SANGHVI JEWELLERY MFG. CO. P.LTD, V. ITO 8(3)(1),

MA 295/MUM/2014

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4334 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: J
• Assessment Year: 2004-2005
• Appeal Filed On: 02-06-2014
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Assessee Lawyers: B V JHAVERI
• Keywords: Business income; Rectification of order; Proportionate interest; Question of law
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & SANJAY GARG (JM) M.A. NO. 295/MUM/2014 ARISING OUT OF I.T.A. NO. 352 /MUM/ 2008 (ASSESSMENT YEAR 2004 - 05 ) M.A. NO. 296/MUM/2014 ARISING OUT OF I.T.A. NO. 577/MUM/ 2008 (ASSESSMENT YEAR 2004 - 05) M/S. SANGHVI JEWELLERY MANUFACTURING CO. PVT. LTD. G - 41, GEM & JEWELLERY COMPLEX - III SEEPZ, SEZ, ANDHERI (EAST) MUMBAI - 400 096. VS. ITO WARD 8(3)(1) ROOM NO. 201 AAYAKAR BHAVAN M.K. ROAD CHURCHGATE MUMBAI - 400 020. ( APPE LLANT ) ( RESPONDENT ) PAN NO. AAACS7836B ASSESSEE BY SHRI B.V. JHAVERI DEPARTMENT BY SHRI SUMIT KUMAR DATE OF HEARING 5 .2 . 201 6 DATE OF PRONOUNCEMENT 13 . 5 . 201 6 O R D E R PER B.R. BASKARAN, A M : - THE ASSESSEE HAS FILED THE S E MISCELLANEOUS APPLICATION S SEEKING RECALL OF THE ORDER DATED 30 - 11 - 2011 PASSED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2004 - 05 IN THE CROSS APPEALS FILED BY THE PARTIES ON THE GROUND THAT THERE IS MISTAKE APPARENT FROM RECORD AND THE SAME REQUIRES RECTIFICATION. 2. T HE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF DIAMOND STUDDED JEWELLERY AND ITS UNDERTAKING IS LOCATED AT SEEPZ, MUMBAI. HENCE IT IS ELIGIBLE TO CLAIM DEDUCTION U/S 10A OF THE ACT. ACCORDINGLY, IT FILED RETURN OF INCOME FOR AY 2004 - 05 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION U/S 10A OF THE ACT. THE AO NOTICED THAT THE GROSS PROFIT MARGIN SHOWN BY THE ASSESSEE WAS HIGHER DURING THE YEAR UNDER M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 2 CONSIDERATION AND HENCE THE ASSESSING OFFICER EXAMINED TH E REASONS THERE FOR. THE ASSESSING OFFICER NOTICED THAT THE AVERAGE PURCHASE PRICE OF DIAMONDS HAS COME DOWN DURING THE YEAR. HE FURTHER NOTICED THAT, DURING THE YEAR UNDER CONSIDERATION, ABOUT 50% OF THE TOTAL PURCHASES HAVE BEEN MADE FROM ITS SISTER CO NCERN. ON FURTHER ANALYSIS, IT WAS NOTICED THAT THE AVERAGE PURCHASE PRICE OF DIAMONDS PURCHASED FROM THE SISTER CONCERN WAS RS.3,445/ - PER CARAT, AS AGAINST THE OVERALL AVERAGE PURCHASE PRICE OF RS.4,193/ - PER CARAT. HENCE THE AO TOOK THE VIEW THAT THE ASSESSEE HAS INFLATED THE GROSS PROFIT BY REDUCING THE PRICE OF DIAMONDS PURCHASED FROM ITS SISTER CONCERN. THE ASSESSEE HAD DECLARED G.P RATE AT 16.80%. IN VIEW OF THE ABOVE DISCUSSED REASONS, THE ASSESSING OFFICER REDUCED THE GROSS PROFIT MARGIN TO 10% OF THE TOTAL SALES AND CORRESPONDINGLY REDUCED THE DEDUCTION ALLOWABLE U/S 10A OF THE ACT. IN VIEW OF THE ABOVE, THE DEDUCTION ALLOWED U/S 10A HAS GONE DOWN BY RS.4,98,18,823/ - . IT IS PERTINENT TO NOTE THAT THE ABOVE DISCUSSED ADJUSTMENT WAS EFFECTED ON LY FOR THE PURPOSE OF COMPUTING ELIGIBLE DEDUCTION U/S 10A OF THE ACT IN TERMS OF SEC. 10A(7) R.W.S. 80IA(10) OF THE ACT. THE AO FURTHER NOTICED THAT THE LABOUR CHARGES BOOKED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WERE ALSO LOWER THAN THAT A CCOUNTED FOR IN THE IMMEDIATELY PRECEDING YEAR, I.E, THE LABOUR CHARGES BOOKED FOR THE YEAR WAS RS.15.00 LAKHS AND IN THE IMMEDIATELY PRECEDING YEAR, THE LABOUR CHARGES WERE INCURRED TO THE TUNE OF RS.73.00 LAKHS. IT WAS ALSO SEEN THAT IN THE SUCCEEDING YEAR, THE LABOUR CHARGES HAS GONE TO RS.75.00 LAKHS. HENCE THE AO TOOK THE VIEW THAT THE ASSESSEE HAS REDUCED THE LABOUR EXPENDITURE ALSO DURING THE YEAR UNDER CONSIDERATION WITH THE OBJECTIVE OF INCREASING THE PROFIT. HENCE THE ASSESSING OFFICER ESTIMAT ED THE LABOUR CHARGES AT RS.75.00 LAKHS AND ACCORDINGLY FURTHER REDUCED THE DEDUCTION U/S 10A BY RS.60.00 LAKHS (RS.75 LAKHS ( - ) RS.15.00 LAKHS). THUS, THE ASSESSING OFFICER REDUCED THE DEDUCTION ALLOWABLE U/S 10A TO THE TUNE OF RS.5,58,18,823/ - (RS.4,98, 18,832/ - + RS.60,00,000/ - ). 3. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) COMPARED AVERAGE PURCHASE PRICE OF THE DIAMONDS PURCHASED FROM THE SISTER CONCERN WITH THE PURCHASE M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 3 RATE OF SIMILAR QUALITY DIAMONDS PURCHASED FROM NON - RELATED CONCERNS. THE LD CIT(A) NOTICED THAT THE AVERAGE PURCHASE PRICE OF DIAMONDS PURCHASED FROM THE SISTER CONCERN WAS LOWER BY RS.72/ - PER CARAT ONLY. ACCORDINGLY, THE LD CIT(A) HELD THAT THE ADJUSTMENT COULD BE MADE TO THE EXTENT OF RS.72/ - PER CARAT AND ACCORDINGLY HELD THAT THE DEDUCTION U/S 10A CLAIMED BY THE ASSESSEE SHOULD BE REDUCED BY RS.41,72,623/ - ONLY. IN RESPECT OF LABOUR CHARGES, THE LD CIT(A) NOTICED THAT THE EXPENSES BOOKED UNDER ANOTHER HEAD EMPLOYEE COST HAS INCREASED DURING THE YEAR. ACCORDINGLY THE L D CIT(A0) OPINED THAT THE REDUCTION IN THE LABOUR CHARGES IS OFFSET BY THE EXPENSES BOOKED AS EMPLOYEE COST. HENCE THE LD CIT(A) RESTRICTED THE DISALLOWANCE MADE OUT OF LABOUR CHARGES TO RS.20.00 LAKHS. ACCORDINGLY, THE FIRST APPELLATE AUTHORITY RESTR ICTED THE ADJUSTMENTS TO SEC. 10A DEDUCTION TO RS.61,72,623/ - . 4. BOTH THE PARTIES PREFERRED APPEAL BEFORE THE ITAT AND THE TRIBUNAL RESTORED THE ADDITION OF RS.4,98,18,823/ - PERTAINING TO UNDER PRICING OF PURCHASE OF DIAMONDS. IN RESPECT OF LABOUR CHARGES, THE TRIBUNAL ESTIMATED THE ADJUSTMENTS TO RS.40.00 LAKHS (AS AGAINST RS.60.00 LAKHS MADE BY THE AO AND RS.20.00 LAKHS MADE BY LD CIT(A)). THIS MISCELLANEOUS PETITION HAS BEEN FILED WITH THE PLEA THAT THEARE MISTAKES APPARENT FROM RECORD IN THE OR DER PASSED BY THE TRIBUNAL. 5. THE LD COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PURCHASED DIFFERENT SIZES OF DIAMONDS FROM BOTH THE SISTER CONCERNS AND UNRELATED PARTIES THROUGHOUT THE YEAR, WHICH IS EVIDENCED BY THE INVOICE S AVAILABLE WITH THE ASSESSEE AS WELL AS IN THE PAPER BOOK. HOWEVER, TRIBUNAL HAS OBSERVED THAT THE DIAMONDS PURCHASED FROM THE SISTER CONCERN (M/S SANGHAVI EXPORTS) WAS LARGER IN SIZE THAN THAT PURCHASED FROM UNRELATED PERSONS AND HENCE THE AVERAGE PURC HASE RATE SHOULD HAVE BEEN HIGHER IN THE CASE OF PURCHASES MADE FROM THE SISTER CONCERN. THE LD COUNSEL SUBMITTED THAT THE TRIBUNAL HAS GIVEN THE ABOVE SAID FINDING BY CONSIDERING ONLY ONE INVOICE PLACED AT PAGES 105A AND 105B OF THE PAPER BOOK. THE TRIB UNAL HAS M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 4 OVERLOOKED THE OTHER INVOICES PLACED ON RECORD AND NON - CONSIDERATION OF THOSE DOCUMENTS HAS RESULTED IN AN ERROR APPARENT FROM RECORD. 6. THE LD A.R FURTHER SUBMITTED THAT THE TRIBUNAL HAS REFERRED TO THE FINANCIAL STATEMENTS OF THE SISTER C ONCERN AND OBSERVED THAT AVERAGE SELLING RATE OF DIAMONDS ON THE SALES EFFECTED BY THE SISTER CONCERN WAS RS.7,310/ - PER CARAT. SINCE THE AVERAGE SELLING RATE OF DIAMONDS SUPPLIED TO THE ASSESSEE HEREIN WAS RS.3,445/ - PER CARAT, IT HAS EXPRESSED THE VIEW THAT THE SELLING RATE OF THE PRODUCTS SUPPLIED TO THE ASSESSEE WAS LOWER. THE LD A.R SUBMITTED THAT THE SISTER CONCERN HAS SOLD VARIOUS KINDS OF DIAMONDS (DIFFERENT IN QUALITY AND SIZE) TO OUTSIDERS AS WELL AS TO THE ASSESSEE HEREIN. HE SUBMITTED THAT TH E SELLING RATE WOULD DEPEND UPON THE QUALITY AND SIZE AND IT HAS RANGED FROM RS.1000/ - PER CARAT TO RS.1.00 LAKH PER CARAT. FURTHER THE TURNOVER OF THE SISTER CONCERN WAS RS.502.74 CRORES OUT OF WHICH, THE SALES MADE TO THE ASSESSEE WAS ONLY RS.19.97 CRO RES, I.E., ABOUT 4% OF THE TOTAL SALES. ACCORDINGLY HE SUBMITTED THAT THE COMPARISON OF AVERAGE SELLING PRICE OF THE SALES EFFECTED FOR THE WHOLE YEAR WITH THE AVERAGE SELLING PRICE OF THE GOODS SOLD TO THE ASSESSEE WITHOUT CONSIDERING THE SIZE AND QUALITY OF DIAMONDS WAS NOT CORRECT AND WOULD GIVE MISLEADING RESULT. HE FURTHER SUBMITTED THAT THE TRIBUNAL ITSELF HAS AGREED TO THIS FACT AND, IN FACT, MADE A SPECIFIC OBSERVATION THAT THE PRICE PER CARAT OF DIAMOND WOULD DEPEND UPON THE QUALITY (COLOUR, CUT AN D CLARITY) AND SIZE OF DIAMONDS (CARAT). DESPITE THIS REALITY, THE TRIBUNAL HAS OBSERVED AS UNDER: - THE AVERAGE RATE OF SALES IN THE CASE OF M/S SANGHAVI EXPORTS IS RS.7310/ - , WHEREAS, AVERAGE SALES RATE PER CARAT TO THE ASSESSEE WAS ONLY RS.3,445/ - . TH E AUTHORITIES WILL, THEREFORE, BE JUSTIFIED IN WORKING OUT THE SHIFTING OF THE PROFIT FROM M/S SANGHAVI EXPORTS TO ASSESS AT AVERAGE SALES RATE OF THAT CONCERN. THERE IS THUS RATE DIFFERENCE OF ABOUT RS.3,865/ - PER CARAT ON SALES MADE TO THE ASSESSEE. TH E TOTAL PURCHASES FROM M/S SANGHAVI EXPORTS WAS RS.57953.10 CARAT OF DIAMONDS AND, THEREFORE, THE PROFIT TRANSFERRED FROM M/S SANGHAVI EXPORTS TO THE ASSESSEE WOULD BE 3865 X 57953.10 WHICH COMES TO ABOUT RS.22.39 CRORES. THE LD A.R SUBMITTED THAT THE ABOVE SAID OBSERVATIONS CLEARLY SHOW THAT THE TRIBUNAL HAS FAILED TO FOLLOW ITS OWN OBSERVATIONS AND FURTHER THE REDUCTION MADE BY THE AO WAS ONLY RS.4.98 CRORES, WHEREAS THE TRIBUNAL IS ARRIVING AT A M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 5 FIGURE OF RS.22.39 CRORES. THE WORKING S MADE BY THE T RIBUNAL SHOWS THAT THEIR COMPUTATION IS PATENTLY WRONG. 7. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF PURCHASES OF DIAMONDS (QUALITY WISE AS WELL AS PRICE WISE) MADE FROM SISTER CONCERNS AS WELL AS FROM OUTSIDER S AT PAGES 187 TO 201 OF THE PAPER BOOK. HOWEVER, THE TRIBUNAL DID NOT CONSIDER THESE DOCUMENTS AT ALL INSTEAD OBSERVED THAT THE CLAIM OF THE LOWER QUALITY DIAMONDS HAD BEEN PURCHASED IS NOT SUPPORTED BY ANY EVIDENCE IS INCORRECT AND CONTRARY TO THE FA CTS AVAILABLE ON RECORD. THE NON - CONSIDERATION OF THESE DETAILS, WHICH ARE VERY MUCH VITAL TO THE ISSUE UNDER APPEAL, HAS RESULTED IN A MISTAKE APPARENT FROM RECORD. 8. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THAT THE PROFIT M ARGIN HAS GONE UP DUE TO THE CHANGE EFFECTED IN THE PRODUCT MIX, I.E., MORE NUMBER OF HIGH PROFIT ITEMS WERE SOLD DURING THE YEAR. THE TRIBUNAL HOWEVER DID NOT ACCEPT THE SAID EXPLANATION AND HELD THAT THE CHANGE IN PRODUCT MIX WOULD NOT HAVE ANY IMPACT O N THE GROSS PROFIT MARGIN. HOWEVER, THE TRIBUNAL ITSELF HAD OBSERVED THAT THE PROFIT MARGIN WOULD BE HIGHER IN THE CASE OF SPECIALISED ITEMS SUCH AS NECKLACE, BANGLES ETC. THUS, THE TRIBUNAL HAS NOT FOLLOWED ITS OWN REASONING WHILE APPRECIATING THE CONTE NTIONS OF THE ASSESSEE AND THE SAME HAS RESULTED IN A MISTAKE APPARENT FROM RECORD. 9. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS PROVED THAT THE PURCHASE RATE OF THE PURCHASES MADE FROM SISTER CONCERN WAS HIGHER THAN THE RATE GIVEN BY THE UN RELATED CONCERNS BY FURNISHING THE DETAILS AT PAGES 188 - 189 OF THE PAPER BOOK. HOWEVER, THE TRIBUNAL DID NOT CONSIDER THOSE DETAILS AND THE SAME HAS RESULTED IN MISTAKE APPARENT FROM RECORD. IN THIS REGARD, THE LD A.R FURNISHED FOLLOWING EXPLANATIONS: - EXPLANATION OF THE MISTAKE: IN THIS RESPECT YOUR HONOURS' KIND ATTENTION IS INVITED TO THE FOLLOWING CHART WHICH IS PREPARED FROM THE DETAILS REFERRED TO HEREINABOVE BY THE HON'BLE APPELLATE TRIBUNAL (PAGES 186 TO 205): M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 6 PARTICULARS OF SANGHAVI DHAV AL SUPER OF QUALITY EXPORTS EXPORTS DIAM D CUT OW/N 2481 - 3591 - 3914 D CUT OWLB 1780 - 8289 - 10591 D CUT OWLB/N 2255 - 14883 3085 - 4052 D CUT OWLC 4370 - 3822 - 4144 D CUT W/N 2876 - 12554 2855 - 4375 D CU T WHITE 3165 - 19788 20722 F CUT OW/P 6284 - 9614 8289 F CUT OWLB/P 4519 - 9476 7598 - 8749 F CUT OWLB/T 2350 - 8188 6447 F CUT W/P 2024 - 13906 5664 - 8289 F CUT W/T 1488 - 6998 3453 - 4144 1750 - 3500 S CUT TTLB 1415 - 1381 - 19 34 1750 S CUT WHITE 1257 - 6449 2486 - 3454 - TOTAL DIAMONDS INCTS. IN CTS. 40,783 CTS. 5,824 CTS. 1,806 CTS. CTS. FROM THE AFORESAID CHART, IT IS CLEAR THAT IN RESPECT OF EACH GRADE (QUALITY) OF DIAMONDS PURCHASED BY THE ASSESSEE COMPA NY BOTH FROM M/S. SANGHAVI EXPORTS AND M/S. DHAVAL EXPORTS, THERE IS VARIATION OF PRICES WHICH IS ONLY BECAUSE OF SIZE OF THE DIAMONDS IN THE SAID GRADE. FOR EXAMPLE, ON PAGE 203/204 OF THE PAPER BOOK IT WILL BE SEEN THAT THE ASSESSEE HAD PURCHASED F CUT W /T DIAMONDS FROM M/S. DHAVAL EXPORTS AT THE PRICE RANGING BETWEEN RS.2,763/ - PER CARAT AND RS.6,216/ - PER CARAT. ON GOING THROUGH THE DETAILS OF THIS GRADE OF DIAMONDS PURCHASED FROM M/S. DHAVAL EXPORTS (SEE PAGE 203/204) IT WILL BE SEEN THAT WHEN THERE WE RE 60 DIAMONDS PER CARAT THE ASSESSEE HAD PAID RS.2,763/ - PER CARAT BUT IF THE NUMBER OF DIAMONDS PER CARAT REDUCED TO 50, THE RATE PER CARAT HAD INCREASED TO RS.4,697/ - PER CARAT. AS THE NUMBER OF PIECES FURTHER REDUCED TO 40 PER CARAT THE RATE PER CARAT OF THE SAME QUALITY OF DIAMONDS INCREASED TO RS.6,216/ - PER CARAT. HOWEVER, THE QUALITY OF DIAMONDS WAS THE SAME VIZ., F CUT W/T. THE SAID QUALITY OF DIAMONDS, VIZ., F CUT W/T, WERE PURCHASED BY THE ASSESSEE FROM M/S. SANGHAVI EXPORTS, THE DETAILS OF WHIC H ARE AT PAGES 194 AND 195 OF THE PAPER BOOK. SECONDLY , THE HON. TRIBUNAL HAS ACCEPTED THAT DIAMOND PRICES ARE HEAVILY INFLUENCED BY THE SIZE OF DIAMONDS, AND THEREFORE, THE STEEP VARIATION IN THE SAME GRADE OF DIAMONDS IS OBVIOUS AND PROVES THE BONA FIDE S OF THE ASSESSEE. THEREFORE, THE AFORESAID EVIDENCE, WHICH IS ON THE RECORD, PROVES THE CASE OF THE ASSESSEE THAT IT HAD PURCHASED DIAMONDS M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 7 FROM M/ SANGHAVI EXPORTS AT THE PREVAILING MARKET PRICES OR AT THE PRICE WHICH IS COMPARABLE WITH THE PRICE PAID T O M/S DHAVAL EXPORTS AND M/S SUPER DIAM. THE LD A.R SUBMITTED THAT THE TRIBUNAL HAS OVERLOOKED THE EVIDENCES AND INFORMATION AVAILABLE ON RECORD AND THE SAME HAS RESULTED IN MISTAKES APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. 10. THE LD A. R FURTHER SUBMITTED THAT THE AVERAGE PURCHASE PRICES WORKED OUT BY THE ASSESSING OFFICER WAS NOT CORRECT, I.E., THE ASSESSING OFFICER HAS ACTUALLY COMPUTED AVERAGE CONSUMPTION COST, INSTEAD OF COMPUTING AVERAGE PURCHASE PRICE. THE MISTAKE COMMITTED BY THE ASSESSING OFFICER WAS POINTED OUT TO THE LD CIT(A) AND THE FIRST APPELLATE AUTHORITY HAS ACCEPTED THE SAME AND DISCUSSED THE DETAILS THERE OF IN PAGE NO.9 OF HIS ORDER. HOWEVER, THE TRIBUNAL DID NOT CONSIDER THESE MISTAKES COMMITTED BY THE ASSESSING OFF ICER, EVEN THOUGH IT WAS POINTED OUT. NON - CONSIDERATION OF THESE APPARENT CLERICAL MISTAKES HAS RESULTED IN MISTAKE APPARENT FROM RECORD. 11. THE LD A.R FURTHER SUBMITTED THAT THE LD CIT(A) HAS COMPARED THE PURCHASE RATE OF SIMILAR QUALITY DIAMONDS BETWEEN THE PURCHASES MADE FROM SISTER CONCERN AND NON - RELATED CONCERNS AND ACCORDINGLY CAME TO THE CONCLUSION THAT THERE WAS DIFFERENCE OF RS.72/ - PER CARAT. HE SUBMITTED THAT THE TRIBUNAL DID NOT CONSIDER THESE SPECIFIC DETAILS ANALYSED BY THE LD CIT(A ), BUT PROCEEDED TO UPHOLD THE COMPUTATIONS MADE BY THE ASSESSING OFFICER WITHOUT POINTING OUT AS TO HOW THE WORKINGS MADE BY THE LD CIT(A) WAS WRONG. HENCE, NON - CONSIDERATION OF SPECIFIC DETAILS HAS RESULTED IN A MISTAKE APPARENT FROM RECORD. 12. W ITH REGARD TO THE LABOUR CHARGES, THE LD A.R SUBMITTED THAT THE ASSESSEE HAS FURNISHED MONTH WISE DETAILS OF LABOURERS AND EMPLOYEES EMPLOYED BY THE ASSESSEE AND HAS SHOWN THAT THE NUMBER OF EMPLOYEES HAS GONE UP EVERY MONTH. HOWEVER, THE TRIBUNAL DID NOT CONSIDER THOSE DETAILS. FURTHER, THE ASSESSEE ALSO FURNISHED THE BUSINESS DETAILS OF THE SISTER CONCERNS M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 8 AND PROVED THAT THERE IS NO SCOPE FOR SHIFTING OF LABOUR COST TO OTHER SISTER CONCERNS. HOWEVER, THE TRIBUNAL FAILED TO CONSIDER THOSE SPECIFIC SUBM ISSIONS ALSO. HENCE NON - CONSIDERATION OF THE DETAILS AND SUBMISSIONS HAS RESULTED IN A MISTAKE APPARENT FROM RECORD. HE FURTHER SUBMITTED THAT THE RATIO OF AVERAGE LABOUR COST OF SISTER CONCERNS TO THEIR RESPECT SALES WAS CONSISTENT IN THE PAST YEAR AND H ENCE THERE WAS NO SCOPE TO TAKE THE VIEW THAT THE LABOUR COST HAS BEEN SHIFTED. THE EXPLANATIONS FURNISHED IN THIS REGARD ARE EXTRACTED BELOW: - THE OTHER ASSOCIATE CONCERN WHICH IS IN THE BUSINESS OF MANUFACTURING AND EXPORT OF DIAMOND STUDDED GOLD JEWEL LERY IS SANGHAVI EXPORTS. THE FINANCIALS OF SANGHAVI EXPORTS OF SALES, EMPLOYEE COST AND LABOUR CHARGES IS AS UNDER: IT CAN BE THUS SEEN THAT TOTAL LABOUR CHARGES ARE MORE OR LESS SAME IN THIS COMPANY. TH ERE IS NO SIGNIFICANT CHANGE IN THE LEVEL OF EXPENSES. THIS COMPANY ALSO ENJOYS THE BENEFIT U/S 10A AND HENCE THE PROFIT IS EXEMPT. HENCE NO BENEFIT WOULD ACCRUED TO THIS UNIT BY TRANSFERRING THE WAGES AND LABOUR CHARGES.' HE SUBMITTED THAT THE TRIBUNAL DID NOT CONSIDER THESE SPECIFIC DETAILS AND NON - CONSIDERATION OF THE SAME HAS RESULTED IN MISTAKE APPARENT FROM RECORD. 13. THE LD A.R FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS ESTIMATED THE GROSS PROFIT BY ADOPTING THE RATE OF 10% ON SALES. HE SUBMITTED THAT THE GROSS PROFIT IS ARRIVED AT AFTER DEDUCTING LABOUR COST AND HENCE SEPARATE ADDITION CONFIRMED BY THE TRIBUNAL WOULD RESULT IN DOUBLE ADDITION OF SAME ITEM. THE TRIBUNAL HAS FAILED TO CONSIDER THESE ARGUMENTS AND THE SAME RESULTED IN A M ISTAKE APPARENT FROM RECORD. (RS IN LAKHS) ASST. YEAR ASST. YEAR 2003 - 04 2004 - 05 SALES JEWELLERY ACTIVITY 2,678.09 3,195.70 EMPLOYEE COST JEWELLERY ACT IVITY 246.37 317.66 LABOUR CHARGES JEWELLERY ACTIVITY 7.85 8.32 TOTAL LABOUR COST 254.22 325.98 TOTAL LABOUR COST % TO SALES 9.49 10.20 M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 9 14. THE LD. A.R PLACED HIS RELIANCE ON THE FOLLOWING CASE LAW TO CONTEND THAT NON - CONSIDERATION OR OVERSIGHT OF MATERIALS AVAILABLE ON RECORD WILL AMOUNT TO MISTAKE APPARENT FROM RECORD: - A. CIT VS. MITHALAL ASHOK KUMAR ( 158 ITR 755)(MP) B. SHREE KISMAT STONE SUPPLYING CO. VS. ITO (M.A.NO.64/MUM/2010 ARISING OUT OF ITA NO.221/MUM/2008) C. RAKESH RAMANI VS. ITO (2006)(5 SOT 547)(MUM) D. GOLDEN MEADOWS PROPERTIES PVT LTD VS. ITO (149 TAXMAN 17)(MUM) E. UDHAVDAS KEWALRAM VS. CIT (66 ITR 462)(SC) F. CHAMPA LAL CHOPRA VS. STATE OF RAJASTHAN (257 ITR 74) G. HONDA SIEL POWER PRODUCTS LTD VS. CIT (295 ITR 466)(SC) ACCORDINGLY, THE LD A.R PRAYED THAT THE ORDER PASSED BY THE TRIBUNAL SUFFERS FROM VARIO US MISTAKES APPARENT FROM RECORD AND ACCORDINGLY PRAYED THAT THE TRIBUNAL BE PLEASED TO RECALL THE IMPUGNED ORDER. 15. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE TRIBUNAL HAS PASSED THE IMPUGNED ORDER BY CONSIDERING ALL SUBMISSIONS MADE BY BOTH TH E PARTIES AND ACCORDINGLY SUBMITTED THAT THE ORDER OF THE TRIBUNAL DOES NOT SUFFER FROM ANY MISTAKE APPARENT FROM RECORD. THE LD D.R FURTHER SUBMITTED THAT THE TRIBUNAL IS NOT ENTITLED TO REVIEW ITS ORDER U/S 254(2) OF THE ACT. IN SUPPORT OF HIS CONTENT IONS, THE LD D.R PLACED HIS RELIANCE ON THE FOLLOWING CASE LAW: - (A) NARESH K PAHUJA VS. ITAT (2015)(54 TAXMANN.COM 258)(BOM) (B) CIT VS. EARNEST EXPORTS LTD (2010)(8 TAXMANN.COM 302)(BOM) (C) INDRAKUMAR PATODIA VS. ITO (2011)(13 TAXMANN.COM 7)(BOM) ACC ORDINGLY HE SUBMITTED THAT THE RECALL OF THE ORDER WOULD LEAD TO REVIEW OF THE DECISION TAKEN BY THE TRIBUNAL, WHICH IS NOT PERMITTED U/S 254(2) OF THE ACT. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BEFORE PROCEEDING FURTHER , WE WO ULD LIKE TO DWELL UPON THE VIEWS EXPRESSED BY HONBLE HIGH COURTS AND TRIBUNALS ON THE SCOPE OF PROVISIONS OF SECTION 254(2) OF THE M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 10 ACT. IT IS WELL SETTLED PROPOSITION OF LAW THAT THE TRIBUNAL IS EMPOWERED ONLY TO RECTIFY ANY MISTAKE FROM RECORD . IT IS A LSO SETTLED THAT THE TRIBUNAL , UNDER THE GAR B OF RECTIFICATION, IS NOT ENTITLED TO REV I E W ITS ORDER. THE QUESTION - WHAT CONSTITUTE MISTAKE APPARENT FROM RECORD WAS ALWAYS A MATTER OF DISPUTE. WE NOTICED THAT THE ISSUE WAS CONSIDERED IN THE THIRD MEMBER C ASE OF ITAT IN THE CASE OF PURANSINGH M. VERMA VS. ITO (2001) 78 ITD 277 (AHD)(TM) . THE HON'BLE THIRD MEMBER OF THE BENCH HAS CONSIDERED THE PRINCIPLES SURROUNDING ABOVE SAID ISSUE. FOR THE SAKE OF CONVENIENCE WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MAD E BY HON'BLE THIRD MEMBER : - 19. IN THE CASE OF T.S. BALARAM, ITO V. VOLKART BROS . [1971] 82 ITR 50 (SC), THEIR LORDSHIPS OF THE SUPREME COURT HAD THE OCCASION TO CONSIDER THE MEANING OF A 'MISTAKE AP PARENT ON THE RECORD'. THEIR LORDSHIPS HELD THAT A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG - DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS . A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. 20. IN THE CASE OF MITHALAL ASHOK KUMAR (SUPRA), THEIR LORDSHIPS OF THE MADHYA PRADESH HIGH COURT HELD AS UNDER : -- 'THOUGH THE APPELLATE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER, YET IT CAN CERTAINLY CORRECT ITS MISTAKES BY RECTIFYING THE SAME IN CASE IT IS BROUGHT TO ITS NOTICE THAT THE MATERIAL WHICH WAS ALREADY ON RECORD BEFORE DECIDING THE APPEAL ON MERITS WAS NOT CONSIDERED BY IT. THEREFORE, WHAT WOULD BE THE EF FECT OF RECTIFYING A MISTAKE AND THEREBY AMENDING ITS ORIGINAL ORDER WOULD ALWAYS DEPEND ON THE FACTS OF EACH CASE. THE MISTAKES HAVE NOT TO BE STRICTLY CONSIDERED ACCORDING TO THE PROVISIONS OF ORDER 47, RULE 1, CIVIL PROCEDURE CODE, 1908, BUT HAVE GOT TO BE TAKEN INTO CONSIDERATION DEPENDING ON THE FACTS OF EACH CASE WHICH MAY VARY AS ALSO THE POINTS INVOLVED.' 21. IN THE CASE OF ITO V. ITAT [1965] 58 ITR 634 (ALL.), IT WAS HELD BY THE ALLAHABAD HIGH COURT THAT WHEREIN A JUDGMENT OR ORDER OF THE TRIBUNAL AN ERROR HAS CREPT IN, NOT AS A RESULT OF ANY FAULT OF THE ASSESSEE, BUT ATTRIBUTABLE ENTIRELY TO THE TRIBUNAL IN HAVING LOST SIGHT OF A MATERIAL FACT AT THE TIME OF WRITING ITS ORDER OR JUDGMENT, WHIC H FACT WAS DULY BROUGHT TO ITS NOTICE BY THE ASSESSEE, THERE WOULD BE AN ERROR APPARENT FROM THE RECORD WHICH COULD BE RECTIFIED. 22. THE MEANING OF WORDS 'MISTAKE APPARENT FROM RECORD' - AS PER CHAMBERS CONCISE DICTIONARY 'MISTAKE' MEANS TO THINK OR UNDE RSTAND WRONGLY, TO TAKE FOR ANOTHER THING OR PERSON, TO BE WRONG ABOUT. IT ALSO MEANS OMISSION MADE NOT BY DESIGN BUT BY MISCHANCE. THE WORD 'APPARENT' REFERS TO SOMETHING WHICH IS OBVIOUS, CONSPICUOUS AND SELF - EVIDENT. THUS 'MISTAKE APPARENT FROM RECORDS' M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 11 WOULD MEAN MISTAKES OR ERRORS WHICH ARE GLARING AND OBVIOUS AND NOT SUCH ERRORS WHICH CAN BE DETERMINED BY ARGUMENTS OR DEBATE. 23. ON THE ANALYSIS OF THE AFOREMENTIONED DECISIONS, FOLLOWING PRINCIPLES EMERGE : -- (1) THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254(2) IS CONFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. (2) THAT THE TRIBUNAL DOES NOT HAVE INHERENT POWER OF RECTIFICATION OR REVIEW OR REVISION. UNLESS THERE IS A MISTAKE APPAREN T FROM THE RECORD IN THE SENSE OF PATENT, OBVIOUS, CLEAR ERROR OR MISTAKE, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. (3) IF THE ERROR OR MISTAKE IS ONE WHICH COULD BE ESTABLISHED ONLY BY LONG - DRAWN ARGUMENTS OR BY WAY OF PROCESS OF INVESTIGATION AND R ESEARCH, IT IS NOT A MISTAKE APPARENT FROM THE RECORD. (4) UNLESS THERE ARE MANIFEST ERRORS WHICH ARC OBVIOUS, CLEAR AND SELF - EVIDENT, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER IN AN ATTEMPT TO RE - WRITE THE SAME. (5) FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. (6) THE TRIBUNAL CANNOT IN EXERCISE OF ITS POWER OF RECTIFICATION LOOK INTO SOME OTHER CIRCUMSTANCES WHICH W OULD SUPPORT OR NOT SUPPORT ITS CONCLUSION. THE TRIBUNAL CANNOT RE - DECIDE THE MATTER AND IT HAS NO POWER TO REVIEW ITS ORDER. (7) THAT THE TRIBUNAL HAS NO POWER TO RECTIFY A DECISION ON DEBATABLE POINT OF LAW. (8) WHEREAS THE COURTS HAVING GENERAL JURISDIC TION LIKE CIVIL COURTS HAVE INHERENT POWER, THE TRIBUNAL DOCS NOT HAVE THE POWER TO REVIEW ITS OWN DECISION EXCEPT WHAT IS AUTHORISED UNDER SECTION 254(2) . (9) WHEREAS THE HIGH COURT HAS INHERENT POWER O F REVIEW, IN THE MATTER OF INCOME - TAX REFERENCES EVEN THE HIGH COURT CANNOT EXERCISE THAT POWER. (10) A DECISION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. (11) WHERE THE TRIBUNAL HAS OVER - LOOKED THE RELEVANT MATERIAL ON RECORD, T HERE WOULD BE AN ERROR APPARENT FROM RECORD WHICH CAN BE RECTIFIED BY SETTING ASIDE THE ORDER FOR FRESH CONSIDERATION. (12) THAT WHERE A MATERIAL FACT BROUGHT TO THE NOTICE OF THE TRIBUNAL HAS BEEN LOST SIGHT OF, THE TRIBUNAL HAS THE POWER TO RECTIFY THE M ISTAKE SO COMMITTED PROVIDED THE MATERIAL FACT HAS AN IMPORTANT BEARING ON THE ULTIMATE DECISION. 17. I N THE CASE OF MITHALAL ASHOK KUMAR (SUPRA), HON'BLE MADHYA PRADESH HIGH COURT HAS ALSO HELD THAT NON CONSIDERATION OF MATERIAL, WHICH ARE ALREADY AVAILA BLE ON RECORD WOULD CONSTITUTE MISTAKE APPARENT FROM RECORD. FOL L OWING OBSERVATIONS MADE BY HON'BLE MP HIGH COURT ARE PERTINENT : - M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 12 THUS, IN THE PRESENT CASE, WE ARE OF THE OPINION THAT THE TRIBUNAL ITSELF HAS FOUND THAT IT HAS COMMITTED CERTAIN MISTAKES IN NOT CONSIDERING THE MATERIAL WHICH WAS ALREADY ON RECORD WHICH HAS THE EFFECT OF DECIDING THE APPEAL ON MERITS. IN THE PRESENT CASE, THE EFFECT OF RECTIFYING ITS MISTAKE, NO DOUBT, HAS RESULTED IN SETTING ASIDE THE ORIGINAL ORDER, BUT THE ONLY QUESTION INVOLVED IN THIS CASE WAS WHETHER THE ASSESSEE - FIRM WAS A GENUINE FIRM OR NOT AND IN ORDER TO DECIDE THAT POINT, IF IT FELT THAT IT HAD COMMITTED CERTAIN MISTAKES IN NOT LOOKING INTO THE MATERIAL ALREADY ON RECORD, THE EFFECT OF THE ERROR HAD BEEN THAT IT HAD TO CONSIDER THE MATTER ON THAT BASIS. THEREFORE, THIS CANNOT BE SAID TO BE A CASE OF REVIEW IN THE STRICT SENSE OF THE TERM. CONSEQUENTLY, WE ARE OF THE OPINION THAT THE TRIBUNAL WAS RIGHT IN REFUSING TO MAKE A REFERENCE TO THIS COURT AS URGED ON BEHAL F OF THE REVENUE BECAUSE NO QUESTION OF LAW AS SUCH IS INVOLVED, THE TRIBUNAL ADMITTEDLY HAVING THE JURISDICTION TO RECTIFY ITS OWN MISTAKES. 18. IDENTICAL VIEW HAS BEEN EXPRESSE D BY HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF ITO VS. ITAT (SUPRA), WHICH HAS BEEN REFERRED TO BY HON'BLE THIRD MEMBER. THE HON'BLE MP HIGH COURT HAS CONSIDERED TH IS QUESTION IN YET ANOTHER CASE NAMED H.H. MAHARAJA MARTANT SINGH JU - DEO VS.CIT (171 ITR 586) AND IT WAS HELD THAT THE TRIBUNAL HAD RECORDED ITS EARLIER FINDI NGS UNDER MISAPPREHENSION AND MISCONCEPTION. THEREFORE WHEN THE TRIBUNAL CORRECTED ITS EARLIER ORDER , IT HAS RIGHTLY EXERCISED ITS POWER U/S. 254(2) OF THE ACT AND THE SAME SHALL NOT CONSTITUTE REV I E W OF THE EARLIER ORDER. IN THE CASE BEFORE HONBLE MADH YA PRADESH HIGH COURT, THE ISSUE RELATED TO THE EXEMPTION CLAIMED U/S 54 OF THE ACT. THE TRIBUNAL HELD THAT THE HOUSE IN QUESTION WAS OWNED BY A GROUP OF OWNERS WHO CONSTITUTED AN ARTIFICIAL JURIDICAL PERSON, THAT A CONSIDERABLE PORTION OF THE PROPERTY WA S IN THE FORM OF VACANT LAND AND THERE WAS NO EVIDENCE TO ESTABLISH THAT THE FLOOR AREA IN THE OCCUPATION OF THE ASSESSEE EXCEEDED FLOOR ARE IN THE OCCUPATION OF A TENANT. A FURTHER QUESTION ARISE WITH REGARD TO THE NATURE OF CAPITAL GAINS, I.E., WHETHER IT IS SHORT TERM OR LONG TERM. THE ASSESSEE FILED MISCELLANEOUS APPLICATION FOR RECTIFICATION OF MISTAKES. THE TRIBUNAL DELETED ITS ENTIRE FINDINGS AND SUBSTITUTED THEM BY STATING THAT THE HOUSE WAS OWNED BY A HINDU UNDIVIDED FAMILY CONSISTING OF THE ASS ESSEE, HIS WIFE AND SON, THAT A PARTITION TOOK PLACE IN 1971 WHEREBY THE PROPERTY WAS DIVIDED INTO THREE PORTIONS,THAT THE CONSIDERABLE PORTION OF THE PROPERTY WAS NOT VACANT LAND, GAINS ARISING ON SALE OF HOUSE IN THE NATURE OF LONG TERM CAPITAL GAINS. WHEN THE REVISION ORDER PASSED BY THE TRIBUNAL WAS CHALLENGED, THE HONBLE HIGH COURT HELD AS UNDER: - M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 13 . IN THIS STATE OF AFFAIRS, THERE CAN BE NO MANNER OF DOUBT THAT THE FINDING WHICH HAD BEEN RECORDED BY THE TRIBUNAL IN ITS ORDER DATED DECEMBER 8, 198 1 AND WERE SUBSEQUENTLY DELETED, HAD BEEN SO RECORDED UNDER SOME MISAPPREHENSION OR MISCONCEPTION. BY DELETING THESE FINDINGS AND SUBSTITUTING THEM BY OTHER FINDINGS AS POINTED OUT ABOVE, THE TRIBUNAL HAS IN SUBSTANCE ENDORSED THE FINDINGS RECORDED IN THI S BEHALF BY THE INCOME TAX OFFICER AND COMMISSIONER OF INCOME TAX, AGAINST WHICH NO APPEAL HAD BEEN PREFERRED BY THE DEPARTMENT AND THE CORRECTNESS OF WHICH, AS INDICATED ABOVE, WAS NOT CHALLENGED EVEN BY THE ASSESSEE IN THE APPEAL PREFERRED BY HIM. IT IS , THEREFORE, APPARENT THAT THE TRIBUNAL HAD COMMITTED A MISTAKE APPARENT FROM THE RECORD IN RECORDING THE FINDINGS IN ITS ORDER DATED DECEMBER 8, 1981 , WHICH WERE SUBSEQUENTLY DELETED AND SUBSTITUTED BY DIFFERENT FINDINGS AS STATED ABOVE. THE FINDINGS REC ORDED UNDER MISAPPREHENSION OR CONCEPTION OF FACTS ARE RECORDED AS MISTAKE APPARENT FROM RECORD. 19. THE MUMBAI BENCH OF THE ITAT HAS CONSIDERED THE ISSUE RELATING TO MISTAKE APPARENT FROM RECORD IN THE CASE OF SHREE KISMAT STONE SUPPLYING CO. VS. ITO (MI SCELLANEOUS APPLICATION NO. 64/MUMBAI/2010 DATED 30.4.2010 ) . IN THE ABOVE SAID CASE THE ASSESSEE WAS SUPPLYING STONES, METAL AN D OTHER BUILDING MATERIAL TO A BUILDER NAMED M/S LOK GROP. AFTER PROLONGED LITIGATION, THE ASSESSEE WAS ALLOTTED A FLAT IN PART IAL DISCHARGE OF THE AMOUNT PAYABLE TO IT . THE REVENUE TOOK THE STAND THAT THE ASSESSEE HAS USED BORROWED FUND S FOR PURCHASING FLAT AND ACCORDINGLY DISALLOWED PROPORTIONATE INTEREST EXPENDITURE. THE SAME WAS ALSO CONFIRMED BY THE TRIBUNAL. THE ASSESSEE FI LED A MISCELLANEOUS APPLICATION POINTING OUT THAT THE FLAT WAS ALLOTTED TOWARDS PARTIAL DISCHARGE OF THE OUTSTANDING AMOUNT AND THE SAID FACT WAS NOT CONSIDERED BY THE TRIBUNAL. THE SAID PLEA OF THE ASSESSEE WAS ACCEPTED BY THE TRIBUNAL AND ACCORDINGLY THE TRIBUNAL ALSO RECORDED A FINDING THAT THE ABOVE SAID FA C T WAS NOT EXAMINED BY IT. SINCE THE RELEVANT EVIDENCES AVAILABLE ON M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 14 RECORD WERE NOT CONSIDERED BY THE TRIBUNAL, ORDER PASSED BY IT WAS RECALLED. SIMILARLY , IN THE CASE OF RAKESH RAMANI VS. ITO [(2006 ) 5 SOT 457] THE ASSESSEE FILED A MISCELLANEOUS APPLICATION BEFORE THE TRIBUNAL POINTING OUT THAT THE TRIBUNAL HAS NOT TAKEN INTO CONSIDERATION CERTAIN IMPORTANT DOCUMENTS FILED BY THE ASSESSEE AND ALSO IT DID NOT REFER TO CERTAIN CASE LAWS RELIED UPON BY THE ASSESSEE. THE TRIBUNAL HAS CONSIDERED THE PLEA OF THE ASSESSEE AND RECALLED THE ORDER WITH THE FOLLOWING OBSERVATIONS : - 7. THE PRINCIPLES OF LAW AS ENUNCIATED BY VARIOUS JUDGMENTS OF THE HON'BLE COURTS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSE SSEE, AND OTHER DECISIONS ARE SUMMARIZED AS UNDER: 1. THAT WHERE THERE IS A WRONG ASSUMPTION OF FACTS, IT WILL CONSTITUTE A MISTAKE APPARENT FROM RECORD; 2. THAT WHERE THERE IS A FAILURE TO CONSIDER CERTAIN EVIDENCE BROUGHT ON RECORD, IT WOULD ALSO CONSTIT UTE A MISTAKE APPARENT FROM RECORD; AND 3. THAT WHERE THERE IS OMISSION ON THE PART OF THE ITAT TO CONSIDER THE PRINCIPLES OF LAW ENUNCIATED BY THE DECISIONS OF VARIOUS COURTS ON WHICH RELIANCE IS PLACED BY THE ASSESSEE IT WILL ALSO CONSTITUTE MISTAKE APPA RENT FROM RECORD. IN THE LIGHT OF PRINCIPLES OF LAW EMERGING FROM VARIOUS DECISIONS AND THE PROVISIONS OF LAW, IF WE EXAMINE THE FACTS OF THE PRESENT CASE, WE FIND THAT MISTAKES HAVE OCCURRED IN THE TRIBUNAL'S APPELLATE ORDER DATED 26 - 2 - 2003 AS VARIOUS FAC TS AND MATERIALS BROUGHT ON RECORD AS REFERRED TO BY THE LEARNED COUNSEL FOR THE ASSESSEE AS MENTIONED IN PARA 4.1 OF MISCELLANEOUS APPLICATION HAVE NOT BEEN CONSIDERED BY THE TRIBUNAL WHILE DECIDING THE APPEAL. IT HAS BEEN MISSED TO BE CONSIDERED VARIOUS PRINCIPLES OF LAW ENUNCIATED BY VARIOUS DECISIONS ON WHICH RELIANCE WAS PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V. ITAT (1988) 172 ITR 158 (MP) HAS HELD THAT 'IF A POINT WHICH IS MATERIAL FOR DETERMINING THE AMOUNT OF TAX SO PRESSED; BUT NOT CONSIDERED BY THE TRIBUNAL, IT WOULD CERTAINLY CONSTITUTE A MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT'. AS SUCH, CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AS ALSO THE LEGAL POSITION, WE ARE OF THE CONSIDERED VIEW THAT IN THE INSTANT CASE, THERE HAS INADVERTENTLY BEEN NON - CONSIDERATION OF VITAL FACTS, BROU GHT ON RECORD AND JUDICIAL DECISIONS, CITED DURING ARGUMENTS OF APPEAL, WHICH ALL GO TO THE ROOT OF THE MATTER AND ARE SO CRUCIAL AS MAY EVEN TILL THE BALANCE OF DECISION. ACCORDINGLY, IN PASSING THE TRIBUNAL'S IMPUGNED APPELLATE ORDER, MISTAKE APPARENT FR OM RECORD HAS OCCURRED, RENDERING THE SAID APPELLATE ORDER OF THE TRIBUNAL LIABLE TO BE RECTIFIED BY ESSENTIALLY RECALLING THE SAME FOR PASSING A FRESH ORDER IN ACCORDANCE WITH LAW AFTER CONSIDERING THE VARIOUS FACTS ON RECORD AS ALSO THE JUDICIAL DECISION S CITED BY THE LEARNED COUNSEL FOR ASSESSEE - PETITIONER. ON THIS VIEW OF OURS, WE ARE SUPPORTED BY THE DECISION OF THE HON'BLE MADHYA PRADESH HIGH M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 15 COURT IN THE CASE OF CIT V. MITHALAL ASHOK KUMAR (1986) 158 ITR 755 (MP) WHEREIN THE HON'BLE COURT HAS HELD 'THE DIRECTION FOR HEARING OF THE APPEAL DID NOT AMOUNT TO REVIEW IN THE STRICT SENSE OF THE TERM'. WE, THEREFORE, SET ASIDE/RECALL THE TRIBUNAL'S APPELLATE ORDER DATED 26 - 2 - 2003 AND DIRECT THE REGISTRY T O FIX THE RELATED APPEAL FOR HEARING SO AS TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW. 20. IN THE CASE OF GOLDEN MEADOWS PROPERTIES PVT. LTD. VS. ITO (149 TAXMAN 17)(MUM) ALSO , THE MUMBAI BENCH OF THE TRIBUNAL HELD THAT WHERE THERE IS A FAILURE TO CONSID ER CERTAIN EVIDENCES BROUGHT ON RECORD, THE SAME WOULD CONSTITUTE MISTAKE APPARENT FROM RECORD. 21. LEARNED DEPARTMENTAL REPRESENTATIVE ALSO P L ACED RELIANCE ON THE DECISION RENDERED BY HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CHAMPA LAL CHOPRA VS. STAT E OF RAJASTHAN (257 ITR 74), WHEREIN HON'BLE HIGH COURT EXPLAINED THE SCOPE OF PROVISIONS OF SECTION 254(2) OF THE ACT AS UNDER : - 7. A READING OF SUB - SECTION (2) OF SECTION 254 OF THE ACT MAKES IT CL EAR THAT ITS SCOPE AND AMBIT IS LIMITED. IT RESTRICTS TO RECTIFY THE MISTAKES APPARENT FROM THE RECORD. THUS, IN THE NORMAL COURSE, THE POWER OF RECTIFICATION CANNOT BE EXTENDED FOR RECALLING THE ENTIRE ORDER, OBVIOUSLY IT WOULD MEAN PASSING OF A FRESH ORD ER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE INTENT. HOWEVER, IN A GIVEN CASE WHERE THE FACTUAL MISTAKE IS SO APPARENT THAT IT BECOMES NECESSARY TO CORRECT THE SAME, THE TRIBUNAL WOULD BE JUSTIFIED IN NOT ONLY CORRECTING THE SAID MISTAKE BY WAY OF RECTIF ICATION BUT IF THE JUDGMENT HAS PROCEEDED ON THE BASIS OF THAT FACT, IT WOULD BE JUSTIFIED IN RECALLING SUCH ORDER AND POSTING FOR HEARING. 8. A DIVISION BENCH OF THE MADHYA PRADESH HIGH COURT IN CIT V. MITHALAL ASHOK KUMAR [1986] 158 ITR 755, THE TRIBUNAL FOUND APPARENT MISTAKE FROM THE RECORD IN ITS ORDER WHILE DECIDING THE QUESTION AS TO WHETHER THE FIRM WAS GENUINE OR NOT, ACCORDINGLY THE RECTIFICATION WAS GRANTED. ON A CHALLENGE BY THE REVENUE, THE DIVISION BENCH HELD THAT WHILE CONSIDERING THE APPLICATION FOR RECTIFICATION, THE PROVISIONS OF ORDER 47, RULE 1 OF THE CIVIL PROCEDURE CODE, CAN BE STRICTLY APPLIED. THE JUDGMENT OF THE MADHYA PRADESH HIGH COURT IS BASED ON THE DECISIONS OF THE APEX COURT IN K.M. SHANMUGAM V. S. R. V. S. (P .) LTD., AIR 1963 SC 1626 AND NAGENDRA NATH BORA V. COMMISSIONER OF HILLS DIVISION , AIR 1958 SC 398. THE DIVISION BENCH CONFIRMED THE ORDER OF THE TRIBUNAL GRANTING RECTIFICATION, THERE BEING MANIFEST ERROR ON THE FACE OF THE PROCEEDINGS. IN A RECENT DECISION THE ALLAHABAD HIGH COURT IN CIT V. U. P. SHOE INDUSTRIE S [1999] 235 ITR 663 HAS TAKEN THE VIEW THAT WHERE THERE IS APPARENT MISTAKE FROM THE RECORD, THE TRIBUNAL HAS JURISDICTION TO RECTIFY THE MISTAKE BY RECALLING THE ENTIRE ORDER AND POSTING FOR REHEARING. 9. IN THE INSTANT CASE, THE TRIBUNAL GRANTED RECTIF ICATION AND POSTED THE CASE FOR REHEARING, HAVING ADMITTED THAT ITS ORDER HAS PROCEEDED ON THE ASSUMPTION OF WRONG FACTS. IN OUR VIEW, IN THE FACTS OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 16 CORRECTING THE MANIFEST ERROR. THE LEARNED SINGLE JUDGE HAS COMMI TTED AN ERROR IN INTERFERING WITH A WELL JUSTIFIED ORDER, WITHOUT LOOKING INTO THE REAL CONTROVERSY INVOLVED. 22. LEARNED AR ALSO PLACED RELIANCE ON THE DECISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. CIT (295 ITR 466), WHEREIN HON'BLE SUPREME COURT HAS OBSERVED THAT NO PARTY APPEARING BEFORE THE TRIBUNAL SUFFERS ON ACCOUNT OF MISTAKE COMMITTED BY THE TRIBUNAL. 23. WE NOTICE THAT THE COURTS/TRIBUNALS HAVE TAKEN CONSISTENT VIEW THAT THE NON - CONSIDERATION OF V ITAL MATERIALS AVAILABLE ON RECORD AND/OR FINDINGS RECORDED UNDER MISAPPREHENSION OR MISCONCEPTION WOULD CONSTITUTE MISTAKES APPARENT FROM RECORD WARRANTING RECALL OF THE ORDER. 24. IN THE INSTANT CASE, THE SUBMISSIONS MADE BY THE ASSESSEE SHOWS THAT TH E TRIBUNAL HAS NOT CONSIDERED CERTAIN IMPORTANT DOCUMENTS AS DETAILED BELOW: - (A) PAGES 105A AND 105B (AS SUBMITTED IN PARA 5 SUPRA) (B) PAGES 187 201 (AS SUBMITTED IN PARA 7 SUPRA) (C) PAGES 188 - 189 (AS SUBMITTED IN PARA 9 SUPRA) FUR THER, THE ASSESSEE HAS POINTED OUT A CLERICAL MISTAKE IN THE COMPUTATION AND THE SAME IS RECORDED IN PARA 10 SUPRA. THE LD A.R SUBMITTED THAT THE LD CIT(A) HAS COMPARED THE PURCHASE PRICES OF DIAMONDS PURCHASED FROM THE SISTER CONCERN AS WELL AS A NON - REL ATED PARTY AND ACCORDINGLY GIVEN A FINDING THAT THE DIFFERENCE IN RATE WAS TO THE EXTENT OF RS.72/ - ONLY. ACCORDING TO THE ASSESSEE, THIS VITAL FACT AS WELL AS THE DOCUMENTS RELATING THERETO HAVE NOT BEEN CONSIDERED/ADDRESSED BY THE TRIBUNAL. FURTHER IT WAS SUBMITTED THAT THE TRIBUNAL HAS OMITTED TO CONSIDER THE FACT THAT THE PRICE OF DIAMONDS WOULD DEPEND UPON ITS QUALITY AND SIZE, EVEN THOUGH A SPECIFIC OBSERVATION WAS MADE ACCEPTING THE SAID FACT. WITH REGARD TO DISALLOWANCE MADE OUT OF LABOUR CHARGES , IT WAS POINTED OUT THAT THE DOCUMENTS RELATING TO THE LABOURER AND EMPLOYEE DETAILS WERE OMITTED TO BE CONSIDERED BY THE TRIBUNAL. M/S. SANHVI JEWELLERY MANUFACTURING CO. PVT. LTD. 17 25. THUS, WE NOTICE THAT THE TRIBUNAL HAS PASSED THE IMPUGNED ORDER WITHOUT CONSIDERING CERTAIN IMPORTANT DOCUMENTS AND WITHOUT ADDRESSING THE IMPORTANT FINDINGS GIVEN BY LD CIT(A). WE HAVE SEEN THAT THE DECISION RENDERED WITHOUT CONSIDERING THE VITAL FACTS AND DOCUMENTS AVAILABLE ON RECORD AND UPON MISAPPREHENSION/MISCONCEPTION SUFFERS FROM MISTAKE APPARENT FROM RECORD. ACCORDINGLY, WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL DESERVES RECALLING. ACCORDINGLY WE RECALL THE IMPUGNED ORDER DATED 30 - 11 - 2011 PASSED BY THE TRIBUNAL IN ITA NO.352/MUM/2008 AND ITA NO.577/MUM/200 8 AND DIRECT THE REGISTRY TO POST THESE APPEALS FOR HEARING AFRESH IN THE NORMAL COURSE. 26. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE ARE ALLOWED. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 13 .5 .2016 . SD/ - SD/ - ( SANJAY GARG ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 13 / 5 /20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS