TMI Blog2020 (1) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... .Sudhakar Reddy, Accountant Member And Shri S.S.Godara, Judicial Member For the Appellant : Shri Somnath Ghosh, Advocate For the Respondent : Altaf Husain, JCIT-DR ORDER PER S.S.GODARA, JUDICIAL MEMBER:- This assessee s appeal for assessment year 2009-10 arises against the Commissioner of Income Tax (Appeals)-6, Kolkata s order dated 28.02.2018 passed in case No.360/CIT(A)-6/Kol/2014-15, involving proceedings 154 of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file(s) perused. 2. The assessee pleadings raised in the instant case seeks to reverse both the lower authorities action disallowing / adding cost of construction amounting to ₹27,88,995/- in exercise of their rectification jurisdiction vested u/s. 154 of the Act. The CIT(A) s detailed discussion to this effect reads as under:- This appeal is directed against the assessment order u/s. 154 of the Income -tax Act,1961 (hereinafter referred to as the Act ) passed on 10.11.2014 by the Assistant Commissioner of Income Tax, Circle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionately in Apartment no. 4 11 between sold and unsold area but in respect of Apartment no. 5 cost allocation was disproportionate, higher for the area sold and lower for the area unsold. Thus, there was an under assessment by ₹ 27,88,995/-. 4. The A/R of the appellant made exhaustive submissions disputing the action of the AO, the relevant portion of such submissions is reproduced as under: - At the outset and in respect of ground no. 1, it is vehemently contended that in the instant case the assumption of jurisdiction by the Ld. Assessing Officer u/ s. 154 of the Income Tax Act, 1961 was not within the statutory parameters. It is most respectfully pointed out that there is no apparent mistake in the return and enclosures thereto and therefore the Ld. Assessing Officer exceeded his power and acted contrary to law in invoking s. 154 of the Income Tax Act, 1961 to impose his view that the cost allocation between sold and unsold area was disproportionate. An apparent mistake presupposes an arithmetical error and such obvious mistake so as not to require any process of interpretation to arrive at such conclusion. The application of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer to rectify, it is not sufficient, if there is merely a mistake in the order sought to be rectified. The mistake to be rectified must be one which is apparent from the record. A mistake apparent from record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on which there may be conceivably two opinions. It is settled in the case of STAR ROLLING MLLS P. D. - VS- C.I.T. (1988) 174 ITR 396 (CAL) that the provision of s. 154 of the Act is applicable obvious mistake only. There must be a mistake apparent on the face of the record. It does not cover any mistake which may be discovered by a process investigation, argument of proof It is also settled in the case of BALARAM, I.T.O. -vs- VOLKART BROTHERS (1971) 82 ITR 50 (SC) that not open to the ITO to go into the true scope of the relevant provisions of Act in a proceeding under section 154 of the 1961 Act. A mistake apparent 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 conceivably be two opinions. Further in the case of C.I.T. VSSATYANARAYAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the nature and source of the investment. The second situation arises where the explanation offered by the assessee is, in the opinion of the Assessing Officer, not satisfactory. Therefore, the action of the Ld. Assessing Officer to resort to the impugned addition of the sum of ₹ 27,88,995/- without giving any basis thereof in the order framed u/s 154 of the Act is thoroughly illegal and unfounded. In fact, there is no material evidence with the Ld. Assessing Officer to construe that such cost of construction was not actually incurred by the appellant. Therefore, his action was born of unilateral surmise, suspicion and conjecture not amenable to reason and having no relevance to facts. It is settled in the case of C.I.T. - vs- MAHARAJADHIRAJA KAMESWAR SINGH OF DARBHANGA (1933) 1 ITR 94 (PC) that an assessment is not a leap in the dark. The AO is not entitled to make a guess without evidence. It is also settled in the case of DHAKESWARI COTTON MILLS LTD. - VSC. I. T. (1954) 26 ITR 775 (SC) that an assessment which is based on conjecture, suspicion and surmise is invalid and unsustainable in law. In the present context, it is submitted that the investment in the sum of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elfsame issue. If he chooses to raise the jurisdictional sword, then he shall be perished by the same sword. The submission that the AD was satisfied, after verifying all records, when he passed the order u/s 143(3) of the Act dated 30.12.2011 is altogether unmeritorious. In such view of the matter, I have no hesitation to hold that the order passed by the AD under section 154 of the Act is valid in the eye of law, as the true intent behind passing such a rectification order is to ensure that the mistake apparent from record, is stricto sensu given effect to. Thus, the grounds raised in this respect fails . 3. Learned authorized representative vehemently submitted during the course of hearing that both the lower authorities have erred in law and on facts in taking recourse to sec. 154 rectification proceedings despite the fact that the impugned showcause notice dated 10.11.2014 (supra) had made it clear that it was an instance of under assessment of income amounting to ₹27,88,995/- than that of an apparent error. The Revenue draws strong support of the lower authorities impugned action. We notice in this backdrop of pleadings that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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