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TMI Blog2015 (7) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... any Circle-IV, Bombay vs. Volkart Brothers and others [1971 (8) TMI 3 - SUPREME Court] wherein held that “a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on debatable point of law is not a mistake apparent from the record.” - Decided in favour of assessee. - I.T.A. No. 3819/DEL/2014 - - - Dated:- 20-7-2015 - Shri S.V. Mehrotra and Shri H.S. Sidhu, JJ. For the Petitioner : Sh. Ankit Gupta, Adv. For the Respondent : Sh. Gaurav Dudeja, Sr. DR ORDER PER H.S. SIDHU : JM This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals), Muzaffarnagar dated 31.3.2014 pertaining to assessment year 2009-10 and following grounds have been raised:- 1. That the notice issued and order passed u/s 154 are illegal, bad in law and without jurisdiction. 2. That, in view of the facts and circumstances, the order passed under section 154 of the Act is illegal, bad in law and cannot be justified by any material on record and the CIT(A) has also erred in u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mises and conjunctures. The additions made cannot be justified by any material on record. 11. That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made. 12. That the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice and the same has been passed without affording reasonable and adequate opportunity of being heard. 13. That the interest u/s 234B has been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out. 14. The appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal. All of the above grounds of appeal are without prejudice and are mutually exclusive to each other. 2. The brief facts of the case are that the assessment in this case was completed u/s. 143(3) of the Act dated 23.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the case law relied upon by the assessee and rejected the same. Since there was apparent mistake on the face of record, the AO disallowed cash purchases made at ₹ 33,70,800/- u/s. 40A(3) of the Act which was added to the income of the assessee vide order dated 17.6.2014 passed u/s. 154 of the I.T. Act, 1961. 3. Aggrieved with the aforesaid Order dated 17.6.2013 passed by the AO u/s. 154 of the I.T. Act, assessee appealed before the Ld. CIT(A), who vide impugned order dated 31.3.2014 has dismissed the Appeal of the assessee. 4. Against the aforesaid order dated 31.3.2014 of the Ld. CIT(A), assessee appealed before the Tribunal. 5. Ld. Counsel of the assessee has reiterated the contention raised by the Assessee. He submitted that the legal issue in respect of additions made u/s. 154 without any mistake apparent on record and on debatable issue, which itself amounts to review the assessment order passed u/s. 143(3) of the Act and also stated that issues on merit are also squarely covered by the decision of the Hon ble Jurisdictional High court of Allahabad in the case of CIT vs. Banwari Lal Bansidhar 229 ITR 299 (All.). To support his contentions, he also filed the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see further placed reliance on the decision of Hon ble Allahabad High Court in the case of CIT vs. Banswari Lal Bansidhar 229 ITR 229 (All.). Further, on the point of GP, it was contended by the assessee that the AO at the time of assessment proceedings rejected the account books of the assessee u/s. 145 and increased the GP rate more than what had been shown by the assessee. Thus it was argued that if the books were rejected by the AO, Section 40A(3) of the Act would not be applicable. However, the AO rejected the contentions made by the assessee and held that the assessee had failed to explain the reason of the purchase made in cash exceeding ₹ 20,000/- aggregating to ₹ 33,70,800/- which was made in contravention of provisions of section 40A(3) of the Act. The AO also found distinguishable the case law relied upon by the assessee and rejected the same. AO observed that since there was apparent mistake on the face of record, he disallowed cash purchases made at ₹ 33,70,800/- u/s. 40A(3) of the Act which was added to the income of the assessee vide order dated 17.6.2013 passed u/s. 154 of the I.T. Act, 1961 and the same was upheld by the Ld. CIT(A) vide order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 has observed that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on debatable point of law is not a mistake apparent from the record. 8. Keeping in view of the aforesaid discussions and precedents relied upon by the Ld. Counsel of the assessee, it is amply clear that the issue in dispute is a legal issue in respect of additions made u/s. 154 without any mistake apparent on record and on debatable issue and we are of the view that the order u/s. 154 passed by the AO and upheld by the Ld. CIT(A) are not sustainable in the eyes of law. Therefore, we are of the considered view that the issue in dispute is squarely covered by the judgments mentioned in paras 7.3 7.5 of this order. Therefore, respectfully, following the precedents as above, we quash the order dated 17.6.2013 passed u/s. 154 of the I.T. Act by the AO and the order dated 31.3.2014 passed by the Ld. CIT(A) u/s. 250 of the I.T. Act and delete the additions emanate therefrom and allow the appeal of the Assessee. 9. In the result, the Appeal fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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