DEVRAJ ANAND CERAMICE (P.) LTD. vs COMMISSIONER OF INCOME TAX

Agarwal, J. -

This is an application filed by the assessee u/s 256(2) of the Income Tax Act, 1961, seeking a direction to the Tribunal, New Delhi, to draw up a statement of case and to refer the following questions of law for opinion to this Court:

"1. Whether, on proper interpretation/ construction of the provisions of section 254(2) of the Act and the Misc. Application dated 10-4-1995 filed by the applicant-assessee, the Tribunal was legally justified in holding that it was an application seeking not only a review of the order dated 23-12-1994 passed by the Tribunal, but an attempt on the part of the counsel to re-argue the appeal itself ?

Whether, on the facts and in the circumstances of the case, the Tribunal being a final fact-finding body was legally justified by not re-casting the trading account of the assessee by excluding the purchases of coal and freight thereon held as bogus and also to telescope separate addition of Rs. 1,60,800 with the trading addition on the basis of its own findings recorded in its order dated 23-12-1994 in disregard of the judicial pronouncement in Anantharam Veerasinghaiah and Co. Vs. Commissioner of Income Tax , Andhra Pradesh, , CIT v. Tyaryamal Balchand (1987)165 ITR 453/32 Taxman 64 (Raj.) , Commissioner of Income Tax Vs. Estate of Late S. Mehboob Khan, and Commissioner of Income Tax, Tamil Nadu-V Vs. K.S.M. Guruswamy Nadar and Sons, as cited before the Tribunal particularly when the assessing officer had himself done it but the Commissioner (Appeals) had reserved such telescoping ?

Whether, the Tribunal was legally justified in ignoring the judgments of the sales-tax authorities by which the turnover declared by the assessee stood accepted by holding that different considerations weigh in Income Tax matters ?

Whether, the Tribunal was legally justified in holding on mere suspicion, conjectures and surmises that the purchases of coal made in October 1989 and freight thereon treated as bogus and the money as debited in the account books for the purchase of coal and freight thereon had been packeted by someone whose identity remains undisclosed particularly when it was not in dispute that the assessee did carry out manufacturing activity which in absence of such coal could not be carried out and there could be no sales without production in October 1989 ?

Whether, the Tribunal was legally justified to estimate the turnover of the applicant-assessee at Rs. 70,00,000 as against Rs. 65,00,000 mentioned in para 31 at page 36 of its order dated 23-12-1994 ?

Whether, on the facts and in the circumstances of the case, the Tribunal being final fact-finding body was not obliged to compute the correct and real income of the assessee even on the basis of its own findings recorded in its order dated 23-12-1994 as also placed before it by the assessee in M.A. No. 63 (Delhi) of 1995 filed by the assessee or in the alternative to direct the assessing officer to compute correct income of the assessee

The Tribunal, Delhi, vide order dated 23-12-1994, had partly allowed the appeal filed by the assessee-applicant. While upholding the applicability of the proviso to section 145(1) of the Act, the Tribunal has fixed the turnover at Rs. 70 lakhs. It applied a gross profit rate of 22.5 per cent. The Tribunal further upheld the separate additions of Rs. 2,47,140 and Rs. 1,60,800 made by the Commissioner (Appeals) in respect of alleged purchases of coal made by the applicant from Sheet Coal Depot as also the amount paid towards freight and fake deposits. The applicant filed an application u/s 254(2) of the Act, seeking rectification of the Tribunal''s order. The Tribunal vide order dated 29-9-1995 had rejected the said application on the ground that the application is wholly misconceived as no mistake apparent from the record within the meaning of section 254(2) has been pointed out. It further held that by means of the said application the applicant is not only seeking a review of the order passed by the Tribunal, but an attempt has been made by the learned counsel to reargue the appeal itself. The Tribunal noted the fact that even on the assumption that the production during the month of October 1989 was carried on with the alleged bogus purchases of coal and there were no other purchases, no further relief would become available to the applicant, since relief already given takes due care of all the submissions made at the time of hearing of appeal. It declined to consider fresh material in proceedings u/s 254(2).

The application filed by the assessee u/s 256(1) was rejected by the Tribunal vide order dated 30-9-1996.

We have heard Shri P.K. Jain, the learned counsel for the applicant and Shri A.N. Mahajan, the learned standing counsel for the respondent.

It may be mentioned here that we have already rejected the reference application filed by the assessee u/s 256(2) against the main order of the Tribunal dated 23-12-1994.

We have perused the order of the Tribunal, New Delhi, passed u/s 254(2) and we fully agree that by means of the application filed u/s 254(2), the assessee-applicant was, in fact, seeking review of the Tribunal''s order dated 23-12-1994. The point raised in the application filed u/s 254(2) in effect seeks review of the, order and not rectification which is outside the purview of section 254(2). The Tribunal was, therefore, justified in rejecting the application filed u/s 254(2).

We are of the opinion that the order of the Tribunal dated 29-9-1995 does not give rise to any question of law.

The reference application is, accordingly, rejected.