Whether Section 154 can be invoked for rectification, re-examination and re-computation of subject matter other than a mistake apparent from the record?

Last updated: 04 September 2014

Court :
Delhi High Court

Brief :
The assessee, a Chartered Accountant, was subjected to search u/s 132 of the Income Tax Act, 1961, for providing accommodation entries in form of share loss or share gain by issuing bills for shares without actual sale and purchase by the party mentioned in the bills. The difference, i.e. gain or loss in sale and purchase was settled by issuing or taking cheques from the party.In other words, the appellant-assessee was indulging in money laundering as majority of the sale and purchase transactions recorded in the books were mere accommodation entries.The Assessing Officer vide assessment order held that the assessee had earned commission @ 1.5% from the said transactions on the turnover of Rs.1,04,76,94,004/-. Undisclosed income of Rs.1.57 crores as commission earned was assessed.the appellant-assessee wants and seeks, by way of rectification, is re-examination of entire bank accounts and re-computation of the turnover.CIT(A) dismissed the appeal of assessee. The appellant-assesseeseekedre-examination of bank accounts and re-computation of the turnover by way of rectification u/s 154 before the ITAT which was also in-turn rejected. Held that detailed scrutiny, examination and verification for which explanation is required cannot be undertaken in exercise of power under Section 154.

Citation :
JRD Stock Brokers (P) Ltd.–Appellant – Versus - Commissioner of Income Tax – Respondent