AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 446
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....er any apparent error committed by the Tribunal or not while passing the impugned order on 13.12.2013. We think it appropriate to bear in mind certain basic principles for exercising powers contemplated in section 254(2) of the Income Tax Act, 1961. 4. There are series of decisions at the end of the Hon'ble Supreme Court as well as Hon'ble High Court expounding scope of exercising powers under section 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. For fortifying this view, we make reference to the decision of the Hon'ble jurisdictional High Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ld., 262 ITR 146 which has been upheld by the Hon'ble Supreme Court reported in 305 ITR 227. The Hon'ble Court ha....
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....rect law, because that will be process of adjudicating the controversy and that can lead to difference of opinion qua result. But if incorrect facts and incorrect provisions are considered, then that would come in the ambit of apparent error. 6. Apart from above, at the time of hearing, the ld.DR relied un two judgments of the Hon'ble High Court rendered in the case of CIT Vs. Gujarat Institute of Housing Estate Developers, and Pr.CIT Vs. Nirma Limited both reported in 84 taxmann.com 148 and 188 (Guj). He has placed on record copies of both these judgments. In the case of Gujarat Institute of Housing Estate Developers (supra), the assessee received contributions from its members. It claimed non-taxability of such contributions on the principle of mutuality. However, the AO did not concur with the view of the assessee and dispute travelled upto the Tribunal. The Tribunal passed a common order dated 29.9.2015 confirming the view of the AO and the CIT(A) holding that such income was taxable. In such order, Tribunal referred to the latest decision of Hon'ble supreme Court in the case of Bangalore Club Vs. CIT, 350 ITR 509 and noted that as per decision of the Hon'ble Supreme Court t....
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....on'ble High Court, therefore, MA ought not to be taken up. But the assessee went to the High Court and direction was made for adjudicating the MA. After hearing the assessee the Tribunal recalled its order. Dissatisfied with the order of the Tribunal, the Revenue went in appeal before the Hon'ble High Court, and the Hon'ble Court has vacated the order of the ITAT. Finding recorded by the Hon'ble High Court explaining the power of the Tribunal under section 254(2) is worth to note. It reads as under: "4. We have heard learned counsel for the parties. We have perused the documents on record. We are of the view that the Tribunal committed a legal error in recalling its earlier detailed judgement. As noted, there was a raging controversy between the Revenue and the assessee regarding the assessce company's claim of deduction of interest expenditure at all stages before the Assessing Officer. Commissioner (Appeals) and the Tribunal. This issue received minute scrutiny. The Tribunal in particular had referred to the facts on record, findings and the observations of the Assessing Officer and the Commissioner (Appeals) and ultimately gave its own reasoning for coming to the co....
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....32(4) on the Diary A-l found from Arvind A. Shah. (ii) Observation of Hon'ble ITAT : The Hon'ble ITAT on page 37 to 39 in para 8.10 to 8.11, while recording the findings has drawn presumptions u/s 132(4) in the case of appellant Jivraj V. Desai and recorded the following findings: "In the present case, we have noted that learned CIT(A) has overlooked the statement recorded u/s 132(4) of IT Act and given undue weightage to the statement recorded u/s 131 of IT Act which were otherwise not supported by evidence. At this juncture we may like to further clarify that the evidence are those evidences which are found at the time of search in search related matters. The entire proceeding revolved around the evidences or documents found in the possession, and unearthed at the time of search; so as to demonstrate that the diary A-l was belonging to the assessee and not to any third person". (iii) Observation in Asst. Order : Since the issue was not raised by AO during the course of assessment proceedings, there is no discussion in the assessment order on presumption u/s 132(4). (iv) Observation in CIT(A)'s Order : On page ....
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....as discussed in Para (viH available on page no.21 to 22. Para (vii) of the order of the CIT(A). (iii) Observation in Asst. Order : (iv) Observation in CIT(A)'s Order : (v) Conclusion : Accordingly, the submission with respect to the major amount of Rs. 23,43,08,700/- with respect to Manoj Vadodaria has altogether been ignored by the Hon'ble ITAT while dealing with the ground of appeal No.1 of the Revenue's appeal and only facts relating to the amount of Jignesh V. Desai & Vikasbhai Shah has been discussed in para 4.4, immediately after reproducing the table in para 4.3. 3. (i) Issue : Written submission of D.R. considered by Hon'ble ITAT was not made available to the A.R. of the appellant, (ii) Observation of Hon'ble ITAT : The Hon'ble ITAT on page nos. 22 to 25 in para 5.1 while considering the side of the Revenue has reproduced the relevant portion of the so called written submission of DR. (iii) Observation in Asst. Order : (iv) Observation in CIT(A)'s Order : (v) Conclusion : Neither the said written submission was filed during the course of appeal hea....
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....tion in CIT(A)'s Order : (v) Conclusion: The discussion of the Hon'ble ITAT on page No.28 & 29 in para No.8 is pertaining to the Statement u/s 132(4) of Arvind A. Shah on 20/10/2000, which is on the basis of discussion made by the AO on Page 8 of the Assessment Order. However, vide Synopsis of the Argument submitted during the course of appeal hearing by the A.R., attention to para No.2.3 was drawn on the Statement u/s 131 of the said Shri Arvind A. Shah recorded on 24/9/2002 wherein while answering to question No.6, the loose page No.93 to 99 were clearly explained as relating the said land. Accordingly, the conclusion has been drawn only on the basis of Statement dated 20/10/2000, ignoring Statement dated 24/9/2002. 6. (i) Issue Finding of the Hon'ble Tribunal that no supporting evidences were furnished. (ii) Observation of Hon'ble ITAT : Hon'ble ITAT after discussing the Statements recorded u/s 132(4) and 131 in para No.8.5 & 8.6 has come to the conclusion in para No.8.8 that assessee has changed the statement and no corroborative documentary evidences were submitted by the assessee to substantiate th....
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....part of the said 9 names and further about Vikasbhai A. Shah onus was discharged as copy of the Block assessment in the case of Vikas A. Shah wherein this aspect has already been considered was also pointed out in para No.9.2 of the Synopsis of Arguments and the copy of the assessment order in the case of Vikas Shah was also submitted on page Nos. 148 to 152 of the Additional Paper Book. Therefore, the said observation of the Hon'ble ITAT is contradictory to the records and facts. 8. (i) Issue : Thaltej land has been taken as security against the loan advanced. (ii) Observation of Hon'ble ITAT : The Hon. ITAT in para No.8.11 has given finding as under: "Therefore, the conclusion is that the Thaltej land was also connected with the sharafi business and the assessee was monitoring the land transaction so as to secure his loan advanced to the parties as noted in the diary. Learned CIT(A) has not looked in this aspect and unilaterally held that the amount which was recorded was required to be considered in the case of one Sri Manoj Vadodaria". (iii) Observation in Asst. Order : (iv) Observation in CITf AVs Order : ....
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....cords of Sri Manoj Vadodaria, it was not justifiable for CIT(A) to take decision by appreciating the facts of one side only". (iii) Observation in Asst. Order : (iv) Observation in CITf AVs Order : (v) Conclusion : It is respectfully submitted that when the CIT(A) passed order in case of appellant on 19/1/2001, only the notice u/s. 158BD was issued in case of Manoj Vadodaria and assessment was completed in case of Manoj Vadodaria u/s 158BD on 29/12/2004. Therefore, there was no occasion to consider CIT(A) the assessment in case of Manoj Vadodaria. Therefore, the said observation is also contrary to the facts and records." 10. Brief facts of the case are that a search under section 132 of the Income Tax Act, 961 was carried out on 20.10.2000. A notice under section 158BC was issued and served upon the assessee. He has filed his return of income on 14.10.2002 declaring NIL income for the block period starting from the assessment year 1991-92 and ending on 2001-02. According to the AO, the assessee is the main person of Master Group which is engaged in the development of residential and commercial blocks. Group is also in the business of land tra....
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....been taken on the face value then also, could the result on this aspect be different ? It is pertinent to observe that before the Tribunal the issue was, whether diary found during the course of search is to be considered as relatable to the assessee, and he is required to explain the noting in this diary. Second aspect is whether statement recorded under section 132(4) at the time of search of Shri Arvind Shah is to be given preference over the statement recorded under section 131 in September, 2002. To our mind, there is no apparent error in the order of the Tribunal. The Tribunal has made analysis of the statement of Shri Arvind Shah, and thereafter observed that according to this statement, diary was to be considered as relatable to the assessee, because the Shri Arvind Shah was accountant working with the assessee and used to write diary under the instructions of the assessee. Statement given at the time of search is the first statement which otherwise also admissible as provided in section 132(4), but that was also, according to the rule of prudence that once the first statement given by a person without any consultancy, the statement given after two years of search is being ....
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....uring the hearing, the ld.counsel for the assessee contended that these issues are involved in M.A.No.4 and 5. The assessee did not press these MAs., and they can be dismissed. MA No.4 and 5 are being filed in the order of the Tribunal dated 13/12/2013 passed in ITA No.3437 and 3438/Ahd/2007. Tribunal has decided other appeals also along with this order. Considering stand of the assessee, these two MAs. are dismissed. As far as MA No.2 and 3 in ITA No.99/Ahd/2004 and 106/Ahd/2004 are concerned, the assessee has raised a plea apart from other submissions that Tribunal has taken cognizance of the submissions made by the ld.DR in para 5.1. In other words, the Tribunal has reproduced written submissions given by the ld.DR. According to the assessee, copy of this submission was never given nor was discussed during the course of hearing. On verification of record, we find that copy of this written submission is available, but it is without signature of any authority and without any date. The above plea taken by the assessee has raised a doubt about sanctity of proceedings before the Tribunal, and if on verification of record, it is found to be correct, then proceedings would be ....
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....thing new is taken from the back of the assessee. Thus, we are of the view that arguments of the assessee in this respect are devoid of any merit because alleged submissions was one fold of contentions amongst others, and not some discovery of new facts. Even for arguments sake, it is presumed that copy was not supplied then also this one-half page submission reproduced by the ITAT is not a sole basis of reasoning given in its order. It is just one facet for corroboration of conclusions. On the basis of this plea of the assessee, we cannot say that proceedings were vitiated or any error crept in the finding of the Tribunal. The assessee could file appeal and point out this error, but it does not fall within the ambit of section 254(2) of the Act. 16. Next error pointed out by the assessee is that while recording conclusion in para 8.8, the Tribunal made reference to the statement recorded under section 132(4) and 131 of Shri Arvindbhai Shah, but failed to take cognizance of various loose papers found at the time of search inventorised as A/3, A4 containing page nos.26 to 52 of A/3 and 91 of A/4. The ld.CIT(A) has considered these pages, and thereafter harboured a belief that out....