ITO, Ward - 32 (3), Kolkata, Kolkata v. M/s. Modern International, Kolkata

ITA 1253/KOL/2011 | 2008-2009
Pronouncement Date: 17-02-2012 | Result: Dismissed

Appeal Details

RSA Number 125323514 RSA 2011
Assessee PAN AAKFM1904D
Bench Kolkata
Appeal Number ITA 1253/KOL/2011
Duration Of Justice 4 month(s) 21 day(s)
Appellant ITO, Ward - 32 (3), Kolkata, Kolkata
Respondent M/s. Modern International, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 17-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 17-02-2012
Assessment Year 2008-2009
Appeal Filed On 26-09-2011
Judgment Text
I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SHRI N VIJAYKUMARAN (JUDICIAL MEMBER) I.T.A. NO. : 1253 / KOL . / 2011 ASSESSMENT YEAR : 2008 - 09 INCOME TAX OFFICER WARD 32(3) KOLKATA .APPELLANT VS. MODERN INTERNATIONAL RESPONDENT 7 CAMAC STREET KOLKATA 700 017 [ PAN : AAKFM1904D] APPEARANCES BY: L K S DEHIYA FOR THE APPELLANT S L KOCHAR ALONG WITH ANIL KOCHAR FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : FEBRUARY 0 8 2012 DATE OF PRONOUNCING THE ORDER : FEBRUARY 17 2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL THE APPELLANT ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF LEARNED COMMISSIONER (APPEALS)S ORDER DATED 21 ST JULY 2011 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 ( HEREINAFTER REFERRED TO AS THE ACT) ON THE FOLLOWING GROUND: THAT THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO TREAT THE INTEREST INCOME AS INCOME FROM BUSINESS AND THEREBY ELIGIBLE FOR EXEMPTION UNDER SECTION 10A IN CONTRADICTION TO THE DECISION OF HONBLE SUPREME COURT IN THE I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 2 OF 11 CASE OF LIBERTY INDIA VS CIT (2009) 183 TAXMAN 349 WHEREIN THE APEX COURT HELD THAT THE WORD DERIVED WAS INTENDED TO COVER SOURCES NOT BEYOND THE FIRST DEGREE. 2. WHEN THIS CASE WAS CALLED OUT FOR HEARING LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IN APPEAL IS SQUARELY COVERED BY TRIBUNALS ORDERS IN ASSESSEES OWN CASES FOR THE ASSESSMENT YEAR 2006 - 07 AND 2007 - 08. WHILE LEARNED DEPARTMENTAL REPRE SENTATIVE DOES NOT DISPUTE THIS FACT HE SUBMITS THAT THE ORDERS RELIED UPON BY THE ASSESSEE ARE PER INCURIUM INASMUCH AS THESE ORDERS DO NOT TAKE INTO ACCOUNT THE LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS CIT ( 317 ITR 218 ). W E ARE THUS URGED TO HEAR THE MATTER ON MERITS INSTEAD OF SIMPLY PROCEEDING TO FOLLOW THE DECISIONS OF THE COORDINATE BENCHES FOR EARLIER ASSESSMENT YEARS. IT IS FOR THIS REASON THAT EVEN THOUGH THE ISSUE IN APPEAL IS A FULLY COVERED MATTER WE WILL DEAL WI TH THE MATTER IN SOME DETAIL. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF GOLD JEWELLERY STUDDED WITH PRECIOUS AND SEMI - PRECIOUS STONES AND HAS A UNIT IN SEZ AT SECTOR V SALT LAKE KOLKATA. THERE IS NO DISPUTE THAT THE ASSES SEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10 A. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS EARNED INTEREST INCOME OF RS 1 04 41 361. THIS INTEREST WAS EARNED ON FIXED DEPOSITS PLACED WITH BANK OF NOVA S COTIA ICICI BANK AND CORPORATION BANK AND AS IS THE CONTROVERTED POSITION THE ASSESSEE PLACED THESE DEPOSITS WITH THE BANKS SO AS TO AVAIL CREDIT FACILITIES FROM THEM. ON THESE FACTS THE ASSESSING OFFICER HELD THAT INTEREST INCOME SO EARNED BY THE ASS ESSEE IS NOT ELIGIBLE FOR THE BENEFIT OF SECTION 10 A DEDUCTION. THE LINE OF REASONING ADOPTED BY THE ASSESSING OFFICER WAS THAT SINCE SECTION 10A PROVIDES FOR DEDUCTION OF SUCH PROFITS AS ARE DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THIN GS OR COMPUTER SOFTWARE AND SINCE THE EXPRESSION DERIVED FROM HAS BEEN I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 3 OF 11 HELD TO IN THE CASE OF LIBERTY INDIA (SUPRA) COVER SOURCES NOT BEYOND THE FIRST DEGREE INTEREST INCOME BEING AN INCOME BEYOND THE FIRST DEGREE IS NOT ELIGIBLE TO DEDUCTION UND ER SECTION 10A. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). LEARNED CIT(A) FOLLOWING THE DECISION OF COORDINATE BENCHES OF THIS TRIBUNAL IN ASSESSEES OWN CASES FOR THE ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 UPHELD THE GRIEVANCE OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO GRANT DEDUCTION UNDER SECTION 10A IN RESPECT OF INTEREST INCOME AS WELL. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON R ECORD AND CONSIDERED FACTUAL MATRIX OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. GRIEVANCE OF THE ASSESSING OFFICER RESTS ON THE FALLACY THAT IN THE SCHEME OF SECTION 10 A THE EXPRESSION PROFIT DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE APPEARING IN SECTION 10A(1) IS TO BE GIVEN ITS NATURAL AND GRAMMATICAL MEANING IN THE LIGHT OF HONBLE SUPREME COURTS JUDGMENTS AND IT COMPLETELY DISREGARDS THE FACT THAT IN TERMS OF SECTION 10A(4 ) FOR THE PURPOSES OF SUB - SECTIONS (1) AND (1A) THE PROFITS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE SHALL BE THE AMOUNT WHICH BEARS TO THE PROFITS OF THE BUSINESS OF THE UNDERTAKING (EMPHASIS SUPPLIED BY US) THE SAME PROPORTION A S THE EXPORT TURNOVER IN RESPECT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE BEARS TO THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY THE UNDERTAKING . ONCE THIS SPECIFIC DEFINITION OF THE EXPRESSION PROFIT DERIVED BY AN U NDERTAKING FROM THE EXPORT O F ARTICLES OR THINGS OR COMPUTER SOFTWARE ASSIGNS A PARTICULAR MEANING IT CANNOT BE OPEN TO US TO DISREGARD THE SAME. IN THIS DEFINITION THE EMPHASIS IS ON PROFITS OF THE BUSINESS OF THE UNDERTAKING RATHER THAN PROFITS DERIVED BY THE UNDERTAKING WHICH IS UNDOUBTEDLY A CONNOTATION OF MUCH WIDER SCOPE. A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF LIVINGSTONE JEWELLERY PVT I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 4 OF 11 LTD VS DCIT (31 SOT 323) HAS ALLOWED SIMILAR CLAIM OF THE ASSESSEE AND IT IS THIS DECISION WHICH HAS BEEN FOLLOWED IN ASSESSEE S OWN CASE FOR THE EARLIER YEARS. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCHES. 6. LEARNED DEPARTMENTAL REPRESENTATIVE THE N CONTENDS THAT COORDINATE BENCH DECISION IN THE CASE O LIVINGSTONE JE WELLERY (SUPRA) IS PER INCURIUM BECAUSE IT IS CONTRARY TO DECISION OF ANOTHER COORDINATE BENCH IN THE CASE OF LOVLESH JAIN VS ACIT (39 SOT 73) ON MATERIALLY SIMILAR SET OF FACTS AND ON THE SAME LEGAL ISSUE. HOWEVER WHEN WE POINTED OUT THAT THIS DECISION BEING DATED 30 TH APRIL 2010 IS A LATER DECISION AND THE BENCH WAS APPARENTLY UNMINDFUL OF THE FACT THAT THERE IS A BINDING JUDICIAL PRECEDENT ON THE SAME IN LIVINGSTONES CASE WHICH WAS DATED 12 TH MAY 2009 LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDE D THAT LATER DECISION SHOULD BE FOLLOWED. 7. WE ARE NOT INCLINED TO ADOPT TH E APPROACH SO CANVASSED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE . ON THE CONTRARY WE ARE OF THE CONSIDERED VIEW THAT IN SUCH A SITUATION THE LATER DECISION WHICH DOES NOT TAKE INTO ACCOUNT THE EARLIER BINDING PRECEDENT ON THE SAME ISSUE IS TO BE TREATED AS PER INCURIUM AND DEVOID OF PRECEDENCE VALUE. IN THE CASE OF J K T FABRICS VS DCIT ( 4 SOT 84) A COORDINATE BENCH OF THIS TRIBUNAL SPEAKING THROUGH ONE OF US (I.E. THE ACCOUNTANT MEMBER) HAS EXPLAINED THE RATIONALE OF THIS APPROACH AS FOLLOWS : ONCE A CO - ORDINATE BENCH COMES TO THIS CONCLUSION IT IS NOT OPEN TO ANOTHER CO - ORDINATE BENCH TO COME TO ANY OTHER CONCLUSION ON THAT ISSUE. THIS IS SO HELD BY THE HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA V. PARAS LAMINATES (P.) LTD. TO THAT EXTENT TRIBUNALS DECISION IN THE CASE OF PRINCE SWR SYSTEMS (P.) LTD. ( SUPRA ) APPEARS T O BE IN OUR HUMBLE UNDERSTANDING PER INCURIAM. IN THE CASE OF PARAS LAMINATES (P.) LTD. ( SUPRA ) HONBLE SUPREME COURT HAS INTER ALIA OBSERVED AS FOLLOWS : I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 5 OF 11 'IT IS TRUE THAT A BENCH OF TWO MEMBERS MUST NOT LIGHTLY DISREGARD THE DECISION OF ANOTHER BENCH OF THE SAME TRIBUNAL ON AN IDENTICAL QUESTION. THIS IS PARTICULARLY TRUE WHEN THE EARLIER DECISION IS RENDERED BY A LARGER BENCH. THE RATIONALE OF THIS RULE IS THE NEED FOR CONTINUITY CERTAINTY AND PREDICTABILITY IN THE ADMINISTRATION OF JUSTICE. PE RSONS AFFECTED BY DECISIONS OF TRIBUNALS OR COURTS HAVE A RIGHT TO EXPECT THAT THOSE EXERCISING JUDICIAL FUNCTIONS WILL FOLLOW THE REASON OR GROUND OF THE JUDICIAL DECISION IN THE EARLIER CASES ON IDENTICAL MATTERS. CLASSIFICATION OF PARTICULAR GOODS ADOPT ED IN EARLIER DECISIONS MUST NOT BE LIGHTLY DISREGARDED IN SUBSEQUENT DECISIONS LEST SUCH JUDICIAL INCONSISTENCY SHOULD SHAKE PUBLIC CONFIDENCE IN THE ADMINISTRATION OF JUSTICE. IT IS HOWEVER EQUALLY TRUE THAT IT IS VITAL TO THE ADMINISTRATION OF JUSTIC E THAT THOSE EXERCISING JUDICIAL POWER MUST HAVE THE NECESSARY FREEDOM TO DOUBT THE CORRECTNESS OF AN EARLIER DECISION IF AND WHEN SUBSEQUENT PROCEEDINGS BRING TO LIGHT WHAT IS PERCEIVED BY THEM AS AN ERRONEOUS DECISION IN THE EARLIER CASE. IN SUCH CIRCUMS TANCES IT IS BUT NATURAL AND REASONABLE AND INDEED EFFICACIOUS THAT THE CASE IS REFERRED TO A LARGER BENCH. 6. . 7. NO DOUBT THAT WHEN A CO - ORDINATE BENCH DOUBTS THE CORRECTNESS OF DECISION OF ANOTHER CO - ORDINATE BENCH A REFERENCE CAN BE MADE TO THE HONBLE PRESIDENT FOR CONSTITUTION OF A LARGER BENCH. HOWEVER AS FAR AS THE ISSUE BEFORE US IS CONCERNED A REQUEST FOR CONSTITUTION OF LARGER BENCH WAS ALREADY BEEN TURNED DOWN. WE SEE NO NECESSITY TO MAKE YET ANOTHER REQUEST CONSIDERING THAT HONBL E PRESIDENT HAS IN A CONSIDERED DECISION TURNED DOWN EARLIER REQUEST TO THAT EFFECT. IN OUR OPINION THE ISSUE DOES NOT CALL FOR A RECONSIDERATION AT THIS STAGE. 8. AS TO WHAT SHOULD BE THE BINDING EFFECT OF A PER INCURIUM DECISION WE CAN DO NO BETTER THAN TO QUOTE THE HONBLE ANDHRA HIGH COURT IN THE CASE OF CIT V. B.R. CONSTRUCTIONS [1993] 202 ITR 222 1 (FB). IN HIS INIMITABLE STYLE JUSTICE S.S.M. QUADRI (AS HE THEN WAS) HAS ARTICULATED THE VIEWS OF THE FULL BENCH OF HONBLE ANDHRA PRADESH HIGH COURT AS FOLLOWS : 'IN A COUNTRY LIKE OURS WHICH IS GOVERNED BY RULE OF LAW LAW HAS TO BE CERTAIN AND UNIFORM WHICH IS FUNDAMENTAL TO THE RULE OF LAW. IN I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 6 OF 11 MAMLESHWAR V. KANAHAIYA LAL AIR 1975 SC 907 KRISHNA IYER J. SPEAKING FOR THE SUPREME COURT OBSERVED ( AT PAGE 909) : CERTAINTY OF THE LAW CONSISTENCY OF RULINGS AND COMITY OF COURTS ALL FLOWERING FROM THE SAME PRINCIPLE - CONVERGE TO THE CONCLUSION THAT A DECISION ONCE RENDERED MUST LATER BIND LIKE CASES. IN THIS CONCURRING JUDGMENT IN STATE OF U.P. V. SYNTHETICS & CHEMICALS LTD. [1991] 4 SCC 139 163 THE OBSERVATION OF SAHAI J. ON THIS ASPECT IS : UNIFORMITY AND CONSISTENCY ARE THE CORE OF JUDICIAL DISCIPLINE. THAT IS WHY THE DOCTRINE OF STARE DECISIS IS PART OF OUR JUDICIAL SYSTEM. THIS DOCTRINE MEANS TO ABIDE BY FORMER PRECEDENTS. BLACKSTONE ELUCIDATED THE DOCTRINE THUS : FOR IT IS AN ESTABLISHED RULE TO ABIDE BY FORMER PRECEDENTS WHERE THE SAME POINTS COME AGAIN IN LITIGATION : AS WELL AS TO KE EP THE SCALE OF JUSTICE EVEN AND STEADY AND NOT LIABLE TO WAIVER WITH EVERY NEW JUDGES OPINION AS ALSO BECAUSE THE LAW IN THAT CASE BEING SOLEMNLY DECLARED AND DETERMINED WHAT BEFORE WAS UNCERTAIN AND PERHAPS INDIFFERENT IS NOW BECOME A PERMANENT RULE WHICH IT IS NOT IN THE BREAST OF ANY SUBSEQUENT JUDGE TO ALTER OR VARY FROM ACCORDING TO HIS PRIVATE SENTIMENT. . . . THE RATIO DECIDENDI OF A JUDGMENT IS A BINDING PRECEDENT. THE HIERARCHY OF AUTHORITY WITH REGARD TO BINDING PRECEDENT IS SUMMED UP IN PARAGRAPH 28 AT PAGE 158 OF SALMOND ON JURISPRUDENCE TWELFTH EDITION AS FOLLOWS: THE GENERAL RULE IS THAT A COURT IS BOUND BY THE DECIS ION OF ALL COURTS HIGHER THAN ITSELF. A HIGH COURT JUDGE CANNOT QUESTION A DECISION OF THE COURT OF APPEAL NOR CAN THE COURT OF APPEAL REFUSE TO FOLLOW JUDGMENTS OF THE HOUSE OF LORDS. A COROLLARY OF THE RULE IS THAT THE COURTS ARE BOUND ONLY BY DECISIONS OF HIGHER COURTS AND NOT BY THOSE OF LOWER OR EQUAL RANK. A HIGH COURT JUDGE IS NOT BOUND BY A PREVIOUS HIGH COURT DECISION THOUGH HE WILL NORMALLY FOLLOW IT ON THE PRINCIPLE OF JUDICIAL COMITY IN ORDER TO AVOID CONFLICT OF AUTHORITY AND TO SECURE CERTA INTY AND UNIFORMITY IN THE ADMINISTRATION OF JUSTICE. IF HE REFUSES TO FOLLOW IT HE CANNOT I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 7 OF 11 OVERRULE IT; BOTH DECISIONS STAND AND THE RESULTING ANTIMONY MUST WAIT FOR A HIGHER COURT TO SETTLE. THE PRINCIPLES APPLICABLE TO COURTS IN INDIA WERE LAID DOWN B Y SUBBA RAO J. (AS HE THEN WAS) IN DR. K.C. NAMBIAR V. STATE OF MADRAS AIR 1953 MAD. 351 WHICH WERE APPROVED BY A FULL BENCH OF OUR HIGH COURT IN SUBBARAYUDU V. STATE AIR 1955 AP 87 (FB)/[1955] 11 ALT (CRI.) 53. THEY ARE AS FOLLOWS (AT PAGE 94 OF AIR 195 5 AP) : A SINGLE JUDGE IS BOUND BY A DECISION OF A DIVISION BENCH EXERCISING APPELLATE JURISDICTION. IF THERE IS A CONFLICT OF BENCH DECISIONS HE SHOULD REFER THE CASE TO A BENCH OF TWO JUDGES WHO MAY REFER IT TO A FULL BENCH. A SINGLE JUDGE CANNOT DIFFE R FROM A DIVISION BENCH UNLESS A FULL BENCH OR THE SUPREME COURT OVERRULED THAT DECISION SPECIFICALLY OR LAID DOWN A DIFFERENT LAW ON THE SAME POINT. BUT HE CANNOT IGNORE A BENCH DECISION AS I AM ASKED TO DO ON THE GROUND THAT SOME OBSERVATIONS OF THE SUP REME COURT MADE IN DIFFERENT CONTEXT MIGHT INDICATE A DIFFERENT LINE OF REASONING. A DIVISION BENCH MUST ORDINARILY RESPECT ANOTHER DIVISIONAL BENCH OF CO - ORDINATE JURISDICTION BUT IF IT DIFFERS THE CASE SHOULD BE REFERRED TO A FULL BENCH. THIS PROCEDURE WOULD AVOID UNNECESSARY CONFLICT AND CONFUSION THAT OTHERWISE WOULD PREVAIL. THE EFFECT OF BINDING PRECEDENTS IN INDIA IS THAT THE DECISIONS OF THE SUPREME COURT ARE BINDING ON ALL THE COURTS. INDEED ARTICLE 141 OF THE CONSTITUTION EMBODIES THE RULE OF PRECEDENT. ALL THE SUBORDINATE COURTS ARE BOUND BY THE JUDGMENTS OF THE HIGH COURT. A SINGLE JUDGE OF A HIGH COURT IS BOUND BY THE JUDGMENT OF ANOTHER SINGLE JUDGE AND A FORTIORI JUDGMENTS OF BENCHES CONSISTING OF MORE JUDGES THAN ONE. SO ALSO A DIVISION BENCH OF A HIGH COURT IS BOUND BY JUDGMENTS OF ANOTHER DIVISION BENCH AND FULL. A SINGLE JUDGE OR BENCHES OF HIGH COURTS CANNOT DIFFER FROM THE EARLIER JUDGMENTS OF CO - ORDINATE JURISDICTION MERELY BECAUSE THEY HOLD A DIFFERENT VIEW ON THE QUESTION OF LAW F OR THE REASON THAT CERTAINTY AND UNIFORMITY IN THE ADMINISTRATION OF JUSTICE ARE OF PARAMOUNT IMPORTANCE. BUT IF THE EARLIER JUDGMENT IS ERRONEOUS OR ADHERENCE TO THE RULE OF PRECEDENTS RESULTS IN MANIFEST INJUSTICE DIFFERING FROM THE EARLIER JUDGMENT WI LL BE PERMISSIBLE. WHEN A DIVISION BENCH DIFFERS FROM THE JUDGMENT OF ANOTHER DIVISION BENCH IT HAS TO REFER THE CASE TO A FULL BENCH. A SINGLE JUDGE CANNOT DIFFER FROM A DECISION OF A DIVISION BENCH EXCEPT WHEN THAT DECISION OR A JUDGMENT RELIED UPON IN THAT DECISION IS OVERRULED BY A FULL BENCH I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 8 OF 11 OR THE SUPREME COURT OR WHEN THE LAW LAID DOWN BY A FULL BENCH OR THE SUPREME COURT IS INCONSISTENT WITH THE DECISION. IT MAY BE NOTICED THAT PRECEDENT CEASES TO BE A BINDING PRECEDENT ( I )IF IT IS REVERSED OR OVERRULED BY A HIGHER COURT ( II )WHEN IT IS AFFIRMED OR REVERSED ON A DIFFERENT GROUND ( III )WHEN IT IS INCONSISTENT WITH THE EARLIER DECISIONS OF THE SAME RANK ( IV )WHEN IT IS SUB SILENTIO AND ( V )WHEN IT IS RENDERED PER INCURIAM. IN PARAGRAPH 5 78 AT PAGE 297 OF HALSBURYS LAWS OF ENGLAND FOURTH EDITION THE RULE OF PER INCURIAM IS STATED AS FOLLOWS : A DECISION IS GIVEN PER INCURIAM WHEN THE COURT HAS ACTED IN IGNORANCE OF A PREVIOUS DECISION OF ITS OWN OR OF A COURT OF CO - ORDINATE JURISDICTIO N WHICH COVERED THE CASE BEFORE IT IN WHICH CASE IT MUST BE DECIDED WHICH CASE TO FOLLOW; OR WHEN IT HAS ACTED IN IGNORANCE OF A HOUSE OF LORDS DECISION IN WHICH CASE IT MUST FOLLOW THAT DECISION; OR WHEN THE DECISION IS GIVEN IN IGNORANCE OF THE TERMS O F A STATUTE OR RULE HAVING STATUTORY FORCE. IN PUNJAB LAND DEVELOPMENT & RECLAMATION CORPN. LTD. V. PRESIDING OFFICER LABOUR COURT [1990] 3 SCC 682/[1990] 77 FJR 17 (SC) THE SUPREME COURT EXPLAINED THE EXPRESSION PER INCURIAM THUS (AT PAGE 36 OF 77 FJ R) : THE LATIN EXPRESSION PER INCURIAM MEANS THROUGH INADVERTENCE. A DECISION CAN BE SAID GENERALLY TO BE GIVEN PER INCURIAM WHEN THE SUPREME COURT HAS ACTED IN IGNORANCE OF A PREVIOUS DECISION OF ITS OWN OR WHEN A HIGH COURT HAS ACTED IN IGNORANCE OF A DECISION OF THE SUPREME COURT. AS HAS BEEN NOTICED ABOVE A JUDGMENT CAN BE SAID TO BE PER INCURIAM IF IT IS RENDERED IN IGNORANCE OR FORGETFULNESS OF THE PROVISIONS OF A STATUTE OR A RULE HAVING STATUTORY FORCE OR A BINDING AUTHORITY. BUT IF THE PROVISION OF THE ACT WAS NOTICED AND CONSIDERED BEFORE THE CONCLUSION ARRIVED AT ON THE GROUND THAT IT HAS ERRONEOUSLY REACHED THE CONCLUSION THE JUDGMENT CANNOT BE I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 9 OF 11 IGNORED AS BEING PER INCURIAM . IN SALMOND ON JURISPRUDENCE TWELFTH EDITION AT PAGE 151 THE RULE IS STATED AS FOLLOWS : THE MERE FACT THAT (AS IS CONTENDED) THE EARLIER COURT MISCONSTRUED A ST ATUTE OR IGNORED A RULE OF CONSTRUCTION IS NO GROUND FOR IMPUGNING THE AUTHORITY OF THE PRECEDENT. A PRECEDENT ON THE CONSTRUCTION OF A STATUTE IS AS MUCH BINDING AS ANY OTHER AND THE FACT THAT IT WAS MISTAKEN IN ITS REASONING DOES NOT DESTROY ITS BINDI NG FORCE. IN CHOUDHRY BROS CASE [1986] 158 ITR 224 AS NOTICED ABOVE THE DIVISION BENCH TREATED THE JUDGMENT IN CH. ATCHAIAHS CASE [1979] 116 ITR 675 AS PER INCURIAM ON THE GROUND THAT THE EARLIER DIVISION BENCH DID NOT NOTICE THE SIGNIFICANT CHANGE S THE CHARGING SECTION 3 HAS UNDERGONE BY THE OMISSION OF THE WORDS OR THE PARTNERS OF THE FIRM OR THE MEMBERS OF THE ASSOCIATION INDIVIDUALLY. IN OUR VIEW THIS CANNOT BE A GROUND TO TREAT AN EARLIER JUDGMENT AS PER INCURIAM . THE CHANGE IN THE PROVISIO NS OF THE ACT WAS PRESENT IN THE MIND OF THE COURT WHICH DECIDED CH. ATCHAIAHS CASE [1979] 116 ITR 675. MERELY BECAUSE THE CONCLUSION ARRIVED AT ON CONSTRUING THE PROVISIONS OF THE CHARGING SECTION UNDER THE OLD ACT AS WELL AS UNDER THE NEW ACT DID NOT HA VE THE CONCURRENCE OF THE LATTER BENCH THE EARLIER JUDGMENT CANNOT BE CALLED PER INCURIAM. THOUGH A JUDGMENT RENDERED PER INCURIAM CAN BE IGNORED EVEN BY A LOWER COURT YET IT APPEARS THAT SUCH A COURSE OF ACTION WAS NOT APPROVED BY THE HOUSE OF LORDS IN CASSELL & CO. LTD. V. BROOME [1972] 1 ALL ER 801 WHEREIN THE HOUSE OF LORDS DISAPPROVED THE JUDGMENT OF THE COURT OF APPEAL TREATING AN EARLIER JUDGMENT OF THE HOUSE OF LORDS AS PER INCURIUM . LORD HAILSHAM OBSERVED (AT PAGE 809) : IT IS NOT OPEN TO THE COURT OF APPEAL TO GIVE GRATUITOUS ADVICE TO JUDGES OF FIRST INSTANCE TO IGNORE DECISIONS OF THE HOUSE OF LORDS IN THIS WAY. IT IS RECOGNISED THAT THE RULE OF PER INCURIAM IS OF LIMITED APPLICATION AND WILL BE APPLICABLE ONLY IN THE RAREST OF RARE CASES. THEREFORE WHEN A LEARNED SINGLE JUDGE OR A DIVISION BENCH DOUBTS THE CORRECTNESS OF AN OTHERWISE BINDING PRECEDENT THE APPROPRIATE COURSE WOULD BE TO REFER THE CASE TO A DIVISION BENCH OR FULL BENCH AS THE CASE MAY BE FOR AN AUTHORITATIVE PRONOUNCEMENT ON THE QUESTION INVOLVED AS INDICATED ABOVE. THE ABOVE - SAID TWO QUESTIONS ARE ANSWERED AS INDICATED ABOVE.' I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 10 OF 11 9. IT IS THUS BEYOND DISPUTE THAT A DECISION WHICH IS PER INCURIAM IS NOT A BINDING JUDICIAL PRECEDENT. IT IS ALSO WELL - SETTLED THAT WHEN IT IS NO T OPEN TO A HIGH COURT BENCH TO DIFFER FROM THE DECISION OF A BENCH OF EQUAL STRENGTH IT CANNOT ALSO BE OPEN TO A BENCH OF THIS TRIBUNAL TO DIFFER FROM THE VIEW TAKEN BY A CO - ORDINATE BENCH OF EQUAL STRENGTH. THE ONLY OPTION IN CASE ONE DOUBTS THE CORRECT NESS OF SUCH A DECISION IS TO REFER THE MATTER FOR CONSTITUTION OF A LARGER BENCH. A DECISION IGNORING THIS RULE OF PRECEDENT WHICH IS DULY APPROVED BY THE HONBLE COURTS FROM TIME TO TIME CANNOT BUT BE VIEWED AS PER INCURIAM. THEREFORE FOLLOWING THE HO NBLE AP HIGH COURT FULL BENCH DECISION IN THE CASE OF B.R. CONSTRUCTIONS ( SUPRA ) SUCH A DECISION OF THE CO - ORDINATE BENCH WAS NO PRECEDENCE VALUE. 8 . IN THE LIGHT OF THE VIEWS SO EXPRESSED BY THE COORDINATE BENCH WITH WHICH WE ARE IN CONSIDERED AGREEMENT WE DECLINE TO BE GUIDED BY THE DECISION OF COORDINATE BENCH IN LOVELESH JAIN (SUPRA) . WE HAVE OUR HIGHEST REGARDS TO THE VIEWS SO EXPRESSED BY THE COORDINATE BEN CH BUT QUITE CLEARLY THE COORDINATE BENCH WAS OBLIVIOUS OF THE FACT THAT THERE IS ALREADY A BINDING JUDICIAL PRECEDENT ON THE ISSUE AND AS HELD BY HONBLE ANDHRA PRADESH HIGH COURT (FB) IN THE CASE OF B R CONSTRUCTIONS (SUPRA) A DECISION SO RENDERED IN IGNORANCE OF A PREVIOUS DECISION OF ITS OWN OR OF A COURT OF CO - ORDINATE JURISDICTION WHICH COVERED THE CASE BEFORE IT LACKS THE BINDING PRECEDENCE VALUE. 9 . EVEN AFTER THIS DECISION WAS POINTED OUT LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT GIVE U P. HIS NEXT PLEA IS THAT NOW THAT DIVERGENT VIEWS HAVE BEEN EXPRESSED BY COORDINATE BENCHES THE MATTER SHOULD AT LEAST BE REFERRED TO A SPECIAL BENCH. WE SEE NO LEGALLY SUSTAINABLE MERITS IN THIS PLEA EITHER. ONCE WE HOLD THAT LOVELESH JAIN DECISION (SUP RA) BY THE COORDINATE BENCH CANNOT BE ACCORDED BINDING PRECEDENCE VALUE THE BINDING JUDICIAL PRECEDENTS THAT WE HAVE BEFORE US ARE IN FAVOUR OF THE ASSESSEE. IN ANY CASE WE ARE IN CONSIDERED AGREEMENT WITH THE REASONING ADOPTED BY AND CONCLUSIONS ARRI VED IN THESE BINDING JUDICIAL PRECEDENTS. WE THEREFORE SEE NO REASONS TO REFER THE MATTER TO THE SPECIAL BENCH EITHER. I.T.A. NO.: 1253/ KOL. / 2011 ASSESSMENT YEAR : 2008 - 09 PAGE 11 OF 11 10. FOR THE REASONS SET OUT ABOVE AND RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCHES IN ASSESSEES OWN CASES FOR THE ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 WE UPHOLD THE ORDER OF THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 11. IN THE RE SULT THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 17 TH DAY OF FEBRUARY 2012. SD/XX SD/XX N VIJAYKUMARAN PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA THE 17 TH DAY OF FEBRUARY 2012 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES KOLKATA