TMI Blog2014 (5) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... on merits in the main appeal before the Tribunal - when definite factual observations were made by the Tribunal that an amount of Rs.7,20,000/- had already been paid to Mr. Ajay Sukhwani and no further incentive was justified then the assessee has come up with the stand that the earlier deduction was wrongly claimed by the assessee. The assessee through this application has attempted to dissect the order of the Tribunal into pieces then to vent out his dissatisfaction regarding the finding arrived at by the Tribunal on the factual matrix of the case in the garb of application u/s 254(2) alleging mistakes apparent on the record - The mistakes pointed out by the assessee do not fall in any manner even in the definition of mistakes, what to say of any mistake apparent on the record - If the assessee had not been satisfied with the order of the Tribunal, the proper course for him was to file an appeal before the higher Appellate Authority - even the scope of provisions of section 254(2) is very limited and the Tribunal has got no authority to recall or review its entire order passed on merits of the case – Decided against Assessee. - M.A. No.265/M/2013 (Arising out of ITA No.391/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake apparent from the record. The Hon'ble Bombay High Court has held that, if there is no attempt to evade tax, then, payments made to relatives or sister concerns cannot be disallowed under section 40A(2) of the Act. The Applicant submits that although the Tribunal has recorded the argument of the Applicant that there is no evasion of tax as the directors are also paying tax at the maximum rate at Para 4 if its order, the Tribunal has erred in not considering the said argument and the decision of the Jurisdictional High Court which gives rise to a mistake apparent from the record. (3) The Applicant submits that the Applicant had relied on the Board's Circular No.6-P dated 6th July, 1968, to argue that if there is no evasion of tax, then provision of section 40A(2)(b) is not applicable. The Hon'ble Tribunal has failed to consider the same in its order, which gives rise to the mistake apparent from the record. (4) The Tribunal has concluded that the three directors are not working with the Applicant on full-time basis as they are deriving salary income from other companies or they have business profits as shown in the return of income. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been able to show what extra services were provided or offered by Mr. Ajay Sukhwani for receiving the extra incentive of Rs.10 Lakhs. Therefore, the Applicant submits that there is a mistake apparent from the record in the order of the Tribunal. (7) The Tribunal, after having accepted that the remuneration should be paid to Mr. Assan Sukhwani and Mr. Sushil Sukhwani, erred in only stating that the reasonable remuneration for them ought to be Rs.30,000/- per month i.e., Rs.3,60,000/- per year considering their educational qualification and work experience. 3. In para 2. I (1) of the application, the assessee has claimed that the Tribunal, vide impugned order, has observed that Mr. Ajay Sukhwani, Director of the company was paid Rs.3,60,000/- as salary and an additional sum of Rs.3,60,000/- as consultation charges totaling Rs.7,20,000/-. However, Mr. Ajay Sukhwani was in fact paid Rs.3,60,000/- only as consultation charges out of which Mr. Ajay Sukhwani has offered the net income of Rs.2,82,534/- in his return of income under the head Income from business and profession after reducing the expenditure incurred by the assessee. 4. We have gone through the recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the lower authorities that only a sum of Rs.3,60,000/- was paid to Mr. Ajay Sukhwani as salary and consultation charges and not a sum of Rs.3,60,000/- for each of the above account totaling Rs.7,20,000/-. Rather the assessee continued to enjoy the benefit of deduction of Rs.7,20,000/- allowed by the lower authorities. 7. Now the assessee has come with a new case that only a sum of Rs.3,60,000/- was paid to Mr. Ajay Sukhwani on account of consultation charges and this Tribunal has committed an error while observing that a sum of Rs.7,20,000/- (Rs.3,60,000/-for salary + Rs.3,60,000/- for consultation charges) was paid to Mr. Ajay Sukhwani. This pleading of the assessee is not only against the own case of the assessee before the lower authorities but also against the facts on record. 8. In the next para i.e. 2.I.(2), the assessee has claimed that this Tribunal has failed to take note of the decision of the Hon'ble Bombay High Court in the case of 'CIT v. Indo-Saudi Services (Travels) P. Ltd.' [(2009) 310 ITR 306 Bom.] wherein the Hon'ble Bombay High Court has held that if there is no attempt to evade tax then payment made to relatives or sister concerns cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of section 115.O of the Act, hence this contention of the assessee is also proved to be wrong. Even otherwise the above cannot be said to be a mistake apparent on record. 10. Vide para 2.I (4), the assessee has claimed that the Tribunal has erred in concluding that the three directors of the company were not working on full time basis as they were deriving salary income from other companies or they have business profits in their return of income. The applicant through this ground has contested the finding of facts arrived at by the Tribunal on the merits of the case. The Tribunal after detailed discussion of the matter as well as after analyzing the facts and material on record including the income tax returns of the director has given a finding of the fact which cannot be said to be a mistake apparent on the record. It was the assessee who has claimed that the three directors of the company to whom the incentive of Rs.10,00,000/- each was claimed to be paid, were fulltime directors and the same was paid to them in lieu of their services, which was disallowed by the authorities below. Hence, it was incumbent upon this Tribunal to discuss this contention of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was in fact also allowed to the assessee. Even thereafter the assessee did not move any rectification application. The assessee even did not point out this double benefit claimed and allowed to the assessee during the argument on merits in the main appeal before this Tribunal. However, when definite factual observations were made by the Tribunal that an amount of Rs.7,20,000/- had already been paid to Mr. Ajay Sukhwani and no further incentive was justified then the assessee has come up with the stand that the earlier deduction was wrongly claimed by the assessee. We may further add that if the averments as made in the application are taken to be correct, the assessee might have put itself into the risk of initiation of penalty and prosecution proceedings against it under the relevant provisions of the Act for furnishing false statement of accounts and thereby concealing the actual income. However, since we have not accepted the contention of the assessee, we do not deem it proper to further deliberate on this aspect of the matter in the present rectification application. 14. The assessee through this application has attempted to dissect the order of the Tribunal into pieces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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