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TMI Blog2024 (2) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... or. In the wake of guidance provided by Tax Audit Report, the CPC do not appear to have committed any apparent error while making adjustment under section 154 of the Act. Any position to be taken contrary to the Tax Audit Report being in the realm of subjectivity is plainly opposed to the basic tenets of section 154 of the Act. Therefore without expressing our opinion on merits, we are convinced that alleged error sought to be pointed out on behalf of the assessee does not fall within the sweep of prima facie mistake of apparent nature envisaged under section 154 - The appeal of the assessee in rectification proceedings is thus not maintainable and hence requires to be summarily dismissed at the threshold as fairly accepted on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - CPC is bad in law and wrong on the facts and is therefore unstainable in law. ii. That the ld CIT(A) has erred in sustaining the addition of contingent liability of Rs. 7,82,85,769/- made by the Ld AO- CPC in order u/s 154 of the IT Act. iii. The Ld. CIT(A) did not consider the fact the appellant had neither claimed this contingent liability, being Entertainment Tax, as expenses in its Income and Expenditure account, nor collected or charged the same to its customers. iv. The Ld. CIT(A) erred in relying on several case laws which held that contingent liability could not be eligible for deduction u/s 37(1), even though the appellant did not claim the said contingent liability as an expense u/s 37(1). That the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee preferred an appeal before CIT(A) against the aforesaid order passed under section 154 of the Act. The CIT(A) however, declined any relief. 6. Further, aggrieved, the assessee preferred appeal before the Tribunal. 7. In the course of hearing before the Tribunal, the assessee adverted the audited financials statement and pointed out that in the Notes Forming Part of the Accounts for the year ended 31st March 2020 annexed thereto, the assessee has disclosed an amount of Rs. 7,82,85,769/- towards contingent liability in respect of the Entertainment Tax which may be payable to the Entertainment Tax officer, Delhi. The contingent liability, as per the notes to accounts, has been challenged by the assessee and is pending for adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed under section 143(1) of the Act before the CIT(A). The learned Counsel simultaneously insisted that the addition cannot be made when the expenditure has not been claimed at all while determining the taxable income. 7. The learned DR for the Revenue did not offer any fresh comment and relied upon the first appellate order in this regard. 8. We have carefully considered the rival submissions and perused the material available on record. The correctness of upward adjustment on account of contingent liabilities on the basis of Tax Audit Report for the purposes of drawing intimation under section 143(1) r.w.s 154 of the Act is in controversy. It is the case of the assessee that the contingent liabilities disallowed as inadmissible e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect or not. An error apparent from record means an error which strikes one on mere looking and does not need any serious justification. It is trite that the power of rectification can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from record in distinction to a purported mistake which requires to be established by arguments and long drawn process of reasoning on points on which there may possibly be two opinions. 9.3 In the instant case, the assessee has preferred captioned appeal arising in the rectification proceedings before the lower authorities to establish the factum of apparent mistake. In view of the narrow and limited scope of section 154 of the Act, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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