Vashisth Builders and Engineers Pvt. Ltd. vs DCIT, Circle 26 (1)

O R D E R

“1.

During the course of hearing, judicial decisions including that of the Jurisdictional High Court of Delhi as referred in the synopsis and reproduced also by Hon'ble Tribunal at page 6, 11-12 of its Order were relied upon and copies of these decisions were also placed by way of separate compilation consisting of 177 pages. These judicial decisions relied upon have not been adverted to by Hon'ble Bench in its order, which constitutes mistake apparent from record as held by Hon'ble Supreme Court in the case of Honda Siel Power Products Ltd vs. CIT 295 ITR 466, relevant excerpts of which are as under:

The purpose behind enactment of s. 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent powers of the Tribunal. One of the important reasons/or giving the power of rectification to the Tribunal is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record. "Rule of precedent" is an important aspect of legal certainty in rule of law. That principle is not obliterated by s. 254(2). When prejudice results from an order attributable to the Tribunal 's mistake, error or omission, then it is the duty of the Tribunal to set it right, Atonement to the wronged party by the Court or Tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. In the present case, the Tribunal was justified in exercising its powers under s. 254(2) when it was pointed out to the Tribunal the decision of the co-ordinate Bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material which was already on record. The Tribunal has acknowledged its mistake, it has accordingly rectified its order. The High Court was not justified in interfering with the said order. For the aforestated reasons, the impugned judgment of the High Court is set aside and the order passed by the Tribunal allowing the rectification application filed by the assessee is restored.

2.

Hon'ble Tribunal have mentioned in para 14 of its Order that all the shareholders in question have shown sources of the investment and have shown as "application money received for allotment of securities and due for refund / interest accrued on above" and further that no document was submitted that all these companies have allotted these shares against such receipt of application pending for allotment.

It is submitted with great respect that neither the argument of allotment of shares by the shareholder companies to their respective share applicants, was raised on behalf of the revenue, nor was this confronted to the assessee during the course of hearing and the adverse finding has been recorded against the assessee.

3.

Hon’ble Tribunal has recorded in Para 13 at page 18 of its Order as under.-

"Therefore as per information available on record assessee has allotted these shares after the receipt of cash only. Therefore, now claiming that the assessee has actually received or realized the cash in the subsequent year cannot be accepted.

It is matter of record that assessee never received the impugned share application money in cash nor was it ever the case of Revenue at any stage and therefore, this finding that assessee has allotted these shares after receipt of cash, goes against the evidences placed before Hon'ble Bench,

4.

That it has been mentioned in para 13 at page 18-19 of its order that:

“now before us, the assessee has filed a chart indicating that the assessee has actually received/realized the amount in FY 2012-13…….Therefore, now claiming that the assessee has actually received or realized the cash in the subsequent year cannot be accepted and it is only an after-thought. Further, it is not brought on record why the payments were received through RTGS after six months of allotment of shares .....”

First of all, it is submitted that this very plea that the amount was realized in next year and hence addition could not be made in the year under appeal was not a new plea before Hon'ble Tribunal but was already raised before Ld, CIT(A) which is evident from ground no. 3 raised before Ld. CIT(A) which is at page 1 of the CIT(A)’s order which reads as under:

“3……….the said amount of Rs.6,50,00,000/- was never credited or ever found to be credited in, the bank account of the appellant assessee during the year, therefore, not covered under the ambit of the provisions of law contained u/s 68 of the Income Tax Act, 1961.”

Therefore, this submission was not the after-thought as contended/held by Hon'ble Tribunal. It is submitted with great respect that the finding of Hon'ble Tribunal is not correct on this count.

Also, Chart reproduced at page 17 of the order of Hon'ble Tribunal clearly mentions that the cheques received but not presented and hence to hold in the order of the Tribunal that it was not brought on record why the payments were received through RTGS after six months, it is submitted with great respect, is not correct.

Since above findings of Hon'ble Tribunal indicate the errors apparent from record, it is therefore prayed that the apparent errors may please be rectified and appropriate effect of such rectification may please be given in the Order either by recalling the order or otherwise as may be deemed fit.”