VENKATESWARA RAO GOPALAM,GUNTUR V. ITO, WARD - I, TENALI

MA 34/VIZ/2025

AI Insights

The case involves Venkateswara Rao Gopalam, the appellant, who filed a Miscellaneous Application against the order of the Income Tax Appellate Tribunal, Visakhapatnam, concerning the assessment year 2018-19. The original dispute was about the addition of Rs. 1,51,42,975 as turnover, which the assessee argued was already taxed as business income. The Tribunal had previously set aside the matter to the file of the Assessing Officer for de novo consideration, citing contradictory views between the Assessing Officer and the CIT(A). The assessee's application under Section 254(2) claimed there were errors in the Tribunal's order, which the Tribunal found to be a request for a review of the decision, not a rectification of a mistake apparent from the record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779339 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 04-09-2025
• Other Referred Cases: CIT, Central Circle 1, VSP vs. M/s Hirapanna Jewellers, VSP
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside; Business income; Corroborative evidences; Rule of consistency
• Section: 147; 69; 145

Judgement Text

"1 आयकर अपीलीय अधिकरण, विशाखापटणम पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench श्री विजय पाल राि, माननीय उपाध्यक्ष एिं श्री मंजूनाथ जी, माननीय लेखा सदस्य SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT AND SHRI MANJUNATHA G, HON’BLE ACCOUNTANT MEMBER M.A. No.34/Viz/2025 आयकरअपीलसं./I.T.A. No.283/Viz/2025 (निर्धारण वर्ा/ Assessment Year : 2018-19) Venkateswara Rao Gopalam, Guntur. PAN : BQYPG7092M Vs. The Income Tax Officer, Ward-1, Tenali. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri DL Narasimha Rao, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Dr. Aparna Villuri, Sr.A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 10.10.2025 घोषणा की तारीख/ Date of Pronouncement : 15.10.2025 O R D E R प्रतत मंजूिाि जी./PER MANJUNATHA G. A.M. The assessee has filed the present Miscellaneous Application (in short, “M.A.”) u/s 254(2) of the Income Tax Act, 1961 (for short “the Act”) against the order of the Tribunal in ITA No.283/Viz/2025 for A.Y. 2018-19 dated 06.08.2025. Printed from counselvise.com M.A.No.34/Viz/2025 in ITA No.283/Viz/2025 Venkateswara Rao Gopalam 2 2. The contents of the Miscellaneous Application of the assessee read as under : 10. NATURE OF 'ERRORS' CONTAINED IN THE ITAT'S ORDER, dt. 06/08/2025 REQUIRING ENFORCEMENT OF PROVISIONS CONTAINED IN SEC. 254 (2) OF THE ACT 10.1. If the assessee is permitted to do so and with high degree of respects to the Hon'ble ITAT.VSP, the assessee would bring on recode a few instances hereunder, which would highlight \"errors\" contained therein and which are apparent from record. 10.2. In response to the notice issued by the A. O. the assessee filed a reply dt. 06/04/2022 (vide page 16 of the paper book filed with the ITAT.VSP that the 'buyers of the Maize, from the assessee made direct payments in the form of 'remittances to his AXIS BANK account' and thereby those credits represented receipts and the Bank account was also filed therewith which would stand to testify that the names of the TRADERS who made payments into the assessee's bank account were reflected in the bank account itself; 10.3. Along with the above reply dt. 06/04/2022, the assessee filed with the A. O. bank statements, Capital account, financial statements, viz., trading Profit & loss account, CASH Book for the Asst. Year 2018-2019 (vide page 16 of paper book). 10.3. Trading account for the Asst. year 2018-2019, (disclosed TURNOVER) of Rs. 1,51,42,975/-, purchases of Rs. 1,47,22,730/-, gross profit of Rs. 4,20,245/administrative overheads of Rs. 2.27.208/ and the Net Profit of Rs. 1,93,037/-(vide page 83 of paper book filed with the ITAT VSP) and such income was disclosed in the statement of total income which formed part of the ROI dt. 10/11/2023 (e-filing Ack. No. 510986631101123) (vide page 80 of the paper book) and such net income of Rs. 1,93,037/-contained in the above ROI for the Asst. year 2018-2019 was duly accepted by the A. O. while completing the original asst, order, dt. 15/03/2024 (vide page 57 of the paper book). The income of Rs. 1,93,040/ was disclosed in the statement of total income under the head \"BUSINESS\" (vide 81 of paper book). And this trading profit was accepted even by the predecessor who completed the original asst. under Sec. 147 dt. 15/03/2024, which was under dispute before the CIT (A). 10.4. Even the CIT (A) confirmed the stand of the A.O. with regard to adoption of business income at Rs. 1,93,037/- while completing the original asst. cited. supra. 10.4. Further, even the predecessor A.O., did not enforce the provisions contained in Sec. 145 of the Income Tax Act, 1961; in that those books of account were not rejected and thereby, the purchases and Sales, stock, administrative costs and profit etc. were not disputed by the predecessor A. O. also and also by the CIT(A) and even by the Income Tax Officer, who submitted the REMAND REPORT, dt. 17/03/2025, act all of the inddun di for nwur that fuelnas by senassactroy and the same of Rs. 1,93,037/- was accepted Agrl all of the form. Printed from counselvise.com M.A.No.34/Viz/2025 in ITA No.283/Viz/2025 Venkateswara Rao Gopalam 3 10.5 NO CONTRADICTORY VIEWS FROM THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) 10.5.1. It is, inter alia, held by the ITAT. VSP Viewed that there was business activity and the income of Rs. 1,93,037/- was accepted by all of them. …Since, there are contradictory views from the Assessing Officer and the Ld. CIT (A) and further, the assessee failed to furnish relevant supporting bills for Sales \"and in our considered view, the matter needs to be SET ASIDE to the file of A. O. for the DE NOVO CONSIDERATION of the issue\". 10.5.2. From the foregoing, it may be noticed that there were 'NO CONTRADICTORY VIEWS' expressed by the A. O., (who completed the original asst.); A. O. (who submitted Remand report (and the Ld. CIT (A) who dismissed the assessee's appeal) as far as the disclosure of BUSINESS INCOME of Rs. 1,93,037/-. 10.5.3. Apparently, there emerged 'contradictory views with regard to formulation of addition of Rs. 1,51,42,975/- (which represented the Turnover - which suffered taxation already as established by the original assessment order dt. 15/03/2024,; in that both the predecessor A. O. and the CIT (A) held the view that such addition under Sec. 69A is warranted; while the A. O. at the remand stage (JAO) specifically reported that such addition may not be justifiable. Thus such 'CONTROVERSY if any, is attributable to the impugned addition of Rs. 1,51,42,975/- and the ITAT took such controversy as a controversy in identification of BUSINESS INCOME which view is apparently not CORRECT and hence the provisions contained in Sec. 254 (2) may be applicable to the instant case. 10.6. RULE OF CONSISTENCY 10.6. The same ITAT at VSP held in the case of A CIT, Central Circle 1, VSP VS. M/s Hirapanna Jewellers, VSP (ITA. No. 253/viz/2020, dt. 12/05/2021 \"that when trading receipts suffered taxation, formulation of addition of the same receipts under Sec. 69/68 may be void in law. A copy of the above judgment of the ITAT.VSP was also filed with the Paper Book-vide page 85 thereof and this judgment is not taken into consideration by the ITAT while rendering judgment in the instant case in ITA No. 282/viz/ 2025, dt. 06/08/2025 and thereby it is felt that there emerged a mistake of fact and mistake of law in view of non enforceability of the RULE OF CONSISTENCY. 10.7. Further, it is submitted that the assessee maintained books of account, inclusive of Cash book (which was supplied to the A. O.) and thereby the provisions of Sec. 69 A are inapplicable to the instant case and on this ground also, the order of the ITAT may have to be considered as an order covered by mistake of fact and mistake of law also and thereby the provisions of Sec. 254 (2) may be applicable to the instant case. 10.8. NON ADJUDICATION OF GROUND NOS. 2,3,4, & 5 reflected in form No. 36. dt. 05/05/2025. 10.8.1. It may further be noticed that the Ground Nos. 2,3,4,& 5 contained in Form No. 36 were not adjudicated by the ITAT specifically and hence the provisions contained in Sec. 254 (2) may be liable to be enforced in accordance with law. Printed from counselvise.com M.A.No.34/Viz/2025 in ITA No.283/Viz/2025 Venkateswara Rao Gopalam 4 11. CUNCLUSIVE SUBMISSIONS, 11.1. For the detailed reasons recorded above and for reasons which may be advanced during the course of hearing of this M. A., it is humbly requested that the Hon'ble ITAT. VSP may be pleased to re-consider the issues raised above and by enforcement of Sec. 254 (2) of the Act, the reliefs sought for may be allowed, by ordering deletion of the impugned addition of Rs. 1,51,42,975/- made by the A. O. under Sec. 69 A r.w.s. 1158BE of the Act, in lieu of the decision ordering 'set aside of the order of the CIT (A), under Sec. 250, dt. 25/03/2025 made in its earlier Order dt. 06/08/2025, in the interests of equity and justice and also to be in conformity with law.” 3. The Learned counsel for the assessee Shri DL Narasimha Rao, Advocate, referring to the petition filed by the assessee u/s 254(2) of the Act, submitted that, there are prima facie errors in the order of the Tribunal dated 06.08.2025 in ITA No.283/Viz/2025 in as much as while adjudicating the issue and setting aside the matter to the file of the A.O., the Tribunal held that there are contradictory views from the A.O. and the Ld. CIT(A) on the issue of additions made towards cash deposited in the bank account, but going by the orders of A.O. and Ld. CIT(A), there are no contradictory views and further both the authorities have accepted the fact that since the cash deposited in the bank account are out of sale proceeds of maize, which has been directly deposited into the bank account by the parties and this fact has been further supported from confirmation letters obtained from the parties. Further, during the course of hearing, the issue has been argued in light of the provisions of Section 69A of the Act, and submitted that, once the turnover is suffered tax as business receipt, then further addition u/s 69A is not permissible. Although the assessee has made extensive arguments on this issue, but the learned Tribunal has set aside the issue to the file of A.O. on the sole basis that there are contradictory views from both the authorities, even though, there is no contradictory views from the authorities on the issue of nature of business of the assessee and source of credit into Printed from counselvise.com M.A.No.34/Viz/2025 in ITA No.283/Viz/2025 Venkateswara Rao Gopalam 5 the bank account. Therefore, he submitted that the findings of the Tribunal in Para 8 of the order dated 06.08.2025 is a mistake apparent on record which needs to be rectified u/s 254(2) of the Act. Therefore, he submitted that the order dated 06.08.2025 in ITA No.283/Viz/2025 should be recalled. 4. The learned Senior A.R. for the Revenue Dr. Aparna Villuri, on the other hand, supporting the order of the Ld. CIT(A) submitted that the assessee has failed to make out a case of prima facie mistake apparent on record, which can be considered u/s 254(2) of the Act, and what is canvassed through the present M.A. is reviewing the decision given by the Tribunal in the given facts and circumstances of the case, which is not permissible under law. Further, the Tribunal after considering the arguments on both the sides has remanded the issue to the file of A.O. for further verification of the issue in light of the arguments of the counsel for the assessee that the credits in the bank accounts pertains to sale proceeds of maize in light of relevant bills and other supporting evidences. Therefore, there is no merit in the M.A. filed by the assessee and thus, the same should be dismissed. 5. We have heard both the parties and considered the relevant contents of M.A. filed by the assessee in light of the order of the Tribunal in ITA No.283/Viz/2025 dated 06.08.2025 and more particularly with reference to Para 8 of the order, where the issue has been discussed at length in light of the reasons given by the A.O. to make additions towards cash deposits, the arguments of the assessee before the authorities to explain the source for cash deposit and also relevant confirmations filed by the assessee from certain parties without further supporting evidences in the form of either purchase Printed from counselvise.com M.A.No.34/Viz/2025 in ITA No.283/Viz/2025 Venkateswara Rao Gopalam 6 bills or sales bills. Upon careful consideration of relevant facts, the Tribunal had recorded a categorical finding that, there are contradictory views from both the authorities, in respect of the issue whereas the A.O. categorically denied the case of the assessee that source for cash deposit is out of sale proceeds of maize, but the Ld. CIT(A) has recorded a categorial finding that the purchase and sales in the books of account of the assessee are matching. The Ld. CIT(A) recorded further finding that, the claim of the assessee is not supported by the relevant purchase and sale bills. Under these facts and circumstances, the Tribunal came to the conclusion that, the issue needs further examination from the A.O. with reference to claim of the assessee regarding source for cash deposits into bank account and thus, set aside the matter to the file of the A.O. to reconsider the issue after providing an opportunity of hearing to the assessee. 6. In our considered view, going by the relevant contents of the petition filed u/s 254(2) of the Act and factual finding recorded by the Tribunal in Para 8 of the order dated 06.08.2025, the assessee has failed to make out a case of prima facie mistake apparent on record from the order of the Tribunal, but what is canvassed though the present M.A. is seeking review of the decision given by the Tribunal under the given facts and circumstances of the case, which is not permissible under law, as per Section 254(2) of the Act. At this stage, we rely on decision of the Hon'ble Supreme Court in the case of Reliance Telecom Ltd. vs. CIT (2021) 133 taxmann.com 41 (SC), wherein it was held that powers u/s 254(2) of the Act, are only to modify/correct any mistake apparent from the record if assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, only remedy available to the assessee was to prefer an appeal before the Hon'ble High Court but, the finding Printed from counselvise.com M.A.No.34/Viz/2025 in ITA No.283/Viz/2025 Venkateswara Rao Gopalam 7 of the Tribunal cannot be considered as mistake apparent on record which can be rectified u/s 254(2) of the Act. 7. In this view of the matter and by respectfully following the decision of Hon'ble Supreme Court in the case of Reliance Telecom Vs. CIT (supra), we are of the considered view that there is no merit in the petition filed by the assessee u/s 254(2) of the Act, against the order of the Tribunal passed in ITA No.283/Viz/2025 and thus, we dismiss the M.A. filed by the assessee. 8. In the result, the M.A. filed by the assessee is dismissed. Order pronounced in the Open Court on 15th October, 2025. Sd/- श्री विजय पाल राि (VIJAY PAL RAO) उपधध्यक्ष /VICE PRESIDENT Sd/- (मंजूिाि जी) (MANJUNATHA G.) लेखध सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 15.10.2025. TYNM/sps आदेशकी प्रतततिति अग्रेतषत/ Copy of the order forwarded to:- 1. तििााररती/The Assessee : Shri Venkateswara Rao Gopalam, D.No.7-98, Main Road, Kotipalli, Donepudi, Bhattiprolu Mandal, Guntur, Guntur District, Pin 522, 234, Andhra Pradesh 2. राजस्व/ The Revenue : The Income Tax Officer, Ward-1, Tenali. 3. The Principal Commissioner of Income Tax, Vijayawada. 4. तवभागीयप्रतततिति, आयकर अिीिीय अतिकरण, / DR, ITAT, Visakhapatnam. 5. गार्ाफ़ाईि / Guard file आदेशािुसार / BY ORDER Printed from counselvise.com "