MAHENDRAKUMAR KHETMAL JAIN,NANDURBAR V. INCOME TAX OFFICER, WARD-1, DHULE, DHULE

MA 21/PUN/2024

AI Insights

The case involves Mahendrakumar Khetmal Jain, who filed a Miscellaneous Application against an order of the Income Tax Appellate Tribunal concerning the Assessment Year 2017-18. The original dispute was about the addition of Rs.8,00,000 to the assessee's income under section 69A read with section 115BBE of the Income Tax Act, due to unexplained cash deposits during the demonetization period. The assessee contended that the cash was not unexplained as it was exchanged from old currency notes belonging to family members, and thus should not be treated as unexplained money. The Tribunal, however, upheld the addition, leading to the filing of the Miscellaneous Application by the assessee seeking rectification of this order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472588 (ITAT-PUNE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Ras Bihari Bansal vs. CIT, CIT (IT-4) Mumbai v. Reliance Telecom Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMNATH MURKUNDE
• Assessee Lawyers: BHUVANESH V. KANKANI
• Section: 254(2); 69A

Judgement Text

" आयकर अपीलीय अधिकरण “एस.एम.सी”न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / MA No.21/PUN/2024 (Arising out of ITA No.1375/PUN/2023) धििाारण वर्ा / Assessment Year: 2017-18 Mahendrakumar Khetmal Jain, Khetiya Road, Shahada, Dist. Nandurbar - 425 409 PAN : ABKPJ3556H Vs. ITO, Ward – 1, Dhule अपीलार्थी /Applicant प्रत्यर्थी / Respondent Assessee by : Shri Bhuvanesh V. Kankani Department by : Shri Ramnath Murkunde Date of hearing : 10-01-2025 Date of Pronouncement : 18-03-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The present Miscellaneous Application is filed by the assessee seeking rectification of the order dated 04.03.2024 in ITA No. 1375/PUN/2023 for the Assessment Year 2017-18. 2. The assessee in its Miscellaneous Application has raised the following contentions: “1. In the above referred appellate decision, in para 4 it is stated as under:- \"4. After giving my thoughtful consideration, I am of the view that even if the assessee has filed his voluminous paper book running into 150 pages, his contention that the cash deposit during demonetization period in fact had come from his other family members who are regular return filers, could hardly be accepted in principle. The fact also remains that learned lower authorities have not given credit of the accumulated cash in his household as well. Faced with the situation, I deem it appropriate in larger interest of justice that a lumpsum addition of Rs.8 lakhs out of that in issue of Rs.11.19 lakhs deserves to be upheld. The assessee gets relief of Rs.3.90 lakhs in very terms. Necessary computation shall follow as per law. Ordered accordingly. 2. The very first sentence is 2 M.A. No. 21/PUN/2024 (Arising out of ITA No.1375/PUN/2023, AY 2017-18 \"After giving my thoughtful consideration, I am of the view that even if the assessee has filed his voluminous paper book running into 150 pages, his contention that the cash deposit during demonetization period in fact had come from his other family members who are regular return filers, could hardly be accepted in principle.\" -This sentence does suggest that the assessee has borrowed the amount of Rs.11,19,000/-from his family members. -However, this is not the case. The fact is that the assessee's Regular currency [and not old currency ] of Rs. 11,19,000/- had been EXCHANGED WITH THE OLD CURRENCY [Specified Bank Notes] BELONGING TO THE FAMILY MEMBERS. -Therefore, it is not the borrowing from the family members as such. -Therefore, also that, it is not the Unexplained Money as taxed u/s.69A -As per the assessee's Cash Book extract, filed at Page no.49 of the Paper Book of 150 pages submitted during the course of the appeal hearing, the Cash position as on 08.11.2016 to 13.11.2016 is arrived at as under:- From the Extract of Cash Book of Mahendrakumar Khetmal Jain FY:2016-17 Date:08-11-2016--0. Balance Rs.12,41,718 Date: 08.11.2016-:Add: Cash Sales as per GST return: Rs. 01,99,280 ============= Total Rs.14,40,998 Date:08.11.2016: Less:Cash Deposited in Mahavir Patpedhi: Rs. 14,071 ============= Closing Balance as on 10-11-2016 Rs.14,26,927 ============= Date:09.11.2016 to 10.11.2016 No Transactions. Therefore Closing balance as on 10.11.2016 Rs. 14,26,927. Date:11.11.2016 Opening balance …………………….. Rs.14,26,927. Add: Cash Sales 1..Rs.1,98,644. 2..Rs.1,98,220. 3..Rs.1,95,040. ============= Total Rs. 5,91,904………………………. Rs. 05,91,904 Total InwardsRs.20,18,831. Less :HDFC Bank Deposits on 11-11-2016 Rs. 9,00,000. ============= Closing Balance as on 11.11.2016 Rs.11,18,831. ============= Date : 12.11.2016 Opening Balance Rs.11,18,831. Add.: Cash sales 1,98,220. Rs.01,98,220. ============= Closing Balance 12-11-2016 Rs.13,17,051. ============= Date: 13.11.2016: Opening Balance Rs.13,17,051. Add: Cash Sales 1.Rs.1,94,510. 2.Rs.1,94,510. ============= 3 M.A. No. 21/PUN/2024 (Arising out of ITA No.1375/PUN/2023, AY 2017-18 TOTAL Rs.3,89,020. Rs.3,89,020. ============= ============ Total of Cash Inward Rs.17,06,071. Less: Cash Outward : 13.11.2016 1.HDFC current Deposits Rs.16,88,000. ============ Cash at close of 13.11.2016 Rs. 18,071. ============ Thus, the HDFC bank Deposits in Current account are explained as the withdrawal from assessee's own books of accounts which are regularly maintained and duly audited. Here, it is to be noticed that the assessee has not credited the amount EXCHANGED of Rs. 11,19,000/- because the cash entry for the exchange does not alter the Cash balance amount. It is also noteworthy that the books of accounts have been accepted as audited. The Sales-Cash as well as credit, have also been accepted by the A.O. but the addition has been made u/s. 69A r.w.s. 115BBE. 3. Section 69A lays down that if, in any financial year, the assessee is found to be the owner of any money, bullion, jewellery,or another valuable article, and such money, etc., is not recorded in the books of account, if any, maintained by him for any source of Income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable articles, or the explanation offered by him is not, is not in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion jewellery or other valuable article may be deemed to be the income of the of the assessee for such financial year. 4. Here in the assessee's case, the amount has been recorded as the Bank Deposits out of the available CASH Balance as per the Cash Book as the outgoing Cash in the Bank Account of the HDFC bank. 5. It is true that the said part of the Cash Balance was in the form of old Currency notes which got exchanged against the assessee's Current and valid currency notes. However, this does not tantamount to the excess Cash Balance in the possession of the assessee. 6. The Assessing Officer, and the C.I.T. Appeals have treated this exchanged currency notes as the excess Cash Balance in the possession of the assessee which is not factually correct. 7. It is noteworthy that my Appeal Ground no. 4 reads as under:- “The CIT(A), (NFAC) erred in not allowing the credit for the total Cash Balance as per Assessee's cash book, for the deposit in the Bank Account, which has resulted in the fact that the Cash Balance (regular) of Rs. 11,19,000/- is the loss of Cash Balance and the same should have been given the set off against the total income of the Appellant, if the credit is denied, under any circumstances.\" 8. It is therefore, requested that these facts and the legal position may please be reviewed and the suitable order may please be passed to delete the confirmed addition of Rs.8,00,000/- if deemed it fit.” 3. The Ld. AR at the time of hearing reiterated the above stated contentions made in the Miscellaneous Application and requested to reconsider the issue(s) decided in ITA No. 1375/PUN/2-23 in respect of addition made therein on account of cash deposit(s) during demonetization period under the provisions of 4 M.A. No. 21/PUN/2024 (Arising out of ITA No.1375/PUN/2023, AY 2017-18 section 69A r.w. section 115BBE of the Income Tax Act, 1961 (the “Act”). He further submitted that the Tribunal has not considered the alternate plea raised by the assessee in ground no. 4 of the said appeal which is reproduced above. 4. The Ld. DR, on the other hand, submitted that the contention of the assessee in the Miscellaneous Application is beyond the scope of section 254(2) of the Act as these are not mistake apparent on record. The Ld. DR argued that by way of this Miscellaneous Application the assessee is seeking review of the Tribunal’s order in the garb of rectification which is not permissible under the law. 5. We have heard both the parties, considered their arguments and carefully perused the Tribunal’s order dated 04.03.2024 in the main appeal being ITA No. 1375/PUN/2023 for Assessment Year 2017-18. The assessee by way of the present Miscellaneous Application contended that the observations and findings in the Tribunal’s order (supra) is not based on the correct facts of the case and also the Tribunal did not consider the alternate claim of the assessee (Ground no. 4), which according to the assessee is mistake apparent on record. The assessee has therefore prayed in the present Miscellaneous Application that the facts and the legal position may be reviewed and the suitable order may be passed to delete the confirmed addition of Rs.8,00,000/-. 6. In exercise of powers under section 254(2) of the Act, the Tribunal may amend any order passed by it only to rectify any mistake apparent from the record. The Tribunal cannot revisit its earlier order and go into the details on merit, which is beyond the scope and ambit of the power conferred under section 254(2) of the Act. 7. On perusal of the contents of the Miscellaneous Application filed by the assessee as well as the findings of the Tribunal in its order dated 04.03.2024 in ITA No. 1375/PUN/2023, we find it difficult to agree with the contentions of the assessee. In our considered view, the Tribunal in its order (supra) had adjudicated the issue(s) under consideration on merits with specific finding on the issue(s) involved and after considering all the facts and circumstances of the case and thereafter allowed the appeal of the assessee in part confirming addition to the tune of Rs. 8,00,000/- under the provisions of section 69A of the Act read with 115BBE of the Act. 5 M.A. No. 21/PUN/2024 (Arising out of ITA No.1375/PUN/2023, AY 2017-18 8. On the other hand, we agree with the contention of the Ld. DR that what the assessee is actually seeking by way of this Miscellaneous Application is the review of the Tribunal’s order dated 04.03.2024 in ITA No. 1375/PUN/2023 in the garb of rectification which is not permissible under the law. 9. It is a settled law that review in the garb of rectification is not permissible under section 254(2) of the Act. The Hon’ble Delhi High Court in the case of Ras Bihari Bansal vs. CIT (2007) 293 ITR 365 held as under:- \"Section 254 of the Income Tax Act; 1961, enables the concerned to rectify any \"mistake apparent from the record\". It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on record, although it may be an error of judgment. The mere fact that the tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section.” 10. In its recent judgment in CIT (IT-4) Mumbai v. Reliance Telecom Ltd. (2021) 284 taxman 517 (SC)/440 ITR 1 (SC) their Lordships of the Hon’ble Supreme Court held that while considering application under section 254(2) Tribunal is not required to revisit its original order and go in details on merits and completely recall its order as powers under section 254(2) are only to rectify/correct any mistake apparent from record. 11. In light of the above discussion and judicial precedent, we hold that there is no mistake apparent on record in the Tribunal’s order dated 04.03.2024 in ITA No. 1375/PUN/2023 calling for rectification of the same. Accordingly, the Miscellaneous Application filed by the assessee is dismissed. 12. In the result, the Miscellaneous Application No.21/PUN/2024 arising out of ITA No. 1375/PUN/2023 filed by the assessee is dismissed. Order pronounced in the open court on 18th March, 2025. Sd/- Sd/- (Manish Borad) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 18th March, 2025. 6 M.A. No. 21/PUN/2024 (Arising out of ITA No.1375/PUN/2023, AY 2017-18 आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “एस.एम.सी” बेंच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठदनजीसदचि / Sr. Private Secretary आयकरअपीलीयअदिकरण ,पुणे/ ITAT, Pune "