Tribunal had already considered the related issues and the developer's case had reached a final decision.

The Tribunal found that the revenue's prayer for rectification did not fall within the scope of rectifiable errors under Section 254(2) of the Act. Therefore, the Miscellaneous Application of the Revenue was dismissed on 11/12/2020.