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2016 (7) TMI 25 - ITAT CHENNAI

2016 (7) TMI 25 - ITAT CHENNAI - TMI - Rectification of mistake u/s 254(2) - Addition to income - assessee has offered an additional income of ₹ 15 lakhs over and above of his regular income - Tribunal found that the methodology followed by the assessee is not appropriate and reversed the findings of the CIT(Appeals) and restored that of the AO. Therefore, he requested that the above order of the Tribunal may be recalled/rectified. - Held that:- The power to rectify a mistake under section .....

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ering the modus operandi followed by the assessee, the Tribunal has taken serious objection and reversed the order of the CIT(Appeals) and confirmed the addition of ₹ 15 lakhs. In our opinion, the judgment of the Jurisdictional High Court in the case of Ramanlal Kamdar v. CIT (1976 (12) TMI 52 - MADRAS High Court ), wherein it was held that once the assessee accepts certain addition before authorities, he cannot be said to be aggrieved by that addition and cannot appeal against it before t .....

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partment came in appeal before the Tribunal with regard to deletion of addition of ₹ 15 lakhs by the CIT(A). The Tribunal decided the issue as follows : 7. We heard both sides in detail and examined the records of the case placed before us. The Assessing Officer has discussed the issue of additional income of Rs. 15 lakhs in a very detailed manner at pages 2 and 3 of his order. He has pointed out that the survey was carried out on 27.2.2008 and the major portion of the expenses had been bo .....

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held that this new item of expenditure has been booked to nullify the effect of additional income of Rs. 15 lakhs offered by the assessee at the time of survey. The Assessing Officer has also pointed out that even though there is a remarkable increase in the turnover reported for the impugned assessment year, the increase reflected in the corresponding gross profit is not satisfactory, which goes to show that the assessee has inflated many of the expenditures, especially after the date of surve .....

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n additional income of Rs. 15 lakhs over and above of his regular income. We extract the exact observation made by the Commissioner of Income Tax (Appeals):- I had gone through the submissions made by the AR and the observations of the A.O. It is a fact admitted by the assessee during the course of survey u/s 133A that the books of accounts were not regularly maintained. In order to overcome its deficiency, the assessee has come forward by disclosing the additional income of Rs. 15 lakhs over an .....

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utable to the profits arose out of the impugned business, what is the basis of bringing Rs. 15 lakhs through assessee s capital account? This amount of Rs. 15 lakhs ought to have been offered by the assessee over and above the regular profits reflected in his statement of accounts. 10. These vital aspects have not been examined by the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) has only stated that once the assessee has technically offered this income of Rs. 15 .....

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fered by inflating the quantum of expenditure. Therefore, we find that the addition cannot be deleted only on the basis of certain general proposition. One has to be meticulous with the facts of the case. 11. From the detailed examination of the surrounding facts of the case discussed by the assessing authority in detail, we come to a formidable conclusion that the assessee has manipulated his claim of expenditure so as to offset the revenue effect of additional income of Rs. 15 lakhs offered by .....

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er of Commissioner of Income Tax (Appeals) on the issue of deleting the addition of Rs. 15 lakhs. The said addition is restored. The Assessing Officer shall revise the assessment. 13. In result, this appeal filed by the Revenue is allowed. 2.1 According to the ld. AR, sustaining the addition of ₹ 15 lakhs amounts to double addition as the same amount has already taken as income of the assessee while computing the income for the assessment year 2008-09. He submitted that as ₹ 15 lakhs .....

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the assessee. So that, the AO made an addition of ₹ 15 lakhs while assessing the income for the asst. year 2008-09. However, the CIT(Appeals) deleted the same on the reason that the assessee has already taken income into profit and loss account a sum of ₹ 15 lakhs while computing the income of the assessee for the asst. year 2008-09. However, the Tribunal found that the methodology followed by the assessee is not appropriate and reversed the findings of the CIT(Appeals) and restored .....

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mount to review of our earlier order of this Tribunal, for which, the Tribunal has no power. 4. It is well-settled that statutory authority cannot exercise power of review unless such power is expressly conferred. There is no express power of review conferred on this Tribunal. Even otherwise, the scope of review does not extend to rehearing of the case on merit. It is held in the case of CIT vs. Pearl Woollen Millos (2011) 330 ITR 164/(2010) 191 Taxman 286 (Punj. & Har.) as under : that the .....

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l reverse a decision on the merits. The Tribunal was not justified in recalling its previous finding restoring the addition, more so when an application for the same relief had been earlier dismissed. 5. The scope and ambit of application of section 254(2) is very limited. The same is restricted to rectification of mistakes apparent from the record. We shall first deal with the question of the power of the Tribunal to recall an order in its entirety. Recalling the entire order obviously would me .....

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ction 254(1). Re-calling of the order is not permissible under section 254(2). Recalling of an order automatically necessitates rehearing and readjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms of Rule 24 of the ITAT Rules, 1963, and that too only in case where the assessee shows that it had a reasonable cause for being absent at a time when the appeal was taken up a .....

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der and that is not permissible under the I T Act. The power to rectify a mistake under section 254(2) cannot be used for recalling the entire order. No power of review has been given to the Tribunal under the I T Act. Thus, what it could not do directly could not be allowed to be done indirectly. 7. In the case of CIT vs. Hindustan Coca Beverages (P) Ltd. (2007) 293 ITR 163/159 Taxman 127 (Delhi), their Lordships while considering the powers of the Tribunal under section 254(2) of the IT Act, 1 .....

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