Tribunal Upholds Decision to Delete Rs. 8.70 Crore Addition; Revenue's Rectification Request Dismissed u/s 254(2.

The ITAT dismissed the revenue's application to recall its order on the assessee's case concerning unexplained cash receipts. The Tribunal had previously directed the AO to delete an addition of Rs. 8.70 crores, based on a gross profit analysis. The revenue's request for rectification was rejected as it did not meet the criteria under Section 254(2) of the Act. The ITAT clarified that the assessee's cross objection was allowed, and the Tribunal's decision was final, dismissing both the revenue's appeal and the assessee's cross objection. The Miscellaneous Application of the Revenue was dismissed on 11/12/2020.

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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 Rs. 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 Rs. 1.39,20,000. The ITAT considered whether the addition of Rs. 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.

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