M/s. Millennium Alcobev Pvt. Ltd., Bangalore V. ITO, CHENNAI

MA 194/CHNY/2009

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6566 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 13-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K R PRADEEP
• Keywords: Business income; Depreciation; Business expenditure; Difference of opinion; Commercial expediency
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH A : CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER] M.P.NOS. 194 & 195/MDS/2009 [ARISING OUT OF I .T.A NOS.589/MDS/07 & 1045/MDS/07 ] ASSESSMENT YEARS : 2002-03 AND 2003-04 M/S MILLENNIUM ALCOBEV PVT. LTD 5, 1 FLOOR, GOLDEN ENCLAVE 104, P.H ROAD, CHENNAI 600 010 VS THE DY. CIT/ITO COMPANY CIRCLE IV(1) CHENNAI (PETITIONER) (RESPONDENT) PETITIONER BY : SHRI K.R. PRADEEP RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE MISCELLANEOUS PETITIONS HAVE BEE N FILED BY THE ASSESSEE AGAINST THE TRIBUNAL ORDERS DATED 12.6.20 09 IN I.T.A.NO. 589/MDS/2007[ASSESSEES APPEAL], FOR ASSESSMENT YEA R 2002-03, AND IN I.T.A.NO. 1045/MDS/2007 [REVENUES APPEAL], FOR ASSESSMENT YEAR 2003-04. M.P. NO.194/MDS/09 2. AS PER THE LD.AR, THE FOLLOWING MISTAKES APPAR ENT FROM RECORD HAVE CREPT INTO THE TRIBUNAL ORDER IN I.T.A. NO. 589/MDS/2007 FOR ASSESSMENT YEAR 2002-03: M.P 194&195/09 :- 2 -: I. PARA 3. ' ........ THE INTEREST INCOME WAS FROM THE INVESTMENTS MADE IN TWO COMPANIES, VIZ M/S GMR BEVERAGES AND IN DUSTRIES LTD AND M/S EMPEE BREWERIES LTD WHICH WERE THE SUBS IDIARIES OF THE ASSESSEE COMPANY THE INTEREST WAS EARNED FROM THE LOANS ADVANCED TO EMPEE BREWERIES LTD & GMR BREWERIES. THE INTEREST INCOME EARNED THEREFROM IS AS UNDER: BREAK UP OF INTEREST INCOME LOAN AMOUNT (RS. IN LACS) (INTEREST RS. IN LACS) EMPEE BREWERIES LTD 1200.17 24.29 GMR BREWERIES 2888.98 55.46 FACTUALLY INCORRECT FINDING HAS BEEN GIVEN CONTRARY TO THE EVIDENCE PLACED IN THE PROCEEDINGS. INTEREST WAS FR OM ADVANCE AND NOT FROM INVESTMENT. II. PARA 7. ' ................ THERE WERE PRACTICALLY NO TRANSACTIONS DURING THE YEAR 2000 - 01. IN THE FINANCIAL YEAR 2001-02 T HE COMPANY HAD STARTED MAKING INVESTMENTS IN THE SHARES OF THE TWO COMPANIES. M/S GMR BEVERAGES INDUSTRIES LTD. AND M/ S EMPEE BREWERIES LTD. WITH THE SOLE INTENT OF ACQUIRING CO NTROL OVER THESE COMPANIES .. THE FINDINGS ARE INCORRECT IN AS MUCH THE ASSESSEE IS CARRYING ON BUSINESS IN THE PRODUCT BEER WAS EXPLAINED BY P LACING THE EVIDENCE IN THE FORM OF TRADE MARK LICENSE AGREEME NT (PAGE NO. 76 - 87) BREWING CAPACITY SHARING AGREEMENT (PA GE NO. 92 - 102). FURTHER THAT IT HAD COMMENCED THE BUSINESS IS EVIDENCE BY THE COMMENCEMENT OF CERTIFICATE ISSUED BY THE RE GISTRAR OF COMPANIES DT. 01.04.1999 PLACED AT PAGE NO.1 10 (9) . IN THIS REGARD THE DECISION OF THE MADRAS HIGH COURT IN 6 C OMPANY CASES 440 BEING APPLICABLE HAS NOT BEEN CONSIDERED . THE FINDING THAT THE ACQUISITION WAS WITH THE 'SOLE INT ENT' IS CONTRARY TO THE EVIDENCE PLACE ON RECORD. III. PARA 8 . ' THE ASSESSEE WAS NOT DIRECTLY INVOLVED IN MANUFACTURING BUSINESS BUT IT WAS ALLEGED THAT THE ASSESSEE DID MAKE INVESTMENT IN MANUFACTURING BUSINESS BY AC QUIRING 100% SHARE HOLDING IN TWO BREWERIES. IT WAS CLARIFI ED BEFORE THE REVENUE AUTHORITIES THAT AS PER THE STATE EXCIS E LAWS, IT IS ONLY A PERSON WHO HAS GOT THE MANUFACTURING LICE NCE IN THAT STATE CAN SELL GOODS TO A CORPORATION OWNED BY THAT STATE ' M.P 194&195/09 :- 3 -: THE FINDINGS ARE CONTRARY TO THE VIEW OF THE ASSESS ING OFFICER THAT THE ASSESSEE IS A MANUFACTURER OF BREWERAGES. IN RECORDING ABOVE THE EVIDENCE SUBMITTED IN THE FO RM OF DEED OF ASSIGNMENT (PAGE NO. 71 - 75) TRADE MARK LICENSE AGREEMENT (PAGE NO. 76 - 87) BREWING CAPACITY SHARI NG AGREEMENT (PAGE NO.92 - 102) AND BOARD RESOLUTION ( PAGE NO. 90) RELEVANT PORTION EXTRACTED HEREWITH HAS NOT BEE N CONSIDERED. (B) MAKE PAYMENT OF A SUM NOT EXCEEDING RS.15, 00, 00, 000/- (RUPEES FIFTEEN CRORES ONLY) TOWARDS NON COMPET ITION FEES TO MR.MP.PURUSHOTHAMAN AND EMPEE DISTILLER IES LIMITED,' AND (C) GIVE ADVANCES/LOANS IF REQUIRED UPTO A SUM NOT EXCEEDING RS.60,00,00,000 (RUPEES SIXTY CRORES ONLY) TO EMPEE BREWERIES LIMITED. THE ABOVE EVENTS ESPECIALLY PAYMENT FOR NON-COMPETE FEE INDICATES THE SERIES OF STEPS TAKEN BY THE ASSESSEE CONSEQUENT TO COMMENCEMENT OF OPERATIONS. FURTHER IT HAS BEEN INCORRECTLY RECORDED THAT ONLY A PERSON WHO HAS GOT MANUFACTURING LICENCE IN THAT STATE CAN SEL L GOODS TO A CORPORATION OWNED BY THAT STATE. THIS IS CONTRARY T O THE POLICY PLACED IN PAGE 36. IV. PARA 9. ' ......... UNITED BREWERIES LTD WANTED TO EXTEND ITS BUSINESS THROUGH THE ASSESSEE COMPANY WHICH WAS ITS SUBSIDIARY. IT WAS NOT POSSIBLE ON THE PART OF THE UNITED B R E WERIES TO O BTAI N A FRESH L ICENCE FOR MANUFACTURING OF BEER IN T AMI L N A DU , K E R ALA AND ANDHRA PRADESH , ' T H IS IS A N INCO RRE CT RECORD O F F ACT AS THERE I S NO P R OH I B IT ION FOR UNITED BRE W E RIES L T D T O GET L I CENCE IN AN Y OF T HESE STATES PARA 9. ' ......... THE ASSESSEE COMPANY WAS FORMED, SO IT COULD FACILITATE UNITED BREWERIES IN THE SALE OF BEER UND ER UB TRADE MARK FOR GETTING THE SUPPLY FROM M/S GMR BEVERAGES & INDUSTRIES LTD. AND M/S EMPEE BREWERIES LTD ' M.P 194&195/09 :- 4 -: FACTUALLY INCORRECT AS THE COMPANY WAS REGISTERED I N THE YEAR 1999 AND AT THAT TIME THERE WAS NO DISCUSSION WITH M/S GMR BEVERAGES & INDUSTRIES LTD OR M/S EMPEE BREWERIES LTD. TO ACQUIRE THE SHARES. THE FINDING IS ALSO CONTRARY TO OBJECT CLAUSE. V. PARA 10. ' THE OBJECT OF THE ASSESSEE COMPANY WAS TO MANUFACTURE AND SALE OF BEER AND OTHER LIQUOR PRODU CTS. DUE TO THE PECULIAR STATE POLICY PERTAINING TO THE LIQUOR TRADE IT WAS NOT POSSIBLE ON THE PART OF THE ASSESSEE TO OBTAIN TH E MANUFACTURING LICENCE.' THE OBJECT OF THE COMPANY IS RECORDED IN PARA 5 AND 6 OF THE ORDER. HENCE IT CANNOT BE SAID THAT OBJECT WAS LIMI TED TO MANUFACTURING AND SALE OF BEER BUT EXTENDS TO THE E NTIRE GAMUT OF ACTIVITIES MENTIONED IN THE OBJECT CLAUSE. THERE IS NO RESTRICTION ON THE ASSESSEE TO OBTAIN THE LICENCE, THIS FACT HAS BEEN INCORRECTLY STATED. FURTHER, THERE IS NO DISTI NCTION BETWEEN MAIN OBJECTS AND INCIDENTAL OBJECTS AS HELD IN NUMB ER OF DECISION OF BINDING NATURE. PARA 10. ..THOUGH THE INVESTMENT WAS MADE IN TH E ACQUISITION OF SHARES AND BY WAY OF ADVANCES TO OTHER COMPANIES , IT SHOULD BE CONSIDERED AS THE FIRST STEP TOWARDS VENTURING I NTO THE BUSINESS OF BREWING PARA 11. ' .... THE BUSINESS WOULD COMMENCE WHEN THE ACTIVITY WHICH IS FIRST IN POINT OF TIME AND WHICH MUST NEC ESSARILY PRECEDE ALL OTHER ACTIVITIES IS STARTED. ACCORDING TO THE LD. COUNSEL, ACQUIRING THE CONTROLLING INTEREST IN THE COMPANIES WHICH WERE ENGAGED IN DOING BREWING ACTIVITY WAS TH E FIRST STEP TOWARDS THE COMMENCEMENT OF THE BUSINESS. THE DOMIN ANT INTENT OF THE ASSESSEE WAS TO DO BUSINESS AND NOT TO EARN INTEREST INCOME OUT OF THE INVESTMENT. THEREFORE TH E INCOME SHOULD NOT BE ASSESSED UNDER THE HEAD 'OTHER SOURCE S '. IT WAS PRAYED THAT THE COURT SHOULD DELVE DEEP INTO THE MA TTER, TO FIND THE REAL OBJECT, SO JUSTICE COULD BE DONE BY APPREC IATING THE REALITIES OF THE SITUATION THE ARGUMENT HAS BEEN INCORRECTLY RECORDED, IT WAS ARGUED THAT CONSEQUENT TO COMMENCEMENT OF BUSINESS, SERIE S OF ACTIVITIES IN THE NATURE OF BUSINESS WAS UNDERTAKEN CONSISTING OF LOOKING VARIOUS OPPORTUNITIES ENGAGING WITH THE OTHER BUSINESS PEOPLE WITH THE POTENTIAL TO CARRY ON ITS BUSINESS AND ALSO TO ADVANCE LOANS TO EARN INTEREST REGULARL Y TO FURTHER THE BUSINESS OF THE COMPANY. COMPANY HAS ALSO ENTER ED INTO NON-COMPETE AGREEMENT TO ASSURE ITSELF OF THE MARKE T PRESENCE. M.P 194&195/09 :- 5 -: IV. PARA 15. ' ............THE DECIPHER THE REAL MEANING OF THE TERM 'BUSINESS' IS A DIFFICULT TASK. CASES FALLING WITHI N THE PERIPHERY OF PENUMBRA ARE APT TO GIVE RISE TO A SHARP DIFFERENCE OF OPINION. THERE IS NO POSSIBILITY OF MISTAKING MIDNIGHT FOR N OON BUT AT WHAT PRECISE MOMENT TWILIGHT BECOMES DARKNESS IS HARD TO DETERMINE. EX FACIE, THE ASSESSEE APPEARS TO BE A CONDUIT BETW EEN UNITED BREWERIES AND OTHER COMPANIES ENGAGED IN THE BREWER IES BUSINESS. THE TASK ASSIGNED TO THE ASSESSEE WAS TO ACQUIRE CONTROLLING INTEREST IN THOSE COMPANIES. THE ASSESS EE DID NOT HAVE ITS OWN CAPITAL. WITH THE BORROWED FUNDS THE A SSESSEE PAID THE PRICE FOR ACQUIRING THE SHARES. THE ASSESSEE WA S NOT OWNING ANY BRAND, THE PROMOTION OF WHICH COULD GIVE SOME B USINESS ADVANTAGE TO THE ASSESSEE.. THE DIFFICULTY EXPRESSED BY THE ITAT IS NO LONGER H OLDS AS THERE ARE NUMBER OF DECISION INCLUDING BY THE SUPR EME COURT RELIED ON BY THE ASSESSEE WHEREIN THE TEST FO R EXISTENCE OF BUSINESS, COMMENCEMENT OF BUSINESS, CARRYING OF BUSINESS AND COMMERCIAL EXPEDIENCY HAS BEEN EXPLAINED. THE NON-CONSIDERATION OF THESE DECISION HAS RESULTED IN THE ABOVE FINDING. IN ARRIVING AT THE ABOVE FINDING, THE HON'BLE ITAT HAS IGNORED THE EVIDENCE PLACED: DEED OF ASSIGNMENT (PAGE 71-75) TRADE MARK LICENSE AGREEMENT (PAGE 76-87) BREWING CAPACITY SHARING AGREEMENT(PAGE 92 TO 102) THE ITAT HAS SAID THAT THE ASSESSEE DID NOT HAVE IT S OWN CAPITAL BUT LATER AS MENTIONED THAT IT HAS A CAPITA L OF RS.800/- THUS INCONSISTENCY IN FINDINGS. IT IS HELD THAT THE COMPANY FACILITATED PARA 15. ' ... .IT ONLY FACILITATED THE UNITED BREWERIES IN ACQUIR ING THE CONTROLLING INTEREST IN SOME COMPANIES. THE REW ARD FOR THIS ACTIVITY WAS INTEREST. THE PAYMENT OF INTEREST WA S NOT IN LIEU OF PROFIT ' IT IS FACTUALLY THE SHARES ARE HELD BY THE COMPANY AND NOT BY UNITED BREWERIES LTD. HENCE THE FINDING THE COMPANY FACILITATED UNITED BREWERIES IN ACQUIRING THE CONTROLLING INTER EST IS INCORRECT. THERE IS NO REWARD BY U.B.LTD TO THE ASSESSEE BY IN TEREST EARNED WAS NOT THROUGH INVESTMENT BUT FOR ADVANCING THE LOAN. THE IT AT HAS MIXED UP THE ACTIVITY OF INVESTMENT, ADVANCING OF LOAN AND OTHER ASPECTS OF CARRYING ON BUSINESS AND THEREBY HAS RECORDED INCORRECT FINDINGS CONTRARY TO THE RECORD. M.P 194&195/09 :- 6 -: PARA 15. ' TO FIND OUT WHETHER THE RECEIPT IN QUESTION WAS BUSINESS RECEIPT, IT IS NECESSARY TO SEE WHETHER T HE ASSESSEE COMPANY AUGMENTED THE PROFITS BY ITS OWN BUSINESS BY MAKING SUCH INVESTMENT ' THE PROPOSITION RAISED BY THE TRIBUNAL IS ALREADY A NSWERED IN THE DECISIONS OF THE SUPREME COURT IN 53 ITR 140, 8 2 ITR 166, 288 ITR 1, 221 ITR 620(MDS), 29 ITR 910 (SC), 118 ITR 200(SC), 6 COMPANY CASES 440(MDS) AND 255 ITR 273, 253 ITR 273 IN THE CASE OF APOLLO TYRES LTD. V.CIT. THE IT AT HAS NOT INCORPORATED THE BINDING RATIO IN DECIDING THE ISSUE. PARA 15. ' ....THE ASSESSEE WAS NOT HOLDING ANY BRAND. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE INVESTMENT WAS MADE TO PROMOTE THE BRAND, IS NOT TENABLE. IN T HE YEAR UNDER CONSIDERATION, THE ASSESSEE DID NOT DERIVE A NY BUSINESS ADVANTAGE OUT OF SUCH INVESTMENT ' NOTHING WAS DEMONSTRATED BEFORE US TO SUBSTANTIAT E THAT BY BAKING SUCH INVESTMENT THE ASSESSEE DERIVED ANY BUSINESS ADVANTAGE. THE BUSINESS ADVANTAGE, IF ANY, WAS IN T HE CONTEXT OF UB GROUP ONLY. THE ASSESSEE COMPANY IS AN INDEPE NDENT UNIT. NO BUSINESS ACTIVITY WAS CARRIED ON BY THE AS SESSEE COMPANY. THEREFORE, THE INTEREST INCOME EARNED BY T HE ASSESSEE FROM THE ADVANCE GIVEN TO THE OTHER TWO CO MPANIES CANNOT BE CHARACTERIZED AS BUSINESS INCOME ' THE ABOVE FINDING IS CONTRARY TO THE ASSESSING OFFI CER RECORDING THAT THE ASSESSEE WAS ENGAGED IN MANUFACTURE OF BRE WERAGES. THE ITAT HAS ALSO GIVEN INCONSISTENCE FINDING IN AS MUCH IN PARA 19 THE ISSUE HAS BEEN REMITTED BACK TO THE ASS ESSING OFFICER TO DECIDE IN DE NOVO IN ACCORDANCE WITH LAW . AT THE SAME TIME IT IS HELD CONTRARY IN THE ABOVE PARAGRAPH. TH US CONFLICTING AND CONFUSING DIRECTIONS HAVE BEEN ISSUED. DEED OF ASSIGNMENT (PAGE 71-75) TRADE MARK LICENSE AGREEMENT (PAGE 76-87) BREWING CAPACITY SHARING AGREEMENT(PAGE 92 TO 102) FURTHER THE ITAT IN DECIDING THE ISSUE HAS NOT CONS IDERED THE DECISION RELIED ON BY THE ASSESSEE IN (1) 288 ITR 1 (SC) IN THE CASE OF CIT VS. S.A.BUILDERS, (2) IN 2008-TIOL- 17-SC-IT IN THE CASE OF DCIT, CORE HEALTH CARE, (3) IN 056 I TR 0052 (SC) IN THE CASE OF BOMBAY STEAM NAVIGATION CO. (19 53) PRIVATE LTD. VS. CIT, (4) IN 192 ITR 151(SC) IN THE CASE OF CIT VS. SARABHAI MANAGEMENT CORPORATION, (5) IN 276 ITR (A.T) 0104 IN THE CASE OF DCIT VS. INDIAN HOTELS CO. LTD VS. JCIT, (6) IN 19 SOT 593(DE1HI) IN THE CASE OF WHIRLPOOL O F INDIA PRODUCTS LTD VS. JT. CIT, (7) IN 295 ITR 466 (SC) I N THE CASE OF M.P 194&195/09 :- 7 -: HONDA SIEL POWER PRODUCTS LTD VS. CLT, (8) IN ITAT ORDER, DELHI BENCH IN THE CASE OF ITO, NEW DELHI VS. MOUNT EVEREST MINERAL WATER LTD. THUS, THE ITAT ERRED IN ARRIVING AT A CONCLUSION WITHOUT CONSIDERING THE EVIDENCE ON RECO RD. ' .THUS, MULTIPLE ERRORS HAVE RESULTED IN CAUSING E XTRAORDINARY HARDSHIP TO THE APPELLANT RESULTING FROM THE ABOVE ERRORS. THE NET EFFECT OF THE ERRORS ARE SUCH THAT THERE HAS BE EN COMPLETE DENIAL OF JUSTICE TO THE APPELLANT AND THESE ERRORS REQUIRE TO BE RECTIFIED BY RECALLING THE DIRECTIONS ON THE ISSUE AND DELETE THE ADDITION OR IN THE ALTERNATIVE THE ISSUE MAY BE SEN T TO THE AO FOR PROPER CONSIDERATION ..' ..ALL THE ABOVE RESULTS IN RENDERING THE ORDER OF THE ITA T OPEN FOR RECTIFICATION TO RECTIFY MISTAKES APPARENT ON RECORD. AS IS EVIDENT, THE ORDER HAS BEEN RENDERED OVERLOOKING THE BINDING DECISIONS OF THE SUPREME COURT, JURISDICTIONAL HIGH COURT, DECISIONS OF OTHER HIGH COURT AND DECISIONS OF OTHE R BENCHES OF THE ITAT AS WELL AS NON-CONSIDERATION OF EXPRESS PR OVISIONS OF THE IT ACT, NON-CONSIDERATION OF EVIDENCE PLACED ON RECORD, WRONG MENTION OF FACTS AND LAW AND MISCARRIAGE OF J USTICE .... ,.' VII PARA 17.' ..WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIN D THAT THIS ISSUE STANDS COVERED BY THE DECISION OF T HE TRIBUNAL RENDERED IN THE CASE OF M/S MGM DIAMOND BEACH RESOR TS PVT. LTD. VS. DCIT IN ITA NO.2173/M/05 DATED 13.06. 2008. FN THIS CASE, THE TRIBUNAL RELIED ON THE DECISION OF T HE HON'BLE SUPREME COURT IN THE CASE OF CIT V. RAJENDRA PRASAD MOODY, 115 ITR 519(SC). THE HON'BLE APEX COURT HAS HELD TH AT THE INTEREST ON MONEY BORROWED FOR INVESTMENT IN SHARES WHICH HAD NOT EARNED ANY DIVIDEND WAS ADMISSIBLE AS A DED UCTION UNDER SEC. 57(III) OF THE ITACT, 1961. SINCE THE DE CISION OF THE TRIBUNAL IS BASED ON THE RATIO OF THE JUDGMENT OF T HE APEX COURT, WE, RESPECTFULLY FOLLOWING THE PRECEDENT, UP HOLD THE IMPUGNED ORDER ON THIS COURT. ' IN THE FINAL CONCLUSION THE ITAT HAS ERRONEOUSLY UP HELD THE ORDER OF THE AUTHORITIES BELOW THOUGH IT IS MENTION ED THAT THE DECISION IN THE CASE OF M/S MGM DIAMOND BEACH RESOR TS PVT. LTD. VS. DCIT AND THE DECISION OF SUPREME COUR T IN THE CASE OF CIT V. RAJENDRA PRASAD MOODY, 115 ITR 519(S C) FAVOURS THE ASSESSEE. THE CONCLUSION MAY BE CORRECT ED BY MENTIONING AS THE ISSUE ALLOWED IN FAVOUR OF THE AS SESSEE. M.P 194&195/09 :- 8 -: 3. WE HAVE GONE THROUGH THE GROUNDS OF MISCELLANEOUS PETITION AS WELL AS THE ORAL SUBMISSIONS OF THE PAR TIES. IT IS FOUND THAT THE MISTAKES POINTED OUT IN THE PETITION ARE N OT RECTIFIABLE U/S 254(2) OF THE ACT. ONLY SUCH MISTAKE AS IS OBVIOUS, PATENT AND MANIFEST ON RECORD CAN BE RECTIFIED UNDER THIS SECTION. THE ORDER OF THE TRIBUNAL MAY NOT BE CORRECT ACCORDING TO ANY OF THE PARTIES TO THE APPEAL, BUT IN THAT CASE, REMEDY DOE S NOT LIE IN SECTION 254(2) BUT IT LIES IN SECTION 260A OF THE A CT. ACCORDINGLY, WE CANNOT ALLOW THIS PETITION. 4. IN THE RESULT, M.P.NO.194/MDS/2009 STANDS DISMISSED. M.P.NO.195/MDS/2009 5. THIS MISCELLANEOUS PETITION HAS BEEN FILED BY T HE ASSESSEE IN RELATION TO TRIBUNAL ORDER DATED 12.6.2009 PASSED I N REVENUES APPEAL IN I.T.A.NO. 1045/MDS/2007, FOR ASSESSMENT YEAR 200 3-04. THE MAIN GIST OF ASSESSEES PETITION IS THAT THE TRIBUNAL OR DER SUFFERS FROM MISTAKES APPARENT ON RECORD WHICH ARE RECTIFIABLE U /S 254(2) OF THE ACT. WITH REFERENCE TO PARA 7 OF THE TRIBUNAL ORDE R, IT HAS BEEN MENTIONED THAT THERE IS INCONSISTENT FINDING INASMU CH AS IT HAS BEEN HELD THAT THE ASSESSEE WAS NOT ENGAGED IN THE BUSIN ESS BUT AT THE SAME TIME, THE ASSESSING OFFICERS ACTION OF COMPUT ING BUSINESS INCOME AND DISALLOWING CERTAIN PORTION OF BUSINESS EXPENDITURE U/S 40A(2)(B) HAS BEEN UPHELD. IN THIS YEAR, THE ASSES SING OFFICER AS M.P 194&195/09 :- 9 -: HIMSELF HELD THAT THE ASSESSEE WAS CARRYING ON MANU FACTURE AND SALE OF BEER DURING THE YEAR AND HAS COMPUTED THE INCOME UNDER THE HEAD BUSINESS INCOME. IT WAS STATED THAT THE DECISION S OF HON'BLE JURISDICTIONAL HIGH COURT AND THE HON'BLE SUPREME C OURT WERE NOT CONSIDERED AND FOLLOWED ITS ORDER PASSED SIMULTANEO USLY FOR ASSESSMENT YEAR 2002-03, ALBEIT, THE FACTS IN BOTH THE YEARS ARE SLIGHTLY DIFFERENT. ACCORDING TO THE PETITION, MUL TIPLE ERRORS HAVE RESULTED IN CAUSING EXTRAORDINARY HARDSHIP TO THE A SSESSEE RESULTING FROM VARIOUS ERRORS AND NET EFFECT OF THEM BEING TH ERE HAS BEEN COMPLETE DENIAL OF JUSTICE AND HENCE, THE ERROR NE EDS TO BE RECTIFIED BY RECALLING THE DIRECTIONS ON THE ISSUE AND DELETE THE ADDITION OR IN THE ALTERNATIVE THE ISSUE MAY BE SENT TO THE ASSESS ING OFFICER FOR PROPER CONSIDERATION. 6. IT WAS ARGUED THAT IN FACT GROUND NOS.2 & 4 OF THE APPEAL WERE NOT DECIDED AND ONLY GROUND NO.3 IN REVENUES APPE AL WAS REALLY DEALT WITH AND DECIDED. ON THE OTHER HAND, THE LD. DR HAS RESISTED THE CONTENTIONS PUT FORTH BY THE LD.AR AND HAS SUPPORTE D THE TRIBUNAL ORDER. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT IN FACT GROUND NOS. 2 & 4 WERE NOT DEALT WITH PROPERLY AND ONLY GROUND NO.3 WAS DEALT WITH AND DECIDED BY THE BENCH. THIS INAD VERTENT MISTAKE WAS CORRECT BECAUSE THE APPEALS FOR TWO YEARS WERE SIMULTANEOUSLY M.P 194&195/09 :- 10 - : DECIDED [BY SEPARATE ORDERS] ON A MISCONCEPTION THA T FACTS AND ISSUES INVOLVED IN BOTH THE YEARS ARE EXACTLY IDENTICAL AS HAS BEEN MENTIONED IN THE TRIBUNAL ORDER IN THE OPENING SENTENCE OF PA RA 2 AT PAGE 1 THAT BOTH THE PARTIES AGREED THAT THE ISSUES INVOLVED IN THE PRESENT APPEAL ARE IDENTICAL TO THE ISSUES DISCUSSED IN I.T.A.NO. 589/MDS/2007. BUT THE FACTS ARE SLIGHTLY DIFFERENT IN BOTH THE YEARS. IN SUCH CIRCUMSTANCES, THE HON'BLE SUPREME COURT WHILE REND ERING THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD VS C IT, 295 ITR 466 HAS HELD AS UNDER: THE PURPOSE BEHIND THE ENACTMENT OF SECTION 254(2) OF T HE INCOME- TAX ACT, 1961, DEALING WITH THE POWER OF THE APPELL ATE TRIBUNAL TO AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1), IF ANY MISTAKE APPARENT FROM THE RECORD IS BROUGHT TO ITS NOTICE, IS BASED ON THE FUNDAMENTAL PRINCIPLE THAT NO PARTY APPEARING BEFOR E THE APPELLATE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPARTMENT, SHOU LD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL. T HIS FUNDAMENTAL PRINCIPLE HAS NOTHING TO DO WITH THE INHERENT POWER S OF THE TRIBUNAL. IF PREJUDICE HAS RESULTED TO THE PARTY, WHICH PREJUDIC E IS ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE, ERROR OR OMISSION, AND WHIC H ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIE D IN RECTIFYING ITS MISTAKE. WHEN PREJUDICE RESULTS FROM AN ORDER ATTRIBUTABLE T O 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 THE TRIBUNAL FOR THE WRONG COMMITTED BY IT HAS NOTHING TO DO WITH TH E CONCEPT OF INHERENT POWER OF REVIEW. 'RULE OF PRECEDENT' IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN THE RULE OF 'AW. THAT PRINCIPLE IS NOT OBLITERATED BY S ECTION 254(2). HELD, REVERSING THE DECISION OF THE HIGH COURT, THA T IN ALLOWING THE RECTIFICATION APPLICATION THE TRIBUNAL GAVE A F INDING THAT THE EARLIER DECISION OF A CO-ORDINATE BENCH WAS CITED B EFORE IT BUT THROUGH OVERSIGHT IT HAD MISSED THE JUDGMENT WHILE DISMISSING THE APPEAL FILED BY THE ASSESSEE ON THE QUESTION OF ADMISSIBILITY/ALLOWABILITY OF THE CLAIM OF THE ASSE SSEE FOR ENHANCED DEPRECIATION UNDER SECTION 43A. ONE OF TH E IMPORTANT REASONS FOR GIVING THE POWER OF RECTIFICATION TO TH E TRIBUNAL UNDER SECTION 254(2) WAS TO SEE THAT NO PREJUDICE W AS CAUSED TO EITHER OF THE PARTIES APPEARING BEFORE IT. THE RULE OF M.P 194&195/09 :- 11 - : PRECEDENT WAS AN IMPORTANT ASPECT OF CERTAINTY IN T HE RULE OF LAW, AND PREJUDICE HAD RESULTED TO THE ASSESSEE SIN CE THE PRECEDENT HAD NOT BEEN CONSIDERED BY THE TRIBUNAL. THE TRIBUNAL WAS JUSTIFIED IN RECTIFYING THE MISTAKE ON RECORD. 8. THUS, IT IS NOW A CLEAR STAND OF THE HIGHER CO URT OF THE COUNTRY THAT THE POWER TO CORRECT ANY MISTAKE, ERROR OR OMI SSION IN THE ORDER, THE TRIBUNAL HAS INHERENT POWER, THE APEX COURT HAS TRIED TO FIND DIFFERENCE BETWEEN VOLUNTARY POWER OF REVIEW AND VO LUNTARY POWER OF RECTIFICATION WHICH MANY A TIMES OVERLAP ON EACH O THER. THE LD.AR HAS PLACED RELIANCE ON VARIOUS OTHER DECISIONS INCL UDING THAT OF HON'BLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT V S RAMESH CHAND MODI, 249 ITR 323 IN WHICH IT HAS BEEN HELD THAT IF ANY ISSUE OR QUESTION RAISED BEFORE IT, COULD NOT BE DECIDED INA DVERTENTLY OR BY OVERSIGHT, THE COURT OR TRIBUNAL ACTS EX DEBITO JUS TITIAE TO PREVENT ABUSE OF PROCESS EVEN IN THE ABSENCE OF ANY POWER. IN THE CASE OF CIT VS SUBODHCHANDRA S. PATEL, 265 ITR 445(GUJ), IT HAS BEEN HELD THAT NON-CONSIDERATION OF A JUDGMENT OF A JURISDICT IONAL HIGH COURT OR THE APEX COURT WOULD ALWAYS CONSTITUTE A MISTAKE AP PARENT FROM THE RECORD, REGARDLESS OF WHETHER THE JUDGMENT WAS REND ERED PRIOR TO, OR SUBSEQUENT TO THE ORDER PROPOSED TO BE RECTIFIED. IN VIEW OF THE ABOVE DECISIONS, WE FEEL THAT A RECTIFIABLE MISTAKE HAS C REPT INTO THE TRIBUNAL ORDER AND WITH A VIEW TO BRING THE DECISION IN CONF ORMITY WITH THE POSITION OF LAW AND FACTS, WE RECALL THE TRIBUNAL I N QUESTION SINCE THE DECISION ON EVEN GROUND NO.3.1 SUFFER ON MISTAKEN P RESUMPTION OF M.P 194&195/09 :- 12 - : FACTS AND LAW. WE, THEREFORE, RECALL THE TRIBUNAL ORDER DATED 12.6.2009 AND DIRECT THE REGISTRY TO FIX THE APPEAL FOR HEARING IN DUE COURSE. 9. IN THE RESULT, THE MISCELLANEOUS PETITION N O.195/MDS/2009 STANDS ALLOWED. 10. TO SUMMARIZE THE RESULT, M.P.NO.194/MDS/2009 STA NDS DISMISSED WHEREAS M.P.NO.195/MDS/2009 STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 1.6.2011. (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 1 ST JUNE, 2011 RD COPY TO: PETITIONER/RESPONDENT/CIT(A)/CIT/DR