Abdul Kareem Ladsab Telgi, Bangalore V. ACIT, Bangalore

MA 56/BANG/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4848 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1996-1997
• Appeal Filed On: 09-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREETHI GARG CITIIIDR
• Assessee Lawyers: K Y NINGOJI RAO
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Peak credit
• Section: 69C; 260A; 37(1); 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.P. NO.56/BANG/2010 (IN ITA NO.1474/BANG/2008) ASSESSMENT YEAR : 1996-97 MR. ABDUL KARIM LADSAB TELGI, CURRENTLY LODGED AT : HOSPITAL ROOM NO.8, CENTRAL JAIL, PARAPPANA AGRAHARA, BANGALORE 560 100. : APPLICANT VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(1), BANGALORE. : RESPONDENT APPLICANT BY : SHRI K.Y. NINGOJI RAO, C.A. RESPONDENT BY : SMT. PREETHI GARG, CIT-III(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS MISC. PETITION OF THE ASSESSEE IS IN CONSEQUEN CE OF HIS ORIGINAL APPEAL IN ITA NO:1474 (BANG)/2008 FOR THE AY 1996-9 7 WHICH WAS DISPOSED OFF ON 29.1.2010. M.P.NO.56/BANG/2010 PAGE 2 OF 10 2. BRIEFLY, THE GRIEVANCE OF THE ASSESSEE WAS THAT CERTAIN MISTAKES HAVE CREPT IN WHILE PASSING THE ABOVE MENTIONED ORD ER WHICH ARE LISTED OUT AS BELOW: (I) DISREGARDED THE CLAIMED OF THE PETITIONER WITH REGARD TO THE ADDITION OF RS.2,29,00,000; (II) ADDITION OF RS.11,17,500/- AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT; (III) ADDITION OF RS.1,35,00,000 AS UNACCOUNTED INVESTMENT IN ALANKAR LODGE PRESUMABLY U/S 69 OF THE ACT;& (IV) ADOPTION OF PEAK CREDIT FORMULA. 3. AFTER DUE CONSIDERATION OF THE CONTENTS OF T HE MISC. PETITION, THE REGISTRY WAS DIRECTED TO TAKE ON RECORD THE MISC. P ETITION OF THE ASSESSEE AND TO BE POSTED FOR HEARING IN NORMAL COURSE. 4. DURING THE COURSE HEARING, THE LD. AR SUBMITT ED THAT (1) ADDITION OF RS.2,29,00,000: WHILE DISMISSING THIS GROUND AND UPHOLDING THE CIT( A)S FINDING, THE HONBLE TRIBUNAL HAD DISREGARDED THE CLAIM OF THE A SSESSEE THAT (A) THE INCOME FROM FAKE STAMP PAPER BUSINESS HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS CONTAINE D IN CH. IV D OF THE ACT; (B) THE EXPLANATION TO S.37(1)APPLIES ONLY TO THE EXPEN DITURE ALLOWANCE U/S 37(1) AND DO NOT APPLY TO ANY OTHER D EDUCTIONS ALLOWABLE UNDER ANY OTHER PROVISIONS CONTAINED UNDE R CH. IV D OF THE ACT; (C) THAT THE INCOME OF RS.33.20 LAKHS DECLARED BY THE A SSESSEE HAVING BEEN HELD AS THE INCOME FROM THE FAKE STAMP PAPER BUSINESS WILL HAVE TO BE DELETED OWING TO ASSESSMEN T OF RS.2.29 CRORES AS THE INCOME FROM THE FAKE PAPER BU SINESS; AND M.P.NO.56/BANG/2010 PAGE 3 OF 10 (D) THE DECISIONS IN THE CASE OF CIT V. S.C.KOTHARI (19 71) 82 ITR 794 (SC), THE RATIOS IN THE CASE OF CIT V. PIARA SI NGH 124 ITR 40 (SC) AND DR.T.A.QURESHI V. CIT 287 ITR 547 (SC) RELIED UPON BY THE ASSESSEE ARE APPLICABLE TO THE ISSUE (2) ADDITION OF RS.11,17,500:U/S 69 OF THE ACT: (A) IT WAS ARGUED BEFORE THE HONBLE BENCH THAT WHEN TH E ASSESSEE HAD DECLARED A TOTAL INCOME OF RS.3835625/ - AND THE AO HAD FURTHER MADE AN ADDITION OF RS.2.29 CRORES A ND THE FUNDS OF THE ASSESSEE TO THE EXTENT OF RS.16.99 LAK HS BROUGHT FORWARD FROM THE EARLIER YEARS WHERE IS THE ISSUE O F INADEQUACY OF AVAILABLE SOURCES FOR THE ALLEGED UNE XPLAINED EXPENDITURE OF RS.11.17 LAKHS; - IT WAS, THEREFORE, CLAIMED THAT THE SAI D ADDITION U/S 69 WAS UNLAWFUL AND APPLYING THE RATIO IN THE CASE OF CIT V. NELLIAPPAN 66 ITR 722 (SC), THE ADDITION WAS LIABLE TO BE SET ASIDE ; (3) ADDITION OF RS.1,35,00,000/- U/S 69 OF THE ACT: (A ) IT WAS ARGUED BEFORE THE HONBLE BENCH THAT THE AS SESSEE HAD TAKEN ALANKAR LODGE LEASE ON PAGADI OF RS.20 LAKHS IN 1998- 99; - DOCUMENTARY EVIDENCES WERE PRODUCED TO PROVE THAT THE ASSESSEE HAD TAKEN THE SAID - PREMISES ON RENT AS TENANT FROM ITS OWNERS AND THE SMALL CAUSES COURT, BOMBAY ITS ORDERS DECREED THAT THE ASSESSEE SHALL HAND OVER THE POSSESSION OF THE DECREED PROPERTY ALANKAR LODGE PREMISES TO THE LANDLORDS; (B) THE DECLARED INCOME OF RS.38.35 LAKHS AND THE FUNDS OF RS.16.99 LAKHS WHICH WERE HELD BY THE ASSESSEE IN HIS BANK A CCOUNTS AS AT 1..4.95 AND THE ADDITION OF RS.2.29 CRORES MADE U/S 68 WERE ADEQUATE TO EXPLAIN THE SOURCE OF INVESTMENT IN THE SAID BUSINESS AND, THUS, THE QUESTION OF UNACCOUNTED INV ESTMENT IN THE SAID LODGE DID NOT ARISE AT ALL; (C) AS COULD BE SEEN FROM THE REASONS OF THE AO, IT WA S EVIDENT THE AO MADE THE ADDITION OF RS.1.35 CRORES AS UNACCOUNT ED INVESTMENT IN THE SAID PROPERTY BASED ON THE REPORT OF THE DDIT(INV)WITHOUT HAVING ANY EVIDENCE TO PROVE SUCH AN INVESTMENT BY THE ASSESSEE - RELIES ON THE CASE LAWS: M.P.NO.56/BANG/2010 PAGE 4 OF 10 (I) K.P.VERGHESE V. ITO 131 ITR 597 (SC); (II) CIT V. GODAVARI CORPORATION LTD 200 ITR 567 (SC) (III) CIT V. NELLIAPPAN 66 ITR 722 (SC) (4) ADOPTION OF PEAK CREDIT FORMULA: (A) IT WAS ARGUED THAT IN CASE ANY ADDITION IN RESPECT OF THE MATTERS COVERED UNDER THE ABOVE MENTIONED GROUNDS ARE TO BE SUSTAINED THEN IN SUCH AN EVENT THE PRINCIPLES OF PEAK CREDIT SHOULD BE ADOPTED, APPLYING THE PRINCIPLES LAID DOWN IN THE C ASE OF CIT V. NELLIAPPAN 66 ITR 722 (SC); - THAT THE ADDITION OF RS.2.29 CRORES MADE IN RESPE CT OF INCOME FROM FAKE STAMP PAPER BUSINESS, THE DECLARED INCOME OF RS.38.35 LAKHS AND THE FUNDS OF RS.16.99 LAKHS BROUGHT FORWA RD FROM THE EARLIER YEARS BY ITSELF CONSTITUTE THE SOURCES FOR THE ALLEGED UNEXPLAINED EXPENDITURE OF RS.11.17 LAKHS AND THE UNEXPLAINED/UNACCOUNTED INVESTMENT OF RS.1.35 CRORE S IN ALANKAR LODGE; - IT, WAS, THEREFORE, ARGUED THAT THE ADDITIONS OF RS.11.17 LAKHS AND RS.1.35 CRORES WERE LIABLE TO BE DELETED APPLYI NG THE DECISION OF THE S.C. IN THE CASE OF CIT V. NELLIAPPAN CITED SUPRA. IN CONCLUSION, IT WAS VEHEMENTLY ARGUED BY THE LD. A R THAT THE SUBMISSIONS MADE REFERRED SUPRA HAVE NOT BEEN CONSI DERED BY THE EARLIER HONBLE BENCH WHILE PASSING ITS ORDER IN ITA NO:14 74(BANG)/2008 DATED: 29.1.2010. THESE OMISSIONS CONSTITUTE MISTAKES APP ARENT FROM RECORDS AS CONTEMPLATED U/S 254(2) OF THE ACT. IT WAS, THEREF ORE, PRAYED THAT THE EARLIER ORDER OF THE HONBLE BENCH BE RECALLED AND TO RECTIFY THE AFORESAID MISTAKES APPARENT FROM THE RECORDS. 5. ON THE OTHER HAND, THE LD D R WAS VERY EMPHAT IC IN HER RESOLVE THAT THE ISSUES RAISED IN THE MISC. PETITION HAD, IN FAC T, BEEN DELIBERATED UPON IN THE EARLIER ORDER OF THE HONBLE BENCH AND THAT THE RE WERE NO MISTAKES CREPT IN WHICH NECESSITATE TO TAKE RECOURSE UNDER S ECTION 254(2) OF THE ACT M.P.NO.56/BANG/2010 PAGE 5 OF 10 THE EARLIER ORDER OF THE HONBLE BENCH DOESNT SUFF ER FROM ANY INFIRMITY AS ALLEGED BY THE ASSESSEE, AND, THEREFORE, PLEADED TH AT THE MISC. PETITION OF THE ASSESSEE CANNOT BE ENTERTAINED WHICH REQUIRES T O BE REJECTED SUMMARILY. 6. WE HAVE CAREFULLY ANALYZED THE RIVAL SUBMISSION S, ATTENTIVELY GONE THROUGH THE RELEVANT RECORDS AND ALSO THE OTHER DOC UMENTARY EVIDENCES PRODUCED DURING THE COURSE OF EARLIER PROCEEDINGS. 6.1. AT THE OUTSET, WE WOULD LIKE TO EMPHASIS IN CLEAR TERMS THAT THE GROUNDS RAISED BY THE ASSESSEE AND THE ARGUMENTS CO UPLED WITH VARIOUS JUDICIAL PRONOUNCEMENTS PUT-FORTH BY HIS LD. AR D URING COURSE OF HEARING OF THE ORIGINAL APPEAL [WHICH HAVE NOW BEEN AGITATE D IN THE MISC. PETITION THAT THEY HAVE NOT BEEN CONSIDERED], WERE, IN FACT, DULY CONSIDERED AND TOOK COGNIZANCE OF THE SAME BY THE EARLIER BENCH. AT THE COST OF REPETITION, WE SHALL REPRODUCE THE RELEVANT PORTION OF THE FIND INGS OF THE EARLIER BENCH, AS UNDER: 2. THE FIRST ISSUE IS WITH REGARD TO ADDITION OF A SUM OF RS.2,29,00,000/- BEING THE AMOUNT DEPOSITED TO THE BANK ACCOUNTS OF THE ASSESSEE. THE AO HAS ASSESSED THE SAME BEIN G THE AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE BY TR EATING THE SAME AS INCOME OF ASSESSEE U/S 68 OF THE IT ACT. THE S AME WAS CONFIRMED BY THE CIT(A). THE AO FOUND THAT THE ASS ESSEE WAS MAINTAINING BANK ACCOUNT IN SBI, MUMBAI VIDE A/C NO .01050, BANK OF BARODA, MUMBAI (A/C NO.20129) AND CITIBANK, A/C NO.00703120128 RESPECTIVELY, WHEREIN DEPOSIT OF RS. 1,49,75,000/-, RS.71,000/- AND RS.60,000/- TOTALING RS.4,54,06,000 /- WERE FOUND. THE ASSESSEE WAS QUESTIONED ABOUT THE DEPOSITS AND WITHDRAWALS. IT WAS EXPLAINED TO THE AO THAT THE CREDITS REPRESE NTED THE RECEIPTS FROM STAMP SALE. AO FOUND THAT STAMP VENDING TURNO VER WAS RS.2.25 CRORES ONLY AND THEREFORE, HE ADDED THE RES T I.E., 2.29 CRORES AS UNACCOUNTED INCOME FROM STAMP VENDING. T HIS ALSO COMMENSURATE WITH CONCLUSION OF OTHER INVESTIGATING AGENCIES THAT THE ASSESSEE HAD EARNED HUGE UNACCOUNTED SUM FROM T HE RACKET OF M.P.NO.56/BANG/2010 PAGE 6 OF 10 COUNTERFEIT STAMP PAPERS. THIS WAS ALSO FOUND COMM ENSURATE WITH THE FURTHER CONCLUSION THAT THE ASSESSEE HAS PAID H UGE AMOUNTS IN CASH TO HIS AIDES REPRESENTING CASH WITHDRAWALS FRO M THE BANK BUT NOT ALLOWED UNDER IT ACT AS EXPENSES FOR ILLEGAL P URPOSE. THE STAND OF THE ASSESSEE IS THAT THE ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS OF DEALING IN WHITE KEROSENE. IN AY: 1996 -97, RS.33,20,000/- (SIC) 3320000 LITRES OF WHITE KEROSE NE WAS SOLD AND THE SALE PRICE WAS RS.8/- PER LITRE TOTALING RS.2,6 5,60,000/- WHICH IS MORE THAN RS.2.49 CRORES ADDED BY THE AO AS UNEX PLAINED CREDIT. IT WAS ALSO PLEADED THAT THE RECEIPT ON SA LE OF WHITE KEROSENE EXPLAINS THE CREDIT ENTRIES IN BANK ACCOUN TS PARTLY AND THE OTHER PART REPRESENTS TURNOVER FROM STAMP VENDI NG. THIS CONTENTION WAS NOT ACCEPTED BY THE CIT(A) ON THE GR OUND THAT THIS ISSUE WAS NOT PLEADED LIKE THAT BEFORE THE AO AND I T WAS FOUND OUT THAT THE BUSINESS OF WHITE KEROSENE WAS FAKE AND NO N-EXISTENCE. EVEN BEFORE THE CIT(A), NO DOCUMENTS IN THE SHAPE O F LICENSE OR CORRESPONDENCE FROM CIVIL SUPPLY DEPARTMENT, TRANSP ORTATION OF WHITE KEROSENE TO REAL (SIC) RETAIL VENDORS OR FROM GOVERNMENT DEPOSITS OR ANY OTHER CORROBORATING EVIDENCE WAS PR ODUCED TO PROVE THE GENUINENESS OF BUSINESS OF WHITE KEROSENE . IN VIEW OF THE ABOVE, THE CIT(A) RIGHTLY CONCLUDED THAT SUCH BUSIN ESS WAS NON- EXISTENCE AND IT WAS ONLY FUTILE ATTEMPT TO EXPLAIN ENTRIES IN THE BANK AND THE REAL SOURCE OF WHICH WAS ONLY TO SALE OF COUNTERFEIT STAMP PAPERS AND FOR THIS YEAR THE AMOUNT OF SUCH E XPLAINED INCOME WAS QUANTIFIED AT RS.2.29 CRORES. THE ASSES SEE CANNOT BE ALLOWED ILLEGAL EXPENSES AS EXPLANATION TO SEC. 37( 1) OF THE ACT. IT IS SETTLED LEGAL PREPOSITION THAT PERSON SHOULD COM E FOR JUSTICE WITH CLEAN HAND. CIT(A)IS JUSTIFIED IN UPHOLDING THE AD DITION IN QUESTION. THE SAME IS UPHELD. WITH REGARD TO THE DISALLOWANCE OF EXPENDITURE OF RS.11.17 LAKHS, IT WAS OBSERVED BY THE HONBLE BENCH THAT 6. AFTER GOING THROUGH THE MATERIAL AND RIVAL SUB MISSIONS, WE FIND THAT AT THE TIME OF RECORDING OF STATEMENT, THE ASS ESSEE STATED TO BE IN IMPROPER AND MENTAL AND PHYSICAL STATE. IT IS NOT SO WHICH IS EVIDENT FROM CATEGORICAL ANSWER THAT HE WAS PAYING SALARY O F RS.5000/- PER PERSON PER MONTH TO 20 PERSONS RESULTING IN PAYMENT OF SALARY OF RS.12 LAKHS AND RS.40000/- PER PERSON PER ANNUM AS CONVEYANCE CHARGES TO 20 PERSONS RESULTING IN PAYMENTS OF CONV EYANCE CHARGES OF RS.4.8 LAKHS TOTALING TO RS.16.8 LAKHS. IT SHOWS T HAT THERE WAS NO CONSISTENCY BETWEEN THE RETURNED EXPENSES AND THE E XPENSES RECORDED IN STATEMENT. APART FROM THIS, THE AR DID NOT PROD UCE ANY BOOKS OF ACCOUNT TO CORROBORATE THE RETURNED EXPENSES. IN V IEW OF THE ABOVE, THE LOWER AUTHORITIES RELYING ON THE STATEMENT RECO RDED ON OATH MADE M.P.NO.56/BANG/2010 PAGE 7 OF 10 THE STAND IN QUESTION, THE AO HAS GIVEN CLEAR CUT F INDING THAT THE BUSINESS OF KEROSENE OIL WAS FAKE AND NOT CARRIED O UT BY THE ASSESSEE AS DISCUSSED ABOVE. SO THE AO HAS RIGHTLY ADDED TH E SAME UNDER THE HEAD OTHER SOURCES. WE UPHOLD THE SAME. IN RESPECT OF THE ADDITION OF RS.1,35,00, 000/-, THE OBSERVATION OF THE HONBLE BENCH WAS THAT 7..THE STAND OF THE AR OF THE ASSESSEE IN TH IS REGARD WAS THAT THE ABOVE SAID DOCUMENTS RELIED ON BY THE ASSESSEE WERE NOT CONFRONTED TO ASSESSEE. MOREOVER, STATEMENT U/ S W131, HE HAS MENTIONED HAVING PAID RS.20.00 LAKHS AS PAGUDI. BE FORE US LEARNED AR HAS FINED AN APPLICATION UNDER RULE OF A PPELLATE RULES,1967, WHEREIN VARIOUS DOCUMENTS HAVE BEEN FIL ED WITH REGARD TO ABOVE SAID PROPERTY AND THE STAND OF THE ASSESSEE IS THAT THE ASSESSEE WAS A TENANT OF ABOVE SAID ALANKAR LOD GE PROPERTY WHICH WAS OWNED BY DAWOOD BHOY FAZALBHOY MUSLIM EDUCATIONAL TRUST. IN THIS REGARD, ATTENTION WAS D RAWN TOWARDS THE ORDER OF THE PUNE COURT IN RAE SUIT NO:46/70 OF 2007 DIRECTING DELIVERY OF POSSESSION OF ALANKAR LODGE P ROPERTY TO ITS OWNER I.E., DAWOOD BHOY FAZALBHOY MUSLIM EDUCATIONA L TRUST. THESE DOCUMENTS WERE FILED BEFORE US AND THE ISSUE GOES TO THE ROOT OF THE ISSUE, SO WE ADMIT THE SAME. THIS DOES NOT HELP ASSESSEE BECAUSE CASE BEFORE US IS WITH REGARD TO Q UANTUM OF PAGRI AMOUNT PREVAILING IN MARKET AT RELEVANT POINT OF TI ME. IT IS NOT THE CASE OF REVENUE THAT THE ASSESSEE WAS LEGAL OWNER O F THE PROPERTY IN QUESTION. THE QUESTION BEFORE US IS WITH REGARD TO INVESTMENT BY WAY OF PAGRI PAID AT RELEVANT POINT OF TIME CANNOT BE DISPUTED. IN VIEW OF ABOVE, WE ARE NOT INCLINED INTERFERE WITH T HE FINDING OF CIT(A) WHO HAS UPHELD THE REASONED ADDITION IN QUES TION. WE UPHOLD THE SAME. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE ISSU ES WHICH CONFRONTED THE EARLIER BENCH, IT, PERHAPS, TOOK A F IRM VIEW THAT THERE WERE NO POSSIBILITIES OF ADOPTING OF PEAK CREDIT FORMULA AS PLEADED BY THE LD. A.R. 6.2. THE ABOVE NARRATION, IN OUR CONSIDERED VIE W, GOES WITHOUT SAYING THAT THE EARLIER BENCH TOOK COGNIZANCE OF ALL THE M ATERIAL ARGUMENTS M.P.NO.56/BANG/2010 PAGE 8 OF 10 VALIANTLY PUT FORTH BY THE LD. A R, THE FACTS CULLE D OUT FROM THE ASSESSMENT ORDER AND ALSO THE VERY ISSUES WHICH WERE DELIBERAT ED UPON BY THE LD. CIT (A) AND, THUS, CAME TO A CONCLUSION THAT THE LD. CI T (A) WAS JUSTIFIED IN HIS FINDINGS. THOUGH THE EARLIER BENCH TOOK COGNIZANCE OF THE CASE LAWS ON WHICH THE ASSESSEE HAD PLACED STRONG RELIANCE AND S INCE THE ISSUES BEFORE THE BENCH WERE ON THE DIFFERENT FOOTING AND THE CAS E LAWS RELIED UPON CLEARLY DISTINGUISHABLE, THEY HAVE NOT BEEN QUOTED EXPRESSLY. SUCH BEING THE GROUND REALITIES, THE ASSESSEE CANNOT COME UP N OW WITH A MISC. PETITION IN THE GUISE OF THE BENCH, WHILE PASSING THE ORDER UPHOLDING THE ORDERS PASSED BY THE AUTHORITIES BELOW, THE AFORESA ID GROUNDS RAISED AND THE CONTENTIONS ADVANCED HAVE NOT BEEN CONSIDERED AT AL L. 6.3. IN CONCLUSION, THE ASSESSEES MISCONCEPTIO N THAT THE EARLIER BENCH HAD NOT TAKEN COGNIZANCE OF THE MATERIAL FACTS ADVA NCED BY HIS LD. A R WAS, TO PUT IT GENTLY, WITHOUT ANY BASIS WHICH DESE RVES TO BE REJECTED OUT- RIGHTLY. IT IS ORDERED ACCORDINGLY. 6.4. IN VIEW OF THE ABOVE, THIS BENCH IS OF THE FIRM VIEW THAT THERE WERE NO MISTAKES APPARENT FROM RECORDS WHICH REQUIRE REC OURSE TO ACTION U/S 254 (2) OF THE ACT AS ALLEGED BY THE ASSESSEE. 6.5. WE SHALL ALSO DRAW STRENGTH FROM THE LEGAL PRECEDENTS FOR OUR ENDEAVOUR, AS QUOTED BELOW: (1) THE HONBLE DELHI HIGH COURT IN THE CASE O F RAS BIHARI BANSAL V. CIT & ANR. REPORTED IN 293 ITR 368, WHILE ELABORATING O N THE SCOPE OF S.254 (2) OF THE ACT HAD UNFOLDED THE ISSUE THUS - M.P.NO.56/BANG/2010 PAGE 9 OF 10 THIS SECTION ENABLES THE CONCERNED AUTHORITIES TO RECTIFY ANY 'MISTAKE APPARENT FROM THE RECORD'. IT IS WELL SETT LED THAT AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT M ISTAKE RECTIFIABLE UNDER THIS SECTION. SIMILARLY, FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR A RRIVING AT A CONCLUSION, IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT THE MERE FACT THAT THE TRIBUNAL HAS NOT ALLOWED A DEDUCTION, EVEN IF THE CONCLUSION IS WRONG, THAT WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER SECTIO N 254(2) OF THE ACT. FURTHER, IN THE GARB OF AN APPLICATION FOR RECTIFICATION, THE ASSESSEE CANNOT BE ALLOWED TO BE PERMITTED TO R EOPEN AND RE- ARGUE THE WHOLE MATTER, WHICH IS BEYOND THE SCOPE O F THIS SECTION. (2) THE HONBLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CIT & ANR. V. MCDOWELL & CO. LTD. REPORTED IN (2009) 310 ITR 215, HAS IN ITS WISDOM RULED THUS - APPLICATION OF THE PRINCIPLES LAID DO WN BY THE SUPERIOR COURTS TO THE FACTS OF THE CASE BEFORE THE TRIBUNAL ON ERR ONEOUS UNDERSTANDING OF SUCH PRINCIPLES, RECORDING OF AN E RRONEOUS FINDING BY IT BASED ON THE FACTS ON RECORD, ARRIVIN G AT A CONCLUSION ON ERRONEOUS APPLICATION OF PROVISIONS OF LAW TO TH E FACTS OF THE CASE, ETC., CANNOT BE HELD TO BE 'A MISTAKE APPAREN T FROM THE RECORD' WARRANTING ANY RECTIFICATION BY THE TRIBUNA L IN EXERCISE OF ITS POWER UNDER S. 254(2) OF THE IT ACT, BY RECONSI DERING THE APPLICATION OF PRINCIPLES OF SUPERIOR COURTS TO THE FACTS OF THE CASE OR BY RECONSIDERING ITS FINDINGS RECORDED, OR BY RE CONSIDERING THE APPLICATION OF THE RELEVANT PROVISIONS OF LAW TO TH E FACTS OF THE CASE AS IS DONE BY THE TRIBUNAL IN THE INSTANT CASE. SUC H AN EXERCISE OF POWER UNDER S. 254(2) OF THE ACT AMOUNTS TO REVIEW OF ITS EARLIER ORDER ON MERITS BUT NOT 'RECTIFICATION OF MISTAKE A PPARENT FROM THE RECORD' AND SUCH REVIEW WOULD CERTAINLY BE BEYOND T HE SCOPE OF S. 254(2) OF THE IT ACT. 6.6. TO ILLUSTRATE FURTHER, IN THE CASE OF THE P RESENT ASSESSEE, IT CANNOT BE SAID THAT THERE WERE MISTAKES ON THE FACE OF THE RE CORDS WARRANTING INTERFERENCE OF THIS BENCH U/S 254(2) OF THE ACT. THE WORST, IT CAN BE SAID THAT THERE BEING ERRORS FOR WHICH THE REMEDY AVAILA BLE TO THE ASSESSEE IS NOT U/S 254(2) OF THE ACT, BUT, U/S 260A OF THE ACT FOR REDRESSAL. OUR M.P.NO.56/BANG/2010 PAGE 10 OF 10 CONCLUSION IS SUPPORTED BY THE FINDING OF THE HONB LE JURISDICTIONAL HIGH COURT REFERRED SUPRA. IN VIEW OF THE ABOVE, THE MI SC. PETITION OF THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE MISC. PETITION OF THE AS SESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF AUGUST, 2010. SD/- SD/- ( SMT. P. MADHAVI DEVI ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 10 TH AUGUST, 2010. DS/- COPY TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.