VAIBHAVI TRADING PRIVATE LIMITED, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX WARD 5(3), MUMBAI

MA 231/MUM/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 5566 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMALATHA
• Keywords: Rectification of order; Reasonable cause

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI RAJENDRA , A M AND SHRI SANDEEP GOSAIN, J M M .A. NO . 231/MUM/2017 (IN ITA NO 1998 /MUM/201 5 ) ( / ASSESSMENT YEAR: 2009 - 10 ) M/S VAIBHAVI TRADING PVT. LTD. R. NO. 28 LOONET BL DG, DR. B. AMBEDKAR ROAD, DADAR (E), MUMBAI. / VS. DCIT WD 5(3), AAYAKAR BHAWAN, MUMBAI ./ ./ PAN/GIR NO. AACCV7832J ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI HARIDAS BH AT / RESPONDENT BY : MS. HEMALATHA / DATE OF HEARING : 10 /11 /201 7 / DATE OF PRONOUNCEMENT : 15/11/2017 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILE D BY THE ASSESSEE FOR RECALLING THE ORDER DATED 14.12.16 PASSED IN ITA NO. 1998/MUM/15 FOR ASSESSMENT YEAR 20 09 - 10 AND FOR DISPOSING OF THE APPEAL ON MERITS. 2 . THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD FILED THE APPEAL AGAINST THE ORDER OF CIT(A) - 10, DATED 02.01.15 FOR AY 2009 - 10 VIDE ITA N. 2 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. 1998/MUM/2015 AND THE SAID ITA WAS DISPOSED OF ON MERITS VIDE ORDER DATED 14.12 .16 AFTER HEARING THE COUNSELS FOR BOTH THE PARTIES. NOW , FILING THROUGH THIS MISC. APPLICATION, THE ASSESSEE SEEKS FOR RECALLING THE ORDER DATED 14.12 .16. 3. LD. AR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER CONTAINS MISTAKE APPARENT ON RECORD AS THE HONBLE ITAT PASSED THE ORDER DATED 14.12.16 AFTER CONSIDERING THE PRINCIPLE LAID DOWN IN THE DECISION REND ERED BY THE HONBLE SUPREME COURT IN THE CASE OF WOODWARD GOVERNER INDIA PVT. LTD. 312 ITR 254(SC) . IT IS FURTHER SUBMITTED THAT THE SAID JUDGMENT ALLOWS THE REALIZED AND UNREALIZED EXCHANGE LOSS ON MERCANTILE BASIS, WHILE UPHOLDING THE AS 11. HOWEVER TH E HONBLE BENCH HAS MADE A MISTAKE IN INTERPRETING THAT THE SAID JUDGMENT COVERS ONLY REALIZED LOSS IGNORING THE MERCANTILE METHOD OF ACCOUNTING AND AS 11. 4 ON THE OTHER HAND THE LD. DR APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT THE PRESENT MISC. APPLICATION FILED BY THE ASSESSEE IS MISCONCEIVED AND SINCE THERE IS NO ERROR APPARENT IN THE RECO RD, THEREFORE THE PRESENT APPLICATION FILED BY THE ASSESSEE IS NOT MAINTAINABLE. IT WAS FURTHER SUBMITTED THAT THE HONBLE TRIBUNAL HAD UPHELD THE ORDER OF C IT(A) AND THE CIT(A) HAD PASSED WELL REASONED ORDER IN THE LIGHT OF DECISION OF SUPREME COURT. 3 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. 5 WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES ON THIS APPLICATION AND ALSO PERUSED THE RECORDS AND AFTER VERIFYING THE RECORDS AS WELL AS THE ORDER DATED 1 4.12 .16 PASSED IN ITA NO. 1998/M/15 FOR ASSESSMENT YEAR 20 09 - 10 , WE HAVE NOTICED THAT THE ASSESSEE HAD FILED THE MAIN APPEAL AGAI NST THE ORDER OF CIT(A) DATED 02.01.15 ON THE GROUND MENTIONED IN THIS APPEAL AND THE BENCH WHILE DISPOSING THE SAID APPEAL HA S CATEGORICALLY MENTIONED THE OPERATIVE PARA OF CIT(A) AND THE SAME IS REPRODUCED IN PARA NO. 6 OF ITAT ORDER DATED 14.12 .16. WE HAVE FU RTHER NOTICED THAT IN PARA NO. 6 OF THE SAID ORDER, THE BENCH HAD HEARD COUNSELS FOR BOTH THE PARTIES AND HAD ALSO PE RUSED THE MATERIAL PLACE ON RECORD AS WELL AS ORDER PASSED BY THE LOWER AUTHORITIES AND AFTER CONSIDERING THE ENTIRE ARGUME NTS, THE IMPUGNED ORDER DATED 14.12 .16 WAS PASSED AND THE OPERATIVE PORTION OF THE SAID ORDER IS REPRODUCED BELOW. 6. WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY THE REVENUE AUTHORITIES. AFTER CONSIDERING THE FACTS OF THE CASE, WE HAVE NOTICED THAT THE LD. CIT(A) WHILE DEALING WITH THE SAID GR OUND HAS PASSED THE DETAILED ORDER. THE OPERATIVE PARA OF CIT(A) IS REPRODUCED BELOW: - 5.1. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, STATEMENT OF FACTS, RELEVANT ASSESSMENT ORDER, WRITTEN SUBMISSION, RELIED UPON CASE LAWS AND T HE ARGUMENTS MADE BY THE LAR BEFORE THE UNDERSIGNED. 4 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. THE ONLY ISSUE OF DISPUTE IN THE INSTANT CASE IS THE CLAIM OF LOSS ON FOREIGN EXCHANGE TRANSACTIONS OF THE APPELLANT. IN THE ASSESSMENT ORDER THE AO HAS TREATED THE LOSS AS MARK TO MARKET LOSS ON FORWAR D CONTRACTS. ON THE OTHER HAND, IT WAS VEHEMENTLY CONTENDED BY THE APPELLANT THAT THE AO HAS WRONGLY CONSIDERED THE LOSS IN QUESTION AS LOSS ON FORWARD CONTRACT OF FOREIGN EXCHANGE, WHEREAS THE LOSS UNDER CONSIDERATION WAS ON THE TRADING TRANSACTIONS OF IM PORTS. IT WAS ALSO CONTENDED BY THE APPELLANT THAT A MAJOR PORTION OF LOSS WAS REALIZED LOSS, WHEREAS THE AO HAS TREATED THE ENTIRE LOSS AS UNREALIZED I.E. ON MARK TO MARKET BASIS. AS THE CLAIM OF THE AO AND THE APPELLANT WERE CONTRADICTORY THEREFORE, VIDE LETTER DATED 18.10.2013 THE AO WAS DIRECTED TO RE - VERIFY THE CONTENTION OF THE APPELLANT REGARDING THE EXACT NATURE OF THE LOSS IN QUESTION. VIDE REMAND REPORT DATED 25.08.2014 THE AO HAS PARTLY ACCEPTED THE CONTENTION OF THE APPELLANT THAT THE LOSS IN QU ESTION IS NOT IN RESPECT OF FORWARD CONTRACTS AND IT IS IN RESPECT OF CURRENT ASSETS/ OUTSTANDING AMOUNTS. THE AO HAS HOWEVER, STATED THAT OUT OF THE TOTAL LOSS OF RS.2,38,21,533/ - ONLY AN AMOUNT OF RS.84,86, 181/ - WHICH IS REALIZED LOSS IS ALLOWABLE WHER EAS THE REMAINING AMOUNT OF RS. L ,53,35,352 / - IS NATIONAL LOSS BECAUSE IT IS A CONTINGENT LIABILITY AS THE SAME IS NOT CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION. IN RESPONSE TO THE REMAND REPORT OF THE AO THE APPELLANT HAS SUBMITTED THAT THE FIGU RES OF UNREALIZED AND REALIZED LOSS MENTIONED IN THE REMAND REPORT OF THE ASSESSING OFFICER ARE NOT FACTUALLY CORRECT. THE REALIZED LOSS IS RS.L,88,92,811/ - AS AGAINST 5 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. RS.84,86,181/ - MENTIONED BY THE AO. SIMILARLY, THE UNREALIZED LOSS IS ONLY RS.49,28,721/ - AS AGAINST RS.L,53,35,352/ - MENTIONED BY THE AO. THE APPELLANT HAS ALSO FILED A DETAILED CHART GIVING BREAK - UP OF ALL THE REALIZED AS WELL AS UNREALIZED LOSS ON VARIOUS TRANSACTIONS. AFTER CONSIDERING THE RIVAL SUBMISSIONS, IT IS HELD THAT IN THE LIGHT O F THE DECISION OF HON'B1E SUPREME COURT IN THE CASE OF M S WOODWARD GOVERNOR INDIA P. LTD. 312 ITR 254, THE FOREIGN EXCHANGE LOSS ON TRADING TRANSACTIONS HAVE TO BE ALLOWED AS BUSINESS LOSS. THEREFORE, THE AO IS DIRECTED TO ALLOW THE LOSS ON REALIZED TRANS ACTIONS OF FOREIGN EXCHANGE AS BUSINESS LOSS. AS REGARDS THE QUANTIFICATION OF THE REALIZED LOSS, THE AO IS ONCE AGAIN DIRECTED TO RECALCULATE THE TOTAL AMOUNTS OF REALIZED LOSS BY VERIFYING THE CONTENTION OF THE APPELLANT THAT THE SAME IS RS.L,88,92,811/ - . AS REGARDS THE CLAIM OF UNREALIZED LOSS, I AGREE WITH THE CONTENION OF THE AO THAT IT IS A CONTINGENT LIABILITY BECAUSE IT IS NOT ASCERTAINABLE AS TO AT WHAT EXCHANGE RATE THE TRANSACTIONS OF FOREIGN EXCHANGE WILL BE REALIZED. SUCH LOSS IS IN THE NATURE OF MARK TO MARKET BASIS WHICH DESERVES TO BE DISALLOWED AND CAN ONLY BE ALLOWED AT THE TIME OF ACTUAL REALIZATION OF SUCH LOSS. THIS GROUND OF APPEAL IS ACCORDINGLY PARTLY ALLOWED. AFTER ANALYZING THE AFOREMENTIONED ORDER AND AFTER HEARING ARGUMENTS OF B OTH THE PARTIES AS WELL AS CONSIDERING THE DOCUMENTS PLACED ON RECORD, WE HAVE NOTICED THAT IN THE ASSESSMENT ORDER THE AO HAS TREATED THE LOSS AS MARK TO MARKET LOSS ON FORWARD CONTRACTS. WHEREAS, THE LD. AR SUBMITTED THAT THE AO HAS WRONGLY 6 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. CONSIDERED TH E LOSS IN QUESTION AS LOSS ON FORWARD CONTRACT OF FOREIGN EXCHANGE, THE LOSS UNDER CONSIDERATION WAS ON THE TRADING TRANSACTIONS OF IMPORTS. IN THIS RESPECT, WE HAVE NOTICED THAT DURING THE PENDENCY OF THE APPEAL BEFORE CIT(A), A REMAND REPORT WAS SOUGHT B Y THE CIT(A) AS THE CLAIM OF THE AO AND THE ASSESSEE WERE CONTRADICTORY. THE LD. CIT(A) HAD CONSIDERED THE REMAND REPORT DATED 25.08.2014 AND HELD THAT THE LOSS IN QUESTION SUFFERED BY THE ASSESSEE WAS NOT IN RESPECT OF FORWARD CONTRACTS AND IT IS IN THE N ATURE OF CURRENT ASSETS/ OUTSTANDING AMOUNTS. THE LD. CIT(A) HAS ALSO RIGHTLY CONSIDERED THAT THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAS MENTIONED THAT OUT OF THE TOTAL LOSS OF RS.2,38,21,533/ - ONLY AN AMOUNT OF RS.84,86, 181/ - WHICH IS REALIZED L OSS IS ALLOWABLE WHEREAS THE REMAINING AMOUNT OF RS. L ,53,35,352 / - IS NOTIONAL LOSS BECAUSE IT IS A CONTINGENT LIABILITY AS THE SAME IS NOT CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) AFTER CONSIDERING THE RIVAL CONTENTIONS OF THE LD . AR REGARDING THE FACTUAL MISTAKES OF THE FIGURES OF UNREALIZED AND REALIZED LOSS MENTIONED IN THE REMAND REPORT AND AFTER CONSIDERING THE DECISIONS OF THE HON'B1E SUPREME COURT IN THE CASE OF M/S WOODWARD GOVERNOR INDIA P. LTD. 312 ITR 254 , HELD THAT TH E FOREIGN EXCHANGE LOSS ON TRADING TRANSACTIONS HAVE TO BE ALLOWED AS BUSINESS LOSS. THEREFORE, WHILE CONSIDERING THE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW THE LOSS ON REALIZED TRANSACTIONS OF FOREIGN EXCHANGE AS BUSINESS LOSS. AS REGARDS THE QUANTIFICATION OF THE REALIZED LOSS, THE AO WAS AGAIN DIRECTED TO RECALCULATE THE TOTAL AMOUNTS OF REALIZED 7 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. LOSS BY VERIFYING THE CONTENTION OF THE APPELLANT THAT THE SAME IS RS. L,88,92,811/ - . THE LD. CIT(A) HAS CONCURRED TO THE EFFECT THAT THE CONTENTIONS REGARDING THE CLAIM OF UNREALIZED LOSS AS IT IS A CONTINGENT LIABILITY BECAUSE IT IS NOT ASCERTAINABLE AS TO WHAT EXCHANGE RATE THE TRANSACTIONS OF FOREIGN EXCHANGE WILL BE REALIZED. THE LD. CIT(A) HAS RIGHTLY HELD THAT S UCH LOSS IS IN THE NATURE OF MARK TO MARKET BASIS WHICH DESERVES TO BE DISALLOWED AND CAN ONLY BE ALLOWED AT THE TIME OF ACTUAL REALIZATION OF SUCH LOSS. WE FOUND THAT THE FINDINGS RECORDED BY LD. CIT(A) IS BASED ON THE FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE AND AFTER CONSIDERING THE PRINCIPLE LAID DOWN IN THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF M/S WOODWARD GOVERNOR INDIA P. LTD. 312 ITR 254 , THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS RIGHTLY UPHELD THE FINDINGS IN THE PRESENT CASE THAT SUCH LOSS IS IN THE NATURE OF MARK TO MARKET BASIS WHICH DESERVES TO BE DISALLOWED AND CAN ONLY BE ALLOWED AT THE TIME OF ACTUAL REALIZATION OF SUCH LOSS. NO NEW CIRCUMSTANCES HAVE BEEN BROUGHT ON RECORD BEFORE US IN ORDE R TO CONTROVERT OR REBUT THE FINDINGS RECORDED BY LEARNED CIT (A), AND THEREFORE, THERE ARE NO REASONS FOR US TO DEVIATE FROM THE FINDINGS RECORDED BY THE LEARNED CIT (A). THEREFORE, AFTER HEARING THE PARTIES AND ANALYZING THE IMPUGNED ORDER WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS RECODED BY THE LEARNED CIT (A) ARE JUDICIOUS AND WELL REASONED. ACCORDINGLY, WE UPHOLD THE SAME AND DISMISS THIS GROUND OF APPEAL. 14. IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . 8 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. 6. FROM PERUSAL O F THE AFOREMENTIONED ORDER, WE FOUND THAT THE BENCH AFTER CONSIDERING THE ENTIRE ARGUMENTS HAD UPHELD THE FINDINGS RECORDED BY LD. CIT(A) AND DISMISSED THE APPEAL OF THE ASSESSEE . 7. BUT NOW THE PRES ENT MISC. APPLICATION HAS BEEN MOVED BY THE ASSESSEE WITH OUT MENTIONING THE SPECIFIC PROVISION UNDER WHICH THE PRESENT APPLICATION HAS BEEN MOVED. 8. THE LEARNED DR SUBMITTED THAT THERE IS NO MISTAKE APPARENT ON RECORD WHICH WARRANTS RECTIFICATION OF EARLIER ORDER OF THE TRIBUNAL. WE HAVE PERUSED CASE TITLE CIT VS. RAMESH ELECTRIC AND TRADING CO . (203 ITR 497) WHEREIN THE BOMBAY HIGH COURT HELD AS UNDER SECTION 254(2) OF THE INCOME - TAX ACT, 1961, THE APPELLA TE TRIBUNAL MAY, 'WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD', AMEND ANY ORDER PASSED BY IT UNDER SUB - SECTION (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVI EW ITS OWN ORDERS UNDER THE PROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND PATENT MISTAKE WHICH IS 9 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. APPARENT FROM THE RECORD, AND NOT A MISTAKE WHICH REQUIRES TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLE BE TWO OPINIONS. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION I SNOT AN ERROR APPARENT ON THE RECORD, ALTHOUG H IT MAY BE AN ERROR OF JUDGEMENT. THE TRIBUNAL CANNOT, IN THE EXERCISE OF ITS POWER OF SRI MOOSA ABU KHALED RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION.' 9 . THE DR ALSO RELIED ON CASE TITLE DHARAMCHAND SURANA VS. ITO (61 ITD 115) (TM), HOMI MEHTA & SONS PVT. LTD. VS. DCIT (63 ITD15). 10 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. I T IS WELL SETTLED THAT STATUTORY AUTH ORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER IS EXPRESSLY CONFERRED. THERE IS NO EXPRESS POWER OF REVIEW CONFERRED ON THIS TRIBUNAL. EVEN OTHERWISE, THE SCOPE OF REVIEW DOES NOT EXTEND TO RE - HEARING OF THE CASE ON MERIT. IT IS HELD IN THE CASE O F CIT VS. PEARL WOOLLEN MILLS (330 ITR 164) ' HELD, THAT THE TRIBUNAL COULD NOT READJUDICATE THE MATTER UNDER SECTION 254(2) . IT IS WELL SETTLED THAT A STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER IS EXPRESSLY CONFERRED. THERE WAS NO EXPRESS POWER OF REVIEW CONFERRED ON THE TRIBUNAL. EVEN OTHERWISE, THE SCOPE OF REVIEW DID NOT EXTENT TO REHEARING A CASE ON THE MERITS. NEITHER BY INVOKING INHERENT POWER NOR THE 10 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. PRINCIPLE OF MISTAKE OF COURT NOT PREJUDICING A LITIGANT NOR BY INVOLVING DOCTRINE OF INCIDENTAL POWER, COULD THE TRIBUNAL REVERSE A DECISION ON THE MERITS. THE TRIBUNAL WAS NOT JUSTIFIED IN RECALLING ITS PREVIOUS SRI MO OSA ABU KHALED FINDING RESTORING THE ADDITION, MORE SO WHEN AN APPLICATION FOR THE SAME RELIEF HAD BEEN EARLIER DISMISSED. ' 11 . EVEN OTHERWISE T HE SCOPE AND AMBIT OF APPLICATION OF SECTION 254(2) IS VER Y LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FROM THE RECORD UNDER THE CIRCUMSTANCES, NOW W E SHALL FIRST DEAL WITH THE QUESTION OF THE POWER OF THE TRIBUNAL TO RECALL AN ORDER IN ITS ENTIRETY. RECALLING THE ENTIRE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE INTENT. THE ORDER PASSED BY THE TRIBUNAL UNDER S. 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORD ER PASSED UNDER S. 254(2) EITHER ALLOWING THE AMENDMENT OR REFUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UN - AMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTI CAL PURPOSES. AN ORDER UNDER S. 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER S. 254(1) . RECALLING OF THE ORDER IS NOT PERMISSIBLE UNDER S. 254(2) . RECALLING OF AN ORDER AUTOMATICALLY NECESSITATES REHEARING AND RE - ADJUDICATION OF THE ENTIRE SUBJECT - MATTER OF APPEAL. THE DISPUTE NO LONGER REMAINS RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIE D. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OF RULE 24 OF 11 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. THE ITAT RULES, 1963, AND THAT TOO ONLY IN CASE WHERE THE ASSESSEE SHOWS THAT IT HAD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME WHEN THE APPEAL WAS TAKEN UP AND WAS DECIDED EX - PARTE. JUDGE D IN THE ABOVE BACKGROUND THE ORDER PASSED BY THE TRIBUNAL IS INDEFENSIBLE. 12 . THE WORDS USED IN S. 254(2) ARE 'SHALL MAKE SUCH AMENDMENT, IF THE MISTAKE IS BROUGHT TO ITS NOTICE'. CLEARLY, IF THERE IS A MISTAKE, THEN AN AMENDMENT IS REQUIRED TO BE CARRIED OUT IN THE ORIGINAL ORDER TO CORRECT THAT PARTICULAR MISTAKE. THE PROVISION DOES NOT INDICATE THAT THE TRIBUNAL CAN RECALL THE ORDER AND PASS A FRESH DECISION. THAT WOULD AMOUNT TO REVIEW OF THE ENTIR E ORDER AND THAT IS NOT PERMISSIBLE UNDER THE IT ACT . THE POWER TO RECTIFY A MISTAKE UNDER S. 254(2) CANNOT BE USED FOR RECALLING THE ENTIRE ORDER. NO POWER OF REVIEW HAS BEEN GIVEN TO THE TRIBUNAL UNDER THE IT ACT . THUS, WHAT IT COULD NOT DO DIRECTLY COULD NOT BE ALLOWED TO BE DONE INDIRECTLY. 13 . IN THE CASE OF CIT VS. HINDUSTAN COCA COLA BEVERAGES (P) LTD . (2007) 207 CTR (DEL) 119; (2007) 293 ITR 163 (DEL), THEIR LORDSHIPS WHILE CONSIDERING THE POWERS OF THE TRIBUNAL UNDER S. 254(2) OF THE IT AC T, 1961 OBSERVED AS UNDER SECTION 254(2) OF THE IT ACT, 1961, THE TRIBUNAL HAS THE POWER TO RECTIFY MISTAKES IN ITS ORDER. HOWEVER, IT IS PLAIN THAT THE POWER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. 12 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. RECTIFICATION IS A SPECIES OF THE LARGER CONCEPT OF REVIEW. ALTHOUGH IT IS POSSIBLE THAT THE PRE - REQUISITE FOR EXERCISE OF EITHER POWER MAY BE SIMILAR (A MISTAKE APPARENT FROM THE RECORD), BY ITS VERY NATURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED.' 14 . THUS THE SCOPE AND AMBIT OF APPLICATION U/S. 254(2) IS AS FOLLOWS: (A) FIRSTLY, THE SCOPE AND AMBIT OF APPLICATION OF S. 254(2) OF IT ACT IS RESTRICTED TO RECTIFICATION OF THE MISTAKES APPARENT FROM THE RECORD. (B) SECONDLY, THAT NO PARTY APPEARING BEFORE THE TRIBUNAL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL AND IF THE PREJUDICE HAS RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE/ERROR OR OMISSION, AND WHICH AN ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTAKE. THE 'RULE OF PRECEDENT' IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN THE RULE OF LAW AND THAT PRINCIPLE IS NOT OBLITERATED BY S. 254(2) OF THE ACT AND NON - CONSIDERATION OF PRECEDENT BY THE TRIBUNAL CAUSES A PREJUDICE TO THE ASSESS EE. (C) THIRDLY, POWER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED SRI MO OSA ABU KHALED 13 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. (D) FOURTHLY, UNDER S. 254(2) AN OVERSIGHT OF A FACT CAN NOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER THE SECTION. (E) FIFTHLY, FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGEMENT. (F) SIXTHLY, EVEN IF ON THE BASIS OF A WRONG CONCLUSION THE TRIBUNAL HAS NOT ALLOWED A CLAIM OF THE PARTY IT WILL NOT BE A GROUND FOR MOVING AN APPLICATION UNDER S. 254(2) OF THE ACT. (G) LASTLY, IN THE GARB OF AN APPLICATION FOR RECTIFICATION UNDER S. 254(2) THE ASSESSEE CANNOT BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER AS THE SAME IS BEYOND THE SCOPE OF S. 254(2) OF THE IT ACT. 15 . FURTHER, IT IS ALSO PERTINENT TO MENTION HEREIN THE JUDGEMENT OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. STEAL CAST CORPORATION (107 ITR 683) WHEREIN IT WAS HELD THAT IN THE ORDER OF APPELLATE AUTHORITY, THE GROUND MIGHT NOT HAVE BEEN DEALT WITH THAT POINT AND THEREBY IT MEANS THAT IT WAS IMPLIEDLY REJECTED IT. BEING SO, IN VIEW OF THE ABOVE JUDGEMENT, IT IS IMPLIED THAT THOUGH THERE WAS NO SPE CIFIC FINDING IN THE ORDER OF THE TRIBUNAL ABOUT EX - PARTE ORDER, IT IS TO BE UNDERSTOOD THAT THIS GROUND WAS REJECTED BY THE TRIBUNAL SO THAT THE TRIBUNAL CONSIDERED ALL THE 14 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. FACTS AND CIRCUMSTANCES OF THE CASE AND GIVEN THE FINDINGS. IF THE ASSESSEE HAS AN Y GRIEVANCE, THE REMEDY LIES ELSEWHERE. WE ALSO PLACE RELIANCE ON THE JUDGEMENT OF SUPREME COURT IN THE CASE OF CIT VS. KARAM CHAND THAPAR & BROS . PVT. LTD. (176 ITR 535) WHEREIN IT WAS HELD THAT THE DEC ISION OF THE TRIBUNAL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JU DGMENT. IF THE COURT, ON A FAIR READING OF THE JUDGMENT OF THE TRIBUNAL, FINDS THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL IN BASING ITS CONCLUSIONS, THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH, UNLESS, OF COURSE, THE CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN ITS JUDGMENT SPECIFICALLY OR IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE C IRCUMSTANCES OR HAS CONSIDERED THE TOTALITY OF THE FACTS, AS IF THAT WERE A MAGIC FORMULA; IF THE JUDGMENT OF THE TRIBUNAL SHOWS THAT IT HAS, IN FACT, DONE SO, THERE IS NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL. 16. NOW COMING TO THE FACTS OF THE PRESENT CASE, THE LD. CIT(A) AFTER CONSIDERING THE RIVAL SUBMISSIONS HAD HELD THAT IN THE LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF WOODWARD GOVERNER INDIA PVT. LTD. 312 15 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. ITR 254, THE FOREIGN EXCHANGE LOSS ON TRADING TRANSACTIONS HAVE TO BE ALLOWED AS BUSINESS LOSS. THEREFORE, THE LD. CIT(A) DIRECTED THE AO TO ALLOW THE LOSS ON REALIZED TRANSACTION OF FOREIGN EXCHANGE AS BUSINESS LOSS AND WITH REGARD TO QUANTIFICATION OF THE REALIZED LOSS, THE AO WAS FURTHER DIRECTED TO RECALCULATE THE TOTAL AMOUNT OF REALIZED LOSS. AS REGARDS THE CLAIM OF UNREALIZED LOSS, THE CIT(A) AGREED WITH THE CONTENION OF THE AO THAT IT IS A CONTINGENT LIABILITY BECAUSE IT IS NOT ASCERTAINABLE AS TO AT WHAT EXCHANGE RATE THE TRANSACTIONS OF FOREIGN EXCHANGE W ILL BE REALIZED. THEREFORE CONSIDERING THE NATURE OF S UCH LOSS OF MARK TO MARKET BASIS WAS DISALLOWED AND IT WAS HELD THAT THE SAME CAN ONLY BE ALLOWED AT THE TIME OF ACTUAL REALIZATION OF SUCH LOSS. THE BENCH AFTER CONSIDERING THE O RDER OF REVENUE AUTHO RITIES HAD DISMISSED THE APPEAL OF THE ASSESSEE AND UPHOLD THE ORDER OF LD. CIT(A), THEREFORE THERE WAS NO MISTAKE IN INTERPRETING THE JUDGMENT OF HONBLE SUPREME COURT. 17. I N VIEW OF THE ABOVE DISCUSSION AS NO GLARING, OBVIOUS OR PATENT MISTAKE HAS BEE N POINTED OUT BY THE ASSESSEE WHICH IS APPARENT FROM THE RECORD, THEREFORE WE ARE INCLINED TO DISMISS THE MA FILED BY THE ASSESSEE. 16 M.A. NO. 231/MUM/2017 ) (IN ITA NO 1998/MUM/2015 ) M/S VAIBHAVI TRADING PVT. LTD. 18 . IN THE NET RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE STANDS DISMISS IN TERMS INDICATED HEREIN ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH NOV , 2017. SD/ - SD/ - ( RAJENDRA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 15 . 11 .201 7 SR.PS DHANANJAY. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORD ER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI