TMI Blog2014 (9) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... bservations of the Tribunal cannot be read in isolation, but meaningfully without indulging in semantics - what the assessee wants and seeks, by way of rectification, is re-examination of entire bank accounts and re-computation of the turnover - the assessee wants enquiry on whether or not the assessee had received commission even when cheques had bounced or whether commission was paid on the transactions which had been made through the stock exchange - the Tribunal made it clear that 0.6% rate of commission would apply to the entire transaction of ₹ 104.76 crores including the transactions which were genuine, i.e. the transactions which were recorded in the stock exchange - this cannot be undertaken in exercise of power u/s 154 - the order passed by the Tribunal rejecting the application u/s 154 cannot be interfered – Decided against Assessee. - Income Tax Appeal 1/2014 - - - Dated:- 22-8-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Appellant : Mr. R. P. Garg and Mr. K. N. Ahuja, Advocates. For the Respondent : Mr. Kamal Sawhney, Sr. Standing Counsel with Mr. Sanjay Kumar, Jr. Standing Counsel. ORDER Sanjiv Khanna, J. (Oral) The assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit or loss in the share transactions. The books of accounts did not reflect the true nature of business or activities and in fact the appellant-assessee was carrying on business outside the books of accounts. On the question of rate of commission, they referred to the seized documents indicating commission charged was between 1% to 1.25%, whereas the same was shown to be between 0.05% to 0.1%. There was direct evidence of the assessee s indulgence in earning undisclosed income through accommodation/fictitious entries and it was not possible to ignore the seized material. In paragraph 16, the Tribunal specifically recorded that there was substantial credit of ₹ 104 crores in the large number of accounts maintained by the assessee, including benami accounts, described as dummy/feeder/main accounts. Through the said accounts, the assessee had carried on fictitious and under cover business. The relevant sub-paragraph read as under:- 16. ...................Similar are the entries in other pages. The contention of the assessee that the assessee did not carry on transaction with Sh. Jitesh (named on page 28) or that some, rough estimates and not actual transactions have to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o includes some genuine transactions carried' on by the assessee on which rate of commission was admittedly much lower ranging between 0.25% to 0.50%, Therefore, having regard to the entire gamut of facts, circumstances and material which is available on record, there does riot appear to be justifiable reasons to estimate the commission brokerage of the assessee by applying rate of 1.5% A of the total turnover. In our view it would be in the fitness of the things that the income earned. by the assessee by was of commission/brokerage on the turnover including accommodation entries provided to its clients is computed @.6% on the total turnover of ₹ 1,04,96,94,004/- on which' there is no dispute. We accordingly direct the AO to compute income on count of commission/brokerage. (emphasis supplied) 5. Accordingly, the Tribunal directed that the commission/brokerage of the assessee should be computed by applying the rate of .6% on the total turnover of ₹ 1,04,76,94,004/-, which was not disputed and accepted as the sum total of all transactions. The Tribunal deleted addition of ₹ 7.13 crores representing peak cash credit, observing that Section 68 should no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 104.76 crores and this was confirmed in the order of the Tribunal dated 30th November, 2004. Further, there was no mistake apparent from the record and the issue being debateable was outside the ambit and scope of Section 154 of the Act. 9. Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee observing that the Assessing Officer did not have jurisdiction to go into the issues raised as doctrine of merger would apply, for the turnover was computed and made subject matter of appeal. 10. The appellant-assessee preferred further appeal, but the same has been dismissed by the Tribunal vide order dated 17th May, 2013, observing:- 7. We have heard both the sides and gone through the application of the assessee and relevant provisions of law. Before adverting to the facts of the present case, it would be relevant first to discuss the provisions relating to section 154. A bare look at section 154 of the Act makes it amply clear that a mistake apparent from the record s is rectifiable. In order to attract the application of sec. 154, a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify u/s 154 it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a mistake apparent from then record. The plain meaning of the word apparent is that it must be something which appears to be so ex facie and it is in capable of argument or debate. It is, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. 8. Now reverting to the facts of the case in the light of rival submissions and case law cited, we find that the assessee, through this application u/s 154 before the AO sought reconsidering and re-determining the turnover, which was confirmed by the Tribunal vide order dated 30.11.2004 at 104,76,94,004/- on which there being no dispute (as observed by ITAT) which has already attained finality as income has been computed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd seeks, by way of rectification, is re-examination of entire bank accounts and re-computation of the turnover. Further, the assessee wants enquiry on whether or not the assessee had received commission even when cheques had bounced or whether commission was paid on the transactions which had been made through the stock exchange. In the order dated 30th November, 2004, the Tribunal made it clear that 0.6% rate of commission would apply to the entire transaction of ₹ 104.76 crores including the transactions which were genuine, i.e. the transactions which were recorded in the stock exchange. Similarly, the case of the appellant-assessee, that there were cross transactions amongst bank accounts, will require detailed scrutiny, examination and verification of entries and details. This cannot be undertaken in exercise of power under Section 154. There may be or may not be any error but the said determination would not be confined to arithmetical or adding figures, but explanation and answers would be required. In the facts of the present case, therefore, we do not think that the impugned order passed by the Tribunal, rejecting the application under Section 154, can be interfered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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