2021 (4) TMI 758 - AT - Income Tax

Rectification u/s 254 - addition u/s. 68 and disallowance of bogus purchases - ITAT has erred in appreciating some of the evidence and submissions - HELD THAT - We find that the ITAT has elaborately discussed the issues both as regards addition u/s. 68 of the Act and disallowance of bogus purchases. The assessee s claim that ITAT has erred in appreciating some of the evidence and submissions do not amount to mistake apparent from record liable to be rectified u/s. 254(2) - The case laws referred by the assessee before us in the Miscellaneous Petition are not at all applicable to the facts of the present case. Various decisions regarding cash credit and bogus purchases claimed to have been filed by the assessee in the appeal proceedings are also on the facts of the individual case. Even the decision in the case of Mohammad Haji Adam Company 2019 (2) TMI 1632 - BOMBAY HIGH COURT is also on the facts of the individual case of trading concern and by no stretch of imagination lays down a specific law to be universally follows on account of bogus purchases. Appreciation of the facts by the Tribunal which as per the assessee is erroneous or wrong cannot permit review of the same by another Bench of the Tribunal in the Miscellaneous Application. There is no mistake apparent from record in the order of the Tribunal. Hence, this Miscellaneous Application by the assessee stands dismissed.

Summary

Issues involved:
1. Rectification of mistakes apparent from the record in the ITAT order regarding cash credit under section 68 of the Income Tax Act and disallowance of bogus purchases for the assessment year 2011-12.

Detailed Analysis:
The Appellate Tribunal ITAT Mumbai addressed a Miscellaneous Application seeking rectification of mistakes apparent from the record in the order pertaining to ITA No. 4929/Mum/2017 for the assessment year 2011-12. The ITAT had set aside the order of the learned CIT(A) concerning a cash credit of ?1,90,95,000 under section 68 of the Income Tax Act and a relief of ?92,54,561 by restricting disallowance on account of bogus purchases. The assessee contended that there were factual inconsistencies in the ITAT order regarding unsecured loans and bogus purchases, affecting the outcome significantly. The assessee highlighted that certain documents were not filed, leading to incorrect recording of details by the Tribunal, impacting the final decision on the issues (Para 2-5).

Regarding the cash credit issue, the assessee argued that the ITAT made factual errors in its order, leading to an incorrect addition of unsecured loans to the total income. The assessee pointed out that the Tribunal failed to consider certain documents and erred in its appreciation of the facts, affecting the decision. Similarly, concerning the addition on account of bogus purchases, the assessee claimed factual inaccuracies in the ITAT order, which substantially influenced the outcome. The assessee referenced unaddressed inconsistencies in the Assessing Officer's order and cited relevant case laws to support the contention that the ITAT's decision was flawed. The assessee emphasized that the Tribunal should have considered specific case laws, including the decision of the Hon'ble Bombay High Court, to arrive at a different conclusion. The assessee argued that the ITAT's failure to acknowledge corresponding sales for alleged bogus purchases rendered the 100% disallowance incorrect (Para 5).

In response, the learned Departmental Representative defended the ITAT's well-reasoned and elaborate order, stating that the assessee's attempt to seek a review under the guise of rectification was unwarranted. After careful consideration, the Tribunal found that the issues had been thoroughly discussed, and the alleged errors in appreciating evidence and submissions did not constitute mistakes apparent from the record. The Tribunal concluded that the case laws cited by the assessee were not applicable to the present case and that the facts and decisions regarding cash credit and bogus purchases were specific to individual cases. The Tribunal emphasized that erroneous factual appreciation by the ITAT did not warrant a review through a Miscellaneous Application (Para 7-8).

Ultimately, the Tribunal dismissed the Miscellaneous Application, stating that there was no mistake apparent from the record in its order. The decision was based on the understanding that the alleged errors did not meet the criteria for rectification under section 254(2) of the Income Tax Act. The order was pronounced, and the Miscellaneous Application was officially dismissed on 19.2.2021 (Para 8-9).