Appeal Details
Counselvise Citation
[2018] 124 COUNSELVISE.COM (IT) 7136 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
10 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
28-09-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
I
Assessment Year
2008-2009
Appeal Filed On
01-11-2017
Judgement Text
, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MISC. APPLICATION NO.260/AHD/2017 (IN ITA NO. 3297/AHD/2014) / ASSTT. YEAR: 2008-2009 ACIT, CENT.CIR.1 BARODA. VS. SUN PHARMACEUTICAL INDUSTRIES LTD. SPARC, TANDALJA, BARODA. (APPLICANT) (RESPONDENT) REVENUE BY : SHRI G.C. SRIVASTAVA, ADVOCATE SPECI AL COUNSEL SHRI SUKH SAGAR SYAL, C.A. ASSESSEE BY : SHRI S.N.SOPARKAR, WITH SHRI VARTIK CHOKSHI, AR / DATE OF HEARING : 14/08/2018 / DATE OF PRONOUNCEMENT: 28/09/2018 ! / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: PRESENT MISC. APPLICATION IS DIRECTED AT THE INSTAN CE OF THE REVENUE POINTING OUT SOME APPARENT MISTAKE IN THE ORDER OF THE ITAT DATED 16.10.2017 PASSED IN ITA NO.3297/AHD/2014 AND SEEKI NG NECESSARY MODIFICATION THEREOF. 2. THE REVENUE IN ITS MA SUBMITS AS UNDER: 1. REVENUE FILED AN APPLICATION DATED 21.04.2017 U NDER RULE 29 OF THE ITAT RULES URGING THE HON'BLE BENCH TO ADMIT CERTAIN ADDITIONAL PIECES OF EVIDENCE. THE ADMISSION OF THE ADDITIONAL EVIDENCE WAS OPPOSED BY THE COUNSEL FOR THE APPELLANT IN THE COURSE OF HEARING OF THE CASE. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 2 2. HOWEVER, THE ORDER OF THE HON'BLE TRIBUNAL DOES NOT EVEN MAKE A MENTION OF ANY SUCH APPLICATION HAVING BEEN FILED BY THE RE VENUE NOR DOES IT RECORD ANY DECISION WITH REGARD TO THE FATE OF SUCH APPLIC ATION., 5. THIS CONSTITUTES A GRAVE MISTAKE APPARENT FROM R ECORD AND IS LIKELY TO ADVERSELY AFFECT THE CASE OF REVENUE AT THE HIGHER FORUM. THIS NEEDS TO BE TAKEN INTO ACCOUNT AND SUITABLE REMEDIAL ORDERS DES ERVE TO BE PASSED IN THIS CASE. B. GROUND NO. 2: INTEREST ON SHARE APPLICATION MONE Y 4. THIS GROUND OF APPEAL IS DEALT WITH IN THE ORDER FROM PAGES 3-9. IN PARA 12, THE SUBMISSIONS OF REVENUE HAVE BEEN SUMMARISED. TH E FINDINGS APPEAR IN PARAS 13 TO 15 OF THE ORDER. 5. THE FINDING OF THE HON'BLE ITAT SUFFERS FROM THE FOL LOWING MISTAKES WHICH ARE APPARENT FROM RECORD: I) IN THE IMPUGNED ORDER, THE ITAT HAS PROCEEDED ON THE ASSUMPTION THAT THE-REVENUE IS SEEKING TO RECHARACTERIZE THE T RANSACTION OF SHARE APPLICATION MONEY AS A LOAN. IN THIS REGARD, IT IS SUBMITTED THAT THE REVENUE NEVER SOUGHT TO RECHARACTERIZE THE TRANSACT ION. IN THE SCHEDULE DETAILING RELATED PARTY TRANSACTIONS, THE AMOUNT ADVANCED TO THE SUBSIDIARY WAS SHOWN UNDER THE HEAD 'LOANS/SHAR E APPLICATION MONEY' OR AS 'LOANS' ONLY IN YEARS WITHOUT SPECIFYI NG WHETHER A PARTICULAR OUTSTANDING WAS A LOAN OR SHARE APPLICAT ION MONEY. IT WAS IN THIS BACKDROP THAT THE REVENUE RAISED A PRIMARY OBJECTION THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE THAT THE MONEY W AS ADVANCED AS SHARE APPLICATION MONEY. IT WAS ARGUED AT LENGTH TO POINT OUT THAT NEITHER ANY BOARD RESOLUTION FROM THE SHARE ISSUING COMPANY OR FROM THE ASSESSEE IS ON RECORD TO GIVE IT A CHARACTER OF SHARE APPLICATION MONEY. THE AMOUNT OF CAPITAL PROPOSED TO BE RAISED, THE SCHEDULE OF PAYMENT OF SHARE APPLICATION MONEY AND THE PERIOD W ITHIN WHICH THE SHARES ARE TO BE ALLOTTED HAVE GOT TO BE SPECIFIED IN SUCH A BOARD RESOLUTION. IT WAS SUBMITTED BEFORE THE HON'BLE BEN CH THAT IN THE ABSENCE OF ANY BOARD RESOLUTION FROM EITHER OF THE TWO COMPANIES, THE CONTENTION OF THE APPELLANT THAT THE ADVANCE WAS TO WARDS SHARE APPLICATION MONEY AND NOT BY WAY OF LOAN IS TOTALLY CONTRARY TO THE FACTS ON RECORD (PARAS IX AND X OF THE WRITTEN SUBM ISSION). THE HON'BLE TRIBUNAL HAS NEITHER RECORDED THESE SUBMISS IONS IN PARA 12 NOR HAS GIVEN ANY CONSIDERATION TO THESE VITAL SUBM ISSIONS MADE ORALLY AS ALSO IN WRITING. THE APPELLANT DID NOT LE AD ANY EVIDENCE AT ANY STAGE OF THE PROCEEDINGS INCLUDING THE REJOINDE R TO REVENUE'S MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 3 SUBMISSIONS. IN THE WRITTEN SUBMISSIONS FILED POST THE HEARING ON 8 TH MAY, 2017, A STATEMENT IS MADE THAT THE BOARD OF TH E APPELLANT COMPANY HAD RESOLVED TO CONTRIBUTE THE SHARES. HOWE VER, NO MATERIAL WHATSOEVER WAS LED. THUS, THE FINDING OF THE TRIBUN AL THAT THE ADVANCE REPRESENTED SHARE APPLICATION MONEY IS NOT BASED ON ANY MATERIAL ON RECORD. THIS, TOGETHER WITH NON-CONSIDE RATION OF VITAL SUBMISSION OF THE REVENUE, CONSTITUTES MISTAKES APP ARENT FROM RECORD. II) THE ITAT NOTES IN PARA 14 OF ITS ORDER THAT THE P ROVISIONS OF INDIAN COMPANIES ACT WILL NOT APPLY TO AN ENTITY INCORPORAT ED IN BRITISH VIRGIN ISLANDS. IT WAS NEVER THE CASE OF THE REVENU E THAT SPG BVI WAS SUBJECT TO THE PROVISIONS OF THE INDIAN COMPANI ES ACT AND THAT IT HAD NOT COMPLIED WITH THESE PROVISIONS. AS A MATTER OF FACT, THIS COULD NEVER HAVE BEEN THE CASE AS THE ITAT IS ANY WAY NOT AN APPROPRIATE FORUM FOR BRINGING UP THE DEFAULTS OF THE ASSESSEE REGARDING COMPLIANCE WITH THE COMPANIES ACT. THE REFERENCE TO THE PROVISIONS OF THE INDIAN COMPANIES ACT WAS SIMPLY TO HIGHLIGHT THE FACT THAT IF IT WERE IN FACT SHARE APPLICATION MONEY, IT WOULD NOT HAVE BEEN MADE AVAILABLE FOR THE BUSINESS OF THE BVI COMPANY AND W OULD HAVE BEEN KEPT SEPARATELY ONLY TO BE USED AGAINST THE ALLOTME NT OF SHARES. THE REVENUE RELIED ON THE DECISION OF LOGIX MICROSYSTEM S LTD. (80 TAXMANN.COM 39)(2017)(BANG).THE HON'BLE ITAT OMITTED T O EVEN REFER TO THIS DECISION, WHICH WAS READ OUT AT LENGT H. IN THE SAID DECISION, THE ITAT HELD THAT WHERE THE ALLEGED SHARE APPLICATION MONEY WAS PAID BY THE INDIAN ASSESSEE TO ITS AE IN U SA, IT WAS TO BE CONSIDERED AS AN ADVANCE FOR THE PURPOSE OF TRANSFE R PRICING UNTIL THE SHARES WERE ALLOTTED. THIS WAS FOR THE REASON THAT THE 'SHARE APPLICATION MONEY' WAS NOT KEPT IN A SEPARATE BANK ACCOUNT AND WAS THEREFORE AVAILABLE TO THE AE FOR USE IN BUSINESS. I T MAY BE APPRECIATED THAT IN THE ITAT DECISION (SUPRA), THE AE WAS A US CO MPANY, TO WHICH THE PROVISIONS OF INDIAN COMPANIES ACT DID NO T APPLY, YET THE CONCLUSION SO MENTIONED WAS REACHED. WHILE THE SAID ITAT DECISION WAS DIRECTLY ON THE ISSUE, THE HON'BLE TRIBUNAL HAS FAILED TO CONSIDER THE CO-ORDINATE BENCH DECISION. THERE IS NO FINDING TO THE EFFECT THAT THE SAID DECISION WAS NOT APPLICABLE TO THE PRESENT CASE NOR IS ANY FINDING TO THE EFFECT THAT THE HON'BLE BENCH WAS NO T AGREEABLE TO THE FINDINGS SO GIVEN. IN THIS SCENARIO, THE FAILURE TO CONSIDER A COORDINATE BENCH DECISION DIRECTLY ON THE ISSUE AND HEAVILY RE LIED UPON BY THE REVENUE WOULD CONSTITUTE A MISTAKE APPARENT FROM RE CORD. III) IN PARA XI OF ITS WRITTEN SUBMISSIONS, RELIANCE WAS PLACED BY THE REVENUE ON THE DECISION OF S.R. THORAT MILK PRODUCT S (70 TAXMANN.COM 261)(2016), WHEREIN THE ITAT HELD THAT SH ARE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 4 APPLICATION MONEY PER SE CANNOT BE EQUATED WITH SHA RE CAPITAL SINCE THE ALLOTMENT IS SUBJECT TO CERTAIN RULES AND REGUL ATIONS. THEREFORE, UNTIL ALLOTMENT, THE MONEY CANNOT BE HELD TOWARDS S HARE CAPITAL. HOWEVER, THIS BINDING DECISION WAS NEITHER REFERRED TO NOR CONSIDERED IN THE IMPUGNED ORDER, WHICH MAKES IT A MISTAKE APP ARENT FROM RECORD.A CO-ORDINATE BENCH DECISION CANNOT BE BRUSHE D ASIDE WITHOUT A FINDING REGARDING ITS INAPPLICABILITY OR THE DISA GREEMENT OF THE HON'BLE BENCH. IV) IN THE IMPUGNED ORDER, THE ITAT HAS ONLY REFERRED TO THE DECISION OF STERLING OIL RESOURCES (P.) LTD. ITA NO. 1791/MU M/2014 TO HOLD THAT WHERE THE ALLOTTEE COMPANY IS A 100% HOLDING C OMPANY, IT MAKES NO DIFFERENCE IF THERE IS A DELAY IN ALLOTMENT OF S HARES SINCE IT REMAINS A 100% PARENT BEFORE AND AFTER ALLOTMENT AND ITS IN TERESTS ARE NOT AFFECTED. IN THIS REGARD, IT IS SUBMITTED THAT THIS DECISION WAS NOT RELIED UPON OR REFERRED TO BY EITHER PARTIES NOR DI D THE HON'BLE BENCH MAKE ANY REFERENCE TO THE PARTIES TO HAVE THEIR SUB MISSIONS IN THIS RESPECT. TO PLACE RELIANCE ON SUCH A DECISION IS W HOLLY AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND WOULD CONSTITUTE A MISTAKE APPARENT FROM RECORD. V) THE ENTIRE THRUST OF REVENUE'S ORAL SUBMISSION BE FORE THE HON'BLE BENCH WAS THAT THE ISSUE WAS NOT OF DISALLOWANCE OF ANY EXPENDITURE UNDER THE NORMAL PROVISIONS OF THE ACT, BUT THE DETE RMINATION OF THE ARM'S LENGTH PRICE OF THE TRANSACTION. THE MERE FAC T THAT THE ALLOTTEE IS A PARENT COMPANY, DOES NOT TAKE THE TRANSACTION OUT OF THE RIGORS OF SECTION 92 OF THE ACT. AS A MATTER OF FACT, IF A HOLD ING COMPANY TRANSACTS WITH ITS SUBSIDIARY AND IT IS HELD THAT I T DOES NOT MAKE A DIFFERENCE WHETHER THEIR CONDUCT INTER SE IS THAT O F INDEPENDENT ENTERPRISES OR NOT SINCE THE HOLDING COMPANY IS ANY WAY ENTITLED TO ALL THE BENEFITS OF THE SUBSIDIARY, THE CONCEPT OF TRAN SFER PRICING ITSELF GOES FOR A TOSS AND WOULD AMOUNT TO NEGATING THE APPLICA TION OF A STATUTORY PROVISION. THE HON'BLE BENCH HAS NOT EVEN PREFERRED TO REFER TO THIS VITAL ARGUMENT OF THE REVENUE NOR DOES IT RECORD AN Y FINDING TO NEGATE THE CONTENTION. THE FINDING, THEREFORE, SUFFERS FRO M AN APPARENT MISTAKE OF LAW. VI) IT IS HUMBLY SUBMITTED THAT THE CORE ISSUE RAISE D BY THE REVENUE BEFORE THE HON'BLE BENCH WAS- WHAT WOULD BE THE PRI CE OF THE SAME TRANSACTION IF IT WAS CARRIED OUT BETWEEN TWO OR MO RE INDEPENDENT ENTERPRISES? BROADLY, IN THE INSTANT CASE, IT WAS T O BE ASCERTAINED WHETHER AN UNRELATED ENTERPRISE WOULD GIVE AN ADVAN CE OF RS. 369 CRORE FOR 6 MONTHS WITHOUT CHARGING ANY INTEREST ON IT. IT NEEDS TO BE RECALLED THAT FOR THIS VERY REASON, THE HON'BLE BEN CH, IN THE COURSE OF MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 5 HEARING, OPENLY CAME TO A VIEW THAT THE MATTER NEED S TO BE SET ASIDE AND RESTORED TO THE TPO. THE FAILURE OF THE HON'BLE ITAT TO ADJUDICATE ON THIS PRIMARY ISSUE, ARGUED AT GREAT L ENGTH BEFORE THE HON'BLE BENCH RAISES APPARENT MISTAKE IN THE IMPUGN ED ORDER. 6. THE ORDER SUFFERS FROM THE GRAVE INFIRMITY OF OM ISSION TO CONSIDER NEARLY ALL VITAL ARGUMENTS OF THE REVENUE AND THE J UDICIAL PRECEDENTS RELIED UPON IN THE COURSE OF HEARING AND ALSO SUBMITTED BY WAY OF WRITTEN SUBMISSIONS. ANY FINDING REACHED BY THE HON'BLE TRIB UNAL WOULD BE A MISTAKE APPARENT FROM RECORD AS ME REFERENCE TO AND CONSIDERATION OF ONE OR ANY OF THESE ARGUMENTS WOULD HAVE CHANGED THE COURS E OF THE FINDINGS REACHED AT BY THE HON'BLE BENCH. THUS, THE AFORESAID VITAL MISTAKES APPARENT FROM RE CORD NEED TO BE RECTIFIED BY AN APPROPRIATE ORDER. C. GROUND NO. 3: INTEREST ON OPTIONALLY FULLY CONVE RTIBLE DEBENTURES (OFCD) 8. THE HON'BLE ITAT HAS OMITTED TO TAKE INTO CONSID ERATION THE RELIANCE OF THE REVENUE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SAHARA INDIA REAL ESTATE (CIVIL APPEAL NO. 9813 OF 2Q7?JHOLDING THAT OFCDS REMAIN IN THE NATURE OF DEBENTURES TILL THESE ARE CONVERTED INTO EQUITY. THE RELEVANT OBSERVATIONS OF THE HON'BLE SU PREME COURT WERE NOT ONLY READ OUT BUT THE ISSUE WAS ARGUED AT LENGTH IN THE COURSE OF ORAL SUBMISSIONS AS ALSO INCORPORATED IN THE WRITTEN SUB MISSIONS. HOWEVER, TO OUR DISMAY, IT IS FOUND THAT THE HON'BLE TRIBUNAL H AS IGNORED THIS DECISION HAVING A VITAL BEARING ON THE FINDINGS REACHED AT W ITHOUT RECORDING ANY FINDING REGARDING ITS INAPPLICABILITY TO THE PRESEN T CASE OR THE FINDING THAT IT WOULD NOT HAVE ANY IMPACT ON THE FINAL OUTCOME OF M ERITS OF THE ISSUE AT HAND. 9 IT IS HUMBLY SUBMITTED THAT IT WAS NEVER THE CA SE OF THE REVENUE THAT THE DECISION OF THE ITAT FOR THE EARLIER YEAR SHOULD NOT BE FOLLOWED AS IT WAS A CASE BADLY ARGUED BY THE REVENUE. REVENUE HAD URGED THAT THE AFORESAID DECISION NOT BEING BEFORE THE HON'BLE BENCH IN THE PRECEDING YEAR, THE OBSERVATIONS OF THE HON'BLE SUPREME COURT REGARDING THE NATURE OF THE INSTRUMENT INVOLVED IN THE TRANSACTION, IF TAKEN IN TO CONSIDERATION, WOULD CHANGE THE OUTCOME OF THE ISSUE. 10. RELIANCE WAS ALSO PLACED BY THE REVENUE ON A NU MBER OF BINDING PRECEDENTS IN THIS REGARD WHICH ALL HAVE BEEN OMITT ED FROM CONSIDERATION MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 6 WITHOUT RECORDING ANY FINDING TO THE EFFECT THAT TH ESE PRECEDENTS ARE NOT APPLICABLE. 11. THE HON'BLE ITAT HAS ALSO OMITTED TO CONSIDER TH E RBI MASTER CIRCULAR WHICH ALSO LAYS DOWN THAT ONLY MANDATORILY CONVERTI BLE DEBENTURES ARE TO BE TREATED AS EQUITY. 12. IN PARA 26 OF THE IMPUGNED ORDER, THE ITAT HAS N OTED THAT CONSIDERING THE FACT THAT THE OFCD WAS ISSUED ON BENEFICIAL TER MS, NO ADJUSTMENT OF INTEREST WAS WARRANTED. THIS WAS THE PRECISE ARGUME NT OF THE APPELLANTS. IN COUNTER TO THIS REASONING, REVENUE DID SUBMIT THAT THE PRESENCE OR OTHERWISE OF BENEFITS WILL NOT DETERMINE WHETHER THE PRICE IS AT ARM'S LENGTH OR NOT. THIS IS NOT A SECTION 37 DISALLOWANCE WHERE THE ALL OWABILITY OF EXPENDITURE IS TO BE TESTED IN TERMS OF THE BENEFIT IT GIVES. THIS IS THE CASE OF A TRANSFER PRICING ADJUSTMENT UNDER CHAPTER X OF THE ACT. THIS CHAPTER MANDATES THE CARRYING OUT OF AN EXERCISE OF COMPARISON BETWEEN A CONTROLLED AND AN UNCONTROLLED TRANSACTION. IN THE INSTANT CASE, THE EXERCISE WOULD TRANSLATE TO COMPARING THE INTEREST ON THE OFCD (OR THE LACK THE REOF) TOGETHER WITH THE CORRESPONDING BENEFIT ARISING THERE FROM ON ONE HAN D AND THE INTEREST TOGETHER WITH THE CORRESPONDING BENEFITS ON A COMPA RABLE DEBENTURE ISSUED TO AN UNRELATED PARTY ON THE OTHER. WHAT IS REQUIRED T O BE SEEN IS WHETHER AN INDEPENDENT PARTY WOULD SUBSCRIBE TO A ZERO PERCENT DEBENTURE OF A COMPARABLE COMPANY WITH SIMILAR TERMS AS THE DEBENT URE IN QUESTION. IF THE ANSWER IS IN AFFIRMATIVE, NO ADJUSTMENT WOULD BE CA LLED FOR, HOWEVER, IF THE ANSWER IS IN THE NEGATIVE, A SUITABLE ADJUSTMENT OF INTEREST WAS REQUIRED. 13. IN THE COURSE OF HEARING, THE HON'BLE BENCH DID CONSIDER THE OPTION OF REMANDING THE OPTION OF REMANDING THE MATTER BACK T O THE TPO FOR CARRYING OUT SUCH A COMPARABILITY ANALYSIS TO DETERMINE THE ARM'S LENGTH PRICE OF THE TRANSACTION. 14. HOWEVER, UNFORTUNATELY IN THE FINAL ORDER, THE HON'BLE BENCH OMITS TO CONSIDER THESE VITAL ARGUMENTS OF REVENUE AND PROCE EDS TO FOLLOW THE ORDER FOR THE EARLIER YEAR. THE FAILURE TO CONSIDER THE V ITAL ARGUMENTS AND JUDICIAL PRECEDENTS RELIED UPON BY REVENUE CONSTITUTED MISTA KE APPARENT FROM RECORD AND DESERVES TO BE SUITABLY RECTIFIED. D. GROUND NO. 4: COMMISSION FOR CORPORATE GUARANTEE 15. THIS GROUND OF APPEAL IS DEALT WITH IN THE ORDE R FROM PAGES 16-19. IN PARA 30, THE SUBMISSIONS OF THE REVENUE HAVE BEEN SUMMAR ISED. THE FINDINGS APPEAR IN PARAS 31 TO 33 OF THE ORDER. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 7 16. THE HON'BLE ITAT SET ASIDE THE ISSUE TO THE FILE OF THE CIT(A) BY REACHING THE CONCLUSION THAT SINCE A SIMILAR ISSUE WAS PENDI NG BEFORE THE JURISDICTIONAL HIGH COURT, IT WOULD BE IMPROPER FOR THE ITAT TO CO NSTITUTE A SPECIAL BENCH. WHILE HOLDING SO, THE ITAT HAS COMMITTED A MISTAKE A PPARENT FROM RECORD BY NOT APPRECIATING THE CONTENTION OF THE REVENUE THAT THERE IS NO BAR ON ADJUDICATING ON AN ISSUE OR CONSTITUTING A SPECIAL BENCH EVEN IF A SIMILAR ISSUE IS PENDING BEFORE THE HIGH COURT. 17. ITAT COMMITTED AN APPARENT MISTAKE BY NOT TAKING NOTE OF THE REVENUE'S RELIANCE ON THE DECISION OF THE CO-ORDINA TE BENCH IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. (ITA NO. 1293/AHD/2015 ) WHEREIN THE HON'BLE BENCH HELD THAT IT WAS ONLY WHEN A SIMILAR ISSUE WAS PENDING BEFORE A HIGH COURT IN ASSESSEE'S OWN CASE, WOULD THERE BE A VALID GROUND FOR DENYING THE CONSTITUTION OF A SPECIAL BENCH. IN THE PRESENT CASE, ADMITTEDLY, THE ISSUE BEFORE THE HIGH COURT WAS NOT PENDING IN THE ASSESSEE'S OWN CASE, THEREFORE, THE ITAT COMMITTED A MISTAKE IN DENYING T HE REQUEST OF CONSTITUTION OF SPECIAL BENCH. THE HON'BLE ITAT OUGH T TO HAVE EITHER REACHED A FINDING REGARDING THE INAPPLICABILITY OF THE COORDINATE BENCH DECISION OR THE CORRECTNESS OF SUCH A DECISION. WIT HOUT RECORDING EITHER OF THE TWO FINDINGS, THE COORDINATE BENCH DECISION COULD N OT JUST BE IGNORED OR BRUSHED ASIDE. THE ORDER PASSED BYPASSING A COORDIN ATE BENCH DECISION WHEN IT HAS BEEN SPECIFICALLY BROUGHT TO THE NOTICE OF T HE BENCH DOES CONSTITUTE A MISTAKE APPARENT FROM RECORD AND DESERVES TO BE ADD RESSED SUITABLY. 18. THE ITAT SET ASIDE THE ISSUE TO THE CIT(A) WITH A DIRECTION TO PASS AN ORDER IN LINE WITH THE DECISION OF THE HIGH COURT, WHENEVER IT COMES. IT IS SUBMITTED THAT PASSING OF SUCH A CONTINGENT ORDER A LSO CONSTITUTES A MISTAKE APPARENT FROM RECORD. IT WAS SUBMITTED BEFORE THE H ON'BLE BENCH THAT A DIRECTION TO THE LOWER AUTHORITIES WITH REFERENCE T O A CONTINGENT HAPPENING IN AN UNCERTAIN POINT OF TIME WOULD BE WHOLLY IMPERMIS SIBLE IN LAW. THE HON'BLE BENCH HAS PREFERRED TO NOT EVEN DEAL WITH T HIS PROPOSITION LED BEFORE IT AND THEREBY FALLING INTO ERROR OF COMMITTING A M ISTAKE APPARENT FROM RECORD. E. GROUND NO. 5: SALE OF PANTOPRAZOLE DRUG 19. THIS GROUND OF APPEAL IS DEALT WITH IN THE ORDE R FROM PAGES 19-111. IN PARAS 68 TO 73, THE SUBMISSIONS OF THE REVENUE HAVE BEEN SUMMARISED. THE FINDINGS APPEAR IN PARA NO. 75 AND ONWARDS. 20. THE ORDER SUFFERS FROM THE FOLLOWING MISTAKES A PPARENT FROM RECORDS: I. REVENUE FILED THREE APPLICATIONS UNDER RULE 29 OF THE ITAT RULES, THE DETAILS OF WHICH ARE GIVEN HEREUNDER: MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 8 A) APPLICATION DATED 30.09.2016 FILING ADDITIONAL EV IDENCE IN THE FORM OF DOCUMENTS FOUND DURING SEARCH OPERATION S, AT A LATER POINT OF TIME ON WHICH RELIANCE WAS PLACED BY THE CIT(A) I N HER ORDER. B) APPLICATION DATED 21.04.2017 FILING ADDITIONAL E VIDENCE IN THE FORM OF EXTRACTS OF ANDA APPROVAL AND ORANGE BOOK AVA ILABLE ON THE WEBSITE OF PDA. DOCUMENT SHOWING THE PROCEDURE LAID DOWN BY THE US AUTHORITIES FOR OBTAINING ANDA APPROVAL AND OTHER RELATED DOCUMENTS. C) APPLICATION REQUESTING THE HON'BLE BENCH TO INVOK E ITS POWERS VESTED UNDER THE RULE AND CALL FOR THE DOCUMENTS LI KE APPLICATION BEFORE PDA, CORRESPONDENCE WITH THE PDA AND OTHER CO NNECTED DOCUMENTS, WHICH WERE BEING WITHHELD BY THE APPELLA NTS FROM THE STAGE OF THE AO/TPO. THE CIT(A) WENT TO THE EXTENT OF GIVING THEM A SPECIFIC NOTICE THAT IF THEY DO NOT FILE THESE DOCU MENTS, AN ADVERSE INFERENCE WOULD BE DRAWN AND YET THE APPELLANTS DEF IED THE ORDERS OF THE AUTHORITIES BELOW AND WITHHELD THE DOCUMENTS. I N THIS BACKDROP, APPLICATION UNDER RULE 29 WAS FILED BEFORE THE HON' BLE BENCH URGING THE ITAT TO EXERCISE ITS POWERS AND DIRECT THE APPEL LANTS TO FILE THESE VITAL DOCUMENTS. II. TO OUR DISMAY, IT IS NOTICED THAT THE HON'B LE TRIBUNAL HAS OMITTED TO PASS ANY ORDER ON ANY OF THESE APPLICATI ONS UNDER RULE 29.THE HON'BLE BENCH HAS NOT EVEN ACKNOWLEDGED THE FILING OF THESE APPLICATIONS BY THE REVENUE. THESE APPLICATIONS PER TAIN TO THE PRIMARY ISSUE REGARDING THE OWNERSHIP OF ANDA RIGHTS WHICH GO TO THE ROOT OF THE MATTER AND IT WAS NOT JUSTIFIED FOR THE HON'BLE BENCH TO PROCEED TO DECIDE THE GROUND WITHOUT DISCHARGING TH E PRIMARY FUNCTION OF ADJUDICATING ON THESE APPLICATIONS. THE HON'BLE BENCH HAS NOT RECORDED ANY FINDING THAT THE DOCUMENTS SOUGHT FOR UNDER APPLICATION C) ABOVE WAS NOT NECESSARY FOR ADJUDICAT ING THE ISSUE NOR IS THERE REJECTION OF THE APPLICATION ON ANY OTHER GROUND. THIS MISTAKE APPARENT FROM RECORD CAN ONLY BE RECTIFIED BY PASSI NG SUITABLE ORDERS ON THESE APPLICATIONS AND THEN TO READJUDICATE THE GROUND OF APPEAL. 21. THE HON'BLE ITAT AFTER RECORDING THE FACTUAL BA CKGROUND OF THE ISSUE AND THE CONTENTIONS OF THE APPELLANT BEFORE LOWER A UTHORITIES AND BEFORE THE ITAT, PROCEEDS TO CONSIDER THE ISSUE FROM PARA 75 ON PAGE 94. APART FROM REPRODUCING THE AGREEMENT OF THE APPELLANT WITH ITS AE, THE HON'BLE BENCH DOES NOT PREFER TO DEAL WITH ANY OF THE ARGUMENTS O R SUBMISSIONS OF THE REVENUE AND RECORDS A FINDING THAT ANDA RIGHTS WERE WITH SPG, BVI. IN MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 9 THIS CONTEXT, EXTENSIVE ARGUMENTS MADE FOR OVER TWO DAYS AND WRITTEN SUBMISSIONS OF THE REVENUE RUNNING INTO 12 PAGES AN D THE ADDITIONAL SYNOPSIS OF THE REVENUE RUNNING INTO 4 PAGES SOME O F WHICH DEALT WITH THIS PRIMARY ISSUE OF OWNERSHIP OF ANDA RIGHTS WERE OMITTE D TO BE CONSIDERED. THE FOLLOWING MISTAKES APPARENT FROM RECORD ARE CLE ARLY DISCERNIBLE FROM THE ORDER OF THE TRIBUNAL: A) ANDA RIGHTS ARE THE RIGHTS SPECIFICALLY GIVEN BY TH E US AUTHORITIES TO A SPECIFIC ENTITY WHICH FULFILS THE REQUISITE CONDITI ONS. THESE RIGHTS DO NOT FLOW FROM ANY AGREEMENT BETWEEN THE PARTIES BUT THESE HA VE TO BE GRANTED SPECIFICALLY BY THE US AUTHORITIES. REVENUE, THEREF ORE, INSISTED TIME AND AGAIN THAT THE COPY OF THE APPLICATION FILED BEFORE THE PDA AND ANY CORRESPONDENCE WHEREBY THE PDA APPROVED THE AE SUBSE QUENTLY, OUGHT TO BE PLACED BY THE APPELLANTS BEFORE THE VITAL ISSUE OF OWNERSHIP OF ANDA RIGHTS IS DECIDED. THE HON'BLE ITAT HAS PREFERRED TO REFER TO THE INTER COMPANY AGREEMENTS ONLY TO REACH THE FINDING AND ALL SUBMIS SIONS OF THE REVENUE IN THIS REGARD HAVE NOT EVEN BEEN EXAMINED AND REJECTE D. B) REVENUE'S ARGUMENTS REGARDING THE CORRECTNESS AND RELIABILITY OF THE COPY OF THE PDA APPROVAL IN THE NAME OF SPG, BVI DATED 10 .09.2007, ESPECIALLY IN THE LIGHT OF THE FACT THAT THE APPROVAL IS OF A DATE PRIOR TO THE DATE WHEN THE TECHNOLOGY WAS ALLEGEDLY PURCHASED BY SPG, BVI HAS NOT BEEN FOUND WORTH ANY MENTION AND CONSIDERATION IN THE ORDER OF THE H ON'BLE TRIBUNAL. C) REVENUE EXTENSIVELY READ OUT THE SUIT FILED BY WY ETH AND NYCOMED READ OUT FROM THE PAPERBOOK DURING THE COURSE OF ORAL AR GUMENTS AND ALSO RECORDED THE GIST OF THE SUIT IN ITS WRITTEN SUBMIS SIONS TO POINT OUT THAT THE SUIT WAS FILED AGAINST THE APPELLANT AND SPARC AND NOT SPG, BVI. THE AE THUS WAS NOT A PARTY TO THE CIVIL SUIT. THE SETTLEM ENT AGREEMENT WAS ALSO MADE BETWEEN PFIZER AND THE APPELLANT AND THE NAMES OF OTHER ENTITIES OF THE GROUP INCLUDING SPG, BVI WAS ONLY MENTIONED IN THE AGREEMENT. IN THE WRITTEN SUBMISSIONS AS ALSO THE ORAL ARGUMENTS, REV ENUE HAD POINTED OUT THAT THE LIABILITIES IN RESPECT OF THE LITIGATION W ERE TAKEN OVER BY THE APPELLANT WITH RETROSPECTIVE EFFECT FROM 1 ST MAY, 2013, I.E. ONE MONTH PRIOR TO THE SETTLEMENT AGREEMENT. THE HON'BLE ITAT HAS COMPLETEL Y OMITTED TO CONSIDER THESE VITAL FACTS IN ITS ORDER WHICH WOULD NECESSAR ILY CHANGE THE COURSE OF THE FINDINGS. D) THE ITAT RECORDS THE FINDING IN PARA 87 THAT THE A PPELLANT COMPANY IS NOTHING BUT A CONTRACT MANUFACTURER OF SPG, BVI, ON THE BASIS OF THE AGREEMENT BETWEEN THE APPELLANT AND SPG, BVI. THE H ON'BLE BENCH HAS COMMITTED THE APPARENT MISTAKE OF NOT TAKING ON REC ORD THE DETAILED FAR ANALYSIS PROVIDED BY THE REVENUE DURING THE COURSE OF ORAL ARGUMENTS AS ALSO MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 10 THROUGH WRITTEN SUBMISSIONS. REVENUE'S DETAILED REF ERENCE TO THE AGREEMENT BETWEEN THE APPELLANT AND CARACO WHEREBY THE ENTIRE MARKETING AND SALES FUNCTIONS STOOD VESTED IN CARACO HAS ALSO BEEN OMIT TED TO BE CONSIDERED. ADMITTEDLY, NO ASSETS BELONGED TO THE AE NOR IT HAD A NY OFFICE OR EMPLOYEE TO SAY THE LEAST. THE ENTIRE ARRANGEMENT, AS DEMONSTRA TED BY REVENUE, AT BEST COULD LEAD TO THE INFERENCE THAT SPG, BVI WAS THE L EGAL OWNER OF THE IPR. HOWEVER, THE HON'BLE BENCH OMITS TO TAKE ANY OF THE SE FACTUAL SUBMISSIONS AND THE ARGUMENTS ON RECORD OR TO REJECT THESE BEFO RE REACHING A FINDING THAT THE APPELLANT WAS ONLY A CONTRACT MANUFACTURER. THE FAILURE TO TAKE INTO CONSIDERATION THE PRIMARY FACTS PLACED BEFORE THE B ENCH WOULD CERTAINLY CONSTITUTE A MISTAKE APPARENT FROM RECORD AND WOULD BE OPEN TO APPROPRIATE RECTIFICATION. E) WHILE REJECTING THE APPLICATION OF PSM METHOD IN PARA 88, THE HON'BLE TRIBUNAL HAS GONE BY THE SUBMISSIONS OF THE APPELLA NT ONLY, OMITTING TO TAKE INTO CONSIDERATION THE ENTIRE FACTUAL MATRIX PROVID ED BY REVENUE. F) UNDER TNMM ALSO, THE ARM'S LENGTH PRICE HAS NEC ESSARILY TO BE DETERMINED TAKING INTO ACCOUNT THE FUNCTIONS PERFOR MED, THE ASSETS USED AND THE RISKS UNDERTAKEN. THE OMISSION OF THE HON'BLE I TAT TO TAKE INTO ACCOUNT THE FAR ANALYSIS PROVIDED BY THE REVENUE LEADS TO AN APPARENT MISTAKE IN COMPARING THE PROFIT MARGIN OF THE APPELLANT WITH T HAT OF ELI LILLY, WHICH COULD THEN NOT BE A RIGHT COMPARABLE. G) THE HON'BLE ITAT HAS OMITTED TO CONSIDER THE DOCUM ENTS FOUND DURING THE COURSE OF SURVEY AND RELIED UPON BY CIT( A) IN HER ORDER. IT WAS ALSO POINTED OUT THAT THE AO IN THE ORDER OF REA SSESSMENT PROCEEDINGS FOR THE YEAR UNDER APPEAL HAS HELD THAT THE TECHNOLOGY WAS DEVELOPED BY SPIL FOR CARACO AND THE TRANSACTIONS W ERE ATTRIBUTED TO SPG, BVI IN ORDER TO SHIFT PROFITS FROM SPIL TO BVI . THE TECHNOLOGY DID NOT MOVE FROM INDIA TO BVI. THIS WAS SUBMITTED AT LENGTH IN THE COURSE OF ORAL ARGUMENTS AND ALSO SUBMITTED IN THE WRITTEN FORM. THE HON'BLE ITAT OMITTED TO TAKE ANY OF THESE FACTUAL ASPECTS ON RECORD AND REACHED A FINDING IN DISREGARD TO THE FACTS IND ICATING QUITE CONTRARY TO THE INFERENCES DRAWN. THE FINDING OF TH E HON'BLE BENCH LEADS NOT ONLY TO THE DELETION OF ADDITIONS MADE FO R THE YEAR IN THESE PROCEEDINGS BUT ALSO AFFECTS ADVERSELY THE FINDINGS REACHED IN THE REASSESSMENT PROCEEDINGS. TO RENDER A FINDING HAVIN G SUCH WIDE RAMIFICATIONS ON THE REASSESSMENT PROCEEDINGS, WITH OUT CONSIDERING AND TAKING ON RECORD THE DOCUMENTS FOUND DURING SUR VEY PROCEEDINGS IS AN APPARENT MISTAKE OF GRAVE NATURE, BOTH ON FAC TS AND IN LAW. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 11 H) THE HON'BLE ITAT IN PARA 91 EXAMINES THE ALTERNAT E CONTENTION OF THE APPELLANT THAT AT THE END OF THE DAY THERE WERE NO PROFITS AND HENCE PSM WOULD NOT BE AN APPROPRIATE METHOD. THIS FINDIN G OF THE TRIBUNAL ALSO OMITS TO TAKE ON RECORD AND CONSIDERA TION DETAILED FACTUAL SUBMISSIONS OF THE REVENUE MADE ORALLY AND THROUGH WRITTEN SUBMISSIONS. THE HON'BLE BENCH HAS FURTHER COMMITTE D A MISTAKE OF ATTRIBUTING TO REVENUE SOME ARGUMENT WHICH WAS NEVE R MADE. REVENUE NEVER CONTENDED THAT IT WAS NOT CONCERNED W ITH THE SETTLEMENT MADE AT A LATER DATE. WHAT REVENUE CONTE NDED WAS THAT THE ENTIRE LIABILITIES HAVING BEEN TAKEN OVER BY THE AP PELLANT, THE RISK ALWAYS REMAINED WITH THE APPELLANT AND FURTHER THAT THERE CAN BE NO PERMISSIBLE WAY TO DETERMINE THE PROFITS OF THE GRO UP INSTEAD OF ASSESSABLE ENTITIES AS CONTEMPLATED IN THE STATUTE AND FURTHER THAT IF LOSSES HAD BEEN INCURRED IN LATER YEARS BY THE APPE LLANT OR ANY OTHER ENTITY OF THE GROUP, IT HAS TO BE DEALT WITH ACCORD ING TO LAW. THUS, THE REJECTION OF PSM ON ALTERNATE GROUNDS IS ALSO BASED ON OMISSION OF THE HON'BLE BENCH TO TAKE ON RECORD THE DETAILED SUBMIS SIONS MADE IN THIS REGARD. 22. THE SCOPE OF THE PROVISIONS CONTAINED IN SECTIO N 254(2) EXTEND TO RECTIFYING ANY MISTAKE APPARENT FROM RECORD WHICH W OULD INCLUDE NOT ONLY OMISSION TO CONSIDER ANY GROUND OF APPEAL BUT ALSO THE OMISSION TO CONSIDER VITAL FACTS, JUDICIAL PRECEDENTS AND LEGAL SUBMISSI ONS MADE BY EITHER PARTIES AND PLACED BEFORE THE BENCH. IN A CASE WHERE THE OM ISSION TO CONSIDER VITAL FACTS OR JUDICIAL PRECEDENTS HAVE THE EFFECT OF CHA NGING THE COURSE OF FINDINGS, THE OMISSION WOULD CONSTITUTE A MISTAKE APPARENT FR OM RECORD AND WOULD BE OPEN TO SUITABLE RECTIFICATION. 23. IN VIEW OF THE ABOVE, IT IS SUBMITTED WITH UTMO ST RESPECT THAT THE ORDER FROM THE HON'BLE BENCH APPEARS TO HAVE BEEN PASSED IN UNDUE HASTE AND HAS LED TO VITAL OMISSIONS OF NOT PASSING STATUTORY ORD ERS, NON-CONSIDERATION OF VITAL EVIDENCE PLACED ON RECORD AND FAILURE TO CONS IDER JUDICIAL PRECEDENTS. IT IS URGED THAT THE ORDER OF THE HON'BLE TRIBUNAL MAY BE SUITABLY MODIFIED BY SETTING ASIDE THE FINDINGS IN RESPECT OF THESE GROU NDS AND TO DECIDE THESE GROUNDS AFRESH AFTER TAKING INTO CONSIDERATION ALL SUCH OMISSIONS OF FACT AND LAW. THIS WILL ALSO BE IN TUNE WITH THE BROADER TEN ETS UNDERLYING THE PRINCIPLES OF NATURAL JUSTICE. THE INTEREST OF SUBS TANTIAL JUSTICE HAS BEEN GRIEVOUSLY HURT IN THIS CASE AND THE ONLY RECTIFICA TION POSSIBLE IS TO SET ASIDE THE FINDINGS AND TO REVISIT THE ISSUES. AN OBJECTIVE AND IMPERSONAL APPRECIATION OF THESE OMISSIONS AND MISTAKES CAN AL ONE MEET THE ENDS OF JUSTICE. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 12 2. THE LD. DR FOR THE REVENUE AT THE TIME HEARING A LSO FILED THE WRITTEN SUBMISSIONS AS DETAILED UNDER: 1. THIS IS IN RESPECT OF THE HEARING BEFORE THE HO N'BLE ITAT ON 22ND JUNE, 2018. ON SUCH DATE, VARIOUS QUESTIONS WERE PUT FORT H BY THE HON'BLE BENCH TO THE REVENUE ASKING IT TO ESTABLISH THAT THE MIST AKES POINTED OUT IN THE MISCELLANEOUS APPLICATION WERE 'APPARENT FROM RECOR D' OR 'FATAL' ENOUGH TO WARRANT AN INTERVENTION BY THE ITAT IN THE PRESENT P ROCEEDINGS. 2. AT THE OUTSET, IT IS SUBMITTED, THAT BY WAY OF TH IS MISCELLANEOUS APPLICATION, THE REVENUE IS NOT SEEKING A BLANKET R ECALL OF THE ENTIRE IMPUGNED ORDER AND IS NOT URGING THE HON'BLE BENCH TO REHEAR THE MATTER IN ENTIRETY AND REVIEW THE SAID IMPUGNED ORDER. IN THE APPLICATION, THE REVENUE HAS PIN-POINTED SOME VERY SPECIFIC GROUND-WISE MIST AKES WHICH ARE APPARENT FROM THE RECORD. IN SUBSTANCE, THE MISTAKES COMMITT ED WHILE PASSING THE IMPUGNED ORDER CAN BE PUT INTO THE FOLLOWING TWO CA TEGORIES: I. NON-CONSIDERATION OF CRUCIAL FACTS (INCLUDIN G THREE APPLICATIONS FOR ADDITIONAL EVIDENCES)... GROUNDS NO. 2, 3 AND 5 II. NON-CONSIDERATION OF BINDING JUDGMENTS DIRE CTLY ON THE ISSUE PASSED BY THE HIGHER COURTS AS WELL AS CO-ORDINATE BENCHES OF THE TRIBUNAL...GROUNDS NO. 2, 3 AND 4 LEGAL POSITION ON THE SCOPE OF RECTIFICATION PROCEE DINGS 3. AS MENTIONED, THE CASE OF THE REVENUE IS THAT THE RE ARE TWO CATEGORIES OF MISTAKES APPARENT FROM RECORD IN THE IMPUGNED ORDER . THERE ARE VARIOUS ORDERS AND JUDGMENTS IN SUPPORT OF EACH OF THESE MI STAKES BEING APPARENT FROM RECORD U/S. 254(2) OF THE ACT. I. NON-CONSIDERATION OF CRUCIAL FACTS (INCLUDIN G THREE APPLICATIONS FOR ADDITIONAL EVIDENCES) 4. THE HON'BLE SUPREME COURT IN THE CASE OF JYOTSNA SURI (179 CTR 265)(2003)(SC) HELD THAT PASSING OF AN ORDER BY THE I TAT BEFORE FIRST ADJUDICATING ON THE APPLICATION FOR ADDITIONAL EVID ENCE UNDER RULE 29 OF THE ITAT RULES IS INCORRECT. IT MAY BE APPRECIATED THAT IN THIS DECISION, THE HON'BLE SUPREME COURT HAS LAID DOWN A LAW AS REGARD S THE APPLICATION FOR ADDITIONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES , WHICH BECOMES THE LAW OF THE LAND FOR ALL THE BENCHES OF THE TRIBUNAL. ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLE LAID DOWN BY THE HON'BLE SUPREME C OURT CONSTITUTES A MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 13 MISTAKE APPARENT FROM RECORD. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED HEREUNDER: 'THE PENDING APPLICATION UNDER RULE 29 OF THE ITAT R ULES, WAS REQUIRED TO BE DISPOSED OF FIRST, BEFORE THE TRIBUNAL HEARD THE APPEAL ON MERITS. THE APPELLANT HAD UNDERTAKEN TO WITHDRAW THE PENDING AP PLICATION BEFORE THE TRIBUNAL FOR MAKING A REFERENCE UNDER SECTION 256(1 ) FOR THE ABOVE PURPOSE. IN VIEW THEREOF, IT WAS TO BE DIRECTED THAT THE TRI BUNAL SHOULD FIRST DISPOSE OF THE APPLICATION UNDER RULE 29 ON MERITS AND THEREAF TER PROCEED TO DISPOSE OF THE APPEAL.' 5. THE AFORESAID JUDGMENT CANNOT BE BRUSHED ASIDE ONLY ON THE GROUND THAT THE JUDGMENT IS NOT UNDER SECTION 254(2). A PRINCIPL E OF LAW SET OUT BY THE APEX COURT CANNOT BE IGNORED ON SUCH GROUNDS. 6. RELIANCE IS ALSO PLACED ON THE DECISION OF THE H ON'BLE BOMBAY HIGH COURT IN THE CASE OF AMORE JEWELS PVT. LTD. (WP 1833/2018)(B OM) WHEREIN IT WAS HELD: WE FIND THAT, THOUGH THE ORDER DATED 13TH FEBRUARY, 2015 DOES RENDER A FINDING THAT NO POSITIVE MATERIAL WAS BROUGHT ON RECORD, THERE IS NO DISCUSSION WHATSOEVER OF THE VARIOUS CASE LAWS DETA ILED IN THE SUBMISSIONS WHICH ACCORDING TO THE PETITIONER CLINC HESTHE ISSUES IN SUPPORT OF ITS CASE THAT THE SHAREHOLDING INVESTMEN T BY THE FIVE COMPANIES WAS GENUINE. IN THE ABOVE VIEW, THE TRIBU NAL OUGHT TO HAVE ALLOWED THE PETITIONER'S RECTIFICATION APPLICA TION AND CONSIDERED THE PETITIONER'S APPEAL BEFORE IT ON MERITS, INTER- ALIA, TAKING INTO ACCOUNT THE MATERIAL AND CASE LAWS WHICH HAS BEEN A LREADY FLED BY THE PETITIONER'S DURING THE HEARING LEADING TO THE ORDE R DATED 13TH FEBRUARY, 2015 IN VIEW OF THE PECULIAR FACTS OF THE PRESENT CASE, WE ARE NOT ONLY SETTING ASIDE THE IMPUGNED ORDER DATED 4TH MAY, 201 8 BUT ALSO THE ORDER DATED 13TH FEBRUARY, 2018 TO THE EXTENT IT DI SMISSED THE PETITIONER'S APPEAL BEFORE IT. THIS FOR THE REASON THAT, WE FIND THE ORDER DATED 13TH FEBRUARY, 2015 IN THE CONTEXT OF T HE MATERIAL AVAILABLE ON RECORD, TO BE A NONSPEAKING ORDER AS I T GIVES NO REASONS TO REJECT THE APPEAL IN THE CONTEXT OF THE DECISIONS A DMITTEDLY RELIED UPON AT THE HEARING BY THE PETITIONERS. 7. THE HON'BLE MUMBAI ITAT IN THE CASE OF GOLDEN MEA DOWS PVT. LTD. (149 TAXMAN 17)(2005) HELD AS UNDER: MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 14 'IT IS A BASIC PRINCIPLE OF JURISPRUDENCE THAT IF T HERE IS A MISTAKE COMMITTED BY THE TRIBUNAL, IT NEEDS TO BE RECTIFIED AS NO ONE SHOULD SUFFER OR COME TO GRIEF ON ACCOUNT OF THE MISTAKE C OMMITTED BY THE COURT. EVEN THE RULES OF PROCEDURE AND TECHNICALITI ES SHOULD NOT COME IN THE WAY IN RENDERING JUSTICE TO THE PARTIES BY C ORRECTING THE MISTAKE COMMITTED BY THE TRIBUNAL. THE PURPOSE OF THE TRIBU NAL IS TO RENDER JUSTICE AND NOT TO NEGATE IT. THE PRINCIPLES OF LAW AS ENUNCIATED BY VARIOUS DECI SIONS ARE SUMMARIZED AS FOLLOWS : 1.THAT WHERE THERE IS A WRONG ASSUMPTION OF FACTS I T WILL CONSTITUTE MISTAKE APPARENT FROM RECORD. 2. WHERE THERE IS A FAILURE TO CONSIDER CERTAIN EVI DENCE BROUGHT ON RECORD IT WOULD ALSO CONSTITUTE A MISTAKE APPARENT FROM RECORD.' 8. IT IS NOT IN DISPUTE THAT THREE APPLICATIONS UND ER RULE 29 WERE FILED BY THE REVENUE BEFORE THE TRIBUNAL AND EVEN AFTER HEARING THE REVENUE AND THE APPELLANT ON THE ADMISSIBILITY OF THESE APPLICATION S, NO ORDER HAS BEEN PASSED BY THE HON'BLE BENCH. IT HAS PROCEEDED TO PASS THE IMPUGNED ORDER WITHOUT TAKING INTO CONSIDERATION THE FACTS BROUGHT OUT IN THESE APPLICATIONS OR THE REQUESTS MADE THEREIN. NON-CONSIDERATION OF THESE FACTS IS FATAL TO THE FI NDING ARRIVED AT: 9. THE MOST CRITICAL QUESTION IN GROUND NO. 5 IS TH E DETERMINATION OF OWNERSHIP OF ANDA RIGHTS. SUBSEQUENT FINDINGS ON THE CHARACTERISATION OF BUSINESS FUNCTIONS OR THE APPLICATION OF METHOD OF DETERMINATION OF ARM'S LENGTH PRICE ENTIRELY DEPENDS ON THIS CRITICAL FACT OR. THE FACTS BROUGHT OUT BY THE REVENUE GO TO THE ROOT OF THE MATTER IN DECIDIN G THIS QUESTION AS ALSO WHETHER THE APPELLANT WAS A CONTRACT MANUFACTURER O R NOT. ONCE A DECISION IS ARRIVED AT WITHOUT CONSIDERING T HE CRITICAL FACTS, THE OMISSION IS CERTAINLY FATAL TO THE FINDINGS. 10. SIMILARLY, IN GROUND NO. 2, THE NON-CONSIDERATI ON OF AN IMPORTANT FACTUAL ASPECT BROUGHT OUT BY THE REVENUE THAT THERE IS NO RESOLUTION BY THE BOARD OF EITHER OF THE COMPANIES, THE APPELLANT OR ITS AE TO THE EFFECT THAT ANY CONTRIBUTION WAS MADE TO THE SHARE APPLICATION. NON -CONSIDERATION OF THIS VITAL FACT IS FATAL TO THE FINDING THAT THE LOANS G IVEN TO THE AE REPRESENTED CONTRIBUTION TO THEIR SHARE CAPITAL. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 15 NON-CONSIDERATION OF BINDING JUDGMENTS DIRECTLY ON THE ISSUE PASSED BY THE HIGHER COURTS AS WELL AS CO-ORDINATE BENCHES OF THE TRIBUNAL. 11. THE HON'BLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (295 ITR 466)(2007)(SC) HELD THAT NON-CONSIDERATI ON OF A DECISION OF THE CO-ORDINATE BENCH IS A MISTAKE APPARENT FROM RE CORD U/S. 254 OF THE ACT. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED: 'AS STATED ABOVE, THE EXPRESSION 'RECTIFICATION OF M ISTAKE FROM THE RECORD' OCCURS IN SECTION 154. IT ALSO FINDS PLACE IN SECTION 254(2). THE PURPOSE BEHIND ENACTMENT OF SECTION 254(2) IS BA SED ON THE FUNDAMENTAL PRINCIPLE THAT NO PARTY APPEARING BEFOR E 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 TRIBU NAL. IN THE PRESENT CASE, THE TRIBUNAL IN ITS ORDER DATED 10-9-2003 ALL OWING THE RECTIFICATION APPLICATION HAS GIVEN A FINDING THAT SAMTEL COLOR LTD, 'S CASE (SUPRA) WAS CITED BEFORE IT BY THE ASSESSEE BUT THROUGH OVERSIGHT IT HAD MISSED OUT THE SAID JUDGMENT WHILE DISMISSING T HE APPEAL FILED BY THE ASSESSEE ON THE QUESTION OF ADMISSIBILITY/ALLOW ABILITY OF THE CLAIM OF THE ASSESSEE FOR ENHANCED DEPRECIATION UNDER SEC TION 43A. ONE OF THE IMPORTANT REASONS FOR GIVING THE POWER OF RECTI FICATION TO THE TRIBUNAL IS TO SEE THAT NO PREJUDICE IS CAUSED TO E ITHER OF THE PARTIES APPEARING BEFORE IT BY ITS DECISION BASED ON A MIST AKE APPARENT FROM THE RECORD. 13. 'RULE OF PRECEDENT' IS AN IMPORTANT ASPECT OF L EGAL CERTAINTY IN RULE OF LAW. THAT PRINCIPLE IS NOT OBLITERATED BY S ECTION 254(2) OF THE INCOME-TAX ACT, 1961. WHEN PREJUDICE RESULTS FROM AN ORDER ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE, ERROR OR OM ISSION, THEN IT IS THE DUTY OF THE TRIBUNAL TO SET IT RIGHT. ATONEMENT TO T HE 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 POWER S UNDER SECTION 254(2) WHEN IT WAS POINTED OUT TO THE TRIBUNAL THAT THE JUDGMENT OF THE CO-ORDINATE BENCH WAS PLACED BEFORE THE TRIBUNA L WHEN THE ORIGINAL ORDER CAME TO BE PASSED BUT IT HAD COMMITT ED A MISTAKE IN NOT CONSIDERING THE MATERIAL, WHICH WAS ALREADY ON RECO RD. THE TRIBUNAL HAS ACKNOWLEDGED ITS MISTAKE; IT HAS ACCORDINGLY RE CTIFIED ITS ORDER. IN OUR VIEW, THE HIGH COURT WAS NOT JUSTIFIED IN INTER FERING WITH THE SAID ORDER. WE ARE NOT GOING BY THE DOCTRINE OR CONCEPT OF INHERENT POWER. WE ARE SIMPLY PROCEEDING ON THE BASIS THAT IF PREJU DICE HAD RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO THE T RIBUNAL'S MISTAKE, MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 16 ERROR OR OMISSION AND WHICH ERROR IS A MANIFEST ERR OR THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTA KE, WHICH HAD BEEN DONE IN THE PRESENT CASE.' 12. REFERENCE IS ALSO MADE TO THE JUDGMENT OF THE J URISDICTION HIGH COURT IN THE CASE OF SUBODHCHANDRA S. PATEL (265 ITR 445)(200 4), WHEREIN IT WAS HELD THAT REFERRING OF A JUDGMENT BUT NOT RECORDING A FI NDING IN RELATION TO THE PROPOSITION OF LAW ENUNCIATED THEREIN IS A MISTAKE APPARENT FROM RECORD. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED: 'NON-CONSIDERATION OF A JUDGMENT OF THE JURISDICTIO NAL HIGH COURT OR THE APEX COURT WOULD ALWAYS CONSTITUTE A MISTAKE AP PARENT FROM THE RECORD, REGARDLESS OF THE JUDGMENT BEING RENDERED P RIOR TO OR SUBSEQUENT TO THE ORDER PROPOSED TO BE RECTIFIED. I N THE INSTANT CASE, ADMITTEDLY, THE DECISION IN THE CASE OF SUNIL SIDDH ARTHBHAI (SUPRA) WAS REFERRED TO BY THE TRIBUNAL WHILE PASSING THE O RDER UNDER SECTION 254(1) BUT THE TRIBUNAL FAILED TO RECORD A FINDING I N RELATION TO THE SECOND PROPOSITION OF LAW ENUNCIATED BY THE SUPREME COURT IN THE SAID DECISION. HENCE, THE TRIBUNAL WAS PERFECTLY JU STIFIED IN EXERCISING ITS POWERS UNDER SECTION 254(2) WHILE PASSING THE IM PUGNED ORDER.' 13. THE HON'BLE MUMBAI ITAT IN THE CASE OF GOLDEN ME ADOWS PVT. LTD. (SUPRA) HELD: 'IT IS A BASIC PRINCIPLE OF JURISPRUDENCE THAT IF T HERE IS A MISTAKE COMMITTED BY THE TRIBUNAL, IT NEEDS TO BE RECTIFIED AS NO ONE SHOULD SUFFER OR COME TO GRIEF ON ACCOUNT OF THE MISTAKE C OMMITTED BY THE COURT. EVEN THE RULES OF PROCEDURE AND TECHNICALITI ES SHOULD NOT COME IN THE WAY IN RENDERING JUSTICE TO THE PARTIES BY C ORRECTING THE MISTAKE COMMITTED BY THE TRIBUNAL. THE PURPOSE OF THE TRIBU NAL IS TO RENDER JUSTICE AND NOT TO NEGATE IT. THE PRINCIPLES OF LAW AS ENUNCIATED BY VARIOUS DECI SIONS ARE SUMMARIZED AS FOLLOWS: 3. WHERE THERE IS AN OMISSION ON THE PART OF THE TR IBUNAL TO CONSIDER THE PRINCIPLES OF LAW ENUNCIATED BY THE DECISIONS O F VARIOUS COURTS ON WHICH RELIANCE WAS PLACED IN THE COURSE OF HEARING, IT WILL ALSO CONSTITUTE MISTAKE APPARENT FROM RECORD. IN THE INSTANT CASE, CERTAIN MISTAKES HAD OCCURRED IN THE ORDER OF THE TRIBUNAL. IT WAS A FACT THAT THE ASSESSEE, IN THE C OURSE OF PLEADING, HAD PLACED RELIANCE ON THE DECISION OF THE JURISDICTION AL HIGH COURT IN THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 17 CASE OF ORIENT TRADING CO. LTD, V. CIT[1963] 49ITR 723 (BOM.) BUT THE SAME WAS NOT CONSIDERED.' 14. THE FOLLOWING DECISIONS CITED BY THE REVENUE HA VE NOT BEEN CONSIDERED BY THE HON'BLE BENCH: GROUND NO. 2- INTEREST ON SHARE APPLICATION MONEY- LOGIX MICROSYSTEMS LTD. (80 TAXMAN 39X20L?XBANG )- ADVANCE WILL BE TREATED AS A LOAN AND NOT SHARE APPLICATION MONEY I F IT IS NOT KEPT IN A SEPARATE BANK ACCOUNT AND MADE AVAILABLE FOR BUSINE SS USE. S.R. THORAT MILK PRODUCTS (70 TAXMAN 261)(2016)( PUNE)-CONTRIBUTION TO SHARE APPLICATION MONEY CANNOT BE EQUATED WITH S HARE CAPITAL BEFORE ITS CONVERSION. FOR ADJUDICATING WHETHER THE ADVANCES WERE IN THE N ATURE OF SHARE APPLICATION MONEY OR NOT, THE CRITERIA LAID DOWN IN THE ABOVE JUDGMENTS WAS VERY CRITICAL. HOWEVER, THE RATIO OF THESE JUDGMENT S WAS NOT CONSIDERED IN THE IMPUGNED ORDER. GROUND NO. 3- INTEREST ON OFCDS- SAHARA INDIA REAL ESTATE (CA NO. 9813/2011)(SCV OFCD S ARE TO BE CONSIDERED DEBT INSTRUMENTS UNTIL THEY ARE CONVERTE D INTO EQUITY. RBI MASTER CIRCULAR ON FOREIGN INVESTMENT- ONLY MAN DATORILY CONVERTIBLE DEBENTURES ARE TO BE CONSIDERED A PART OF EQUITY. THE HON'BLE SUPREME COURT IN THE ABOVE JUDGMENT HAD IN UNEQUIVOCAL TERMS HELD THAT OFCDS ARE TO BE CONSIDERED PLAIN DE BT INSTRUMENTS UNTIL AN ACTUAL CONVERSION INTO EQUITY HAPPENS. IN THE A.Y. U NDER CONSIDERATION, THE OFCDS HAD NOT BEEN CONVERTED, THEREFORE THE IT AT HA S COMMITTED AN APPARENT MISTAKE IN TREATING THEM AS EQUITY INSTRUM ENTS AND NOT CONFIRMING THE ADDITION ON ACCOUNT OF NON-CHARGING OF INTEREST . THE RATIO OF THE JUDGMENT OF THE HON'BLE SUPREME COURT HAS NOT BEEN CONSIDERED IN THE IMPUGNED ORDER. GROUND NO. 4- TP ADJUSTMENT ON CORPORATE GUARANTEE- GENERAL MOTORS (TTA 1293/AHD/2015V IT IS ONLY IN THOSE CASES WHERE THE M ATTER IS PENDING BEFORE THE HC IN THE ASSESSEE'S OWN CASE CAN THERE BE NO R EFERENCE TO SPECIAL BENCH. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 18 ON THE ISSUE WHETHER A SPECIAL BENCH COULD BE CONST ITUTED WHERE AN APPEAL ON THE SAME ISSUE HAS BEEN ADMITTED BY THE HIGH COU RT, THE HON'BLE ITAT IN THE ABOVE CASE HELD THAT IF THE APPEAL IS ADMITTED IN THE ASSESSEE'S OWN CASE BEFORE THE HIGH COURT, THEN A REFERENCE TO SPECIAL BENCH CANNOT BE MADE, HOWEVER, WHERE AN APPEAL ADMITTED BEFORE THE HIGH C OURT WAS IN THE CASE OF SOME OTHER ASSESSEE, THEN A REFERENCE TO SPECIAL BE NCH CAN BE MADE. THIS DECISION HAS BEEN IGNORED IN THE IMPUGNED ORDER. 15. IN ADDITION TO THE ABOVE, IT MAY ALSO BE APPREC IATED THAT ONE OF THE MOST CRITICAL ARGUMENTS OF THE REVENUE WITH RESPECT TO G ROUND NO. 2 AND 3 WAS THAT NO COMPARABILITY ANALYSIS HAS BEEN DONE BY THE ASSESSEE. THE ADDITIONS ARISING FROM THESE TWO GROUNDS HAVE BEEN DELETED BY THE IT AT WITHOUT APPRECIATING THIS ARGUMENT AND TREATING THE ISSUES TO BE NON TRANSFER ISSUES. WHETHER THE DECISIONS OF JURISDICTIONAL HIGH COURT CREATE ANY BAR TO THE HON'BLE IT AT FOR RECALLING CERTAIN GROUNDS: 16. ANOTHER CONCERN OF THE HON'BLE TRIBUNAL WHICH WA S BROUGHT TO THE ATTENTION OF THE PARTIES ON THE PREVIOUS DATE OF HE ARING WAS THAT IF AN APPEAL HAS BEEN ADMITTED BY THE HON'BLE HIGH COURT, WOULD IT BE IN TUNE WITH THE PREVAILING LAW FOR THE TRIBUNAL TO RECALL PARTS OF THE ORDER AND RECTIFY MISTAKES. THE HON'BLE TRIBUNAL ALSO REFERRED TO THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OFNIRMALTD. (88 TAXM AN 188)(GUJ)(2017), WHEREIN THE HIGH COURT SET ASIDE THE ORDER OF THE T RIBUNAL, AFTER IT RECALLED ITS EARLIER ORDER U/S. 254(2) AND ORDER WAS PASSED O N MERITS. IT IS SUBMITTED THAT IN THE SAID CASE, THE HON'BLE HIGH COURT SET A SIDE THE ORDER OF THE IT AT IN RECALLING ITS EARLIER ORDER ON THE GROUND THAT A LL THE FACTS, FINDINGS AND ARGUMENTS HAD RECEIVED MINUTE SCRUTINY IN THE ORIGI NAL ORDER AND THE ISSUE OF ALLOWING DEDUCTION U/S. 36 WAS A HIGHLY CONTENTI OUS ISSUE WHICH COULD HAVE BEEN DECIDED ONE WAY OR THE OTHER. THE HIGH CO URT HELD THAT HAVING CONSIDERED ALL THE ARGUMENTS AND FACTS, IF THE ORDE R IS RECALLED BY THE ITAT, IT WOULD AMOUNT TO A REVIEW, WHICH IS NOT PERMISSIBLE U/S. 254(2) OF THE ACT. THE RELEVANT PORTION OF THE JUDGMENT OF THE HON'BLE HIGH COURT IS EXTRACTED: 4. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. W E HAVE PERUSED THE DOCUMENTS ON RECORD. WE ARE OF THE VIEW THAT THE TR IBUNAL COMMITTED A LEGAL ERROR IN RECALLING ITS EARLIER DETAILED JUD GEMENT. AS NOTED, THERE WAS A RAGING CONTROVERSY BETWEEN THE REVENUE AND TH E ASSESSEE REGARDING THE ASSESSEE COMPANY'S CLAIM OF DEDUCTION OF INTEREST EXPENDITURE AT ALL STAGES BEFORE THE ASSESSING OFFIC ER, COMMISSIONER (APPEALS) AND THE TRIBUNAL. THIS ISSUE RECEIVED MINU TE SCRUTINY. THE TRIBUNAL IN PARTICULAR HAD REFERRED TO THE FACTS ON RECORD, FINDINGS AND THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE CO MMISSIONER MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 19 (APPEALS) AND ULTIMATELY GAVE ITS OWN REASONING FOR COMING TO THE CONCLUSION THAT THE TRANSACTION LEADING TO THE ASSE SSEE'S CLAIM OF INTEREST EXPENDITURE WAS NOT GENUINE AND IT ULTIMAT ELY PUT ITS SEAL ON THE DECISIONS OF THE REVENUE AUTHORITIES. WHETHER S UCH OPINION OF THE TRIBUNAL WAS LEGALLY SUSTAINABLE OR NOT IS THE SUBJ ECT MATTER BEFORE US IN THE PRESENT TAX APPEAL. THE RELEVANT QUESTION IS , COULD THE TRIBUNAL HAVE EXERCISED THE POWER OF RECTIFICATION TO RECALL SUCH JUDGEMENT? THE ANSWER BEING OBVIOUS, IS IN THE NEGATIVE. THE POWER S OF RECTIFICATION FLOWING FROM SECTION 254(2) OF THE ACT ARE FOR CORREC TING APPARENT ERRORS AND NOT FOR RE-EXAMINATION OF THE ISSUES ALR EADY CONSIDERED AND CONCLUDED. IT IS WELL RECOGNISED THAT THE POWERS OF RECTIFICATION CANNOT BE EQUATED TO THAT OF REVIEW. THE TRIBUNAL THUS TRA VELLED FAR BEYOND ITS POWER OF RECTIFICATION IN ACCEPTING THE ASSESSE E'S VARIOUS CONTENTIONS WHICH WERE NOT CONFINED TO PURE FACTUAL ERRORS APPARENT ON THE RECORD. SOME OF THE CONTENTIONS OF THE ASSES SEE WERE HIGHLY CONTENTIOUS LEGAL ISSUES. ONCE THE TRIBUNAL HAD TAK EN A PARTICULAR VIEW, IT WAS ALWAYS OPEN FOR THE AGGRIEVED PARTY TO CHALLENGE SUCH VIEWS BEFORE THE HIGHER COURT. THE TRIBUNAL COULD N OT HAVE BEEN PERSUADED TO RE-EXAMINE THE ISSUES ON THE PREMISE T HAT THERE WAS AN ERROR APPARENT ON THE RECORD. 5. IN THE RESULT, THE QUESTION IS ANSWERED IN FAVOU R OF THE REVENUE. THE IMPUGNED ORDER OF THE TRIBUNAL DATED 28.10.2016 IS SET ASIDE. CONSEQUENTLY, THE ORIGINAL JUDGEMENT OF THE TRIBUNA L DATED 31.07.2006 IS RESTORED TO FILE. TAX APPEAL IS DISPO SED OF ACCORDINGLY. 17. IT IS SUBMITTED, THAT IN THE PRESENT PROCEEDING S, IT IS THE CASE OF THE REVENUE THAT SOME VERY CRUCIAL FACTS AND ARGUMENTS, WHICH GO TO THE ROOT OF THE MATTER AND WHICH WERE CRITICAL TO ADJUDICATION, WERE NOT TAKEN NOTE OF BY THE TRIBUNAL AND THEREFORE THIS IS A FIT CASE FOR R ECTIFICATION. THEREFORE, THE DECISION OF THE HON'BLE HIGH COURT IN THE CASE OF N IRMA (SUPRA) DOES NOT AFFECT THE MISCELLANEOUS APPLICATION FILED BY THE R EVENUE. 18. AS REGARDS THE INTERPLAY BETWEEN RECTIFICATION P ROCEEDINGS U/S. 254(2) AND APPEAL PROCEEDINGS U/S. 260A, IT IS SUBMITTED T HAT THE TWO PROCEEDINGS ARE ENTIRELY DIFFERENT FROM ONE ANOTHER. THE PROVIS IONS GOVERNING THE RECTIFICATION PROCEEDINGS BEFORE THE TRIBUNAL ARE C ONTAINED IN SECTION 254 OF THE ACT, WHEREAS THE PROVISIONS RELATING TO THE APPE AL BEFORE THE HIGH COURT ARE CONTAINED IN SECTION 260A OF THE ACT. NEITHER OF THE TWO PROVISIONS SHUT OUT THE OTHER AND HAVE CO-EXISTED FOR SEVERAL DECAD ES. 19. IT MAY FURTHER BE APPRECIATED THAT THE SCOPE OF THE TWO PROVISIONS IS ENTIRELY DIFFERENT. WHILE, UNDER SECTION 254, THE T RIBUNAL HAS THE POWER TO MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 20 RECTIFY ITS MISTAKES ON ITS OWN OR AT THE INSTANCE OF EITHER OF THE TWO PARTIES, ON THE OTHER HAND, THE PROVISIONS OF SECTION 260A AL LOW THE HIGH COURT TO EXAMINE WHETHER THERE ARISES ANY QUESTION OF LAW FR OM THE ORDER OF THE TRIBUNAL. THEY BOTH OPERATE IN THEIR OWN DOMAINS AN D NEITHER OF THE TWO IMPEDES THE VALUE OF THE OTHER. 20. IT MAY ALSO BE APPRECIATED THAT WHEREVER THE LE GISLATURE HAS DESIRED TO GIVE ONE OF TWO OPTIONS TO A TAXPAYER, IT HAS DONE SO IN EXPRESS WORDS. FOR INSTANCE, AN 'ELIGIBLE TAXPAYER' CAN EITHER FILE OB JECTIONS AGAINST THE DRAFT ASSESSMENT ORDER BEFORE THE DISPUTE RESOLUTION PANE L UNDER SECTION 144C OF THE ACT OR ACCEPT THE DRAFT ASSESSMENT ORDER AND FIL E AN APPEAL BEFORE THE CIT(A). SIMILARLY, A TAXPAYER CAN EITHER APPROACH TH E COMMISSIONER OF INCOME TAX UNDER SECTION 264 OR FILE AN APPEAL BEFO RE THE CIT(A) U/S. 249 OF THE ACT. IT IS MOST RESPECTFULLY SUBMITTED, THAT IN THE ABSENCE OF ANY SUCH EXPRESS EMBARGO IN THE ACT, NO ARTIFICIAL RESTRICTIO N ON THE POWERS OF THE HON'BLE TRIBUNAL CAN BE IMAGINED. 21.THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF R.W . PROMOTIONS PVT. LTD. (376 ITR 126)(2015) HAS DEALT WITH THIS EXACT IS SUE AND HELD THAT EVEN WHEN AN APPEAL HAS BEEN ADMITTED U/S. 260A OF THE ACT , THE POWER OF RECTIFICATION U/S. 254 CAN BE INVOKED. THE RELEVANT EXTRACTS ARE REPRODUCED: 'THE LEAST THAT CAN BE SAID ABOUT THE UNDERSTANDING OF THE LEGAL PROVISION BY THE TRIBUNAL IS THAT IT IS EX FACIE IN CORRECT AND ERRONEOUS. MERELY BECAUSE THE ASSESSEE HAS CHALLENGED THE ORDE R OF THE TRIBUNAL IN AN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT , 1961 BEFORE THE HIGH COURT DOES NOT MEAN THAT THE POWER UNDER S ECTION (2) OF SECTION 254 CANNOT BE INVOKED EITHER BY THE ASSESSE E OR BY THE REVENUE/ASSESSING OFFICER. SUCH A POWER ENABLES THE TRIBUNAL TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND MA KE AMENDMENTS. THAT IN A GIVEN CASE -WOULD NOT ONLY SAVE PRECIOUS JUDICIAL TIME OF THE TRIBUNAL BUT EVEN OF THE HIGHER COURT.' 22. THERE IS NO DECISION OF THE JURISDICTIONAL HIGH COURT OR ANY OTHER HIGH COURT LAYING DOWN THE PRINCIPLE THAT ONCE AN APPEAL HAS BEEN FILED OR ADMITTED ON QUESTIONS OF LAW, THE HON'BLE ITAT CANNO T PROCEED TO DECIDE ON APPLICATIONS UNDER SECTION 254(2). WHETHER AN APPLIC ATION UNDER RULE 29 CAN BE REGARDED AS AN INTERIM APPLICATION AND CAN B E DEEMED TO HAVE BEEN DISPOSED OFF ONCE A FINAL ORDER IS PASSED. 23. IT IS SUBMITTED THAT THIS PROCESS WHICH NORMALL Y OCCURS IN CIVIL MATTERS WOULD NOT APPLY IN THE PRESENT CASE FOR THE REASON THAT THE APPLICATION UNDER RULE 29 IS A STATUTORY APPLICATION AND THE ORDER TO ACCEPT OR REJECT THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 21 APPLICATION HAS NECESSARILY TO BE PASSED BY THE TRI BUNAL AS LAID DOWN IN THE CASE OFJYOTSNA SURI (SUPRA). THE DIFFERENCE BETWEEN I NTERIM APPLICATIONS IN CIVIL MATTERS SEEKING CERTAIN RELIEFS IN THE PROCED URE OF ADJUDICATION AND A STATUTORY APPLICATION CANNOT BE OVEREMPHASIZED. A FU NCTION WHICH IS CAST ON THE TRIBUNAL BY THE STATUTE CANNOT BE DEEMED TO HAV E BEEN DONE BY CITING A PARALLEL WITH INTERIM APPLICATIONS IN CIVIL MATTERS . 24. FOR THE BENEFIT OF THE HON'BLE BENCH THE MISTAK ES OCCURRING IN THE ORDER OF THE TRIBUNAL AND ASSUMING A FATAL CHARACTER ARE ELUCIDATED IN A TABULAR FORM AND MADE PART OF ANNEXURE-A. 25. IT IS REQUESTED THAT GROUND NOS. 2, 3 AND 5 MAY BE RECALLED AND ADJUDICATED AFTER FOLLOWING DUE PROCESS OF LAW. 3. THE LD. AR FOR THE ASSESSEE AT THE TIME OF HEARI NG ALSO FILED THE WRITTEN SUBMISSIONS AS DETAILED UNDER: 1. AT THE OUTSET, IT IS SUBMITTED THAT THE DEPUTY C OMMISSIONER OF INCOME-TAX, CIRCLE 2(1)(1) (THE REVENUE) HAVE FILED A MISCELLANEOUS APPLICATION (THE MA) UNDER SECTION 254(2) OF THE IN COME-TAX ACT, 1961 (THE ACT) SEEKING YOUR HONOURS TO AMEND THE ORDER P ASSED UNDER SECTION 254(1) OF THE ACT.THE SAID MA IS BAD IN LAW IN AS MUC H AS IT DOES NOT SPECIFY AS TO THE APPLICATION FILED UNDER SECTION 254 IS AG AINST WHICH ORDER I.E., WHETHER AGAINST THE ORDER PASSED WITH REFERENCE TO THE ASSESSEES APPEAL (BEARING ITA NO.3297/AHD/2014) OR WITH REFERENCE TO T HE DEPARTMENTS APPEAL (BEARING ITA NO.3420/AHD/2014). THE APPLICATIO N UNDER SECTION 254(1) IS BAD IN AS MUCH AS IT DOES NOT SPECIFY AS T O WHICH ORDER IS SOUGHT TO BE AMENDED. THUS, THE MA FILED BY THE REVENUE IS DEF ECTIVE AND INVALID IN THE EYES OF LAW AND OUGHT TO BE QUASHED. 1. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T THE MA FILED UNDER SECTION 254(2) OF THE ACT BY THE REVENUE IS GRO SSLY ERRONEOUS AND BAD IN LAW SINCE THE ORDER OF THE TRIBUNALSOUGHT TO BE QUESTIONED BY THE REVENUE DOES NOT SUFFER FROM ANY INFIRMITY NOR DOES IT CONT AIN ANY MISTAKE APPARENT FROM RECORD. 2. IN SUPPORT OF THE ABOVE, IT IS FURTHER SUBMITTED TH AT THE REVENUE IN THE GARB OF THE MA FILED UNDER SECTION 254(2) OF THE ACT, IS REQUIRING THE HONORABLE TRIBUNAL TO REVIEW THE ORDER PASSED IN IT A NO.3297 & 3420/AHD/2017.IT IS PERTINENT TO NOTE THAT THE PROVI SIONS OF THE SECTION 254(2) OF THE ACT PROVIDE ONLY FOR RECTIFICATION AND NOT FOR THE REVIEW OF THE ORDER PASSED BY THE HONORABLE TRIBUNAL. THUS, UNDER THE GARB OF AN MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 22 APPLICATION FOR RECTIFICATION, THE REVENUE SHOULD N OT BE ALLOWED TO REOPEN OR REARGUE OR SEEK REVIEW OF THE MATTER WHICH HAS ALRE ADY BEEN DECIDED ON MERITS BY THETRIBUNAL IN ITS ORIGINAL ORDER. IT IS THUS SU BMITTED THAT THE PLEA OF THE REVENUE IS DEVOID OF MERIT AND HENCE BAD IN LAW. 3. IT IS RELEVANT TO UNDERSTAND THAT FOR THE PROVISION S OF SECTION 254(2) OF THE ACT TO APPLY, THERE MUST EXIST A MISTAKE, AND IT MUST BE APPARENT FROM RECORD. MISTAKE MEANS TO TAKE OR UNDERSTAND WRONG LY OR INACCURATELY; TO MAKE AN ERROR IN INTERPRETING; AN ERROR; A FAULT; A MISUNDERSTANDING; A MISCONCEPTION. APPARENT MEANS VISIBLE; CAPABLE OF BEING SEEN; EASILY SEEN; OBVIOUS; PLAIN. AN ERROR APPARENT FROM THE RECORD MU ST BE SUCH AN ERROR WHICH MAY STRIKE ONE ON A MERE LOOKING AT THE RECOR D AND IS NOT DEPENDENT ON ANY ARGUMENT OR ELABORATION. IT HAS ALSO BEEN OBSER VED BY THE HONBLE SUPREME COURT IN MASTER CONSTRUCTION CO. (P.) LTD. V . STATE OF ORISSA [1966] 17 STC 360 THAT AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD SHOULD BE ONE WHICH IS NOT AN ERROR WHICH DEPENDS F OR ITS DISCOVERY ON ELABORATE ARGUMENTS ON QUESTIONS OF FACT OR OF LAW. (COPY OF DECISION IS ATTACHED AT PAGE NO. 32 TO 37 OF PAPER BOOK). 4. A MISTAKE APPARENT FROM THE RECORD MUST BE AN OBVIOU S AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG-DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVAB LY BE TWO OPINIONS. THIS VIEW HAS ALSO BEEN TAKEN BY THE HONBLE APEX COURT IN THE CASE OF SATYANARAYAN LAXMINARAYAN HEGDE V. MALLIKARJUN BHAVANAPPATIRUYMALE[AIR 1960 SC 137] WHEREIN IT OBSE RVED THAT: 'AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG-DRAW N PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CAN HARDLY BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. (COPY OF DECISION IS ATTACHED AT PAGE NO.38 TO 44 O F PAPER BOOK). THUS, IT CAN BE CONCLUDED THAT THE PROVISIONS OF SE CTION 254(2) OF THE ACT CAN BE RESORTED TO ONLY IN A CASE WHERE THERE IS MANIFE ST ERROR WHICH IS OBVIOUS, CLEAR AND SELF-EVIDENT AND NOT OTHERWISE. 5. IN A NUTSHELL, THE POWERS ENVISAGED IN THE PROVISIO NS OF SECTION 254(2) OF THE ACT, CLEARLY CONTEMPLATES THAT WHAT CAN BE CO RRECTED IS A MISTAKE APPARENT FROM RECORD AND HENCE IT DOES NOT INCLUDE DEALING WITH THE MERITS OF THE CASE AGAIN, BASED ON SOME SECOND OPINION AND TO RECALL THE ORDER WHICH HAS ALREADY BEEN PASSED WITH PROPER APPLICATION OF MIND BY THE TRIBUNAL. THE SCOPE OF SECTION 254(2) IS VERY LIMITED AND IT IS ON LY THE APPARENT ERROR, WHICH CAN BE RECTIFIED. THE SAID POWER TO RECTIFY D OES NOT, HOWEVER, MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 23 CONTEMPLATE A RE-HEARING OF THE APPEAL FOR A FRESH DISPOSAL. DOING SO WOULD OBLITERATE THE DISTINCTION BETWEEN THE POWER TO REC TIFY MISTAKES AND THE POWER TO REVIEW THE ORDER MADE BY THE TRIBUNAL. THUS, SEC TION 254(2) DOES NOT PERMIT RECALLING OF ORDER AND TO RE-WRITE THE SAME AGAIN AND REVERSE THE EARLIER DECISION TAKEN ON MERITS. SIMILARLY, WHERE TWO OPINIONS ARE POSSIBLE, SUCH A SITUATION DO NOT FALL AT ALL UNDER THE PROVI SIONS OF SECTION 254(2) OF THE ACT, AS HELD BY THE HON'BLE PUNJAB & HARYANA HIGH CO URT IN THE CASE OF CIT V. VARDHAMAN SPINNINGS [1997] 226 ITR 296. THUS , IT IS CLEAR THAT THE POWER SO CONFERRED DOES NOT CONTEMPLATE A RE-HEARIN G WHICH WOULD HAVE THE EFFECT OF RE-WRITING AN ORDER, AFFECTING THE MERITS OF THE CASE, AS SOUGHT BY THE REVENUE IN THE PRESENT CASE.(COPY OF DECISION IS AT TACHED AT PAGE NO.45 TO 48 OF PAPER BOOK). 6. IN THE PRESENT CASE, ON PERUSAL OF THE ORDER PASSED BY YOUR HONOURS, IT COULD BE OBSERVED THAT THERE DOES NOT EXIST ANY LEG AL OR FACTUAL MISTAKE, APPARENT FROM RECORD. THE ISSUES RAISED BY THE REVE NUE IN THE MA HAVE BEEN EXTENSIVELY DISCUSSED AND ADJUDICATED ON MERITS BY YOUR HONOURS AFTER DUE APPRECIATION OF THE FACTUAL AND LEGAL POSITION OF T HE CASE. FURTHER, THE HONBLE TRIBUNAL HAVE CONSIDERED THE JUDICIAL PRECEDENTS RE LIED UPON BY THE ASSESSEE AS WELL AS THE REVENUE IN LIGHT OF ALL THE FACTS AN D SUBMISSIONS PLACED BEFORE IT. THEREFORE, THE TRIBUNAL HAVE GIVEN A FINDING AN D REACHED TO THE CONCLUSION IN ITS COMPLETE WISDOM AND BASIS THE MERITS OF THE CASE. IN SUPPORT OF THE ABOVE, IT IS ALSO STATED THAT MOST OF THE GROUNDS D ECIDED BY THE TRIBUNAL IN THE IMPUGNED ORDER ARE ALREADY COVERED BY THE ORDER OF THE HONBLE TRIBUNAL FOR THE PREVIOUS ASSESSMENT YEARS IN THE ASSESSEES OWN CASE AND TO THIS EFFECT YOUR HONOURS HAVE WHILE FOLLOWING THE EARLIER ORDER HAVE EXPLICITLY DISCUSSED THAT THE ORDER OF THE PRECEDING YEAR WAS BINDING CO NSIDERING THAT THERE WAS NO CHANGE IN THE FACT BEING BROUGHT OUT BY THE REVE NUE. IT IS THEREBY SUBMITTED THAT THE REVENUE BY FILING THE MA UNDER S ECTION 254(2) IS MERELY SEEKING TO RECALL AND REVIEW THE IMPUGNED ORDER BY ADOPTING A DIFFERENT VIEW IN RESPECT OF THE GROUNDS AS RAISED BY IT IN THE SA ID APPLICATION. IT IS FURTHER ADDED THAT THESE GROUNDS OF THE MA ARE DEBATABLE ISS UES AND NOT THE MISTAKE APPARENT FROM RECORD AND, HENCE, ARE NOT AMENABLE T O RECTIFICATION JURISDICTION CONFERRED ON THE TRIBUNAL BY THE PROVI SIONS OF SECTION 254(2) OF THE ACT. 7. FURTHER, ON READING OF THE MA FILED, IT CAN BE OBSER VED THAT THE MAIN ALLEGATION OF THE REVENUE IS THAT YOUR HONOURS HAVE FAILED TO CONSIDER THE SUBMISSIONS AND ARGUMENTS MADE BY IT WHILE DECIDING ON THE VARIOUS GROUNDS OF APPEALS. IN RESPONSE TO THIS, WE SUBMIT THAT THE ALLEGATIONS OF THE REVENUE ARE UNFOUNDED AND CONTRARY TO THE FACTS. IN THE ENSUING PART OF THE SUBMISSION, WE HAVE CLEARLY DEMONSTRATED AS TO HOW YOUR HONOURS HAVE CONSIDERED AND DEALT WITH THE SUBMISSIONS OF THE RE VENUE. WE, WITHOUT MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 24 ACCEPTING THE ALLEGATIONS OF THE REVENUE, SUBMIT TH AT FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FO R ARRIVING AT A CONCLUSION SHALL NOT CONSTITUTE MISTAKE APPARENT ON THE RECORD, ALTHOUGH IT MAY HAVE BEEN AN ERROR OF JUDGMENT. IN THIS REGARD WE PLACE STRONG RELIANCE ON THE FOLLOWING DECISIONS: CIT V. RAMESH ELECTRIC & TRADING CO. [1993] 203 ITR 497 (HIGH COURT OF BOMBAY). (COPY OF DECISION IS ATTACHED AT PAGE NO. 49 TO 51 OF PAPER BOOK). RASBIHARIBANSAL V. CIT(A) [2008] 170 TAXMAN 31 (HIGH COURT OF DELHI) (COPY OF DECISION IS ATTACHED AT PAGE NO. 52 TO 54 OF PAPER BOOK). 8. AT THIS JUNCTURE, IT MAY ALSO BE RELEVANT TO NOTE TH AT THE REVENUE HAVE PREFERRED AN APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT AGAINST THE ORDER PASSED BY YOUR HONOURS. THE HONBLE HIGH COURT HAVE ALSO ADMITTED THE APPEAL FILED BY THE REVENUE. IT MAY BE NOTED THAT T HE GROUNDS RAISED BY THE REVENUE IN THE APPEAL WHICH IS ADMITTED BY THE HON BLE HIGH COURT ALSO INCLUDES THE GROUNDS FOR WHICH REVENUE HAVE FILED T HE MA BEFORE THE TRIBUNAL UNDER SECTION 254(2) OF THE ACT. THE ADMISSI ON OF GROUNDS BY THE HONBLE HIGH COURT UNDOUBTEDLY EVIDENCES THAT THE I SSUES RAISED IN THE MA ARE QUESTION OF LAW AND ARE SUCH WHICH REQUIRE ELAB ORATE DISCUSSION. THESE ARE THE DEBATABLE ISSUES ON WHICH TWO DIFFERENT OPI NIONS CAN BE MADE. THUS, THESE ISSUES RAISED BY THE REVENUE CANNOT BE CONSTR UED AS MISTAKE AND HENCE THE CLAIM OF THE REVENUE PATENTLY FALLS BEYOND THE PURVIEW OF SECTION 254(2) OF THE ACT. 9. WE AT THIS STAGE SHALL ALSO SEEK TO HIGHLIGHT THAT REVENUES PLEA BEFORE THE HONBLE HIGH COURT OF GUJARAT IS PURELY ON MERI TS AND THAT NOWHERE DOES THE REVENUE CONTESTS THAT THE ORDER PASSED BY YOUR HONOURS SUFFERS FROM MISTAKE. IT IS EXPLICITLY EVIDENT THAT THE GRO UNDS ON WHICH APPEAL HAVE BEEN PREFERRED BY THE REVENUE BEFORE THE HONBLE HI GH COURT ARE PURELY QUESTION OF LAW. THUS, BY FILING MA BEFORE YOUR HONO URS, THE REVENUE SEEKS TO EXERCISE DUAL REMEDIES ON SAME SET OF ISSUES. TH IS ACT OF THE REVENUE IS NOT ONLY BAD UNDER LAW BUT ALSO POSES QUESTION OVER THE PROFICIENCY AND ESTEEM OF THE TRIBUNAL AS AN INSTITUTION, CONSEQUENTLY RESULT ING IN TERRIBLE WASTE OF JUDICIAL TIME AND ENERGY AND ALSO AFFECTING THE EFF ICACY OF THE JUDICIAL SYSTEM. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 25 10. YOUR HONOURS SHALL APPRECIATE THAT THE ACT OF THE R EVENUE OF CONTESTING ITS CLAIMS ON MERITS BEFORE THE HONBLE HIGH COURT OF GUJARAT AND AT THE SAME TIME THROUGH RECTIFICATION APPLICATION UNDER SECTION 254(2) OF THE ACT, PURELY RESEMBLES AN ACT OF DESPERATION FROM THE REVENUES END. IT IS QUITE CLEARLY A FRIVOLOUS ATTEMPT WHEREBY THE REVEN UE IS SEEKING BACKDOOR ENTRY REQUIRING YOUR HONOURS TO REVIEW THE ORDER WH ICH HAS ALREADY BEEN DECIDED ON MERITS. IT IS STRONGLY SUBMITTED THAT WH AT CANNOT BE ACHIEVED DIRECTLY CANNOT BE PERMITTED TO BE ACHIEVED INDIREC TLY. THUS, WHERE THE LAW DOES NOT ALLOW A MATTER TO BE REHEARD OR REVIEWED, THEN THE SAME UNDER THE GARB OF RECTIFICATION CANNOT BE ALLOWED TO RE-CONTE STED. CLEARLY THE PLEA OF THE REVENUE IS BEYOND PROVISIONS OF THE LAW AND SHALL B E QUASHED BEING VOID. IN LIGHT OF ALL THE ABOVE SUBMISSIONS, IT IS THE HU MBLE PLEA OF THE ASSESSEE THAT THE MA FILED BY THE REVENUE IS BAD IN LAW AND OUGHT TO BE QUASHED. WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE SEEKS T O REBUT THE ALLEGATIONS RAISED BY THE REVENUE. IN THIS REGARD, THE SUBMISSI ON OF THE ASSESSEE IS AS UNDER: GROUND 2: INTEREST ON SHARE APPLICATION MONEY SN. PARTICULARS 1. ALLEGATION OF THE REVENUE: IT IS THE SAY OF THE REVENUE THAT THE AMOUNT ADVANC ED TO SUN PHARMA GLOBAL INC. BVI (SPG BVI) (100% SUBSIDIARY OF THE ASSESSEE ) WAS SHOWN UNDER THE HEAD LOANS / SHARE APPLICATION MONEY OR LOAN S IN CERTAIN YEARS WITHOUT CLEARLY SPECIFYING WHETHER IT WAS A LOAN OR SHARE APPLICATION MONEY. [PAGE NO. 1 PARA 5(I) OF THE MA] REBUTTAL OF THE ASSESSEE: 1. THE ALLEGATION BY THE REVENUE THAT THE AMOUNT ADVAN CED TO SUBSIDIARY WAS SHOWN UNDER THE HEAD LOANS / SHARE APPLICATION MONEY OR LOANS IN CERTAIN YEARS WITHOUT CLEARLY SPECIFYING WHETHER IT WAS A LOAN OR SHARE APPLICATION MONEY IS FACTUALLY INCORR ECT AND WITHOUT ANY MERIT WHATSOEVER. 2. THE ASSESSEE HAS VERY CLEARLY CLASSIFIED THE AMOUNT ADVANCED TO SPG BVI AS SHARE APPLICATION MONEY IN THE SCHEDULE 15 O F THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR UNDER CONSIDERATI ON. IN THIS REGARD ATTENTION IS DRAWN TO PAGE NO. 20 OF THE COMPILATIO N OF SUBMISSION / MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 26 DOCUMENTS SUBMITTED BY REVENUE. 3. THE REVENUE HAS CONVENIENTLY IGNORED THE AFORE-MENT IONED SCHEDULE 15 AND SELECTIVELY REFERRED TO THE RELATED PARTY TR ANSACTIONS ANNEXURE TO SUBSTANTIATE ITS CLAIM. THUS, THE CLAIM OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE THAT MONEY WAS ADVANCED AS SHARE APPLICATION MONEY IS DEVOID OF MERITS AND PATENTLY INCORRECT. 2. ALLEGATION OF THE REVENUE: IT IS THE SAY OF THE REVENUE THAT NEITHER ANY BOARD RESOLUTION FROM THE SHARE ISSUING COMPANY OR FROM THE ASSESSEE IS ON RECORD TO GIVE IT A CHARACTER OF SHARE APPLICATION MONEY. [PAGE NO. 2 PARA 5(I) OF THE MA] REBUTTAL OF THE ASSESSEE: 1. THE REVENUE SEEKS TO CONTEST ITS CLAIM PURELY ON TH E PREMISE THAT BOARD RESOLUTION EVIDENCING ADVANCES AS SHARE APPLI CATION MONEY IS NOT ON RECORD. 2. THE REVENUE HAS FAILED TO CONSIDER THE FACT THAT TH E ASSESSEE HAS IN THE AUDITED FINANCIAL STATEMENTS VERY CLEARLY CLASSIFIE D HE ADVANCES GIVEN TO SPG BVI AS SHARE APPLICATION MONEY. THE REVENUE HAS CONVENIENTLY IGNORED THE AUDITED FINANCIAL STATEMEN TS OF THE ASSESSEE AND HAVE QUESTIONED THE AUTHENTICITY OF THE SAME. 3. THE REVENUE HAS IGNORED THE FACT THAT THE FINANCIAL STATEMENTS OF THE ASSESSEE ARE AUDITED BY THE INDEPENDENT STATUTORY AUD ITOR IN ACCORDANCE WITH THE PROVISIONS OF THE COMPANIES ACT. FURTHER, THIS AUDITED FINANCIAL STATEMENTS ARE ADOPTED BY THE SHA REHOLDERS OF THE COMPANY IN ITS ANNUAL GENERAL MEETING. ALSO, IT IS WO RTH NOTING THAT THE ASSESSEE BEING A LISTED COMPANY, ITS FINANC IAL STATEMENTS ARE SUBJECT TO GREATER SCRUTINY BY VARIOUS REGULATORY A UTHORITIES. THUS, THE AUTHENTICITY WITH RESPECT TO FACT THAT THE AMOU NT ADVANCED REPRESENTS SHARE APPLICATION MONEY CANNOT BE DOUBTE D. THE AUDITED FINANCIAL STATEMENTS SHOULD BE CONSIDERED AS CONCLU SIVE EVIDENCE WITH RESPECT TO SAME. HENCE, IT IS SUBMITTED THAT THE CLAIM OF THE REVENU E THAT IN ABSENCE OF ANY BOARD RESOLUTION FROM EITHER OF THE TWO COMPANIES, THE CONTENTION OF THE ASSESSEE WAS CONTRARY TO THE FACT, IS CLEARLY AND DE MONSTRABLY WRONG AND DEVOID OF MERITS. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 27 4. WITHOUT PREJUDICE TO THE ABOVE, WE PLACE RELIANCE O N RULING OF THE BOMBAYHIGH COURT IN THE CASE OF RAMESH ELECTRIC & T RADING CO. (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD THAT FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT FOR ARRIVING AT A CONCLUSION SHALL NOT CONSTITUTE MISTAKE APPARENT ON THE RECORD. 3. ALLEGATION OF THE REVENUE: IT IS THE CONTENTION OF THE REVENUE THAT YOUR HONOU RS HAVE NEITHER RECORDED NOR CONSIDERED THE SUBMISSIONS MADE BY IT. FURTHER, THE REVENUE ALSOALLEGES THAT THE FINDING REACHED BY THE HONBLE TRIBUNALIS NOT BASED ON ANY MATERIAL ON RECORD AND THAT THE SAME TOGETHER WITH NON-CONSI DERATION OF VITAL SUBMISSION, CONSTITUTES MISTAKE APPARENT FROM RECOR D. [PAGE NO. 2 PARA 5(I) OF THE MA] REBUTTAL OF THE ASSESSEE: 1. THE CLAIM OF THE REVENUE IS BLATANTLY INCORRECT SIN CE YOUR HONOURSHAVE REACHED TO THE CONCLUSION ONLY AFTER DI SCUSSING THE CONCERNED ISSUES AT LENGTH, GIVING PROPER WEIGHTAGE TO THE ARGUMENTS ADVANCED BY BOTH THE PARTIES. 2. IN THIS REGARD ATTENTION OF YOUR HONOURS IS DRAWN O N PARA 13 AND 14 ON PAGE 5 AND 6, RESPECTIVELY, OF THE IMPUGNED ORDE R TO THE FOLLOWING OBSERVATION MADE BY YOUR HONOURS: 13. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO TH E RIVAL CONTENTIONS QUA THE FACTS IN ISSUE BEFORE US. 14. THE CRUCIAL FACT RELATES TO THE BALANCE AS AT 3 1STMARCH, 2007 SHOWN UNDER THE HEAD ADVANCES AS SHARE APPLICATION MONEY TO SUN PHARMA GLOBAL INC. BVI AT RS. 1469.7 MILLION AND TH E SAME HAS BEEN REFLECTED AS ON 31ST MARCH, 2008 AT RS. 1007.4 MILL ION. IF THESE FIGURES ARE CONSIDERED IT EMERGES THAT SHARES WORTH 462.3 M ILLION WERE ALLOTTED TO THE ASSESSEE COMPANY DURING THE YEAR UN DER CONSIDERATION AND THE BALANCE WERE ALLOTTED IN THE SUBSEQUENT FIN ANCIAL YEARS. THIS MEANS THAT THE BALANCE OF THE APPLICATION MONEY REM AINED SO PENDING ALLOTMENT FROM THE ABOVE OBSERVATIONS, IT IS CLEARLY EVIDENT THAT YOUR HONOURSHAVE CONSIDERED AND RECORDED ALL THE ESSENTI AL AND VITAL FACTS WHICH ARE RELEVANT TO REACH TO THE CONCLUSION. 3. FURTHER, IT IS SUBMITTED THAT THE ARGUMENTS OF THE REVENUE ON THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 28 CONCERNED MATTER ARE ALSO BEING CONSIDERED AND DISM ISSED BEFORE COMING TO THE CONCLUSION. IN THIS REGARD, ATTENTIO N IS DRAWN TO PARA 14 ON PAGE 6 OF THE IMPUGNED ORDER WHICH CONTAINS D ETAILED DISCUSSION AND FINDINGS OF YOUR HONOURS ON THE SUBJECT. 4. IN THIS REGARD RELIANCE IS ALSO PLACED ON THE RULIN G OF THIRD MEMBER BENCH OF TRIBUNAL AT PUNE IN THE CASE OF POONA PEAR LS POULTRY BREEDING FARMS & HATCHERIES 58 ITD 1 [1996] WHEREIN THE HONBLE TRIBUNAL HAS HELD: THE DECISION OF THE TRIBUNAL NEED NOT BE SCRUTINI SED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR, WHETHER SOME INCIDENTAL FACTS WHICH APPEAR ON THE RECORD HAVE NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IF ON A BARE READING OF THE JUDGMENT OF THE TRIBUNA L ONE HAS FOUND THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIA L AND HAS ALSO NOT TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL FOR BASI NG ITS CONCLUSIONS, THE DECISION OF THE TRIBUNAL IS NOT TO BE INTERFERE D WITH. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN ITS JUDGMENT SPECIFICALLY IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CU MULATIVE EFFECT OF THE CIRCUMSTANCES, OR, HAS CONSIDERED THE TOTALITY OF THE FACTS... (PARA 25) [EMPHASIS SUPPLIED] THUS, THE CLAIM OF THE REVENUE THAT THE FINDINGS RE ACHED BY YOUR HONOURS IS WITHOUT ANY MATERIAL ON RECORD IS BLATANTLY INCORRE CT AND WITHOUT ANY MERIT. 5. WITHOUT PREJUDICE TO THE ABOVE, WE PLACE RELIANCE O N RULING OF THE BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC & TRADING CO. (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD THAT FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT FOR ARRIVING AT A CONCLUSION SHALL NOT CONSTITUTE MISTAKE APPARENT ON THE RECORD. 4. ALLEGATION OF THE REVENUE: REVENUE CONTENDS THAT THERE APPEARS MISTAKE APPAREN T FROM RECORD AS YOUR HONOURS HAVE FAILED TO CONSIDER THE DECISION OF HON BLE TRIBUNAL AT BANGALORE IN THE CASE OF LOGIX MICROSYSTEMS LTD. [2 017] 80 TAXMANN.COM 39)AND DECISION OF HONBLE TRIBUNAL AT PUNE IN CASE OF S.R. THORAT MILK PRODUCTS [2016] 70 TAXMANN.COM 261,ON WHICH STRONG R ELIANCE WAS PLACED BY IT. [PAGE NO. 3 PARA 5(II) AND PARA 5(III) OF THE MA] REBUTTAL OF THE ASSESSEE: MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 29 1. IN THIS REGARD, WE WOULD LIKE TO DRAW YOUR ATTENTIO N TO PARA 12 ON PAGE 5 OF THE IMPUGNED ORDER WHERE YOUR HONOURS HAV E CLEARLY RECORDED THE RELIANCE PLACED BY THE REVENUE ON THE SAID CASE: 12 . STRONG RELIANCE WAS PLACED ON THE DECISION O F THE CO- ORDINATE BENCH AT BANGALORE IN CASE OF LOGIX MICRO SYSTEMS LTD. 80 TAXMANN.COM 39 2. THUS, THE CONTENTION OF THE REVENUE THAT YOUR HONOU RS HAVE FAILED TO RECORD THE RELIANCE PLACED BY IT ON THE ABOVE-MENTI ONED CASE LAW IS GROSSLY INCORRECT. 3. FURTHERMORE, YOUR HONOURS HAVE CLEARLY MENTIONED HO W THE FACTS IN THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE O F STERLING RESOURCES (P.) LTD. IN ITA NO. 1791/MUM/2014 ARE APPLICABLE TO THE CASE OF THE ASSESSEE IN PARA 14 ON PAGE 7 OF THE IMPUGNED ORDER. THUS, CONSIDERING THE CLOSENESS OF FACTS OF THE ASSESSEES CASE WITH THAT OF THE FACTS INVOLVED IN STERLING RESOURCES (P.) LTD. (SUPR A), YOUR HONOURS HAVE RELIED UPON THE RULING OF THE CO-ORDINATE BENC H IN CASE OF STERLING RESOURCES (P.) LTD. THUS, WHERE THE TRIBUNAL, CONSID ERING THE FACTS AND MERITS OF THE CASE, FEELS APPROPRIATE TO FOLLOW ONE JUDICIAL PRECEDENT OVER THE OTHER IT CANNOT BE SAID THAT THE ACT OF THE HONBLE TRIBUNAL IS ERRONEOUS. 4. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T NON-MENTIONING OF A DECISION RELIED UPON BY EITHER PARTY DOES NOT REN DER THE ORDER OF THE TRIBUNAL AS ERROR-PRONE. IN THIS REGARD RELIANCE IS PLACED ON THE FOLLOWING DECISIONS COMMISSIONER OF INCOME-TAX VS. THE INCOME-TAX APPEL LATE TRIBUNAL [2006] 293 ITR 118 (HIGH COURT OF DELHI). (COPY OF CASE DECISION IS ATTACHED AT PAGE NO. 55 T O 58 OF PAPER BOOK). POONA PEARLS POULTRY BREEDING FARMS & HATCHERIES [1 996] 58 ITD 1 (PUNE)(THIRD MEMBER / SPECIAL BENCH) (COPY OF CASE DECISION IS ATTACHED AT PAGE NO. 59 T O 69 OF PAPER BOOK). HENCE THERE APPEARS NO MERIT IN THE CONTENTION OF T HE REVENUE AND CONSEQUENTLY THE CLAIM OF THE REVENUE ALLEGING THAT THERE IS MISTAKE APPARENT ON RECORD FALLS FLAT AND OUGHT TO BE DISMISSED. 5. ALLEGATION OF THE REVENUE: MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 30 IT IS THE CONTENTION OF THE REVENUE THAT RELIANCE P LACED BY YOUR HONOURS ON THE DECISION OF THE STERLING RESOURCES (P.) LTD. IN ITA NO. 1791/MUM/2014 IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS THI S CASE LAW HAVE NEITHER BEEN RELIED UPON OR REFERRED TO BY EITHER PARTY. [PAGE NO. 3 PARA 5(IV) OF THE MA] REBUTTAL OF THE ASSESSEE: 1. WE WOULD LIKE TO STATE THAT THIS DECISION HAS BEEN SPECIFICALLY RELIED UPON BY THE ASSESSEE AND IS PART OF THE PAPER BOOK K EPT ON RECORD DURING THE COURSE OF HEARING BEFORE THE HONBLE TRI BUNAL. IN THIS REGARD ATTENTION IS DRAWN TO SUBMITTED THIS CASE LA W AT ANNEXURE K OF COMBINED PAPER BOOK FOR 2007-08 &2008-09. THUS, THE CLAIM OF THE REVENUE IS GROSSLY INCORRECT AS THE ASSESSEE HAS CLEARLY MENTIONED THIS CASE LAW AS A PART OF ITS SUBMISSION S. GROUND NO. 3: INTEREST ON OPTIONALLY FULLY CONVERTI BLE DEBENTURE(OFCD) SN. PARTICULARS 1. ALLEGATION OF THE REVENUE: THE REVENUE CONTENDS THAT THERE IS A MISTAKE APPARE NT FROM RECORD AS YOUR HONOURS HAVE IGNORED THE RELIANCE PLACED BY THE REV ENUE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SAHARA IND IA REAL ESTATE CORP. LTD(CIVIL APPEAL NO. 9813 OF 2011) AND NOT RECORDED ANY FINDINGS REGARDING ITS INAPPLICABILITY TO THE PRESENT CASE. [PAGE NO. 5 PARA 8 OF THE MA] REBUTTALS OF THE ASSESSEE: 1. IN RESPONSE TO THE ABOVE, WE WOULD LIKE TO DRAW THE ATTENTION OF YOUR HONOURSTO PARA 19 ON PAGE 10 OF THE IMPUGNED ORDER WHEREIN THE DECISION OF HONBLE APEX COURT IN THE CASE OF SAHAR A INDIA REAL ESTATE CORP. LTD (CIVIL APPEAL NO. 9813 OF 2011), HAVE BEE N CONSIDERED BY YOUR HONOURS WHICH IS REPRODUCED AS UNDER: 19. SHRI G.C. SHRIVASTAVA REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SAHARA INDIA REAL ESTA TE CORPORATIONS LTD. IN CIVIL APPEAL NO. 9813 OF 2011. IT IS CONTEN DED THAT THE HONBLE SUPREME COURT HAS EXPLAINED THE NATURE OF OFCDS AND HAVE HELD THAT OFCDS ARE HYBRID SECURITIES WHICH REMAINED IN THE N ATURE OF DEBENTURES TILL THEY ARE CONVERTED INTO EQUITY AFTE R WHICH THEY TAKE FORM OF EQUITY MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 31 2. WE WOULD ALSO LIKE TO STATE THAT THE SENIOR COUNSEL REPRESENTING THE ASSESSEE SHRI SOPARKAR(SENIOR COUNSEL), DURING THE COURSE OF PROCEEDINGS, HAS STRONGLY OPPOSED THE RELIANCE PLAC ED BY THE REVENUE ON THE DECISION OF THE SUPREME COURT IN THE CASE OF SAHARA INDIA REAL ESTATE CORP. LTD (SUPRA).THE ABOVE SUBMISSIONS AND C OUNTER ARGUMENTS OF THE REVENUE AND THE ASSESSEE, RESPECTIV ELY, HAVE BEEN CLEARLY RECORDED BY YOUR HONOURS IN THE IMPUGNED OR DER. IN THIS REGARD, ATTENTION OF YOUR HONOURS IS DRAWN TO PARA 20 ON PAGE 10 OF THE IMPUGNED ORDER WHICH READS AS FOLLOWS: 20. SHRI SOPARKAR LD. SENIOR COUNSEL REPLYING TO T HE SUBMISSIONS OF REVENUE STATED THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SAHARA INDIA REAL ESTATE CORPORATIONS IN CIVIL A PPEAL NO. 9813 OF 2011 RELIED UPON THE BY THE LEARNED DR IS NOT APPLI CABLE TO THE ISSUE BEFORE THE HONBLE ITAT. EVEN IF IT IS HELD THAT OFC D IS A HYBRID INSTRUMENT AS LAID DOWN BY THE SUPREME COURT, IN AP PLYING THE TRANSFER PRICING PROVISIONS, THE ENTIRE INSTRUMENT HAS TO BE CONSIDERED AND THE SAME CANNOT BE RE-CHARACTERIZED PARTLY AS L OAN PARTLY AS EQUITY SO AS TO ENABLE ANY TRANSFER PRICING ADJUSTMENT FOR THE SAME. IN THIS REGARD, WE RELY ON THE DECISIONS CITED EARLIER, WHI CH HAVE BEEN APPROPRIATELY FOLLOWED BY THE HONBLE ITAT IN A.Y. 20 07-08 AND THE DECISION OF THE SUPREME COURT (SUPRA) CITED BY THE L D. DR DOES NOT IN ANY WAY JUSTIFY ANY DEPARTURE FROM THE DECISION LAI D DOWN IN A.Y. 2007-08. 21 THUS, THE RELIANCE ON THE DECISION OF THE SUPREME C OURT IN THE CASE OF SAHARA INDIA REAL ESTATE CORP. LTD (SUPRA) HAS BEEN STRONGLY REFUTED ON THE MERITS OF THE CASE. IT IS NOT THE CASE THAT THE DECISION OF THE SUPREME COURT HAS NOT BEEN CONSIDERED AT ALL. 3. ALSO, YOUR HONOURS WHILE REACHING TO A CONCLUSION AN D GIVING A FINDING IN THIS REGARD HAVE MADE SPECIFIC OBSERVATI ONS AND PASSED A SPEAKING ORDER NEGATING THE ARGUMENTS AND CONTENTIO NS RAISED BY THE REVENUE, WHICH ARE DULY CAPTURED IN PARA 22 TO PARA 26 OF THE IMPUGNED ORDER. IT IS ONLY AFTER CONSIDERING THE IS SUES ON MERIT AND RELYING ON THE DECISION BY THE HONBLE TRIBUNAL OF THE EARLIER YEAR IN THE ASSESSEES OWN CASE, YOUR HONOURS HAVE COME TO A CONCLUSION. THE RELEVANT EXTRACT FROM THE IMPUGNED ORDER IS AS UNDE R: 26. THE DISTINGUISHING FACTS AS CANVASSED BY THE S HRI SHRIVASTAVA DO NOT CULMINATE IN TO ANY PROPOSITION SO AS TO CONVIN CE US TO TAKE ANY DIVERGENCE FROM EARLIER FINDINGS AND THE JUDICIAL D ISCIPLINE ALSO GUIDES MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 32 US TO FOLLOW THE DECISIONS OF THE CO-ORDINATE BENCH 4. IT IS CLEARLY VISIBLE THAT THE YOUR HONOURS CONSIDE RING THE ARGUMENTS ADVANCED BY BOTH THE PARTIES HAVE COME TO THE CONCL USION. A PERUSAL OF THE IMPUGNED ORDER CLEARLY REVEALS THAT ISSUE HAVE BEEN ADJUDICATED BY YOUR HONOURS ON MERIT, AFTER EVALUATING THE RIVAL S UBMISSIONS, INCLUDING CASE LAWS RELIED UPON BY BOTH THE PARTIES . ALL THE SUBMISSIONS MADE BY BOTH THE PARTIES HAVE BEEN DULY CONSIDERED AND THEN THE ISSUE HAVE BEEN DECIDED ON MERIT AFTER DUE APPLICATION OF MIND. THE ISSUES THAT HAVE BEEN RAISED BY THE REVENUE BEF ORE YOUR HONOURS HAVE BEEN DEALT WITH AFTER APPRECIATION OF THE FACT UAL AND LEGAL POSITION OF THE CASES AND ADJUDICATED ON MERIT. THUS, THE AP PLICATION MADE BEFORE YOUR HONOURS BY THE REVENUE IS NOT SUSTAINAB LE. 5. THUS, THE CONTENTION OF THE REVENUE THAT THE RELIAN CE PLACED BY IT ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF SAHARA INDIA REAL ESTATE CORP. LTD (SUPRA) IS NOT DISCUSSED IN THE IMP UGNED ORDER IS FACTUALLY WRONG. 6. WE WISH TO SUBMIT THAT IT IS NOT IMPERATIVE TO DISC USS AND RECORD EACH AND EVERY ARGUMENT OF THE PARTIES. WE FURTHER SUBMI T THAT IF IT APPEARS THAT THE TRIBUNAL WHILE REACHING TO THE CONCLUSION HAS TAKEN INTO ACCOUNT ALL RELEVANT SUBMISSIONS AND HAS NOT CONSID ERED ANY IRRELEVANT MATERIAL FOR BASING ITS CONCLUSIONS, THE DECISION O F THE TRIBUNAL IS NOT TO BE INTERFERED WITH. 7. IT IS REITERATED THAT NON-MENTIONING OF A DECISION RELIED UPON BY EITHER PARTY DOES NOT RENDER THE ORDER OF THE TRIBUNAL AS ERROR-PRONE. IN THIS REGARD RELIANCE IS PLACED ON THE FOLLOWING DECISION S. COMMISSIONER OF INCOME-TAX VS. INCOME-TAX APPELLATE TRIBUNAL (SUPRA). POONA PEARLS POULTRY BREEDING FARMS & HATCHERIES (S UPRA). 2. ALLEGATIONS OF THE REVENUE: THE REVENUE CONTENDS THAT THERE IS MISTAKE APPARENT FROM RECORD AS YOUR HONOURS HAVE, UNFORTUNATELY IN THE FINAL ORDER, FAI LED TO CONSIDER THE VITAL ARGUMENTS AND JUDICIAL PRECEDENTS RELIED UPON BY TH E REVENUE. [PAGE NO. 6 PARA 14 OF THE MA] REBUTTAL BY THE ASSESSEE: 1. WE WOULD LIKE TO REITERATE AND STATE THAT THE ISSUE S WHICH HAVE BEEN CONSIDERED AND DECIDED ON MERITS AFTER DUE APPLICAT ION OF MIND BY THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 33 BENCH DO NOT CONSTITUTE OBVIOUS, GLARING, PATENT AN D SELF-EVIDENT MISTAKE OF FACTS OR LAW WHICH IS REQUISITE FOR FILI NG THE RECTIFICATION APPLICATION UNDER SECTION 254(2) OF THE ACT. THEREFOR E, THE GROUNDS RAISED BY THE REVENUE IN THE IMPUGNED MA FILED FALLS BEYOND THE PURVIEW OF THE SECTION 254(2) OF THE ACT. FURTHER ANA LYSIS AND DISCUSSION ON THE JURISDICTION OF THE TRIBUNAL UNDE R SECTION 254(2) OF THE ACT WOULD REVEAL THAT THESE ISSUES RAISED BY THE REVENUE IN THE SAID MA, AS DISCUSSED ABOVE, ARE NOT COVERED BY THE STAT UTORY PHRASE 'ANY MISTAKE APPARENT FROM RECORD'. IT IS REITERATED THA T A MISTAKE APPARENT FROM RECORD IS NOT THE ONE WHICH REQUIRES DETAILED INQUIRY AND DISCUSSION. 2. WE WOULD LIKE TO DRAW YOUR ATTENTION TO THE DECISIO N OF THE HONBLE DELHI TRIBUNAL IN THE CASE OF THE DEEPAK CHHABRA V. ITO 14 SOT 171 [2007]. THE TRIBUNAL HELD THAT: THE MERE NON-MENTION OF THE DECISIONS DOES NOT GIV E RISE TO ANY MISTAKE APPARENT FROM RECORD WHEN THE ORDER OF THE TRIBUNAL HAS PROCEEDED ON THE FACTUAL BASIS. THERE MAY EVEN BE A N ERROR OF JUDGMENT IN APPRECIATING THE IMPACT OF THE POINTS RAISED BY THE PARTIES BEFORE THE TRIBUNAL WHICH MAY MAKE ITS ORDER VULNERABLE IN FUR THER APPEAL BUT THAT ALSO DOES NOT GIVE RISE TO A MISTAKE APPARENT FROM THE RECORD. IF ON A FAIR AND WHOLE READING OF THE TRIBUNALS ORDER, O NE CAN BROADLY SAY THAT THE TRIBUNAL HAS FAIRLY AND SUBSTANTIALLY DEAL T WITH THE CONTENTIONS RAISED BY THE PARTIES BEFORE IT OR THE ISSUE IN ALL ITS IMPORTANT ASPECTS, THE MERE FACT THAT THERE HAS BEE N AN OMISSION OF SOME INCIDENTAL POINTS OR TO REFER TO A DECISION OR AUTHORITY CITED BEFORE IT DOES NOT GIVE RISE TO A MISTAKE APPARENT FROM TH E RECORD. [EMPHASIS SUPPLIED] (COPY OF DECISION IS ATTACHED AT PAGE NO. 70 TO 74 OF PAPER BOOK). 3. THE FACTS OF THE ABOVE CASE ARE SIMILAR TO THE CASE OF THE ASSESSEE. WE WOULD LIKE TO STATE THAT IN THE ASSESSEES OWN CASE YOUR HONOURS HAVE SUBSTANTIALLY DEALT WITH ALL THE IMPORTANT ASPECTS. YOUR HONOURS HAVE CLEARLY DISPENSED UPON ALL THE CONTENTIONS AND ARGU MENTS OF BOTH THE PARTIES. WHEN THE TRIBUNAL HAS BROADLY REASONED ON ALL THE IMPORTANT POINTS LAID BEFORE IT BY BOTH THE PARTIES AND ON AN OVERALL BASIS ADJUDICATED ON THE ISSUE THEN THE NON-MENTION OF A PARTICULAR CASE LAW CITED BEFORE THE TRIBUNAL OR ANY OTHER INCIDENTAL P OINTS IS NOT A MISTAKE APPARENT FROM RECORD. THE ORDER OF THE TRIBUNAL HAS TO BE READ IN A BROAD MANNER AND NOT SCRUTINIZED SENTENCE TO SENTEN CE. A BROAD READING OF THE ORDER PASSED BY YOUR HONOURS CLEARLY DEPICTS THAT THE CONCERNED ISSUES HAVE BEEN DEALT WITH IN ITS ENTIRE TY. THUS, THERE IS NO MISTAKE APPARENT FROM RECORD IN NOT MENTIONING EACH AND EVERY CASE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 34 LAW CITED BY THE REVENUE OR IN OMITTING INCIDENTAL POINTS. IN SUCH CIRCUMSTANCES, IT MAY BE CONSIDERED AS AN ERROR OF JUDGEMENT IN APPRECIATING THE IMPACT OF THE POINTS RAISED BEFORE THE HONBLE TRIBUNAL. HOWEVER, THE ONLY RELIEF AVAILABLE IN SUC H SCENARIO WOULD BE TO PREFER AN APPEAL BEFORE THE HIGHER AUTHORITIES, WHICH HAVE ALREADY BEEN RESORTED BY THE REVENUE SINCE THEY HAVE ALREAD Y FILED AN APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT AGAINST THE I MPUGNED ORDER. THUS, IN THE PRESENT CIRCUMSTANCES, FILING A RECTIF ICATION APPLICATION UNDER SECTION 254(2) OF THE ACT WOULD NOT BE AN APPRO PRIATE REMEDY. GROUND NO. 4: COMMISSION FOR CORPORATE GUARANTEE SN. PARTICULARS 1. ALLEGATIONS OF THE REVENUE: THE REVENUE HAS CONTENDED THAT THERE IS A MISTAKE A PPARENT FROM RECORD BY NOT APPRECIATING THE CONTENTION OF REVENUE THAT THE RE IS NO BAR ON ADJUDICATING ON AN ISSUE OR CONSTITUTING A SPECIAL BENCH EVEN IF A SIMILAR ISSUE IS PENDING BEFORE THE HIGH COURT. [PAGE NO. 6 PARA 16 OF THE MA] REBUTTALS OF THE ASSESSEE: 1. WE WOULD LIKE TO POINT OUT THAT YOUR HONOURS HAVE N OTED THE REQUEST OF THE REVENUE TO REFER THE ISSUE TO THE SPECIAL BE NCH IN PARA 30 ON PAGE 17 OF THE IMPUGNED ORDER: 30. LD. SHRI G.C. SHRIVASTAVA VEHEMENTLY OPPOSED T HIS CONTENTION BY REFERRING TO OTHER DECISIONS OF THE CO-ORDINATE BEN CHES ON THIS ISSUE AND IT IS PROPOSED THAT AS THERE ARE CONFLICTING DE CISIONS OF THE CO- ORDINATE BENCHES, THE ISSUES SHOULD BE REFERRED FOR A SPECIAL BENCH . FURTHER, YOUR HONOURS HAVE ADEQUATELY EXPLAINED AS TO WHY A SPECIAL BENCH SHOULD NOT BE CONSTITUTED IN PARA 32 ON PAGE 18 OF THE IMPUGNED ORDER: 32. WE FIND THAT IN A.Y. 2007-08, THE BENCH HAS OBS ERVED THAT THE HONBLE JURISDICTIONAL HIGH COURT IS SEIZED WITH A S IMILAR QUESTION OF LAW IN TAX APPEAL NO. 567 OF 2016. IN OUR CONSIDERE D OPINION, WHEN A SUPERIOR COURT IS SEIZED WITH A SUBSTANTIAL QUESTIO N OF LAW ON THIS VERY ISSUE, IT WOULD BE IMPROPER FOR A LOWER FORUM TO CO NSTITUTE A SPECIAL BENCH TO DECIDE ON THE SAME ISSUE. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 35 THUS, THE TRIBUNAL HAVE WITH DUE APPLICATION OF MIN D FORMED AN OPINION AND THEREAFTER DISMISSED THE REQUEST OF THE REVENUE FOR CONSTITUTING THE SPECIAL BENCH. WE SUBMIT THAT JUDGEMENT RENDERED WITH DUE A PPLICATION OF MIND CAN BY NO STRETCH OF IMAGINATION BE SAID TO BE MISTAKE, IT AT BEST BE A CASE OF ERROR, IF ANY, OF JUDGMENT. THUS, THE CONTENTIONS OF THE R EVENUE ARE GROSSLY INCORRECT AND ACCORDINGLY THE MA SHALL BE DISMISSED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE HONBLE DELHI T RIBUNAL IN THE CASE OF SMT. BALJEET JOLLY V. CIT [2001] 250 ITR 113 HELD THAT WHERE AN ERROR WAS FAR FROM SELF-EVIDENT, IT CEASED TO BE AN APPARENT ERROR. THE CONTENTION OF THE REVENUE THAT DENIAL OF THEIR REQ UEST FOR A SPECIAL BENCH IS A MISTAKE IS NOT SELF-EXPLANATORY AND REQ UIRES AN EXTENSIVE UNDERSTANDING. THE REVENUE HAS FAILED TO MENTION IN THEIR APPLICATION HOW EXACTLY DENIAL TO REFER TO A SPECIAL BENCH CONS TITUTES A MISTAKE APPARENT FROM RECORD. HENCE, IN LIGHT OF THE RATIO LAID DOWN IN THE ABOVE-MENTIONED DECISION, THE CONTENTION OF THE REV ENUE FALLS BEYOND THE SCOPE OF SECTION 254(2) OF THE ACT. (COPY OF DECISION IS ATTACHED AT PAGE NO. 75 TO 79 OF PAPER BOOK). 2. ALLEGATIONS OF THE REVENUE: THE REVENUE HAS ALLEGED THAT THERE IS A MISTAKE APP ARENT FROM RECORD AS YOUR HONOURS HAVE NOT TAKEN NOTE OF RELIANCE PLACED BY T HE REVENUE ON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF GENERAL MOT ORS INDIA PVT. LTD. (ITA NO. 1293/AHD/2015). [PAGE NO. 7 PARA 17 OF THE MA] REBUTTALS OF THE ASSESSEE: 1. WE WOULD LIKE TO POINT THAT THE ABOVE CASE RELIED U PON BY THE REVENUE HAS BEEN SATISFACTORILY DELIBERATED IN THE IMPUGNED ORDER. THE RELIANCE OF THE REVENUE ON THE ABOVE-MENTIONED CASE HAS BEEN CLEARLY NOTED DOWN IN PARA 30 ON PAGE 17 OF THE IMPUGNED ORDER: 30. LD. SHRI G.C. SHRIVASTAVA VEHEMENTLY OPPOSED T HIS CONTENTION BY REFERRING TO OTHER DECISIONS OF THE CO-ORDINATE BEN CHES ON THIS ISSUE AND IT IS PROPOSED THAT AS THERE ARE CONFLICTING DE CISIONS OF THE CO- ORDINATE BENCHES, THE ISSUES SHOULD BE REFERRED FOR A SPECIAL BENCH THUS, THE CLAIM OF THE REVENUE THAT YOUR HONOURS HA VE FAILED TO RECORD THE RELIANCE PLACED BY IT ON THE DECISION OF THE CO-ORD INATE BENCH IS INCORRECT. 2. WITHOUT PREJUDICE TO THE ABOVE, IT IS EVIDENT THAT THE ISSUE RAISED BY THE REVENUE IN THE MA WAS DECIDED BY YOUR HONOURS ON MER ITS AND MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 36 HAVING REGARD TO THE RIVAL SUBMISSIONS AND THE CASE LAWS. THUS, THE ISSUE WAS DEBATABLE AND SUSCEPTIBLE TO DIFFERENT OP INIONS. THESE ISSUES DECIDED ON MERITS AFTER DUE APPRECIATION OF THE FAC TS OF THE CASE, AS HIGHLIGHTED IN THE IMPUGNED ORDER OF YOUR HONOURS C ANNOT NOT BE CONSTRUED AS SUFFERING FROM PATENT, SELF-EVIDENT, G LARING MISTAKE APPARENT FROM THE RECORD AS CONTEMPLATED UNDER SECT ION 254(2) OF THE ACT. IT IS A WELL-SETTLED PRINCIPLE THAT ONLY AN APP ARENT ERROR OF FACTOR LAW CAN BE RECTIFIED. IF THE MISTAKE OF LAW HAS TO BE ESTABLISHED BY LONG DRAWN PROCESS OR BY A LONG EXPLANATION OR BY CONSTR UING THE WORDS OF A SECTION, TO FIND ITS PROPER MEANING, THEN SUCH AN E RROR CANNOT NORMALLY BE A RECTIFIABLE ERROR UNDER SECTION 254(2) OF THE ACT. 3. WITHOUT PREJUDICE TO THE ABOVE, IT IS REITERATED TH AT NON-MENTIONING OF A DECISION RELIED UPON BY EITHER PARTY DOES NOT REN DER THE ORDER OF THE TRIBUNAL AS ERROR-PRONE. IN THIS REGARD RELIANCE IS PLACED ON THE FOLLOWING DECISIONS COMMISSIONER OF INCOME-TAX VS. INCOME-TAX APPELLATE TRIBUNAL (SUPRA). POONA PEARLS POULTRY BREEDING FARMS & HATCHERIES (S UPRA). 4. FURTHER, IN RESPONSE TO THE CONTENTION OF THE REVEN UE THAT PROPER REASONS HAVE NOT BEEN RECORDED BY YOUR HONOURS FOR THE INAPPLICABILITY OF THE CASE LAW CITED BY THEM, WE WOULD LIKE TO DRA W YOUR ATTENTION TO THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT I N THE CASE OF POPULAR ENGG. CO V. ITAT 248 ITR 577[ 2001].WHEREIN I T WAS OBSERVED THAT ABSENCE OF REASON IN AN ORDER WAS NOT TO BE CONSIDERED AS A MISTAKE APPARENT FROM RECORD. THUS, THE CONTENTIO N OF THE REVENUE THAT THERE EXISTS A MISTAKE APPARENT FROM RECORD IN NOT GIVING SPECIFIC REASONS FOR THE NON-APPLICABILITY OF THE DECISION O F THE CO-ORDINATE BENCH RELIED UPON BY THEM IS INCORRECT IN LIGHT OF THE ABOVE-MENTIONED OBSERVATION LAID DOWN BY THE HONBLE PUNJAB AND HAR YANA HIGH COURT. (COPY OF DECISION IS ATTACHED AT PAGE NO.80 TO84 OF PAPER BOOK). 3. ALLEGATIONS OF THE REVENUE: THE REVENUE HAS ALLEGED THAT THERE IS A MISTAKE APP ARENT FROM RECORD AS YOUR HONOURS HAVE PASSED A CONTINGENT ORDER BY GIVING A DIRECTION TO THE COMMISSIONER OF INCOME-TAX APPEALS(CIT (A)) TO PASS AN ORDER IN LINE WITH THE DECISION OF THE HONBLE HIGH COURT ON THE SAME SET OF GROUNDS WHICH IS STILL PENDING FOR DISPOSAL. [PAGE NO. 7 PARA 18 OF THE MA] MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 37 REBUTTALS OF THE ASSESSEE: 1. THE CONTENTIONS OF THE REVENUE IN THE MA ARE BASELES S. THE FACTS OF THE CASE ARE STRAIGHT-FORWARD. YOUR HONOURS, RELYING ON THE DECISION OF THE HONBLE TRIBUNAL IN THE ASSESSEES OWN CASE FOR AY 20 07-08, HAVE SET ASIDE THE MATTER TO THE FILE OF THE HONBLE CIT (A) WITH THE DIRECTION TO DECIDE UPON THE ISSUE AS PER THE DECISION GIVEN BY THE JURISDICTIONAL HIGH COURTWHICH IS SEIZED WITH A SIMILAR QUESTION O F LAW.IT MUST BE NOTED THAT SUCH AN ORDER IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE SINCE YOUR HONOURS HAVE SIMPLY DIRECTED THA T THE DECISION OF THE JURISDICTIONAL HIGH COURT SHALL BE APPLIED. 2. FURTHER, IT IS SUBMITTED THAT THE REVENUE IS CHALLE NGING YOUR HONOURS POWERS TO SET ASIDE THE ORDER TO THE FILE OF THE CI T(A) WITH THE DIRECTIONS TO DECIDE UPON THE MATTER IN LIGHT OF TH E DECISION OF THE HONBLE HIGH COURT OF GUJARAT WITHOUT APPRECIATING THAT RULE 28 OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963 (IT AT RULES) CLEARLY GIVES THE POWER TO THE HONBLE TRIBUNAL TO REMAND BACK THE MATTER TO THE AUTHORITY FROM WHOSE ORDER APPEAL HAS BEEN PREFERRED AND WITH SUCH DIRECTIONS AS IT MAY THINK FIT. THUS, YOU R HONOURS, IN PURSUANCE OF SUCH POWERS ENVISAGED BY RULE 28, HAVE GIVEN THE DIRECTIONS TO CIT(A) TO FOLLOW THE DECISION OF THE H ONBLE HIGH COURT AND HENCE SUCH DIRECTION CANNOT BE CONSTRUED AS AN ERROR APPARENT FROM THE RECORD. THUS, IN LIGHT OF THE ABOVE, IT IS SUBMITTED THAT T HE CONTENTION OF THE REVENUE THAT YOUR HONOURS HAVE COMMITTED A MISTAKE BY ISSUI NG DIRECTIONS TO THE CIT (A) TO PASS AN ORDER IN LINE WITH THE DECISION OF TH E HONBLE HIGH COURT, IS LEGALLY WRONG AND WITHOUT ANY MERITS. GROUND NO. 5: SALE OF PANTOPRAZOLE DRUG S.N O. PARTICULARS 1. ALLEGATIONS OF THE REVENUE: IT IS THE ALLEGATION BY THE REVENUE THAT THERE IS A MISTAKE APPARENT FROM RECORD SINCE YOUR HONOURS HAVE OMITTED TO PASS ANY ORDER O N THE APPLICATION FILED BY THE REVENUE UNDER RULE 29 OF THE ITAT RULES. [PAGE NO. 7 PARA 20 OF THE MA] REBUTTALS OF THE ASSESSEE: 1. IT IS THE CONTENTION OF THE REVENUE THAT IT HAS FIL ED 3 APPLICATIONS BEFORE THE HONBLE TRIBUNAL UNDER RULE 29 OF THE ITAT RULES FOR PRODUCING MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 38 ADDITIONAL EVIDENCE. IN RESPONSE TO THE ABOVE, WE W OULD LIKE TO MAKE SUBMISSIONS QUA EACH APPLICATION FILED BY THE REVEN UE AS FOLLOWS: I. ADDITIONAL EVIDENCE APPLICATION UNDER RULE 29 DATED 29.09.2016: ON PERUSAL OF THE PAPER BOOK FILED BY THE REVENUE, IT CAN BE OBSERVED THAT IN THE NAME OF APPLICATION UNDER RULE 29, ONLY A COVERING LETTER WAS FILED BEFORE YOUR HONOURS WHERE BY NO ADDITIONAL EVIDENCE OR ANY DOCUMENTS WAS PRODUCED A S SUCH. IN THIS REGARD ATTENTION IS DRAWN TO PAGE NO. 62 OF TH E COMPILATION OF SUBMISSION/ DOCUMENTS FILED BY REVENUE. THUS, THE C ONTENTION OF THE REVENUE THAT YOUR HONOURS HAVE FAILED TO CONSID ER THE ADDITIONAL EVIDENCE FILED VIDE THIS APPLICATION IS BASELESS AND WITHOUT ANY MERITS SINCE NO SUCH ADDITIONAL EVIDENC E WAS PRODUCED BY IT. FURTHER ON PERUSAL OF THE COVERING PAGE OF THE APPLICATION, IT NOWHERE APPEARS THAT THE REVENUE IS SEEKING TO PLACE ANY ADDITIONAL EVIDENCE. ON APPARENT READING OF THE SAID APPLICATION DATED 29.09.2016 SUBMITTED ON 30.09.201 6 IT COULD BE RATHER OBSERVED THAT THE SAID APPLICATION IS CONCER NED WITH FILING OF ADDITIONAL GROUND OF APPEAL AND NOT ADDITIONAL EVID ENCE. THUS, THE REVENUE ITSELF SEEMS TO BE CONFUSED ABOUT ITS CLAIM S AND THAT THE MA IS FILED BY THE REVENUE IN COMPLETE HASTE AND WIT HOUT DUE APPLICATION OF MIND. II. ADDITIONAL EVIDENCE APPLICATION UNDER RULE 29 DATED 21.04.2017: THE ADDITIONAL EVIDENCE IN THE FORM OF EXTRACTS OF ANDA APPROVAL AND ORANGE BOOK WAS FILED BY THE REVENUE VIDE APPLI CATION DATED 21.04.2017. IT IS SUBMITTED THAT SUCH DOCUMENTS WER E DULY CONSIDERED BY YOUR HONOURS WHILE RENDERING THE DECI SION WHICH IS CLEARLY REFLECTED IN THE PARA 79 ON PAGE 100 OF THE IMPUGNED ORDER WHICH IS REPRODUCED AS UNDER: 79. COPY OF ORANGE BOOK REFLECTED TITLE OF THE ANDA OF PANTOPRAZOLE SODIUM WITH SPG BVI IS EXHIBITED AT PA GES 569 & 570 OF THE PAPER BOOK WHICH CONCLUSIVELY PROVES THA T THE ANDA RIGHTS WERE WITH THE SPG BVI. THUS, THE CONTENTION OF THE REVENUE THAT YOUR HONOU RS HAVE OMITTED TO CONSIDER THE DOCUMENTS PRODUCED VIDE THI S APPLICATION IS FACTUALLY INCORRECT SINCE THE HONBLE TRIBUNAL HAVE STRONGLY RELIED ON THESE DOCUMENTS WHILE DETERMINING THE ISSUE WITH RESPECT TO THE OWNERSHIP OF THE ANDA RIGHTS. III. APPLICATION REQUESTING THE HONBLE TRIBUNAL TO ISSU E DIRECTIONS FOR MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 39 FILING DOCUMENTS NECESSARY TO DECIDE ANDA OWNERSHIP THE PROVISIONS SPECIFIED IN RULE 29 OF THE ITAT RULE S DEAL WITH THE PRODUCTION OF ADDITIONAL EVIDENCE DURING THE COURSE OF PROCEEDINGS. THE DISCRETIONARY POWER TO ENTERTAIN THE APPLICATIO N MADE BY EITHER PARTY FOR PRODUCING ADDITIONAL EVIDENCE DURING THE COURSE OF PROCEEDINGS RESTS WITH THE HONBLE TRIBUNAL. HOWEVE R, BEFORE MAKING ANY SUCH APPLICATION, IT IS NECESSARY THAT S UCH ADDITIONAL EVIDENCE MUST BE IN THE POSSESSION OF THE PARTY WHI CH INTENDS TO PRODUCE THE SAME. IN A CASE WHERE REVENUE INTENDS T O FURNISH ADDITIONAL EVIDENCE, THE APPLICATION SHALL BE MADE TO THE HONBLE TRIBUNAL ONLY WHEN SUCH ADDITIONAL EVIDENCE IS IN T HE POSSESSION OF THE REVENUE. THE PROVISIONS ENVISAGED UNDER RULE 29 OF THE ITAT RULES DOES NOT GIVE ANY POWER TO THE REVENUE WHEREB Y IT CAN REQUEST THE HONBLE TRIBUNAL TO DIRECT THE ASSESSEE TO FURNISH CERTAIN DOCUMENTS OR EVIDENCE WHICH IS NOT ON THE R ECORD. ON PERUSAL OF THE APPLICATION FILED BY THE REVENUE UND ER RULE 29, IT CAN BE CLEARLY SEEN THAT THROUGH SAID APPLICATION T HE REVENUE DOES NOT PLACES ON RECORD ANY ADDITIONAL EVIDENCES BEFOR E YOUR HONOURS. THUS, THE APPLICATION FILED BY THE REVENUE REQUIRIN G HONBLE TRIBUNAL TO ISSUE DIRECTIONS TO THE ASSESSEE FOR FUR NISHING ADDITIONAL DOCUMENTS IS ITSELF VOID AND BAD IN LAW. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THA T ON PERUSAL OF THE APPLICATION FILED BY THE REVENUE UNDER RULE 29 OF THE ITAT RULES, IT CAN BE OBSERVED THAT REVENUE IS PREDOMINA NTLY ASKING FOR AND STRETCHING AT ITS LENGTH, REQUESTING YOUR HONOU RS TO DIRECT THE ASSESSEE TO FURNISH THE DOCUMENTS LIKE APPLICATION M ADE BEFORE THE FDA AND OTHER CONNECTED DOCUMENTS. THE CONTENTION OF THE REVENUE THAT THE HONBLE TRIBUNAL HAVE FAILED TO CO NSIDER THE APPLICATION FILED BY IT IS FACTUALLY INCORRECT SINC E YOUR HONOURS HAVE VERY EXPLICITLY DEALT WITH THE SAME IN PARA 90 ON PAGE 108 OF THE IMPUGNED ORDER WHICH IS REPRODUCED AS UNDER: 90. .. SPG MAY NOT HAVE DONE ANY FILING RELATED T O PANTOPRAZOLE SODIURN PATENT TO US FDA BUT THE FACT O F THE MATTER AND WHICH HAVE BEEN DEMONSTRATED SUCCESSFULLY BY TH E APPELLANT COMPANY IS THAT THE IPR / ANDA RIGHTS BECAME THE PROP ERTY OF SPG BVI BY VIRTUE OF THE AGREEMENT FOR SALE BETWEEN SPARC AND SPG. THUS, THE HONBLE TRIBUNAL HAVE VERY WELL CONSIDERE D THE REQUEST OF THE REVENUE AND THAT ON MERITS YOUR HONOURS HAVE DISMISSED MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 40 THE ADDITIONAL EVIDENCE APPLICATION OF THE REVENUE BASIS SPECIFIC FINDING. THEREFORE, THE CONTENTION OF THE REVENUE T HAT YOUR HONOURS HAVE FAILED TO CONSIDER THE APPLICATION FIL ED BY IT UNDER RULE 29 OF THE ITAT RULES SEEKING ADDITIONAL EVIDEN CE IS INCORRECT AND WITHOUT ANY MERITS. 2. ALLEGATIONS OF THE REVENUE: IT IS THE ALLEGATION BY THE REVENUE THAT YOUR HONOU RS HAS ONLY CONSIDERED INTER-COMPANY AGREEMENTS FOR THE PURPOSE OF DETERMI NING THE OWNERSHIP OF ANDA RIGHTS. [PAGE NO. 9 PARA 21(A) OF THE MA] REBUTTALS OF THE ASSESSEE: 1. THE ALLEGATION OF THE REVENUE THAT ONLY INTER-COMPA NY AGREEMENTS HAS BEEN CONSIDERED FOR THE PURPOSE OF DETERMINING THE OWNERSHIP OF ANDA RIGHTS IS INCORRECT SINCE YOUR HONOURS, WHILE DE CIDING ON THE SAID MATTER, HAVE PLACED STRONG RELIANCE ON THE COP Y OF THE ORANGE BOOK WHICH REFLECTED THE TITLE OF ANDA RIGHTS OF PAN TOPRAZOLE SODIUM WITH SPG BVI AND NOT MERELY ON THE INTER-COMPANY AG REEMENTS. 2. THE ORANGE BOOK IS THE PUBLICATION MAINTAINED BY UN ITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES WHICH IDENT IFIES THE DRUG PRODUCTS APPROVED BY THE FOOD AND DRUG ADMINISTRATIO N (FDA). 3. ACCORDINGLY, THE COPY OF ORANGE BOOK HAS BEEN REFERR ED BY YOUR HONOURS AND IS CONSIDERED AS CONCLUSIVE EVIDENCE FO R DETERMINING THE OWNERSHIP OF ANDA RIGHTS WHICH IS RECORDED BY YOUR HO NOURS IN THE PARA 79 ON PAGE 100 OF THE IMPUGNED ORDER AS FOLLOW S: 79. COPY OF ORANGE BOOK REFLECTED TITLE OF THE ANDA OF PANTOPRAZOLE SODIUM WITH SPG BVI IS EXHIBITED AT PAGES 569 & 570 OF THE PAPER BOOK WHICH CONCLUSIVELY PROVES THAT THE ANDA RIGHTS W ERE WITH THE SPG BVI. 4. FURTHER, IN RESPONSE TO THE ARGUMENT OF THE REVENUE THAT THE COPY OF APPLICATION FILED BEFORE FDA AND OTHER CORRESPONDENC ES HAVE NOT BEEN PRESENTED BY THE ASSESSEE, YOUR HONOURS HAVE CONSIDE RED THE SAME IN PARA 90 ON PAGE 108 OF THE IMPUGNED ORDER AS FOLLOW S: 90. .. SPG MAY NOT HAVE DONE ANY FILING RELATED T O PANTOPRAZOLE SODIURN PATENT TO US FDA BUT THE FACT OF THE MATTER AND WHICH HAVE BEEN DEMONSTRATED SUCCESSFULLY BY THE APPELLANT COM PANY IS THAT THE IPR / ANDA RIGHTS BECAME THE PROPERTY OF SPG BVI BY V IRTUE OF THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 41 AGREEMENT FOR SALE BETWEEN SPARC AND SPG. THUS, THE CONTENTION OF THE REVENUE IS WITHOUT ANY MERITS AND HENCE DOES NOT HOLD GOOD. WE REITERATE THE PRINCIPLE LAID DOWN BY THE PUNE ITAT IN THE CASE OF POONA PEARLS POULTRY BREEDING FARMS & HATCHERIES (SUPRA) WHEREIN IT HELD THAT IF ON A BARE READING OF THE JUDGMENT OF THE TR IBUNAL ONE HAS FOUND THAT IT HAS TAKEN INTO ACCOUNT RELEVANT MATERIAL FOR BASING ITS CONCLUSIONS, THEN THE DECISION OF THE TRIBUNAL IS NOT TO BE INTERFERED WI TH. HENCE IN THE PRESENT CASE, THE TRIBUNAL HAS IN ITS WISDOM CONSIDERED THE REQUI SITE DOCUMENTS INCLUDING THE ORANGE BOOK AND THAT AFTER DUE VERIFICATION THE REOF CAME TO A CONCLUSION THAT SPG BVI IS THE OWNER OF THE ANDA RIGHTS. IN LIGH T OF THESE FACTS, IT IS SUBMITTED THAT ORDER OF THE TRIBUNAL DOES NOT SUFFE R FROM ANY INFIRMITY AND CONTAINS NO MISTAKE APPARENT FROM RECORD. 3. ALLEGATIONS OF THE REVENUE: IT IS CONTENDED BY THE REVENUE IN RESPECT OF THE FA CT THAT THE FDA APPROVAL IS OF A DATE PRIOR TO THE DATE WHEN THE TECHNOLOGY WAS ALLEGEDLY PURCHASED BY SPG BVI HAS NOT BEEN FOUND WORTH ANY MENTION IN THE ORDER PASSED BY YOUR HONOURS. [PAGE NO. 9 PARA 21(B) OF THE MA] REBUTTALS OF THE ASSESSEE: 1. IT IS SUBMITTED THAT THE CONTENTIONS OF THE REVENUE ARE BASELESS. THE ARGUMENTS OF THE SPECIAL COUNSEL REPRESENTING FOR T HE REVENUE HAS BEEN RECORDED BY YOUR HONOURS IN THE PARA 68 ON PAG E 81 OF THE IMPUGNED ORDER WHICH IS REPRODUCED AS FOLLOWS: 68. .. SHRI SHRIVASTAVA POINTED THAT THE USF DA APPROVAL IN THE NAME OF SPG IS DATED 10.09.2017, HOWEVER, TE CHNOLOGY WAS PURCHASED BY SPG ONLY IN THE MONTH OF OCTOBER, 2007 . . 2. FURTHER, IN RESPONSE TO THE ABOVE, THE ARGUMENTS OF THE SENIOR COUNSEL REPRESENTING THE ASSESSEE HAVE ALSO BEEN RECORDED BY YOUR HONOURS IN THE SUB POINT (7) OF THE POINT (A) IN THE PARA 74 ON PAGE 87 OF THE ORDER WHICH IS ALSO REPRODUCED AS UNDER: 7. THE DATE OF ORIGINAL APPROVAL MENTIONED AS 10TH SEPTEMBER 2007 IS MERELY THE DATE WHEN THE ANDA WAS APPROVED A ND DOES NOT INDICATE THAT THE ANDA WAS OWNED BY SPG BVI FROM THAT DATE. THIS IS UNINTENDED CONFUSION THAT HAS BEEN SOUGHT TO BE CREATED AND SHOULD STAND SUITABLY EXPLAINED AND CLARIFIED. THUS, IT CAN BE SAID THAT THE ISSUES HAVE BEEN CONS IDERED AND DECIDED BY YOUR MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 42 HONOURS ON MERIT AND AFTER EVALUATING THE RIVAL SUB MISSIONS. 3. IT IS FURTHER SUBMITTED THAT FAILURE BY THE HONBLE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING A T A CONCLUSION SHALL NOT CONSTITUTE MISTAKE APPARENT ON THE RECORD AS HELD BY THE BOMBAYHIGH COURT OF BOMBAY IN THE CASE OF CIT V. RA MESH ELECTRIC & TRADING CO. (SUPRA). 4. ALLEGATION OF THE REVENUE: THE REVENUE ALLEGES THAT ITS WRITTEN SUBMISSIONS AN D ORAL ARGUMENTS WITH RESPECT TO THE FACT THAT THE SUIT FILED BY WYETH AN D NYCOMED WAS AGAINST THE ASSESSEE AND SPARC AND NOT AGAINST SPG BVI HAVE BEEN COMPLETELY OMITTED BY YOUR HONOURS IN THE IMPUGNED ORDER. [PAGE NO. 9 PARA 21(C) OF THE MA] REBUTTALS OF THE ASSESSEE: 1. IT IS SUBMITTED THAT THE PLEA OF THE REVENUE DOES N OT HOLD GOOD. THE SENIOR COUNSEL REPRESENTING THE ASSESSEE HAS EXTENSI VELY DEALT WITH AND CHALLENGED THE SUBMISSION OF THE REVENUE. WE SU BMIT THAT THE ARGUMENTS OF THE SENIOR COUNSEL REPRESENTING THE ASS ESSEE IN RESPONSE TO THE ORAL AND WRITTEN ARGUMENT OF THE REVENUE HAV E ALSO BEEN RECORDED BY YOUR HONOURS IN THE SUB POINT (3) OF THE POINT (A) IN THE PARA 74 ON PAGE 85 OF THE ORDER WHICH IS REPRODUCED HEREUNDER: 3. SUBSEQUENTLY, THE ORIGINAL PATENT HOLDER VIZ. WYETH PHARMACEUTICAL INC. AND ATLANTA PHARMA AG FILED A COM PLAINT FOR THE PATENT INFRINGEMENT. SINCE THE SUIT HAD BEEN FILED IN THE FINANCIAL YEAR 2005-06 WHEN SPIL WAS THE ACTUAL OWNER OF ANDA APPLIC ATION. THEREFORE, BOTH SPIL AND SPARC 1 WERE MADE DEFENDANT S OF THE ORIGINAL PATENT HOLDER IN THE SUIT FILED. THUS, THE CONTENTION OF THE REVENUE HAS BEEN APPROP RIATELY ADDRESSED AND NEGATED BY THE SENIOR COUNSEL REPRESENTING THE ASSES SEE AND THAT THE SAME HAVE BEEN FAIRLY RECORDED BY YOUR HONOURS IN YOUR O RDER. WE REITERATE THAT ONCE THE ARGUMENTS OF THE PARTIES ARE CONSIDERED BY THE HONBLE TRIBUNAL THEN IT IS NOT MANDATORY FOR IT TO EXPLICITLY SPECIFY AN D DISCUSS EACH AND EVERY ARGUMENT IN THE ORDER. THUS, THE ALLEGATIONS OF THE REVENUE THAT YOUR HONO URS HAVE COMPLETELY OMITTED TO CONSIDER THE VITAL DOCUMENTS SUCH AS CIV IL SUIT FILED BY WYETH AND NYCOMED IS NOT TENABLE. 2. WITHOUT PREJUDICE TO THE ABOVE, IT IS FURTHER SUBMI TTED THAT FAILURE BY MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 43 THE HONBLE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANC ED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION SHALL NOT CONSTI TUTE MISTAKE APPARENT ON THE RECORD AS HELD BY THE BOMBAY HIGH COURT OF B OMBAY IN THE CASE OF CIT V. RAMESH ELECTRIC & TRADING CO. (SUPRA). 5. ALLEGATION OF THE REVENUE: THE REVENUE ALLEGES THAT YOUR HONOURS HAVE OMITTED TO CONSIDER THE FACTUAL SUBMISSIONS SUCH AS FAR ANALYSIS SUBMITTED BY IT AS WELL AS ORAL ARGUMENTS WITH RESPECT TO THE FACT THAT THE ASSESSEE WAS ONLY A CONTRACT MANUFACTURER. [PAGE NO. 10 PARA 21(D) AND PARA 21(F) OF THE MA] REBUTTAL OF THE ASSESSEE: 1. IT IS SUBMITTED THAT YOUR HONOURS HAVE DULY CONSIDE RED ALL THE PRIMARY FACTS BEFORE REACHING TO A FINDING THAT THE ASSESSEE WAS ONLY A CONTRACT MANUFACTURER. 2. THE SUBMISSIONS AND ARGUMENTS OF THE REVENUE HAVE B EEN RECORDED BY YOUR HONOURS IN A VERY DETAILED MANNER IN THE PARA 71 AND 72 ON PAGE 83 OF THE IMPUGNED ORDER WHICH ARE REPRODUCED AS UN DER: 71. SHRI SHRIVASTAVA FURTHER STATED THAT ALL MARKE TING, SELLING AND DISTRIBUTION EXPENSES ARE TO BE BORNE BY CARACO AND NOT SPG AND SPG HAD NO FREEDOM TO APPROACH ANY OTHER MANUFACTURER. HE CONTINUED BY SAYING THAT NONE OF THE MAJOR FUNCTIONS HAVE REALLY BEEN PERFORMED BY SPG. 72. IT IS FURTHER CONTENDED BY REVENUE THAT ONLY TW O ASSETS HAVE BEEN USED IN THE TRANSACTION, USFDA PLANT AND ANDA / IPR, T HE OWNERSHIP OF ANDA IS THE MOST IMPORTANT AND THE MOST CONTENTIOUS ISSUE. REVENUE CONTENDS THAT AS PER THE EVIDENCES O N RECORD, IT WAS SPIL WHO OWNED THE ANDA RIGHTS AND NOT SPG; INSOFAR AS THE RISK IS CONCERNED; SOME OF THE LITIGATION RISK AND THE CONS EQUENTIAL BURDEN HAVE BEEN ADMITTEDLY BORNE BY SPIL, THE BALANCE POR TION THEREOF HAS ALSO BEEN TRANSFERRED TO IT AS A RESULT OF MERGER I N MAY; 2013. 3. IN RESPONSE TO THE ABOVE, THE ARGUMENTS OF THE SENI OR COUNSEL REPRESENTING THE ASSESSEE HAVE ALSO BEEN RECORDED BY YOUR HONOURS IN THE SUB POINT (II) AND (III) OF THE POINT (B) IN THE P ARA 74 ON PAGE 88 OF THE ORDER WHICH IS ALSO REPRODUCED AS UNDER: (II). THE AE THUS OWNS THE MOST IMPORTANT ASSETS THA T DRIVES THE GENERIC BUSINESS I.E. ANDA APPROVAL UNDER THE PARA IV FILING AND MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 44 THE PRODUCT IPRS. IT ALSO FACES THE BIGGEST RISK OF PROLONGED LITIGATION / INFRINGEMENT AS WELL AS THAT ARISING FROM TECHNOLOG Y OBSOLESCENCE. (III). BEING THE OWNER OF THE IPRS (ANDA AND THE PRODU CT TECHNOLOGY), AE TOOK THE ENTREPRENEURIAL RISKS OF COMMERCIALIZATI ON OF THE PRODUCT ALONG WITH AN IMPENDING THREAT DUE TO THE LITIGATIO N ALREADY INITIATED, PROTECTING THE IPR TITLE AS WELL AS THE CLAIMS OF I NFRINGEMENT. THE APPELLANT IS A MERE CONTRACT MANUFACTURER THAT MANU FACTURES THE PRODUCTS ON BEHALF OF SPG BVI. IT BEARS NO RISKS AR ISING OUT OF THE IPRS SELLING AND DISTRIBUTION IS NOT CARRIED OUT BY THE APPELLANT AND IT HAS BEEN CARRIED OUT BY THE OVERSEAS AE. 4. FURTHER, THE ARGUMENT OF THE SENIOR COUNSEL REPRESE NTING THE ASSESSEE IN CONTEXT OF AGREEMENT WITH CARACO HAVE ALSO BEEN RECORDED BY YOUR HONOURS IN THE SUB POINT 7 OF THE POINT (C) IN THE P ARA 74 ON PAGE 92 OF THE ORDER WHICH IS REPRODUCED AS UNDER: 7. THE LEARNED DR HAS ALSO HIGHLIGHTED THAT THE DI STRIBUTION AGREEMENT ENTERED INTO WITH THE CARACO WAS BY SPIL AND VARIOUS CLAUSES IN THE AGREEMENT WERE HIGHLIGHTED TO BRING OUT THE PROPOSITION THAT ULTIMATELY IT WAS SPIL WHICH HAD PERFORMED THE FUNCTIONS AND BEEN PARTY TO THE DISTRIBUTION AGREEMENT. IN THIS R EGARD, IT IS HIGHLIGHTED THAT CLAUSE 11 OF THE SAID DISTRIBUTION AGREEMENT PLACED AT PAGE 273 TO 294 OF THE PAPER-BOOK, CLEARLY PROVIDED THAT THE ASSESSEE COMPANY COULD PERFORM ANY OF THE FUNCTIONS THROUGH ONE OR MORE AFFILIATES. IN THE PRESENT CASE, WHAT IS RELEVANT I S THAT THE AFFILIATE COMPANY NAMELY SPG BVI HAS PERFORMED THE RELEVANT F UNCTIONS AND ASSUMED THE RELEVANT RESPONSIBILITIES AND RISKS PUR SUANT TO THE DISTRIBUTION AGREEMENT. HENCE IT IS CLEAR THAT THE RELEVANT AGREEMENT IF NO T PROPERLY READ WITH THE CLAUSE 11 AND THE ACTUAL CONDUCT OF THE PARTIES CAN BE MISLEADING AND CONFUSING WHICH ADVANTAGE THE LEARNED DR HAS TR IED TO TAKE BUT WITHOUT ANY MERITS. 5. IT IS SUBMITTED THAT THE HONBLE TRIBUNAL HAVE VERY WELL CONSIDERED THE SUBMISSION AND COUNTER SUBMISSION OF BOTH THE PARTI ES TO THE APPEAL AND THEREAFTER CAME TO CONCLUSION CONSIDERING THE F ACTS AND MERITS OF THE CASE. 6. WE SUBMIT THAT IT IS CLEAR CASE WHERE THE REVENUE S EEKS RECALLING OF THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 45 ORDER UNDER THE GARB OF RECTIFICATION AND THEREBY R EQUIRING YOUR HONOURS TO RECONSIDER THE DECISION ALREADY RENDERED ON CAREFUL CONSIDERATION OF THE FACTS AND LAW. THUS, THE GROUND OF THE REVENUE THAT YOUR HONOURS H AVE FAILED TO TAKE INTO CONSIDERATION THE PRIMARY FACTS BEFORE REACHING A F INDING THAT THE ASSESSEE WAS ONLY A CONTRACT MANUFACTURER IS NOT SUSTAINABLE . 6. ALLEGATION OF THE REVENUE: THE REVENUE CONTENDS THAT YOUR HONOURS, WHILE REJEC TING THE APPLICATION OF THE PSM METHOD HAVE ONLY CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE AND HAVE NOT CONSIDERED THE ENTIRE FACTUAL MATRIX P ROVIDED BY IT IN THIS REGARD. [PAGE NO. 10 PARA 21(E)OF THE MA] REBUTTALS OF THE ASSESSEE: 1. THE ORDER PASSED BY YOUR HONOURS JUSTIFIES THE SELE CTION OF METHOD FOR THE PURPOSE OF DETERMINING ALP IN A VERY PRECISE AND DETAILED MANNER. 2. AS IT CAN BE SEEN FROM THE PARA 84 ON PAGE 103 OF TH E IMPUGNED ORDER, YOUR HONOURS HAVE EXAMINED THE APPLICATION OF THE A PPROPRIATE METHOD IN THE GIVEN FACTUAL MATRIX BY CONSIDERING THE OFCD GUIDELINES AS WELL REFERRING THE UNITED NATIONS PRACTICE MANUAL O N TRANSFER PRICING. 3. CONSIDERING THE GUIDELINES, YOUR HONOURS HAVE TAKEN A CONSIDERATE VIEW IN PARA 86 ON PAGE 105 OF THE ORDER BY OBSERVI NG THAT PSM IS FOUND TO BE THE MOST SUITABLE METHOD ONLY IN SITUAT IONS WHERE THERE ARE HIGHLY INTEGRATED OPERATIONS AND IN SCENARIO WHERE BOTH THE PARTIES TO THE TRANSACTIONS MAKE UNIQUE AND VALUABLE CONTRIBUT IONS. 4. FURTHER, IN PARA 91 ON PAGE 109 OF THE IMPUGNED ORD ER, YOUR HONOURS HAVE ALSO EVALUATED THE ALTERNATE SITUATION, WHEREI N THE CONSEQUENCES HAVE BEEN DISCUSSED IN A VERY PRECISE MANNER IN A C ASE IF PSM IS HELD TO BE THE MOST APPROPRIATE METHOD. THUS, YOUR HONOU RS HAVE DECIDED ON THE ISSUE BY CONSIDERING ALL THE POSSIBLE ANGLES . 5. THE ALLEGATION OF THE REVENUE CANNOT BE SUSTAINED I N THE GIVEN CASE SINCE YOUR HONOURS HAVE DECIDED ON THE MATTER WITH PROPER APPLICATION OF THE MIND. THUS, THE CONTENTION OF THE REVENUE THAT YOUR HONOU RS WHILE REJECTING THE APPLICATION OF PSM METHOD HAVE FAILED TO CONSIDER T HE FACTUAL MATRIX PROVIDED BY IT IS FACTUALLY INCORRECT. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 46 IT IS FURTHER SUBMITTED THAT FAILURE BY THE HONBLE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION SHALL NOT CONSTITUTE MISTAKE APPARENT ON THE RECORD AS HELD B Y THE BOMBAY HIGH COURT IN THE CASE OF CIT V. RAMESH ELECTRIC & TRADING CO. (SUPRA). 7. ALLEGATION OF THE REVENUE: THE REVENUE IS OF THE CONTENTION THAT YOUR HONOURS HAVE COMMITTED A MISTAKE BY FAILING TO CONSIDER THE DOCUMENTS FOUND DURING THE SURVEY PROCEEDINGS WHICH RESULTED IN RENDERING OF SUCH DEC ISION BY THE HONBLE TRIBUNAL THAT IS HAVING A WIDE RAMIFICATION ON THE REASSESSMENT PROCEEDINGS. [PAGE NO. 10 PARA 21(G) OF THE MA] REBUTTAL OF THE ASSESSEE: 1. IN RESPONSE TO THE ABOVE CONTENTION, IT IS SUBMITTE D THAT IN THE PRESENT CASE THE REASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS ARE BOTH DISTINCT AND INDEPENDENT OF EACH OTHER AND CAN NOT BE LINKED IN ANY MANNER WHATSOEVER. 2. FURTHER, IT IS SUBMITTED THAT THE DOCUMENTS FOUND D URING THE SURVEY PROCEEDINGS, HAVE BEEN EXPLICITLY DEALT BY THE CIT( A) WHILE RENDERING ITS DECISION ON THE CONCERNED ISSUES. THUS, AT THE TIME OF PROCEEDINGS BEFORE THE HONBLE TRIBUNAL, THE DOCUMENTS FOUND DU RING THE SURVEY PROCEEDINGS WERE ALREADY ON RECORD. A PERUSAL OF THE IMPUGNED ORDER CLEARLY REVEALS THAT ISSUE HAVE BEEN ADJUDICATED BY YOUR HONOURS ON MERIT AFTER CONSIDERING ALL THE DOCUMENTS ON RECORD AND AFTER DUE APPLICATION OF MIND. 3. FURTHER WITHOUT PREJUDICE TO THE ABOVE CONTENTION, WE SUBMIT THAT THE REASSESSMENT PROCEEDINGS ARE SEPARATE AND DISTINCT PROCEEDINGS AND THAT THE SAME HAVE NOT ATTAINED ANY FINALITY. THUS, IN LIGHT OF THIS FACT IT IS SUBMITTED THAT THE CLAIM OF THE REVENUE THAT RENDERING OF SUCH DECISION WOULD HAVE WIDE RAMIFICATIONS ON THE REASS ESSMENT PROCEEDINGS IS IMAGINARY AND WITHOUT ANY BASES. THUS, THE CONTENTION OF THE REVENUE THAT YOUR HONOU RS HAVE FAILED TO CONSIDER THE DOCUMENTS FOUND DURING THE SURVEY PROCEEDINGS I S WITHOUT ANY MERITS. SUCH AN ALLEGATION BY THE REVENUE WOULD LOWER THE E STEEM OF THE HONBLE TRIBUNAL SINCE IT ALLEGES TO ESTABLISH THE FACT THA T THE IMPUGNED ORDER HAVE BEEN PASSED BY YOUR HONOURS WITHOUT PROPER APPLICAT ION OF MIND. IT IS FURTHER SUBMITTED THAT FAILURE BY THE HONBLE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION SHALL NOT MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 47 CONSTITUTE MISTAKE APPARENT ON THE RECORD AS HELD B Y THE BOMBAY HIGH COURT IN THE CASE OF CIT V. RAMESH ELECTRIC & TRADING CO. (SUPRA). 8. ALLEGATION OF THE REVENUE: THE REVENUE IS OF THE CONTENTION THAT YOUR HONOURS HAVE COMMITTED A MISTAKE BY NOT CONSIDERING THE ORAL AND WRITTEN SUB MISSIONS MADE BY IT WHILE DECIDING ON THE ISSUE WITH RESPECT TO SELECTION OF MOST APPROPRIATE METHOD FOR DETERMINING ALP. [PAGE NO. 11 PARA 21(H) OF THE MA] REBUTTALS OF THE ASSESSEE: 1. IN RESPONSE TO THE ABOVE ALLEGATION, A DETAILED SUB MISSION ALREADY MADE IN THE POINT NO. 6 ABOVE CAN BE CONSIDERED, WHERE I N IT HAS BEEN DISCUSSED THAT THE DECISION OF THE TRIBUNAL WITH RE SPECT TO THE SELECTION OF METHOD CANNOT BE QUESTIONED SINCE YOUR HONOURS H AVE COVERED ALL THE POSSIBLE ANGLES AND HAVE JUSTIFIED THE SAME IN A VERY PRECISE AND DETAILED MANNER. 2. IT IS FURTHER SUBMITTED THAT IN PARA 91 ON PAGE 109 OF THE IMPUGNED ORDER, YOUR HONOURS HAVE EXAMINED THE ALTERNATE SIT UATION WHEREIN THE CONSEQUENCES HAVE BEEN DISCUSSED IN A VERY PRECISE MANNER IN A CASE IF PSM IS HELD TO BE THE MOST APPROPRIATE METHOD. 3. FURTHER, WE REITERATE THE RELIANCE PLACED ON THE PR INCIPLE ADOPTED BY THE BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC & TRADING CO. (SUPRA)WHEREIN IT WAS HELD THAT: FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT AD VANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY HAVE BEEN AN ERROR OF JUDGE MENT. THUS, THE REVENUE HAS FAILED TO CONSIDER THE EXAMIN ATION MADE BY YOUR HONOURS IN ITS TRUE SENSE AND FURTHER THE ALLEGATIO N BY THE REVENUE THAT YOUR HONOURS HAVE OMITTED TO TAKE INTO CONSIDERATION ITS ARGUMENT IS WITHOUT ANY MERITS SINCE THE SAME CANNOT BE CONSIDERED TO BE AN ERROR APPARENT ON RECORD WHICH CAN BE RECTIFIED BY FILING APPLICATION UNDER SECTION 254(2) OF THE ACT. FURTHER ASSESSEE HAS RELIED DECISION ON THE FOLLOWI NG DECISION : MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 48 HONBLE GUJARAT HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX V. NIRMA LTD. [2017] 88 TAXMAN 188 (GUJAR AT) (COPY OF CASE DECISION IS ATTACHED AT PAGE NO. 85 T O 87 OF PAPER BOOK). HONBLE GUJARAT HIGH COURT IN THE CASE OF COMMISSI ONER OF INCOME TAX (EXEMPTION) V. GUJARAT INSTITUTE OF HOUSING ESTATE D EVELOPERS [2017] 84 TAXMAN 148 (GUJARAT) (COPY OF CASE DECISION IS ATTACHED AT PAGE NO. 88 T O 90 OF PAPER BOOK). HONBLE GUJARAT HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX V. ATUL LTD. [2016] 74 TAXMAN 255 (GUJARAT) (COPY OF CASE DECISION IS ATTACHED AT PAGE NO. 91 T O 96 OF PAPER BOOK). THUS, IT CAN BE OBSERVED THAT THE PRIMARY CONTENTIO N OF THE REVENUE IS THAT YOUR HONOURS HAVE FAILED TO CONSIDER THE WRITTEN SU BMISSIONS, ORAL ARGUMENTS AND JUDICIAL PRECEDENTS RELIED UPON BY IT . WE REITERATE THAT YOUR HONOURS HAVE CONSIDERED EACH AND EVERY ARGUMENT ADV ANCED BY BOTH THE PARTIES AND DECIDED ON THE ISSUE WITH PROPER APPLIC ATION OF MIND. FURTHER, IT IS SUBMITTED THAT SUCH CONTENTIONS OF THE REVENUE R AISE QUESTIONS ON THE PROFICIENCY OF THE HONBLE TRIBUNAL. FURTHER, SUCH ARGUMENTS OF THE REVENUE CANNOT BE ENTERTAINED SINCE IN NO CASE WHATSOEVER I T AMOUNTS TO AN ERROR APPARENT ON RECORD. IT IS WELL ACCEPTED LEGAL PRINC IPLE THAT FAILURE BY THE HONBLE TRIBUNAL TO CONSIDER AN ARGUMENT OR JUDICIA L PRECEDENT RELIED UPON BY EITHER PARTY WOULD NOT CONSTITUTE AN ERROR APPAR ENT ON RECORD. IF SUCH CONTENTIONS OF THE REVENUE ARE ADMITTED, THEN EVERY ORDER PASSED BY THE HONBLE TRIBUNAL WOULD BE QUESTIONED AND CONSEQUENT LY WILL BE SOUGHT FOR RECTIFICATION. THUS, IT IS PLEA OF THE ASSESSEE THA T IT SHOULD BE DISMISSED WITHOUT ANY FURTHER CONSIDERATION. IN VIEW OF THE ABOVE SUBMISSIONS, IT IS REITERATED THAT THE ALLEGATIONS RAISED BY THE REVENUE CANNOT BE CONSTRUED TO BE AN ERROR APPA RENT FROM RECORD WHICH CAN BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. THU S, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE SEEKING RECTIFICAT ION OF THE ORDER PASSED BY YOUR HONOURS IS BAD IN LAW AND FACTS AND HENCE IT I S OUGHT TO BE QUASHED WITHOUT ANY DUE CONSIDERATION. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORDS CAREFULLY. SUB SECTION 2 OF SECTION 254 HAS DIRECT BEARING ON THE CONTROVERSY BEFORE US. THEREFORE IT IS IMPERATIVE U PON US TO TAKE NOTE OF THE RELEVANT PART OF SECTION, WHICH READ AS UNDER: MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 49 ORDERS OF APPELLATE TRIBUNAL. 254. (1) THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORDERS THEREO N AS IT THINKS FIT. (1A) [***] (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN 63 [SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED], WITH A VI EW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD 64 , AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1 ), AND 64 SHALL MAKE SUCH AMENDMENT 64 IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE 65 [ASSESSING] OFFICER : PROVIDED THAT AN AMENDMENT WHICH HAS THE EFFECT OF ENHANCIN G AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREASING THE LIABI LITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SUB-SECTION UNLESS THE APPELLATE TR IBUNAL HAS GIVEN NOTICE TO THE ASSESSEE OF ITS INTENTION TO DO SO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AS NOTICED ABOVE, THE REVENUE HAS FILED A DETAILED MISC. APPLICATION HIGHLIGHTING VARIOUS FACTS AND CIRCUMSTANCES IN ORD ER TO POINT OUT ALLEGED APPARENT ERROR COMMITTED BY THE TRIBUNAL WHILE DECI DING THE APPEAL. BOTH SIDES HAVE MADE REFERENCE TO A LARGE NUMBER OF DECI SIONS WHICH WE HAVE TAKEN NOTE WHILE TAKING COGNIZANCE OF PLEADING IN T HEIR SUBMISSIONS. 5. BEFORE WE EMBARK UPON AN ENQUIRY ON THE FACTS OF PRESENT CASE IN ORDER TO FIND OUT WHETHER ANY APPARENT ERROR COMMIT TED BY TRIBUNAL OR NOT WHILE ADJUDICATING THE APPEALS, WE THINK IT APPROPR IATE TO BEAR IN MIND CERTAIN BASIC PRINCIPLES FOR EXERCISING THE POWERS CONTEMPLATED IN SECTION 254(2) OF THE INCOME TAX ACT, 1961. 6. THERE ARE SERIES OF DECISIONS AT THE END OF THE HONBLE SUPREME COURT AS WELL AS HONBLE HIGH COURT EXPOUNDING SCOPE OF E XERCISING POWERS UNDER SECTION 254(2) OF THE ACT. WE DO NOT DEEM IT NECESSARY TO RECITE AND RECAPITULATE ALL OF THEM, BUT SUFFICE TO SAY THAT C ORE OF ALL THESE AUTHORITATIVE PRONOUNCEMENTS IS THAT POWER FOR RECTIFICATION UNDE R SECTION 254(2) OF THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 50 ACT CAN BE EXERCISED ONLY WHEN MISTAKE, WHICH IS SO UGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MISTAKE, WHICH IS APPARENT FR OM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE ESTABLISHED BY ARG UMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FOR FORTIFYING THIS VIEW, WE MAKE REFERE NCE TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AC IT VS. SAURASHTRA KUTCH STOCK EXCHANGE LD., 262 ITR 146 WHICH HAS BEEN UPHE LD BY THE HONBLE SUPREME COURT REPORTED IN 305 ITR 227. THE HONBLE COURT HAS LAID DOWN FOLLOWING PROPOSITION WHILE CONCLUDING THE JUDGMENT : '(A) THE TRIBUNAL HAS POWER TO RECTIFY A MISTAKE APP ARENT FROM THE RECORD ON ITS OWN MOTION OR ON AN APPLICATION BY A PARTY UNDE R S. 254(2) OF THE ACT; (B) AN ORDER ON APPEAL WOULD CONSIST OF AN ORDER MADE UNDER S. 254(1) OF THE ACT OR IT COULD BE AN ORDER MADE UNDER SUB-S. (1) AS AMENDED BY AN ORDER UNDER SUB-S. (2) OF S. 254 OF THE ACT; (C) THE POWER OF RECTIFICATION IS TO BE EXERCISED TO REMOVE AN ERROR OR CORRECT A MISTAKE AND NOT FOR DISTURBING FINALITY, THE FUNDAM ENTAL PRINCIPLE BEING THAT POWER OF RECTIFICATION IS FOR JUSTICE AND FAIR PLAY ; (D) THAT POWER OF RECTIFICATION CAN BE EXERCISED EVE N IF A MISTAKE IS COMMITTED BY THE TRIBUNAL OR EVEN IF A MISTAKE HAS OCCURRED A T THE INSTANCE OF PARTY TO THE APPEAL; (E) A MISTAKE APPARENT FROM RECORD SHOULD BE SELF-EVI DENT, SHOULD NOT BE A DEBATABLE ISSUE, BUT THIS TEST MIGHT BREAK DOWN BEC AUSE JUDICIAL OPINIONS DIFFER AND WHAT IS A MISTAKE APPARENT FROM THE RECO RD CANNOT BE DEFINED PRECISELY AND MUST BE LEFT TO BE DETERMINED JUDICIA LLY ON THE FACTS OF EACH CASE; (F) NON-CONSIDERATION OF A JUDGMENT OF THE JURISDICT IONAL HIGH COURT WOULD ALWAYS CONSTITUTE A MISTAKE APPARENT FROM THE RECOR D, REGARDLESS OF THE JUDGMENT BEING RENDERED PRIOR TO OR SUBSEQUENT TO T HE ORDER PROPOSED TO BE RECTIFIED; (G) AFTER THE MISTAKE IS CORRECTED, CONSEQUENTIAL OR DER MUST FOLLOW AND THE TRIBUNAL HAS POWER TO PASS ALL NECESSARY CONSEQUENT IAL ORDERS.' MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 51 7. IT IS PERTINENT TO OBSERVE THAT IN HIERARCHY OF APPELLATE JURISDICTION UNDER THE INCOME TAX ACT, ITAT IS THE LAST FACT FIN DING APPELLATE AUTHORITY, THEREAFTER APPEAL TO THE HONBLE HIGH COURT UNDER S ECTION 260A OF THE ACT IS PROVIDED ON POINT OF LAW INVOLVED THEREIN. OPERATI VE FORCE OF THE ARGUMENTS ADVANCED BY SHRI G. C. SRIVASTAVA ON BEHA LF OF THE REVENUE WAS THAT ITAT HAS CONCEIVED FACTS WRONGLY AND CUMULATIV E EFFECT OF THIS CONCEIVEMENT OF THESE WRONG FACTS WOULD BE THAT THE Y WILL GOAD THE ADJUDICATING AUTHORITY ON WRONG CONCLUSION. ASSIMI LATION OF INCORRECT FACTS WOULD LAY FOUNDATION OF WRONG REASON AND RESULT IN AN INCORRECT ADJUDICATION. WE ARE CONSCIOUS OF THE FACT THAT ER ROR OF FACT AND LAW IN APPRECIATING THE CIRCUMSTANCES SECTION AND PROVISIO N COULD FALL IN THE AMBIT OF APPARENT ERROR BUT NOT ERROR OF JUDGMENT REACHED AFTER APPLYING CORRECT FACT AND CORRECT LAW, BECAUSE THAT WILL BE PROCESS OF ADJUDICATING THE CONTROVERSY AND THAT CAN LEAD TO DIFFERENCE OF OPIN ION QUA RESULT. BUT IF INCORRECT FACTS AND INCORRECT PROVISIONS ARE CONSID ERED, THEN THAT WOULD COME IN THE AMBIT OF APPARENT ERROR. 8. APART FROM ABOVE, AT THE TIME OF HEARING, WE HAV E CONFRONTED THE LD. COUNSEL FOR THE REVENUE WITH THE TWO JUDGMENTS OF T HE HONBLE HIGH COURT RENDERED IN THE CASE OF CIT VS. GUJARAT INSTITUTE O F HOUSING ESTATE DEVELOPERS, AND PR.CIT VS. NIRMA LIMITED BOTH REPOR TED IN 84 TAXMANN.COM 148 AND 188 (GUJ). HE HAS PLACED ON RE CORD COPIES OF BOTH THESE JUDGMENTS. IN THE CASE OF GUJARAT INSTITUTE OF HOUSING ESTATE DEVELOPERS (SUPRA), THE ASSESSEE RECEIVED CONTRIBUT IONS FROM ITS MEMBERS. IT CLAIMED NON-TAXABILITY OF SUCH CONTRIBUTIONS ON THE PRINCIPLE OF MUTUALITY. HOWEVER, THE AO DID NOT CONCUR WITH THE VIEW OF THE ASSESSEE AND DISPUTE TRAVELLED UPTO THE TRIBUNAL. THE TRIBUNAL PASSED A COMMON ORDER DATED 29.9.2015 CONFIRMING THE VIEW OF THE AO AND THE CIT (A) HOLDING THAT SUCH MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 52 INCOME WAS TAXABLE. IN SUCH ORDER, TRIBUNAL REFERR ED TO THE LATEST DECISION OF HONBLE SUPREME COURT IN THE CASE OF BANGALORE C LUB VS. CIT, 350 ITR 509 AND NOTED THAT AS PER DECISION OF THE HONBLE S UPREME COURT THERE ARE THREE BASIC FEATURES, WHICH WOULD HAVE TO BE TESTED VIZ. COMPLETE IDENTITY BETWEEN THE CLASS OF CONTRIBUTORS AND THE PARTICIPA TORS, THE ACTION OF THE PARTICIPATORS AND CONTRIBUTORS SHOULD BE IN FURTHER ANCE OF THE MANDATE OF THE ASSOCIATION, AND LASTLY THAT THERE SHOULD NOT B E ANY SCOPE OF PROFITEERING BY THE CONTRIBUTORS FROM A FUND MADE BY THEM WHICH COULD ONLY BE EXTENDED OR RETURNED TO THEMSELVES. IN THIS WAY, THE TRIBUNAL HELD THAT PRINCIPLE OF MUTUALITY WOULD NOT APPLY IN THE CASE OF ASSESSEE AND DISMISSED ITS APPEAL. THE ASSESSEE THEREAFTER FILE D MA POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. THIS MA WAS ALLOWED AND ORDER OF THE TRIBUNAL WAS RECALLED. DISSATISFIED WITH TH E ORDER OF THE TRIBUNAL, THE REVENUE WENT IN APPEAL BEFORE THE HONBLE HIGH COUR T AND THE HONBLE HIGH COURT SET ASIDE THE ORDER OF RECALL AND RESTOR ED THE ORIGINAL ONE. IT IS IMPERATIVE UPON US TO TAKE THE FOLLOWING FINDING OF THE HONBLE HIGH COURT: 4. IN THE PRESENT CASE, AS NOTED THE TRIBUNAL HAD GIVEN DETAILED REASONS FOR COMING TO THE CONCLUSION THAT THE PRINCIPLE OF MUTU ALITY WOULD NOT APPLY. WHILE ACCEPTING THE ASSESSEE'S RECTIFICATION APPLIC ATIONS, THE TRIBUNAL UNDERTOOK EQUALLY PAINSTAKING AND ELABORATE CONSIDE RATION OF THE VERY SAME ISSUES AND VERY SAME FACTS TO COME TO A CONTRARY CO NCLUSION. IT IS NOT NECESSARY NOR POSSIBLE FOR US TO HOLD WHETHER THE T RIBUNAL'S FIRST VIEW WAS CORRECT OR THE SUBSEQUENT ONE. IT IS ENOUGH TO HOLD THAT THE TRIBUNAL COULD NOT HAVE UNDERTAKEN SUCH INCISIVE AND DETAILED EXAM INATION OF FACTS AND LAW TO COME TO THE CONCLUSION WHICH ARE COMPLETELY CONT RARY TO ITS OWN CONCLUSION ARRIVED AT AFTER DETAILED CONSIDERATIONS . SUCH POWERS SIMPLY DO NOT FLOW FROM THE POWER OF RECTIFICATION UNDER SUB- SECTION (2) OF SECTION 254 OF THE ACT. 9. NEXT DECISION DISCUSSED ON THIS ISSUE AT THE TIM E OF HEARING IS IN THE CASE OF NIRMA LTD. IN THIS CASE, THE ASSESSEE HAD CLAIMED INTEREST EXPENDITURE UNDER SECTION 36(1) OF THE ACT ALLEGEDL Y INCURRED BY IT ON MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 53 PREMATURE REDEMPTION OF SECURED PREMIUM NOTES ISSUE D BY THE COMPANY. THE AO DID NOT ACCEPT THIS CLAIM OF THE ASSESSEE WH ICH WAS CONCURRED BY THE CIT(A) AS WELL AS BY THE TRIBUNAL. THE ASSESSE E FILED APPEAL AGAINST THE ORDER OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT AS WELL AS FILED MA BEFORE THE TRIBUNAL. THE TRIBUNAL EARLIER WAS OF T HE VIEW THAT SINCE THE ASSESSEE HAS FILED APPEAL BEFORE THE HONBLE HIGH C OURT, THEREFORE, MA OUGHT NOT TO BE TAKEN UP. BUT THE ASSESSEE WENT TO THE HIGH COURT AND DIRECTION WAS MADE FOR ADJUDICATING THE MA. AFTER HEARING THE ASSESSEE THE TRIBUNAL RECALLED ITS ORDER. DISSATISFIED WITH THE ORDER OF THE TRIBUNAL, THE REVENUE WENT IN APPEAL BEFORE THE HONBLE HIGH COUR T, AND THE HONBLE COURT HAS VACATED THE ORDER OF THE ITAT. FINDING R ECORDED BY THE HONBLE HIGH COURT EXPLAINING THE POWER OF THE TRIBUNAL UND ER SECTION 254(2) IS WORTH TO NOTE. IT READS AS UNDER: 4. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. WE HAVE PERUSED THE DOCUMENTS ON RECORD. WE ARE OF THE VIEW THAT THE TR IBUNAL COMMITTED A LEGAL ERROR IN RECALLING ITS EARLIER DETAILED JUDGEMENT. AS NOTED, THERE WAS A RAGING CONTROVERSY BETWEEN THE REVENUE AND THE ASSESSEE RE GARDING THE ASSESSCE COMPANY'S CLAIM OF DEDUCTION OF INTEREST EXPENDITUR E AT ALL STAGES BEFORE THE ASSESSING OFFICER. COMMISSIONER (APPEALS) AND THE TR IBUNAL. THIS ISSUE RECEIVED MINUTE SCRUTINY. THE TRIBUNAL IN PARTICULA R HAD REFERRED TO THE FACTS ON RECORD, FINDINGS AND THE OBSERVATIONS OF THE ASSE SSING OFFICER AND THE COMMISSIONER (APPEALS) AND ULTIMATELY GAVE ITS OWN R EASONING FOR COMING TO THE CONCLUSION THAT THE TRANSACTION LEADING TO T HE ASSESSEE'S CLAIM OF INTEREST EXPENDITURE WAS NOT GENUINE AND IT ULTIMAT ELY PUT ITS SEAL ON THE DECISIONS OF THE REVENUE AUTHORITIES. WHETHER .SUCH OPINION OF THE TRIBUNAL WAS LEGALLY SUSTAINABLE OR NOT IS THE SUBJECT MATTE R BEFORE US IN THE PRESENT TAX APPEAL. THE RELEVANT QUESTION IS, COULD THE TRI BUNAL HAVE EXERCISED THE POWER OF RECTIFICATION TO RECALL SUCH JUDGEMENT? TH E ANSWER BEING OBVIOUS, IS IN THE NEGATIVE. THE POWERS OF RECTIFICATION FLOWIN G FROM SECTION 254(2) OF THE ACT ARE FOR CORRECTING APPARENT ERRORS AND NOT F OR RE-EXAMINATION OF THE ISSUES ALREADY CONSIDERED AND CONCLUDED. IT IS WELL RECOGNISED THAT THE POWERS OF RECTIFICATION CANNOT BE EQUATED TO THAT OF REVIE W. THE TRIBUNAL THUS TRAVELLED FAR BEYOND ITS POWER OF RECTIFICATION IN ACCEPTING THE ASSESSEE'S VARIOUS CONTENTIONS WHICH WERE NOT CONFINED TO PURE FACTUAL ERRORS APPARENT ON THE RECORD. SOME OF THE CONTENTIONS OF THE ASSES SEE WERE HIGHLY CONTENTIOUS MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 54 LEGAL ISSUES. ONCE THE TRIBUNAL HAD TAKEN A PARTICU LAR VIEW, IT WAS ALWAYS OPEN FOR THE AGGRIEVED PARTY TO CHALLENGE SUCH VIEW S BEFORE THE HIGHER COURT. THE TRIBUNAL COULD NOT HAVE BEEN PERSUADED TO RE-EX AMINE THE ISSUES ON THE PREMISE THAT THERE WAS AN ERROR APPARENT ON THE REC ORD. 10. IN THE LIGHT OF ABOVE LETS EXAMINE EACH ISSUE AGITATED BY THE RESPECTIVE PARTIES. I. ISSUE ON THE INTEREST ON SHARE APPLICATION MONEY: A) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 5(I) IN ITS MA 11. ON PERUSAL OF THE FINANCIAL STATEMENT OF THE AS SESSEE AS ON 31-3-2008, WE NOTE THAT IT WAS CLEARLY SHOWN IN SCHEDULE 15 TH AT THE ASSESSEE HAS ADVANCED TO SUN PHARMA GLOBAL INC. BVI AS SHARE APP LICATION MONEY WHICH IS EVIDENT AS UNDER: LOANS/ADVANCES DUE FROM SUBSIDIARIES: (RS. IN MILLIO N) BALANCE AS AT 31 ST MARCH 2008 MAXIMUM BALANCE BALANCE AS AT 31 ST MARCH, 2007 MAXIMUM BALANCE 2006-07 LOANS SUN PHARMA GLOBAL INC. BVI - - - 2,9187.7 SUN PHARMACEUTICAL PERU SA - - - 1.1 SUN FARMACEUTICA LTDA BRAZIL - - - 18.3 SUN PHARMACEUTICAL UK LTD. 0.1 0.7 0.1 0.7 ADVANCES SHARE APPLICATION MONEY TO SUN PHARMA GLOBAL INC. BVI 1,007.4 3,789.9 1,469.7 1,469.8 SUN PHARMA DE MEXICO SOCIEDAO ANONINA LIMITED 53.6 60.0 60.0 60.0 MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 55 TOTAL 1,061.1 1,529.8 12. FROM THE ABOVE IT IS CLEAR THAT THE SHARE APPLI CATION MONEY WAS DULY DISCLOSED IN THE FINANCIAL STATEMENT. THUS THE ALLE GATION OF THE REVENUE THAT THE ASSESSEE HAS DISCLOSED THE ADVANCES AS SHARE AP PLICATION MONEY AS WELL AS LOANS IS NOT TENABLE. THE DISCLOSURE MADE IN THE ANNEXURE A TO THE NOTES ON ACCOUNTS OF RELATED PARTY TRANSACTIONS CANNOT SU PERSEDE THE DISCLOSURE MADE IN THE SCHEDULE AS DISCUSSED ABOVE. 13. WE ALSO NOTE THAT THE ARGUMENT OF THE REVENUE F OR THE BOARD RESOLUTION NOT MENTIONED IN THE ORDER OF ITAT IS CO RRECT. BUT THAT DOES NOT LEAD TO DRAW AN INFERENCE THAT THE ORDER OF THE ITA T SUFFERS FROM THE APPARENT MISTAKE. IN THIS REGARD WE PLACE OUR RELIA NCE ON THE JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC & TRADING COMPANY REPORTED IN 77 TAXMAN 43 WHEREIN IT WAS HELD AS UND ER: THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE INCOME-TAX ACT, 1961. THE ONL Y POWER WHICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDE R WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDE R. IN THE INSTANT CASE, IN THE FIRST ORDER OF THE TRIBUNAL DATED 9-6-1975, THERE WAS NO MISTAKE WHICH WAS APPARENT FROM THE RECORD AT ALL. THE TRIBUNAL WAS REQUIRED T O DECIDE WHETHER THE COMMISSION PAYMENT OF RS. 54,000 WAS DEDUCTIBLE UNDER SECTION 37 AFTER EXAMINING THE CIRCUMSTANCES, THE TRIBUNAL CAME TO THE CONCLUSION THAT IT WAS NOT SO DEDUCTIBLE. THE TRIBUNAL CANNOT, IN EXERCISE OF ITS POWER OF RE CTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT IT S CONCLUSION SO ARRIVED AT. THE MISTAKE WHICH THE TRIBUNAL IS ENTITLED TO CORRECT I S NOT AN ERROR OF JUDGMENT BUT A MISTAKE WHICH IS APPARENT FROM THE RECORD ITSELF. N O SUCH MISTAKE WAS APPARENT FROM THE RECORD. IN FACT, THIS WAS DOUBTFUL, IF THI S SORT OF AN EXERCISE COULD HAVE BEEN DONE BY THE TRIBUNAL EVEN IF IT HAD THE POWER OF RE VIEW. THE TRIBUNAL HAD, PATENTLY, FAR EXCEEDED ITS JURISDICTION UNDER SECTION 254(2) IN REDECIDING THE ENTIRE DISPUTE WHICH WAS BEFORE IT IN THIS FASHION, AND THE TRIBUN AL HAD COMMITTED A GROSS AND INEXPLICABLE ERROR FOR REASONS WHICH COULD NOT BE U NDERSTOOD. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHERE THE MISTAKE IS APPARENT FROM THE RECORD, AND NOT A MIST AKE WHICH IS REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND A LONG-DRAWN PROCESS O F REASONING ON POINTS ON WHICH THERE MIGHT CONCEIVABLY BE TWO OPINIONS. FAIL URE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING A T A CONCLUSION IS NOT AN ERROR MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 56 APPARENT ON THE RECORD, ALTHOUGH IT MAY HAVE BEEN A N ERROR OF JUDGMENT. IN THE INSTANT CASE, THE ALLEGED FAILURE, AT LEAST ON ONE COUNT, WAS ATTRIBUTED BY THE ASSESSEE TO THE ITO AND NOT THE TRIBUNAL THEREFORE, THE TRIB UNAL HAD NO JURISDICTION UNDER SECTION 254(2) TO PASS THE SECOND ORDER. 14. BESIDES THE ABOVE WE ALSO NOTE THAT THE HONBLE ITAT HAS PASSED A SPEAKING ORDER CONSIDERING MANY OTHER FACTS WHICH H AVE BEEN DISCUSSED IN LENGTH THEREIN AND NO INFIRMITY ON SUCH FINDING WAS POINTED BY THE REVENUE. THEREFORE MERELY NON-CONSIDERATION OF ONE OF ARGUMENT OF THE PARTY WILL NOT LEAD TO CONCLUDE THAT THE ORDER OF T HE TRIBUNAL SUFFERS FROM THE APPARENT MISTAKE. 15. THE PROVISIONS OF SECTION 254(2) OF THE ACT CAN BE INVOKED FOR THE MISTAKES WHICH ARE GLARING IN NATURE AND CAN BE POI NTED FROM THE FACE OF THE ORDER. THE MISTAKES WHICH REQUIRE APPLICATION OF MI ND AND LONG DRAWN PROCESS TO ARRIVE AT THE CONCLUSION CANNOT AMOUNT T O APPARENT MISTAKE. IF THESE TYPES OF MISTAKES ARE CONSIDERED AS APPARENT FROM RECORD THEN IT WOULD LEAD TO REVIEW THE ORDER. IN THIS REGARD WE F IND SUPPORT & GUIDANCE FROM THE JUDGMENT OF HONBLE DELHI HIGH COURT IN TH E CASE SMT. BALJEET JOLLY VS. CIT REPORTED IN 113 TAXMAN 38 WHEREIN IT WAS HE LD AS UNDER: A BARE LOOK AT SECTION 254(2) MAKES IT CLEAR THAT A 'MISTAKE APPARENT FROM THE RECORD' IS RECTIFIABLE. IN ORDER TO ATTRACT THE APP LICATION OF SECTION 254(2), THE MISTAKE MUST EXIST AND THE SAME MUST BE APPARENT FR OM THE RECORD. THE POWER TO RECTIFY THE MISTAKE, HOWEVER, DOES NOT COVER CASES WHERE A REVISION OR REVIEW OF THE ORDER IS INTENDED. 'MISTAKE' MEANS TO TAKE OR UNDER STAND WRONGLY OR INACCURATELY; TO MAKE AN ERROR IN INTERPRETING; IT IS AN ERROR; A FAULT, A MISUNDERSTANDING, A MISCONCEPTION. 'APPARENT' MEANS VISIBLE; CAPABLE OF BEING SEEN; EASILY SEEN; OBVIOUS; PLAIN. A MISTAKE WHICH CAN BE RECTIFIED UN DER SECTION 254(2) IS ONE WHICH IS PATENT, WHICH IS OBVIOUS AND WHOSE DISCOVERY IS NOT DEPENDENT ON ARGUMENT OR ELABORATION. THE LANGUAGE USED IN SECTION 254(2) MA KES IT CLEAR THAT ONLY AMENDMENT TO THE ORDER PASSED UNDER SECTION 254(1) IS PERMISSIBLE WHERE IT IS BROUGHT TO THE NOTICE OF THE TRIBUNAL THAT THERE IS ANY MISTAKE APPARENT FROM THE RECORD. AMENDMENT OF AN ORDER DOES NOT MEAN OBLITER ATION OF THE ORDER ORIGINALLY PASSED AND ITS SUBSTITUTION BY A NEW ORDER. WHAT TH E ASSESSEE INTENDED, TO DO IN THE INSTANT CASE WAS PRECISELY THE SUBSTITUTION OF THE ORDER, WHICH WAS NOT PERMISSIBLE UNDER THE PROVISIONS OF SECTION 254(2) AND, THEREFO RE, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THERE WAS NO MISTAKE APPARENT ON THE F ACE OF THE RECORD. WHERE AN MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 57 ERROR IS FAR FROM SELF-EVIDENT, IT CEASES TO BE AN APPARENT ERROR. IT IS NO DOUBT TRUE THAT A MISTAKE CAPABLE OF BEING RECTIFIED UNDER SEC TION 254(2) IS NOT CONFINED TO CLERICAL OR ARITHMETICAL MISTAKE. ON THE OTHER HAND , IT DOES NOT COVER ANY MISTAKE WHICH MAY BE DISCOVERED BY A COMPLICATED PROCESS OF INVESTIGATION, ARGUMENT OR PROOF. AS OBSERVED BY THE APEX COURT IN MASTER CONSTRUCTION CO. (P.) LTD. V. STATE OF ORISSA [1966] 17 STC 360, AN ERROR WHICH IS APPARENT ON TH E FACE OF THE RECORD SHOULD BE ONE WHICH IS NOT AN ERROR WHICH DE PENDS FOR ITS DISCOVERY ON ELABORATE ARGUMENTS ON QUESTIONS OF FACT OR LAW. 16. WE ALSO NOTE THAT THE ITAT IN ITS ORDER HAS MAD E THE REFERENCE TO THE WORD RECHARACTERIZATION FOR DECIDING THE ISSUE ON HAND AND THIS IS NOT THE SOLE BASIS FOR GRANTING THE RELIEF TO THE A SSESSEE. THEREFORE THE QUESTION OF RECHARACTERIZATION OF THE MONEY DOES NO T ARISE. HENCE IN OUR CONSIDERED VIEW THE FACTS OF THE CASE WERE NOT MISC ONCEIVED BY THE ITAT AS DISCUSSED IN THE ORDER. B) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 5(II ) IN ITS MA 17. REGARDING THE ISSUE OF APPLICABILITY OF COMPANI ES ACT 1956 TO THE FOREIGN COMPANY, WE NOTE THAT THE REVENUE HAS REFER RED THE PROVISIONS OF COMPANIES ACT FOR THE ALLOTMENT OF SHARES TO STRENG THEN ITS CASE. ALTHOUGH THE REVENUE AT THE TIME OF HEARING OF THE APPEAL FA IRLY AGREED THAT THE PROVISION OF COMPANIES ACT CANNOT BE APPLIED TO THE FOREIGN COMPANIES. HOWEVER WE FURTHER NOTE THAT THE ITAT IN ITS ORDER HAS MADE THE REFERENCE TO THE COMPANIES ACT FOR DECIDING THE ISSUE ON HAND . BUT THIS WAS NOT THE ONLY BASIS FOR GRANTING THE RELIEF TO THE ASSESSEE. THEREFORE WE NOTE THAT THERE WAS NO MISTAKE APPARENT FROM THE RECORD. 18. WE ALSO FIND THAT THE CASE LAW I.E. LOGIX MICR OSYSTEMS LTD. (SUPRA) AS RELIED BY THE LEARNED COUNSEL FOR THE REVENUE AT TH E TIME OF HEARING OF APPEAL WAS DULY RECORDED BY THE ITAT IN ITS ORDER. HOWEVER WE FIND THAT ITAT WHILE DECIDING THE ISSUE HAS NOT MADE ANY REFE RENCE TO SUCH ORDER. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 58 BUT IN OUR VIEW NON-MENTIONING THE ORDER IN THE CON CLUDING PARAGRAPH DOES NOT LEAD TO HOLD THAT THERE IS MISTAKE APPARENT FRO M RECORD. ONCE THE ARGUMENT OF THE PARTY HAS BEEN THE RECORDED BY THE ITAT BUT THE SAME WAS NOT CONSIDERED WHILE DECIDING THE ISSUE ON HAND COU LD BE A MISTAKE OF THE JUDGMENT BUT THE SAME CANNOT BE CONSTRUED AS MISTAK E APPARENT FROM RECORD. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE ORDER OF PUNE TRIBUNAL IN THE CASE OF POONA PEARLS POULTRY BREEDI NG FARMS & HATCHERIES V DCIT REPORTED IN 58 ITD 1(PUNE) (TM). THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW: WHAT IS RECTIFIABLE UNDER SECTION 254(2) IS A MIST AKE WHICH IS APPARENT. IT MUST BE ONE FOR THE DISCOVERY OF WHICH NO ELABORATE REASONI NG OR ENQUIRY IS NECESSARY. A BARE LOOK AT SECTION 254(2) MAKES IT CLEAR THAT A M ISTAKE APPARENT FROM RECORD IS RECTIFIABLE, BUT IN ORDER TO ATTRACT THAT SECTION, THE MISTAKE MUST EXIST AND IT MUST BE PRIMA FACIE APPARENT FROM THE RECORD. TO MISTAKE ME ANS TO TAKE OR UNDERSTAND WRONGLY OR INACCURATELY; TO MAKE AN ERROR IN INTERP RETING; IT IS AN ERROR; A FAULT; A MISUNDERSTANDING OR MISCONCEPTION. UNLESS THE ALLEG ED MISTAKE FALLS IN THESE CATEGORIES, IT COULD NOT BE TAKEN AS A MISTAKE APPA RENT FROM RECORD. IN OTHER WORDS, WHERE THE TRIBUNAL HAS COMMITTED AN ERROR OF JUDGME NT, THE SAME CANNOT BE SUFFICIENT TO EXERCISE THE POWER OF RECTIFICATION U NDER SECTION 254(2). THE CORRECTNESS OF A CONCLUSION ON FACTS CANNOT BE THE SUBJECT-MATTER OF AN APPLICATION FOR RECTIFICATION. IF THE TRIBUNAL ON THE FACTS AND ON THE CIRCUMSTANCES HAS TAKEN A CONSCIOUS DECISION, THAT DECISION CANNOT BE UPSET B Y EITHER PARTY TO THE DISPUTE BY MOVING AN APPLICATION FOR RECTIFICATION. SUCH AN AP PLICATION, IN FACT, WOULD AMOUNT TO REVIEW OF THE PROCEEDINGS WHICH THE TRIBUNAL IS NOT ENTITLED TO DO. THE TRIBUNAL IS THE CREATURE OF LAW AND, THEREFORE, IS DEBARRED FROM REVIEWING ITS OWN DECISION. ONLY A MISTAKE CAN BE RECTIFIED BY THE TRIBUNAL ON ITS OWN MOTION OR BY AN APPLICATION MADE IN THIS BEHALF. ON PERUSAL OF THE ORDER OF THE TRIBUNAL, IT COULD B E SEEN THAT IT HAD DISCUSSED ONLY ONE DECISION OUT OF SO MANY DECISIONS WITH IDE NTICAL FACTS CITED BY THE ASSESSEE AND NEITHER ACCEPTED THE DECISIONS NOR MEN TIONED THE OTHER DECISIONS IN ITS ORDER. IT COULD NOT BE SAID THAT NON-MENTION OF THE OTHER DECISIONS HAD AFFECTED THE RESULT OF THE APPEAL OF THE ASSESSEE. THEREFORE, THE ABSENCE OF SPECIFIC MENTION OF THE OTHER DECISIONS, DID NOT CONSTITUTE A MISTAKE APPARENT FROM RECORD. IT IS WELL-SETTLED THAT THE DECISION OF THE TRIBUNA L NEED NOT BE SCRUTINISED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR, WHETHER SOME INCIDENTAL FACTS WHICH APPEAR ON THE RECORD HAVE NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IF ON A BARE READING OF THE JUDGMENT OF THE TRIBUNAL ONE HAS FOU ND THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS ALSO NOT TAKE N INTO ACCOUNT ANY IRRELEVANT MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 59 MATERIAL FOR BASING ITS CONCLUSIONS, THE DECISION O F THE TRIBUNAL IS NOT TO BE INTERFERED WITH. IT IS NOT NECESSARY FOR THE TRIBUN AL TO STATE IN ITS JUDGMENT SPECIFICALLY IN EXPRESS WORDS THAT IT HAS TAKEN INT O ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES, OR, HAS CONSIDERED THE TOTALI TY OF THE FACTS, AS IF THAT IS A MAGIC FORMULA; IF THE JUDGMENT OF THE TRIBUNAL SHOW ED THAT IT HAS IN FACT DONE SO, THERE WAS NO REASON TO COME TO THE CONCLUSION T HAT THERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL. A CAREFUL READING OF THE APPELLATE ORDER OF THE TRI BUNAL IN THE INSTANT CASE CLEARLY INDICATED THAT WHATEVER EVIDENCE WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL, IT HAD BEEN TAKEN INTO ACCOUNT TO DECIDE THE APPEAL. ALL THE JUDICIAL DECISIONS CITED BEFORE THE TRIBUNAL WERE CONSIDERED , THOUGH ONLY ONE DECISION WAS MENTIONED. THERE WAS NO NECESSITY OF MENTIONING THE OTHER DECISIONS AS THE ISSUE DECIDED IN THOSE CASES WAS THE SAME. IN OTHER WORDS, BY REJECTING THE DECISION MENTIONED IN JUDGMENT, THE TRIBUNAL HAD RE JECTED THE OTHER DECISIONS DECIDED ON SIMILAR FACTS. THE OMISSION TO MENTION A LL OTHER DECISIONS, THEREFORE, WAS NO MISTAKE APPARENT FROM RECORD WITHIN THE MEAN ING OF SECTION 254(2). THE CONTROVERSY WHETHER THE POULTRY BUILDING IS A P LANT OR NOT HAS NOT BEEN SET AT REST EITHER BY A JURISDICTIONAL HIGH COURT DECIS ION OR BY A SUPREME COURT DECISION. SOME BENCHES OF THE TRIBUNAL HAVE TAKEN A VIEW THAT THE POULTRY BUILDING IS A PLANT, WHILE OTHER BENCHES HAVE DIFFE RED FROM THAT VIEW. IF ONE OF THE AVAILABLE VIEWS IS ADOPTED BY THE TRIBUNAL. THI S WILL NOT CONSTITUTE A MISTAKE APPARENT FROM RECORD. THE ASSESSEE CONTENTION BASED ON PARAGRAPHS 8 AND 1 3 OF THE TRIBUNALS ORDER COULD NOT BE ACCEPTED AS THESE PARAGRAPHS DID NOT C ONTAIN FINDINGS OF THE TRIBUNAL BUT ONLY ARGUMENTS ADVANCED BY THE ASSESSE E AND THE REVENUE RESPECTIVELY AGAIN, THE PROPOSITION THAT AN APPELLATE ORDER OF T HE TRIBUNAL IS BINDING ON OTHER BENCHES OF THE TRIBUNAL IS CONVENTIONAL ONLY AND NOT MANDATORY. THERE ARE MANY DECISIONS WHERE ONE BENCH OF THE TRIBUNAL MAY HAVE TAKEN A VIEW DIFFERENT FROM ANOTHER BENCH ON SIMILAR FACTS. THE PERCEPTIONS OF THE MEMBERS CONSTITUTING THE BEN CH MAY DIFFER. IN SUCH A CIRCUMSTANCE, IT MUST BE THE DUTY OF THE PARTIES TO THE DISPUTE TO MAKE A SPECIFIC REQUEST TO THE TRIBUNAL TO REFER THE MATTER TO THE SPECIAL BENCH. IN THE INSTANT CASE, NO REQUEST SEEMED TO HAVE BEEN MADE BY THE AS SESSEE. THEREFORE, THERE WAS NO MISTAKE APPARENT FROM RECORD, WHICH COULD BE REC TIFIED UNDER SECTION 254(2). THEREFORE, THE VIEW EXPRESSED BY THE ACCOUNTANT MEM BER TO THE EFFECT THAT THE MISCELLANEOUS APPLICATION WAS TO BE DISMISSED, WAS AGREED TO. C) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 5(II I) IN ITS MA MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 60 19. WE FURTHER NOTE THAT THE PRINCIPLES LAID DOWN BY THE HONOURABLE APEX COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. V. CIT REPORTED IN 165 TAXMAN 307 THAT NON-CONSIDERATION OF THE ORDER OF THE COORDINATE BENCH WILL AMOUNT TO A MISTAKE APPARENT FROM RECORD. BUT IN OUR CONSIDERED VIEW THE PRINCIPLES AS LAID DOWN BY THE APEX COURT ARE N OT APPLICABLE TO THE PRESENT FACTS OF THE CASE ON HAND. IN THE CASE OF H ONDA SIEL POWER PRODUCTS LTD. SUPRA THE MISTAKE WAS ADMITTED BY THE ITAT AND THEREAFTER RECTIFICATION ORDER WAS PASSED. HOWEVER IN THE CASE BEFORE US, WE NOTE THAT THE LD. REPRESENTATIVES FROM BOTH THE SIDES CITED VARIOUS J UDGMENTS AS AVAILABLE ON THE RECORDS BEFORE US AND ORDER WAS DELIVERED BY TH E ITAT AFTER CONSIDERING AND PLACING THE RELIANCE ON THE DECISION OF THE COO RDINATE BENCH. THEREFORE IN OUR CONSIDERED VIEW THE PRINCIPLES LAID DOWN BY THE APEX COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. CANNOT BE AP PLIED TO THE PRESENT FACTS OF THE CASE. THUS WE HOLD THAT NON-MENTIONING THE D ECISION OF THE COORDINATE BENCH IN THE CASE OF SR THORAT MILK PROD UCTS REPORTED IN 70 TAXMANN.COM 261 CANNOT LEAD TO DRAW AN INFERENCE TH AT THERE IS A MISTAKE IN THE ORDER OF ITAT WHICH IS APPARENT FROM RECORD. FO R THIS PROPOSITION WE FURTHER EXTEND OUR RELIANCE IN THE ORDER OF PUNE TR IBUNAL IN THE CASE OF POONA PEARLS POULTRY BREEDING FARMS & HATCHERIES V DCIT REPORTED IN 58 ITD 1(PUNE) (TM) THE RELEVANT EXTRACT OF THE ORDER HAS ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPH. BUT FOR THE BETTER UNDERSTANDING & CLARITY WE REPRODUCE THE SAME AS UNDER: ON PERUSAL OF THE ORDER OF THE TRIBUNAL, IT COULD BE SEEN THAT IT HAD DISCUSSED ONLY ONE DECISION OUT OF SO MANY DECISIONS WITH IDENTICA L FACTS CITED BY THE ASSESSEE AND NEITHER ACCEPTED THE DECISIONS NOR MENTIONED THE OT HER DECISIONS IN ITS ORDER. IT COULD NOT BE SAID THAT NON-MENTION OF THE OTHER DEC ISIONS HAD AFFECTED THE RESULT OF THE APPEAL OF THE ASSESSEE. THEREFORE, THE ABSENCE OF SPECIFIC MENTION OF THE OTHER DECISIONS, DID NOT CONSTITUTE A MISTAKE APPARENT FR OM RECORD. D) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 5(IV ) IN ITS MA MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 61 20. REGARDING THE ORDER OF COORDINATE BENCH IN THE CASE OF STERLING RESOURCES PRIVATE LIMITED IN ITA NUMBER 1791 OF THE MUMBAI OF THE 2014, WE NOTE THAT THE ASSESSEE CLAIMED TO HAVE FILED THE SAME IN THE PAPER BOOK IN ANNEXURE K PERTAINING TO THE ASSESSMENT YEARS TO 2007-08 AND 2008-09. THE LEARNED DR BEFORE US HAS NOT BROUGHT ANYTHING O N RECORD CONTRARY TO THE ARGUMENTS ADVANCED BY THE LEARNED COUNSEL FOR T HE ASSESSEE. IN ADDITION TO THE ABOVE WE ALSO NOTE THAT THERE WERE MANY ORDERS/JUDGMENTS WHICH WERE OFFERED BY THE TRIBUNAL WHILE PASSING TH E ORDER. THUS ON THIS COUNT IN OUR VIEW THERE CANNOT BE ANY MISTAKE APPAR ENT FROM THE RECORD AS ALLEGED BY THE LEARNED COUNSEL OF THE REVENUE. E) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 5(V)I N ITS MA: 21. WE HAVE ALREADY HELD THAT NON-CONSIDERATION OF THE ARGUMENT RAISED BY THE PARTY AT THE TIME OF HEARING WILL NOT LEAD T O DRAW AN INFERENCE THAT THERE IS A MISTAKE IN THE ORDER OF HONBLE ITAT. IN THIS CONNECTION WE HAVE PLACED THE RELIANCE ON THE ORDER OF BOMBAY HIGH COU RT IN THE CASE OF RAMESH ELECTRIC & TRADING ( SUPRA) WHICH HAS ALREADY BEEN DISCUSSED IN THE PRECEDING PARAGRAPH. F) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 5(VI ) IN ITS MA: 22. FROM THE ORDER OF THE ITAT WE NOTE THAT IT WAS HEARD ON 8 TH MAY 2017 AND IT WAS PRONOUNCED ON 16 JUNE 2017. THUS IT IMPLI ES THAT THE ORDER WAS KEPT RESERVE FOR PRONOUNCEMENT. THEREFORE THERE IS NO MERIT IN THE ARGUMENT OF THE REVENUE THAT HONBLE ITAT AGREED TO RESTORE THE ISSUE FOR FRESH ADJUDICATION TO THE TPO WHICH WAS SUBSEQUENTL Y PASSED AFTER DUE CONSIDERATION. ACCORDINGLY WE HOLD THAT NON-CONSIDE RATION OF THE ARGUMENT RAISED BY THE PARTY WHICH WAS NOT CONSIDERED BY HON BLE ITAT WILL NOT LEAD MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 62 TO DRAW AN INFERENCE THAT THE ORDER SUFFERS FROM AN Y INFIRMITY WHICH IS APPARENT FROM RECORD. II. ISSUE ON THE INTEREST ON OFCD A) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 8 & 9 IN ITS MA 23. IN THIS REGARD WE NOTE THAT BOTH THE LD. AUTHOR IZED REPRESENTATIVES DULY ARGUED AT THE TIME OF HEARING THE APPEAL FOR THE JU DGMENT OF SUPREME COURT IN THE CASE OF SAHARA INDIA REAL ESTATE CIVIL APPEA L NUMBER 9813 OF 2011. THIS FACT WAS ALSO RECORDED BY THE TRIBUNAL IN ITS ORDER. HOWEVER WE FIND THAT ITAT WHILE DECIDING THE ISSUE HAS NOT MADE ANY REFERENCE TO SUCH ORDER. BUT NON-REFERENCE TO THE JUDGMENT DOES NOT L EAD TO CONCLUDE THAT THERE IS MISTAKE APPARENT FROM RECORD IN THE ORDER OF ITAT. ONCE THE ARGUMENT OF THE PARTY HAS BEEN THE RECORDED BY THE ITAT BUT THE SAME WAS NOT CONSIDERED WHILE DECIDING THE ISSUE ON HAND COU LD BE A MISTAKE OF THE JUDGMENT BUT THE SAME CANNOT BE CONSTRUED AS MISTAK E APPARENT FROM RECORD. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE ORDER OF PUNE TRIBUNAL IN THE CASE OF POONA PEARLS POULTRY BREEDI NG FARMS & HATCHERIES V DCIT REPORTED IN 58 ITD 1(PUNE) (TM) THE RELEVANT E XTRACT OF THE ORDER HAS BEEN REPRODUCED IN THE PRECEDING PARAGRAPH. B) DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 10, 11, 12, 13 & 14 IN ITS MA 24. THE REVENUE ALSO SUBMITTED THAT THE BINDING PRE CEDENTS ARGUED BY IT AT THE TIME OF HEARING OF APPEAL WERE NOT RECORDED IN THE ORDER OF ITAT. SIMILARLY IT WAS ALSO SUBMITTED THAT THE MASTER CIR CULAR OF RBI WAS ALSO NOT REFERRED BY THE ITAT WHILE DECIDING THE ISSUE ON HA ND. HOWEVER IN OUR CONSIDERED VIEW NON-MENTIONING OF THE ARGUMENT OF T HE PARTY DOES NOT LEAD TO DRAW AN INFERENCE THAT THE ORDER OF THE ITAT SUF FERS FROM THE APPARENT MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 63 MISTAKE. IN THIS REGARD WE PLACE OUR RELIANCE ON TH E JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC & TRADING COMPANY REPORTED IN 77 TAXMAN 43 WHICH HAS ALREADY BEEN DISCUSSED IN THE P RECEDING PARAGRAPH. 25. WE ALSO NOTE THAT THE ITAT HAS PASSED A VERY SP EAKING AFTER CONSIDERING VARIOUS JUDGMENTS PASSED BY THE APEX CO URT, JURISDICTIONAL HIGH COURT AND TRIBUNAL. THERE WERE LOTS OF ARGUMEN TS RAISED BY THE LD. DR AT THE TIME OF ORIGINAL HEARING OUT OF WHICH VARIOU S WERE ALSO RECORDED IN THE ORDER OF HONBLE ITAT. THUS WE HOLD THAT THE IT AT HAS TAKEN A CONSCIOUS DECISION AFTER DUE APPLICATION OF MIND. T HUS THE ORDER OF THE TRIBUNAL DOES NOT SUFFER FROM ANY INFIRMITY WHICH A PPARENT FROM RECORD. III. ISSUE OF COMMISSION ON CORPORATE GUARANTEE DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 17 & 18 26. IN THIS REGARD WE NOTE THAT THE TRIBUNAL CONSCI OUSLY DECIDED NOT TO REFER THE MATTER TO THE SPECIAL BENCH. IT IS NOT TH E CASE OF THE REVENUE THAT ITAT HAS NOT CONSIDERED THE REQUEST FOR MAKING THE REFERENCE TO THE SPECIAL BENCH. IT IS A FACT AVAILABLE ON RECORD THAT THE RE QUEST FOR MAKING THE REFERENCE TO THE SPECIAL BENCH WAS REJECTED BY THE ITAT ON THE GROUND THAT SIMILAR ISSUE IS PENDING BEFORE THE HONBLE HIGH CO URT AND ACCORDINGLY A DIRECTION WAS ISSUED TO THE LD. CIT(A) TO ADJUDICAT E THE ISSUE IN THE LIGHT OF THE JUDGMENT OF THE HONBLE HIGH COURT. FROM THE FI NDING OF THE ITAT THERE IS NO AMBIGUITY THAT THERE IS NO MISTAKE APPARENT F ROM THE RECORD. THE ARGUMENT OF THE LD. DR FOR THE REVENUE THAT NO CASE IS PENDING IN THE OWN CASE OF THE ASSESSEE BEFORE THE SUPERIOR COURT AND THEREFORE THE MATTER CAN BE REFERRED TO THE SPECIAL BENCH IN VIEW OF THE JUD GMENT OF THIS COORDINATE BENCH IN THE CASE OF GENERAL MOTORS INDIA PRIVATE LIMITED (SUPRA) . HOWEVER WE DISAGREE WITH THE ARGUMENT OF THE LEARNE D DR ON THE GROUND MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 64 THAT THE JUDGMENT OF THE HONBLE HIGH COURT WILL BE APPLICABLE TO ALL THE ASSESSEE INVOLVING SIMILAR FACTS AND IT WILL NOT BE APPLIED TO A PARTICULAR CASE IN WHICH THE ISSUE WAS DECIDED. ACCORDINGLY WE HOLD THAT THERE IS NO MISTAKE IN THE FINDING OF THE TRIBUNAL WHICH IS APP ARENT FROM THE RECORD. ISSUE ON THE ADMISSION OF ADDITIONAL EVIDENCE DECISION ON ISSUE RAISED BY THE REVENUE IN PARA 20 27. THE LEARNED DR FOR THE REVENUE SUBMITTED THAT A DDITIONAL EVIDENCES WERE FILED IN THE APPLICATION DATED 30 SEPTEMBER 20 16 WHICH WERE CONSIDERED BY THE LEARNED THAT CIT-A IN HER ORDER. THE LEARNED DR ALSO SUBMITTED THAT THESE ADDITIONAL EVIDENCES WERE NOT CONSIDERED BY THE ITAT IN ITS ORDER. IN THIS REGARD WE NOTE THAT ONCE THE DOCUMENTS FILED BEFORE THE ITAT HAVE BEEN CONSIDERED BY THE LEARNED CIT-A, THE N IT WILL NOT BE CALLED AS AN ADDITIONAL EVIDENCES. IT IS BECAUSE THE DOCUM ENTS FILED BEFORE THE CIT- A HAVE ALREADY BEEN CONSIDERED WHILE ADJUDICATING T HE ISSUE ON HAND. 28. SIMILARLY WE NOTE THAT, THE APPLICATION DATED 2 1ST OF APRIL 2017 OF THE REVENUE FOR FILING THE ADDITIONAL EVIDENCES, HAD BE EN DULY CONSIDERED BY THE ITAT IN ITS ORDER VIDE PARAGRAPH NUMBER 79 PLAC ED ON PAGE 100 OF THE ORDER. IF THE CONTENTION OF THE REVENUE IS CONSIDER ED THEN IT WILL AMOUNT TO REVIEW OF THE ORDER OF THE TRIBUNAL WHICH IS NOT PE RMITTED UNDER THE PROVISIONS OF SECTION 254 (2) OF THE ACT. THE RELEV ANT PROVISION OF THE SECTION IS EXTRACTED BELOW: 29. SIMILARLY WE ALSO NOTE THAT THE REVENUE HAS REQUEST ED AT THE TIME OF HEARING THE APPEAL FOR OBTAINING THE ADDITIONAL DOC UMENTS FROM THE ASSESSEE FOR BETTER APPRECIATION OF THE FACTS IN DISPUTE. BU T THE SAME REQUEST WAS NOT CONSIDERED BY THE ITAT IN ITS ORDER. THE ITAT HAS P ASSED THE ORDER AFTER DETAILED REASONING WHILE DECIDING THE ISSUE ON HAND . THUS THE REQUEST OF THE MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 65 REVENUE TO CALL FOR CERTAIN DOCUMENTS FROM THE ASSE SSEE FOR DECIDING THE ISSUE ON HAND WHICH IN THE OPINION OF ITAT ARE NOT RELEVANT CANNOT AMOUNT TO A MISTAKE APPARENT FROM RECORD. AS SUCH WE ARE O F THE VIEW THAT THE REQUEST MADE BY THE REVENUE IN THE COURSE OF HEARIN G IS NOT AN ADDITIONAL DOCUMENT WHICH REQUIRES SEPARATE ADJUDICATION. THUS THE PRINCIPLES LAID DOWN BY THE HONORABLE SUPREME COURT OF INDIA IN THE CASE OF JYOTSNA SURI V. ITAT REPORTED IN 128 TAXMAN 33 ARE NOT APPLICABL E TO THE PRESENT FACTS OF THE CASE. THUS WE ARE RELUCTANT TO DRAW ANY SUPPORT ING GUIDANCE FROM SUCH JUDGMENT AS RELIED BY THE LEARNED DR FOR DECIDING T HE ISSUE ON HAND. THUS IN OUR CONSIDERED VIEW NON CONSIDERATION OF THE REQ UEST MADE BY THE REVENUE CANNOT AMOUNT TO A MISTAKE WHICH IS APPAREN T FROM THE RECORD. 30. WE ALSO NOTE THAT THE LD. DR AT THE TIME HEARIN G RELIED ON THE STRENGTHS OF VARIOUS JUDGMENTS IN ITS SUBMISSION BU T ON PERUSAL OF SAME, WE ARE OF THE PRIMA FACIE OPINION THAT THE RATIO LAID DOWN BY THE HONBLE RESPECTIVE COURTS/ TRIBUNALS ARE NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE. THEREFORE WE ARE RELUCTANT TO EXTEND OUR RELI ANCE ON THOSE JUDGMENTS/ ORDERS WHILE DECIDING THE ISSUE ON HAND. 31. IN VIEW OF THE ABOVE DISCUSSIONS AND FINDING, W E ARE OF THE VIEW OF THAT THERE IS NO MERIT IN THE MISC. APPLICATION FIL ED BY THE REVENUE, WHICH IS ACCORDINGLY DISMISSED. MA NO.260/AHD/2017 ACIT VS. SUN PHARMACEUTICALS INDUSTRIES LTD. 66 32. IN THE RESULT, MISC. APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON __28 TH _SEPTEMBER, 2018. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (WASEEM AHMED) ACCOUNTANT MEMBER AHMEDABAD; DATED 28/09/2018 ! '#$% & % / COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. ')'( / THE RESPONDENT. 3. ** + / CONCERNED CIT 4. + ( ) / THE CIT(A) 5. %,- '## , / DR, ITAT, 6. -./ 0 / GUARD FILE. ! / BY ORDER , TRUE COPY 1 / *2 (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
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