RAJESH TRADELINK PVT LTD, Ahmedabad V. THE Dy.CIT CENT CIR.1(4), Ahmedabad

MA 123/AHD/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7886 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESHCHANDRA SHARMA
• Assessee Lawyers: PF JAIN
• Keywords: Unexplained investment; Income from undisclosed sources; Block assessment; Onus to prove
• Section: 143(3); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT, JM AND SHRI A. MOHA N ALANKAMONY, AM) M. A. NO.123/AHD/2011 (IN IT (SS) A NO.238/AHD/2002 BLOCK PERIOD: 01-04-1 989 TO 18-04-1999) RAJESH TRADE LINK (P) LTD., 1, BASEMENT, SUMATHINATH COMPLEX, PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD PA NO. AABCR 0329 R VS THE D. C. I. T., CENT. CIR-1(4), 318, 3 RD FLOOR, AAYAKAR BHAVAN, AHMEDABAD (APPLICANT) (RESPONDENT) APPLICANT BY SHRI P. F. JAIN, AR RESPONDENT BY SHRI DINESHCHANDRA SHARMA, SR. DR DATE OF HEARING: 18-05-2012 DATE OF PRONOUNCEMENT: 25-05-2012 ORDER PER A. MOHAN ALANKAMONY : THIS MISC. APPLICATION IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE T RIBUNAL DATED 16-04- 2010 IN IT(SS)A NO.238/AHD/2002 FOR THE BLOCK PERIO D 01-04-1989 TO 18-04-1999 SEEKING RECALLING OF THE ORDER OF THE TR IBUNAL FOR RECTIFICATION. 2. THE LEARNED AR POINTED OUT BEFORE THE BENCH THAT THE TRIBUNAL HAD NOT CONSIDERED CERTAIN FACTS AND IN ITS WRITTEN SUBMISSION IT WAS PLEADED THAT - (1) DURING THE COURSE OF HEARING OF APPEAL ON 7-4-2010, FOR APPRECIATING THE MATERIAL FACTUAL ASPECTS OF MATTER , ATTENTION OF HON'BLE BENCH WAS DRAWN TO THE AFFIDAVIT EXECUTED BY APPELLANT ON 26-7-2008 AS REQUIRED BY THE I.T.A.T DURING THE PREVIOUS HEARING FOR THE FACTS OF CASE, BUT IN THE ORDER THI S AFFIDAVIT DETAILING THE MATERIAL FACTS WHICH INTER ALIA INCLU DED THAT OCTROI MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 2 RECEIPTS WERE NOT SEIZED FROM THE PREMISES OF THE A SSESSEE COMPANY HAS NOT BEEN CONSIDERED. (2) DURING THE HEARING ON 7-4-2010 FOR THE PURPOSE OF RECORDING ARGUMENTS / SUBMISSIONS OF THE APPELLANT BY THE BEN CH THE ATTENTION WAS DRAWN TO THE SYNOPSIS OF SUBMISSION F ILED BEFORE I. T. T. A T BUT THIS SYNOPSIS OF SUBMISSIONS HAS NOT BEE N CONSIDERED BY THE HON'BLE I.T.A.T. IN THIS SYNOPSIS ON FACTUAL AS PECTS EIGHT MATERIAL SUBMISSIONS AS REPRODUCED BELOW HAS BEEN N ARRATED BUT SAME HAS NOT BEEN CONSIDERED ; - SYNOPSIS OF SUBMISSION THE DEPARTMENTAL APPEAL AGAINST ORDER OF CIT(APPEAL) IS SUBMITTED TO BE WITHOUT MERIT AND NOT TENABLE EITHE R LEGALLY OR FACTUALLY. FACTUAL ASPECTS: ADDITION OF RS.4575000/- IS BASED ON SURMISES, CONJ ECTURES AND PRESUMPTION OF WRONG FACTS. 1. THE ADDITION HAS BEEN MADE ON THE BASIS OF PAYME NT OF OCTROI OF RS.101000/- ON 20/07/1999 CONSEQUENT TO SPOT INSPEC TION BY THE OCTROI DEPARTMENT ON 17/07/1999 AT THE BUSINESS PREMISES O F THE COMPANY, AND THE PAYMENT RELATED TO GOODS AT THE BUSINESS PREMIS ES. WHEREAS, THE INCOME TAX SEARCH WAS CONDUCTED ON 20/11/1999. THE GOODS IN RESPECT OF WHICH OCTROI HAS BEEN PAID PERTAIN TO TRANSACTIONS OF PURCHASES DULY RECO RDED IN THE BOOKS OF ACCOUNTS PRIOR TO SEARCH AND HENCE THESE TRANSACTIO NS DO NOT COME UNDER THE AMBIT OF UNDISCLOSED INCOME AS ENVISAGED IN CHA PTER XIV-B. FOR FINANCIAL YEAR 1999-2000 REGULAR ASSESSMENT HAS BEEN PASSED U/S 143(3) ON 27/03/2003 (THE ORDER HAS BEEN PLACED IN THE PAPER BOOK PAGE NO. 127 TO 128). 2. AT THE TIME OF SPOT INSPECTION BY THE OCTROI DE PARTMENT ON 17/07/1999 AT THE BUSINESS PREMISES OF THE COMPANY STOCK LYING IN THE GODOWN WAS PHYSICALLY VERIFIED AND INVENTORISED IN TERMS OF QUANTITY PERTAINING TO RESPONDENT AND TWO OTHER CON CERNS. FOR VERIFICATION OF OCTROI PAYMENT FOR THE FINANCIAL YE AR 1996-97 TO 1999- 2000 THE OCTROI DEPARTMENT ISSUED NOTICE TO THE RES PONDENT AND TWO OTHER CONCERNS AS EVIDENT FROM THE LETTER DATED 17/07/1999 ISSUED ALONGWITH INVENTORY OF STOCK. THE STOCK TAKE N AT THE GODOWN WAS DULY RECONCILED WITH THE BOOK STOCK AND THE OCT ROI DEPARTMENT MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 3 HAS NOT COME ACROSS ANY UNACCOUNTED STOCK AND THERE FORE, THE ADDITION OF UNACCOUNTED INVESTMENT IN PURCHASE ON T HE BASIS OF VALUE OF GOODS MENTIONED IN THE OCTROI RECEIPT IS S IMPLY ON PRESUMPTION BASIS. THE LEVY OF OCTROI IS NOT LINKED TO ANY SPECIFIC PURCHASE OF PARTICULAR DATE AND IT CAN BE EXPLAINED FROM THE OCTROI RECEIPT ITSELF IN WHICH THE COLUMN OF IDENTIFICATION OF GOODS, QUANTITY OF GOODS, VEHICLE NO., WEIGHT OF GOODS HAV E NOT BEEN FILLED IN BY THE OCTROI DEPARTMENT OBVIOUSLY FOR TH E REASON THAT AT THE TIME OF SPOT INSPECTION OF THE GODOWN ON 17/07/1999 NO GOODS WERE PURCHASED BY THE RESPONDENT. ON THE OCTROI RECEIPT THE WORDS 'CHECKING SQUAD', S POT INSPECTION HAVE ALSO BEEN CLEARLY MENTIONED. THE DATE-20/07/1999 AND THE TIME MENTIONED IN THE O CTROI RECEIPTS IS WITH REGARD TO THE PAYMENT DATE OF OCTR OI AND NOT PURCHASE OF GOODS. (I) THE SHOW CAUSE LETTER DATED 17/07/1999 IN GUJAR ATI FOR VERIFICATION OF OCTROI PAYMENT ISSUED BY THE OCTROI DEPARTMENT ALONGWITH THE INVENTORY TAKEN FROM THE GODOWN HAS B EEN PLACED ON PAPER-BOOK PAGE NO. 29 TO 34. (II) OCTROI RECEIPTS ON PAPER-BOOK PAGE NO. 36 TO 38 AND THE ENGLISH VERSION OF THE LETTER AND STOCK APPEAR ON P AGE NO. 97 TO 102. (III) ENGLISH VERSION OF LETTER AND STOCK INVENTORY APPEAR ON PAGE NO. 97 TO 102. 3. BY RELYING UPON NEWSPAPER CUTTING PLACED IN PAPER BOOK PAGE NO. 113, SEIZED FROM THE RESIDENCE OF J. M. KOTHARI, ASSESSING OFFICER HAS RECORDED HIS FINDING ON PAGE 4 OF ASSESSMENT ORDER AT SR. NO. (IV) THAT THE ALLEGED G OODS WERE IN MATADOR GJ-1-T-4698 AND LINKING THE OCTROI PAYMENT OF RS. 1 LACS TO THE SAID GOODS. THIS FINDING IS CONTRADICTORY TO TH E FACTS BECAUSE (I) THE SAID MATADOR WAS DETAINED BY THE OCTROI DEP ARTMENT AND INFORMATION WAS GIVEN TO THE SALES TAX AND CENT RAL EXCISE DEPARTMENT AS MENTIONED IN THE NEWSPAPER CUT TING. (II) THE CENTRAL EXCISE DEPARTMENT AND SALES TAX DEPARTM ENT DID NOT FIND ANY IRREGULARITY IN THE GOODS FOUND I N THE SAID MATADOR [REFER TO PAPER BOOK PAGE NO. 114, 115 AND 116] MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 4 (III) THE SAID MATADOR CONTAINED GOODS OF RS.192960/-PURC HASED FROM KAMAL AGENCY DULY RECORDED IN THE BOOKS AND MENTIONED IN THE ANNEXURE ATTACHED BY THE A.O. WITH THE ORDER. (IV) AFTER NO-OBJECTION AND COMPLETION OF INQUIRY F ROM EXCISE AND SALES TAX DEPARTMENT THE OCTROI DEPARTMENT RECOVERE D OCTROI OF RS.35000/- ON ADHOC BASIS ON THE SAID GOO DS IN THE MATADOR AND THE SAID PAYMENT IS DULY RECORDED IN TH E REGULAR BOOKS ON 31/07/1999 VERIFIABLE FROM THE SEIZED FLOP PY AND DETAILS OF OCTROI EXPENSES ATTACHED WITH THE ORDER OF THE A.O. [FOR OCTROI RECEIPT REFER TO PAGE NO. 117] THE AMOUNT OF RS.1 LACS OF OCTROI PAYMENT MENTIONED IN THE NEWSPAPER CUTTING IS IN RESPECT OF GOODS FOUND AT B USINESS PREMISES AND IRREGULARITIES NOTICED BY THE OCTROI D EPARTMENT DURING SPOT INSPECTION AND VERIFICATION OF OCTROI PAYMENT WHICH MIGHT HAVE ARISEN FOR THE FACT THAT THE ORIGINAL OCTROI RECEIP TS ARE SENT TO THE PRINCIPAL FOR REIMBURSEMENT AND THE GOODS DEALT IN ARE LIABLE TO EXCISE DUTY AND SALES TAX. 4. BY APPLICATION DATED 26/11/2001 TO OCTROI DEPARTMEN T THE ASSESSEE HAS REQUESTED FOR CLARIFICATION AS TO THE COMPUTATION OF OCTROI PAYMENT FOR SPOT INSPECTION ON GODOWN ON 17/07/1999.[REFER TO PAPER BOOK PAGE NO. 104 AND 105 FOR ENGLISH TRANSLATION] AFTER OBTAINING AFFIDAVIT THAT ASSESSEE WILL NOT GO TO COURT AND WILL NOT ASK FOR REFUND THE OCT ROI DEPARTMENT VIDE LETTER DATED 01/12/01 CLARIFIED THAT THE SAID OCTROI HAS BEEN RECOVERED IN CONNECTION WITH IRREGULARITY NOTICED D URING SPOT INSPECTION ON 17/07/1999. [AFFIDAVIT IN GUJARATI DATED 26/11/2001 ALONG WITH ENGLISH VERSION APPEARS ON PAGE NO. 106-108 OF THE PAPER-BOOK, THE CLARIFICATORY LETTER ISSUED BY OCTROI DEPARTMENT ON 01/12/01 ALON GWITH ENGLISH VERSION APPEARS ON PAGE NO. 109-112] 5. IN THE CASE OF OCTROI EVASION THE OCTROI RECOVE RED IS ALWAYS MORE THAN THE VALUE OF GOODS INVOLVED BECAUSE AS PE R SEC 125 OF THE GUJARAT MUNICIPALITIES ACT, THE AUTHORIZED OFFI CER IS EMPOWERED TO RECOVER TEN TIMES OCTROI OR RS. 50 WHICHEVER IS MORE, BUT, THIS POWER OF PENALTY HAS BEEN HELD TO BE ILLEGAL BY THE GUJARAT HIGH COURT [IN THE CASE OF MULJIBHAI CHAMPAKLAL SHAH GLR VOL. XXXVII (1) PAGE 634] AND THEREFORE, THE WORD 'PENALTY' IS NOT WRITTEN IN THE OCTROI RECEIPT BUT FOR THE OCTROI RECOVERED WHICH I S ALWAYS MORE THAN THE VALUE OF GOODS INVOLVED CORRESPONDING VALUE OF GOODS ON ESTIMATION IS MENTIONED TO MATCH THE OCTROI RECOVER ED WHICH CAN BE MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 5 SEEN FROM THE FACT THAT AS MENTIONED IN THE ASSESSM ENT ORDER THE VALUE OF GOODS BELONGING TO THE RESPONDENT INVENTOR ISED BY THE OCTROI DEPARTMENT AT THE TIME OF SPOT INSPECTION ON 17/07/1999 AT THE BUSINESS PREMISES WAS RS.415728/- ONLY AS MENTI ONED ON PAGE 3 OF THE ORDER AND WHICH IS NOT IN DISPUTE. 6. THE MATADOR HAS NO CAPACITY TO LOAD GOODS WORTH RS.45.75 LACS. 7. PHYSICAL INVENTORY OF GOODS WAS TAKEN DURING S POT INSPECTION ON 17/07/1999 AT THE BUSINESS PREMISES BY THE OCTRO I DEPARTMENT WHICH WAS PRIOR TO SEARCH AND THE SAID GOODS WERE D ULY RECONCILED WITH THE BOOK STOCK AND THE OCTROI DEPARTMENT HAS N OT MADE ANY ADVERSE COMMENT OR OBSERVATION THAT UNACCOUNTED GOO DS WERE PURCHASED BY THE COMPANY. SIMILARLY, INCOME TAX DEP ARTMENT HAS ALSO TAKEN INVENTORY OF GOODS AT THE TIME OF SEARCH ON 18/11/1999 AND AT THAT TIME ALSO THEY HAVE NOT COME ACROSS ANY UNACCOUNTED PURCHASE OR SALES, THEREFORE THE QUESTION OF ANY UN ACCOUNTED INVESTMENT IN PURCHASE DOES NOT ARISE. 8. THE ONUS TO PROVE UNACCOUNTED INVESTMENT IS ON DEPARTMENT. AS HELD BY THE SUPREME COURT IN THE CASE OF P. R. METRANI 287 ITR 209 PRESUMPTION DOES NOT EXTEND TO REGULAR ASSESSMENT. THE TRANSACTIONS OF PURCHASE AND SALES OF GOODS FOR WHI CH OCTROI HAS BEEN PAID ARE REGULAR TRANSACTIONS AND ARE DULY REC ORDED IN BOOKS PRIOR TO DATE OF SEARCH AND THEREFORE, THE PROVISIO N OF BLOCK ASSESSMENT IS NOT APPLICABLE. KIND ATTENTION IS DRA WN TO DECISION OF GUJARAT HIGH COURT IN THE CASE OF N. R. PAPERS AND BOARDS LTD 248 ITR 526 WHERE THE COURT FOLLOWED ITS OWN DECISION REPORTED IN 234 ITR 733, THE RELEVANT HEAD NOTE ON PAGE 526 IS REPRODUCED HEREUNDER ' IF PRIOR TO THE DATE OF SEARCH, THE ASSESSEE HAD DISCLOSED THE PARTICULARS OF INCOME OR EXPENDITURE EITHER IN THE RETURN OR IN THE BOOKS OF ACCOUNT OR IN THE COU RSE OF PROCEEDINGS TO THE ASSESSING OFFICER OR WHERE THE R ETURN HAD NOT BECOME DUE, THEY ARE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT, THEN SUCH INCOME CANNOT BE TREATE D AS UNDISCLOSED INCOME SO AS TO TAX A PERSON AT THE RAT E OF SIXTY PER CENT, UNDER CHAPTER XIV-B OF THE INCOME TAX ACT ,1961.' 3. IN PARA 18 THE HON'BLE I.T.A.T FOR INVOKING PROV ISIONS OF SECTION 69 FOR MAKING ASSESSMENT U/S 158BC HAS RELIED UPON DEC ISIONS OF HON'BLE KARNATAKA HIGH COURT IN BENGATABAVA V/S CI T [2009] 318 I.T.R 276 (KARNATAKA), RAJENDRA LABOTIA VS. DCIT [2 004] 216 I.T.R MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 6 621 (RAJ) AND H SAHUL V/S ACIT [2002] 258 I.T.R 266 (MAD) BUT THESE DECISIONS WERE NOT CITED BY THE D.R. DURING T HE COURSE OF HEARING AND THEREBY THE ASSESSEE DID NOT GET ANY OP PORTUNITY TO REPLY TO THE SAME. 3.A. WHILE CONSIDERING THE ISSUE OF ONUS IN PARA 18 OF THE ORDER, THE `HON'BLE I.T.A.T. HAS NOT CONSIDERED THE CONTENTION S OF THE ASSESSEE THAT THE ONUS STAND DISCHARGE BECAUSE (I) THAT OCTROI RECOVERED IS BY WAY OF COMPOUNDING THE COST OF GOODS BY INCREASING THE COST AS CLARIFIED BY THE MU NICIPAL CORPORATION EVIDENT FROM THE LETTER QUOTED IN THE O RDER U/S. 144 A IN THE CASE OF M/S. A. RAMANLAL & CO. PLACED IN THE PA PER BOOK NO. IV AT PAGE NO. 6 TO 16 RELIED UPON BY THE ASSES SEE. (II) THAT IT IS IN LIEU OF PENALTY WHICH CAN NOT BE LEVIED AS PE R DECISION OF GUJARAT HIGH COURT PLACED AT PAGE NO. 1 33 TO 138 - PAPER BOOK NO. III. (III) THAT THERE IS DIFFERENCE BETWEEN THE REGULAR OCTROI RECEIPTS PLACED BEFORE THE BENCH AND THE OCTROI RECEIPTS ISS UED BY THE CHECKING SQUAD WHICH IS NOT LINKED WITH THE GOODS I MPORTED. (IV) THAT NO DISCREPANCY WAS FOUND IN THE STOCK AS PER BOOKS AND AS PER THE INVENTORY TAKEN BY THE CHECKING SQUAD (V) THAT IN THE MATADOR SEIZED GOODS WERE OF RS.1,9 2,960/- BUT IT HAS BEEN VALUED AT RS.8,75,0007- AND OCTROI OF RS.3 5,0007- WAS RECOVERED EVIDENT FROM OCTROI RECEIPT PLACED AT PAG E NO. 117 OF PAPER BOOK - II. VI) THAT AS PER DECISION OF SUPREME COURT IN THE CASE O F SREE LEKHA BANERJEE & OTHERS - 49 I.T.R. , 112, THE DEPARTMENT CAN NOT BY MERELY REJECTING UN REASONABLY A GOOD EX PLANATION CONVERT GOOD PROOF INTO NO PROOF AS MENTIONED IN TH E SYNOPSIS FURNISHED TO THE BENCH. 4. 'IN PARA 20 THE I.T.A.T HAS MENTIONED REGARDING ALT ERNATIVE SUBMISSION THAT ALL THE PURCHASES COULD NOT HAVE BE EN MADE ON ONE DAY.ASSESSEE IS ALSO MAKING SALES OUTSIDE T HE BOOKS. THERE WOULD BE A TURNOVER AND RECYCLING OF THE PURC HASES AND SALES, THEREFORE ENTIRE INVESTMENT OF RS.45.75,000 CAN NOT BE SAID TO HAVE BEEN DONE ON A SINGLE DAY. THERE IS AL SO NO MATERIAL TO INFER THAT THEY WERE DONE IN A SINGLE D AY '. BUT NO SUCH ALTERNATIVE SUBMISSIONS WERE MADE BY APPELLANT . MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 7 5. FURTHER, IN PARA 20, THE I.T.A.T HAS WORKED OUT STOCK TURNOVER RATIO BF 4.1 % AND ESTIMATED VALUE OF INVESTMENT AT RS.1, 93,202 BY TAKING INTO CONSIDERATION THE TURNOVER, G.P OF 3 %, CLOSING STOCK, WORKED OUT THE TURNOVER VALUE OF RS.45,75,000 AT RS .47,12,250. BUT SUCH FORMULA WAS NEITHER DISCUSSED NOR ARGUED DURIN G COURSE OF HEARING OF APPEAL. 6. ON THE ISSUE OF ADDITION ON THE BASIS OF A D-HOC PAYMENT OF OCTROI ON SPOT CHECKING BY CHECKING SQUAD OF AHMEDABAD MUNICI PAL CORPORATION THE ASSESSEE HAS RELIED UPON AND WITH R EGARD TO MODUS OPERAND! OF OCTROI RECOVERY , SPECIFICALLY PO INTED OUT THE FOLLOWING ORDERS PLACED IN PAPER BOOK NO. IV. I. ORDER U/S 144A BY ADDITIONAL C.IT IN THE CASE OF A. RAMANLAL & CO. ( PLACED ON PAGE NO. 6 TO 16 OF PAPER BOOK NO. I) II. ASSESSMENT ORDER OF M/S A RAMANLAL A& COMPANY FOR A .Y 1996- 97 ( PLACED ON PAGE NO. 17 TO 23 &24-TO 27 OF PAPER BOOK NO. IV) III. I.T.A.T ORDER ITA. NO. 3181/AHD/2004 A.Y.2001- 02 IN THE CASE OF FREEDOM (GLASSES) EYLEASER CENTRE P. LTD. ( PL ACED ON PAGE NO. 36 TO 40 OF PAPER BOOK NO. IV). IV. DECISION OF GUJARAT HIGH COURT IN RESPECT OF SE C. 125 OF GUJARAT MUNICIPALITIES ACT FOR LEVY OF PENALTY ON THE AMOUN T OF OCTROI EVADED IN THE CASE OF MULJIBHAI C SHAH V. STATE. (P LACED ON PAGE NO. 133 TO 138 OF PAPER BOOK NO III) THE ABOVE DECISIONS WHICH GO TO THE ROOTS OF ISSUE OF ADDITION ON THE BASIS OF OCTROI RECEIPTS ISSUED BY CHECKING SQU AD OF A.M.C. OCTROI DEPARTMENT AND MATERIAL TO THE FACTS OF THE ASSESSE E, HAVE NOT BEEN CONSIDERED BY HONBLE I.T.A.T. 7. FOR UPHOLDING THE ADDITION OF G.P RS.1,37,250 AN D UNACCOUNTED SALES OF RS.76,266 THE FINDINGS OF THE C.I.T (APPEA LS) AS WELL AS THE DECISION OF GUJARAT HIGH COURT ON THIS ISSUE IN CASE OF PRESIDENT INDUSTRIES REPORTED IN 258 ITR 654, HAVE NOT BEEN CONSIDERED. 8. HON'BLE I.T.A.T. HAS NARRATED THE FINDINGS OF C .I.T.(APPEALS) FOR DELETING THE ADDITION OF RS.45,75,000/- IN PARA 8, DELETING THE ADDITION OF RS.1,37,2507- IN PARA 9, AND FOR RESTRI CTING THE ADDITION I TO RS.2,378/- AGAINST ADDITION OF RS.79, 266/- BEING UNACCOUNTED SALES IN PARA 11 , BUT THE FINDINGS OF CIT(APPEALS) IN WHOSE ORDER THE ORDER OF A.O. HAS MERGED , HAVE NOT BEEN MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 8 CONSIDERED BY THE HON'BLE I.T.A.T. BEFORE TAKING AD VERSE VIEW . IN THIS CONNECTION KIND ATTENTION IS DRAWN TO THE FOLLOWING DECISIONS OF THE HON'BLE GUJARAT HIGH COURT: 1. RAMESHCHANDRA M. LUTHARA -257ITR, 460 2. MIRA S. KHURANA - 333 ITR, 488. 3. RAJESH BABUBHAIDAMANIA - 251 ITR, 541. 4. MERCURY METALS (P) LTD. 257 ITR, 297. 5. SHAKTI CARGO MOTORS PVT. LTD. TAX APPEAL NO. 232 4 OF 2009. DATED 19/01/2010. THE NON CONSIDERATION OF ABOVE FACTS BEING AFFIDAVI T, SYNOPSIS, CONTENTIONS, DECISIONS ARE APPARENT MISTAKES AND IN THIS CONNECTION RELIANCE IS PLACED ON AND KIND ATTENTION IS DRAWN T O THE FOLLOWING DECISIONS : 1. LAXMI ELECTRONIC CORPORATION LTD. 188 ITR 398 (ALL. HIGH COURT) THE COURT HAS HELD THAT WHERE THE TRIBUNAL FAILS OR OMI TS TO DEAL WITH AN IMPORTANT CONTENTION AFFECTING THE MAINTAINABILITY/ MERITS OF AN APPEAL, IT MUST BE DEEMED TO BE MISTAKE APPARENT FR OM THE RECORD WHICH EMPOWER THE TRIBUNAL TO REOPEN THE APPEAL AND RECTIFY THE SAME IF IT IS SO SATISFIED. 2. SAURASHTRA KUTCH STOCK EXCHANGE LTD. 262 ITR 146 (G UJ.HIGH COURT) THE COURT HAS HELD (PAGE 155) ' IT HAS TO BE BORNE IN MIND THAT THE ACT IS A STATUTE PROVIDING FOR LEVY AND CO LLECTING OF TAX. IN CASE A PARTY BEFORE THE TRIBUNAL INVITES THE ATTENT ION OF THE TRIBUNAL THAT A POINT OR A CONTENTION WHICH IS MATERIAL FOR DETERMINING THE AMOUNT OF TAX PAYABLE (WHICH MAY BE NIL IN A GIVEN CASE) HAS NOT BEEN CONSIDERED BY THE TRIBUNAL, IT WOULD CERTAINLY CONSTITUTE A MISTAKE APPARENT FROM THE 'RECORD' WITHIN THE MEANI NG OF SECTION 254(2) OF THE ACT.' THE ABOVE DECISION HAS BEEN AFFIRMED BY THE SUPREME COURT REPORTED IN 305 ITR - 227 AND HAS HELD THAT FAILURE TO APPLY JUDGMENT OF JURISDICTIONAL HIGH COURT IS A MISTAKE APPARENT ON RECORD. RECTIFICATION OF AN ORDER STEMS FROM THE FUNDAMENTA L PRINCIPLE THAT JUSTICE IS ABOVE ALL. IT IS EXERCISED TO REMOV E THE ERROR AND TO DISTURB THE FINALITY. 3. HONDA SIEL POWER PRODUCTS LTD. 295ITD - 466(S.C) . THE LEARNED AR ALSO RELIED ON THE DECISION OF THE I TAT JAIPUR A BENCH IN THE CASE OF GEHNA VS ITO (MA NO.33/JP/2008 IN ITA MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 9 NO.22/JP/2002 AY 1998-99 DATED 24-12-2010) REPORT ED IN (2011) 137 TTJ (JP) (UO) 17. WITH THE ABOVE SUBMISSIONS TH E LEARNED AR PRAYED THAT THE ORDER OF THE TRIBUNAL SUFFERS FROM VARIOUS DEFICIENCIES AND THEREFORE, MAY BE RECALLED FOR FURTHER CONSIDER ATION 3. THE LEARNED DR OBJECTED TO THE SUBMISSIONS OF TH E LEARNED AR AND RELIED ON THE DECISION OF THE HONBLE APEX COUR T IN THE CASE OF CIT VS KARAM CHAND THAPPAR AND BROS. PVT. LTD., 176 ITR 535. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. ON PERUSING THE TRIBUNALS ORD ER IT IS APPARENT THAT THE ASSESSEE HAD RAISED ONLY ONE GROUND IN ITS APPEAL WHICH IS EXTRACTED HEREIN BELOW: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.45,75,000/- MADE ON ACCOUNT OF UNEXP LAINED INVESTMENT IN PURCHASES, RS.76,888/- ON ACCOUNT OF UNACCOUNTED SALE OF GOODS AND RS.1,37,250/- ON ACCO UNT OF UNACCOUNTED INCOME ON SALE OF GOODS. THUS, THE WHOLE CONTROVERSY OF THE CASE IS IN RESPE CT TO ADDITION MADE ON ACCOUNT OF UNACCOUNTED INVESTMENTS TO THE E XTENT OF RS.45,75,000/-, ON ACCOUNT OF UNACCOUNTED SALE OF RS.76,888/- AND RS.1,37,250/- ON ACCOUNT OF UNACCOUNTED INCOME ON S ALE OF GOODS. AFTER EXAMINATION OF THE SUBMISSIONS AND PAPER BOOK S FILED BY THE ASSESSEE, THE TRIBUNAL HAD UPHELD THE GROSS PROFIT ADDITION OF RS.1,37,250/-, UNACCOUNTED SALES OF RS.79,266 AND R S.1,93,202/- FOR UNACCOUNTED INVESTMENTS. FROM THE LENGTHY SUBMISSIO NS OF THE LEARNED AR IT IS APPARENT THAT THE REQUEST OF THE L EARNED AR IS FOR REVIEWING THE ORDER OF THE TRIBUNAL AND NOT FOR REC TIFYING ANY MISTAKE MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 10 APPARENT ON RECORD. IT IS SETTLED LAW THAT THE EXPR ESSION MISTAKE APPARENT ON RECORD MEANS A MISTAKE EITHER CLERICAL OR GRAMMATICAL OR ARITHMETICAL OR LIKE NATURE WHICH COULD BE DETECTED WITHOUT RE- ARGUMENT OF THE MATTER OR REAPPRAISAL OF THE FACTS AS APPEARING FROM THE RECORDS. THE TRIBUNAL IS EMPOWERED TO RECTIFY O NLY SUCH MISTAKE AND CANNOT REVIEW ITS EARLIER ORDER. WE ALSO ARE RE MINDED OF THE DECISION IN THE CASE OF CIT VS KARAM CHAND THAPPAR AND BROS. PVT. LTD., 176 ITR 535 RENDERED BY THE HONBLE APEX COUR T WHEREIN IT IS HELD AS UNDER: IT IS WELL SETTLED THAT THE TRIBUNAL IS THE FINAL F ACT FINDING BODY. THE QUESTIONS WHETHER A PARTICULAR LO SS IS A TRADING LOSS OR A CAPITAL LOSS AND WHETHER THE LOSS IS GENUINE OR BOGUS ARE PRIMARILY QUESTIONS WHICH HAVE TO BE DETERMINED ON APPRECIATION OF FACTS. THE FINDINGS O F THE TRIBUNAL ON THESE QUESTIONS ARE NOT LIABLE TO BE IN TERFERED WITH UNLESS THE TRIBUNAL HAS TAKEN INTO CONSIDERATI ON ANY IRRELEVANT MATERIAL OR HAS FAILED TO TAKE INTO CONS IDERATION ANY RELEVANT MATERIAL OR THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IS PERVERSE IN THE SENSE THAT NO REASONABL E PERSON, ON THE BASIS OF FACTS BEFORE THE TRIBUNAL, COULD HAVE COME TO THE CONCLUSION TO WHICH IT HAS COME. IT IS EQUALLY SETTLED THAT THE DECISION OF THE TRIB UNAL HAS NOT TO BE SCRUTINISED SENTENCE BY SENTENCE MERE LY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DET AIL BY THE TRIBUNAL OR WHETHER SOME INCIDENTAL FACT WHICH APPE ARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IF THE COURT, ON A FAIR READING OF THE JU DGMENT OF THE TRIBUNAL, FINDS THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUNT ANY IRRELEV ANT MATERIAL IN BASING ITS CONCLUSIONS, THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH, UNLES S, OF COURSE, THE CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 11 IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN IT S JUDGMENT SPECIFICALLY OR IN EXPRESS WORDS THAT IT H AS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTA NCES OR HAS CONSIDERED THE TOTALITY OF FACTS, AS IF THAT WE RE A MAGIC FORMULA; IF THE JUDGMENT OF THE TRIBUNAL SHOWS THAT IT HAS, IN FACT, DONE SO, THERE IS NO REASON TO INTERFERE W ITH THE DECISION OF THE TRIBUNAL. IN ARRIVING AT THE CONCLUSION THAT LOSSES INCURRED BY THE RESPONDENT COMPANY BY THE SALES OF CERTAIN SHAR ES IN TWO COMPANIES BELONGING TO THE SAME GROUP WERE TRAD ING LOSSES, THE APPELLATE TRIBUNAL TREATED THE RESPONDE NT COMPANY AS A DEALER IN SHARES FOR THE RELEVANT YEAR AS IN THE EARLIER YEARS IT HAD BEEN SO TREATED BY THE DEP ARTMENT, FOUND THAT THERE WAS NOTHING ON RECORD WHICH WOULD SUGGEST THAT THE ACQUISITION AND SALE OF THOSE SHAR ES WAS FOR ANYTHING OTHER THAN COMMERCIAL PURPOSES, CONSID ERED THAT THE MERE CIRCUMSTANCE THAT THOSE SHARES WERE S HOWN BY THE RESPONDENT AS INVESTMENTS IN ITS BALANCE-SHE ET WAS NOT CONCLUSIVE, POINTED OUT THAT THERE WAS NOTHING TO SHOW THAT THE PURCHASE OF THE SHARES HAD ANYTHING TO DO WITH THE CONTROL OF THE COMPANIES CONCERNED, AND RELIED UPON THE CIRCUMSTANCE THAT THE SALES WERE AT MARKET RATES OR AT GOING RATES : HELD, ON THE FACTS, THAT THERE WAS NO REASON TO INTERFERE WITH THE ORDER OF THE TRIBUNAL TO ARRIVE AT THAT CONCLUSION DID NOT ARISE FROM ITS DECISION. 5. AFTER OVERALL EXAMINATION OF THE MISC. APPLICATI ON AND THE DISCUSSIONS HEREINABOVE, WE ARE OF THE CONSIDERED V IEW THAT THIS MISC. APPLICATION FILED BY THE ASSESSEE SEEKING REC ALLING OF THE ORDER OF THE TRIBUNAL FOR RECTIFICATION U/S 254(2) OF THE IT ACT DOES NOT HAVE ANY MERIT. THEREFORE, WE HEREBY DISMISS THE MISC. A PPLICATION FILED BY THE ASSESSEE. MA NO.123/AHD/2011 (IN IT(SS)A NO.238/AHD/2002 (BP: 01-04-1989 TO 18-04 -1999) RAJESH TRADE LINK (P) LTD. VS DCIT, CENT. CIR-1(4), AHMEDABAD 12 6. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-05-2012. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 18-05-12 [CORRECTED ON 22-05 12] 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 21-05-12, 22-05-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: