TaxTMI 
TaxTMI 
2010 (2) TMI 798
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....t the same had been incurred in connection with the acquisition of a new line of business. 3. In appeal the CIT(A) following the decision in the case of Jonas Woodhead and Sons (India) Ltd. vs. CIT reported in 224 ITR 342 and the decision of the Hon'ble Madras High Court in the case of CIT vs. W.S. Insulators of India Ltd., reported in 243 ITR 348 held that the sum of Rs.2.70 crores incurred by the assessee on account of transfer of generic business, market know-how and non-competition agreement is capital in nature. He accordingly upheld he order of the Assessing Officer. When the matter came to the Tribunal, the Tribunal vide order dated 11th June, 2009 upheld the order of the CIT(A) and dismissed the ground raised by the assessee. 4. The learned counsel for the assessee referring to page 7 of the order of the Tribunal referred to the following observation of the Tribunal: "The three separate agreements dated 27.1.1997 between the assessee company and M/s. Max India Ltd. bifurcating the consideration of Rs.3.25 crores into three parts for acquisition of three different rights is not only afterthought but also seems to be self-serving document".  ....
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....4 of the written note wherein the various clauses of the MOU were mentioned and the decision of Hon'ble A.P. High Court in the case of Coromandel Fertilizers Ltd. vs. CIT, reported in 148 ITR 546 was relied on. Referring to various decisions as mentioned in the MA, he submitted that the Tribunal while dismissing the ground has not considered and discussed the arguments of the assessee company given in the written note though reference was made in the last para at page No.5 of the order. He submitted that the various decisions relied on by the assessee were directly on the issue. However, the Tribunal while deciding the issue has completely ignored the various distinguishable features brought on record by the learned counsel for the assessee. Referring to the order of the Hon'ble Supreme Court in the case of Jonas Woodhead and Sons (India) Ltd. (supra), he submitted that the Hon'ble Supreme Court in the said decision has held that 25% of the sum paid as royalty by the assessee to the Insurance company is to be disallowed as capital expenditure and balance 75% be allowed as revenue expenditure. However, in the instant case the Tribunal while rejecting the claim of the assessee by rel....
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....he Tribunal to this extent should be recalled. 9. The learned DR, on the other hand, submitted that the Tribunal has considered all material facts and decided the issue against the assessee. Therefore, there is no mistake apparent from record so as to recall the order of the Tribunal. It is only assumption by the learned counsel for the assessee. He submitted that the learned counsel for the assessee through this MA is trying to ask the Tribunal to review its own order which is not permissible under the law. He accordingly submitted that the MA filed by the assessee should be dismissed. 10. We have considered the rival submissions made by both the sides. We find the Tribunal while deciding the issue against the assessee has relied on the decision of the Hon'ble Supreme Court in the case of Jonas Woodhead and Sons (India) Ltd. (supra) which was relied on by the CIT(A). However, we find the assessee at the time of hearing of the appeal before the Tribunal has distinguished the above decision and has cited various other decisions including the decision of Hon'ble Supreme Court in the case of Madras Auto Service Pvt. Ltd. reported in 223 ITR 468 (SC) and the decisio....
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....anced depreciation under section 43A. One of the important reasons for giving the power of rectification to the Tribunal is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record. "Rule of precedent" is an important aspect of legal certainty in rule of law. That principle is not obliterated by section 254(2) of the Income-tax Act, 1961. When prejudice results from an order attributable to the Tribunal's mistake, error or omission, then it is the duty of the Tribunal to set it right. Atonement to the wronged party by the court or the Tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. In the present case, the Tribunal was justified in exercising its powers under section 254(2) when it was pointed out to the Tribunal that the judgment of the co-ordinate Bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material which was already on record. The Tribunal has acknowledged its mistake, it has accordingly rectified its order. In our view, the High Court was not ju....