TMI Blog2010 (3) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for the years under consideration on the basis of average cost of jewellery manufactured by him or the jewellery which has been purchased from other manufacturers. The assessment year 2000-01 being the first year of the business, the accounts were not audited. The assessee had valued the jewellery in view of the decision of the hon'ble Supreme Court in the case of Investment Ltd. v. CIT [1970] 77 ITR 533 wherein it has been held that the taxpayer is free to employ, for the purpose of his trade, his own method of keeping accounts and for that purpose the value of his stock-in-trade either at cost or at market price. A method of accounting adopted by the trader consistently and regularly cannot be discarded by the Departmental authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require any extraneous matter to show its incorrectness. The Income-tax Appellate Tribunal, Delhi Bench "C" New Delhi in the case of Vijay Kant Sharma (Karta, HUF) M. A. No. 265/D/2007 in I. T. A. No. 3391/D/2004 for the assessment year 2001-02 order dated April 24, 2009 (where one of us (AM) was party) examined the scope of rectification under section 254(2) in the light of decisions of the hon'ble Delhi High Court as below: "13 . The scope of rectification under section 254(2) is very limited and has been discussed by their Lordships of the Delhi High Court in their various decisions, few of which are mentioned hereinunder : (i) In the case of CIT v. ITAT [2007] 293 ITR 118 (Delhi), their Lordships while examining the scope and ambi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal or by any other court was not noticed by the Tribunal while taking a particular view on the merits of the controversy may constitute an error that would call for correction in an appropriate appeal against the order. Any such error may, however, fall short of constituting a mistake apparent from the record within the meaning of section 254(2). Just because a point was debatable could hardly provide a justification for recalling the order and fixing the appeal for a de novo hearing. Therefore, the order of recall passed by the Tribunal was quashed." (ii) In the case of CIT v. Hindustan Coca Cola Beverages P. Ltd. [2007] 293 ITR 163 (Delhi), their Lordships while considering the powers of the Tribunal under section 254(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and reargue the whole matter, which is beyond the scope of this section.' 14. What emerges from the decisions (supra) of the hon'ble jurisdictional High Court of Delhi for examining the scope and ambit of the application of section 254(2) of the Income-tax Act can be summarised as under: First, the scope and ambit of application of section 254(2) of Income-tax Act is restricted to rectification of the mistakes apparent from the record. Second, power to rectify a mistake is not equivalent to a power to review or recall the order sought to be rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act by valuing the closing stock at cost price. This issue has been discussed by us in detail in the order dated August 28, 2009. The case law relied upon by the assessee were examined and have been discussed. It was observed that in view of the decision of the hon'ble Supreme Court in the case of CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297 the assessee cannot be permitted to claim the benefit of the closing stock by changing the method of valuation in the assessment proceedings under section 153A of the Act, which were initiated to assess or reassess the undisclosed income. If the applicant-assessee does not now agree with the reasoning given by the Tribunal, it cannot be said that an apparent mistake has crept in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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