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TMI Blog2018 (9) TMI 1701X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment under Section 158BC of the Incometax Act, 1961 ('the Act' for short) was carried out in case of petitioner as well as Shri M. N. Patel for the block period. Assessment of total income of Rs. 3.06 (rounded off) was made. This included a sum of Rs. 2,27,41,125/( rounded of Rs. 2.27 crores) on the basis of loose papers seized by the Department, on substantive basis in the hands of the petitioner Company and on protective basis in the hands of Shri M. N. Patel. 3. The Company as well as Shri M. N. Patel challenged such assessment before the Tribunal. The Tribunal passed an order on 20.6.2000 in case of the company and deleted the addition in the hands of the company while making observations touching the liability of Shri M. N. Patel in this regard. Aggrieved by such judgment and order of the Tribunal Shri M. N. Patel approached the High Court. The High Court allowed the petition of Shri M. N. Patel by judgment dated 17.4.2001 and requested the Tribunal to hear both appeals simultaneously. The Tribunal thereupon decided the appeals of the company as well as Shri M. N. Patel by common order dated 10.10.2001 and restored entire issue back before the Assessing Officer. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd which required rectification. (iii) Against the Tribunal's order concerning the petitioner company the Revenue had already filed tax appeal. Such tax appeal was admitted by the High Court. When the High Court was thus in seisin of the issues the Tribunal could not have exercised powers of rectification. In this context reliance was placed on the decision of this Court in case of Commissioner of IncometaxIII vs. Munni Seva Ashram, reported in (2013) 38 taxmann.com 110. (iv) Counsel lastly contended that in any case this was not a fit case for exercise of powers of rectification by the Tribunal. While disposing of the tax appeals the Tribunal had examined all relevant aspects of the matter, evaluated the evidence on record and come to certain definite conclusions. In exercise of powers for rectification the issues cannot be reexamined. The power of the Tribunal under Section 254(2) of the Act is to correct an error apparent on record. In this context counsel relied on the following decisions of the Supreme Court. (a) In case of T.S.Balaram, Incometax Officer vs. Volkart Brothers, reported in (1971) 82 ITR page 50 (SC). (b) In case of Commissioner of Central Excise, Belapur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the same has to be brought to tax and if yes in whose hands on substantive basis. 9. In clear terms therefore the Revenue's application for rectification covered both the appeals before the Tribunal. It was not confined to Shri M. N. Patel and for that matter, even to the company. Revenue's stand was simple. The income had to be taxed in the hands of someone. According to the Revenue, if the Tribunal was of the opinion that Shri M. N. Patel can be taxed only to the extent of 6.25% of the unaccounted income, the Tribunal committed an error in deleting even the protective assessment in the hands of the company to the extent of 93.75% of such sum. This contention of the petitioner is therefore rejected. 10. We also do not find that the application of the Revenue did not disclose grounds on which it urged the Tribunal to rectify the order. The Revenue's ground as noted earlier was that the income had to be taxed in hands of one of the two entities and the Tribunal had therefore committed an error in dissipating such amount altogether from assessment. Whether such ground should have been accepted is a matter presently we will not comment upon. Nevertheless this is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on protective basis in the hands of assessee M. N. Patel, whereas in fresh assessment order, the A.O. made addition of Rs. 2,16,56,000/being 100% share of profit calculated on the basis of Rs. 13,53,500/profit share of 6.25%. In fresh assessment, this entire 100% amount has been added in the hands of M. N. Patel on substantive basis. The A.O. made this addition in the hands of assessee on substantive basis. It appears that the AO added this amount in compliance to the direction of C.I.T., Rajkot an Addl.. C.I.T. By stating that these directions are statutory and binding nature. The total profit Rs. 2,16,56,000/was taxed on substantive basis as the relevant page No.8 and 10 were found and seized from the premises of the assessee M. N. Patel. It is admitted facts that and as discussed in various para of this order that in spite of availability of the sufficient material, documents and explanation for examinations and investigation by A.O. to put on record the complete facts but he failed to do so. He has also failed to comply with the directions of the ITAT. Further, this 100% profit has been added by A.O. in the hands of the assessee M. N. Patel on the basis of direction which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. But in fresh assessment, the A.O. made addition of Rs. 2,27,41,125/on protective basis. This amount Rs. 2,27,41,125/includes Rs. 10,85,125 /total of page No.8 and Rs. 2,16,56,000/being balance amount of profit 93.75% calculated on the basis of M. N. Patel's profit share 6.25 of Rs. 13,53,500/noted on page No.10. As per the discussion made while deciding MN Patel's share profit in above various para we do not find any justification of such addition on protective basis in the hands of assesseecompany Ambica Realities Pvt. Ltd. Therefore, same are deleted." 16. From the above noted discussion of the Tribunal's previous order in the tax appeals of Shri M. N. Patel and the company it can be seen that the Tribunal was acutely conscious about three aspects of the matter. (i) Firstly, whether the entire amount of Rs. 2.27 lacs could be stated to be the income of Shri M. N. Patel and could be taxed in his hands. (ii) Having held that only 6.25% of such amount which came to Rs. 13.53 lacs could be taxed in the hands of Shri M. N. Patel as part of his share out of the company's profit, what would happen to the rest of the amount and (iii) whether the remaining sum of Rs. 2.16 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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