TaxTMI 
TaxTMI 
2015 (9) TMI 1297
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....man & 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 Rs. 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 the same and repeated previous assessment order. It was further contended that the Tribunal has not taken cognizance of the order of the Tribunal in the case of Balmiki Singh vs. ACIT in I.T.A. No. 157/LKW/2011, in which the Tribunal has estimated the net profit on the sales declared by the assessee. The ld. counsel for the assessee has further contended that since the Tribunal has not appreciated the facts correctly, the order of the Tribunal may be recalled or be modified by estimating the net 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 dire....
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....ted the sale by applying the multiplier of 2.5 times of the licence fee/bid money. Therefore, there is no error apparent in the order of the Tribunal and the application filed by the assessee seeking certain modification in the order of the Tribunal deserves to be dismissed, as the assessee seeks review of the order. 4. Having carefully examined the Miscellaneous 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 made a proper compliance of the order of the Tribunal, the Tribunal has examined the order of the Agra Bench of the Tribunal in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra), in which it was held by the Tribunal that average sale rate per liter has to be worked out from the rates fixed by the State Excise Departme....
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....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 per liter to the bid money. Mathematically it can be arrived as under: Let the total purchase made during the year are X and purchase price per liter is Y and sale rate per liter fixed is Z. The sales will be = Z x X. Y It is further clarified that the method gives the correct estimation of sales should be adopted." 5. Similar directions, following the aforesaid order of the Tribunal in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra), were given by the Tribunal in the instant 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 ....
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....cise only those powers which have been conferred upon it. The only power conferred on the Tribunal u/s 254(2) of the I.T. Act, 1961 is to rectify any mistake apparent from record. The 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 record either suo moto or on an application made. What can be rectified under this section is a mistake which is apparent and patent. The mistake has to be such for which no elaborate reasons or inquiry is necessary. Where two opinions are possible, then it cannot be said to be an error apparent on the face of the record". 8. In the case of CIT Vs. Suman Tea and Plywood Industries (P) Ltd., 226 ITR 34 their Lordships of Calcutta High Court have expressed similar observations after holding that "under section 254(....
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....viewed under section 254(2) of the Act." The provisions of section 254 were also examined by the Hon'ble High Court of M.P. in the case of Prakash Chand Mehta Vs. CIT; 220 ITR 277 in which their Lordship have held that scope of section 254(2) of the Income-tax Act is very limited and it is only the apparent error which can be rectified. 10. Their Lordships of the Apex court in the case of T.S. Balaram ITO Vs. Volkart Brothers; 82 ITR 50 (SC) have held that a mistake apparent on the record must be an 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 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 the case as to whether the Tribunal has gone wrong in not considering the affidavit of a particular person....