SHIVAM BUILDERS PRIVATE LIMITED,AHMEDABAD V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4(1)(1), AHMEDABAD

MA 134/AHD/2024

AI Insights

Shivam Builders Private Limited filed a Miscellaneous Application requesting the Income Tax Appellate Tribunal to modify its earlier order concerning the Assessment Year 2015-16. The application argued that the Tribunal had overlooked certain submissions and case laws during the initial ruling, which affected the assessment of gross profit and the handling of stock valuation. The Tribunal, however, found that all submissions had been considered and that the issues raised were not within the scope of Section 254(2) of the Income Tax Act, which only allows for rectification of apparent mistakes, not a re-examination of the case on its merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24990 (ITAT-AHMEDABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Other Referred Cases: CIT vs. Reliance Telecom Limited (2021) 133 taxmann.com 41 (SC)
• Laws Referred To: Section 254(2) of the Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: MAHESH CHHAJED
• Keywords: Set aside; Rejection of books of accounts
• Section: 254(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER MISCELLANEOUS APPLICATION No. 134/Ahd/2024 (In ITA No. 317/Ahd/2022) (Ǔनधा[रण वष[ / Assessment Years : 2015-16) Shivam Builders Private Limited 802, 8th Floor, Rajvi Arcade, Nr. Gurukul Drive in Road, Memnagar, Ahmedabad, Gujarat 380052 बनाम/ Vs. Deputy Commissioner of Income Tax Circle 4(1)(1), Ahmedabad èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AACCS0296D (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Mahesh Chhajed, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Rignesh Das, Sr. DR Date of Hearing 03/01/2025 Date of Pronouncement 08/01/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: The present Miscellaneous Application is filed by the assessee with a request to modify the order of this Tribunal in ITA No. 317/Ahd/20224 dated 09.05.2024 for the Assessment Year 2015-16. 2. Shri Mahesh Chhajed, Ld. AR of the assessee submitted that in the course of appeal, the assessee had filed a detailed paper MA No. 134/Ahd/2024 [Shivam Builders Private Limited vs. DCIT] A.Y. 2015-16 - 2 – book along with synopsis of arguments explaining each issue involved in the appeal. He submitted that a contention was taken that if the addition is sustained, the assessee should be allowed to increase value of stock as opening stock in the subsequent year. Further that, as a result of addition the gross profit of the issue would be 78.66%, which was absurd and not possible in the construction industry. The Ld. AR submitted that these submissions were not considered in the order passed by the Tribunal. Further, the ITAT had overlooked the reliance placed by the Ld. AR of the assessee on various case laws as relied upon, while passing the order. He, therefore, requested that the order passed by the Tribunal may kindly be recalled and the appeal re- fixed to consider the documents/facts/submissions which had not been considered. 3. Per contra, Shri Rignesh Das, Ld. Sr. DR submitted that the Tribunal had passed the order after considering all the submissions of the assessee and the case laws as relied upon by the assessee which were also extensively discussed in the order. As regarding issue of increase of opening stock for the next year, the Ld. DR submitted that no such ground was taken by the assessee and, therefore, the Tribunal was not required to adjudicate this issue. 4. We have carefully considered the rival submissions. It is found that the submissions and arguments of the assessee were duly incorporated in Para Nos. 4 to 6 of the order dated MA No. 134/Ahd/2024 [Shivam Builders Private Limited vs. DCIT] A.Y. 2015-16 - 3 – 09.05.2024. The grounds taken by the assessee pertained to rejection of the books of accounts by the AO and estimation of net profit @ 10% of total receipts. These issues along with submissions of the assessee were duly considered by the Tribunal in the order. A categorical finding was given that the assessee did not explain the reason for huge loss with negative NP of 61% during the year as against income and net profit of 17.82% in the preceding year. After considering the facts of the case, the rejection of books of accounts by the AO was upheld and estimation of the net profit @ 10% was also upheld. The contention of the assessee that the addition would result in increase of gross profit to 78.66% was duly considered by the Tribunal while confirming the estimation of the net profit @ 10% by the AO, which was held as reasonable considering the fact that the assessee himself had disclosed net profit of @17.82% in the preceding year. As regarding allowing to increase the value of opening stock in the subsequent year, neither any ground was taken by the assessee in this regard nor this issue was found pertaining to the appeal of the current year. The case laws relied upon by the assessee and their applicability to the facts of the present case were duly discussed in Para Nos. 16 to Para 24 of the order. 5. In view of the above facts, we do not find any mistake apparent from record in the order dated 09.05.2024 passed by the Tribunal. By filing the present Misc. application, the assessee has precisely requested to recall the order and to allow another opportunity of MA No. 134/Ahd/2024 [Shivam Builders Private Limited vs. DCIT] A.Y. 2015-16 - 4 – being heard on the issues which have all been considered in the order. The provision of Section 254(2) of the Act is intended to rectify only the mistake apparent from the record and we do not find any mistake in the order. The power of Section 254(2) of the Act cannot be utilized to recall and review the order on its merit. The Hon’ble Supreme Court in the case of CIT vs. Reliance Telecom Limited (2021) 133 taxmann.com 41 (SC) has categorically held as under: “3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re- heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court.” 6. Considering the totality of the facts, the Miscellaneous Application filed by the assessee is required to be dismissed for MA No. 134/Ahd/2024 [Shivam Builders Private Limited vs. DCIT] A.Y. 2015-16 - 5 – the reason as discussed above and also on account of judicial discipline following the judgement of Hon’ble Supreme Court in the case of Reliance Telecom Ltd. (supra). 7. Accordingly, the Miscellaneous Application filed by the assessee is dismissed. This Order pronounced on 08/01/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 08/01/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "