VIJAY SOLVEX LTD., Alwar v. ACIT, Alwar

MA 118/JPR/2016 | 2009-2010
Pronouncement Date: 04-10-2016 | Result: Allowed

Appeal Details

RSA Number 11823124 RSA 2016
Assessee PAN AAACV6864A
Bench Jaipur
Appeal Number MA 118/JPR/2016
Duration Of Justice 2 month(s) 6 day(s)
Appellant VIJAY SOLVEX LTD., Alwar
Respondent ACIT, Alwar
Appeal Type Miscellaneous Application
Pronouncement Date 04-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 04-10-2016
Assessment Year 2009-2010
Appeal Filed On 28-07-2016
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHES JAIPUR JH FOE FLAG ;KNO ] YS[KK LNL; OA JH YFYR DQEKJ] U;KF;D LNL; DS LE{K BEFORE: SHRI VIKRAM SINGH YADAV AM & SHRI LALIET KU MAR JM M.A. NO. 118 /JP/2016 (ARISING OUT OF ITA NOS. 435/JP/2013) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S VIJAY SOLVEX LTD. SWAMI DAYANAND MARG ALWAR. CUKE VS. A.C.I.T. CIRCLE-2 ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACV 6864 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/09/2016 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04/10/2016 VKNS'K@ ORDER PER: LALIET KUMAR J.M. THE ASSESSEE HAS FILED THE PRESENT MISC. APPLICATIO N ON 25/07/2016 AGAINST THE ORDER OF THE ITAT JAIPUR BEN CH JAIPUR DATED 18/03/2016 PASSED IN ITA NO. 435/JP/2013 FOR A.Y. 2 009-10 IN RESPECT OF GROUND NO. 4 WHEREIN IT IS ALLEGED THAT THE FOLL OWING MISTAKE WHICH ARE APPARENT ON RECORD WERE CREPT IN THE ORDER:- MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 2 1. THE APPLICANT BEGS TO SUBMIT THAT THE ORDER GIVI NG RISE TO THE PRESENT MISCELLANEOUS APPLICATION WAS PASSED ON 18.03.2016. 2. THE APPLICANT IN GROUND NO. 4 HAS CHALLENGED THE DISALLOWANCE OF RS.19 70 157/- U/S 14A OF THE INCOME TAX ACT 1961. THIS DISALLOWANCE MADE AS PER RULE 8D COMPRISES OF RS. 17 31 840/- ON ACCOUNT OF INTEREST AND RS.2 38 317/- ON ACCOUNT OF OTHER EXPENSES. 3. IN THE COURSE OF HEARING IT WAS SUBMITTED THAT T HE SHARE CAPITAL AND RESERVE AND SURPLUS OF THE ASSESSEE AS ON 31.03.2009 IS RS.5975.95 LACS WHEREAS THE INVESTMENT IN SHARES IS OF RS.1120.98 LACS. THE SOURCE OF INVESTME NT IN SHARES IS OUT OF THE NON-INTEREST BEARING FUNDS OF RS.5975.95 LACS. AO HAS NOT ESTABLISHED THAT BORROWE D FUNDS IS UTILIZED FOR INVESTMENT IN SHARES AND THE RELIANCE WAS PLACED ON VARIOUS CASES WHERE IT WAS HELD THAT IF THERE ARE FUNDS AVAILABLE BOTH INTEREST FREE AND BO RROWED THE PRESUMPTION IS THAT INVESTMENT IS OUT OF INTERE ST FREE FUNDS AND THEREFORE THE DISALLOWANCE OF INTEREST MAD E BY AO AND CONFIRMED BY CIT(A) IS NOT AS PER LAW. FURTHER REFERENCE WAS MADE TO THE DECISION OF HONBLE ITAT I N ASSESSEES OWN CASE FOR A.Y. 10-11 IN ITA NO. 109/JP /14 DATED 11.01.2016 WHEREIN IT WAS HELD THAT EVEN IF TH E INTEREST FREE FUNDS ARE AVAILABLE WITH THE ASSESSEE DISALLOWANCE U/S 14A CAN BE MADE AS THE MANAGEMENT A S WELL AS STAFF AND OTHER OFFICE FACILITIES ARE USED F OR MAKING MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 3 INVESTMENT IN SHARES AND ON THAT ACCOUNT DISALLOWANC E OF RS. 5 LACS WAS CONFIRMED AGAINST THE DISALLOWANCE OF INTEREST OF RS.23 84 269/- MADE BY THE AO UNDER RUL E 8D. 4. HONBLE ITAT IN DECIDING THIS ISSUE AT PARA 33.3 AT PAGE 31 REFERRED TO THE JUDGMENT OF SUPREME COURT IN CASE O F HERO CYCLES PVT. LTD. VS. CIT 63 TAXMAN. COM 308/ 379 ITR 347 AND OBSERVED THAT IN THEIR VIEW ASSESSEE MAY BE HAV ING RESERVES/SURPLUS/SHARE CAPITAL BUT WHAT IS REQUIRED BY THE AO WAS WHETHER ON THE DATE OF MAKING THE INVESTMENT IN SHARES THERE WAS A CREDIT BALANCE IN THE ACCOUNT OF THE ASSESSEE FROM WHERE INVESTMENT WAS MADE. ASSESSEE HAS NOT PROVIDED DATE-WISE AVAILABILITY OF INTEREST FREE FUNDS AND THEREFORE THE MATTER WAS SET ASIDE TO THE AO WITH THE DIRECTION TO THE ASSESSEE TO FURNISH DATE WISE AVAIL ABILITY OF INTEREST FREE FUND WHEN INVESTMENT IS MADE IN THE S HARES AND IF THE ASSESSEE FAILS TO PROVE SUCH AVAILABILIT Y OF INTEREST FREE FUNDS THEN THE ORDER OF AO SHALL BE FINAL. 5. IN GIVING THE ABOVE DIRECTION THE FOLLOWING MIST AKES APPARENT ON RECORD HAS CREPT IN THE ORDER OF HONBL E ITAT:- (I) THE HONBLE ITAT HAS NOT CONSIDERED ITS DECISION IN ASSESSEES OWN CASE IN ITA NO. 109/JP/14 FOR A.Y. 10 - 11 DATED 11.01.2016 IN WHICH A FINDING IS GIVEN THAT WHERE ASSESSEE HAS MIXED FUNDS PRESUMPTION FOR INTEREST FREE FUND IS APPLICABLE IN CASE OF ASSESSE E BUT MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 4 CONSIDERING THAT THERE IS INVOLVEMENT OF MANAGEMENT STAFF AND OTHER OFFICE FACILITIES THE DISALLOWANCE U/S 14A ON THIS ACCOUNT IS RESTRICTED TO RS. 5 LACS BY DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF INTEREST. NOT CONSIDERING THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE HAVING SAME MEMBERS IS A MISTAKE APPARENT ON RECORD AS HELD BY SUPREME COURT IN CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. CIT 295 ITR 0466. (II) THE HONBLE ITAT HAS RELIED ON THE DECISION OF SUPREME COURT IN CASE OF HERO CYCLES LTD. (SUPRA). THIS DECISION IS NEITHER REFERRED BY THE ASSESSEE NO R REFERRED BY THE DEPARTMENTAL REPRESENTATIVE. THEREFORE THE ORDER OF HONBLE ITAT BASED ON THIS DECISION WHICH IS NOT ARGUED BEFORE IT IS A MISTAKE APPARENT ON RECORD AS HELD BY HONBLE JAIPUR TRIBUNA L IN CASE OF LATE SMT. RADHA DEVI AGARWAL VS. ITO ORDER DT. 08.07.2011 IN MA NO. 16/JP/11 ARISING OUT OF ITA NO. 465/JP/10 (COPY ENCLOSED). (III) THE ABOVE DECISION OF SUPREME COURT IS IN CON TEXT OF ALLOWANCE OF INTEREST U/S 36(1)(III) AND NOT WITH REFERENCE TO SECTION 14A. FURTHER IN THIS DECISION THE FACTS AS FOUND BY THE CIT(A) WITH REFERENCE TO LOANS GIVEN TO ITS OWN DIRECTORS WAS THAT WHEN THE LOAN WAS GIVEN THERE WAS A CREDIT BALANCE IN THE ACCOUNT OF T HE ASSESSEE FROM WHERE THE LOAN WAS GIVEN AND MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 5 THEREFORE THE INTEREST LIABILITY OF THE ASSESSEE TO WARDS BANK ON THE BORROWING HAD NO BEARINGS BECAUSE OTHERWISE ASSESSEE HAD SUFFICIENT FUNDS OF ITS OWN WHICH THE ASSESSEE COULD HAVE ADVANCED AND IT WAS FOR THE AO TO ESTABLISH THE NEXUS BETWEEN THE BORROWINGS AND ADVANCING TO PROVE THAT EXPENDITURE WAS FOR NON-BUSINESS PURPOSE WHICH THE AO FAILED TO DO. ON THE ABOVE FINDING OF FACT HONBLE SUPREME COURT IN LAST PARA OF ITS ORDER OBSERVED THAT INSO FAR AS THE LOANS TO DIRECTORS ARE CONCERNED IT COULD NOT BE DISPUTED BY THE REVENUE THAT THE ASSESSEE HAD A CREDIT BALANCE IN THE BANK ACCOUNT WHEN THE SAID ADVANCE OF RS. 34 LAKHS WAS GIVEN. REMARKABLY AS OBSERVED BY THE CIT (APPEAL) IN HIS ORDER THE COMPANY HAD RESERVE/SURPLUS TO THE TUNE OF ALMOST 15 CRORES AND THEREFORE THE ASSESSEE COMPANY COUL D IN ANY CASE UTILIZE THOSE FUNDS FOR GIVING ADVANCE TO ITS DIRECTORS. FROM THESE FINDINGS OF THE SUPREME COURT IT CAN BE NOTED THAT EVEN IN THIS DECISION IT IS HELD THAT IF THE ASSESSEE HAS RESERVE AND SURPLUS THEN IT COULD UTILIZE THOSE FUNDS FOR GIVING INTERE ST FREE ADVANCES OR AT LOWER INTEREST RATE TO ITS DIRECTORS. NO EXPRESS FINDING IS GIVEN IN THIS DECISION BY THE HO NBLE COURT THAT ASSESSEE IS TO PROVE NEXUS OF THE ADVANC E GIVEN TO ITS DIRECTORS OUT OF INTEREST FREE FUND RA THER IT CAN BE SO PRESUMED IF IT HAS SUFFICIENT RESERVE AND SURPLUS. THUS THIS DECISION RATHER FAVOURS THE MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 6 ASSESSEE IN AS MUCH AS ASSESSEE HAS RESERVES/SURPLUS/SHARE CAPITAL OF RS.5975.95 LACS AGAINST INVESTMENT IN SHARES OF RS. 1120.98 LACS. HAVING NOT CONSIDERED THIS FINDING OF THE HONBLE COURT A MISTAKE APPARENT ON RECORD HAS CREPT IN TH E ORDER OF HONBLE ITAT. SINCE THE ABOVE MISTAKES ARE APPARENT ON RECORD I T IS REQUESTED TO SUITABLY MODIFY PARA 33.3 OF THE ORDER . THEREFORE THE ORDER PASSED BY THE TRIBUNAL ON 18/03/ 2016 IS REQUIRED TO BE MODIFIED IN RESPECT OF PARAGRAPH NO. 33.3 OF THE ORDER. 2. THE LD. AR OF THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE ORDER PASSED BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2010- 11 IN THE CASE OF ASSESSEE SUBMITTING THAT THE TRIBUNAL HAS NOT FOLLO WED THE EARLIER ORDER PASSED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF THEREFORE ORDER OF THE TRIBUNAL IS REQUIRED TO BE RECALLED AND MODIFIED. THE ORDER OF THE TRIBUNAL FOR A.Y. 2010-11 PARAGRAPH NO. 19 I S REPRODUCED HEREINBELOW FOR THE SAKE OF CLARITY. 19. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. I T IS UNDISPUTED FACT THAT THE ASSESSEE HAS RESERVED AND SURPLUS SHARE CAPITAL TO THE EXTENT OF RS.5888.76 L ACS. THE ASSESSEE HAS MIXED FUND THE PRESUMPTION FOR INTERE ST FREE FUND IS ALSO APPLICABLE IN THE CASE OF ASSESSEE BUT MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 7 FOLLOWING THE VARIOUS DECISIONS ON THIS ISSUE SECTI ON 14A READ WITH RULE 8D BECOMES REDUNDANT. IT IS ALSO A FA CT THAT THE MANAGEMENT AS WELL AS STAFF AND OTHER OFFIC E FACILITIES AVAILABLE WITH THE ASSESSEE ARE USED FOR MAKING INVESTMENT IN SHARES THEREFORE IT CANNOT BE RULED OUT THAT NO INCOME CAN BE GENERATED WITHOUT ANY EXPENDITURE. THE QUANTUM MAY BE VARIANCE AND DEPEND ON INVESTMENT MADE BY THE ASSESSEE. THEREFORE WE IN THE INTEREST OF JUSTICE UPHOLD THE DISALLOWANCE U/S 14A AT RS. 5 LA CS AGAINST THE DISALLOWANCE CONFIRMED BY THE LD CIT(A) A T RS. 23 84 269/-. ACCORDINGLY WE ALLOW THIS GROUND OF APP EAL PARTLY. 3. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THE TRIBUNAL IN ITS EARLIER ORDER FOR A.Y. 2010-11 HAS NOT LAID DO WN ANY LAW AND HAS MERELY DISALLOWED RS. 5.00 LACS ON LUMP SUM BASIS AN D THEREFORE THE SAID ORDER WAS ON PECULIAR FACTS OF THE CASE AND THE REFORE CANNOT BE RELIED UPON FOR ADJUDICATION OF THE EARLIER ASSESSM ENT YEAR 2009-10. MOREOVER IT WAS ALSO POINTED OUT BY THE LD. DR THAT THE BENCH CONSTITUTING THE SAME MEMBERS HAVE DECIDED BOTH THE APPEALS AND IT IS PRESUMED THAT THE BENCH WAS CONSCIOUS OF ITS EARLIER ORDER AND MOREOVER THE PRESENT ORDER HAS REMANDED THE MATTER TO A.O. FOR VERIFYING THE FACTS IN ACCORDANCE WITH LAW OF THE LAN D. IT WAS ALSO POINTED OUT THAT THIS TRIBUNAL WHILE DECIDING THE APP EAL THOUGH HAS MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 8 REFERRED TO THE JUDGMENT IN THE CASE OF HERO CYCLES PVT. LTD. VS CIT 63 TAXMAN.COM 308 BUT SAID JUDGMENT HAS NOT BEEN FOLLO WED BY THE BENCH AND THE BENCH HAS MERELY REMANDED BACK THE MATTER F OR VERIFICATION OF THE VARIOUS FACTS AS POINTED OUT BY THE ASSESSING O FFICER AND REASSERTED BY THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE THI RD MEMBER IN THE CASE OF DEEPAK DALELA VS. ITO (2014) 43 TAXMAN.COM 96 HAS HELD AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE ME. LET US FIRST CONSIDER THE RATIO LAID DOWN IN THE TWO DECISIONS RELIED UPON BY THE L EARNED COUNSEL. 7. IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. ( SUPRA ) THE ITAT HAD ALLOWED THE ASSESSEE'S MISCELLANEOUS APPLICATION ON THE GROUND THAT A DECISION OF A COORDINATE BENCH OF THE ITAT WAS REFE RRED BY THE ASSESSEE AT THE TIME OF HEARING BUT THE SAME HAD ES CAPED ITS ATTENTION. THE DEPARTMENT PREFERRED APPEAL TO THE HIGH COURT A ND THE HON'BLE HIGH COURT SET ASIDE THE ORDER OF THE ITAT HOLDING THAT THE POWER TO RECTIFY ANY MISTAKE WAS NOT EQUIVALENT TO POWER TO REVIEW OR RECALLING THE ORDER SOUGHT TO BE RECTIFIED. ON APPEAL TO SUPR EME COURT THE HON'BLE APEX COURT HELD AS UNDER: 'HELD REVERSING THE DECISION OF THE HIGH COURT TH AT IN ALLOWING THE RECTIFICATION APPLICATION THE TRIBUNAL GAVE A FINDI NG THAT THE EARLIER DECISION OF A CO-ORDINATE BENCH WAS CITED BEFORE IT BUT THROUGH OVERSIGHT IT HAD MISSED THE JUDGMENT WHILE DISMISSI NG THE APPEAL FILED BY THE ASSESSEE ON THE QUESTION OF ADMISSIBILITY/AL LOWABILITY OF THE CLAIM OF THE ASSESSEE FOR ENHANCED DEPRECIATION UND ER SECTION 43A. ONE OF THE IMPORTANT REASONS FOR GIVING THE POWER O F RECTIFICATION TO MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 9 THE TRIBUNAL UNDER SECTION 254(2) WAS TO SEE THAT N O PREJUDICE WAS CAUSED TO EITHER OF THE PARTIES APPEARING BEFORE IT . THE RULE OF PRECEDENT WAS AN IMPORTANT ASPECT OF CERTAINTY IN T HE RULE OF LAW AND PREJUDICE HAD RESULTED TO THE ASSESSEE SINCE THE PR ECEDENT HAD NOT BEEN CONSIDERED BY THE TRIBUNAL. THE TRIBUNAL WAS J USTIFIED IN RECTIFYING THE MISTAKE ON RECORD.' 8. IN THE CASE OF INDENTURE GROWTH & SECURITIES LTD. ( SUPRA ) THE ITAT PASSED THE ORDER RELYING ON ITS OWN DECISION IN ANO THER CASE WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE TO DEAL WITH THE SAID DECISION. THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE WAS DISMISSED BY THE ITAT. ON A WRIT PETITION BY THE ASSESSEE HON'B LE BOMBAY HIGH COURT HELD AS UNDER: 'HELD ALLOWING THE PETITION THAT IT COULD NOT BE L AID DOWN AS AN INFLEXIBLE PROPOSITION OF LAW THAT AN ORDER OF REMA ND ON A MISCELLANEOUS APPLICATION UNDER SECTION 254(2) WOUL D BE WARRANTED MERELY BECAUSE THE TRIBUNAL HAD RELIED UPON A JUDGM ENT WHICH WAS NOT CITED BY EITHER PARTY BEFORE IT. IN EACH CASE FT WAS FOR THE COURT TO CONSIDER AS TO WHETHER A PRIMA FACIE OR ARGUABLE DI STINCTION HAD BEEN MADE AND WHICH SHOULD HAVE BEEN CONSIDERED BY THE T RIBUNAL. THE DISTINGUISHING FEATURES IN THE CASE OF KHANDWALA FI NANCE LIMITED WHICH HAD BEEN POINTED OUT BY THE ASSESSEE WERE SUFFICIEN T TO HOLD THAT AN OPPORTUNITY SHOULD BE GRANTED TO THE PETITIONER TO PLACE ITS CASE ON THE APPLICABILITY OR OTHERWISE OF THE DECISION IN KHAND WALA FINANCE LIMITED BEFORE THE TRIBUNAL. THEREFORE THE APPEAL AND THE C ROSS-OBJECTIONS WERE TO BE RESTORED FOR FRESH CONSIDERATION ON THE MERITS BEFORE THE TRIBUNAL.' 9. NOW LET US EXAMINE THE FACTS OF THE ASSESSEE'S C ASE IN THE LIGHT OF ABOVE DECISIONS OF HON'BLE APEX COURT AND HON'BLE B OMBAY HIGH COURT. IN THIS CASE THE ITAT HAS RELIED UPON A PLE THORA OF DECISIONS OF THE ITAT VARIOUS HIGH COURTS AND HON'BLE APEX COUR T FROM PAGE NOS.10 TO 21 OF THE ORDER. ADMITTEDLY THOSE DECISI ONS WERE NOT CITED AND ARGUED UPON BY EITHER SIDE AT THE TIME OF HEARI NG BEFORE THE ITAT. 10. IN THE CASE OF INVENTURE GROWTH & SECURITIES LTD. ( SUPRA ) HON'BLE BOMBAY HIGH COURT HAS SET ASIDE THE DECISION OF ITA T BECAUSE THE ITAT HAS RELIED UPON A DECISION WHILE PASSING THE ORDER WITHOUT GIVING AN MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 10 OPPORTUNITY TO THE ASSESSEE TO DEAL WITH SUCH DECIS ION. THOUGH HON'BLE JURISDICTIONAL HIGH COURT WHILE SETTING ASIDE THE MATTER HAS HELD THAT 'IT COULD NOT BE LAID DOWN AS AN INFLEXIBLE PROPOSI TION OF LAW THAT AN ORDER OF REMAND ON A MISCELLANEOUS APPLICATION UNDE R SECTION 254(2) WOULD BE WARRANTED MERELY BECAUSE THE TRIBUNAL HAD RELIED UPON A JUDGMENT WHICH WAS NOT CITED BY EITHER PARTY BEFORE IT IN EACH CASE IT WAS FOR THE COURT TO CONSIDER AS TO WHETHER A PRIMA FACIE OR ARGUABLE DISTINCTION HAD BEEN MADE AND WHICH SHOULD HAVE BEE N CONSIDERED BY THE TRIBUNAL.' IN THE CASE UNDER CONSIDERATION BEF ORE ME I FIND THAT AS MANY AS 22 CASES OF VARIOUS BENCHES OF ITAT VARIOU S HIGH COURTS AND HON'BLE APEX COURT HAVE BEEN RELIED UPON AND CONSID ERED BY THE ITAT. IN MY OPINION WHEN THE BENCH PROPOSES TO RELY UPON SUCH LARGE NUMBER OF DECISIONS IT WOULD CERTAINLY BE EXPECTED FROM IT TO CONFRONT THE PARTIES WITH THOSE DECISIONS AND GIVE AN OPPORT UNITY TO THEM TO GIVE THEIR COMMENTS ON THOSE DECISIONS. AS PER THE RATIO OF ABOVE DECISION OF HON'BLE BOMBAY HIGH COURT IF THE DECIS ION RELIED UPON BY THE ITAT WITHOUT GIVING OPPORTUNITY TO THE PARTIES HAS IDENTICAL FACTS THEN PERHAPS THERE MAY NOT BE ANY REQUIREMENT OF RECALLING THE ORDER OF ITAT FOR GIVING OPPORTUNITY OF BEING HEARD. HOWE VER WHEN SUCH LARGE NUMBER OF DECISIONS ARE RELIED UPON BY THE IT AT WITHOUT CONFRONTING THE SAME TO THE PARTIES IT IS NOT EVEN THE CASE OF THE REVENUE THAT THE FACTS IN ALL THE CASES WERE IDENTI CAL TO THE FACTS IN THE PRESENT CASE. 11. HON'BLE APEX COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. ( SUPRA ) HAS UPHELD THE ORDER OF THE ITAT RECALLING ITS OW N DECISION WHERE THE DECISION OF COORDINATE BENCH REFERRED TO BY THE ASSESSEE HAD ESCAPED TO BE CONSIDERED. WHILE DOING SO THEIR LORDSHIPS AT PAGE 473 HELD ''RULE OF PRECEDENT' IS AN IMPORTANT ASPEC T OF LEGAL CERTAINTY IN RULE OF LAW. THAT PRINCIPLE IS NOT OBLITERATED B Y SECTION 254(2) OF THE INCOME-TAX ACT 1961. WHEN PREJUDICE RESULTS FROM A N ORDER ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE ERROR OR OM ISSION THEN IT IS THE DUTY OF THE TRIBUNAL TO SET IT RIGHT' IN MY OPINION SIMILAR TO THE RULE OF PRECEDENT THE RULE OF NATURAL JUSTICE IS AN IMPORT ANT ASPECT OF DISPENSATION OF JUSTICE. IN MY OPINION WHEN LARGE NUMBER OF DECISIONS ARE RELIED UPON BY THE ITAT WITHOUT GIVING OPPORTUN ITY TO THE PARTIES TO PUT FORTH THEIR VIEWS ON THOSE DECISIONS IT IS VIO LATION OF RULE OF NATURAL JUSTICE AND SINCE DUE TO SUCH VIOLATION THE PREJU DICE IS CAUSED TO THE MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 11 ASSESSEE IT IS THE DUTY OF THE TRIBUNAL TO SET IT RIGHT BY RECALLING ITS ORDER. 12. I ALSO FIND THAT THE ITAT IN ITS ORDER AT PAGE 7 PARAGRAPH 4.1 HAS DISCUSSED THE DECISION OF ITAT IN THE CASE OF GEMS PARADISE ( SUPRA ). PARAGRAPH 5 OF SUCH DECISION WAS WITH REGARD TO REJ ECTION OF BOOKS OF ACCOUNT. IN PARAGRAPH 6 THE ITAT UPHELD THE FINDIN G OF THE CIT(A) APPLYING THE GROSS PROFIT RATE ON THE DECLARED SALE S. HOWEVER IN THE PRESENT CASE THOUGH THE ITAT HAS RELIED UPON THE A BOVE DECISION FOR REJECTION OF BOOKS OF ACCOUNT BUT HAD UPHELD THE OR DER OF THE LEARNED CIT(A) DISALLOWING 25% OF THE PURCHASES INSTEAD OF APPLYING GROSS PROFIT RATE ON SALES OF THE ASSESSEE. THEREFORE WHILE ONE PART OF THE ORDER OF THE ITAT IN THE CASE OF GEMS PARADISE ( SUPRA ) WAS CONSIDERED BUT THE OTHER PART WAS NOT CONSIDERED FOR WHICH NO SPECIFI C REASON IS GIVEN IN THE ORDER OF THE ITAT. 13. IN VIEW OF THE ABOVE FACTUAL POSITION AND THE RAT IO LAID DOWN BY THE HON'BLE APEX COURT IN ITS DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. ( SUPRA ) AND BY HON'BLE BOMBAY HIGH COURT IN ITS DECISION IN THE CASE OF INVENTURE GROWTH & SECURITIES LTD. ( SUPRA ) I AGREE WITH THE PROPOSED ORDER OF LEARNED JUDICIAL MEMBER AND ACCORDINGLY HOLD THAT THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS LIABLE TO BE ALLOWED BY RECALLING THE ORDER OF THE TRIBUNAL. 5. THE FACTS OF THE PRESENT CASE BEFORE US IS ALMOS T SIMILAR TO THE CASE DECIDED BY THE THIRD MEMBER THEREFORE IN OUR VIEW THE GROUND NO. 4 IS REQUIRED TO BE REHEARD AND DECIDE BY THE B ENCH AFRESH AFTER GIVING OPPORTUNITIES TO THE PARTIES ON THE FOLLOWING ASPECT. (I) THE EFFECT OF THE JUDGMENT OF THE HON'BLE SUPRE ME COURT IN THE CASE OF HERO CYCLES PVT. LTD. VS. CIT (SUPRA) AN D THE OBSERVATION MADE THEREIN ON THE PRESENT CASE. MA 118/JP/2016_ VIJAY SOLVEX VS ACIT 12 (II) THE EFFECT OF THE EARLIER LUMP SUM DISALLOWANCE MADE BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2010-11. IN THE LIGHT OF THE ABOVE THIS MISC. APPLICATION I S DISPOSED OFF AND THE MATTER IS DIRECTED TO BE PUT UP BEFORE THE REGULAR HEARING FOR DECIDING GROUND NO. 4 ONLY ON 06/10/2016. 5. THIS MISC. APPLICATION IS DISPOSED OFF. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2016. SD/- SD/- FOE FLAG ;KNO YFYR DQEKJ (VIKRAM SINGH YADAV) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04 TH OCTOBER 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S VIJAY SOLVEX LTD. ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE A.C.I.T. CIRCLE-2 ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR ITAT JAIPUR 6. XKMZ QKBZY @ GUARD FILE (MA NO. 118/JP/2016) VKNS'KKUQLKJ @ BY ORDER LGK;D IATHDKJ @ ASST. REGISTRAR