2021 (6) TMI 927 - AT - Income Tax

Rectification of mistake - apparent error in the order of the Tribunal as the issue of the addition made on account of unaccounted transactions with M/s Fortune Group was adjudicated - HELD THAT - From contents of Miscellaneous Application filed at the instance of Revenue stating that there is an apparent error in the order of the Tribunal as the issue of the addition made on account of unaccounted transactions with M/s Fortune Group was adjudicated without considering the fact that M/s Fortune Builders in its application to Income Tax Settlement Commission has taken a plea that addition on the basis of alleged diary BS-1 have been made in the case of M/s Soumya Homes Pvt. Ltd and therefore no addition of income was offered before Income Tax Settlement Commission. We however on perusal of the records placed before us find that during the course of hearing of appeal sufficient opportunity was granted to the revenue to file its documents. However revenue failed to file any such detail before this Tribunal of the application of M/s Fortune Builders made before the Income Tax Settlement Commission. Since the Tribunal has dealt with all the relevant facts and settled judicial precedents to adjudicate the issue in question before us, we find no mistake apparent on record in the impugned order and thus no rectification is called for. We therefore, in the given facts and circumstances of the case find no merit in the Miscellaneous Application filed by the Revenue and the same deserves to be dismissed.

Summary

Issues:
1. Consideration of unaccounted transactions with M/s Fortune Group.
2. Opportunity for cross-examination regarding addition made on the basis of seized diary.
3. Adjudication of the issue by the Tribunal.

Analysis:
1. The Miscellaneous Application filed by the Revenue challenged the Tribunal's order regarding the addition made on account of unaccounted transactions with M/s Fortune Group. The Tribunal had previously deleted the addition after finding no substantial evidence linking the transactions to the assessee. The Revenue contended that the Tribunal erred in not considering M/s Fortune Builders' plea before the Income Tax Settlement Commission, which stated that the addition was already made in another case. However, the Tribunal noted that the Revenue failed to provide any supporting documents during the appeal, and after thorough examination, concluded that the addition was unjustified as it was solely based on a diary prepared by a third party without any corroborating evidence linking the transactions to the assessee. The Tribunal emphasized the lack of incriminating material found during the search at the assessee's premises and the absence of an opportunity for cross-examination, leading to a violation of natural justice principles.

2. The Tribunal highlighted that it had already considered all relevant facts, including judicial precedents, while adjudicating the issue. The Tribunal's decision was based on the absence of a valid link between the assessee and the transactions mentioned in the seized diary. The Tribunal clarified that its decision did not prevent the Assessing Officer from reopening the case if a direct connection between the assessee and the transactions was established. Ultimately, the Tribunal found no error in its previous order and dismissed the Miscellaneous Application filed by the Revenue, stating that no rectification was necessary in light of the circumstances and facts presented.

3. The Tribunal's detailed analysis of the case, including the lack of supporting evidence, absence of incriminating material, and violation of natural justice principles, led to the dismissal of the Revenue's Miscellaneous Application. The Tribunal's decision was based on a thorough examination of the facts, legal principles, and precedents, ensuring a fair and just outcome in the matter related to unaccounted transactions with M/s Fortune Group. The Tribunal's order emphasized the importance of substantiated evidence and adherence to procedural fairness in tax matters, maintaining the integrity of the judicial process.