M/s Vishal Coaters Limited, Patiala V. ACIT, Patiala

MA 73/CHANDI/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9316 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Capital asset; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER MA NO. 72/CHD/2012 IN ITA NO. 267/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S VISHAL PAPER INDUSTRIES, V JCIT, RANGE, PATIALA. PATIALA. & MA NO. 73/CHD/2012 IN ITA NO. 268/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S VISHAL COATER LTD., V JCIT, RANGE, PATIALA. PATIALA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI N.K.SAINI DATE OF HEARING : 02.11.2012 DATE OF PRONOUNCEMENT : 29.11.2012 ORDER PER MEHAR SINGH, AM THE ASSESSEE APPELLANT, FILED MISCELLANEOUS APPLICATIONS U/S 254(2) OF THE INCOME-TAX ACT,1961 (HEREINAFTER REFERRED TO 'THE ACT') BEARING NUMBER MA 72/CHD/2012, ARISING OUT OF ITA 267/CHD/2011 AND MA/73/2012, ARISING OUT OF ITA NO. 268/CHD/2011, EA CH DATED 28.5.2012, FOR THE ASSESSMENT YEAR 2007-08 AN D CONTENDED THEREIN THAT THE APPELLATE ORDER, DATED 26.03.2012, PASSED BY THE TRIBUNAL U/S 254(1) OF TH E ACT, SUFFERS FROM MISTAKES APPARENT FROM RECORD. IT IS PERTINENT TO POINT OUT HERE THAT BOTH THE MISCELLANEOUS APPLI CATIONS 2 DIRECTED AGAINST CONSOLIDATED APPELLATE ORDER, DATE D 26.3.2012, PASSED U/S 254(1) OF THE ACT, CONTAINING IDENTICAL CONTENTS AND SUBMISSIONS, AND, HENCE, SUCH MISCELLA NEOUS APPLICATIONS ARE CONSIDERED AND DECIDED TOGETHER. 2. IN THE COURSE OF PRESENT RECTIFICATORY PROCEEDIN GS , U/S 254(2) OF THE ACT, LD. 'AR' CONTENDED THAT ISSUE IN VOLVED IN BOTH THESE MAS BEARING NOS. MA 72&72/CHD/2012, IS IDENTICAL, HENCE, THE SUBMISSIONS MADE IN RESPECT O F M.A. 72/CHD/2012 MAY BE TREATED AS APPLICABLE TO M.A. 73/CHD/2012 ALSO. LD. 'AR' REFERRED TO PARA 26 & 29 OF THE ITAT ORDER DATED 26.3.2012 AND MADE AN ATTEMPT TO M AKE OUT A CASE THAT THE DISALLOWANCE OF INTEREST FOLLOW ING DECISIONS OF THE HON'BLE SUPREME COURT IN ACIT V AR VIND POLYCOT LTD. (2008) 299 ITR 12 (S.C); JCIT V UNITED PHOSPHOROUS LTD. (2008) 299 ITR 9 (S.C) AND DCIT V GUJRAT ALKALIES & CHEMICALS LTD. (2008) 299 ITR 85 (S.C) AND THE AMENDED PROVISIONS OF SECTION 36(1)(III) AND PROVIS O THEREUNDER W.E.F. 1.4.2004, CONSTITUTED MISTAKE APP ARENT FROM RECORDS U/S 254(2) OF THE ACT. LD. 'AR' ARGUE D THAT ISSUE OF INTEREST HAS NOT BEEN PROPERLY CONSIDERED, IN THE LIGHT OF SUBMISSIONS MADE. LD. 'AR' WAS OF THE OPI NION THAT THE FUNDS USED FOR PURCHASE OF ASSETS, WERE NOT BOR ROWED FUNDS. 3. LD. 'DR', ON THE OTHER HAND, CATEGORICALLY AND VEHEMENTLY CONTENDED THAT THE ISSUE IN QUESTION HAS BEEN CONSIDERED AND ADJUDICATED BY THE HON'BLE BENCH, PU RELY ON MERIT AND, HENCE, THE QUESTION OF FRESH HEARING OF THE SAME 3 ISSUE, ADJUDICATED ON MERIT AND REVERSAL OF THE SAM E, AS SOUGHT FOR BY THE LD. 'AR', FALLS BEYOND THE PURVIE W OF THE PROVISIONS OF SECTION 254(2) OF THE ACT. HE, FURTHE R, CONTENDED THAT NO JURISDICTION FOR JUDICIAL REVIEW IS AVAILABLE, TO THE TRIBUNAL IN RESPECT OF THE ISSUES ADJUDICATED ON MERIT. HENCE, BOTH THE M.AS MAY BE DISMISSED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, FACTS OF TH E CASE AND THE RELEVANT RECORDS. THE RELEVANT PART OF THE MA NO.72/CHD/2012, WHICH IS ALMOST SIMILAR IN RESPECT OF BOTH THE MAS, IS REPRODUCED HEREWITH: 1. THAT IT IS VERY HUMBLY SUBMITTED THAT THE ABOVE SAID APPEAL OF THE DEPARTMENT ALONG WITH ASSESSEE'S APPEAL BEARING ITA NO. 348/CHD/ 2011 WERE HEARD/DECIDED BY THE HON'BLE BENCH VIDE ORDER, DATE D 26.03.2012 AS PER COPY OF THE ORDER BEING ENCLOSED HEREWITH. 2. THAT IN THE CONSOLIDATED ORDER, THE DE PARTMENTAL APPEAL HAS BEEN ADJUDICATED BY THE HON'BLE BENCH IN ITA NO. 267/CHD / 2011, AT PAGE 30 OF THE ORDER, THE REVENUE HAD TAKEN GROUND OF APPEAL AS UN DER:- '24. IN GROUND NO.1, THE REVENUE CONTENDED THAT THE ID. CIT (A) ERRED IN DELETING THE ADDITION OF RS. 15,61 ,8287- MADE BY THE AO, ON ACCOUNT OF DISALLOWANCE OF INTER EST U/S 36 (1)(III) OF THE ACT, ON BORROWED CAPITAL WITHOUT APPRECIATING THE FACT THAT THE SAME ASSET WAS NOT P UT TO USE.' 3. THE HON'BLE ITAT HAS CONFIRMED THE DISALLOWAN CE OF INTEREST OF RS. 1561828/- ON THE GROUND THAT DECISION OF HON'BLE SU PREME COURT IN THE CASE OF CIT VS. ASSOCIATED FIBRE AND RUBBER INDUSTRIES PRIV ATE LIMITED (1999) 236 ITR 471 WAS APPLICABLE UPTO ASSESSMENT YEAR 2003-04 AS THE PROVISIONS OF SECTION 36 (1) (III) AND THE PROVISO THERE UNDER WERE AMENDED W.E. F 01.04.2004 VIDE FINANCE ACT 2003. 4. IN THIS CONNECTION IT IS SUBMITTED THAT THE DEC ISION OF THE HON'BLE SUPREME COURT HAS BEEN RELIED UPON BY THE I D. C!T (A) ONLY TO FORTIFY HIS FINDING THAT NO DISALLOWANCE OF INTERES T IN THIS CASE WAS CALLED FOR AS NO BORROWED FUNDS WERE UTILIZED IN PURCHASE OF U NINSTALLED CAPITAL ASSETS. THE OBSERVATION MADE BY HIM IN PARA 8.7 OF HIS ORDE R READS AS UNDER:- 4 'WHEN THE APPELLANT HAD HIS OWN CAPITAL AS WELL AS BORROWED FUNDS THE A.O.'S PRESUMPTION THAT THE BORR OWED FUNDS HAVE BEEN UTILIZED FOR PURCHASE OF CAPITAL AS SETS IS TOO FAR FETCHED A CONCLUSION.' IN FACT THE HON'BLE ITAT IN ITS ORDER UNDER REFEREN CE ALSO OBSERVED IN PARA 28 (PAGE 32) OF THE ORDER THAT THE ADDITION WAS DELETED BY THE CIT (A) ON THE GROUND THAT NO BORROWED FUNDS WE RE UTILIZED FOR PURCHASE OF CAPITAL ASSETS. THE RELEVANT OBSERVATIO N MADE BY THE HON'BLE ITAT READS AS UNDER:- 'THE ID. CIT (A) DELETED THE IMPUGNED ADDITION, ON THE GROUND THAT THE APPELLANT HAS OWN CAPITAL AS WELL A S BORROWED FUNDS AND HENCE THE A.O.'S PRESUMPTION THA T THE BORROWED FUNDS HAVE BEEN UTILIZED FOR PURCHASE OF C APITAL ASSETS IS TOO FAR-FETCHED CONCLUSION.' FROM THE ABOVE IT IS APPARENT THAT THE ID. CIT (A) DELETED THE ADDITION AS HE FOUND THAT NO BORROWED FUNDS WERE UTILIZED FO R PURCHASE OF CAPITAL ASSETS. HE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT (SUPRA) ONLY TO FORTIFY HIS OPINION. 5. BEFORE THE ID. CIT (A) THE ASSESSE E HAD CONTENDED THAT NO BORROWED FUNDS WERE UTILIZED FOR PURCHASE OF CAPITA L ASSETS (PAGE NO 156 TO 160 OF THE PAPER BOOK FILED WITH THE HON'BLE ITA T). AS PER PAGES 181 TO 184 OF THE PAPER BOOK FILED WITH THE HON'BLE TRIBUN AL (PAGE 181 TO 184) IT HAS BEEN BROUGHT OUT THAT OUT OF INVESTMENT OF RS. 36687609/- MADE IN PURCHASE OF CAPITAL ASSETS INVESTMENT TO THE TUNE O F 27194780/- WAS OUT OF INTERNAL ACCRUAL AND THE BALANCE INVESTMENT OF RS. 9492829/- WAS RELATABLE TO SUNDRY CREDITORS OF RS. 12861125/- FROM WHOM CAP ITAL ASSETS WERE PURCHASED AND THE AMOUNT WAS OUTSTANDING FOR PAYMEN T. 6. SINCE THE FACT THAT NO BORROWED FUNDS WERE UTILIZED FOR PURCHASE OF CAPITAL ASSETS IS CLEAR FROM THE RECORD , IT IS HUMBLY PRAYED THAT THE HON'BLE ITAT MAY KINDLY BE PLEASED TO REVI SE ITS ORDER DATED 26.03.2012 UNDER SECTION 254 (2) IN RESPECT OF ADDI TION OF RS. 1561828/- AND ALLOW NECESSARY RELIEF TO THE APPELLANT 5. THE ISSUE IN QUESTION HAS BEEN ADJUDICATED BY TH E BENCH VIDE PARA 24 TO 29. RELEVANT PART OF THE ADJUDICATION/FINDINGS ON THE ISSUE IN QUESTION IS R EPRODUCED HEREUNDER : 24 IN GROUND NO. 1, THE REVENUE CONTENDED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 15,61,828/-, MADE BY T HE AO, ON ACCOUNT OF DISALLOWANCE OF INTEREST U/S 36(1)(III) OF THE ACT, ON BORROWED CAPITAL WITHOUT APPRECIATING THE FACT THAT THE SAME ASSET WAS NOT P UT TO USE. 25 WE HAVE PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE, RELEVANT RECORD AND THE PAPER BOOK. THE LD 'DR' FOR THE REVE NUE PLACED RELIANCE ON THE ORDER OF THE AO. THE LD 'AR' FOR THE ASSESSEE CONT ENDED THAT THE AO ADOPTED 5 INCORRECT FIGURES WHICH HAVE BEEN DEALT WITH AT PAG E 41 OF THE PAPER BOOK. IT WAS, FURTHER, ARGUED BY THE LD 'AR' FOR THE ASSESSE E THAT IT IS UNDISPUTED FACT THAT NO SPECIFIC LOAN HAS BEEN RAISED, FOR THE PURC HASE OF MACHINERY, AS IS EVIDENT FROM PAGE 280 OF THE PAPER BOOK. THE ASSES SEE PLACED RELIANCE ON THE DECISION OF CHANDIGARH TRIBUNAL IN THE CASE OF UPPE R INDIA STEEL MANUFACTURING CO. LTD. IN ITA 920/CHD/2009. 26. BRIEF FACTS OF THE CASE ARE THAT THE AO IN HIS ASSESSMENT ORDER HAS MENTIONED THAT THE APPELLANT IN HIS BALANCE SHEET H AS SHOWN SECURED LOANS OF R. 2,64,14,278/- AND UNSECURED LOANS OF RS. 6558726 3/- RESPECTIVELY. CORRESPONDINGLY, HE DEBITED RS. 80,89,966/- AS BANK INTEREST, (FINANCIAL CHARGES) IN THE PROFIT AND LOSS ACCOUNT. THE APPE LLANT HAD SHOWN ADDITION TO CAPITAL ASSETS OF RS. 10,80,48,935/-. FOR THIS ADD ITION THE APPELLANT HAD BORROWED FUNDS TO ACQUIRE THE CAPITAL ASSETS. THE AO WAS OF THE OPINION THAT THE INTEREST OF RS. 80,89,966/- CHARGED ON BORROWED FUNDS UTILIZED FOR THE ACQUISITION OF THE CAPITAL ASSETS NEEDED TO BE TRE ATED AS CAPITAL EXPENDITURE. HE GAVE A SHOW CAUSE NOTICE TO THE APPELLANT FOR HI S PROPOSAL TO MAKE SUCH AN ADDITION. THE APPELLANT REPLIED THAT INVESTMENT IN FIXED ASSETS WAS NOMINAL DURING THE CURRENT YEAR WHEREAS THE MAJOR INVESTMEN T FOR ACQUISITION OF FIXED ASSETS LIKE BOILER, BUILDING, ELECTRIC MOTORS AND M ACHINERY ACCOUNTS OF RS. 38452705/- HAD BEEN MADE IN THE FINANCIAL YEAR 200 5-06 I.E. A YEAR PRIOR TO THE CURRENT ASSESSMENT YEAR. IN FACT THESE ASSETS HAD BEEN PUT TO USE ONLY ON 19.4.2006 AND THE ADDITION MADE DURING THIS FINANCI AL YEAR 2006-07 WAS VERY NOMINAL. ALL THE INVESTMENTS HAD NOT BEEN MADE OUT OF UNSECURED LOANS OR SECURED LOANS BUT ONLY OUT OF THE PROFITS OF THE FI RM AND OUT OF NON-INTEREST BEARING FUNDS. 27. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASS ESSEE AND MADE THE IMPUGNED ADDITION U/S 36(1)(III) AND PROVISO THEREU NDEER. 28. THE LD. CIT(A) DELETED THE IMPUGNED ADDITION, O N THE GROUND THAT THE APPELLANT HAS OWN CAPITAL AS WELL AS BORROWED FUNDS AND HENCE THE AOS PRESUMPTION THAT THE BORROWED FUNDS HAVE BEEN UTILI ZED FOR PURCHASE OF CAPITAL ASSET IS TOO FAR-FETCHED CONCLUSION. IT IS , FURTHER, OBSERVED BY THE LD. CIT(A) THAT THE AO PRESUMED THAT OUT OF FUNDS AVAIL ABLE FROM SECURED AND UNSECURED LOANS, THE APPELLANT MADE PAYMENTS FOR PU RCHASE OF ASSETS, EVEN THOUGH THE SAME WAS FAR IN EXCESS OF PROFITS EARNED . THE LD. CIT(A), FURTHER, OBSERVED AS ALSO, INTEREST CANNOT BE DISALLOWED ME RELY BECAUSE THE ASSET WAS NEVER USED AND WHERE THE BORROWING HAD BEEN HELD FO R BUSINESS (CIT V. ASSOCIATED FIBRE & RUBBER INDUSTRIES PVT LTD (1999) 236 ITR 471 (SC). IN VIEW OF THIS DISCUSSION MADE THE ADDITION MADE BY T HE AO NEEDS TO BE DELETED. 29. THIS IS UNDISPUTED FACT THAT THE INTEREST HAS B EEN PAID BY THE ASSESSEE, AS IS EVIDENT FROM PERUSAL OF THE PROFIT AND LOSS A CCOUNT, AS MENTIONED BY THE AO. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEE H AD PURCHASE ASSETS. THEREFORE, THE PROVISIONS OF SECTION 36(1)(III) AND PROVISO THEREUNDER, WHICH IS INSERTED W.E.F. 1.4.2004 VIDE FINANCE ACT, 2003 ARE APPLICABLE. IT IS EVIDENT THAT THE INTEREST ON BORROWED CAPITAL CANNOT BE ALL OWED UNLESS SUCH ASSET WAS FIRST PUT TO USE. IN THE PRESENT CASE, THE LD. CIT (A), HAS PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF AS SOCIATED FIBRE AND RUBBER INDUSTRIES PVT LTD (SUPRA) WHICH RELATES TO PERIOD PRIOR TO THE INSERTION OF PROVISO TO SECTION 36(1)(III) OF THE A CT. WE ARE DEALING WITH AY 2007-08 WHICH FALLS UNDER THE PROVISO TO SEC 36(1)( III). IN THIS CONTEXT, THE HON'BLE SUPREME COURT POINTED OUT IN A BATCH OF CAS ES IN ACIT V. ARVIND POLICOT LTD V JCIT, 299 ITR 12 (SC), UNITED PHOSPHO ROUS LTD (2008) 299 ITR 9 (S.C) AND DCIT V. GUJARAT ALKALIES AND CHEMICALS LTD (2008) 299 ITR 85 6 (SC), HOLDING THAT ITS EARLIER DECISION IN DCIT V. CORE HEALTH CARE LTD (2008)298 ITR 194 (SC) CONTINUE TO HAVE APPLICATION , FOR PRE-AMENDED PERIOD, FOR AY BEFORE AY 2004-05. SIMILARLY, THE D ECISIONS RELIED UPON BY THE LD. CIT(A) ARE APPLICABLE TO THE PRE-AMENDED ERA. IN VIEW OF THIS, THE FINDINGS OF THE LD. CIT(A) ARE CONTRARY TO THE PROVISIONS O F SECTION 36(1)(III) AND PROVISO THEREUNDER, IN THE LIGHT OF THESE, THE LATE ST DECISIONS OF THE HON'BLE SUPREME COURT. HAVING REGARD TO THE FACTS OF THE C ASE AND RELEVANT PROVISIONS OF THE ACT, AS DISCUSSED ABOVE AS ALSO D ECISIONS OF THE HON'BLE APEX COURT. THIS GROUND OF APPEAL OF THE REVENUE IS ALLOWED. HOWEVER, THE APPELLANT WOULD BE ENTITLED FOR ENHANCED DEDUCTION U/S 80IB, IN RESPECT OF SUCH ADDITION AS HELD IN THE FOREGOING PARAGRAPHS. 6. A BARE PERUSAL OF THE FACTS AND ISSUE INVOLVED A ND ADJUDICATION OF THE ISSUE BY THE BENCH REVEALS THAT THE ISSUE IN QUESTION HAS BEEN ADJUDICATED ON MERIT, HA VING REGARD TO THE FACT-SITUATION OF THE CASE, DECISIONS OF THE HON'BLE SUPREME COURT AND THE RELEVANT PROVISIONS O F SECTION 36(1)(III) AND PROVISO THEREUNDER. THEREFOR E, FINDINGS OF THE CIT(APPEALS) WERE FOUND CONTRARY TO THE PROV ISIONS TO SECTION 36(1)(III) AND PROVISO THEREUNDER, IN THE L IGHT OF THE DECISIONS OF THE HON'BLE SUPREME COURT IN ACIT V AR VIND POLYCOT LTD. (2008) 299 ITR 12 (S.C); JCIT V UNITED PHOSPHOROUS LTD. (2008) 299 ITR 9 (S.C) AND DCIT V GUJRAT ALKALIES & CHEMICALS LTD. (2008) 299 ITR 85 (S.C). SUCH FINDINGS OF THE TRIBUNAL CANNOT BE TREATED AS MISTA KE APPARENT FROM RECORD, AS MISCONSTRUED BY LD. 'AR'. IT IS PERTINENT TO MENTION HERE THAT ALL THE DETAILS AND DATA PERTAINING TO THE ISSUE IN QUESTION HAS BEEN DISCUS SED IN THE FINDINGS OF THE BENCH AND HAVING REGARD TO THE INTERPRETATION OF PROVISIONS OF SECTION 36(1)(III) READ WITH PROVISO THEREUNDER, AS PLACED BY THE DECISIONS OF H ON'BLE SUPREME COURT (SUPRA), THE ISSUE HAS BEEN ADJUDICAT ED. IT IS NOT A CASE WHERE THE BENCH HAS IGNORED DECISIONS OF THE JURISDICTIONAL HIGH COURT OR THE HON'BLE SUPREME CO URT ON 7 THE ISSUE IN QUESTION. IT IS A CASE, WHERE THE RIVA L SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT REC ORDS HAD BEEN DULY CONSIDERED AND, CONSEQUENTLY, FINDINGS ON THE ISSUE WERE RECORDED BY THE BENCH, ON MERIT. IN VIE W OF THIS, APPELLANT HAS FAILED TO PROPERLY CONCEIVE, READ AND UNDERSTOOD RELEVANT PROVISIONS OF SECTION 254(2) OF THE ACT AND MISCONSTRUED THE ISSUE DECIDED ON MERIT, AS MIS TAKE APPARENT FROM RECORD, WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. 7. IT IS PERTINENT TO HIGHLIGHT AND APPRECIATE THE CORRECT CONNOTATION OF THE EXPRESSION USED U/S 254(2) OF TH E ACT. A MISTAKE APPARENT FROM RECORD IS ONE WHICH IS AP PARENT, SELF-EVIDENT, ON THE FACE OF IT AND NOT ONE, TO BE ESTABLISHED BY WAY OF PRODUCTION OF FRESH MATERIALS AND BY PLAC ING RELIANCE, ON A NUMBER OF FRESH JUDICIAL PRECEDENTS. THE POWER U/S 254(2) OF THE ACT, IS CONFINED ONLY TO RE CTIFICATION OF ANY MISTAKE APPARENT FROM THE RECORD. THE ASSESS EE APPELLANT SOUGHT TO REVISE THE FINDINGS, ARRIVED AT , ON MERIT, AFTER DUE DELIBERATIONS, DISCUSSIONS, AND ON CONSID ERATION OF RELEVANT MATERIAL ON RECORDS, RELEVANT PROVISIONS O F SECTION 36(1)(III) AND PROVISO THEREUNDER, INCLUDING THE DE CISIONS OF THE HON'BLE SUPREME COURT AS DISCUSSED EARLIER. IN VIEW OF THIS, THE PROVISIONS OF SECTION 254(2) OF THE ACT, DONT WARRANT TO TAKE A DIFFERENT VIEW, ALREADY TAKEN ON MERIT, IN THE GUISE OF RECTIFICATORY PROCEEDINGS U/S 254(2) O F THE ACT. IT IS A WELL SETTLED LEGAL PROPOSITION THAT PROVISI ONS OF SECTION 254(2) OF THE ACT, DO NOT EXTEND TO RE-HEAR ING AND PERMITTING ARGUMENTS, ON ISSUES, ALREADY ADJUDICATE D ON 8 MERIT. THE HON'BLE GAUHATI HIGH COURT, IN THE CASE OF BHARAT DRUG STORES V CIT (2007) 295 ITR 120 (GAU) H AS HELD THAT TRIBUNAL HAD NO POWER TO RE-HEAR THE MATTER, T OUCHING UPON THE MERIT WHICH WAS DECIDED AND OUGHT NOT TO H AVE MADE ANY OBSERVATION, RELATING TO MERITS OF THE CAS E, WHILE EXERCISING POWER U/S 254(2) OF THE ACT. IN THE PRES ENT CASE, BENCH HAS PASSED A WELL REASONED AND DETAILED APPEL LATE ORDER, U/S 254(1) OF THE ACT, ON APPRECIATION OF TH E MATERIAL AVAILABLE ON RECORD AND THE SAME CANNOT BE UPTURNED BY TAKING RECOURSE TO THE PROVISIONS OF SECTION 254(2) OF THE ACT. THE ASSESSEE IS NOT COMPETENT, IN THE GUISE O F MISCELLANEOUS APPLICATION(S), TO CONVERT THE RECTIF ICATORY PROCEEDINGS U/S 254(2) OF THE ACT INTO APPELLATE PROCEEDINGS, AS COMPLETED U/S 254(1) OF THE ACT. 8. FURTHER, THE APPELLANT HAS FAILED TO SPECIFY ANY MISTAKE APPARENT FROM RECORD, AS CONTEMPLATED U/S 254(2) OF THE ACT, IN THE IMPUGNED ORDER OF THE TRIBUNAL. THE MISTAKE S WHICH ARE OBVIOUS, SELF-EVIDENT, PATENT AND GLARING ONE, FALL UNDER THE CATEGORY OF MISTAKE APPARENT FROM RECORD. THE ACT DOES NOT DEFINE MISTAKE APPARENT FROM RECORD, THOUGH THE SAME HAS BEEN DEFINED JUDICIALLY, IN A NUMBER OF DECISIO NS. IT IS LEGALLY SETTLED PROPOSITION THAT A MISTAKE APPARENT FROM RECORD, MUST BE 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 CONCE IVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF L AW, IS NOT A MISTAKE APPARENT FROM RECORD, AS HELD BY THE HON' BLE SUPREME COURT IN T.S.BALARAM ITO V VOLKART BROTHERS & 9 OTHERS 82 ITR 50 (S.C). SIMILARLY, THE POWER OF RE CTIFICATION U/S 254(2) OF THE ACT, DOES NOT CONTEMPLATE A REVIE W, AND REVERSAL OF THE DECISION, TAKEN AFTER DUE CONSIDERA TION OF LAW, CASE LAWS AND FACTS OF THE CASE. IN THE PRESE NT CASE, THE APPELLANT MERELY SEEKS THAT HIS CASE BE RE-CONS IDERED AND FINDINGS OF THE TRIBUNAL, BASED ON MERIT, BE RE WRITTEN AND DECIDED AS CONTEMPLATED IN THE IMPUGNED MISCELL ANEOUS APPLICATIONS. 9. THE HON'BLE SUPREME COURT, IN MEPCO INDUSTRIES L TD. V CIT 319 ITR 208, HAS CITED THE OBSERVATIONS MADE, B Y THE HON'BLE SUPREME COURT IN DEVA METAL POWER P.LTD. V COMMISSIONER TRADE TAX, UP (2008) (II ) SCC 439 (S. C) AND HELD THAT NOT ONLY A MISTAKE SHOULD EXIST IN THE OR DER SOUGHT TO BE RECTIFIED, BUT THE SAME SHOULD BE A PATENT MI STAKE WHICH IS OBVIOUS AND WHOSE DISCOVERY IS NOT DEPENDE NT ON ELABORATE ARGUMENTS. IN THE LIGHT OF THE DECISION O F THE HON'BLE SUPREME COURT, NO SUCH MISTAKE APPARENT FRO M RECORDS HAS BEEN POINTED OUT BY THE APPELLANT WHICH FALLS UNDER THE CATEGORY OF MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT. 10. THE HON'BLE SUPREME COURT, IN THE CASE OF DEV A METALS POWER V COMMISSIONER TRADE TAX (SUPRA), LAID DOWN THE FOLLOWING LEGAL PROPOSITIONS, ON THE ISSUE OF M ISTAKE APPARENT FROM RECORD AND RECTIFICATION THEREOF : I) THE MISTAKE IN THE ORDER SOUGHT TO BE RECTIFIE D, MUST EXIST AND THE SAME MUST BE APPARENT FROM THE RECORD. II) MISTAKE MEANS TO TAKE OR UNDERSTAND WRONGLY O R INACCURATELY; TO MAKE AN ERROR IN INTERPRETING; IT IS AN ERROR, A FAULT, A MIS-UNDERSTANDING, MIS- CONCEPTION. APPARENT MEANS VISIBLE , CAPABLE OF BEING SEEN, OBVIOUS; PLAIN. IT MEANS OPEN TO 10 VIEW, VISIBLE, EVIDENT, APPEARS AS REAL AND TRUE, CONSPICUOUS, MANIFEST OBVIOUS AND SEEMING. III) A MISTAKE WHICH CAN BE RECTIFIED, IS ONE WHICH IS PATENT, OBVIOUS AND WHOSE DISCOVERY IS NOT DEPENDENT ON ARGUMENT OR ELABORATION. THOUGH A MISTAKE, CAPABLE OF BEING RECTIFIED, IS NOT CONFINE D TO CLERICAL OR ARITHMETICAL MISTAKE, IT DOES NOT, HOWEVER, COVER ANY MISTAKE WHICH MAY BE DISCOVERED BY A COMPLICATED PROCESS OF INVESTIGATION, ARGUMENT OR PROOF. THE DECISION ON A DEBATABLE POINT OF LAW OR FACT OR FAILURE TO APPLY THE LAW, TO A SET OF FACTS WHICH REMAINS TO BE INVESTIGATION, CANNOT BE CORRECTED BY WAY OF RECTIFICATION. IV) WHERE AN ERROR IS FAR FROM SELF-EVIDENT, IT CEASES TO BE AN ERROR AND, THEREFORE, NOT CAPABLE OF BEING RECTIFIED. 11. BY APPLYING THESE JUDICIAL PROPOSITIONS, AS LAI D DOWN BY THE HON'BLE APEX COURT, TO THE CONTENTS OF THE PRES ENT MISCELLANEOUS APPLICATION(S), IT IS EVIDENT THAT TH ERE DOES NOT EXIST ANY MISTAKE APPARENT FROM THE RECORD, EIT HER OF FACTS OR OF LAW. 12. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSI ONS, BOTH MISCELLANEOUS APPLICATIONS FILED BY THE APPELLANTS, ARE DISMISSED. HOWEVER, THE AMOUNT IN ITA 268/CHD/201 1, IN THE CASE OF ACIT, CIRCLE, PATIALA V M/S VISHAL COAT ERS LTD., VILLAGE MAIN, DISTT. PATIALA MAY BE READ AS RS.10,2 1,390/- IN PLACE OF RS.15,61,828/-. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOV.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH NOV.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH