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2015 (7) TMI 765 - ITAT MUMBAI

2015 (7) TMI 765 - ITAT MUMBAI - TMI - Validity of re-opening of assessments - additions of Gross Profit made by the AO towards suppressed sales on account of suppression of electricity charges - ITAT deleted the addition - whether the Tribunal has deleted the addition on wrong appreciation of facts and the same has resulted in a mistake apparent from record? - Held that:- The power given to the Tribunal u/s 254(2) can be exercised by the Tribunal, even if the order passed by the Tribunal u/s 25 .....

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ting to the addition of Gross profit made on account of suppression of production/sales. In the miscellaneous petitions, the revenue has not pointed out any mistake on the decision rendered on the issues relating to validity of reopening of assessments. Hence the grounds relating to validity of reopening of assessments need not be recalled - Decided in part in favour of revenue. - MISC.APPLICATION Nos.337 to 341/Mum/2014 arising out of I.T.A. No.4059 to 4063/Mum/200 - Dated:- 8-7-2015 - S/Shri D .....

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sed by Ld CIT(A) for the above said years, wherein he had confirmed the validity of re-opening of assessments and granted partial relief in respect of additions of Gross Profit made by the AO towards suppressed sales. The Tribunal confirmed the order of Ld CIT(A) in upholding the validity of re-opening of the assessments. However, the Tribunal deleted the addition of Gross profit made towards suppression of sales in all the years referred above. 3. In the miscellaneous petitions, the revenue has .....

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, the AO estimated the production suppressed by the assessee and also estimated the suppressed Gross profit and added the same. 4. The revenue has further stated that the assessee had also suppressed the actual electricity payments made by it. For example, in the year relevant to the assessment year 2000-01, the assessee had paid electricity charges of ₹ 4,99,363/-, but it has accounted only ₹ 50,000/- in its books of account. It is stated that the assessee has accepted the fact of s .....

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delete the addition made in AY 2000-01 on the erroneous presumption that the addition was made in that year on account of power theft, which is against the facts available on record. Accordingly it was pointed out that the incorrect appreciation of facts has led to a mistake apparent from record in the order passed by the Tribunal for AY 2000-01. 6. The revenue has pointed out that the Tribunal has proceeded to delete the addition of Gross profit made towards suppressed production/sales in AY 2 .....

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the revenue that the Tribunal has deleted the addition made in AY 2001-02 to 2004-05 also on wrong appreciation of facts and the same has resulted in a mistake apparent from record. Accordingly it has been prayed that the common order, referred above, should be recalled. 8. The Ld A.R appearing before us strongly opposed the miscellaneous petitions filed by the revenue. He submitted that the Tribunal has deleted the addition by on proper reasoning by observing that the methodology adopted by the .....

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ly he submitted that there is no merit in the contentions of the revenue that there are mistakes apparent from record in the common order passed by the Tribunal. He submitted that the Tribunal is empowered u/s 254(2) of the Act to correct non-debatable mistakes apparent from the record. The ld A.R submitted that the prayer made by the revenue in the impugned petitions are debatable in nature. Accordingly he submitted that the relief sought by the revenue would lead to review of the order passed .....

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following case law:- (a) Tata Communications Ltd Vs. CIT (124 TTJ 721)(Mum-SB) (b) R.W Promotion Pvt Ltd (MA No.194/Mum/2013) (c) DCIT Vs. Padam Prakash (HUF) (121 TTJ 593)(Del-SB) Accordingly, the Ld A.R contended that the miscellaneous applications filed by the revenue are liable to be dismissed. 10. We have heard rival contentions and perused the record. There should not be any dispute with regard to the fact that the power given to the Tribunal u/s 254(2) of the Act is limited one and the Tr .....

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High Court. We notice that the Tribunal has passed an order against the miscellaneous application filed by M/s R.W. Promotions P Ltd (supra), wherein the Tribunal has refused to adjudicate the said miscellaneous application on the ground that the assessee has filed appeal before the High Court. The reasoning given by the Tribunal was that the judicial propriety does not allow the assessee to seek efficacious remedy simultaneously before two authorities. The said order was challenged by M/s R.W P .....

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s reproduced above, and section 260A of the Income tax Act, 1961 we are of the view that the Tribunal s order and impugned in the Writ Petition cannot be sustained. This Court also has clarified the legal position in an order passed copy of which is annexed at page 146 of the petition paper book. We have noted that such a power is possessed by the Court or Tribunal and even after it disposes of the main matter and application of the nature made and to seek rectification or correction of an appar .....

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of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, then, such an amendment shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard. We are not confronted with such a situation. What we are called upon to decide is the correctness of the view taken by the Tribunal and that the judicial propriety does not .....

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) of section 254 cannot be invoked either by the assessee or by the revenue/Assessing Officer. Such a power enables the Tribunal to rectify any mistake apparent from the record and make amendments. That in a given case would not only save precious judicial time of the Tribunal but even of the higher Court. Only when the assessee or the Assessing Officer calls upon the Tribunal to undertake an exercise which is not permissible within the meaning of section (2) of section 254 that the Tribunal can .....

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contrary to the plain language of the two statutory provisions and which have been brought to our notice. Nothing contrary having been pointed out and such a view of the Tribunal may affect and prejudicially the interest of the revenue that all the more we cannot sustain the impugned order. The Writ Petition is allowed. The petitioners misc. application seeking to invoke the powers under sub.section (2) of section 254 of the Income tax Act, 1961 being Misc. Application No.194/M/2013 shall now be .....

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on suppressed production/sales was made by the assessing officer on two counts, viz:- (a) The suppression of electricity charges (b) The alleged power theft. It is pointed out that the issue relating to addition made on account of power theft is not available in assessment year 2000-01. The addition made in AY 2000-01 pertained to the Gross profit estimated on suppressed production on account of suppression of electricity charges. However, it is noticed that the Tribunal has proceeded to dispose .....

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Tribunal took note of the fact that the assessee has been acquitted from the power theft case and accordingly deleted the addition. 15. The Ld A.R submitted that the revenue has filed appeals before the Hon ble High Court of Bombay challenging the order passed by the Tribunal. The assessee has furnished copies of order passed by the Hon ble High Court, wherein following Substantial Question of Law has been admitted:- Whether on the facts and in the circumstances of the case and in law, the Hon .....

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in the methodology adopted by the assessing officer, yet the addition has been deleted mainly on the ground that the assessee has been acquitted in the Power theft case. Following observations made by the Tribunal vindicates this point:- The very fact that the learned CIT(A) has not accepted the assumption of the Assessing Officer that yield would be of 2.50 Kg indicate that the Assessing officer has proceeded to estimate the income arbitrarily and without any basis but an identical mistake was .....

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TAT) shows that the Court has categorically noticed that the seals were found intact and it would be stretching things too far to conclude that somebody has tampered with the meter. The Court has taken judicial notice of the fact that whenever glass goes inside the meter it can be replaced in the original position only if the meter is opened. In other words, meter has not been tampered with. In view of the categorical findings of the Additional Sessions Judge, Palghar, and admitted by the ITAT i .....

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