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TMI Blog2020 (8) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal at paragraph 13, page of 8 its order, to contend, without prejudice, in accordance with ground No. 4 of memo of appeal, that quantum/percentage of gross profit already offered and assessed to tax pertaining to alleged bogus purchases ought to be decreased from quantum/percentage of addition, if any, approved by the Tribunal vis-a-vis bogus purchases. It is stated that at the time of hearing, the appellant also submitted written submissions and case law paper book. The Ld. counsel argues that the Tribunal in the impugned order inter alia truncated addition from 12.5% to 5% of supposed bogus purchases without directing the AO to reduce from such quantum the sum of gross profit already disclosed and assessed to tax in connection with such bogus purchases. Thus it is stated that the Tribunal, inadvertently and through oversight, did not adjudicate on ground No. 4 embedded in appeal memo filed before it, which projects, without prejudice and independent argument, that gross profit already shown and assessed on bogus purchases ought to be reduced from amount representing restricted 5% addition approved by the Tribunal. Thus it is argued by the Ld. counsel that overlook ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, the Ld. DR submits that there is no mistake apparent from record in the impugned order passed by the Tribunal. She submits that the Tribunal has no power to review its order in the garb of section 254(2) of the Act. III 4. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. The issue for our consideration falls in a narrow compass. We have to decide whether the Tribunal in the impugned order has considered the 4th ground of appeal, which reads as under : "On the facts and in law and without prejudice to above grounds of appeal, the Ld. CIT(A) erred in sustaining an addition to the extent of 12.5% of the alleged bogus purchases without reducing the GP already shown by the appellant on these alleged bogus purchases." 4.1 Let us discuss the background facts of the case. The AO has made an addition of Rs. 31,65,79,780/- towards bogus purchases by working out the peak balances. There is no dispute that these were bogus purchases. In appeal by the assessee, the Ld. CIT(A) by following the judgment of the Hon'ble Gujarat High Court in Bholanath Poly Fab Pvt. Ltd. [355 ITR 290 (Guj)] and CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales. We have also noticed that the AO has accepted the sales. Hence there is merit in the contentions of the assessee that he could not have sold the goods without purchasing the materials. Under these facts, as per the decision rendered by Hon'ble Gujarat High Court in the case of Simit P Sheth (supra), the profit element embedded in such purchases may be assessed to tax. Since the suppliers have been branded as hawala dealers providing only accommodation bills without actually supplying materials, it is for the assessee to prove that the purchases were actually made from those suppliers only. In the instant case, the assessee has failed to prove the same, as he has taken the stand that he has purchased goods through brokers. In these set of facts, one of the possibilities is that the assessee could have purchased materials from one source and could have obtained accommodation bills from these hawala dealers. In these kind of situations, there is also a possibility that the assessee could have made profit on purchases in the form of savings by way of VAT tax and also by way of discounts. We have noticed that the Ld. CIT(A) has followed the decision rendered by Hon'ble Gujarat H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed to tax. We have earlier observed that the profit rate of 12.50% estimated by Ld CIT(A) is on the higher side. This is for the reason that the VAT rate applicable to the products dealt in by the assessee was only 4%. We have earlier observed that the assessee, at the most, could have made savings by way of VAT tax and obtained discount. The assessee could have also incurred expenses in getting the accommodation bills. Considering these facts, the profit that could have made by the assessee in the impugned purchases, in our view, may be determined @ 5%. Hence, we have held that the estimate of 12.50% made by the AO is on the higher side. Accordingly we modify the order passed by Ld CIT(A) on this issue and direct the AO to restrict the addition to 5% of the value of alleged bogus purchases." 4.2 Thus the 4th ground of appeal should not be seen in isolation. The Tribunal in the impugned order has considered all the grounds of appeal including the 4th one, while deciding the case. In the instant case, as mentioned above, the explanations given by the assessee have been duly considered. In the impugned order all the submissions and explanations by the assessee have been summari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Co. (1993) 203 ITR 497 (Bom), wherein their Lordships of the Hon'ble Bombay High Court have held: "Under s. 254(2) of the IT Act, 1961, the Tribunal may, 'with a view to rectifying any mistake apparent from the record', amend any order passed by it under subs (1) within the time prescribed therein. It is an accepted position that the Tribunal does not have any power to review its own orders under the provisions of the IT Act, 1961. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending its order. In the present case, in the first order, there is no mistake which is apparent from the record at all. The Tribunal was required to decide whether the commission payment of Rs. 54,000 was deductible under s. 37. After examining the circumstances, the Tribunal came to a conclusion that it was not so deductible. The Tribunal cannot, in exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. The mistake the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid- 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial work all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after the lockdown by observing that "In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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