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2015 (3) TMI 749 - ITAT LUCKNOW

2015 (3) TMI 749 - ITAT LUCKNOW - TMI - Rectification of mistake - Tribunal has not considered the correspondence exchanged between the assessee and the Assessing Officer with regard to the purchase of goods for a sum of ₹ 17,989,142/- from M/s J.S. Jain Agro Industries Pvt. Ltd. (Shamily Party) in a proper manner and has confirmed the additions on account of unexplained investment - Held that:- . From the orders of the lower authorities, we find that after collecting the evidence from JSJ .....

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any fraud by showing wrong sales in its name, there could have been some criminal complaint or FIR against JSJAI. But nothing has been done by the assessee against JSJAI. Even till final hearing of the appeal before the Tribunal, the ld. counsel for the assessee could not place any evidence on record as to how and when he has recovered the outstanding debit balance of ₹ 17,98,142.70 from JSJAI nor did he claim it to be as bad debt if he failed to recover it for any reason. All these facts .....

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Since the Tribunal has examined all the facts in the light of the orders of the lower authorities and the rival submissions and adjudicated the issue after taking into account all minor details and the assessee sought re-appreciation of facts through its Miscellaneous Application, which is not permissible under the law, we find no error apparent in the order of the Tribunal and we accordingly reject the Miscellaneous Application of the assessee. - Decided against assessee. - M.A. .....

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d legal arguments raised on behalf of the assessee during the course of hearing of the appeal. Therefore, an error is crept in the order of the Tribunal, which calls for rectification. 2. The ld. counsel for the assessee, besides explaining the facts of the case, has submitted that the Tribunal has not considered the correspondence exchanged between the assessee and the Assessing Officer with regard to the purchase of goods for a sum of ₹ 17,989,142/- from M/s J.S. Jain Agro Industries Pvt .....

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ition owing to non-applicability of section 69B of the Act has been raised on behalf of the assessee with reference to and with the support of material information already on record, but the Tribunal has not taken into account the specific plea while deciding the issue. It was further argued that while deciding the issue, the Tribunal has wrongly shifted the onus upon the assessee/appellant by upholding the findings of the first appellate authority to the effect that the assessee had not furnish .....

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that the arguments raised by the ld. counsel for the assessee was taken into account by the Tribunal while adjudicating the appeal. The Tribunal has recorded complete facts borne out from the orders of the lower authorities and after taking into account the rival submissions of the parties, the Tribunal has adjudicated the issue and finally concluded that the ld. CIT(A) has properly examined the issue in the light of the given facts and since no infirmity was found in the order of the ld. CIT(A .....

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nt was furnished by JSJAI in which debit balance was shown at ₹ 899.30 lakhs. These facts were confronted to the assessee and the assessee has submitted reply, which were again confronted to JSJAI. While adjudicating the issue, the Tribunal has taken into account the correspondence exchanged between the assessee and the Assessing Officer and the Assessing Officer of the JSJAI and the Tribunal has also taken a note of the observation of the ld. CIT(A) that if the debit balance of ₹ 17 .....

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the appeal by the Tribunal on 7.3.2014, and noted that no effort was made by the assessee to recover the said amount from JSJAI if it has not purchased H.R. coils from JSJAI. 5. We have carefully examined the order of the Tribunal and we find that the Tribunal has taken into account all the relevant facts and arguments of the parties and after taking into account all these facts, the Tribunal has concluded that since the assessee has been showing debit balance in the name of JSJAI in its books o .....

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the course of assessment proceedings the assessee has filed the list of debtors and creditors giving the details of amount/balance as on 31.3.2003 receivable from the debtors and payable to the creditors. A sum of ₹ 17,98,142.70 was shown as debit balance i.e. receivable from JSJAI. In order to verify the correctness of the details submitted by the assessee, the Assessing Officer asked JSJAI to furnish copy of account and in response thereto JSJAI has furnished copy of accounts which is re .....

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lance 17,99,042 899.30 r. 5. From the above details, the Assessing Officer noticed that the assessee-company has purchased goods for a sum of ₹ 17,99,042 on different dates as mentioned above. A copy of the letter and copy of account received from JSJAI have been provided to the assessee and in response thereto the assessee has stated that the assesseecompany has not purchased any goods from JSJAI. After considering the reply of the assessee, a letter dated 20.1.2006 was written to JSJAI a .....

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ssessee vide letter dated 28.2.2006 and the assessee was required to explain as to why the amount of sale made by the above party to the assessee should not be added to the total income of the assessee being unaccounted purchase. In response thereto, the assessee has filed an affidavit of its Director, Shri. S. S. Agarwal disputing the sales made by JSJAI to it (the assessee), but he has not filed any confirmation of account of JSJAI as appearing in its books of account. The Assessing Officer ha .....

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the back of the assessee should be tested through cross-examination and also requested the Assessing Officer to summon the responsible Director of JSJAI for cross-examination, but the assessee was not allowed an opportunity to cross-examine the responsible Director of JSJAI. Therefore, the addition made by the Assessing Officer was not sustainable. 7. The ld. CIT(A) re-examined the entire issue but was not convinced with the explanations furnished by the assessee as he was of the view that in i .....

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From the above, following facts emerge. 1. The assessee claims that he had made no purchase from M/s J.S. Jain Agro & that the amount was due from them & they have wrongly reversed the entry by showing sale to them. 2. Assessee has pointed several discrepancies in the bills to indicate the sale was not genuine. 3. Assuming that if the contention of the assessee is true then this is a fraud perpetuated by J.S. Jain Agro & the assessee should atleast have filed an FIR or Court case to .....

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ter to M/s J.S. Jain Agro disputing this amount and to give a copy of same to me. Even this was declined by the directors of the company. 7. The assessee company on its part did not do anything to dispute the amount with the party at that point of time or during last 10 years or even during appellate proceedings. 8. The only conclusion that can be drawn from this conduct is that the assessee is raising a bogey of false bill before the department without disputing the same with the party who is a .....

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er. Our attention was also invited to the letter dated 10.3.2006 of the assessee written to the Assessing Officer, in which a specific request was made to allow an opportunity to cross-examine the responsible Director of JSJAI to verify the correctness of the transaction along with books of account. Despite a specific request, the Assessing Officer has not allowed any opportunity to the assessee to cross-examine the responsible person of JSJAI. Our attention was also invited to the affidavit of .....

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basis of that evidence is not sustainable in the eyes of law. It was also contended that the sales declared by the assessee were accepted in the VAT assessments. It was also contended that no sales were made to the assessee as shown by JSJAI in its statement during the period 2.5.2002 to 15.5.2002. 10. The ld. D.R., on the other hand, has contended, beside placing heavy reliance upon the order of the ld. CIT(A), that the assessee himself has furnished the details of amount/balance as on 31.3.20 .....

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h as to how and when the aforesaid outstanding amount was recovered from JSJAI. The ld. D.R. further contended that the outstanding amount is not a small amount which can be ignored by any businessman. If the assessee has not purchased the alleged goods from JSJAI, an effort could have been made by the assessee to recover the aforesaid outstanding amount from JSJAI. Therefore, the ld. CIT(A) has rightly taken cognizance of these facts while confirming the addition. The assessee has raised object .....

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ing given a thoughtful consideration to the rival submissions and from a careful perusal of record and the documents placed on record, we find that during the course of assessment proceedings, the assessee-company filed the list of debtors and creditors vide their reply dated 30.5.2005 in which a sum of ₹ 17,98,142.70 was shown as debit balance receivable from JSJAI as on 31.3.2003. In order to verify the genuineness, the Assessing Officer has asked JSJAI to furnish the copy of the account .....

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ssessee that it has not made any purchase from JSJAI as shown in the statement filed by JSJAI. On receipt of this information, the Assessing Officer further confronted these facts to JSJAI and JSJAI was asked to furnish necessary evidence about receipt of goods and the details of transport by which the goods have been transported, vide letter dated 20.1.2006. In response thereto JSJAI has furnished the details of invoices along with transport receipts of M/s Deep Goods Carrier, Railway Road, Sha .....

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er to allow cross-examination of the responsible Director of JSJAI. Since the assessment was going to be time barred, the Assessing Officer completed the assessment vide order dated 17.3.2006. 12. Though the assessee has filed an appeal before the ld. CIT(A), but did not file any confirmation from JSJAI with regard to the debit balance shown in its books of account as on 31.3.2003. The ld. CIT(A) has taken note of the fact that according to the assessee a sum of ₹ 17,98,142.70 was the debi .....

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assessee has raised technical objection to the evidences collected by the Assessing Officer during the course of assessment proceedings. From the orders of the lower authorities, we find that after collecting the evidence from JSJAI, the Assessing Officer has immediately confronted the same to the assessee. Thereafter the ld. counsel for the assessee asked the Assessing Officer to afford an opportunity to cross-examine the responsible Director of JSJAI but he has not made any effort to obtain th .....

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not place any evidence on record as to how and when he has recovered the outstanding debit balance of ₹ 17,98,142.70 from JSJAI nor did he claim it to be as bad debt if he failed to recover it for any reason. All these facts support the case of the Revenue that the assessee has made purchases as declared in the books of JSJAI out of its books of account and made sale thereof and earned profit. Since the assessee has been showing debit balance in the name of JSJAI in its books of account an .....

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d we find no infirmity therein. Accordingly we confirm the same. 14. The scope of provisions of section 254(2) of the Act is limited and only those errors which are apparent from the record can only be rectified. 15. The scope of provisions of section 254(2) of the Act has been repeatedly examined by the Hon'ble Apex Court and various High Courts and it was held that the Tribunal can rectify only those mistakes which are arithmetical or clerical or apparent in its order. The Tribunal has no .....

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only those powers which have been conferred upon it. The only power conferred on the Tribunal u/s 254(2) of the I.T. Act, 1961 is to rectify any mistake apparent from record. The jurisdiction to review or modify orders passed by the authorities under the Act cannot be interfered with on the basis of supposed inherent rights. U/s 254(1) of the Act, the Appellate Tribunal, after hearing the contesting parties, can pass such order as it deems fit. Sec. 254(2) of the Act specifically empowers the Ap .....

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6. In the case of CIT Vs. Suman Tea and Plywood Industries (P) Ltd., 226 ITR 34 their Lordships of Calcutta High Court have expressed similar observations after holding that under section 254(2) of the Incometax Act, an order, which has been passed by the Tribunal reaches finality the moment the same is passed; cannot be touched thereafter. By section 254(2) of the Act, the Tribunal, however, has been authorized to rectify mistakes in its orders, which are apparent on the face of the records. Th .....

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ke apparent from the record either suo moto or on an application. If in its order there is no mistake which is patent and obvious on the basis of the record, the exercise of the jurisdiction by the Tribunal u/s 254(2) will be illegal and improper. An oversight of the fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference procee .....

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d by it under sub-sec. (1) of section 254 with a view to rectifying any mistake apparent from the record. The power of the Tribunal conferred by sub-section (2) of section 254 for rectifying any mistake apparent from the record cannot be exercised by the Tribunal to recall any order passed by it under section 254(2). Further, reviewing and recalling an order is one thing and rectifying a mistake in the order which is apparent from the record is quite another. In the absence of any statutory prov .....

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olkart Brothers; 82 ITR 50 (SC) have held that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from record. Their Lordships have further held that if a statement of any person has been recorded without producing him in the witness box, the authorities should not act upon th .....

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ter more of merit and cannot be rectified within the scope of rectification. The powers of the Tribunal while making a rectification were again examined by the Apex Court in the case of CIT Vs. Hero Cycles Pvt. Ltd.; 228 ITR 463 in which their Lordships have held that rectification can only be made when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from record. Rectification is not possible if the question is debatable. Moreover, a point which was n .....

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is done, it would amount to an amendment of an earlier order with a view to rectify a mistake apparent from record, but it would be an order passed on reappraisal of the material facts and circumstances and on a fresh application of the legal position which is not permissible within the scope of section 254(2) of the Act. 19. In the case of Ms. Deeksha Suri Vs. ITAT; 232 ITR 395 their Lordships of Delhi High Court have held in specific terms that the Incometax Appellate Tribunal is a creature of .....

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