TMI Blog2009 (7) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... d appeals, the Hon ble Tribunal expressed its view in open court that the difference arising from assignment of the sales tax loan liability is not exigible to tax either under sections 41(1) or 28( iv ) and the difference amount Rs. 18,74,92,706 treated by the CIT(A) as interest accruing to the assessee on the alleged principal amount Rs. 5,62,31,224 purportedly advanced by the assessee to Ganjam cannot be brought to tax in the hands of the Appellant in as much as Ganjam has already been taxed on the income earned by it on Rs. 5,62,31,224. Moreover, the Tribunal also observed that it will have to proceed on the footing that the loan liability has been waived. Further, the Tribunal on the same day, that is 27-2-2008, also unequivocally expressed its view that the duty benefit emanating from the advance license should not be assessed in the year of entitlement, but in the year of utilization of the license. It was also clearly pointed out that such a view was taken in earlier year in assessee s own case. In the light and backdrop of what transpire in the hearing proceedings before the Tribunal on 27-2-2008 as adumbrated in the foregoing paragraphs, to the utter shock and surprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assigning the loan liability to Ganjam inasmuch as the said sum never came back to the Applicant; ( b )holding that the interest on the impugned sum Rs. 5,62,31,224 accrued to the Applicant when the amount was no longer owned by the Applicant more particularly, when the income originating from it had already been offered and taxed in the hands of Ganjam and hence such a conclusion tantamount to double taxation thereby transgressing the very fundamental and basic tenet of tax that a subject cannot suffer double jeopardy or be exacted to tax twice over; ( c )the bona fides of the agreement having not been doubted and impeached, the Tribunal erred in rewriting the agreement; and ( d )in respect of the duty benefit Rs. 80,75,513 arising from the advance license, the Tribunal overlooked its order for the assessment year 1996-97 in the Applicant s own case. The Hon ble Tribunal has not taken into account and considered the written submissions, documents and other evidences embedded in the paper books and other evidence lodged before the Tribunal." 3. In the course of present appellate proceedings, the ld. A.R contended that the impugned appellate order contains error ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that it is not a case of remission of liability, now we decide as to whether this difference of Rs. 1874.92 lakhs is taxable in the hands of the assessee as income or not and if yes in which year or years. We find that GTC has debited interest in its books every year on account of this very transaction and as per the copy of journal entries passed in the books of GTC and submitted before us, year-wise detail of such debit of interest by GTC as under : Year ended Amount 31-3-1999 90,39,423.00 31-3-2000 1,04,92,551.35 31-3-2001 1,21,79,276.38 31-3-2002 1,41,37,150.08 31-3-2003 1,61,09,760.82 31-3-2004 1,74,53,503.06 31-3-2005 1,83,31,477.00 15. From the above it can be seen that GTC has duly accounted for the interest payable by it on the amount of Rs. 5,62,31,224 received by it from the assessee in the light of factual position, we feel that nomenclature of this impugned agreement between the assessee and GTC is not decisive and we have to see the substance of the agreement. The substance is that the loan liability is not payable by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this benefit is arising to the assessee on account of providing of funds of Rs. 562.31 lakhs by the assessee to GTC now as against future liabilities and GTC is using the funds till then. Once we hold that it is income of the assessee, it has to be accepted that this income is to be taxed during each year from the date when the sum of Rs. 562.31 lakhs was paid by the assessee to GTC till the date of the last instalment of loan to be paid by GTC on account of the assessee s loan liability. This view of us is fortified by the judgment of Hon ble Apex Court rendered in the case of Madras Industrial Investment Corporation Ltd. v. CIT as reported in 225 ITR 802 . In this case, the assessee issued debentures at a discount. The debentures were redeemable after 12 years. Total discount was Rs. 3 lakhs which was payable after the end of 12 years at the time of redemption of debentures. Under these facts, it was held by the Hon ble Apex Court that although the assessee has incurred the liability to pay the discount in the year of issue of debentures, the payment is to secure the benefit over a number of years. There is a continuing business of the assessee- company over the entire peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted the decision of the Apex Court, in the case of Madras Industrial Investment Corpn. Ltd. v. CIT [1997] 225 ITR 802, to support its conclusion, on the issue in question. Thus, on consideration of rival submissions and material available on record including the decisions cited by the ld. A.R. the Bench adjudicated the issue, on merit and confirmed the findings of the ld. CIT(A). Hence, the findings of the Bench are based on appreciation of the material on record and considering the rival submissions. Thus, the issue has been adjudicated by the Bench on merit. 6. As regards the second issue challenged by the assessee, in the present miscellaneous application, it is apt to mention here that the Bench adjudicated the issue in terms of the Tribunal decision, in the assessee s own case, for the assessment year 1996-97, as relied by the assessee as well as on appreciation of the material available on record, as is evident from the para 5 of the impugned appellate order. Thus the ground raised by the assessee regarding addition of Rs. 80,75,513 being duty benefit of duty free advance licence, was decided by the Bench against the assessee, on merit after considering the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication were decided by the Bench, on merit and having regard to the rival submissions and case laws relied upon by the assessee, in respect of relevant issue, as discussed earlier. Thus, both the issues are debatable and susceptible to different opinions. These issues decided on merit after appreciation of the facts of the case, as highlighted in the impugned appellate order of the Bench cannot be construed as suffering from patent, self-evident, glaring and mistake apparent from the record, as contemplated under section 254(2) of the Act. This view is further fortified by the ensuring discussion, on the scope of provisions of 254(2) of the Act. 8. In the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 . Hon ble Apex Court judiciously defined the scope of the provision of section 254(2) of the Act as under: "An error cannot be said to be apparent on the fact of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the face of the record means an error which strikes the eye on merely looking at it and does not need long-drawn-out process of reasoning on points where there may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said Miscellaneous Application, as discussed above, do not fall under the statutory phrase any mistake apparent from record . The Tribunal does not enjoy jurisdiction under section 254(2) of the Act, which are in the nature of review and reversal of its decision, taken after appreciation of legal and factual position of the case. No such powers are conferred by the Income-tax Act, 1961, on any authority, whereby at the convenience and arbitrariness of the authority, the decision already taken on merit can be reversed under the guise of rectification. Such plenary power and jurisdiction falls beyond the purview of section 254(2) of the Act. The issues raised by the assessee, in the impugned Miscellaneous Application decided by the Bench on merit, do not fall under the category of mistake apparent from record, as contemplated under section 254(2) of the Act. It is relevant to refer to the decision of the Hon ble Apex Court, wherein similar expression error apparent on the face of the record came up for consideration before the Hon ble Supreme Court, in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50. The Hon ble Apex Court observed as under : "An erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a long drawn process of reasoning on points on which there may conceivably be two opinions". 8.4 There has to be a mistake apparent from the record. A look at the record must show that there has been an error, and that error may be rectified as held by the Supreme Court in CIT v. Keshri Metal (P.) Ltd. [1999] 237 ITR 165 . Only an apparent error of fact or law can be rectified. 8.5 Thus the issues raised by the assessee, in the impugned Miscellaneous Application have been dealt with by the Bench after appreciation of the factual and legal position of the case and rendered the decision on merit. Therefore, these two grounds mentioned, in the Miscellaneous Application, do not fall under the purview of the provisions of section 254(2) of the Act. The provisions of the section contemplate to rectify any mistake apparent from record and non-consideration of any argument advanced by either party for arriving at a conclusion is not an error apparent on record, although it may be an error of judgment and the same cannot be rectified under section 254(2) of the Act, as held by the Hon ble Jurisdictional High Court in the case of Ramesh Electric Trading Co. s case ( supra ) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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