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2015 (9) TMI 1297 - ITAT LUCKNOW

2015 (9) TMI 1297 - ITAT LUCKNOW - TMI - Rectification of mistake - Estimation of sales and profit - as objected tribunal has estimated the sale by applying the multiplier of 2.5 times to the licence fee/bid money whereas the facts of the case are quite identical with the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra but the Assessing Officer has not followed the same and repeated previous assessment order

Held that:- Undisputedly, in the instant case, the sale rates are .....

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plying the multiplier of 2.5 times of licence fee/bid money of ₹ 3,14,53,860/-. Therefore, we are of the view that the Tribunal has correctly applied the formula in the light of the orders of the Tribunal and also the judgment of the Hon'ble M.P. High court in the case of Badri Prasad Bhagwandas & Co vs. CIT (1994 (10) TMI 268 - MADRAS HIGH COURT ), of which reference was made in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra). Since the Tribunal has adjudicated the i .....

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ct the Miscellaneous Application. - Decided against assessee. - M.A. No.28/LKW/2014, Arising out of ITA No.388/LKW/2011 - Dated:- 3-9-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER For The Applicant : Shri. K. R. Rastogi, C.A. For The Respondent : Smt. Nidhi Verma Singh, D.R. ORDER PER SUNIL KUMAR YADAV: This Miscellaneous Application is preferred on behalf of the assessee against the order of the Tribunal dated 11.4.2014 arising out of I.T.A. No. 388/L .....

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e case of Awadhesh Pratap Singh Abdul Rehman & Bros., Banda and the order dated 15.1.2003 of the Lucknow Bench of the Tribunal in the case of ACIT, Kanpur vs. M/s Unnao Wines, Kanpur in ITA No.1973/Alld/1995, has estimated the sale by applying the multiplier of 2.5 times to the licence fee/bid money, at ₹ 3,14,53,860/-; whereas the facts of the case are quite identical with the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra), but the Assessing Officer has not followed .....

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t profit rate @ 4% on the declared sale. 3. The ld. D.R., on the other hand, has submitted that the Tribunal has taken cognizance of all the relevant judgments placed before it and also direction of the Tribunal in its order dated 22.10.2007 directing the Assessing Officer to recompute the sale as well as net profit in the manner prescribed in the order. As per directions of the Tribunal, the sales can be estimated by multiplying the average sale rate per liter to the quantity purchased. The Tri .....

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profit thereon. In that judgment in para 10 it has been mentioned that the average sale rate per liter has to be worked out from the rates fixed by the State Excise Department on the quantity/purchase available with the assessee, therefore, the sales can be estimated multiplying the average sale rate per liter to the quantity purchased. Thereafter, the Tribunal has also laid down some formula in order to determine the sales. While adjudicating the issue in terms of the direction of the Tribunal .....

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ficer accordingly held that the order of the Tribunal in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra) cannot be followed. Having taken cognizance of these facts, the Tribunal has also given similar findings and the Tribunal further opined that if the sale cannot be estimated as per formula laid down by the Tribunal in the instant case as well as in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra), the sale is to be estimated following the other order .....

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laneous Application vis-à-vis the order of the Tribunal, we find that the issue before the Tribunal was with regard to the estimation of sales and profit. The Tribunal vide its order dated 22.10.2007 directed the Assessing Officer to compute the net profit following the formula laid down in the order and also by following the order of the Tribunal in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra). While adjudicating the issue as to whether the Assessing Officer has .....

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on'ble M.P. High court in the case of Badri Prasad Bhagwandas & Co vs. CIT, 82 Taxman 109. In that judgment, the Tribunal has not categorically held as to what method is to be applied when sale rate as fixed by the State Government are not available. The Tribunal has laid down the formula to compute the sales. For the sake of reference, we extract para 10 of the order of the Tribunal in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra) in which the Tribunal has laid d .....

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in the case of Badri Prasad Bhagwan Das & Co. (supra). In this case, the purchase price of the liquor was 11.80 per litre and the sales were at ₹ 30/- per liter. The ratio of sales to purchase was 2.5. Thus the estimation of sales was made by multiplying 2.5 to the bid money. Thus, the estimation of sales on the basis of bid money was held to be justified. In the case before us, the information regarding the purchase and sales rates as fixed by the State Govt. are not available. The r .....

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liquor purchased is available with the assessee. The sales can be estimated by multiplying average sales rate per liter to the quantity purchased. The sales can also be estimated from the ratio of sale price per liter to purchase price per liter and multiplying amount of total purchases excluding all overheads. Mathematically it can be arrived as under: In other words sales can be estimated by multiplying the figure derived from sales/liter rate fixed by the Govt. divided by the purchase rate p .....

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case while restoring the matter to the file of the Assessing Officer to estimate the sales and the net profit. 6. From the perusal of the aforesaid order of the Tribunal, it has become abundantly clear that the sales are to be worked out on the basis of sale rate fixed by the State Govt. or the Excise Department as per aforesaid orders. But in the aforesaid order, no formula was laid down to work out the sales in a case where sale rates are not fixed either by the State Government or the Excise .....

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are to be estimated and the Assessing Officer has estimated the sales by applying the multiplier and the Tribunal having followed the order of the Lucknow Bench of the Tribunal in the case of ACIT, Kanpur vs. M/s Unnao Wines, Kanpur (supra), estimated the sales by applying the multiplier of 2.5 times of licence fee/bid money of ₹ 3,14,53,860/-. Therefore, we are of the view that the Tribunal has correctly applied the formula in the light of the orders of the Tribunal and also the judgment .....

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rent or arithmetical can only be rectified. The scope of provisions of section 254(2) of the Act has been repeatedly examined by the Hon'ble Apex Court and various High Courts and it was held that the Tribunal can rectify only those mistakes which are arithmetical or clerical or apparent in its order. The Tribunal has no jurisdiction to review its own order in the grab of rectification. It was also held that if the Tribunal commits an error of judgement, that error cannot be rectified under .....

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he jurisdiction to review or modify orders passed by the authorities under the Act cannot be interfered with on the basis of supposed inherent rights. U/s 254(1) of the Act, the Appellate Tribunal, after hearing the contesting parties, can pass such order as it deems fit. Sec. 254(2) of the Act specifically empowers the Appellate Tribunal at any time within four years of the date of an order to amend any order passed by it u/s 254(1) of the Act with a view to rectify any mistake apparent from re .....

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er section 254(2) of the Incometax Act, an order, which has been passed by the Tribunal reaches finality the moment the same is passed; cannot be touched thereafter. By section 254(2) of the Act, the Tribunal, however, has been authorized to rectify mistakes in its orders, which are apparent on the face of the records. The expression mistake apparent on the record means a mistake either clerical or grammatical or arithmetical or of like nature, which can be detected without there being any neces .....

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jurisdiction by the Tribunal u/s 254(2) will be illegal and improper. An oversight of the fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference proceedings u/s 256. The normal rule is that the remedy by way of review is a creature of the statute and unless clothed with such power by the statute, no authority can exercise the .....

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r rectifying any mistake apparent from the record cannot be exercised by the Tribunal to recall any order passed by it under section 254(2). Further, reviewing and recalling an order is one thing and rectifying a mistake in the order which is apparent from the record is quite another. In the absence of any statutory provision for review by Tribunal, the order passed by the Tribunal cannot be recalled or reviewed under section 254(2) of the Act. The provisions of section 254 were also examined by .....

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rocess 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 record. Their Lordships have further held that if a statement of any person has been recorded without producing him in the witness box, the authorities should not act upon that statement without affording the assessee an opportunity to cross-examine the witness, but that is a matter not for rectification but it is a matter relating to the merits of t .....

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case of CIT Vs. Hero Cycles Pvt. Ltd.; 228 ITR 463 in which their Lordships have held that rectification can only be made when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from record. Rectification is not possible if the question is debatable. Moreover, a point which was not examined on facts or in law cannot be dealt with as mistake apparent from record. In the case of ITO Vs. ITAT; 229 ITR 651 their Lordships of Patna High Court have also expres .....

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facts and circumstances and on a fresh application of the legal position which is not permissible within the scope of section 254(2) of the Act. 11. In the case of Ms. Deeksha Suri Vs. ITAT; 232 ITR 395 their Lordships of Delhi High Court have held in specific terms that the Incometax Appellate Tribunal is a creature of the statute. It has not been vested with the review jurisdiction by the statute creating it. The Tribunal does not have any power to review its own judgements or orders. The gro .....

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